ISDA SCHEDULE to the MASTER AGREEMENT dated as of October 22, 2007 between MINISTRY PARTNERS FUNDING LLC (“Party A”) and BANK OF MONTREAL (“Party B”)
Exhibit
10.16
(Multicurrency
- Cross Border)
ISDA
SCHEDULE
to
the
MASTER
AGREEMENT
dated as
of October 22,
2007
between
MINISTRY PARTNERS FUNDING
LLC (“Party A”)
and
BANK OF MONTREAL (“Party
B”)
Part
1
Termination
Provisions
(a) “Specified Entity” means in
relation to Party A for the purpose of:
Section
5(a)(v), Not Applicable
Section
5(a)(vi), Not Applicable
Section
5(a)(vii), Not Applicable
Section
5(b)(iv), Not Applicable
and in
relation to Party B for the purpose of:
Section
5(a)(v), Not Applicable
Section
5(a)(vi), Not Applicable
Section
5(a)(vii), Not Applicable
Section
5(b)(iv), Not Applicable
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(b)
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“Specified Transaction”
will have the meaning specified in Section 14 of this
Agreement.
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(c)
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The
“Cross Default”
provision of Section 5(a)(vi) will not apply to either Party A or Party
B.
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(d)
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The
“Credit Event Upon
Merger” provisions of Section 5(b)(iv) will not apply to either
Party A or Party B.
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(e)
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The
“Breach of
Agreement” provisions of Section 5(a)(ii) will not apply to either
Party A or Party B.
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(f)
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The
“Credit Support
Default” provisions of Section 5(a)(iii) will not apply to either
Party A or Party B.
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(g)
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The
“Misrepresentation”
provisions of Section 5(a)(iv) will not apply to either Party A or Party
B.
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(h)
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The
“Default under Specified
Transaction” provisions of Section 5(a)(v) will not apply to either
Party A or Party B.
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(i)
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The
“Automatic Early
Termination” provisions of Section 6(a) will not apply to Party A
and will not apply to Party B.
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(j)
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Payments on Early
Termination. For the purpose of Section 6(e) of this
Agreement:
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(i)
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Market
Quotation will apply.
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(ii)
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The
Second Method will apply.
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(k)
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“Termination Currency”
means U.S. Dollars.
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(l)
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Additional Termination
Event will apply. It shall be an Additional Termination
Event hereunder, with Party A as the Affected Party,
if:
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(i)
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an
Event of Default occurs under the Loan, Security and Servicing Agreement
and either (1) the obligations under the Loan, Security and Servicing
Agreement are accelerated in accordance with the terms of the Loan,
Security and Servicing Agreement or (2) the Loan, Security and Servicing
Agreement is terminated as a result of repayment in full by Party A of all
of Party A’s obligations, other than hedging obligations, under the Loan,
Security and Servicing Agreement;
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(ii)
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the
Loan, Security and Servicing Agreement is amended or modified in any
manner, without Party B’s prior written consent, and Party B concludes, in
its sole discretion, that such amendment or modification could have a
material adverse effect on Party B’s position under this Agreement or any
transaction; or
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(iii)
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Transactions
entered into under this Agreement cease to be secured under the Loan,
Security and Servicing Agreement and the other documents relating
thereto.
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Part
2
Tax
Representations
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(a)
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Payer
Representation. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following
representation:-
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It is not
required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction to make any
deduction or withholding for or on account of any Tax from any payment (other
than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be made
by it to the other party under this Agreement. In making this
representation, it may rely on:
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(i)
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the
accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement;
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(ii)
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the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement; and
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(iii)
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the
satisfaction of the agreement of the other party contained in Section 4(d)
of this Agreement;
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provided that it shall not be
a breach of this representation where reliance is placed on clause (ii) and the
other party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
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(b)
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Payee Tax
Representations. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations
specified below, if any:
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(i)
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The
following representation will apply to Party A and will
apply to Party B when Party B is acting through its Toronto
office:
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It is
fully eligible for the benefits of the “Business Profits” or “Industrial and
Commercial Profits” provision, as the case may be, 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 and no such payment is attributable to a trade or
business carried on by it through a permanent establishment in the Specified
Jurisdiction.
“Specified
Treaty” means with respect to Party B or Party A as Payee, the income tax
convention between Canada and the United States of America.
“Specified
Jurisdiction” means, with respect to Party A as Payee Canada.
“Specified
Jurisdiction” means, with respect to Party B as Payee the United States of
America.
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(ii)
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The
following representation will not apply to Party A and will apply to Party
B when Party B is acting through its Chicago
office:
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Each
payment received or to be received by it in connection with this Agreement will
be effectively connected with its conduct of a trade or business in the United
States of America.
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(iii)
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The
following representation will apply to Party A and will not apply to Party
B:
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It has
been duly incorporated, created or organized under the laws of the United States
of America or of any State of the United States of America, and it is validly
existing under those laws.
Part
3
Agreement
to Deliver Documents
For the
purpose of Sections 4(a)(i) and (ii) of this Agreement, each party agrees to
deliver the following documents, as applicable:
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(a)
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Each
party shall, as soon as practicable after demand, deliver to the other
Party any form or document reasonably requested by the other party,
including without limitation, any form or document required to enable such
other party to make payments hereunder without withholding for or on
account of Taxes or with such withholding at a reduced
rate. Without limiting the generality of the
foregoing:
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Covered
by Section 3(d) Representation
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Party
A
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Form
W-9
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Upon
execution of this Agreement
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Yes
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Party
B
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Form
W-8-ECI, with respect to Transactions entered into by Party B’s Chicago
Office
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Upon
execution of this Agreement
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Yes
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Party
B
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Form
W-8-BEN, with respect to Transactions entered into by Party B’s London and
Toronto Offices
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Upon
execution of this Agreement
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Yes
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(b)
Other documents to be delivered by each party concurrently with the
execution and delivery of this Agreement
are:
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Party
required to deliver document
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Form/Document/Certificate
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Date
by which to be delivered
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Covered
by Section 3(d) Representation
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Party
A and Party B
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Certificate
of incumbency containing specimen signatures of each person executing the
Agreement and if requested, any Confirmation
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Upon
execution of this Agreement, and if requested, each
Confirmation
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Yes
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Party
A
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Legal
opinion substantially in the form of Exhibit I attached
hereto
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Upon
execution of this Agreement
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No
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Party
A
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Audited
Annual and Quarterly Financial Statements
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Promptly
upon request
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Yes
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Part
4
Miscellaneous
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(a)
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Addresses for
Notices. For the purpose of Section 12(a) of this
Agreement:
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Address(es) for notices or
communications to Party A:
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Address:
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Ministry
Partners Funding, LLC
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▇▇▇
▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
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Attention: ▇▇▇▇▇
▇. ▇▇▇▇▇▇, President
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
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With
a copy to:
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▇▇▇▇▇
▇. ▇▇▇▇▇▇, Esq.
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▇▇▇▇
▇▇▇▇, P.A.
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▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
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Address(es) for notices or
communications to Party B:
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With
respect to Transactions:
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Address:
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Bank
of Montreal
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▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
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▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
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▇▇▇▇▇▇
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Attention: Manager,
Confirmations
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇/6827
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Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
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Any other
notice sent to Party B (including without limitation, any notice in connection
with Section 5, 6 or 9(b)) shall be copied to the following
address:
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Address:
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Bank
of Montreal
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24th
Floor
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▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
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▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇
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Attention: Managing
Director, Documentation
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Telephone: (▇▇▇)
▇▇▇-▇▇▇▇
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Facsimile: (▇▇▇)
▇▇▇-▇▇▇▇
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(b)
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Process
Agent. For purposes of Section 13(c) of this
Agreement:
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Party A
appoints as its Process Agent: Not applicable.
Party B
appoints as its Process Agent: its Office at ▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇.▇.
▇▇▇▇▇.
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(c)
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Offices. The
provisions of Section 10(a) will apply to this
Agreement.
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(d)
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Multibranch
Party. For the purpose of Section 10(c) of this
Agreement:
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Party A
is not a Multibranch Party and, for the purposes of this Agreement and each
Transaction entered into pursuant hereto, may act through its Brea, California
Office.
Party B
is a Multibranch Party and, for purposes of this Agreement and each Transaction
entered into pursuant hereto, may act through its London, Chicago or Toronto
Offices.
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(e)
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Calculation
Agent. The Calculation Agent is Party B, unless
otherwise specified in a Confirmation in relation to the relevant
Transaction.
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(f) Credit Support
Document(s). None.
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(g)
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Credit Support
Provider. None.
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(h)
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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).
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(i)
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Netting of
Payments. Subparagraph (ii) of Section 2(c) shall apply
to all Transactions.
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(j)
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“Affiliate” will have the
meaning specified in Section 14 of this
Agreement.
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Part
5
Other
Provisions
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(a)
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2000 ISDA
Definitions. The provisions of the 2000 ISDA Definitions
the (“Definitions”), published by the International Swaps and Derivatives
Association, Inc., are incorporated by reference in, and will be deemed to
be part of, this Agreement and each Confirmation as if set forth in full
in this Agreement or in such Confirmation, without regard to any revision
or subsequent edition thereof. In the event of any
inconsistency between the provisions of this Agreement and the
Definitions, this Agreement will prevail. In the event of any
inconsistency between the provisions of any Confirmation and this
Agreement or the Definitions, such Confirmation will prevail for the
purpose of the relevant
transaction.
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(b)
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Illegality or Force
Majeure. As contemplated by Section 6 of this Agreement,
while neither party shall be obligated to violate any applicable law by
reason of Section 6 or this Part 5(b), each party shall retain its right
to payment pursuant to Section 6(e) if the other party does not perform
because of Illegality or Force
Majeure.
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(c) Set-off. The following is
added as Section 6(f):
"(f) Any
amount (the "Early Termination Amount") payable to one party (the "Payee") by
the other party (the "Payer") under Section 6(e), in circumstances where there
is a Defaulting Party or one Affected Party in the case where a Termination
Event under Section 5(b)(iv) or 5(b)(v) has occurred, will, at the option of the
party ("X") other than the Defaulting Party or the Affected Party ("Y") (and
without prior notice to Y), be reduced by its set-off against any amount(s) (the
"Other Agreement Amount") payable (whether at such time or in the future or upon
the occurrence of a contingency) by the Payee to the Payer (irrespective of the
currency, place of payment or booking office of the obligation) under any other
agreement(s) between the Payee and the Payer or instrument(s) or undertaking(s)
issued or executed by one party to, or in favour of, the other party (and the
Other Agreement Amount will be discharged promptly and in all respects to the
extent it is so set-off). X will give notice to Y of any set-off effected under
this Section 6(f).
For this
purpose, either the Early Termination Amount or the Other Agreement Amount (or
the relevant portion of such amounts) may be converted by X into the currency in
which the other is denominated at the rate of exchange at which such party would
be able, acting in a reasonable manner and in good faith, to purchase the
relevant amount of such currency.
If an
obligation is unascertained, X may in good faith estimate that obligation and
set-off in respect of the estimate, subject to the relevant party accounting to
the other when the obligation is ascertained.
Nothing
in this Section 6(f) shall be effective to create a charge or other security
interest. This Section 6(f) shall be without prejudice and in addition to any
right of set-off, combination of accounts, lien or other right to which any
party is at any time otherwise entitled (whether by operation of law, contract
or otherwise)."
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(d)
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Conditions to Certain
Payments. Notwithstanding the provision of Section
6(e)(i)(3) and (4), as applicable, if the amount referred to therein is a
positive number, the Defaulting Party will pay such amount to the
Non-defaulting Party, and if the amount referred to therein is a negative
number, except to the extent set out below, the Non-defaulting Party shall
have no obligation to pay any amount thereunder to the Defaulting Party
unless and until the conditions set forth in (i) and (ii) below have been
satisfied, at which time there shall arise an obligation of the
Non-defaulting Party to pay to the Defaulting Party an amount equal to the
absolute value of such negative number less any and all amounts which the
Defaulting Party may be obligated to pay under Section 11 (the "Conditional Payment
Amount"):
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(i)
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the
Non-defaulting Party shall have received confirmation satisfactory to it
in its sole discretion (which may include an unqualified opinion of its
counsel) that (x) no further payments or deliveries under Section 2(a)(i)
or 2(e) in respect of Terminated Transactions will be required to be made
in accordance with Section 6(c)(ii) and (y) each Specified Transaction
shall have terminated pursuant to its specified termination date or
through the exercise by a party of a right to terminate and all
obligations owing under each such Specified Transaction shall have been
fully and finally performed;
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(ii)
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all
obligations (contingent or absolute, matured or unmatured) of the
Defaulting Party and any Affiliate of the Defaulting Party to make any
payment or delivery to the Non-defaulting Party or any Affiliate of the
Non-defaulting Party shall have been fully and finally
performed;
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provided
that if the Conditional Payment Amount exceeds
the aggregate amount of the obligations owing to the Non-defaulting Party and
Affiliates of the Non-defaulting Party by the Defaulting Party and Affiliates of
the Defaulting Party (including without limitation all obligations owing under
each Specified
Transactions),
the Non-defaulting Party shall pay the amount of the excess to the Defaulting
Party.
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(e)
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Relationship between the
Parties. Each party will be deemed to represent to the
other party on the date on which it enters into a Transaction that (absent
a written agreement between the parties that expressly imposes affirmative
obligations to the contrary for that
Transaction):
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(i)
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Non-Reliance. It
is acting for its own account, and it has made its own independent
decision to enter into that Transaction and as to whether that Transaction
is appropriate or proper for it based upon its own judgment and upon
advice from such advisors as it has deemed necessary. It is not
relying on any communication (written or oral) of the other Party as
investment advice or as a recommendation to enter into that Transaction;
it being understood that information and explanations related to the terms
and conditions of a Transaction shall not be considered investment advice
or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party shall be
deemed to be an assurance or guarantee as to the expected results of that
Transaction.
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(ii)
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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
that Transaction. It is also capable of assuming, and assumes,
the risks of that Transaction.
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(iii)
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Status of
Parties. The other party is not acting as a fiduciary
for or an advisor to it in respect of that
Transaction.
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(f)
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Bankruptcy
Code. The parties hereto intend that this Agreement
shall be a “master agreement” for purposes of 11 U.S.C. §101(53B) and
12U.S.C. §1821(e)(8)(D)(vii),
or any successor provisions.
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(g)
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Commodity Exchange Act.
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Each
party represents to the other party on and as of the date hereof and on
each date on which a Transaction is entered into among them
that:
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(i)
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such
party is an “eligible contract participant” as defined in the U.S.
Commodity Exchange Act, as amended (the
“CEA”);
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(ii)
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neither
this Agreement nor any Transaction has been executed or traded on a
“trading facility” as such term is defined in the CEA;
and
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(iii)
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the
terms of this Agreement and each Transaction have been subject to
individual negotiation.
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(h)
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Escrow. If
by reason of the time difference between the cities in which payments are
to be made or otherwise, it is not possible for simultaneous payments to
be made on any date on which both parties are required to make payments
hereunder, either party may at its option and in its sole discretion
notify the other party that payments on that date are to be made in
escrow. In this case deposit of the payment due earlier on that
date shall be made by 2:00 p.m. (local time at the place for the earlier
payment) on that date with an escrow agent selected by the party giving
the notice and reasonably acceptable to the other party, accompanied by
irrevocable payment instructions (a) to release the deposited payment to
the intended recipient upon receipt by the escrow agent of the required
deposit of the corresponding payment from the other party on the same date
accompanied by irrevocable payment instructions to the same effect or (b)
if the required deposit of the corresponding payment is not made on that
same date, to return the payment deposited to the party that paid it into
escrow. The party that elects to have payments made in escrow
shall pay the costs of the escrow arrangements and shall cause those
arrangements to provide that the intended recipient of the payment due to
be deposited first shall be entitled to interest on that deposited payment
for each day in the period of its deposit at the rate offered by the
escrow agent for that day for overnight deposits in the relevant currency
in the office where it holds that deposited payment (at 11:00 a.m. local
time on that day) if that payment is not released by 5:00 p.m. local time
on the date it is deposited for any reason other than the intended
recipient’s failure to make the escrow deposit it is required to make
hereunder in a timely fashion.
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(i)
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WAIVER OF JURY
TRIAL: EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
SUIT, ACTION OR PROCEEDING RELATING TO THIS AGREEMENT, ANY CREDIT SUPPORT
DOCUMENT OR ANY TRANSACTION. EACH PARTY ACKNOWLEDGES THAT IT
AND THE OTHER PARTY HAVE ENTERED INTO THIS AGREEMENT AND ANY CREDIT
SUPPORT DOCUMENT, AS APPLICABLE, IN RELIANCE ON, AMONG OTHER THINGS, THE
MUTUAL WAIVERS IN THIS
SECTION.
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(j)
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Telephone
Recording. Each party (i) consents to the recording of
telephone conversations of trading and marketing personnel of the parties
in connection with this Agreement or any potential or actual Transaction
hereunder; (ii) agrees to obtain any necessary consent of and give notice
of such recording to its trading and marketing personnel; and (iii) agrees
that such recordings may be submitted in evidence in any proceeding
relating to this Agreement, subject to applicable rules of discovery and
evidence.
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(k)
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Additional
Definitions. The following definitions shall be added to
Section 14 in their appropriate alphabetical
place:
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“Force
Majeure” is a natural or man-made disaster, armed conflict, riot, civil
disturbance, or similar event that materially disrupts transportation or
communication facilities in the relevant city where the party is to make
payment, or otherwise prevents the
personnel of the party from performing their duties in connection with such
payment, and is beyond the control of the party.
“Loan, Security
and Servicing Agreement” means the Loan, Security and Servicing Agreement
dated as of October 25, 2007 among Party A, Evangelical Christian Credit Union,
Fairway Finance Company, LLC, BMO Capital Markets Corp., U.S. Bank National
Association and Lyon Financial Services, Inc, as amended, supplemented, restated
or replaced from time to time.
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(l)
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No
Petition. Party B hereby covenants and agrees that it
will not institute against, or join any other Person in instituting
against, the Lender any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding, or other proceeding under any
federal or state bankruptcy or similar law, for one year and one day after
the latest maturing Note issued by the Lender is paid in
full.
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(m)
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Limited
Recourse. Notwithstanding anything in this Agreement to
the contrary, the payment obligations of Party A set forth under this
Agreement (including this Schedule and any Confirmation) shall be limited
recourse obligations of Party A and shall be payable only as and to the
extent funds are available for such purpose pursuant to Section 1.4 of the
Loan, Security and Servicing Agreement. Upon the exhaustion of
all such sources of payment, all further liability of Party A under this
Agreement shall be extinguished, and no further claims shall be made
against Party A in respect thereof.
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(n)
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Defined
Terms. Capitalized terms not otherwise defined in this
Agreement will have the meanings ascribed to those terms in the Loan,
Security and Servicing Agreement.
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MINISTRY
PARTNERS FUNDING LLC
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BANK
OF MONTREAL
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By:
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By:
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Name:
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Name:
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Title:
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Title:
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Date:
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Date:
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