Exhibit 10.7
(Multicurrency--Cross Border)
ISDA(Registered)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of September 1999
AXA Trusteed Limited (ALN 004 029 841)
in its capacity as trustee of the
Crusade Global Trust No.11999
Bankers Trust Corporation ("Party B") and Crusade Management
New York ("Party A") Limited "Manager"
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have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable: --
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will: --
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for: --
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
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(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 judgement) 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 judgement 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, 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,
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organised, managed and controlled, or considered to have its seat, or in which a
branch or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the other
party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however
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described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgement 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 judgement 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
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below: --
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
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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)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and obligations
under this Agreement in respect of the Affected Transactions to another of
its Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a
Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect to
all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in
the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
9
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
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 Transaction without 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
12
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement: --
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
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
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group or Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: --
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the 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
17
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Bankers Trust Corporation,
New York AXA Trustees Limited
------------------------------ ----------------------------------------
(Name of Party) (Name of Party)
By: By:
-------------------------- -------------------------
Name: Name:
Title: Title:
Date: Date:
Crusade Management Limited
----------------------------------------
(Name of Party)
By:
-------------------------
Name:
Title:
Date:
18
ISDA
International Swaps and Derivatives Association, Inc.
SCHEDULE
to the
Master Agreement
Dated as of
Between
Bankers Trust Corporation, New York ("Party A")
and
AXA Trustees Limited (ACN 004 029 841) in its capacity as trustee
of the Crusade Global Trust No. 1 1999 ("Party B")
and
Crusade Management Limited (ACN 072 715 916) ("Manager")
Part 1
Termination Provisions
(a) "Specified Entity" is not applicable in relation to Party A and Party B.
(b) "Specified Transaction" will have the meaning set forth in Section 14.
(c) (i) Sections 5(a)(ii), (iii), (iv), (v), (vi), 5(b)(iii) and (iv) will not
apply to Party A or Party B.
(ii) Replace Section 5(a)(i) with:
"(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 at or before 10:00am on the tenth
Local Business Day after the due date;"
(iii) Section 5(b)(ii) will not apply to Party A as the Affected Party
(subject to Part 5(m)(iii) of this Schedule).
(d) The "Bankruptcy" provisions of Section 5(a)(vii) are replaced by "An
Insolvency Event has occurred in respect of Party A or Party B". In
relation to Party A, the events described in the definition of Insolvency
Event shall apply to it as if Party A were a relevant corporation referred
to in that definition. The occurrence of an Insolvency Event in respect of
Party B in
--------------------------------------------------------------------------------
Page 1
its personal capacity will not constitute an Event of Default provided that
within thirty Business Days of that occurrence, Party A, Party B and the
Manager are able to procure the novation of this Agreement and all
Transactions to a third party in respect of which the Designated Rating
Agencies confirm that the novation will not cause a reduction or withdrawal
of the rating of the Notes, and Party A and Party B agree to execute such a
novation agreement in standard ISDA form.
(e) The "Automatic Early Termination" provisions of Section 6(a):
will not apply to Party A.
will not apply to Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation (as amended by Part 5(q)(ii)) will apply; and
(ii) the Second Method will apply.
(g) "Termination Currency" means United States Dollars.
(h) "Additional Termination Event" means:
(i) Party B must, at the direction of the Manager, terminate this
Agreement if it becomes obliged to make a withholding or deduction in
respect of any Notes and the Notes are redeemed as a result (and Party
B is the Affected Party);
(ii) Party B must, at the direction of the Manager, terminate this
Agreement if Party A breaches Part 5(z) (and Party A is the Affected
Party).
Part 2
Tax Representations
(a) Payer Tax Representations
For the purpose of Section 3(e) of the Agreement, Party A and Party B will
make the following representations:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on:
(i) the satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii); and
(ii) the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement.
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not deliver a
form or document under Section 4(a)(iii) of the Agreement by reason of
material prejudice to its legal or commercial position.
(b) Payee Tax Representations
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Page 2
For the purpose of Section 3(f) of this Agreement:
Party A makes the following representation:
None
Party B makes the following representation:
It is an Australian resident and does not derive the payments under this
Agreement in part or in whole in carrying on business in a country outside
Australia at or through a permanent establishment of itself in that
country.
Part 3
Agreement to Deliver Documents
For the purposes of Section 4(a)(i) and (ii) of this Agreement:
(a) Party A agrees to provide to ▇▇.▇▇▇▇▇▇ and the Manager, , at any time on
the request of the Manager, any information required to be provided for the
purposes of periodic filings made by the Trust Manager with the Securities
and Exchange Commission; and
(b) in addition, each party further agrees to deliver the following documents
as applicable in accordance with the following:
------------------------ ------------------------------- ------------------------ ------------------
Party required to Document Date by which to be Covered by
deliver delivered section 3(d)
representations
------------------------ ------------------------------- ------------------------ ------------------
Party B and the Manager a list of authorised On execution and yes
signatories for the party and delivery of this
evidence satisfactory in form Agreement or any
and substance to the other relevant Confirmation
party of the authority of the and when the list is
authorised signatories of the updated and at any
party to execute this time on the request of
Agreement and each the other party.
Confirmation on behalf of
Party B
------------------------ ------------------------------- ------------------------ ------------------
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Page 3
------------------------ ------------------------------- ------------------------ ------------------
Party B a United States Internal Upon (A) the earlier yes
Revenue Service Form W-8 of: (1) the first
BEN, or any successor form Payment Date; (2)
promptly upon
reasonable demand by
Party A; and
(3)learning that any
United States Internal
Revenue Service Form
W-8 BEN previously
provided by Party B has
become obsolete or
incorrect; and (B)prior
to the first Payment
Date every three
calendar years
thereafter.
------------------------ ------------------------------- ------------------------ ------------------
Party A Party A shall deliver On execution and yes
evidence satisfactory in form delivery of this
and substance to the other Agreement or any
party of the authority of the relevant
signatories of the party to Confirmation.
create this Agreement and
each confirmation on behalf
of Party A (including, but
not limited to, at the
request of Party B, an
incumbency certificate or
a Power or Attorney)
------------------------ ------------------------------- ------------------------ ------------------
Party B Legal opinions as to the Before the entering yes
validity and enforceability into of any
of the obligations of Party B Transaction.
and the Manager under this
Agreement, the Trust Deed,
the Security Trust Deed and
the Notes in form and
substance and issued by legal
counsel reasonably acceptable
to Party A
------------------------ ------------------------------- ------------------------ ------------------
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Page 4
------------------------ ------------------------------- ------------------------ ------------------
Manager Copies of the Trust Deed and On execution and Yes
Security Trust Deed certified delivery of this
to be true copies by two Agreement
authorised signatories of the
Manager
------------------------ ------------------------------- ------------------------ ------------------
Part 4
Miscellaneous
(a) Address for Notices: For the purpose of Section 12(a) of this Agreement:
Address for Notices to Party A:
Attention: Bankers Trust Corporation
Address: Bankers Trust Corporation
▇/▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇ Avenue of the ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
Telex: N/A
Address for Notices to Party B:
▇▇▇▇▇ ▇, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone: (▇▇) ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇▇
Telex: N/A
Address for Notice to Manager:
▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention: Middle Office Compliance Manager
Telephone: (▇▇) ▇▇▇▇ ▇▇▇▇
Facsimile: (▇▇) ▇▇▇▇ ▇▇▇▇
Telex: N/A
(b) Process Agent: For the purposes of Section 13(c) of this Agreement: Party A
appoints as its Process Agent: Not Applicable Party B appoints as its
Process Agent: CT Corporation
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇
Phone: ▇▇▇ ▇▇▇ ▇▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇▇
(c) Offices: The provisions of Section 10(a) will apply to this Agreement.
--------------------------------------------------------------------------------
Page 5
(d) Multibranch Party: For the purposes of Section 10(c) of this Agreement:
Party A is not a multibranch Party.
Party B is not a multibranch Party.
(e) Calculation Agent: The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) Credit Support Document: Details of any Credit Support Document:
(i) In relation to Party A: Nil
(ii) In relation to Party B: Security Trust Deed.
(g) Credit Support Provider:
(i) In relation to Party A: Any party appointed under Part 5(z)(ii)(B).
(ii) In relation to Party B: Nil
(h) Governing Law: This Agreement will be governed by and construed in
accordance with New York law.
(i) Netting of Payments: Sub-paragraph (ii) of Section 2(c) of this Agreement
will apply.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement. For the purposes of Section 3(c), neither Party A nor Party B is
deemed to have any Affiliates.
Part 5
Other Provisions
(a) In Section 2(a)(i) add the following sentence:
"Each payment will be by way of exchange for the corresponding payment or
payments payable by the other party."
(b) In Section 2(a)(ii), after "freely transferable funds" and "free of any
set-off, counterclaim, deduction or withholding (except as expressly
provided in this Agreement).
(c) Insert new Sections 2(a)(iv) and 2(a)(v) as follows;
"(iv) The condition precedent in Section 2(a)(iii)(1) does not apply to a
payment due to be made to a party if it has satisfied all its payment
and delivery obligations under Section 2(a)(i) of this Agreement and
has no future payment or delivery obligations, whether absolute or
contingent under Section 2(a)(i).
(v) Where:
(1) payments are due pursuant to Section 2(a)(i) by Party A to Party
B (the "Party A Payment") and by Party B to Party A (the "Party B
Payment") on the same day; and
(2) the Security Trust Deed has become, and remains at that time,
enforceable.
then Party A's obligation to make the Party A Payment to Party B shall
be subject to the condition precedent (which shall be an "applicable
condition precedent" for the purpose of Section 2(a)(iii)(3)) that
Party A first receives either:
(3) the Party B Payment; or
(4) confirmation from Party B's bank that it holds irrevocable
instructions to effect payment of the Payment B Payment and that
cleared funds are available to make that payment."
(d) add the following new sentence to Section 2(b):
"Each new account so designed must be in the same tax jurisdiction as
the original account."
--------------------------------------------------------------------------------
Page 6
(e) Delete the word "if" at the beginning of Section 2(d)(i)(4) and insert the
following words instead:
"if and only if X is Party A and";
(f) In Section 2(d)(ii) insert the words "(if and only if Y is Party A)" after
the word then at the beginning of the last paragraph. Party B will have no
obligation to pay any amount to Party A under Section 2(d)(ii), and may
make any payment under or in connection with this Agreement net of any
deduction or withholding referred to in Section 2(d)(i).
(g) Additional Representations: In Section 3 add the following immediately
after paragraph (f):
"(g) Non Assignment. It has not assigned (whether absolutely, in
equity or otherwise) or declared any trust over any of its rights
under any Transaction (other than, in respect of Party B, the Trusts
created pursuant to the Trust Deed) and has not given any charge over
the assets of the Trust (other than as provided in the Security Trust
Deed), in the case of Party B.
(h) Party B also represents to Party A (which representations will be deemed to
be repeated by Party B on each date on which a Transaction is entered into)
that:
(i) Trust Validly Created. The Trust has been validly created and is
in existence at the date of this Agreement.
(ii) Sole Trustee. Party B has been validly appointed as trustee of
the Trust and is presently the sole trustee of the Trust.
(iii) No Proceedings to remove. No notice has been given to Party B
and to Party B's knowledge no resolution has been passed, or
direction or notice has been given, removing Party B as trustee
of the Trust.
(iv) Power. Party B has power under the Trust Deed to enter into this
Agreement and the Security Trust Deed in its capacity as trustee
of the Trust.
(v) Good Title. Party B is the equitable owner of the assets of the
Trust and has power under the Trust Deed to mortgage or charge
them in the manner provided in the Security Trust Deed and,
subject only to the Trust Deed, the Security Trust Deed and any
Security Interest (as defined in the Security Trust Deed)
permitted under the Trust Deed, as far as Party B is aware, those
assets are free from all other Security Interests.
(i) In Section 4 add a new paragraph as follows:
(f) Contracting as Principal. Party A will enter into all
Transactions as principal and not otherwise and Party B will
enter into all Transactions in its capacity as trustee of the
Trust and not otherwise."
(j) Confirmations. For the purposes of Section 9(e)(ii) Party B (either itself
or through the Manager) will, on or promptly after the relevant Trade Date,
send Party A a Confirmation confirming that Transaction and Party A must
promptly then confirm the accuracy of or request the correction of such
Confirmation. Notwithstanding the provisions of Section 9(e)(ii), each
Confirmation in respect of a Transaction which is confirmed by electronic
messaging system, an exchange of telexes or an exchange of facsimiles will
be further evidenced by an original Confirmation signed by the parties,
however any failure to sign an original Confirmation will not affect the
validity or enforcement of any Swap Transaction.
(k) Section 5(b)(i) (Illegality) is amended by adding the following paragraph
at the end:
"this sub paragraph (i) does not apply to the imposition by the Australian
government or any agency of the Australian government of any exchange
control restrictions or prohibitions ("exchange controls"). For the
avoidance of doubt:
(vi) exchange controls do not constitute an Illegality or Event of Default
or Termination Event under this Agreement, and do not entitle a party
to terminate a Transaction or otherwise refuse to make any payments it
is obliged to make under a Transaction"; and
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Page 7
(ii) Delivery by Party B of Australian dollar amounts required to be paid
by it under any relevant Confirmation to the bank account specified in
that confirmation will constitute proper payment of those amounts by
Party B and Party A's obligations under this Agreement will be
unaffected by any such exchange controls.
(l) Section 6 is amended by replacing "20 days" in line 3 with "10 Local
Business Days", and deleting the words "all outstanding Transactions" where
they appear and inserting instead of words "the Relevant Swap Transaction".
(m) Add a new Section 6(aa):
"(aa) Restricted Termination Rights
(i) Termination by Party B: Party B must not designate an
Early Termination Date without the prior written
consent of the Note Trustee.
(ii) Consultation: Each Party may only designate an Early
Termination Date following prior consultation with the
other Party as to the timing of the Early Termination
Date. Subject to its duties under the Trust Deed and
the Supplementary Terms Notice, Party B may exercise
any rights in its capacity as holder of the Purchased
Receivables only on the instructions of the Note
Trustee and only after consultation between Party A and
the Note Trustee.
(iii) Party A's limited rights in relation to Tax Event:
Notwithstanding Part 1(c)(iii) of this Schedule, Party
A may designate an Early Termination Date if it is an
Affected Party following a Tax Event but only if all
Notes will be redeemed at their Invested Amount (or, if
the Noteholders by Extraordinary Resolution have so
agreed, at their Stated Amount) together with accrued
interest to (but excluding) the date of redemption.
(iv) Transfer where Party B does not gross-up: If any
payment by Party B to Party A under this Agreement is,
or is likely to be, made subject to any deduction or
withholding on account of Tax, Party B will endeavour
to procure the substitution as principal obligor under
Agreement in respect of each affected Transaction of a
Party B incorporated in another jurisdiction approved
by Party A and the Note Trustee and in respect of which
the Designated Rating Agencies confirm that the
substitution will not cause a reduction or withdrawal
of the rating of Notes".
(n) In Section 6(b)(ii), add the words "so long as the transfer in respect of
that Transaction would not lead to a rating downgrade of any rated debt of
Party B that is secured under the Security Trust Deed" after the words
"ceases to exist" at the end of the first paragraph.
(o) In Section 6(e), delete the sentence "The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off." At the end of the first paragraph.
(p) Section 12 is amended as follows:
(i) In Section 12(a), insert "and settlement instructions requiring
payment to an entity other than the original counterparty" after
"Section 5 or 6" in line 2.
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Page 8
(ii) Section 12(a)(iii) is replaced with:
"(iii) if sent by facsimile transmission, on the date a transmission
report is produced by the machine from which the facsimile was sent
which indicates that the facsimile was sent in its entirety to the
facsimile number of the recipient notified for the purpose of this
Section, unless the recipient notifies the sender within one Local
Business Day of the facsimile being sent that the facsimile was not
received in its entirety and in legible form."
(q) Section 14 of the Agreement is modified as follows :
(i) New definitions are inserted as follows:
"Future Obligations" means all payment or delivery obligations
(whether the underlying obligation was absolute or contingent and
assuming the satisfaction of each applicable condition precedent) of a
party under Section 2(a)(i) in respect of a 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).
"Relevant Swap Transaction" means, in relation to Class A Notes, each
Transaction which is a Currency Swap for Class A Notes only and in
relation to Class B Notes, each Transaction which is a Currency Swap
for Class B Notes only.
"Trust Deed" means that the Master Trust Deed dated 14 March 1998 and
the Crusade Global Trust No. 1 of 1999 Supplementary Terms Notice
dated on or about the date of this Agreement ("Supplementary Terms
Notice") between Party B St ▇▇▇▇▇▇ Bank Limited and the Manager, and
each of the following expressions has the meanings given to them in
the Trust Deed.
"Associate"
"Class A Notes"
"Class B Notes"
"Conditions"
"Currency Swap"
"Designated Rating Agency"
"Extraordinary Resolution"
"Insolvency Event"
"Invested Amount"
"Mortgaged Property"
"Note"
"Note Trustee"
"Purchased Receivables"
"Security Trust Deed"
"Stated Amount"
"Trust"
"Trust Expense"
(ii) The definition of "Market Quotation" is replaced with:
"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 take into account any existing Credit Support
Documentation with respect to the obligations of such party.
Each quotation will, at the option of the party making the
determination, be
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Page 9
determined as either:
(1) the amount, if any, that would be paid to such party (expressed
as a negative number) or any such party (expressed as a positive
number) in consideration of an agreement between 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 the Future
Obligations of both parties; or
(2) the present value (calculated using commercially reasonable
discount rates) of the difference or the differences on each
Scheduled Payment Date that would have occurred after the Early
Termination Date between (a) the Future Obligations of the other
party to the Terminated Transaction or Termination Transactions
and (b) the obligations that a quoting Reference Market-maker
would have under a transaction ("Replacement Transaction") that
would preserve for the party making the determination that
party's Future Obligations, with such present value being
positive if (a) is greater than (b) and negative if (a) is less
than (b).
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 it's 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 the
quotation or quotations are to be obtained will be selected in god
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."
(r) Trust Deed and Security Trust Deed: The parties acknowledge and agree and
for the purposes of the Trust Deed and Security Trust Deed
(a) all Transactions under this Agreement are "Hedge Agreements";
(b) Party A is a "Support Facility Provider",
(s) ISDA Definitions: This Agreement, each Confirmation and each Transaction
are subject to the 1991 ISDA Definitions and the 1998 Supplement to the
1991 ISDA Definitions (as published by the International Swap Dealers
Association, Inc.) (the "ISDA Definitions"), and ill be governed in all
respects by any provisions set forth in the ISDA Definitions, without
regard to any amendments to the ISDA Definitions made after the date of
this Agreement. The ISDA Definitions are incorporated by reference in, and
shall be deemed to be part of, this Agreement and each Confirmation.
(t) Inconsistency: In the event of any inconsistency between any two or more of
the following documents, they shall take precedence over each other in the
following descending order:
(i) any Confirmation;
(ii) the Schedule to the Master Agreement;
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Page 10
(iii) the other provisions of the Master Agreement;
(iv) the ISDA Definitions.
(u) Any reference to a:
(i) "Swap Transaction" in the ISDA Definitions is deemed to be a reference
to a "Transaction" for the purpose of interpreting this Agreement or
any Confirmation; and
(ii) "Transaction" in this Agreement or any Confirmation is deemed to be a
reference to a "Swap Transaction" for the purposes of interpreting the
1991 ISDA Definitions.
(v) New clauses 15, 16, 17 and 18 are added as follows:
"15. Trustee provisions
(a) Each party acknowledges and agrees that Party B enters into
this Agreement in its capacity as trustee of the Trust and
in no other capacity. Clause 16 of the Security Trust Deed
applies to govern Party A's priority to monies received from
the sale of trust Assets or other enforcement of the Charge
under the Security Trust Deed (each as defined in the
Security Trust Deed). Clauses 1.2(p) and 30.13 of the Trust
Deed apply to this Agreement as if set out in full, with
references to Deed being construed as references to
Agreement.
(b) Nothing in paragraph (a) limits Party A in:
(i) obtaining an injunction or other order to restrain any
breach of this Agreement by Party B;
(ii) obtaining declaratory relief; or
(iii) in relation to its rights under the Security Trust
Deed.
(c) Except as provided in paragraphs (a) and (b), Party A shall
not
(i) (judgment) obtain a judgment for the payment of money
or damages by Party B
(ii) (statutory demand) issue any demand under s459E(1) of
the Corporations Law (or any analogous provision under
any other law) against Party B;
(iii) (winding up) apply for the winding up or dissolution
of Party B;
(iv) (execution) levy or enforce any distress or other
execution to, on, or against any assets of Party B;
(v) (court appointed receiver) apply for the appointment by
a court of a receiver to any of the assets of Party B;
(vi) (set-off or counterclaim) exercise or seek to exercise
any set-off or counterclaim against Party B; or
(vii) (administrator) appoint, or agree to the appointment,
of any administrator to Party B,
or take proceedings for any of the above and Party A waives
its rights to make those applications and take those
proceedings.
16. Segregation:
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Page 11
The liability of Party B under this Agreement is several and
is separate in respect of each Relevant Swap Transaction.
The failure of Party B to perform its obligations in respect
of any Relevant Swap Transaction does not release Party B
from its obligations under this Agreement or under any other
Relevant Swap Transaction in respect of any other Notes
issued by Party B. Nothing in this Agreement affects the
respective priority rankings of claims against the Mortgaged
Property under the Security Trust Deed. Without limiting the
generality of the foregoing, the provisions of this
Agreement have effect separately and severally in respect of
each Relevant Swap Transaction and are enforceable by or
against Party B as though a separate agreement applied
between Party A and Party B for each Relevant Swap
Transaction, so that (among other things):
(i) this Agreement together with each Confirmation relating
to a Relevant Swap Transaction will form a single
separate agreement between Party A and Party B and
references to the respective obligations (including
references to payment obligations generally and in the
context of provisions for the netting of payments and
the calculation of amounts due on early termination) of
Party A and Party B shall be construed accordingly as a
several reference to each mutual set of obligations
arising under each such separate agreement between
Party A and Party B;
(ii) representations made and agreements entered into by the
parties under this Agreement are made and entered
separately and severally by Party B in respect of each
Relevant Swap Transaction and may be enforced by Party
B against Party A separately and severally in respect
of each Relevant Swap Transaction;
(iii) rights of termination, and obligations and
entitlements consequent upon termination, only accrue
to Party A against Party B separately and severally in
respect of each Relevant Swap Transaction, and only
accrue to Party B against Party A separately and
severally in respect of each Relevant Swap Transaction;
and
(iv) the occurrence of an Event of Default or Termination
Event in respect of a Relevant Swap Transaction does
not in itself constitute Event of Default or
Termination Event in respect of any other Relevant Swap
Transaction.
17. Replacement Currency Swap
(a) If this Agreement is terminated, Party B must, at the
direction of the Manager, enter into one or more currency
swaps which replace the Transactions under this Agreement
(collectively a "Replacement Currency Swap") but only on the
following conditions:
(k) the Settlement Amount payable (if any) by Party B to
Party A upon termination of this Agreement will be paid
in full when due in accordance with the Supplementary
Terms Notice and this Agreement;
(ii) the Designated Ratings Agencies confirm that the
Replacement Currency Swap will not cause a reduction or
withdrawal of the ratings of the Notes; and
(iii) the liability of Party B under the Replacement
Currency Swap is limited to at least the same extent
that its liability is limited under this Agreement.
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(b) If the conditions in Section 17(a) are satisfied, Party B
must, at the direction of the Manager, enter into the
Replacement Currency Swap and if it does so it must direct
the Replacement Currency Swap provider to pay any upfront
premium to enter into the Replacement Currency Swap due to
Party B directly to Party A in satisfaction of and to the
extent of Party B's obligation to pay the Settlement Amount
to Party A as referred to in Section 17(a) and to the extent
that such premium is not greater than or equal to the
Settlement Amount, the balance must be satisfied by Party B
as a Trust Expense.
(c) If the conditions in Section 17(a) are satisfied and Party B
has entered into the Replacement Currency Swap, Party B must
direct Party A to pay any Settlement Amount payable by Party
A to Party B on termination of this Agreement directly to
the Replacement Currency Swap provider as payment and to the
extent of any premium payable by Party B to enter into the
Replacement Currency Swap, in satisfaction of and to the
extent of Party A's obligation to pay that part of the
Settlement Amount to Party B.
18. Novation
Party A may at any time novate its obligations under this
Agreement to any Associate of Deutsche Bank AG (the "New
Counterparty") provided that:
(a) the New Counterparty is obligated to file periodic reports
with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934;
(b) the New Counterparty provides a legal opinion to Party B
that this Agreement, as novated, is valid, binding and
enforceable (subject to equitable doctrines and creditor's
right generally); and
(c) the Designated Ratings Agencies confirm that the New
Counterparty will not cause a reduction or withdrawal of the
ratings of the Notes.
Party B and the Manager will execute all such documents as are
reasonably necessary to give effect to that novation."
(w) Telephone recording: Each party:
(l) consents to the recording of the telephone conversations of trading
and marketing personnel of that party and its Affiliates in connection
with this Agreement or any potential Transaction; and
(ii) agrees to obtain any necessary consent of and give notice of such
recording to such personnel of it and its Affiliates.
(x) Relationship Between Parties: Each party will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent
a written agreement between the parties that expressly imposes affirmative
obligations to the contrary for the Transaction):-
(a) Non-Reliance. It is acting for its own account (or, in the case of
Party B, as trustee of the Trust), and it has made its own independent
decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own
judgement and upon advise from such advisers as it has deemed
necessary. It is not relying on any communication (written or oral) of
the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to enter
into that Transaction. No communication (written or oral) received
from the other party shall be deemed to be an assurance or guarantee
as to the expected results of that Transaction.
(b) Assessment and Understanding. It is capable of assessing the merits of
and
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Page 13
understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks
of that Transaction. It is also capable of assuming, and assumes, the
risks of that Transaction.
(y) Appointment of Manager: Party A acknowledges that under the Trust Deed
Party B has appointed the Manager as manager of the Trust with the powers
set out in and upon and subject to the terms of, the Trust Deed.
Accordingly, subject to the terms of the Trust Deed, the Manager:
(i) may arrange, enter into, and monitor Transactions, execute
Confirmations and exercise all other rights and powers of Party B
under this Agreement; and
(ii) without limiting the generality of the foregoing, the Manager shall,
issue and receive, on behalf of Party B all notices, Confirmations,
certificates and other communications to or by Party A under this
Agreement.
(z) Ratings Downgrade:
(i) If, as a result of the withdrawal or downgrade of its credit
rating by a Designated Rating Agency, Party A does not have
either a long term credit rating of at least AA- by S&P or a
short term credit rating of at least A-1+ by S&P, and a long term
credit rating of at least A2 by Moody's or a long term rating of
at least AA- by Fitch (and, in the case of Moody's or Fitch, such
a downgrade would, except for this clause adversely affect the
rating of the Notes), Party A shall within:
(A) 30 Business Days of a downgrade of its long term credit
rating by S&P to not lower than A- together with a downgrade
of its short term credit rating by S&P to not lower than
A-1, or the downgrade of its long term credit rating by
Moody's to not lower than A3, or a downgrade of its long
term credit rating by Fitch IBCA to not lower than A-;
5 Business Days of any other such withdrawal or downgrade
and for the avoidance of doubt, if Party A's long term
credit rating by S&P is not lower than A- and Party A's
short term credit rating by S&P is not lower than A-1, and
in each case Party A's long term credit rating by ▇▇▇▇▇'▇ is
not lower than
(B) A3 and its long term credit rating by Fitch IBCA is not
lower than A- then paragraph (A) above shall apply and not
this paragraph (B),
(or, in either case, such greater period as is agreed to in
writing by the relevant Designated Rating Agency) at its cost
alone and at its election:
(C) (in the case of paragraph (i)(A) only) lodge cash collateral
in US$ with an Approved Bank outside Australia in an amount
equivalent to the Cash Collateral Amount as defined in
paragraph (z)(ii)(A) below. This collateral must be lodged
with an entity that each Designated Rating Agency confirms
will not affect the rating of the Notes. Any interest earned
on it is payable to Party A. Party A will pay any costs
associated with lodgment of the collateral; or
(D) at the cost of Party A, enter into an agreement novating
this Agreement to a replacement counterparty proposed by any
of Party A, Party B or the Manager (if any) and which each
Designated Rating Agency has confirmed will result in there
not being a withdrawal or downgrade of any credit rating,
assigned by it, to the Notes; or
(E) enter into such other arrangements which each Designated
Rating Agency has confirmed will result in there not being a
withdrawal or downgrade of any credit rating assigned by it
to the Notes.
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(ii) For the purpose of this paragraph (z):
(A) the Cash Collateral Amount shall be an amount equal to the
greater of the following:
(1) zero;
(2) CRR; and
(3) an amount acceptable to Moody's and Fitch and
sufficient to maintain the credit rating assigned to
the Notes by Moody's and Fitch immediately prior to the
review of Party A's credit rating; and
(B) Approved Bank means a Bank which has a short- term rating of
at least A-1+ (S&P), P-1 (Moody's) and F1+ (Fitch IBCA).
(iii) For the purpose of paragraph (ii)(A), the formula for
calculating CCR is as follows.
CCR = CR x 1.030
where
CR means MTM + VB
MTM means the ▇▇▇▇-to-market value of the swap. Party A will have
to ▇▇▇▇ the swap to market and post collateral on a weekly basis,
with a cure period of 3 days. The ▇▇▇▇-to-market value should
reflect the higher of 2 bids from counterparties that will be
eligible and willing to provide the swap in the absence of Party
A.
VB means the volatility buffer, being the relevant percentage
calculated from the following table:
Volatility Buffer (%)
Counterparty Maturities up Maturities up Maturities more
rating to 5 years to 10 years than 10 years
A+ 1.05 1.75 3.0
A 1.35 2.45 4.5
A- 1.5 3.15 6.0
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[Bankers Trust Corporation Letterhead]
[ ] September 1999
National Mutual Trustees Limited
c/o Crusade Management Limited
▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
Attention: Middle Office Compliance Manager
Facsimile No: (▇▇) ▇▇▇▇ ▇▇▇▇
Dear Sir/Madam
AUD/USD CROSS CURRENCY SWAP TRANSACTION FOR CLASS [A1] NOTES: - OUR
REFERENCE [ ]
The purpose of this letter is to confirm the terms and conditions of the
Transaction entered into between us on the Trade Date specified below. This
letter constitutes a "Confirmation" as referred to in the Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA Definitions and the
1998 Supplement to the 1991 ISDA Definitions (as published by the International
Swap Dealers Association, Inc.) are incorporated into this Confirmation. In the
event of any inconsistency between those definitions and provisions and this
Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to the
ISDA Master Agreement dated on or before [*] September 1999 as amended
and supplemented from time to time between you, us and Crusade
Management Limited (the Agreement). All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
2. Terms defined in the Trust Deed and the Supplementary Terms Notice
(each as defined in the Agreement) have the same meanings when used in
this Confirmation.
3. The terms of the particular Transaction to which this Confirmation
relates are as follows:
TRADE DATE : Pricing Date
EFFECTIVE DATE : Closing Date
TERMINATION DATE : Final Quarterly Payment Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention
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PARTY A
FLOATING AMOUNTS:
FLOATING RATE PAYER : Bankers Trust Corporation, New
York
("Party A")
PARTY A FLOATING AMOUNT : IA x FR x Actual/360, where:
IA is the aggregate
Invested Amount for
all Class A Notes as
at the first day of
the Interest Period
ending on but
excluding the relevant
Floating Rate Payer
Payment Date; and
FR is the Party A Floating Rate
Option plus the Party A Spread
Provided that, if on any Floating Rate Payer Payment Date, the Manager
determines, in accordance with Clause 5 of the Supplementary Terms Notice (as
specified in a notice from the Manager to Party A on the relevant Quarterly
Determination Date), that there are insufficient funds available for Party B to
pay the Party B Floating Amount in full, then the Party A Floating Amount
otherwise due on such Floating Rate Payer Payment Date shall be reduced by the
same proportion as the reduction in the A$ Class [A1] Interest Amount.
FLOATING RATE PAYER : Each Quarterly Payment Date up
PAYMENT DATES to and including the last
Quarterly Payment Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
PARTY A FLOATING RATE OPTION : USD-LIBOR-BBA
DESIGNATED MATURITY : 3 months (except for the initial
Calculation Period in which case
the Designated Maturity is [2
months])
PARTY A SPREAD : The Margin for Class [A1] Notes
FLOATING RATE DAY COUNT FRACTION : Actual/360
PERIOD END DATES : Each Quarterly Payment Date
RESET DATES : The first day of each Interest
Period
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Subject to adjustment in accordance with the Modified Following
Business Day Convention.
BUSINESS DAYS : Sydney, London, New York
PARTY B
FLOATING AMOUNTS:
FLOATING RATE PAYER : National Mutual Trustees Limited
as Trustee of Crusade Global
Trust No. 1 of 1999 ("Party B")
PARTY B FLOATING AMOUNT : The A$ Class [A1] A Interest
Amount
Provided that, if on any Floating Rate Payer Payment Date, the Manager
determines, in accordance with Clause 5 of the Supplementary Terms Notice (as
specified in a notice from the Manager to Party B on the immediately preceding
Quarterly Determination Date), that there are insufficient funds available for
Party B to pay the Party B Floating Amount in full, then the Party B Floating
Amount payable on such Floating Rate Payer Payment Date shall be an amount equal
to the lesser AUD amount specified in such notice.
FLOATING RATE PAYER : Each Quarterly Payment Date up
PAYMENT DATES to and including the last
Quarterly Payment Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
PARTY B FLOATING RATE OPTION : AUD-BBR-BBSW (based on the
average rate for the Reset Date
and the 2 immediately preceding
Business Days)
DESIGNATED MATURITY : 90 days (except for the initial
Calculation Period in which case
the Designated Maturity is [60]
days)
PARTY B SPREAD : [*]% for all Calculation
Periods.
FLOATING RATE DAY COUNT FRACTION : Actual/365 (fixed)
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PERIOD END DATES : Each Quarterly Payment Date
RESET DATES : The first day of each Interest
Period
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
BUSINESS DAYS : Sydney
INITIAL EXCHANGE:
INITIAL EXCHANGE DATE : Closing Date
Subject to adjustment in accordance with the Modified Following
Business Day Convention.
PARTY A : An amount in AUD equal to the
INITIAL EXCHANGE AMOUNT aggregate Initial Invested
Amounts for all Class [A1]
Notes on the Closing Date
divided by the exchange rate of
USD [*] (AUD [*])
PARTY B : The aggregate Initial Invested
INITIAL EXCHANGE AMOUNT Amounts for all Class [A1] Notes
on the Closing Date (USD [*])
INSTALMENT EXCHANGE:
INSTALMENT EXCHANGE DATE : Each Quarterly Payment Date
PARTY A INSTALMENT EXCHANGE AMOUNT : An amount in USD equal to the
USD amounts paid to Party A,
pursuant to clauses 5.4(c)(viii)
and 5.2(a)(ii)(A) of the
Supplementary Terms Notice, paid
on the relevant Instalment
Exchange Date divided by the
exchange rate of USD [*]
PARTY B INSTALMENT EXCHANGE AMOUNT : The AUD amounts due to Party A,
pursuant to clauses 5.4(c)(viii)
and 5.2(a)(ii)(A) of the
Supplementary
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Terms Notice, paid on the
relevant Instalment Exchange
Date divided by the exchange
rate of USD [*]
PARTY B INSTALMENT EXCHANGE AMOUNT : The AUD amounts due to Party A,
pursuant to clauses 5.4(c)(viii)
and 5.2(a)(ii)(A) of the
Supplementary Terms Notice, paid
on the relevant Instalment
Exchange Date.
FINAL EXCHANGE : NONE
CALCULATION AGENT : Party A
ACCOUNT DETAILS:
Payments to Bankers Trust Corporation, New York
Account Name: Bankers Trust Corporation, New York
Account Number: [*]
Account Held at: [*]
BSB Number: [*]
Payments to National Mutual Trustees Limited as trustee of Crusade
Global Trust No. 1 of 1999
Currency : USD
Pay to : [*]
Favour of : [*]
Account no. : [*]
For credit to : [*]
Account no. : [*]
Attention: : [*]
Currency : AUD
To: : St ▇▇▇▇▇▇ Bank Limited
▇▇▇▇▇ ▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇
Swift Code : [*]
Sort Code : [*]
BSB: : [*]
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Page 5
OFFICES: : The Office of Party A is:
Bankers Trust Corporation, New
York [*]
: The Office of Party B is:
c/- Crusade Management Limited
▇▇▇▇▇ ▇▇
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇, ▇▇▇▇
This message will be the only form of Confirmation dispatched by us. Please
execute and return it to us by facsimile immediately, and send a hard copy of
the original to us by courier.
Yours faithfully,
for and on behalf of
BANKERS TRUST CORPORATION, NEW YORK
By: By:
---------------------------- --------------------------
Name: Name:
Title: Title:
Date: Date:
Confirmed as of the date first written
NATIONAL MUTUAL TRUSTEES LIMITED AS TRUSTEE OF
CRUSADE GLOBAL TRUST NO. 1 OF 1999
By: By:
---------------------------- --------------------------
Name: Name:
Title: Title:
Date: Date:
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Page 6