ISDAâ International Swap Dealers Association, Inc. MASTER AGREEMENT dated as of May 30, 2006
EXHIBIT
99.3
(Multicurrency-Cross
Border)
ISDAâ
International
Swap Dealers Association, Inc.
MASTER
AGREEMENT
dated
as
of May 30, 2006
|
▇▇▇▇▇▇
BROTHERS
SPECIAL
FINANCING INC.
|
THE
BANK OF NEW YORK, not in its individual or corporate capacity but
solely
as Swap Contract Administrator for CWABS
Asset-Backed Certificates Trust 2006-BC2, Asset-Backed Certificates,
Series 2006-BC2,,
pursuant to a Swap Contract Administration
Agreement
|
have
entered and/or anticipate entering into one or more transactions (each a
“Transaction”) that are or will be governed by this Master Agreement, which
includes the schedule (the “Schedule”), and the documents and other confirming
evidence (each a “Confirmation”) exchanged between the parties confirming those
Transactions.
Accordingly,
the parties agree as follows: —
1. Interpretation
(a) Definitions.
The
terms
defined in Section 14 and in the Schedule will have the meanings therein
specified for the purpose of this Master Agreement.
(b) Inconsistency.
In
the
event of any inconsistency between the provisions of the Schedule and the other
provisions of this Master Agreement, the Schedule will prevail. In the event
of
any inconsistency between the provisions of any Confirmation and this Master
Agreement (including the Schedule), such Confirmation will prevail for the
purpose of the relevant Transaction.
(c) Single
Agreement. All
Transactions are entered into in reliance on the fact that this Master Agreement
and all Confirmations form a single agreement between the parties (collectively
referred to as this “Agreement”), and the parties would not otherwise enter into
any Transactions.
2. Obligations
(a) General
Conditions.
(i) Each
party will make each payment or delivery specified in each Confirmation to
be
made by it, subject to the other provisions of this Agreement.
(ii) Payments
under this Agreement will be made on the due date for value on that date in
the
place of the account specified in the relevant Confirmation or otherwise
pursuant to this Agreement, in freely transferable funds and in the manner
customary for payments in the required currency. Where settlement is by delivery
(that is, other than by payment), such delivery will be made for receipt on
the
due date in the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each
obligation of each party under Section 2(a)(i) is subject to (1) the condition
precedent that no Event of Default or Potential Event of Default with respect
to
the other party has occurred and is continuing, (2) the condition precedent
that
no Early Termination Date in respect of the relevant Transaction has occurred
or
been effectively designated and (3) each other applicable condition precedent
specified in this Agreement.
(b) Change
of Account.
Either
party may change its account for receiving a payment or delivery by giving
notice to the other party at least five Local Business Days prior to the
scheduled date for the payment or delivery to which such change applies unless
such other party gives timely notice of a reasonable objection to such change.
(c) Netting.
If
on any
date amounts would otherwise be payable:—
(i) in
the
same currency; and
(ii) in
respect of the same Transaction,
by
each
party to the other, then, on such date, each party’s obligation to make payment
of any such amount will be automatically satisfied and discharged and, if the
aggregate amount that would otherwise have been payable by one party exceeds
the
aggregate amount that would otherwise have been payable by the other party,
replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.
The
parties may elect in respect of two or more Transactions that a net amount
will
be determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts
are
payable in respect of the same Transaction. The election may be made in the
Schedule or a Confirmation by specifying that subparagraph (ii) above will
not
apply to the Transactions identified as being subject to the election, together
with the starting date (in which case subparagraph (ii) above will not, or
will
cease to, apply to such Transactions from such date). This election may be
made
separately for different groups of Transactions and will apply separately to
each pairing of Offices through which the parties make and receive payments
or
deliveries.
(d) Deduction
or Withholding for Tax.
(i) Gross-Up.
All
payments under this Agreement will be made without any deduction or withholding
for or on account of any Tax unless such deduction or withholding is required
by
any applicable law, as modified by the practice of any relevant governmental
revenue authority, then in effect. If a party is so required to deduct or
withhold, then that party (“X”) will:—
(1) promptly
notify the other party (“Y”) of such requirement;
(2) pay
to
the relevant authorities the full amount required to be deducted or withheld
(including the full amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly
forward to Y an
official receipt (or a certified copy), or other documentation reasonably
acceptable to Y, evidencing such payment to such authorities; and
(4) if
such
Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which
Y is
otherwise entitled under this Agreement, such additional amount as is necessary
to ensure that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount
Y would have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:—
(A) the
failure by Y to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d); or
(B) the
failure of a representation made by Y pursuant
to Section 3(f) to
be
accurate and true unless such failure would not have occurred but for (I) any
action taken by a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.
(ii) Liability.
If: —
(1) X
is
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction or withholding in respect
of which X would not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X
does
not so deduct or withhold; and
(3) a
liability resulting from such Tax is assessed directly against X,
then,
except to the extent Y has satisfied or then satisfies the liability resulting
from such Tax, Y will promptly pay to X the amount of such liability (including
any related liability for interest, but including any related liability for
penalties only if Y has
failed to comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default
Interest; Other Amounts. Prior
to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party that defaults in the performance of any
payment obligation will, to the extent permitted by law and subject to Section
6(c), be required to pay interest (before as well as after judgment) on the
overdue amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to
(but excluding) the date of actual payment, at the Default Rate. Such interest
will be calculated on the basis of daily compounding and the actual number
of
days elapsed. If, prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party defaults in
the
performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each
party represents to the other party (which representations will be deemed to
be
repeated by each party on each date on which a Transaction is entered into
and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:—
(a) Basic
Representations.
(i) Status.
It
is
duly organized and validly existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such laws, in good
standing;
(ii) Powers.
It
has
the power to execute this Agreement and any other documentation relating to
this
Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and any
obligations it has under any Credit Support Document to which it is a party
and
has taken all necessary action to authorise such execution, delivery and
performance;
(iii) No
Violation or Conflict. Such
execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order
or
judgment of any court or other agency of government applicable to it or any
of
its assets or any contractual restriction binding on or affecting it or any
of
its assets;
(iv) Consents.
All
governmental and other consents that are required to have been obtained by
it
with respect to this Agreement or any Credit Support Document to which it is
a
party have been obtained and are in full force and effect and all conditions
of
any such consents have been complied with; and
(v) Obligations
Binding. Its
obligations under this Agreement and any Credit Support Document to which it
is
a party constitute its legal, valid and binding obligations, enforceable in
accordance with their respective terms (subject to applicable bankruptcy,
reorganisation, insolvency, moratorium or similar laws affecting creditors’
rights generally and subject, as to enforceability, to equitable principles
of
general application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence
of Certain Events. No
Event
of Default or Potential Event of Default or, to its knowledge, Termination
Event
with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its
obligations under this Agreement or any Credit Support Document to which it
is a
party.
(c) Absence
of Litigation. There
is
not pending or, to its knowledge, threatened against it or any of its Affiliates
any action, suit or proceeding at law or in equity or before any court,
tribunal, governmental body, agency or official or any arbitrator that is likely
to affect the legality, validity or enforceability against it of this Agreement
or any Credit Support Document to which it is a party or its ability to perform
its obligations under this Agreement or such Credit Support
Document.
(d) Accuracy
of Specified Information. All
applicable information that is furnished in writing by or on behalf of it to
the
other party and is identified for the purpose of this Section 3(d) in the
Schedule is, as of the date of the information, true, accurate and complete
in
every material respect.
(e) Payer
Tax Representation. Each
representation specified in the Schedule as being made by it for the purpose
of
this Section 3(e) is accurate and true.
(f) Payee
Tax Representations. Each
representation specified in the Schedule as being made by it for the purpose
of
this Section 3(f) is accurate and true.
4. Agreements
Each
party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document to which
it
is a party:—
(a) Furnish
Specified Information. It
will
deliver to the other party or, in certain cases under subparagraph (iii) below,
to such government or taxing authority as the other party reasonably directs:—
(i) any
forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;
(ii) any
other
documents specified in the Schedule or any Confirmation; and
(iii) upon
reasonable demand by such other party, any form or document that may be required
or reasonably requested in writing in order to allow such other party or its
Credit Support Provider to make a payment under this Agreement or any applicable
Credit Support Document without any deduction or withholding for or on account
of any Tax or with such deduction or withholding at a reduced rate (so long
as
the completion, execution or submission of such form or document would not
materially prejudice the legal or commercial position of the party in receipt
of
such demand), with any such form or document to be accurate and completed in
a
manner reasonably satisfactory to such other party and to be executed and to
be
delivered with any reasonably required certification,
in
each
case by the date specified in the Schedule or such Confirmation or, if none
is
specified, as soon as reasonably practicable.
(b) Maintain
Authorizations. 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, organized, 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 (l) a default, event of default or other similar condition
or
event (however described) in respect of such party, any Credit Support Provider
of such party or any applicable Specified Entity of such party under one or
more
agreements or instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has resulted
in
such Specified Indebtedness becoming, or becoming capable at such time of being
declared, due and payable under such agreements or instruments, before it would
otherwise have been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or collectively) in
making one or more payments on the due date thereof in an aggregate amount
of
not less than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or grace
period);
(vii) Bankruptcy.
The
party, any Credit Support Provider of such party or any applicable Specified
Entity of such party: —
(1) is
dissolved (other than pursuant to a consolidation, amalgamation or merger);
(2)
becomes insolvent or is unable to pay its debts or fails or admits in writing
its inability generally to pay its debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a judgment
of
insolvency or bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors’ rights, or a petition is presented
for its winding-up or liquidation, and, in the case of any such proceeding
or
petition instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an order
for
relief or the making of an order for its winding-up or liquidation or (B) is
not
dismissed, discharged, stayed or restrained in each case within 30 days of
the
institution or presentation thereof (5) has
a
resolution passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for it
or
for all or substantially all its assets; (7) has a secured party take possession
of all or substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against
all
or substantially all its assets and such secured party maintains possession,
or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 30 days thereafter; (8) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger
Without Assumption.
The
party or any Credit Support Provider of such party consolidates or amalgamates
with, or merges with or into, or transfers all or substantially all its assets
to, another entity and, at the time of such consolidation, amalgamation, merger
or transfer: —
(1) the
resulting, surviving or transferee entity fails to assume all the obligations
of
such party or such Credit Support Provider under this Agreement or any Credit
Support Document to which it or its predecessor was a party by operation of
law
or pursuant to an agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the
benefits of any Credit Support Document fail to extend (without the consent
of
the other party) to the performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) Termination
Events.
The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any
event specified below constitutes an illegality if the event is specified in
(i)
below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon
Merger if the event is specified in (iii) below, and, if specified to be
applicable, a Credit Event Upon Merger if the event is specified pursuant to
(iv) below or an Additional Termination Event if the event is specified pursuant
to (v) below:—
(i) Illegality.
Due to
the adoption of, or any change in, any applicable law after the date on which
a
Transaction is entered into, or due to the promulgation of, or any change in,
the interpretation by any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes unlawful (other
than as a result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): —
(1) to
perform any absolute or contingent obligation to make a payment or delivery
or
to receive a payment or delivery in respect of such Transaction or to comply
with any other material provision of this Agreement relating to such
Transaction; or
(2) to
perform, or for any Credit Support Provider of such party to perform, any
contingent or other obligation which the party (or such Credit Support Provider)
has under any Credit Support Document relating to such Transaction;
(ii) Tax
Event.
Due to
(x) any action taken by a taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with respect to a party
to this Agreement) or (y) a Change in Tax Law, the party (which will be the
Affected Party) will, or there is a substantial likelihood that it will, on
the
next succeeding Scheduled Payment Date (1) be required to pay to the other
party
an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2)
receive a payment from which an amount is required to be deducted or withheld
for or on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect
of
such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A)
or (B));
(iii) Tax
Event Upon Merger.
The
party (the “Burdened Party”) on the next succeeding Scheduled Payment Date will
either (1) be required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under
Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
has been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional amount
(other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a
result of a party consolidating or amalgamating with, or merging with or into,
or transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit
Event Upon Merger.
If
“Credit Event Upon Merger” is specified in the Schedule as applying to the
party, such party (“X”), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or merges with or into,
or transfers all or substantially all its assets to, another entity and such
action does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is materially
weaker than that of X, such Credit Support Provider or such Specified Entity,
as
the case may be, immediately prior to such action (and, in such event, X or
its
successor or transferee, as appropriate, will be the Affected Party); or
(v) Additional
Termination Event.
If any
“Additional Termination Event” is specified in the Schedule or any Confirmation
as applying, the occurrence of such event (and, in such event, the Affected
Party or Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event
of Default and Illegality.
If an
event or circumstance which would otherwise constitute or give rise to an Event
of Default also constitutes an Illegality, it will be treated as an Illegality
and will not constitute an Event of Default.
6. Early
Termination
(a) Right
to Terminate Following Event of Default.
If at
any time an Event of Default with respect to a party (the “Defaulting Party”)
has occurred and is then continuing, the other party (the “Non-defaulting
Party”) may, by not more than 20 days notice to the Defaulting Party specifying
the relevant Event of Default, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all outstanding
Transactions. If, however, “Automatic Early Termination” is specified in the
Schedule as applying to a party, then an Early Termination Date in respect
of
all outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section 5(a)(vii)(1),
(3), (5), (6) or, to the extent analogous thereto, (8), and as of the time
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent
analogous thereto, (8).
(b) Right
to Terminate Following Termination Event.
(i) Notice.
If
a
Termination Event occurs, an Affected Party will, promptly upon becoming aware
of it, notify the other party, specifying the nature of that Termination Event
and each Affected Transaction and will also give such other information about
that Termination Event as the other party may reasonably require.
(ii) Transfer
to Avoid Termination Event.
If
either an Illegality under Section 5(b)(i)(l) or a Tax Event occurs and there
is
only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss, excluding
immaterial, incidental expenses) to transfer within 20 days after it gives
notice under Section 6(b)(i) all its rights and obligations under this Agreement
in respect of the Affected Transactions to another of its Offices or Affiliates
so that such Termination Event ceases to exist.
If
the
Affected Party is not able to make such a transfer it will give notice to the
other party to that effect within such 20 day period, whereupon the other party
may effect such a transfer within 30 days after the notice is given under
Section 6(b)(i).
Any
such
transfer by a party under this Section 6(b)(ii) will be subject to and
conditional upon the prior written consent of the other party, which consent
will not be withheld if such other party’s policies in effect at such time would
permit it to enter into transactions with the transferee on the terms proposed.
(iii) Two
Affected Parties.
If an
illegality under Section 5(b)(i)(l) or a Tax Event occurs and there are two
Affected Parties, each party will use all reasonable efforts to reach agreement
within 30 days after notice thereof is given under Section 6(b)(i) on action
to
avoid that Termination Event.
(iv) Right
to Terminate. If:
—
(1) a
transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as
the
case may be, has not been effected with respect to all Affected Transactions
within 30 days after an Affected Party gives notice under Section 6(b)(i);
or
(2) an
Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional
Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened
Party is not the Affected Party,
either
party in the case of an Illegality, the Burdened Party in the case of a Tax
Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon Merger
or an Additional Termination Event if there is only one Affected Party may,
by
not more than 20 days notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not earlier than the
day
such notice is effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect
of Designation.
(i) If
notice
designating an Early Termination Date is given under Section 6(a) or (b), the
Early Termination Date will occur on the date so designated, whether or not
the
relevant Event of Default or Termination Event is then continuing.
(ii) Upon
the
occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 2(e) in respect of the
Terminated Transactions will be required to be made, but without prejudice
to
the other provisions of this Agreement. The amount, if any, payable in respect
of an Early Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement.
On or as
soon as reasonably practicable following the occurrence of an Early Termination
Date, each party will make the calculations on its part, if any, contemplated
by
Section 6(e) and will provide to the other party a statement (1) showing, in
reasonable detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving details of
the
relevant account to which any amount payable to it is to be paid. In the absence
of written confirmation from the source of a quotation obtained in determining
a
Market Quotation, the records of the party obtaining such quotation will be
conclusive evidence of the existence and accuracy of such quotation.
(ii) Payment
Date.
An
amount calculated as being due in respect of any Early Termination Date under
Section 6(e) will be payable on the day that notice of the amount payable is
effective (in the case of an Early Termination Date which is designated or
occurs as a result of an Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable is effective
(in the case of an Early Termination Date which is designated as a result of
a
Termination Event). Such amount will be paid together with (to the extent
permitted under applicable law) interest thereon (before as well as after
judgment) in the Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid, at the
Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.
(e) Payments
on Early Termination.
If an
Early Termination Date occurs, the following provisions shall apply based on
the
parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment method, either the “First Method” or the
“Second Method”. If the parties fail to designate a payment measure or payment
method in the Schedule, it will be deemed that “Market Quotation” or the “Second
Method”, as the case may be, shall apply. The amount, if any, payable in respect
of an Early Termination Date and determined pursuant to this Section will be
subject to any Set-off.
(i) Events
of Default. If
the
Early Termination Date results from an Event of Default: —
(1) First
Method and Market Quotation. If
the
First Method and Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect of the
Terminated Transactions and the Termination Currency Equivalent of the Unpaid
Amounts owing to the Non-defaulting Party over (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party.
(2) First
Method and Loss. If
the
First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party’s Loss in respect of this
Agreement.
(3) Second
Method and Market Quotation.
If the
Second Method and Market Quotation apply, an amount will be payable equal to
(A)
the sum of the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that
amount is a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting Party
will
pay the absolute value of that amount to the Defaulting Party.
(4) Second
Method and Loss. If
the
Second Method and Loss apply, an amount will be payable equal to the
Non-defaulting Party’s Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the Non-defaulting Party;
if it is a negative number, the Non-defaulting Party will pay the absolute
value
of that amount to the Defaulting Party.
(ii) Termination
Events.
If the
Early Termination Date results from a Termination Event: —
(1) One
Affected Party.
If there
is one Affected Party, the amount payable will be determined in accordance
with
Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if
Loss
applies, except that, in either case, references to the Defaulting Party and
to
the Non-defaulting Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively, and, if Loss
applies and fewer than all the Transactions are being terminated, Loss shall
be
calculated in respect of all Terminated Transactions.
(2) Two
Affected Parties.
If there
are two Affected Parties: —
(A) if
Market
Quotation applies, each party will determine a Settlement Amount in respect
of
the Terminated Transactions, and an amount will be payable equal to (I) the
sum
of (a) one-half of the difference between the Settlement Amount of the party
with the higher Settlement Amount (“X”) and the Settlement Amount of the party
with the lower Settlement Amount (“Y”) and (b) the Termination Currency
Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency
Equivalent of the Unpaid Amounts owing to Y; and
(B) if
Loss
applies, each party will determine its Loss in respect of this Agreement (or,
if
fewer than all the Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal to one-half of
the
difference between the Loss of the party with the higher Loss (“X”) and the Loss
of the party with the lower Loss (“Y”).
If
the
amount payable is a positive number, Y will
pay
it to X; if it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment
for Bankruptcy.
In
circumstances where an Early Termination Date occurs because “Automatic Early
Termination” applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate and
permitted by law to reflect any payments or deliveries made by one party to
the
other under this Agreement (and retained by such other party) during the period
from the relevant Early Termination Date to the date for payment determined
under Section 6(d)(ii).
(iv) Pre-Estimate. The
parties agree that if Market Quotation applies an amount recoverable under
this
Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount
is payable for the loss of bargain and the loss of protection against future
risks and except as otherwise provided in this Agreement neither party will
be
entitled to recover any additional damages as a consequence of such
losses.
7. Transfer
Subject
to Section 6(b)(ii), neither this Agreement nor any interest or obligation
in or
under this Agreement may be transferred (whether by way of security or
otherwise) by either party without the prior written consent of the other party,
except that: —
(a) a
party
may make such a transfer of this Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially
all its assets to, another entity (but without prejudice to any other right
or
remedy under this Agreement); and
(b) a
party
may make such a transfer of all or any part of its interest in any amount
payable to it from a Defaulting Party under Section 6(e).
Any
purported transfer that is not in compliance with this Section will be void.
8. Contractual
Currency
(a) Payment
in the Contractual Currency.
Each
payment under this Agreement will be made in the relevant currency specified
in
this Agreement for that payment (the “Contractual Currency”). To the extent
permitted by applicable law, any obligation to make payments under this
Agreement in the Contractual Currency will not be discharged or satisfied by
any
tender in any currency other than the Contractual Currency, except to the extent
such tender results in the actual receipt by the party to which payment is
owed,
acting in a reasonable manner and in good faith in converting the currency
so
tendered into the Contractual Currency, of the full amount in the Contractual
Currency of all amounts payable in respect of this Agreement. If for any reason
the amount in the Contractual Currency so received falls short of the amount
in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in
the
Contractual Currency so received exceeds the amount in the Contractual Currency
payable in respect of this Agreement, the party receiving the payment will
refund promptly the amount of such excess.
(b) Judgments.
To the
extent permitted by applicable law, if any judgment or order expressed in a
currency other than the Contractual Currency is rendered (i) for the payment
of
any amount owing in respect of this Agreement, (ii) for the payment of any
amount relating to any early termination in respect of this Agreement or (iii)
in respect of a judgment or order of another court for the payment of any amount
described in (i) or (ii) above, the party seeking recovery, after recovery
in
full of the aggregate amount to which such party is entitled pursuant to the
judgment or order, will be entitled to receive immediately from the other party
the amount of any shortfall of the Contractual Currency received by such party
as a consequence of sums paid in such other currency and will refund promptly
to
the other party any excess of the Contractual Currency received by such party
as
a consequence of sums paid in such other currency if such shortfall or such
excess arises or results from any variation between the rate of exchange at
which the Contractual Currency is converted into the currency of the judgment
or
order for the purposes of such judgment or order and the rate of exchange at
which such party is able, acting in a reasonable manner and in good faith in
converting the currency received into the Contractual Currency, to purchase
the
Contractual Currency with the amount of the currency of the judgment or order
actually received by such party. The term “rate of exchange” includes, without
limitation, any premiums and costs of exchange payable in connection with the
purchase of or conversion into the Contractual Currency.
(c) Separate
Indemnities.
To the
extent permitted by applicable law, these indemnities constitute separate and
independent obligations from the other obligations in this Agreement, will
be
enforceable as separate and independent causes of action, will apply
notwithstanding any indulgence granted by the party to which any payment is
owed
and will not be affected by judgment being obtained or claim or proof being
made
for any other sums payable in respect of this Agreement.
(d) Evidence
of Loss.
For the
purpose of this Section 8, it will be sufficient for a party to demonstrate
that
it would have suffered a loss had an actual exchange or purchase been
made.
9. Miscellaneous
(a) Entire
Agreement. This
Agreement constitutes the entire agreement and understanding of the parties
with
respect to its subject matter and supersedes all oral communication and prior
writings with respect thereto.
(b) Amendments.
No
amendment, modification or waiver in respect of this Agreement will be effective
unless in writing (including a writing evidenced by a facsimile transmission)
and executed by each of the parties or confirmed by an exchange of telexes
or
electronic messages on an electronic messaging system.
(c) Survival
of Obligations.
Without
prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties
under this Agreement will survive the termination of any Transaction.
(d) Remedies
Cumulative.
Except
as provided in this Agreement, the rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges provided by law.
(e) Counterparts
and Confirmations.
(i) This
Agreement (and each amendment, modification and waiver in respect of it) may
be
executed and delivered in counterparts (including by facsimile transmission),
each of which will be deemed an original.
(ii) The
parties intend that they are legally bound by the terms of each Transaction
from
the moment they agree to those terms (whether orally or otherwise). A
Confirmation shall he entered into as soon as practicable and may he executed
and delivered in counterparts (including by facsimile transmission) or be
created by an exchange of telexes or by an exchange of electronic messages
on an
electronic messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The parties will
specify therein or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.
(f) No
Waiver of Rights.
A
failure or delay in exercising any right, power or privilege in respect of
this
Agreement will not be presumed to operate as a waiver, and a single or partial
exercise of any right, power or privilege will not be presumed to preclude
any
subsequent or further exercise, of that right, power or privilege or the
exercise of any other right, power or privilege.
(g) Headings.
The
headings used in this Agreement are for convenience of reference only and are
not to affect the construction of or to be taken into consideration in
interpreting this Agreement.
10. Offices;
Multibranch Parties
(a) If
Section 10(a) is specified in the Schedule as applying, each party that enters
into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through
its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither
party may change the Office through which it makes and receives payments or
deliveries for the purpose of a Transaction without the prior written consent
of
the other party.
(c) If
a
party is specified as a Multibranch Party in the Schedule, such Multibranch
Party may make and receive payments or deliveries under any Transaction through
any Office listed in the Schedule, and the Office through which it makes and
receives payments or deliveries with respect to a Transaction will be specified
in the relevant Confirmation.
11. Expenses
A
Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees
and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
to
which the Defaulting Party is a party or by reason of the early termination
of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness.
Any
notice or other communication in respect of this Agreement may be given in
any
manner set forth below (except that a notice or other communication under
Section 5 or 6 may not be given by facsimile transmission or electronic
messaging system) to the address or number or in accordance with the electronic
messaging system details provided (see the Schedule) and will be deemed
effective as indicated:—
(i) if
in
writing and delivered in person or by courier, on the date it is delivered;
(ii) if
sent
by telex, on the date the recipient’s answerback is received;
(iii) if
sent
by facsimile transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form (it being agreed that
the
burden of proving receipt will be on the sender and will not be met by a
transmission report generated by the sender’s facsimile machine);
(iv) if
sent
by certified or registered mail (airmail, if overseas) or the equivalent (return
receipt requested), on the date that mail is delivered or its delivery is
attempted; or
(v) if
sent
by electronic messaging system, on the date that electronic message is received,
unless
the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered
(or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change
of Addresses.
Either
party may by notice to the other change the address, telex or facsimile number
or electronic messaging system details at which notices or other communications
are to be given to it.
13. Governing
Law and Jurisdiction
(a) Governing
Law. This
Agreement will be governed by and construed in accordance with the law specified
in the Schedule.
(b) Jurisdiction.
With
respect to any suit, action or proceedings relating to this Agreement
(“Proceedings”), each party irrevocably:—
(i) submits
to the jurisdiction of the English courts, if this Agreement is expressed to
be
governed by English law, or to the non-exclusive jurisdiction of the courts
of
the State of New York and the United States District Court located in the
Borough of Manhattan in New York City, if this Agreement is expressed to be
governed by the laws of the State of New York; and
(ii) waives
any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have any
jurisdiction over such party.
Nothing
in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English
law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service
of Process. Each
party irrevocably appoints the Process Agent (if any) specified opposite its
name in the Schedule to receive, for it and on its behalf, service of process
in
any Proceedings. If for any reason any party’s Process Agent is unable to act as
such, such party will promptly notify the other party and within 30 days appoint
a substitute process agent acceptable to the other party. The parties
irrevocably consent to service of process given in the manner provided for
notices in Section 12. Nothing in this Agreement will affect the right of either
party to serve process in any other manner permitted by law.
(d) Waiver
of Immunities.
Each
party irrevocably waives, to the fullest extent permitted by applicable law,
with respect to itself and its revenues and assets (irrespective of their use
or
intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way
of
injunction, order for specific performance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v) execution
or
enforcement of any judgment to which it or its revenues or assets might
otherwise be entitled in any Proceedings in the courts of any jurisdiction
and
irrevocably agrees, to the extent permitted by applicable law, that it will
not
claim any such immunity in any Proceedings.
14. Definitions
As
used
in this Agreement:—
“Additional
Termination Event”
has the
meaning specified in Section 5(b).
“Affected
Party”
has the
meaning specified in Section 5(b).
“Affected
Transactions”
means
(a) with respect to any Termination Event consisting of an Illegality, Tax
Event
or Tax Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all
Transactions.
“Affiliate”
means,
subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the person, any entity that controls, directly or
indirectly, the person or any entity directly or indirectly under common control
with the person. For this purpose, “control” of any entity or person means
ownership of a majority of the voting power of the entity or person.
“Applicable
Rate”
means:—
(a) in
respect of obligations payable or deliverable (or which would have been but
for
Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in
respect of an obligation to pay an amount under Section 6(e) of either party
from and after the date (determined in accordance with Section 6(d)(ii)) on
which that amount is payable, the Default Rate;
(c) in
respect of all other obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate;
and
(d) in
all
other cases, the Termination Rate.
“Burdened
Party” has
the
meaning specified in Section 5(b).
“Change
in Tax Law”
means
the
enactment, promulgation, execution or ratification of, or any change in or
amendment to, any law (or in the application or official interpretation of
any
law) that occurs on or after the date on which the relevant Transaction is
entered into.
“consent” includes
a consent, approval, action, authorization, exemption, notice, filing,
registration or exchange control consent.
“Credit
Event Upon Merger” has
the
meaning specified in Section 5(b).
“Credit
Support Document” means
any
agreement or instrument that is specified as such in this Agreement.
“Credit
Support Provider” has
the
meaning specified in the Schedule.
“Default
Rate” means
a
rate per annum equal to the cost (without proof or evidence of any actual cost)
to the relevant payee (as certified by it) if it were to fund or of funding
the
relevant amount plus 1% per annum.
“Defaulting
Party” has
the
meaning specified in Section 6(a).
“Early
Termination Date” means
the
date determined in accordance with Section 6(a) or 6(b)(iv).
“Event
of Default” has
the
meaning specified in Section 5(a) and,
if
applicable, in the Schedule.
“Illegality”
has
the
meaning specified in Section 5(b).
“Indemnifiable
Tax” means
any
Tax other than a Tax that would not be imposed in respect of a payment under
this Agreement but for a present or former connection between the jurisdiction
of the government or taxation authority imposing such Tax and the recipient
of
such payment or a person related to such recipient (including, without
limitation, a connection arising from such recipient or related person being
or
having been a citizen or resident of such jurisdiction, or being or having
been
organised, present or engaged in a trade or business in such jurisdiction,
or
having or having had a permanent establishment or fixed place of business in
such jurisdiction, but excluding a connection arising solely from such recipient
or related person having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or a Credit Support
Document).
“law”
includes
any treaty, law, rule or regulation (as modified, in the case of tax matters,
by
the practice of any relevant governmental revenue authority) and “lawful”
and
“unlawful”
will
be
construed accordingly.
“Local
Business Day” means,
subject to the Schedule, a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits) (a)
in
relation to any obligation under Section 2(a)(i), in the place(s) specified
in
the relevant Confirmation or, if not so specified, as otherwise agreed by the
parties in writing or determined pursuant to provisions contained, or
incorporated by reference, in this Agreement, (b) in relation to any other
payment, in the place where the relevant account is located and, if different,
in the principal financial centre, if any, of the currency of such payment,
(c)
in relation to any notice or other communication, including notice contemplated
under Section 5(a)(i), in the city specified in the address for notice provided
by the recipient and, in the case of a notice contemplated by Section 2(b),
in
the place where the relevant new account is to be located and (d) in relation
to
Section 5(a)(v)(2), in
the
relevant locations for performance with respect to such Specified Transaction.
“Loss”
means,
with respect to this Agreement or one or more Terminated Transactions, as the
case may be, and a party, the Termination Currency Equivalent of an amount
that
party reasonably determines in good faith to be its total losses and costs
(or
gain, in which case expressed as a negative number) in connection with this
Agreement or that Terminated Transaction or group of Terminated Transactions,
as
the case may be, including any loss of bargain, cost of funding or, at the
election of such party but without duplication, loss or cost incurred as a
result of its terminating, liquidating, obtaining or reestablishing any hedge
or
related trading position (or any gain resulting from any of them). Loss includes
losses and costs (or gains) in respect of any payment or delivery required
to
have been made (assuming satisfaction of each applicable condition precedent)
on
or before the relevant Early Termination Date and not made, except, so as to
avoid duplication, if Section 6(e)(i)(l) or (3) or 6(e)(ii)(2)(A) applies.
Loss
does not include a party’s legal fees and out-of-pocket expenses referred to
under Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the earliest
date thereafter as is reasonably practicable. A party may (but need not)
determine its Loss by reference to quotations of relevant rates or prices from
one or more leading dealers in the relevant markets.
“Market
Quotation” means,
with respect to one or more Terminated Transactions and a party making the
determination, an amount determined on the basis of quotations from Reference
Market-makers. Each quotation will be for an amount, if any, that would be
paid
to such party (expressed as a negative number) or by such party (expressed
as a
positive number) in consideration of an agreement between such party (taking
into account any existing Credit Support Document with respect to the
obligations of such party) and the quoting Reference Market-maker to enter
into
a transaction (the “Replacement Transaction”) that would have the effect of
preserving for such party the economic equivalent of any payment or delivery
(whether the underlying obligation was absolute or contingent and assuming
the
satisfaction of each applicable condition precedent) by the parties under
Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated
Transactions that would, but for the occurrence of the relevant Early
Termination Date, have been required after that date. For this purpose, Unpaid
Amounts in respect of the Terminated Transaction or group of Terminated
Transactions are to be excluded but, without limitation, any payment or delivery
that would, but for the relevant Early Termination Date, have been required
(assuming satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be subject
to such documentation as such party and the Reference Market-maker may, in
good
faith, agree. The party making the determination (or its agent) will request
each Reference Market-maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to different time zones)
on or as soon as reasonably practicable after the relevant Early Termination
Date. The day and time as of which those quotations are to be obtained will
be
selected in good faith by the party obliged to make a determination under
Section 6(e), and, if each party is so obliged, after consultation with the
other. If more than three quotations are provided, the Market Quotation will
be
the arithmetic mean of the quotations, without regard to the quotations having
the highest and lowest values. If exactly three such quotations are provided,
the Market Quotation will be the quotation remaining after disregarding the
highest and lowest quotations. For this purpose, if more than one quotation
has
the same highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed
that
the Market Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.
“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, organized, managed and controlled or considered to have its seat,
(b) where an Office through which the party is acting for purposes of this
Agreement is located, (c) in which the party executes this Agreement and (d)
in
relation to any payment, from or through which such payment is made.
“Scheduled
Payment Date”
means a
date on which a payment or delivery is to be made under Section 2(a)(i) with
respect to a Transaction.
“Set-off”
means
set-off, offset, combination of accounts, right of retention or withholding
or
similar right or requirement to which the payer of an amount under Section
6 is
entitled or subject (whether arising under this Agreement, another contract,
applicable law or otherwise) that is exercised by, or imposed on, such payer.
“Settlement
Amount” means,
with respect to a party and any Early Termination Date, the sum of; —
(a) the
Termination Currency Equivalent of the Market Quotations (whether positive
or
negative) for each Terminated Transaction or group of Terminated Transactions
for which a Market Quotation is determined; and
(b) such
party’s Loss (whether positive or negative and without reference to any Unpaid
Amounts) for each Terminated Transaction or group of Terminated Transactions
for
which a Market Quotation cannot be determined or would not (in the reasonable
belief of the party making the determination) produce a commercially reasonable
result.
“Specified
Entity”
has the
meanings specified in the Schedule.
“Specified
Indebtedness”
means,
subject to the Schedule, any obligation (whether present or future, contingent
or otherwise, as principal or surety or otherwise) in respect of borrowed money.
“Specified
Transaction”
means,
subject to the Schedule, (a) any transaction (including an agreement with
respect thereto) now existing or hereafter entered into between one party to
this Agreement (or any Credit Support Provider of such party or any applicable
Specified Entity of such party) and the other party to this Agreement (or any
Credit Support Provider of such other party or any applicable Specified Entity
of such other party) which is a rate swap transaction, basis swap, forward
rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any
of
these transactions), (b) any combination of these transactions and (c) any
other
transaction identified as a Specified Transaction in this Agreement or the
relevant confirmation.
“Stamp
Tax”
means
any stamp, registration, documentation or similar tax.
“Tax”
means
any present or future tax, levy, impost, duty, charge, assessment or fee of
any
nature (including interest, penalties and additions thereto) that is imposed
by
any government or other taxing authority in respect of any payment under this
Agreement other than a stamp, registration, documentation or similar tax.
“Tax
Event”
has the
meaning specified in Section 5(b).
“Tax
Event Upon Merger”
has the
meaning specified in Section 5(b).
“Terminated
Transactions”
means
with respect to any Early Termination Date (a) if resulting from a Termination
Event, all Affected Transactions and (b) if resulting from an Event of Default,
all Transactions (in either case) in effect immediately before the effectiveness
of the notice designating that Early Termination Date (or, if “Automatic Early
Termination” applies, immediately before that Early Termination Date).
“Termination
Currency”
has the
meaning specified in the Schedule.
“Termination
Currency Equivalent”
means,
in respect of any amount denominated in the Termination Currency, such
Termination Currency amount and, in respect of any amount denominated in a
currency other than the Termination Currency (the “Other Currency”), the amount
in the Termination Currency determined by the party making the relevant
determination as being required to purchase such amount of such Other Currency
as at the relevant Early Termination Date, or, if the relevant Market Quotation
or Loss (as the case may be), is determined as of a later date, that later
date,
with the Termination Currency at the rate equal to the spot exchange rate of
the
foreign exchange agent (selected as provided below) for the purchase of such
Other Currency with the Termination Currency at or about 11:00 a.m. (in the
city
in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later date.
The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party and
otherwise will be agreed by the parties.
“Termination
Event”
means an
Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be
applicable, a Credit Event Upon Merger or an Additional Termination Event.
“Termination
Rate”
means a
rate per annum equal to the arithmetic mean of the cost (without proof or
evidence of any actual cost) to each party (as certified by such party) if
it
were to fund or of funding such amounts.
“Unpaid
Amounts”
owing to
any party means, with respect to an Early Termination Date, the aggregate of
(a)
in respect of all Terminated Transactions, the amounts that became payable
(or
that would have become payable but for Section 2(a)(iii)) to such party under
Section 2(a)(i) on or prior to such Early Termination Date and which remain
unpaid as at such Early Termination Date and (b) in respect of each Terminated
Transaction, for each obligation under Section 2(a)(i) which was (or would
have
been but for Section 2(a)(iii)) required to be settled by delivery to such
party
on or prior to such Early Termination Date and which has not been so settled
as
at such Early Termination Date, an amount equal to the fair market value of
that
which was (or would have been) required to be delivered as of the originally
scheduled date for delivery, in each case together with (to the extent permitted
under applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been required
to have been paid or performed to (but excluding) such Early Termination Date,
at the Applicable Rate. Such amounts of interest will be calculated on the
basis
of daily compounding and the actual number of days elapsed. The fair market
value of any obligation referred to in clause (b) above shall be reasonably
determined by the party obliged to make the determination under Section 6(e)
or,
if each party is so obliged, it shall be the average of the Termination Currency
Equivalents of the fair market values reasonably determined by both parties.
IN
WITNESS WHEREOF the parties have executed this document on the respective dates
specified below with effect from the date specified on the first page of this
document.
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BROTHERS
SPECIAL
FINANCING INC.
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THE
BANK OF NEW YORK, not in its individual or corporate capacity but
solely
as Swap Contract Administrator for CWABS
Asset-Backed Certificates Trust 2006-BC2, Asset-Backed Certificates,
Series 2006-BC2pursuant
to a Swap Contract Administration Agreement
(A)
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(Name
of Party)
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(Name
of Party)
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/s/
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/s/
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Name:
▇▇▇▇ ▇▇▇▇▇▇▇
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Name:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title:
Vice President
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Title:
Assistant Vice President
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Date:
5/30/2006
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Date:
5/30/2006
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