Exhibit 10.4
ISDA Master Agreement, relating to the Class 5A-3 Floating Rate
Certificates, dated as of December 3, 1999 among Credit Suisse Financial
Products and Bank One, National Association, as grantor trustee, including the
Schedule to the Master Agreement, with attached Exhibits, and the Confirmation,
dated December 3, 1999, relating to the Master Agreement.
10.4
(Multicurrency--Cross Border)
ISDA(Registered)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of ___________________
_________________________________ and __________________________________________
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.
2 ISDA(Registered) 1992
(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 authorize 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, reorganization, 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)).
3 ISDA(Registered) 1992
(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 aspect.
(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
4 ISDA(Registered) 1992
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 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
5 ISDA(Registered) 1992
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):--
6 ISDA(Registered) 1992
(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.
7 ISDA(Registered) 1992
(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 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.
8 ISDA(Registered) 1992
(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:--
9 ISDA(Registered) 1992
(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
10 ISDA(Registered) 1992
(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.
11 ISDA(Registered) 1992
(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 organization 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,
12 ISDA(Registered) 1992
unless the date of 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).
13 ISDA(Registered) 1992
"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 organized, 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).
14 ISDA(Registered) 1992
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obligated 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).
15 ISDA(Registered) 1992
"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 meaning 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).
16 ISDA(Registered) 1992
"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.
----------------------------------- -----------------------------------
(Name of Party) (Name of Party)
By_________________________________ By_________________________________
Name: Name:
Title: Title:
Date: Date:
17 ISDA(Registered) 1992
Class 5 A-3
SCHEDULE
to the
Master Agreement
dated as of December 3, 1999
between
CREDIT SUISSE FINANCIAL PRODUCTS ("Party A"),
And
BANK ONE, NATIONAL ASSOCIATION, (the "Grantor Trustee")
acting as Grantor Trustee for
The Washington Mutual Bank, FA Series 1999-WM1 Grantor Trust ("Party B"), a
trust formed pursuant to a grantor trust agreement dated as of November 1, 1999
(as amended and supplemented from time to time, the "Grantor Trust Agreement"),
among Credit Suisse First Boston Mortgage Securities Corp., as depositor,
Washington Mutual Bank, FA, as Seller and Servicer, and the Grantor Trustee for
the benefit of the holders of the Class 5 A-3 Floating Rate Certificates.
Part 1. Termination Provisions
In this Agreement:
(a) "Specified Entity" shall not apply for purposes of this Agreement.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) The "Default under Specified Transaction" provisions of Section 5(a)(v),
the "Cross Default" provisions of Section 5(a)(vi), and the "Credit Event
Upon Merger" provisions of Section 5(b)(iv) will not apply to Party A and
will not apply to Party B.
(d) The "Automatic Early Termination" provisions of Section 6(a) will not
apply to Party A and will not apply to Party B.
(e) Payments on Early Termination. As provided in Section 4(i) of the
Confirmation.
(f) "Termination Currency" means United States Dollars ("USD").
(g) The "Default Interest" provisions of Section 2(e) will not apply for
purposes of this Agreement.
Part 2. Tax Representations.
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following
representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or on
account of any Tax from any payment to be made by it to the other
party under this Agreement. In making this representation, it may
rely on (i) the accuracy of any representation made by the other
party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4(a)(i)
and 4(a)(iii) of this Agreement; and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form of document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
(b) Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A makes the following representations:
"For the purpose of Section 3(f), Party A represents that it is
fully eligible for the benefits of the "Business Profits" or
"Industrial or Commercial Profits" provision, as the case may be,
and the "Interest" provision or the "Other Income" provision (if
any) of the Specified Treaty with respect to any payment described
in such provisions and received or to be received by it in
connection with this Agreement that is not effectively connected
with its conduct of a trade or business in the Specified
Jurisdiction and no such payment is attributable to a trade or
business carried on by it through a permanent establishment in the
Specified Jurisdiction.
Each payment received or to be received by Party A in connection
with this Agreement that is not eligible for the benefits of the
Specified Treaty will be effectively connected with its conduct of a
trade or business in the Specified Jurisdiction.
Specified Treaty means the Convention Between the United States of
America and the Government of the United Kingdom of Great Britain
and Northern Ireland for the Avoidance of Double Taxation and the
Prevention of Fiscal Evasion with Respect to Taxes on Income and
Capital Gain.
Specified Jurisdiction means the United States of America."
19
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 3(d), 4(a)(i) and (ii) of this Agreement, each
party agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
=========================================================================================================
Party required
to deliver Date by which Covered by Section
document Form/Document/Certificate to be delivered 3(d) Representation
-------- ------------------------- --------------- -------------------
---------------------------------------------------------------------------------------------------------
Party B Any form or document that may Promptly upon reasonable Yes
be reasonably requested, and demand by the other party.
that Party B is eligible to
provide, in order to allow the
requesting party to make a
payment without (or with
reduced) withholding Tax.
---------------------------------------------------------------------------------------------------------
Party A An accurate and complete Within 30 days of the Yes
signed copy of Internal execution and delivery of
Revenue Service Form 1001 and this Agreement, but in no
all other related forms event later than the date
(including any certificate of the first payment made
with respect thereto) as Party by Party B to Party A in
B may reasonably request, and connection with the
two accurate and completed Agreement.
signed copies of Internal
Revenue Service Form 4224, and
all other related forms
(including any certificate
with respect thereto) as Party
B may reasonably request.
=========================================================================================================
(b) Other documents to be delivered are:
=========================================================================================================
Party required to Date by which to be Covered by
deliver document Form/Document/Certificate delivered Section 3(d)
---------------- ------------------------- --------- ------------
---------------------------------------------------------------------------------------------------------
Party A Opinions of counsel for Party Upon execution of this No
A substantially in the form of Agreement
Exhibit A to this Schedule
---------------------------------------------------------------------------------------------------------
Party A An incumbency certificate with Upon execution of this Yes
respect to the signatory of Agreement
this Agreement
---------------------------------------------------------------------------------------------------------
Party B An opinion of counsel for Upon execution of this No
Party B substantially in the Agreement
form of Exhibit B to this
Schedule
---------------------------------------------------------------------------------------------------------
Party B An incumbency certificate with Upon execution of this Yes
respect to the signatory of Agreement
this Agreement
=========================================================================================================
20
21
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a):
Address for notices or communications to Party A:
Address: Credit Suisse Financial Products
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
Attention: (1) Co-Heads of Global Trading;
(2) Managing Director -
Operations Department;
(3) Director - Legal Department
Telex No.: 264521 Answerback: CSFINP G
(For all purposes.)
(2) For the purpose of facsimile notices or communications under this
Agreement (other than a notice or communication under Section 5 or 6):
Facsimile No.: 0171 888 2686
Attention: Director - Legal Department
Telephone number for oral confirmation of receipt of facsimile in legible form:
0171 888 2028 Designated responsible employee for the purposes of Section
12(a)(iii): Senior Legal Secretary"
Address for notices or communications to Party B:
Address: Washington Mutual Bank, FA Series 1999-WM1 Grantor Trust
c/o Bank One, National Association, as Grantor Trustee
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇-▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Global Corporate Trust Services
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
Washington Mutual Bank, FA Series 1999-WM1 Grantor Trust
c/o Washington Mutual Bank, FA
▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇. ▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Facsimile No.: ▇▇▇-▇▇▇-▇▇▇▇
For all purposes.
(b) Process Agent. For the purpose of Section 13(c):
22
(c) Party A appoints as its Process Agent: Credit Suisse First Boston
Corporation, Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (Attention:
Director, Legal and Compliance Department).
Party B appoints as its Process Agent: Not applicable.
(d) Offices. The provisions of Section 10(a) will apply to this Agreement.
(e) Multibranch Party. For the purpose of Section 10(c) of this Agreement.
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(f) Calculation Agent. Party A.
(g) Credit Support Document. Details of any Credit Support Document:
In the case of Party A: Not applicable.
In the case of Party B: Not applicable.
(h) Credit Support Provider.
In relation to Party A: Not applicable
In relation to Party B: Not applicable
(i) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine but without prejudice to the provisions of Section
5-1401 of the General Obligations Law of the State of New York) and each
party submits to the jurisdiction of the courts of the State of New York.
(j) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to any of the Transactions.
(k) "Affiliate" will have the meaning specified in Section 14 of this
Agreement, except that with respect to Party B there shall be deemed to be
no Affiliates.
23
Part 5. Other Provisions.
(a) Confirmation. Each Confirmation supplements, forms part of, and will be
read and construed as one with, this Agreement.
(b) Waiver of Trial By Jury. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in
respect of any suit, action or proceeding relating to this Agreement. Each
party (i) certifies that no representative, agent or attorney of the other
party has represented, expressly or otherwise, that such other party would
not, in the event of such a suit, action or proceeding, seek to enforce
the foregoing waiver and (ii) acknowledges that it and the other party
have been induced to enter this Agreement by, among other things, the
mutual waivers and certifications in this Section.
(c) Non-Petition. Party A hereby agrees that it will not bring or join in any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state
bankruptcy or similar law against Party B in connection with any
obligations relating to this Agreement, prior to the date which is one
year and one day after all Floating Rate Certificates (as such term is
defined in the Grantor Trust Agreement) of Party B have been paid in full.
(d) Assignment. In the event the long-term unsecured, unsubordinated debt
rating of Party A is lowered to below the category of BBB- by Standard &
Poor's Ratings Group, a division of ▇▇▇▇▇▇-▇▇▇▇, Inc. ("S&P") or Baa3 by
▇▇▇▇▇'▇ Investors Service, Inc. ("Moody's") or such rating agencies' then
equivalent ratings, or such ratings are withdrawn by either S&P or
Moody's, Party A shall assign and delegate its rights and obligations
under any Transaction to a replacement counterparty, subject to the prior
written direction of Party B.
(e) Relationship Between Parties. Each party will be deemed to represent to
the other party on the date on which it enters into this Agreement that
(absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary):
(i) Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into this Agreement and as to
whether this Agreement is appropriate or proper for it based upon
its own judgment and upon advice 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 this Agreement; it being understood that information and
explanations related to the terms and conditions of this Agreement
shall not be considered investment advice or a recommendation to
enter into this Agreement. 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 this Agreement.
(ii) Assessment and Understanding. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of this Agreement. It is also capable of
assuming, and assumes, the risks of this Agreement.
(iii) Status of Parties. The other party is not acting as a fiduciary for
or as adviser to it in respect of this Agreement.
(f) Additional Representations. Each of Party A and Party B represents that it
is an "eligible swap participant" as defined in Commodities Futures
Trading Commission Rule 35.1(b)(2)(vi) (17 C.F.R. 35(b)(2)(vi)).
(g) Negative Interest Rates. Party A and Party B agree that:
if, with respect to a Calculation Period for a Transaction, a party ("X")
is obligated to pay a Floating Amount that is a negative number (either by
reason of a negative Floating Rate or the
24
subtraction of a Spread from the Floating Rate), the Floating Amount with
respect to X for that Calculation Period will be deemed to be zero.
(h) Limited Recourse. It is expressly understood and agreed by the parties
hereto that (i) this Agreement and the Transaction entered into pursuant
to this Agreement is entered into by Bank One, National Association, not
individually or personally but solely as Grantor Trustee of the Washington
Mutual Bank, NA Series 1999-WM1 Grantor Trust (the "Trust") in the
exercise of the powers and authority conferred and vested in it, (ii) the
representations, undertakings and agreements herein made on the part of
the Trust are made and intended not as personal representations,
undertakings and agreements by the Grantor Trustee but are made and
intended for the purpose of binding only the Trust, (iii) nothing herein
contained shall be construed as creating any liability on the Grantor
Trustee, individually or personally, to perform any covenant either
expressed or implied contained herein on the part of the Trust, all such
liability, if any, being expressly waived by the parties who are
signatories to this Agreement and by any Persons claiming by, through or
under such parties; provided, however, that the Grantor Trustee shall be
liable in its individual capacity for its own willful misconduct or
negligence and (iv) under no circumstances shall the Grantor Trustee be
personally liable for the payment of any indebtedness or expenses of the
Trust or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by the Trust under
this Agreement.
(i) "Definitions. Unless otherwise specified in a Confirmation, this Agreement
and each Transaction between the parties are subject to the 1991 ISDA
Definitions as amended by the 1998 Supplement thereto as published by the
International Swap Dealers Association, Inc. (the "Definitions"), and will
be governed in all relevant respects by the provisions set forth in the
Definitions, without regard to any amendment to the Definitions subsequent
to the date hereof. The provisions of the Definitions are incorporated by
reference in and shall be deemed a part of this Agreement, except that
references in the Definitions to a "Swap Transaction" shall be deemed
references to the "Transaction" for purposes of this Agreement. In the
event of any inconsistency between the provisions of this Agreement and
the Definitions, this Agreement will prevail.
(j) Change of Account. Section 2(b) of this Agreement is hereby amended by the
addition of the following after the word "delivery" in the first line
thereof:-
"to another account in the same legal and tax jurisdiction as the
original account"
(k) Incorporation of Protocol Terms. The parties agree that the definitions
and provisions contained in Annexes 1 to 5 and Section 6 of the EMU
Protocol published by the International Swaps and Derivatives Association,
Inc., on 6 May, 1998 are incorporated into and apply to this Agreement.
References in those definitions and provisions to any "ISDA Master
Agreement" will be deemed to be references to this Agreement."
25
The parties executing this Schedule have executed the Master Agreement and
have agreed as to the contents of this Schedule.
CREDIT SUISSE FINANCIAL PRODUCTS
By: ______________________________________
Name:
Title:
By: ______________________________________
Name:
Title:
WASHINGTON MUTUAL BANK, FA SERIES
1999-WM1 GRANTOR TRUST
BANK ONE, NATIONAL ASSOCIATION, solely in
its capacity as Grantor Trustee for the
benefit of the holders of the Class 5 A-3
Floating Rate Certificates and not in its
individual capacity
By: ______________________________________
Name:
Title:
EXHIBIT A to Schedule
[Form of Opinion of Counsel for Party A.]
On the letterhead of Credit Suisse Financial Products]
[date]
To: [ ]
Dear Sirs,
This Opinion is furnished to you pursuant to Part 3 of the Schedule
to the ISDA Master Agreement, dated as of [date of Agreement] (the "Master
Agreement") by and between Credit Suisse Financial Products ("CSFP") and [name
of counterparty] (the "Company") [and a confirmation dated [ ] (the "Specified
Confirmation") between the Company and CSFP, which supplements and forms part of
the Master Agreement (the Master Agreement and the Specified Confirmation
together the "Agreement"). I am delivering this Opinion, not in an individual
capacity, but solely as an employee of CSFP working, at present, as internal
legal counsel in its Legal and Compliance Department.
In giving this Opinion I have examined [draft][executed] copies of
the Agreement and of such documents, corporate records, certificates of public
officials and other instruments certified or otherwise identified to my
satisfaction and I have relied on information obtained from public records,
officers of CSFP and such other sources as I have deemed necessary or
appropriate for the purposes of this Opinion.
In giving this Opinion, I have assumed:
(a) that the Agreement is within the capacity and power of the Company;
(b) that the Agreement will be duly authorised, executed and delivered
by the Company;
(c) the genuineness of all signatures (other than the signature of CSFP
under the Agreement), the authenticity of all agreements,
certificates, instruments, and documents examined by me and the
conformity to the originals of all agreements, certificates,
instruments and documents submitted to me as originals;
(d) that all documents examined by me remain complete and up to date;
and
(e) that insofar as any obligation falls to be performed in any
jurisdiction outside England, its performance will not be illegal or
ineffective by virtue of the laws of that jurisdiction.
Upon the basis of the foregoing and subject to the qualifications
set out below, I am of the opinion that at the date hereof so far as the present
laws of England are concerned:
1. CSFP is a company incorporated in England and Wales with unlimited
liability. It is currently a bank listed as an Authorised Institution
under the Banking ▇▇▇ ▇▇▇▇;
2. save for obtaining the necessary authorisations under the provisions of
the Financial Services Act, which authorisations have been obtained by
CSFP, CSFP is not required to obtain any authorisation, consent, approval,
exemption or licence from any governmental authority of England as a
condition to the execution and delivery of the Agreement;
3. CSFP has the requisite corporate power and authority to enter into the
Agreement and to perform its obligations thereunder, and the Agreement has
been duly authorised and [duly
executed and delivered by CSFP and constitutes valid, binding and
enforceable obligations of CSFP][when executed and delivered by CSFP shall
constitute its valid, binding and enforceable obligations]; and
4. the obligations of CSFP under the Agreement rank at least pari passu in
priority of payment with all other unsecured unsubordinated obligations of
CSFP, excepting only those obligations preferred by operation of law.
The Opinion set forth above is subject to the following qualifications:-
(i) This Opinion is confined solely to the laws of England as in force at the
date of this Opinion and I have made no investigation and no opinion is
expressed or implied as to the laws of any other jurisdiction. I have
assumed that no foreign law qualifies or affects my Opinion as set out
above. This Opinion shall, itself, be construed and interpreted in
accordance with the laws of England and Wales.
(ii) As used in this Opinion, the term "enforceable" means that each obligation
or document is of a type and form enforced by the English courts. The term
does not address the extent to which a judgment obtained in a court
outside England will be enforceable in England. Certain rights and
obligations may be qualified by the nature of the remedies available in
the English courts, the acceptance by such courts of jurisdiction, the
power of such courts to stay proceedings, the provisions of the Limitation
▇▇▇ ▇▇▇▇, doctrines of good faith and fair conduct and laws based on those
doctrines and other principles of law and equity of general application.
(iii) This Opinion is subject to all insolvency and other laws affecting the
rights of creditors generally.
(iv) Section 2(e) of the Master Agreement provides for interest to be paid on
overdue amounts. Such interest may amount to a penalty under English law
and may therefore not be recoverable. Under English law a contractual
provision conferring or imposing a remedy or an obligation consequent upon
default, particularly if it involves enforcing an additional pecuniary
remedy (such as default or overdue interest) referrable to such default,
might be held by an English court to be irrecoverable on the grounds that
it is a penalty and thus void. The provision for liquidated damages will
only be enforceable if the calculation is a genuine pre-estimate of the
loss which will be suffered as a result of the relevant default, though
the fact that any such provision was held to be void would not of itself
prejudice the legality or validity of any other provision of the Agreement
and if in the opinion of the court a provision for liquidated damages does
not represent a genuine pre-estimate of loss and is therefore an
unenforceable penalty, the court will apply the normal rules in relation
to the calculation of damages.
(v) I express no opinion as to the availability of any specific remedy other
than monetary damages for the enforcement of any obligation of CSFP and
this Opinion should not be taken to imply that an English court will
necessarily grant any remedy, the availability of which is subject to
equitable considerations or which is otherwise in the discretion of the
court and, in particular, orders for specific performance and injunctions,
which are
A-28
discretionary remedies under English law, will not be available where
damages are considered by the court to be an adequate alternative remedy.
(vi) An English court may stay proceedings brought in an English court if
concurrent proceedings are being brought elsewhere.
(vii) Any term of the Agreement may be amended orally by the parties despite
Section 9(b) of the Master Agreement.
(viii) (The provisions of Section 11 of the Master Agreement which include an
indemnity for the costs of litigation are subject to the discretion of
the court to decide whether and to what extent a party to litigation
should be awarded the costs incurred by it in connection with the
litigation.
(ix) Whilst in the event of any proceedings being brought in an English court
in respect of a monetary obligation expressed to be payable in a currency
other than pounds sterling of the United Kingdom, the court would have
power to give judgment expressed as an order to pay such currency, it may
decline to do so in its discretion, and an English court might not
enforce the benefit of currency conversion clauses and may require that
all claims or debts be converted into pounds sterling at an exchange rate
determined by the court as at date relating to such proceeding, such as
the date of commencement of winding-up.
This Opinion is given to you, [the Company], solely for your benefit and may not
be relied upon for any purposes other than the entry into and performance of the
Agreement. You are requested not to give copies to others without my prior
written permission except that copies may be released to your legal advisers and
auditors for the purposes of information only on the strict understanding that I
assume no responsibility whatsoever to them as a result or otherwise.
Yours faithfully
CREDIT SUISSE FINANCIAL PRODUCTS
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice President - Legal & Compliance
Department
A-29
[CSFBC LETTERHEAD]
December 3, 1999
Bank One, National Association
solely in its capacity as Grantor Trustee for
and on behalf of
Washington Mutual Bank, FA Series 1999-WM1 Grantor Trust
▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Dear Sirs:
I am a Director of Credit Suisse First Boston Corporation., an affiliate
of Credit Suisse Financial Products ("CSFP"). At your request, I am delivering
this opinion as counsel to CSFP in connection with the Agreement (as defined
below) . Unless otherwise defined, capitalized terms used herein shall have the
meanings assigned to such terms in the Agreement.
For purposes of delivering the opinions set forth below, I have reviewed
copies of the following documents:
(i) ISDA Master Agreement dated as of December 3, 1999 (the "Master
Agreement") between CSFP and Bank One, National Association solely in its
capacity as Grantor Trustee (the "Counterparty") for and on behalf of
Washington Mutual Bank, FA Series 1999-WM1 Grantor Trust (the "Trust") for
the benefit of holders of the Class _A-_(1) Floating Rate Certificates to
be issued by the Trust; and
(ii) the Confirmation dated December 3, 1999 (the "Confirmation") between CSFP
and the Counterparty relating to the Class _A-_ Floating Rate Certiticates
to be issued by the Trust (the Confirmation together with the Master
Agreement is hereinafter referred to collectively as the "Agreement").
I have also examined originals, or copies certified or otherwise
identified to my satisfaction, of such records of CSFP, certificates of public
officials, and such other documents as I have deemed necessary for purposes of
this opinion.
For purposes of delivering the opinions set forth below, I have assumed
the genuineness of all signatures, the authenticity of all documents (including
the Agreement) submitted to me as originals, the conformity to authentic
original documents of documents submitted to me as certified, conformed or
photostatted copies and the authority of the person signing and delivering all
such documents. I have also assumed that the Agreement has been duly authorized,
executed and delivered by CSFP and is the legal, valid and
----------
(1) To be completed. There will be a separate opinion for each Master Agreement
and Confirmation.
binding obligation of CSFP under English law. As to certain matters of fact, I
have relied without additional investigation upon the documents examined or upon
certificates and statements of officers of CSFP. I have also assumed that only
the interest rate swap transaction evidenced by the Confirmation will be entered
into under the Master Agreement.
Based on the foregoing, and such other considerations of fact and law as I
have deemed appropriate, I am of the opinion that:
1. The execution, delivery and performance of the Agreement by CSFP do not
contravene any provision of law applicable to it and no authorizations of,
exemptions by, or filings with, any governmental or other authority are
required to be obtained or made by CSFP in connection therewith.
2. Assuming that the Agreement has been duly authorized, executed and
delivered by the Counterparty and is a legal, valid and binding obligation
of the Counterparty, the Agreement will be a legal, valid and binding
agreement of CSFP, enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, and other laws of general applicability
relating to or affecting the enforcement of creditors' rights, and to
general principles of equity, including without limitation those
respecting the availability of specific performance, the enforcement of
liquidated damages provisions and the ability to terminate an agreement or
invoke a condition upon the occurrence of a default deemed immaterial
(regardless of whether enforcement is sought in a proceeding in equity or
at law).
I do not express any opinion as to whether a money judgment granted by a
court of the United States of America or of the State of New York would be
rendered in a currency other than U.S. Dollars and the enforceability of the
provisions of Section 7 of the Master Agreement to the extent that a Transaction
may be deemed a "general intangible" under the New York Uniform Commercial Code.
The opinions given above are limited to matters concerning the federal
laws of the United States of America and the laws of the State of New York as
they exist as of the date hereof and no opinion is expressed as to the laws of
any other jurisdiction. I express no opinion as to the antitrust, banking,
commodities, environmental, securities, insurance (including financial guaranty
insurance) or tax laws of any state or the United States of America. I expressly
disclaim any duty to update the opinions contained herein.
The undersigned is duly admitted to practice law in the State of New York
and has issued this opinion as an employee of Credit Suisse First Boston
Corporation acting as its internal company counsel and as counsel to CSFP, and
not in any other capacity. This opinion is solely for your benefit and may not
be relied upon by any other person without my prior written consent other than
▇▇▇▇▇'▇ Investors Service, Inc. and Duff & ▇▇▇▇▇▇ Credit Rating Co.
Very truly yours,
---------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Director and Counsel
EXHIBIT B
[___________], 1999
Credit Suisse Financial Products
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇
Re: Credit Suisse First Boston Mortgage Securities Corp.
Washington Mutual Bank, FA Mortgage-Backed Pass-Through
Certificates, Series 1999-WM1
Ladies and Gentlemen:
This opinion is furnished to you pursuant to Part 3 of the Schedule to the
Master Agreement, dated as of December 3, 1999 (the "Agreement"), between Credit
Suisse Financial Products ("Party A") and Bank One, National Association ("Party
B").
We have acted as counsel to Party B in connection with the preparation,
execution and delivery of the Agreement. In that connection we have examined
such documents and considered such questions of law as we have deemed necessary
or appropriate for the opinion expressed herein.
In examining the documents referred to above, we have assumed, and in giving
this opinion, we assume, without independent verification:
(a) the genuineness of all signatures of such documents or the originals
thereof, the authenticity of all documents submitted to us as originals
and the completeness and conformity to original documents of all documents
submitted to us as photostated, telecopied or certified copies and the
authenticity of the originals of such copies; and
(b) that the Agreement constitutes the legal, valid, binding and enforceable
obligation of Party A.
In rendering this opinion, we are opining on the following matters only insofar
as they are governed by the laws of the State of Illinois. We have not made any
investigation of the laws of any jurisdiction other than aforesaid.
Based upon and subject to the foregoing, we are of the opinion that:
1. Party B is a duly organized, validly existing and in good standing as a
national banking association under the laws of the United States of
America.
2. Pursuant to the constitutive documents and resolutions of the board of
Party B it has the power (a) to execute and deliver the Agreement and any
other required documentation relating to the Agreement, and (b) to perform
its obligations under the Agreement, and has taken all necessary action to
authorize such execution, delivery and performance.
3. Such execution, delivery and performance do not violate or conflict with
any law applicable to Party B, 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.
4. Any consent, approval, authorization of, or filing with any governmental
or other authority required by Party B in connection with the Agreement
has been obtained or made and is in full force and effect and all
conditions thereof have been satisfied and complied with.
5. The obligations of Party B under the Agreement constitute legal, valid and
binding obligations enforceable against Party B in accordance with their
respective terms (subject as to enforceability to applicable bankruptcy,
reorganization, insolvency, moratorium or similar laws affecting
creditors' rights generally and to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
This opinion is addressed to you and is solely for your benefit and may not be
relied upon by any other person or for any other purpose other than the entering
into and performing of the Agreement.
Very truly yours,
Ungaretti & ▇▇▇▇▇▇
Class 5 ▇-▇
▇▇▇▇▇▇▇▇ ▇, ▇▇▇▇
▇▇▇▇ One, National Association solely in
its capacity as Grantor Trustee for the
benefit of the holders of the Class 5
A-3 Floating Rate Certificates and on
behalf of Washington Mutual Bank, FA
Series 1999 - WM1 Grantor Trust ▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇-▇▇▇▇ ▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇
--------------------------------------------------------------------------------
Dear Sirs:
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between us on the Trade
Date specified below (the "Transaction"). This Confirmation constitutes a
"Confirmation" as referred to in the Agreement specified below.
1. The definitions and provisions contained in the 1991 ISDA Definitions (as
supplemented by the 1998 Supplement) (as published by the International
Swaps and Derivatives 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.
References herein to a "Transaction" shall be deemed to be references to a
"Swap Transaction" for the purposes of the 1991 ISDA Definitions.
This Confirmation supplements, forms part of, and is subject to, the 1992
ISDA Master Agreement dated as of 3 December 1999 as amended and
supplemented from time to time (the "Agreement"), between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below.
In this Confirmation "Party A" means Credit Suisse Financial Products and "Party
B" means Bank One, National Association solely in its capacity as Grantor
Trustee for and on behalf of Washington Mutual Bank, FA Series 1999 - WM1
Grantor Trust (the "Trust") and for the benefit of the holders of the Class 5
A-3 Floating Rate Certificates.
Unless otherwise defined herein or in the 1991 ISDA Definitions, capitalized
terms used herein are used as defined in the Grantor Trust Agreement dated as of
November 1, 1999 (the "Grantor Trust Agreement") by and among Credit Suisse
First Boston Mortgage Securities Corp., as Depositor (in such capacity, the
"Depositor"), Washington Mutual Bank, FA and Bank One, National Association as
Grantor Trustee (in such capacity, the "Trustee").
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
Notional Amount: USD 200,000,000 for the initial
Calculation Period and thereafter, for
each subsequent Calculation Period, a
USD amount equal to the then current
Floating Rate Certificate Principal
Balance, as determined by the
Calculation Agent based on information
provided to it by the Trustee no later
than the Distribution Date in such
Calculation Period.
Trade Date: 3 December 1999
Effective Date: 3 December 1999 provided, however that
for purposes of the initial Calculation
Period, the Effective Date shall be 23
November 1999.
Termination Date: The earlier to occur of (i) the date
that the Floating Rate Certificate
Principal Balance of the Class 5 A-3
Floating Rate Certificates has been
reduced to zero; and (ii) 23 April 2003.
Party A Floating Amounts: On each Party A Floating Rate Payer
Payment Date, Party A shall pay to Party
B a Floating Amount in US Dollars
expressed in accordance with Section 6.1
of the 1991 ISDA Definitions, less the
Adjustment Factor.
Calculation Amount: For any Party A Floating Rate Payer
Payment Date, the Notional Amount,
multiplied by a fraction the numerator
of which is the Current Interest for
such date and the denominator of which
is interest due on the Class 5 A-3 REMIC
Certificates for such date, in each case
based on information provided by the
Trustee to Party A not later than the
Distribution Date in such Calculation
Period.
Party A Floating Rate
Payer Payment Dates: The 23rd day of each month commencing on
23 December 1999 and ending on the
Termination Date, subject to the
Following Business Day Convention, but
with No Adjustment to Period End Dates.
Floating Rate for Initial
Calculation Period: 5.81%
36
Floating Rate Option: USD-LIBOR-BBA provided that the
reference to "two London Banking Days"
in Section 7.1(s)(ii) of the 1991 ISDA
Definitions shall be modified to read
"two New York and London Banking Days",
mutatis mutandis.
Designated Maturity: One month
Spread: Plus 0.22% for the initial Calculation
Period (the "Initial Spread"), and
thereafter, an amount (which may be
negative) determined by the Calculation
Agent in accordance with the following
formula:
The Initial Spread, plus (a) the
Reference Rate for the then current
Calculation Period, minus (b) 6.7342%.
I. Day Count Fraction: 30/360
Reset Dates: The first day of each Calculation
Period.
Compounding: Inapplicable.
Party B Floating Amounts: On each Party B Floating Rate Payer
Payment Date, Party B shall pay to Party
A an amount in U.S. Dollars equal to the
Current Interest, as determined by the
Calculation Agent based on information
provided to it by the Trustee on the
Distribution Date in the Calculation
Period.
Party B Floating Rate
Payer Payment Dates: The Party A Floating Rate Payer Payment
Dates.
II. Business Days: States of New York,
Washington, Illinois
Calculation Agent: Party A
3. Additional Termination Events
The occurrence of the following shall constitute an Additional Termination
Event under Section 5(b)(v) of the Agreement.
37
(i) The occurrence of an Optional Termination under Section 10.01 of the
Pooling and Servicing Agreement. Notwithstanding anything to the
contrary in the Agreement, the Early Termination Date with respect
to this Additional Termination Event shall be the Optional
Termination Date designated under the Pooling and Servicing
Agreement.
(ii) Any of the Grantor Trust Agreement, the Pooling and Servicing
Agreement or any other instrument or agreement relating to the
issuance of the Class 5 A-3 Floating Rate Certificates
(collectively, the "Transaction Documents") shall have been amended
or modified without the prior written consent of Party A if the
result of such amendment or modification is (a) to increase or
reduce or change the priority of payment of any amount stated to be
payable by either party under the Transaction; (b) accelerate or
postpone the scheduled date of any payment under the Transaction,
(c) affect the calculation of any amount that would have been
payable upon an early termination of the Transaction, (d) release a
party from any of its obligations under the Transaction; or (e)
modify any of the definitions in any of the Transaction Documents
which would have the affect of any of the foregoing.
(iii) 30 days following a Downgrade Event if Party A has not taken action
that prevents the downgrading of the Class 5 A-3 Floating Rate
Certificates below the rating of such Certificates by ▇▇▇▇▇'▇
Investors Service, Inc. ("Moody's") immediately prior to the
Downgrade Event.
(iv) A payment default on the Class 5 A-3 REMIC Certificates that is
caused by the failure of a party to the Pooling and Servicing
Agreement to make a payment when due, provided that any cure period
for such default provided in the Pooling and Servicing Agreement has
expired.
(v) The termination or dissolution of the Trust for any reason
whatsoever, including a termination pursuant to Section 9.01 of the
Grantor Trust Agreement.
4. Additional Provisions
(i) Notwithstanding anything to the contrary in the Agreement, upon the
occurrence of an Early Termination Date, the Settlement Amount shall
be equal to zero.
(ii) The parties to this Transaction shall be entitled to assume that all
information received from the Trustee is accurate and that it is
reasonable to rely on that information. Neither party shall be
liable for any errors that arise as a result of such reliance.
(iii) Party A Downgrade Provision: If, at any time prior to the reduction
of the Floating Rate Certificate Principal Balance of the Class 5
A-3 Floating Rate Certificates to zero, (a) the short-term or
long-term debt or counterparty rating of Party A by ▇▇▇▇▇'▇ is
withdrawn, or (b) the short-term or long-term debt or counterparty
rating of Party A by Moody's lowered below P-1 or A2, respectively,
Party A shall
38
promptly notify Party B of such event (a "Downgrade Event"). Within
30 days after the date of the occurrence of such event, Party A
shall propose an arrangement which will prevent any reduction in the
▇▇▇▇▇'▇ rating of the Class 5 A-3 Floating Rate Certificates below
the then current rating on the Class 5 A-3 Floating Rate
Certificates resulting from a Party A Downgrade Event. Such
arrangements may include;
(a) any arrangement satisfactory to Party A, Party B and Moody's; or
(b) a transfer by Party A (solely at its cost or benefit) of its
rights and obligations pursuant to this Transaction to a replacement
swap counterparty that would result in the Class 5 A-3 Floating Rate
Certificates receiving a rating from Moody's not lower than the
rating applicable to the Class 5 A-3 Floating Rate Certificates
immediately prior to the occurrence of the Downgrade Event.
(iv) Party B shall deliver to Party A on each Distribution Date the
monthly statement delivered to the holders of the Class 5 A-3 REMIC
Certificates on such date pursuant to Section 4.04 of the Pooling
and Servicing Agreement.
5. Definitions:
For the purposes of this Confirmation the following expressions shall have
the following meanings ascribed to them, notwithstanding anything to the
contrary in the Grantor Trust Agreement:
"Adjustment Factor" means, for any Party A Floating Rate Payer
Payment Date, Realized Losses (as defined in
the Pooling and Servicing Agreement) applied
to reduce interest payable on the Class 5
A-3 REMIC Certificates on such date. Party B
shall notify Party A of any Adjustment
Factor on the Distribution Date in the
Calculation Period.
"Class 5 A-3 Floating
Rate Certificate" means any of the Class 5 A-3 Floating Rate
Certificates issued pursuant to the Grantor
Trust Agreement, each representing the
interests and rights described under the
Grantor Trust Agreement.
"Class 5 A-3 REMIC
Certificates" means the Class 5 A-3 REMIC Certificates
issued pursuant to the Pooling and Servicing
Agreement.
"Current Interest" means with respect to any Party A Floating
Rate Payer Payment Date, the amount of
interest actually paid on the Washington
Mutual Bank, FA Mortgage-Backed Pass-Through
Certificates, Series 1999 - WM1, Class 5 A-3
REMIC Certificates on the Distribution Date
39
during the related Calculation Period at the
Reference Rate.
"Distribution Date" means the day on which principal and
interest is paid on the Class 5 A-3 REMIC
Certificates pursuant to the Pooling and
Servicing Agreement.
"Floating Rate Certificate
Principal Balance" means as of any time of determination, the
Floating Rate Certificate Principal Balance
as of the Effective Date of all Class 5 A-3
Certificates less any amounts actually
distributed on such Class 5 A-3 Certificates
with respect to the Principal Distribution
Amount pursuant to Section 7.03(d) of the
Grantor Trust Agreement with respect of the
principal thereon on all prior Distribution
Dates, and less any losses on the mortgage
loans applied to reduce the outstanding
principal balance of the Class 5 A-3 REMIC
Certificates pursuant to the Pooling and
Servicing Agreement on all prior
Distribution Dates.
"Pooling and Servicing
Agreement" means the Pooling and Servicing Agreement,
dated as of November 1, 1999 among the
Depositor, Washington Mutual Bank, FA and
the Trustee.
"Reference Rate" means, for any Party A Floating Rate Payer
Payment Date, the Certificate Rate (as
defined in the Pooling and Servicing
Agreement) applicable to the Class 5 A-3
REMIC Certificates for such date.
6. Office:
Party A is acting through its London Office for the purposes of this
Transaction.
Party B is acting through its Corporate Trust Office for the purposes of
this Transaction.
7. Account Details:
Payments to Party A: The Bank of New York
ABA # ▇▇▇-▇▇▇-▇▇▇
Account # ▇▇▇-▇▇▇▇-▇▇▇
For favor: Credit Suisse Financial Products
Payments to Party B: Bank One, NA
ABA #▇▇▇▇▇▇▇▇▇
Acct. # 4811-5377
40
Re: WAMU 99-WM1
Attn: ▇. ▇▇▇▇▇▇ 407-1902
Credit Suisse Financial Products is regulated by The Securities and
Futures Authority and has entered into this transaction as principal. The time
at which the above transaction was executed will be notified to Party B on
request.
41
Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.
CREDIT SUISSE FINANCIAL PRODUCTS
By: CSFP Trading LLC
By:__________________________
Name:
Title:
BANK ONE, NATIONAL ASSOCIATION, solely in its capacity as Grantor Trustee for
the benefit of the holders of the Class 5 A-3 Floating Rate Certificates and on
behalf of WASHINGTON MUTUAL ▇▇▇▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇- ▇▇▇ ▇▇▇▇▇▇▇ TRUST
By:__________________________
Name:
Title:
42