(Multicurrency-Cross Border)
ISDA registered trademark
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of June 18, 1997
Deutsche Bank AG, New York Branch and MBNA Master Credit Card Trust II
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 the 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)(1) 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, 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 requirements;
(2) pay to the relevant authorities the full amount required to
be deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving notice
that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that
the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal
the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to pay
any additional amount to Y to the extent that it would not be
required to be paid but for:-
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d);
or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure
would not have occurred but for (I) any action taken by a
taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is
entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (II) a
Change in Tax Law.
(ii) Liability. If:-
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or
effective designation of an Early Termination Date in respect of the
relevant Transaction, a party that defaults in the performance of any
payment obligation will, to the extent permitted by law and subject to
Section 6(c), be required to pay interest (before as well as after
judgment) on the overdue amount to the other party on demand in the same
currency as such overdue amounts, 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 organisation or incorporation and,
if relevant under such laws, in good standing:
(ii) Powers. It has the power to execute this Agreement and any
other documentation relating to this Agreement to which it is a
party, to deliver this Agreement and any other documentation
relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and
any obligations it has under any Credit Support Document to which
it is a party and has taken all necessary action to 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, reorganisation, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event
of Default or, to its knowledge, Termination Event with respect to it
has occurred and is continuing and no such event or circumstances 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 obligations under this Agreement or under any Credit
Support Document to which it is a party:-
(a) Furnish Specified Information. It will deliver to the other party
or, in certain cases under subparagraph (iii) below, to such government
or taxing authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing
in order to allow such other party or its Credit Support Provider
to make a payment under this Agreement or any applicable Credit
Support Document without any deduction or withholding for or on
account of any Tax or with such deduction or withholding at a
reduced rate (so long as the completion, execution or submission
of such form or document would not materially prejudice the legal
or commercial position of the party in receipt of such demand),
with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation
or, if none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or
other authority that are required to be obtained by it with respect to
this Agreement or any Credit Support Document to which it is a party and
will use all reasonable efforts to obtain any that may become necessary
in the future.
(c) Comply with Laws. It will comply in all material aspects with all
applicable laws and orders to which it may be subject if failure so to
comply would materially impair its ability to perform its obligations
under this Agreement or any Credit Support Document to which it is a
party.
(d) Tax Agreement. It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and true
promptly upon learning of such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any
Stamp Tax levied or imposed upon it or in respect of its execution or
performance of this Agreement by a jurisdiction in which it is
incorporated, organised, managed and controlled, or considered to have
its seat, or in which a branch or office through which it is acting for
the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and
will indemnify the other party against any Stamp Tax levied or imposed
upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which
is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or
any Specified Entity of such party of any of the following events
constitutes an event of default (an "Event of Default") with respect to
such party:-
(i) Failure to Pay or Deliver. Failure by the party to make,
when due, any payment under this Agreement or delivery under
Section 2(a)(i) or 2(e) required to be made by it if such failure
is not remedied on or before the third Local Business Day after
notice of such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to
make any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d))
to be complied with or performed by the party in accordance with
this Agreement if such failure is not remedied on or before the
thirtieth day after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure
is continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit
Support Document relates without the written consent of the
other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a
representation under Section 3(e) or (f) made or repeated or
deemed to have been made or repeated by the party or any Credit
Support Provider of such party in this Agreement or any Credit
Support Document proves to have been incorrect or misleading in
any material respect when made or repeated or deemed to have been
made or repeated;
(v) Default under Specified Transaction. The party, any Credit
Support Provider of such party or any applicable Specified Entity
of such party (1) defaults under a Specified Transaction and,
after giving effect to any applicable notice requirement or grace
period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified
Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date of, or
any payment on early termination of, a Specified Transaction (or
such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part,
a Specified Transaction (or such action is taken by any person or
entity appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence of
(1) a default, event of default or other similar condition or
event (however described) in respect of such party, any Credit
Support Provider of such party or any applicable Specified Entity
of such party under one or more agreements or instruments relating
to Specified Indebtedness of any of them (individually or
collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due
and payable or (2) a default by such party, such Credit Support
Provider or such Specified Entity (individually or collectively)
in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable
to pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for
the benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or liquidation
or (B) is not dismissed, discharged, stayed or restrained in
each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or
other similar official for it or for all or substantially
all its assets; (7) has a secured party take possession of
all or substantially all its assets or has a distress,
execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially
all its assets and such secured party maintains possession,
or any such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8)
causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses
(1) to (7) (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit
Support Provider of such party consolidates or amalgamates with,
or merges with or into, or transfers all or substantially all its
assets to, another entity and, at the time of such consolidation,
amalgamation, merger or transfer:-
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or
any Specified Entity of such party of any event specified below
constitutes an Illegality if the event is specified in (i) below, a Tax
Event if the event is specified in (ii) below or a Tax Event Upon
Merger if the event is specified in (iii) below, and, if specified to
be applicable, a Credit Event Upon Merger if the event is specified
pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:-
(i) Illegality. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered
into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with
competent jurisdiction of any applicable law after such date, it
becomes unlawful (other than as a result of a breach by the party
of Section 4(b)) for such party (which will be the Affected
Party):-
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply with
any other material provision of this Agreement relating to
such Transaction; or
(2) to perform,, or for any Credit Support Provider of
such party to perform, any contingent or other obligation
which the party (or such Credit Support Provider) has under
any Credit Support Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into (regardless
of whether such action is taken or brought with respect to a party
to this Agreement) or (y) a Change in Tax Law, the party (which
will be the Affected Party) will, or there is a substantial
likelihood that it will, on the next succeeding Scheduled Payment
Date (1) be required to pay to the other party an additional
amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to
be deducted or withheld for or on account of a Tax (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by reason of Section
2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on
the next succeeding Scheduled Payment Date will either (1) be
required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount has been deducted or withheld for or
on account of any Indemnifiable Tax in respect of which the other
party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a
result of a party consolidating or amalgamating with, or merging
with or into, or transferring all or substantially all its assets
to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section
5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party
("X"), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or merges
with or into, or transfers all or substantially all its assets to,
another entity and such action does not constitute an event
described in Section 5(a)(viii) but the creditworthiness of the
resulting, surviving or transferee entity is materially weaker
than that of X, such Credit Support Provider or such Specified
Entity, as the case may be, immediately prior to such action (and,
in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional
Termination Event" is specified in the Schedule or any
Confirmation as applying, the occurrence of such event (and, in
such event, the Affected Party or Affected Parties shall be as
specified for such Additional Termination Event in the Schedule or
such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance
which would otherwise constitute or give rise to an Event of
Default also constitutes an Illegality, it will be treated as an
Illegality and will not constitute an Event of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an
Event of Default with respect to a party (the "Defaulting Party") has
occurred and is then continuing, the other party (the "Non-defaulting
Party") may, by not ore than 20 days notice to the Defaulting Party
specifying the relevant Event of Default, designate a day not earlier
than the day such notice is effective as an Early Termination Date in
respect of all outstanding Transactions. If, however, "Automatic Early
Termination" is specified in the Schedule as applying to a party, then
an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party
of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6)
or, to the extent analogous thereto, (8), and as of the time
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4)
or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party
will, promptly upon becoming aware of it, notify the other party,
specifying the nature of that Termination Event and each Affected
Transaction and will also give such other information about that
Termination Event as the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an
Illegality under Section 5(b)(i)(2) 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.
(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 Events of Default) and on the day which is two
Local Business Days after the day on which notice of the amount
payable is effective (in the case of an Early Termination Date
which is designated as a result of a Termination Event). Such
amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after
judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number
of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date
occurs, the following provisions shall apply based on the parties'
election in the Schedule of a payment measure, either "Market
Quotation" or "Loss", and a payment method, either the "First Method"
or the "Second Method". If the parties fail to designate a payment
measure or payment method in the Schedule, it will be deemed that
"Market Quotation" or the "Second Method", as the case may be, shall
apply. The amount, if any, payable in respect of an Early Termination
Date and determined pursuant to this Section will be subject to any
Set-off.
(i) Events of Default. If the Early Termination Date results
from an Event of Default:-
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party will
pay to the Non-defaulting Party the excess, if a positive
number, of (A) the sum of the Settlement Amount (determined
by the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B)
the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss
in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B)
the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party. If that amount is a positive
number, the Defaulting Party will pay it to the Non-
defaulting Party; if it is a negative number, the Non-
defaulting Party will pay the absolute value of that amount
to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount
is a positive number, the Defaulting Party will pay it to
the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results
from a Termination Event:-
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance with
Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:-
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be payable
equal to (I) the sum of (a) one-half of the difference
between the Settlement Amount of the party with the
higher Settlement Amount ("X") and the Settlement
Amount of the party with the lower Settlement Amount
("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts
owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Loss of the party with the higher Loss ("X") and
the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of
that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are
appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement
(and retained by such other party) during the period from the
relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount
is payable for the loss of bargain and the loss of protection
against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest
or obligation in or under this Agreement may be transferred (whether
by way of security or otherwise) by either party without the prior
written consent of the other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or
transfer of all or substantially all its assets to, another
entity (but without prejudice to any other right or remedy under
this Agreement); and
(b) a party may make such a transfer of all or any part of its
interest in any amount payable to it from a Defaulting Party
under Section 6(e).
Any purported transfer that is not in compliance with this Section
will be void.
(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 sort of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the
payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the
amount in the Contractual Currency so received exceeds the amount in
the Contractual Currency payable in respect of this Agreement, the
party receiving the payment will refund promptly the amount of such
excess.
(b) Judgments. To the extent permitted by applicable law, if
any judgment or order expressed in a currency other than the
Contractual Currency is rendered (i) for the payment of any amount
owing in respect of this Agreement, (ii) for the payment of any
amount relating to any early termination in respect of this Agreement
or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party
seeking recovery, after recovery in full of the aggregate amount to
which such party is entitled pursuant to the judgment or order, will
be entitled to receive immediately from the other party the amount of
any shortfall of the Contractual Currency received by such party as a
consequence of sums paid in such other currency and will refund
promptly to the other party any excess of the Contractual Currency
received by such party as a consequence of sums paid in such other
currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual
Currency is converted into the currency of the judgment or order for
the purposes of such judgment or order and the rate of exchange at
which such party is able, acting in a reasonable manner and in good
faith in converting the currency received into the Contractual
Currency, to purchase the Contractual Currency with the amount of the
currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the
purchase of or conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable
law, these indemnities constitute separate and independent
obligations from the other obligations in this Agreement, will be
enforceable as separate and independent causes of action, will apply
notwithstanding any indulgence granted by the party to which any
payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of
this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it
will be sufficient for a party to demonstrate that it would have
suffered a loss had an actual exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to its
subject matter and supersedes all oral communication and prior
writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect
of this Agreement will be effective unless in writing (including a
writing evidenced by a facsimile transmission) and executed by each
of the parties or confirmed by an exchange of telexes or electronic
messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections
2(a)(iii) and 6(c)(ii), the obligations of the parties under this
Agreement will survive the termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement,
the rights, powers, remedies and privileges provided in this
Agreement are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver
in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be
deemed an original.
(ii) The parties intend that they are legally bound by the terms
of each Transaction from the moment they agree to those terms
(whether orally or otherwise). A Confirmation shall be entered
into as soon as practicable and may be executed and delivered in
counterparts (including by facsimile transmission) or be created
by an exchange of telexes or by an exchange of electronic messages
on an electronic messaging system, which in each case will be
sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through
another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any
right, power or privilege in respect of this Agreement will not be
presumed to operate as a waiver, and a single or partial exercise of
any right, power or privilege will not be presumed to preclude any
subsequent or further exercise, of that right, power or privilege or
the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for
convenience of reference only and are not to affect the construction
of or to be taken into consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying,
each party that enters into a Transaction through an Office other
than its head or home office represents to the other party that,
notwithstanding the place of booking office or jurisdiction of
incorporation or organisation of such party, the obligations of such
party are the same as if it had entered into the Transaction through
its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered
into.
(b) Neither party may change the Office through which it makes
and receives payments or deliveries for the purpose of a Transaction
without the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the
Schedule, such Multibranch Party may make and receive payments or
deliveries under any Transaction through any Office listed in the
Schedule, and the Office through which it makes and receives payments
or deliveries with respect to a Transaction will be specified in the
relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the
other party for and against all reasonable out-of-pocket expenses,
including legal fees and Stamp Tax, incurred by such other party by
reason of the enforcement and protection of its rights under this
Agreement or any Credit Support Document to which the Defaulting
Party is a party or by reason of the early termination of any
Transaction, including, but not limited to, costs of collection.
12. 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 an delivered in person or by courier, on the
date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the
date that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of 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 Act of
1982 or any modification, extension or re-enactment thereof for the
time being in force) nor will the bringing of Proceedings in any one or
more jurisdictions preclude the bringing of Proceedings in any other
jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process
Agent (if any) specified opposite its name in the Schedule to receive,
for it and on its behalf, service of process in any Proceedings. If
for any reason any party's Process Agent is unable to act as such, such
party will promptly notify the other party and within 30 days appoint a
substitute process agent acceptable to the other party. The parties
irrevocably consent to service of process given in the manner provided
for notices in Section 12. Nothing in this Agreement will affect the
right of either party to serve process in any other manner permitted by
law.
(d) Waiver of Immunities. Each party irrevocably waives, to the
fullest extent permitted by applicable law, with respect to itself and
its revenues and assets (irrespective of their use or intended use),
all immunity on the grounds of sovereignty or other similar grounds
from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of
injunction, order for specific performance or for recovery of
property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it
or its revenues or assets might otherwise be entitled in any
Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any
such immunity in any Proceedings.
14. Definitions
As used in this Agreement:-
"Additional Termination Event" has the meaning specified in Section
5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and
(b) with respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person,
any entity controlled, directly or indirectly, by the person, any
entity that controls, directly or indirectly, the person or any entity
directly or indirectly under common control with the person. For this
purpose, "control" of any entity or person means ownership of a
majority of the voting power of the entity or person.
"Applicable Rate" means:-
(a) in respect of obligations payable or deliverable (or which would
have been but for Section 2(a)(iii) by a Defaulting Party, the Default
Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with
Section 6(d)(ii) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or
which would have been but for Section 2(a)(iii) by a Non-defaulting
Party, the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or
after the date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation,
exemption, notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is
specified as such in this Agreement.
"Credit Support Document" means any agreement or instrument that is
specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof
or evidence of any actual cost) to the relevant payee (as certified by
it) if it were to fund or of funding the relevant amount plus 1% per
annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with
Section 6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present
or former connection between the jurisdiction of the government or
taxation authority imposing such Tax and the recipient of such payment
or a person related to such recipient (including, without limitation, a
connection arising from such recipient or related person being or having
been a citizen or resident of such jurisdiction, or being or having been
organised, present or engaged in a trade or business in such
jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection
arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document.
"law" includes any treaty, law, rule or regulation (as modified, in the
case of tax matters, by the practice of any relevant governmental
revenue authority) and "lawful" and "unlawful" will be construed
accordingly.
"Local Business Day" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) (a) in relation to any
obligation under Section 2(a)(i), in the place(s) specified in the
relevant Confirmation or, if not so specified, as otherwise agreed by
the parties in writing or determined pursuant to provisions contained or
incorporated by reference, in this Agreement, (b) in relation to any
other payment, in the place where the relevant account is located and,
if different, in the principal financial centre, if any, of the currency
of such payment, (c) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), in the city
specified in the address for notice provided by the recipient and, in
the case of a notice contemplated by Section 2(b), in the place where
the relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to
such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith
to be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated
Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of
such party but without duplication, loss or cost incurred as a result of
its terminating, liquidating, obtaining or reestablishing any hedge or
related trading position (or any gain resulting from any of them). Loss
includes losses and costs (or gains) in respect of any payment or
delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early
Termination Date and not made, except, so as to avoid duplication, if
Section 6(e)(i)(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).
"Office" means a branch or office of a party, which may be such party's
head or home office.
"Potential Event of Default" means any event which, with the giving of
notice or the lapse of time or both, would constitute an Event of
Default.
"Reference Market-makers" means four leading dealers in the relevant
market selected by the party determining a Market Quotation in good
faith (a) from among dealers of the highest credit standing which
satisfy all the criteria that such party applies generally at the time
in deciding whether to offer or to make an extension of credit and (b)
to the extent practicable, from among such dealers having an office in
the same city.
"Relevant Jurisdiction" means, with respect to a party, the
jurisdictions (a) in which the party is incorporated, organised, managed
and controlled or considered to have its seat, (b) where an Office
through which the party is acting for purposes of this Agreement is
located, (c) in which the party executes this Agreement and (d) in
relation to any payment, from or through which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is
to be made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the
payer of an amount under Section 6 is entitled or subject (whether
arising under this Agreement, another contract, applicable law or
otherwise) that is exercised by, or imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early
Termination Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations
(whether positive or negative) for each Terminated Transaction or group
of Terminated Transactions for which a Market Quotation is determined;
and
(b) such party's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for each Terminated Transaction or
group of Terminated Transactions for which a Market Quotation cannot be
determined or would not (in the reasonable belief of the party making
the determination) produce a commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"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 nay other similar
transaction (including any option with respect to any of these
transactions), (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this
Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing
authority in respect of any payment under this Agreement other than a
stamp, registration, documentation or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination
Date (a) if resulting from a Termination Event, all Affected
Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the
effectiveness of the notice designating that Early Termination Date (or,
if "Automatic Early Termination" applies, immediately before that Early
Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency
amount and, in respect of any amount denominated in a currency other
than the Termination Currency (the "Other Currency"), the amount in the
Termination Currency determined by the party making the relevant
determination as being required to purchase such amount of such Other
Currency as at the relevant Early Termination Date, or, if the relevant
Market Quotation or Loss (as the case may be), is determined as of a
later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected
as provided below) for the purchase of such Other Currency with the
Termination Currency at or about 11:00 a.m. (in the city in which such
foreign exchange agent is located) on such date as would be customary
for the determination of such a rate for the purchase of such Other
Currency for value on the relevant Early Termination Date or that later
date. The foreign exchange agent will, if only one party is obliged to
make a determination under Section 6(e), be selected in good faith by
that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or
an Additional Termination Event.
"Termination Rate means a rate per annum equal to the arithmetic mean of
the cost (without proof or evidence of any actual cost) to each party
(as certified by such party) if it were to fund or of funding such
amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i)
on or prior to such Early Termination Date and which remain unpaid as at
such Early Termination Date and (b) in respect of each Terminated
Transaction, for each obligation under Section 2(a)(i) which was (or
would have been but for Section 2(a)(iii) required to be settled by
delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an
amount equal to the fair market value of that which was (or would have
been) required to be delivered as of the originally scheduled date for
delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been
required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will
be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in
clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so
obliged, it shall be the average of the Termination Currency Equivalents
of the fair market values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on
the first page of this document.
Deutsche Bank AG, MBNA Master Credit Card Trust II
New York Branch The Bank of New York
(Name of Party) (Name of
Party)
solely in its capacity as trustee
and not in its individual capacity.
By /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇ By /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President Title: Assistant
Vice President
By. /s/ ▇▇▇▇ ▇. McGill_________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President
EXECUTION COPY
SCHEDULE
to the
Master Agreement
dated as of June 18, 1997
between
DEUTSCHE BANK AG, NEW YORK BRANCH ("Party A"),
and
THE BANK OF NEW YORK (the "Trustee")
acting as trustee for
The MBNA MASTER CREDIT CARD TRUST II ("Party B"), a trust formed
pursuant to a pooling and servicing agreement dated as of August 4, 1994
(as amended and supplemented from time to time, the "Pooling and
Servicing Agreement"), as supplemented by the Series 1997-F Supplement
dated as of June 18, 1997, each between MBNA America Bank, National
Association, as Seller and Servicer, and the Trustee (the Pooling and
Servicing Agreement, as so supplemented, the "Trust Agreement").
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 "Breach of Agreement" provisions of Section 5(a)(ii), the
"Misrepresentation" provisions of Section 5(a)(iv), the "Default
under Specified Transaction" provisions of Section 5(a)(v), the
"Cross Default" provisions of Section 5(a)(vi), the "Merger
Without Assumption" provisions of Section 5(a)(viii), the "Tax
Event" provisions of Section 5(b)(ii), "Tax Event Upon Merger"
provisions of Section 5(b)(iii), and the "Credit Event Upon
Merger" provisions of Section 5(b)(iv), and, to the extent of any
Payment Carryforward Event set forth in the applicable
Confirmation, the "Failure to Pay or Deliver" provisions of
Section 5(a)(i) will not apply to Party A and will not apply to
Party B. Solely with respect to payments required to be made by
Party A relating to the Rapid Accumulation Period, the word
"third" in the final line of Section 5(a)(i) shall be replaced
with "12:00 noon of the first".
(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. For the purpose of Section 6(e) of
this Agreement, Market Quotation and the Second Method will apply;
provided, however, that in the case of an Event of Default with
respect to Party A as the Defaulting Party or a Termination Event
with respect to Party A as the Affected Party, the related
Settlement Amount, if negative, will be deemed to be zero if the
Market Quotation cannot be determined.
(f) Market Quotation. Notwithstanding anything to the contrary in the
definition of Market Quotation in Section 14, in the case of an
Event of Default with respect to Party A as the Defaulting Party
or a Termination Event with respect to Party A as the Affected
Party, the Market Quotation, if negative, will be deemed to be the
negative quotation, if any, with the highest absolute value
received from any Reference Market-maker, even if only one
quotation is provided, with which Party B is able, using its best
efforts, to enter into a Replacement Transaction even if Party B
reasonably believes such Market Quotation would not produce a
commercially reasonable result.
(g) "Reference Market-maker" will not have the meaning specified in
Section 14, but will instead mean the following:
"Reference Market-maker" means five leading dealers in the
relevant market selected by the party determining the Market
Quotation in good faith (a) from among dealers which are
rated not lower than investment grade by S&P and ▇▇▇▇▇'▇
which satisfy the criteria that such party applies generally
at that time in deciding whether to offer or make an
extension of credit and (b) to the extent practicable, from
among dealers having an office in the same city.
(h) "Termination Currency" means United States Dollars ("USD").
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 (other than interest under
Sections 2(e), 6(d)(ii) and 6(e) of this Agreement) to be made by
it to the other party under this Agreement. In making this
representation, it may rely on (i) the 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 represents that either (i) it is wholly exempt
from deduction or withholding of Tax imposed by the United States
or any political subdivision or taxing authority thereof or
therein with respect to all amounts to be made in connection with
this Agreement because of an applicable tax treaty to which the
United States is a party, or (ii) 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.
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 document-
Form/Document/Certificate-
Date by which
to be delivered-Covered by Section 3(d) Representation
Party B-Any form or document that may be reasonably requested, and that
Party B is eligible to provide, in order to allow the requesting party
to make a payment without (or with reduced) withholding Tax.-Promptly
upon reasonable demand by the other party.-Yes
Party A-Two accurate and completed 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.-
Within 30 days of the execution and delivery of this Agreement, but in
no event later than the date of the first payment made by Party B to
Party A in connection with the Agreement and additionally, prior to the
date on which the first payment is to be made by Party B, with respect
to each succeeding calendar year; and within the earlier of (i) 30 days
of a change in circumstances that renders the forms previously delivered
to Party B inaccurate or incomplete in any material respect or (ii) the
first Party B Floating Amount Payment Date which falls after a change in
circumstances that renders the forms previously delivered to Party B
inaccurate or incomplete in any material respect.-Yes
(b) Other documents to be delivered are:
Party required to deliver document-
Form/Document/Certificate-
Date by which to be delivered-Covered by Section 3(d)
Party A-Opinions of counsel for Party A substantially in the form of
Exhibit A and Exhibit B to this Schedule-Upon execution of this
Agreement-Yes
Party A-An incumbency certificate with respect to the signatories of
this Agreement-Upon execution of this Agreement-Yes
Party B-An opinion of counsel for Party B substantially in the form of
Exhibit C to this Schedule-Upon execution of this Agreement-Yes
Party B-An incumbency certificate with respect to the signatory of this
Agreement-Upon execution of this Agreement-Yes
Party B-Documentary evidence of authority of The Bank of New York, as
Trustee, to act on behalf of Party B-Upon execution of this Agree-ment-
Yes
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a):
Address for notices or communications to Party A:
Address: Deutsche Bank AG,
New York Branch
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
For all purposes.
Address for notices or communications to Party B:
Address: MBNA Master Credit Card Trust II
▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇, as Trustee
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
MBNA Master Credit Card Trust II
MBNA America Bank, National Association,
as Servicer
Securitizations
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
For all purposes.
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this
Agreement.
(d) 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.
(e) Calculation Agent. The Calculation Agent is the Trustee, unless
otherwise specified in a Confirmation in relation to the relevant
Transaction.
(f) 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.
(g) Credit Support Provider.
In relation to Party A: Not applicable
In relation to Party B: Not applicable
(h) 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).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this
Agreement will apply to any of the Transactions, except that it
will not apply to payments by each Party to the other if Party B
so notifies Party A ten (10) days in advance of the date such
Payments are due.
(j) "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.
Part 5. Other Provisions.
(a) Confirmation. Each Confirmation supplements, forms part of, and
will be read and construed as one with, this Agreement. A form of
Confirmation is set forth as Exhibit D hereto.
(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 any
action (whether in bankruptcy or otherwise) against Party B in any
court prior to the date which is one year and one day after all
Investor Certificates (as such term is defined in the Pooling and
Servicing Agreement), including all collateral interests and class
C interests, of Party B have been paid in full.
(d) Assignment. In the event the long-term debt obligations of Party
A are lowered to below the category of BBB- by Standard & Poor's
Corporation ("S&P") or Baa3 by ▇▇▇▇▇'▇ Investor Services
("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) Provision for Payments from Party B. Notwithstanding anything
contained in this Agreement to the contrary, any amount required
to be paid by Party B pursuant to this Agreement will be payable
only to the extent provided in subsections 4.09(a)(ii) and 4.11(l)
of the Trust Agreement (as each such term is defined in the
Confirmation). The Trustee shall not be required to expend or
risk its own funds or otherwise incur any liability in connection
with this Agreement, and Party A shall not bring any claim
whatsoever against the Trustee in its individual capacity or
against the assets of the Trustee (other than the assets of the
Trust).
(f) Definition of Trustee. For purposes of this Agreement the term
"Trustee" shall mean The Bank of New York as trustee for Party B.
(g) 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.
(h) Additional Amounts Payable to Party A. In the event that the
Rapid Amortization Period commences as a result of a Trust Pay Out
Event, on each Floating Rate Payer Payment Date during the Rapid
Amortization Period, Party B shall pay to Party A, an amount equal
to the sum of the monthly Settlement Amounts for each of the
related Floating Rate Payer Payment Dates during the Rapid
Amortization Period plus accrued interest thereon, compounded
monthly, at a rate per annum equal to the Floating Rate Option
plus the Floating Rate Spread for each of the related Floating
Rate Payer Payment Dates. For purposes of determining the
Settlement Amount for each Floating Rate Payer Payment Date during
the Rapid Amortization Period, the Terminated Transaction will be
the amount by which the Floating Rate Notional Amount has been
reduced since the preceding Floating Rate Payer Payment Date.
The parties executing this Schedule have executed the Master
Agreement and have agreed as to the contents of this Schedule.
DEUTSCHE BANK AG,
NEW YORK BRANCH
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
MBNA CREDIT CARD MASTER TRUST II
THE BANK OF NEW YORK, solely in its
capacity as
trustee and not in its individual capacity
By: ____________________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
EXHIBIT A to Schedule
[Form of Opinion of Counsel for
Party A.]
[date]
MBNA Credit Card Master Trust II
▇/▇ ▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Gentlemen:
I have acted as counsel to Deutsche Bank AG, New York Branch
("Party A"), and am familiar with matters pertaining to the execution
and delivery of the Master Agreement (the "Master Agreement") dated as
of June 18, 1997 between Party A and The Bank of New York as Trustee for
the MBNA Master Credit Card Trust II ("Party B"). The Master Agreement
is to be supplemented by confirmations of swap transactions to be
entered into by Party A and Party B from time to time (each a
"Confirmation") and the Master Agreement, together with all such
Confirmation, shall constitute one agreement.
In connection with this opinion, I have examined or had examined
on my behalf an executed copy of the Master Agreement and the form of
Confirmation attached thereto, and certificates of public officials and
officers of Party A and such other documents as I have deemed necessary
or appropriate for the purposes of this opinion. In such opinion, I
have assumed the genuineness of all the signatures, the authenticity of
all documents submitted to me as originals and the conformity to
authentic original documents of all documents submitted to me as
certified, conformed or photostatic copies. I have also assumed that
each Confirmation will be in substantially the form of Exhibit D to the
Master Agreement.
Based upon the foregoing, I am of the opinion that:
1. Party A is a branch duly licensed under the laws of the
State of New York of Deutsche Bank AG, a corporation duly organized and
validly existing under the laws of the Federal Republic of Germany.
2. The execution, delivery and performance of the Master
Agreement and each Confirmation are within the corporate power of Party
A, have been duly authorized by all necessary corporate action and do
not, or, with respect to each Confirmation, will not, conflict with any
provision of its articles of incorporation or by-laws.
3. The Master Agreement has been duly executed and delivered by
Party A and constitutes, and with respect to each Confirmation, upon due
execution and delivery by Party A, will constitute, a legally valid and
binding obligation of Party A, enforceable against it in accordance with
its 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)).
4. To the best of my knowledge no consent, authorization,
license or approval of or registration or declaration with, any United
States of America federal or New York governmental authority is required
in connection with the execution, delivery and performance of the Master
Agreement and each Confirmation by Party A.
I am admitted to the bar of the State of New York. I express no
opinion as to the laws of any jurisdiction other than (a) the laws of
the State of New York, (b) United States federal laws and (c) the laws
of the Federal Republic of Germany solely to the extent set forth in
paragraphs (1) and (3) above and solely in reliance on consultations
with, opinions of and information from the Central Legal Department of
Deutsche Bank.
This opinion is furnished to you only in connection with the
transactions contemplated and is not to be used, circulated, quoted or
otherwise referred to for any other purpose, provided that it may also
be delivered to Deutsche Bank which may rely upon this opinion to the
same extent as if such opinion were addressed to it. Except as
expressly provided in this paragraph, no other person may rely on this
opinion without my prior written consent.
EXHIBIT B to Schedule
[Form of Opinion of Foreign Counsel for Party A]
Ladies and Gentlemen:
In our capacities as Counsel of Deutsche Bank AG, we have been
asked to render the opinions expressed below with respect to the Master
Agreement (the "Master Agreement") dated as of June 18, 1997 between
Deutsche Bank AG, New York Branch (the "Branch") and The Bank of New
York as trustee for the MBNA Master Credit Card Trust II ("Party B"), as
supplemented by the Schedule and Confirmation thereto, each dated June
18, 1997 between the Branch and Party B (the Master Agreement as so
supplemented is referred to herein as the "Agreement"). In connection
therewith, we have examined the laws of the Federal Republic of Germany
and such other documents and instruments as we have deemed necessary in
order to render the opinions hereinafter set forth. We are qualified to
practice law in the Federal Republic of Germany and we do not purport to
be experts on, or to express any opinion herein concerning, any law
other than the law of the Federal Republic of Germany.
Based upon and subject to the foregoing, we are of the opinion that:
(i) Deutsche Bank AG is a corporation duly organized and validly
existing under the laws of the Federal Republic of Germany. Under
such laws, Deutsche Bank AG has the corporate power and authority,
acting through the Branch, to execute and deliver and to perform
its obligations under the Agreement.
(ii) Assuming that the Agreement has been duly authorized and
issued by the Branch and constitutes a legal, valid and binding
obligation under the laws of the State of New York, the Agreement
constitutes a legal, valid and binding obligation of Deutsche Bank
AG to be performed through the Branch and, assuming the due
authorization, execution and delivery thereof by each party
thereto other than the Branch, is enforceable against Deutsche
Bank AG in accordance with its terms, except as the enforceability
thereof may be limited (a) by bankruptcy, insolvency or similar
laws affecting the enforcement of creditors' rights generally, as
the same may be applied in the event of bankruptcy, insolvency or
similar proceedings of Deutsche Bank AG, (b) by the equitable
power of any court having jurisdiction or (c) as a result of
government action within the United States of America.
(iii) There are no legal requirements under the laws of the
Federal Republic of Germany which had to be met or fulfilled as a
condition precedent to the enforceability in the Federal Republic
of Germany of the Agreement which have not been duly met or
fulfilled.
(iv) Any judgment against the Branch with respect to the
Agreement given by the courts of the United States of America in
the State of New York or by the courts of the State of New York
would be recognized and enforced in the Federal Republic of
Germany, provided that the requirements of Section 328 of the
German Code of Civil Procedure are met, in particular that:
a. the courts have subject matter jurisdiction and there
is no exclusive German jurisdiction; we confirm that as
regards the enforcement of the Agreement against German
corporations, German courts do not have exclusive
jurisdiction;
b. Deutsche Bank AG has put in a general appearance in
the proceedings or actual personal service of process was
made on Deutsche Bank AG in a proper way (or at least timely
enough to allow for the raising of defenses); we confirm
that service on the Branch at its offices is sufficient
service on Deutsche Bank AG;
c. such judgment is not contrary to an existing judgment
which is to be recognized in the Federal Republic of
Germany;
d. such judgment has not resulting from legal proceedings
begun subsequent to other legal proceedings regarding the
same subject matter, which legal proceedings are
incompatible therewith;
e. the recognition of the foreign judgment is not
obviously contrary to essential principles of the laws of
the Federal Republic of Germany, in particular rights
granted under the constitutional law of the Federal Republic
of Germany; we have no reason to believe that any judgment
enforcing an obligation of the Branch pursuant to the
Agreement (other than a judgment awarding punitive damages),
which judgment is in line with the laws of the State of New
York, would be obviously contrary either to the essential
principles of the laws of the Federal Republic of Germany or
of the rights granted under the constitutional law of the
Federal Republic of Germany; and
f. reciprocity exists.
(v) An action to enforce the obligations under the Agreement may
be brought against Deutsche Bank AG in the courts of the Federal
Republic of Germany.
Very truly yours,
EXHIBIT C to Schedule
[Form of Opinion of Counsel for Trustee]
EXHIBIT D TO SCHEDULE
Date: June 18, 1997
To: The Bank of New York acting as
Trustee for the
MBNA Master Credit Card Trust II
Telephone:
Telecopier:
From: Deutsche Bank AG, New York Branch
Subject: Swap Transaction
The purpose of this communication is to set forth the terms
and conditions of the swap transaction entered into on the Trade Date
referred to below (the "Swap Transaction"), between THE BANK OF NEW YORK
(the "Trustee") acting as trustee for the MBNA MASTER CREDIT CARD TRUST
II, but only as relates to the Series 1997-F Class A 6.60% Certificates
(the "Trust") and Deutsche Bank AG, New York Branch. ("DBNY"). This
communication constitutes a "Confirmation" as referred to in the Swap
Agreement specified below.
This Confirmation supplements, forms part of, and is subject
to, the Master Agreement dated as of June 18, 1997, between DBNY and the
Trustee (the "Master Agreement"). All provisions contained in, or
incorporated by reference to, such Master Agreement shall govern this
Confirmation except as expressly modified below.
This Confirmation and the Schedule to the Master Agreement
(the "Schedule") each incorporate the definitions and provisions
contained in (i) the 1991 ISDA Definitions (as published by the
International Swaps and Derivatives Association, Inc.) (the
"Definitions") and (ii) the Series 1997-F Supplement dated as of June
18, 1997 (the "Supplement") to the Pooling and Servicing Agreement dated
as of August 4, 1994 by and between MBNA America Bank, National
Association, as Seller and Servicer, and The Bank of New York, as
Trustee (as amended, the "Pooling and Servicing Agreement", together
with the Supplement, the "Trust Agreement"), and relating to the Trust,
Series 1997-F ("Series 1997-F") and, in particular, for the purposes
hereof, the Class A 6.60% Asset Backed Certificates, Series 1997-F (the
"Class A Certificates"). In the event of any inconsistency between the
definitions in the Supplement and any of the Definitions, the Schedule
or this Confirmation, the definitions in the Supplement will govern; in
the event of any inconsistency between this Confirmation and either the
Schedule or the Definitions, this Confirmation will govern; and in the
event of any inconsistency between the Schedule and the Definitions, the
Schedule will govern.
The terms of this particular Swap Transaction to which this
Confirmation relates are as follows:
Trade Date:-June 18, 1997
Effective Date:-The Closing Date for Series 1997-F.
Termination Date:-The Scheduled Payment Date; provided, however, that in
the event that the Rapid Amortization Period commences as a result of a
Trust Pay Out Event, the Termination Date will be the earlier of (i) the
date on which the Notional Amount is zero and (ii) the Scheduled Payment
Date.
Fixed Amounts:-
Fixed Rate
Payer:-Party A.
Fixed Rate:-6.60%
Calculation
Periods:
-For the initial Calculation Period, the period from and including the
Effective Date through the day preceding the first Distribution Date;
thereafter, each Calculation Period will be the period from and
including the previous Distribution Date through the day preceding the
current Distribution Date.
Fixed Amount
for Initial
Calculation
Period:-$6,270,000.
Fixed Rate
Notional
Amount:-For the initial Calculation Period, $600,000,000 (the initial
outstanding principal balance of the Class A Certificates), and
thereafter the outstanding principal balance of Class A Certificates as
of the Record Date which occurs during each Calculation Period.
Fixed Rate
Payer Payment
Dates:-Each Transfer Date.
Fixed Rate Day
Count Fraction:-30/360
Floating Amounts:-
Floating Rate
Payer:
-Party B.
Calculation
Periods:-For the initial Calculation Period, the period from and
including the Effective Date through the day preceding the first
Distribution Date; thereafter, each Calculation Period will be the
period from and including the previous Distribution Date through the day
preceding the current Distribution Date.
Floating Rate
Payer Payment
Dates:-Each Transfer Date.
Floating Rate
Option:-USD-LIBOR-BBA.
Reset Dates:-Means, with respect to the initial Calculation Period, the
Effective Date, for the period from and including the Effective Date
through and including July 14, 1997, and July 15, 1997, for the period
from and including July 15, 1997 through and including the day preceding
the first Distribution Date, and with respect to each Calculation Period
thereafter, the first day of such Calculation Period.
Calculation Dates:-Means, with respect to each Calculation Period, the
first day of such Calculation Period.
Designated
Maturity:-One month.
Floating Rate
Spread:-%.
Floating Rate
Notional
Amount:-For the initial Calculation
Period, $600,000,000 (the initial outstanding principal balance of the
Class A Certificates), and thereafter the outstanding principal balance
of the Class A Certificates as of the Record Date which occurs during
each Calculation Period.
Floating Rate
Day Count Frac-
tion:-Actual/360.
Compounding:-Not Applicable.
Calculation Agent: -Trustee.
Business Days: -New York and Newark, Delaware.
Credit Support Document: -Not Applicable.
Other Provisions:
-If at any time during the Term of the Swap Transaction Party A's rating
is reduced below AA- by S&P or below Aa3 by ▇▇▇▇▇'▇, or is withdrawn by
either S&P or ▇▇▇▇▇'▇, the Trustee at the written instruction of the
Servicer, on behalf of the Trust shall establish and maintain with a
Qualified Institution, in the name of the Trust for the benefit of the
Class A Certificateholders, the interest reserve account as a segregated
trust account held for the benefit of Class A Certificateholders (the
"Interest Reserve Account"). Within thirty days of such reduction or
withdrawal, Party A shall fund the Interest Reserve Account in an amount
equal to one-twelfth of the product of (a) the Fixed Rate, and (b) the
outstanding principal balance of the Class A Certificates on the Record
Date preceding such reduction or withdrawal for reinvestment in
accordance with the Supplement; provided, however, that the failure of
Party A to adequately fund the Interest Reserve Account within thirty
days of such reduction or withdrawal shall not constitute an Event of
Default pursuant to the provisions of subsection 5(a) or a Termination
Event pursuant to the provisions of subsection 5(b). Party A shall
treat the amount on deposit in the Interest Reserve Account as its money
for tax purposes. After establishment of the Interest Reserve Account,
in the event there shall occur an Early Termination Date as a result of
an Event of Default with respect to Party A as the Defaulting Party or a
Termination Event with respect to Party A as the Affected Party, the
funds then contained in the Interest Reserve Account will be deposited
into the Finance Charge Account to the extent provided in the
Supplement. Upon termination of the Interest Reserve Account as
provided in the Supplement after payment of all amounts owing to the
1997-F Certificateholders that are payable from such account, the
Trustee will release all amounts on deposit therein to Party A.
A "Payment Carryforward Event" shall be deemed to occur for any Floating
Rate Payer Payment Date to the extent that (i) the sum of the Payment
Carryforward Amount for such date and the amount of any past due Payment
Carryforward Amount exceeds zero and (ii) amounts are not available
under subsection 4.11(l) of the Supplement to fully satisfy such amounts
on such date.
If Party B notifies Party A that netting of payments will not apply to
any of the Transactions pursuant to Part 4(i) of the Schedule, each
payment obligation of Party B under Section 2(a)(i) of the Master
Agreement in respect of this Swap Transaction shall be subject to the
condition precedent that in respect of each such payment obligation each
amount payable by Party A with respect to this Swap Transaction shall be
paid by Party A by 10:00 a.m., New York City time, on the relevant
Payment Date.
Governing Law: -New York.
Offices:-Party A is not a Multibranch Party.
-Party B is not a Multibranch Party.
Payment Instructions
for Party A USD:-
Payment Instructions
for the Trust in USD:
-
Please confirm that the foregoing correctly sets forth the terms of our
agreement with respect to the Swap Transaction by signing in the space
provided below and sending a copy of the executed Confirmation by
telecopier ( ) to Client Services Group.
It has been a pleasure working with you on this transaction and we look
forward to working with you again in the future.
Very truly yours,
DEUTSCHE BANK AG,
NEW YORK BRANCH
By: ___________________________________
Name:
Title:
By: ___________________________________
Name:
Title:
Agreed and Accepted by:
MBNA MASTER CREDIT CARD TRUST II,
THE BANK OF NEW YORK, solely
in its capacity as trustee and not
in its individual capacity
By: ______________________________
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Assistant Vice President
D-2
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