FOR REFERENCE USE ONLY - NOT A SUBSTITUTE FOR THE PRINTED ISDA FORM
Exhibit
10.9
FOR
REFERENCE USE ONLY - NOT A SUBSTITUTE FOR THE PRINTED ISDA FORM
(Multicurrency-Cross
Border)
ISDAâ
International
Swap Dealers Association, Inc.
MASTER
AGREEMENT
dated as
of ...........................................
.............................................................. and ...................................................................
have
entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly,
the parties agree as follows:-
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1.
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Interpretation
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(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.
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2.
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Obligations
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(a)
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General
Conditions.
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(i) Each
party will make each payment or delivery specified in each Confirmation to be
made by it, subject to the other provisions of this Agreement.
(ii)
Payments under this Agreement will be made on the due date for value on that
date in the place of the account specified in the relevant Confirmation or
otherwise pursuant to this Agreement, in freely transferable funds and in the
manner customary for payments in the required currency. Where
settlement is by delivery (that is, other than by payment), such delivery will
be made for receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation or elsewhere
in this Agreement.
(iii)
Each obligation of each party under Section 2(a)(i) is subject to (1) the
condition precedent that no Event of Default or Potential Event of Default with
respect to the other party has occurred and is continuing, (2) the condition
precedent that no Early Termination Date in respect of the relevant Transaction
has occurred or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.
(b) Change of
Account. Either party may change its account for receiving a payment or
delivery by giving notice to the other party at least five Local Business Days
prior to the scheduled date for the payment or delivery to which such change
applies unless such other party gives timely notice of a reasonable objection to
such change.
(c) Netting. If on any date
amounts would otherwise be payable:-
(i) in the same
currency; and
(ii) in respect
of the same Transaction,
by each
party to the other, then, on such date, each party's obligation to make payment
of any such amount will be automatically satisfied and discharged and, if the
aggregate amount that would otherwise have been payable by one party exceeds the
aggregate amount that would otherwise have been payable by the other party,
replaced by an obligation upon the party by whom the larger aggregate amount
would have been payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.
The
parties may elect in respect of two or more Transactions that a net amount will
be determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such amounts are
payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This
election may be made separately for different groups of Transactions and will
apply separately to each pairing of Offices through which the parties make and
receive payments or deliveries.
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1992
2
(d) Deduction or
Withholding for Tax.
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(i)
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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:-
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(1)
promptly notify the other party ("Y") of such requirement;
(2) pay
to the relevant authorities the full amount required to be deducted or withheld
(including the full amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly
forward to Y an official receipt (or a certified copy), or other documentation
reasonably acceptable to Y, evidencing such payment to such authorities;
and
(4) if
such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which
Y is otherwise entitled under this Agreement, such additional amount as is
necessary to ensure that the net amount actually received by Y (free and clear
of Indemnifiable Taxes, whether assessed against X or Y) will equal the full
amount Y would have received had no such deduction or withholding been
required. However, X will not be required to pay any additional
amount to Y to the extent that it would not be required to be paid but
for:-
(A)
the failure by Y to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d); or
(B) the
failure of a representation made by Y pursuant to Section 3 (f) to be accurate
and true unless such failure would not have occurred but for (I) any action
taken by a taxing authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a party to this Agreement) or
(II) a Change in Tax Law.
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(ii)
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Liability. If:-
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(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
ISDA
1992
3
respect
of which X would not be required to pay an additional amount to Y under Section
2(d)(i)(4);
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(2)
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X
does not so deduct or withhold; and
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(3)
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a
liability resulting from such Tax is assessed directly against
X,
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then,
except to the extent Y has satisfied or then satisfies the liability resulting
from such Tax, Y will promptly pay to X the amount of such liability (including
any related liability for interest, but including any related liability for
penalties only if Y has failed to comply with or perform any agreement contained
in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest;
Other Amounts. Prior to the occurrence
or effective designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment obligation
will, to the extent permitted by law and subject to Section 6(c), be required to
pay interest (before as well as after judgment) on the overdue amount to the
other party on demand in the same currency as such overdue amount, for the
period from (and including) the original due date for payment to (but excluding)
the date of actual payment, at the Default Rate. Such interest will
be calculated on the basis of daily compounding and the actual number of days
elapsed. If, prior to the occurrence or effective designation of an
Early Termination Date in respect of the relevant Transaction, a party defaults
in the performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3.
Representations
Each
party represents to the other party (which representations will be deemed to be
repeated by each party on each date on which a Transaction is entered into and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:-
(a)
Basic
Representations.
(i) Status. It
is duly organized and validly existing under the laws of the jurisdiction of its
Organization or incorporation and, if relevant under such laws, in good
standing;
(ii) Powers. It
has the power to execute this Agreement and any other documentation relating to
this Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement and any
obligations it has under any Credit Support Document to which it is a party and
has taken all necessary action to authorize such execution, delivery and
performance;
(iii) No Violation or
Conflict. Such execution,
delivery and performance do not violate or conflict with any law applicable to
it, any provision of its constitutional
ISDA
1992
4
documents,
any order or judgment of any court or other agency of government applicable to
it or any of its assets or any contractual restriction binding on or affecting
it or any of its assets;
(iv) Consents. All governmental
and other consents that are required to have been obtained by it with respect to
this Agreement or any Credit Support Document to which it is a party have been
obtained and are in full force and effect and all conditions of any such
consents have been complied with; and
(v) Obligations
Binding. Its obligations
under this Agreement and any Credit Support Document to which it is a party
constitute its legal, valid and binding obligations, enforceable in accordance
with their respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity or at
law)).
(b) Absence of
Certain Events. No Event of
Default or Potential Event of Default or, to its knowledge, Termination Event
with respect to it has occurred and is continuing and no such event or
circumstance would occur as a result of its entering into or performing its
obligations under this Agreement or any Credit Support Document to which it is a
party.
(c) Absence of
Litigation. There is not
pending or, to its knowledge, threatened against it or any of its Affiliates any
action, suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to affect
the legality, validity or enforceability against it of this Agreement or any
Credit Support Document to which it is a party or its ability to perform its
obligations under this Agreement or such Credit Support Document.
(d) Accuracy of
Specified Information. All applicable
information that is furnished in writing by or on behalf of it to the other
party and is identified for the purpose of this Section 3(d) in the Schedule is,
as of the date of
the information, true, accurate and complete in every material
respect.
(e) Payer Tax
Representation. Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(e) is accurate and true.
(f) Payee Tax
Representations. Each
representation specified in the Schedule as being made by it for the purpose of
this Section 3(f) is accurate and true.
4. Agreements
Each
party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document to which it
is a party:-
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1992
5
(a) Furnish Specified
Information. It will deliver
to the other party or, in certain cases under subparagraph (iii) below, to such
government or taxing authority as the other party reasonably
directs:-
(i) any
forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;
(ii)
any
other documents specified in the Schedule or any Confirmation;
and
(iii) upon
reasonable demand by such other party, any form or document that may be required
or reasonably requested in writing in order to allow such other party or its
Credit Support Provider to make a payment under this Agreement or any applicable
Credit Support Document without any deduction or withholding for or on account
of any Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would not
materially prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and completed in a
manner reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each
case by the date specified in the Schedule or such Confirmation or, if none is
specified, as soon as reasonably practicable.
(b) Maintain
Authorizations. It will use all
reasonable efforts to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained by it with
respect to this Agreement or any Credit Support Document to which it is a party
and will use all reasonable efforts to obtain any that may become necessary in
the future.
(c) Comply with
Laws. It will comply
in all material respects with all applicable laws and orders to which it may be
subject if failure so to comply would materially impair its ability to perform
its obligations under this Agreement or any Credit Support Document to which it
is a party.
(d) Tax
Agreement. It will give
notice of any failure of a representation made by it under Section 3(f) to be
accurate and true promptly upon learning of such failure.
(e) Payment of Stamp
Tax. Subject to
Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of
its execution or performance of this Agreement by a jurisdiction in which it is
incorporated, organized, managed and controlled, or considered to have its seat,
or in which a branch or office through which it is acting for the purpose of
this Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the
other party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party, s execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.
ISDA
1992
6
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5.
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Events of Default and
Termination Events
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(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;
ISDA
1992
7
(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
ISDA
1992
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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):-
ISDA
1992
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(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 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
ISDA
1992
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(and, in
such event, the Affected Party or Affected Parties shall be as specified for
such Additional Termination Event in the Schedule or such
Confirmation).
(c) Event of
Default and
Illegality. If an event or circumstance which would otherwise constitute
or give rise to an
Event of Default also constitutes an Illegality, it will be treated as an
Illegality and will not constitute an Event of Default.
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6.
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Early
Termination
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(a) Right to
Terminate
Following Event of Default. If at any time an Event of Default
with respect to a party (the "Defaulting Party") has occurred and is then
continuing, the other party (the "Non-defaulting Party") may, by not more than
20 days notice to the Defaulting Party specifying the relevant Event of Default,
designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as applying
to a party, then an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon the occurrence with respect to such
party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6)
or, to the extent analogous thereto, (8), and as of the time immediately
preceding the institution of the relevant proceeding or the presentation of the
relevant petition upon the occurrence with respect to such party of an Event of
Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto,
(8).
(b Right to
Terminate Following Termination Event.
(i) Notice. If a Termination
Event occurs, an Affected Party will, promptly upon becoming aware of it, notify
the other party, specifying the nature of that Termination Event and each
Affected Transaction and will also give such other information about that
Termination Event as the other party may reasonably require.
(ii) Transfer to
Avoid Termination
Event. If either an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all reasonable
efforts (which will not require such party to incur a loss, excluding
immaterial, incidental expenses) to transfer within 20 days after it gives
notice under Section 6(b)(i) all its rights and obligations under this Agreement
in respect of the Affected Transactions to another of its Offices or Affiliates
so that such Termination Event ceases to exist.
If the
Affected Party is not able to make such a transfer it will give notice to the
other party to that effect within such 20 day period, whereupon the other party
may effect such a transfer within 30 days after the notice is given under
Section 6(b)(i).
ISDA
1992
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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.
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(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(c)) and (2) giving details of the
relevant account to which any amount payable to it is to be paid. In the absence
of written confirmation from the source of a quotation obtained in determining a
Market Quotation, the records of the party obtaining such quotation will be
conclusive evidence of the existence and accuracy of such
quotation.
(ii) Payment
Date. An amount
calculated as being due in respect of any Early Termination Date under Section
6(e) will be payable on the day that notice of the amount payable is effective
(in the case of an Early Termination Date which is designated or occurs as a
result of an Event of Default) and on the day which is two Local Business Days
after the day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a Termination
Event). Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination Date
to (but excluding) the date such amount is paid, at the Applicable Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) Payments on Early
Termination. If an Early Termination Date occurs, the following
provisions shall apply based on the parties' election in the Schedule of a
payment measure, either "Market Quotation” or "Loss", and a payment
method, either the "First Method" or the "Second Method". If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method", as the case
may be, shall apply. The amount, if any, payable in respect of an
Early Termination Date and determined pursuant to this Section will be subject
to any Set-off.
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(i)
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Events
of Default.
If the Early Termination Date results from an Event of
Default:-
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(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.
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(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
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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.
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8.
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Contractual
Currency
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(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
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1992
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actual
receipt by the party to which payment is owed acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the
Contractual Currency so received falls short of the amount in the Contractual
Currency payable in respect of this Agreement, the party required to make the
payment will, to the extent permitted by applicable law, immediately pay such
additional amount in the Contractual Currency as may be necessary to compensate
for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.
(b) Judgments.
To the extent permitted by applicable law, if any judgment or order
expressed in a currency other than the Contractual Currency is rendered (i) for
the payment of any amount owing in respect of this Agreement, (ii) for the
payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any
shortfall of the Contractual Currency received by such party as a consequence of
sums paid in such other currency and will refund promptly to the other party any
excess of the Contractual Currency received by such party as a consequence of
sums paid in such other currency if such shortfall or such excess arises or
results from any variation between the rate of exchange at which the Contractual
Currency is converted into the currency of the judgment or order for the
purposes of such judgment or order and the rate of exchange at which such party
is able, acting in a reasonable manner and in good faith in converting the
currency received into the Contractual Currency, to purchase the Contractual
Currency with the amount of the currency of the judgment or order actually
received by such party. The term "rate of exchange" includes, without
limitation, any premiums and costs of exchange payable in connection with the
purchase of or conversion into the Contractual Currency.
(c) Separate
Indemnities. To the extent permitted by applicable law, these indemnities
constitute separate and independent obligations from the other obligations in
this Agreement, will be enforceable as separate and independent causes of
action, will apply notwithstanding any indulgence granted by the party to which
any payment is owed and will not be affected by judgment being obtained or claim
or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence
of Loss.
For the purpose of this Section 8, it will be sufficient for a party to
demonstrate that it would have suffered a loss had an actual exchange or
purchase been made.
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9.
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Miscellaneous
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(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.
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(e)
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Counterparts
and Confirmations.
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(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.
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10.
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Offices; Multibranch
Parties
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(a) If
Section 10(a) is specified in the Schedule as applying, each party that enters
into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or Organization of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered
into.
(b) Neither
party may change the Office through which it makes and receives payments or
deliveries for the purpose of a Transaction without the prior written consent of
the other party.
(c) If
a party is specified as a Multibranch Party in the Schedule, such Multibranch
Party may make and receive payments or deliveries under any Transaction through
any Office listed in the Schedule, and the Office through which it makes and
receives payments or deliveries with respect to a Transaction will be specified
in the relevant Confirmation.
11. Expenses
A
Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of
collection.
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12.
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Notices
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(a) Effectiveness. Any notice or
other communication in respect of this Agreement may be given in any manner set
forth below (except that a notice or other communication under Section 5 or 6
may not be given by facsimile transmission or electronic messaging system) to
the address or number or in accordance with the electronic messaging system
details provided (see the Schedule) and will be deemed effective as
indicated:-
(i)
if in writing and delivered in person or by courier, on the date it is
delivered;
(ii)
if
sent by telex, on the date the recipient's answerback is
received;
(iii) if
sent by facsimile transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form (it being agreed that the
burden of proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile
machine);
(iv) if
sent by certified or registered mail (airmail, if overseas) or the equivalent
(return receipt requested), on the date that mail is delivered or its delivery
is attempted; or
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(v)
if sent by electronic messaging system, on the date that electronic message is
received,
unless
the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of
addresses. Either party may
by notice to the other change the address, telex or facsimile number or
electronic messaging system details at which notices or other communications are
to be given to it.
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13.
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Governing Law and
Jurisdiction
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(a) Governing
Law. This Agreement
will be governed by and construed in accordance with the law specified in the
Schedule.
(b) Jurisdiction. With respect to
any suit, action or proceedings relating to this Agreement ("Proceedings"), each
party irrevocably:-
(i) submits
to the jurisdiction of the English courts, if this Agreement is expressed to be
governed by English law, or to the non-exclusive jurisdiction of the courts of
the State of New York and the United States District Court located in the
Borough of Manhattan in New York City, if this Agreement is expressed to be
governed by the laws of the State of New York; and
(ii) waives
any objection which it may have at any time to the laying of venue of any
Proceedings brought in any such court, waives any claim that such Proceedings
have been brought in an inconvenient forum and further waives the right to
object, with respect to such Proceedings, that such court does not have any
jurisdiction over such party.
Nothing
in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed by English
law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of
Process. Each party
irrevocably appoints the Process Agent (if any) specified opposite its name in
the Schedule to receive, for it and on its behalf, service of process in any
Proceedings. If for any reason any party's Process Agent is unable to
act as such, such party will promptly notify the other party and within 30 days
appoint a substitute process agent acceptable to the other party. The
parties irrevocably consent to service of process given in the manner
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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.
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"Burdened
Party" has the
meaning specified in Section 5(b).
"Change in Tax
Law" means the enactment, promulgation, execution or ratification of, or
any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
“consent"
includes a consent, approval, action, authorization, exemption, notice,
filing, registration or exchange control consent.
"Credit Event
Upon Merger" has
the meaning specified in Section 5(b).
"Credit Support
Document" means
any agreement or instrument that is specified as such in this
Agreement.
"Credit Support
Provider" has the
meaning specified in the Schedule.
"Default Rate"
means a rate per annum equal to the cost (without proof or evidence of
any actual cost) to the relevant payee (as certified by it) if it were to fund
or of funding the relevant amount plus I % per annum.
"Defaulting
Party" has the meaning specified in Section 6(a).
"Early
Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of
Default" has the meaning specified in Section 5(a) and, if applicable,
in the
Schedule.
"Illegality"
has the meaning specified in Section 5(b).
"Indemnifiable
Tax" means any Tax other than a Tax that would not be imposed in respect
of a payment under this Agreement but for a present or former connection between
the jurisdiction of the government or taxation authority imposing such Tax and
the recipient of such payment or a person related to such recipient (including,
without limitation, a connection arising from such recipient or related person
being or having been a citizen or resident of such jurisdiction, or being or
having been organized, present or engaged in a trade or business in such
jurisdiction, or having or having bad 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.
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"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 refer-red to under Section I 1. 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
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Termination
Date, have been required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included. The
Replacement Transaction would be subject to such documentation as such party and
the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference Market-maker
to provide its quotation to the extent reasonably practicable as of the same day
and time (without regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more
than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
lowest values. If exactly three such quotations are provided, the
Market Quotation will be the quotation remaining after disregarding the highest
and lowest quotations. For this purpose, if more than one quotation
has the same highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be
deemed that the Market Quotation in respect of such Terminated Transaction or
group of Terminated Transactions cannot be determined.
"Non-default
Rate" means a rate per annum equal to the cost (without proof or evidence
of any actual cost) to the Non-defaulting Party (as certified by it) if it were
to fund the relevant amount.
"Non-defaulting
Party" has the meaning specified in Section 6(a).
"Office"
means a branch or office of a party, which may be such party's bead or home
office.
"Potential Event
of Default" means any event which, with the giving of notice or the lapse
of time or both, would constitute an Event of Default.
"Reference
Market-makers" means four leading dealers in the relevant market selected
by the party determining a Market Quotation in good faith (a) from among dealers
of the highest credit standing which satisfy all the criteria that such party
applies generally at the time in deciding whether to offer or to make an
extension of credit and (b) to the extent practicable, from among such dealers
having an office in the same city.
"Relevant
Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled
Payment Date" means a date on which a payment or delivery is to be made
under Section 2(a)(i) with respect to a Transaction.
"Set-off”
means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or
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subject
(whether arising under this Agreement, another contract, applicable law or
otherwise) that is exercised by, or imposed on, such payer.
"Settlement
Amount" means, with respect to a party and any Early Termination Date,
the sum of:-
(a) the
Termination Currency Equivalent of the Market Quotations (whether positive or
negative) for each Terminated Transaction or group of Terminated Transactions
for which a Market Quotation is determined; and
(b) such
party's Loss (whether positive or negative and without reference to any Unpaid
Amounts) for each Terminated Transaction or group of Terminated Transactions for
which a Market Quotation cannot be determined or would not (in the reasonable
belief of the party making the determination) produce a
commercially
reasonable result.
"Specified
Entity" has the meaning specified in the Schedule.
"Specified
Indebtedness" means, subject to the
Schedule, any obligation (whether present or future, contingent or otherwise, as
principal or surety or otherwise) in respect of borrowed money.
"Specified
Transaction" means, subject to the Schedule,
(a) any transaction (including an agreement with respect thereto) now existing
or hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such party)
and the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp
Tax" means any stamp, registration, documentation or similar
tax.
"Tax" means any present or
future tax, levy, impost, duty, charge, assessment or fee of any nature
(including interest, penalties and additions thereto) that is imposed by any
government or other taxing authority in respect of any payment under this
Agreement other than a stamp, registration, documentation or similar
tax.
“Tax Event"
has the meaning specified in Section 5(b).
ISDA
1992
24
"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 I 1:00 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
ISDA
1992
25
Applicable
Rate. Such amounts of interest will be calculated on the basis of
daily compounding and the actual number of days elapsed. The fair
market value of any obligation referred to in clause (b) above shall be
reasonably determined by the party obliged to make the determination under
Section 6(e) or, if each party is so obliged, it shall be the average of the
Termination Currency Equivalents of the fair market values reasonably determined
by both parties.
IN
WITNESS WHEREOF the parties have executed this document on the respective dates
specified below with effect from the date specified on the first page of this
document.
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(Name
of Party)
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(Name
of Party)
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Name
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Name
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Title
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Title
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Date:
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Date:
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Name
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Name
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Title
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Title
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Date:
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Date:
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ISDA
1992
26
(Bilateral
Form)
ISDAÒ
International
Swaps and Derivatives Association. Inc.
CREDIT
SUPPORT ANNEX
to the
Schedule to the
………………………....................................
dated as
of…………………........................
between
| .....................……………..................….......... and ..............................................…………… |
|
(“Party
A”)
|
(“Party
B”)
|
||
This
Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly,
the parties agree as follows: –
Paragraph
1. Interpretation
|
(a)
|
Definitions and
Inconsistency. Capitalized terms
not otherwise defined herein or elsewhere in this Agreement have the
meanings specified pursuant to Paragraph 12, and all references in this
Annex to Paragraphs are to Paragraphs of this Annex. In the event of any
inconsistency between this Annex and the other provisions of this
Schedule, this Annex will prevail, and in the event of any inconsistency
between Paragraph 13 and the other provisions of this Annex, Paragraph 13
will prevail.
|
|
(b)
|
Secured Party and
Pledgor. All references in
this Annex to the "Secured Party" will be to either Party when acting in
that capacity and all corresponding references to the "Pledgor” will be to
the other party when acting in that capacity; provided, however, that
if Other Posted Support is held by a party to this Annex, all references
herein to that party as the Secured Party with respect to that Other
Posted Support will be to that party as the beneficiary thereof and will
not subject that support or that party as the beneficiary thereof to
provisions of law generally relating to security interests and secured
parties.
|
Paragraph
2. Security Interest
Each
party, as the Pledgor, hereby pledges to the other party, as the Secured Party,
as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
Copyright
Ó 1994 by
International Swaps and Derivatives Association, Inc.
1
Paragraph
3. Credit Support Obligations
|
(a)
|
Delivery Amount. Subject to Paragraphs
4 and 5, upon a demand made by the Secured Party on or promptly following
a Valuation Date, if the Delivery Amount for that Valuation Date equals or
exceeds the Pledgor's Minimum Transfer Amount, then the Pledgor will
Transfer to the Secured Party Eligible Credit Support having a Value as of
the date of Transfer at least equal to the applicable Delivery Amount
(rounded pursuant to Paragraph 13). Unless otherwise specified in
Paragraph 13, the “Delivery Amount" applicable to the
Pledgor for any Valuation Date will equal the amount by
which:
|
|
(i)
|
the
Credit Support Amount
|
exceeds
|
(ii)
|
the
Value as of that Valuation Date of all Posted Credit Support held by the
Secured Party.
|
|
(b)
|
Return Amount. Subject to
Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly
following a Valuation Date, if the Return Amount for that Valuation Date
equals or exceeds the Secured Party's Minimum Transfer Amount, then the
Secured Party will Transfer to the Pledgor Posted Credit Support specified
by the Pledgor in that demand having a Value as of the date of Transfer as
close as practicable to the applicable Return Amount (rounded pursuant to
Paragraph 13). Unless otherwise specified in Paragraph 13, the "Return Amount” applicable to the
Secured Party for any Valuation Date will equal the amount by
which:
|
|
(i)
|
the
Value as of that Valuation Date of all Posted Credit Support held by the
Secured Party
|
exceeds
|
(ii)
|
the
Credit Support Amount.
|
“Credit Support Amount” means,
unless otherwise specified in Paragraph l3, for any Valuation Date (i) the
Secured Party's Exposure for that Valuation Date plus (ii) the aggregate of all
Independent Amounts applicable to the Pledgor, if any, minus (iii) all
Independent Amounts applicable to the Secured Party, if any, minus (iv) the
Pledgor’s Threshold; provided,
however, that the Credit Support Amount will be deemed to be zero
whenever the calculation of Credit Support Amount yields a number less than
zero.
Paragraph
4. Conditions Precedent, Transfer Timing, Calculations and
Substitutions
|
(a)
|
Conditions
Precedent. Each Transfer
obligation of the Pledgor under Paragraphs 3 and 5 and of the Secured
Party under Paragraphs 3, 4(d)(ii), 5 and 6(d) is subject to the
conditions precedent that:
|
|
(i)
|
no
Event of Default, Potential Event of Default or Specified Condition has
occurred and is continuing with respect to the other party;
and
|
|
(ii)
|
no
Early Termination Date for which any unsatisfied payment obligations exist
has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the other
party.
|
|
(b)
|
Transfer Timing. Subject to
Paragraphs 4(a) and 5 and unless otherwise specified, if a demand for the
Transfer of Eligible Credit Support or Posted Credit Support is made by
the Notification Time, then the relevant Transfer will be made not later
than the close of business on the next Local Business Day; if a demand is
made after the Notification Time, then the relevant Transfer will be made
not later than the close of business on the second Local Business Day
thereafter.
|
|
(c)
|
Calculations. All calculations
of Value and Exposure for purposes of Paragraphs 3 and 6(d) will be made
by the Valuation Agent as of the Valuation Time. The Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party)
of its calculations not later than the Notification Time on the Local
Business Day following the applicable Valuation Date (or in the case of
Paragraph 6(d), following the date of
calculation).
|
2
(d) Substitutions.
|
(i)
|
Unless
otherwise specified in Paragraph 13, upon notice to the Secured Party
specifying the items of Posted Credit Support to be exchanged, the Pledgor
may, on any Local Business Day, Transfer to the Secured Party substitute
Eligible Credit Support (the "Substitute Credit Support");
and
|
|
(ii)
|
subject
to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the
items of Posted Credit Support specified by the Pledgor in its notice not
later than the Local Business Day following the date on which the Secured
Party receives the Substitute Credit Support, unless otherwise specified
in Paragraph 13 (the "Substitution Date"); provided that the
Secured Party will only be obligated to Transfer Posted Credit Support
with a Value as of the date of Transfer of that Posted Credit Support
equal to the Value as of that date of the Substitute Credit
Support.
|
Paragraph
5. Dispute Resolution
If a
party (a "Disputing Party") disputes (I) the Valuation Agent's calculation of a
Delivery Amount or a Return Amount or (II) the Value of any Transfer of Eligible
Credit Support or Posted Credit Support, then (1) the Disputing Party will
notify the other party and the Valuation Agent (if the Valuation Agent is not
the other party) not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to
Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the
other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:
|
(i)
|
In
the case of a dispute involving a Delivery Amount or Return Amount, unless
otherwise specified in Paragraph 13, the Valuation Agent will recalculate
the Exposure and the Value as of the Recalculation Date
by:
|
(A)
utilizing any calculations of Exposure for the Transactions (or Swap
Transactions) that the parties have agreed are not in dispute;
(B)
calculating the Exposure for the Transactions (or Swap Transactions) in dispute
by seeking four actual quotations at mid-market from Reference Market-makers for
purposes of calculating Market Quotation, and taking the arithmetic average of
those obtained; provided
that if four quotations are not available for a particular Transaction
(or Swap Transaction), then fewer than four quotations may be used for that
Transaction (or Swap Transaction); and if no quotations are available for a
particular Transaction (or Swap Transaction), then the Valuation Agent's
original calculations will be used for that Transaction (or Swap Transaction);
and
(C)
utilizing the procedures specified in Paragraph 13 for calculating the Value, if
disputed, of Posted Credit Support.
|
(ii)
|
In
the case of a dispute involving the Value of any Transfer of Eligible
Credit Support or Posted Credit Support, the Valuation Agent will
recalculate the Value as of the date of Transfer pursuant to Paragraph
13.
|
Following
a recalculation pursuant to this Paragraph, the Valuation Agent will notify each
party (or the other party, if the Valuation Agent is a party) not later than the
Notification Time on the Local Business Day following the Resolution Time. The
appropriate party will, upon demand following that notice by the Valuation Agent
or a resolution pursuant to (3) above and subject to Paragraphs 4(a) and 4(b),
make the appropriate Transfer.
3
Paragraph
6. Holding and Using Posted Collateral--
|
(a)
|
Care of Posted
Collateral. Without limiting
the Secured Party's rights under Paragraph 6(c), the Secured Party will
exercise reasonable care to assure the safe custody of all Posted
Collateral to the extent required by applicable law, and in any event the
Secured Party will be deemed to have exercised reasonable care if it
exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding
sentence, the Secured Party will have no duty with respect to Posted
Collateral, including, without limitation, any duty to collect any Distributions, or
enforce or preserve any rights pertaining
thereto.
|
|
(b)
|
Eligibility to Hold Posted
Collateral; Custodians.
|
|
(i)
|
General. Subject to the
satisfaction of any conditions specified in Paragraph 13 for holding
Posted Collateral, the Secured Party will be entitled to hold Posted
Collateral or to appoint an agent (a "Custodian”) to hold Posted
Collateral for the Secured Party. Upon notice by the Secured Party to the
Pledgor of the appointment of a Custodian, the Pledgor's obligations to
make any Transfer will be discharged by making the Transfer to that
Custodian. The holding of Posted Collateral by a Custodian will be deemed
to be the holding of that Posted Collateral by the Secured Party for which
the Custodian is acting.
|
|
(ii)
|
Failure to Satisfy
Conditions. If the Secured
Party or its Custodian fails to satisfy any conditions for holding Posted
Collateral. then upon a demand made by the Pledgor, the Secured Party
will, not later than five Local Business Days after the demand, Transfer
or cause its Custodian to Transfer all Posted Collateral held by it to a
Custodian that satisfies those conditions or to the Secured Party if it
satisfies those conditions.
|
|
(iii)
|
Liability. The Secured Parry
will be liable for the acts or omissions of its Custodian to the same
extent that the Secured Party would be liable hereunder for its own acts
or omissions.
|
|
(c)
|
Use of Posted
Collateral. Unless otherwise
specified in Paragraph 13 and without limiting the rights and obligations
of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured
Party is not a Defaulting Party or an Affected Party with respect to a
Specified Condition and no Early Termination Date has occurred or been
designated as the result of an Event of Default or Specified Condition
with respect to the Secured Party, then the Secured Party will,
notwithstanding Section 9-207 of the New York Uniform Commercial Code,
have the right to:
|
|
(i)
|
sell,
pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose
of, or otherwise use in its business any Posted Collateral it holds, free
from any claim or right of any nature whatsoever of the Pledgor, including
any equity or right of redemption by the Pledgor;
and
|
|
(ii)
|
register
any Posted Collateral in the name of the Secured Party, its Custodian or a
nominee for either.
|
For
purposes of the obligation to Transfer Eligible Credit Support or Posted Credit
Support pursuant to Paragraphs 3 and 5 and any rights or remedies authorized
under this Agreement, the Secured Party will be deemed to continue to hold all
Posted Collateral and to receive Distributions made thereon, regardless of
whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
|
(d)
|
Distributions
and Interest Amount.
|
|
(i)
|
Distributions. Subject to
Paragraph 4(a), if the Secured Party receives or is deemed to receive
Distributions on a Local Business Day, it will Transfer to the Pledgor not
later than the following Local Business Day any Distributions it receives
or is deemed to receive to the extent that a Delivery Amount would not be
created or increased by that Transfer, as calculated by the Valuation
Agent (and the date of calculation will be deemed to be a Valuation Date
for this purpose).
|
4
|
(ii)
|
Interest Amount. Unless otherwise
specified in Paragraph 13 and subject to Paragraph 4(a), in lieu of any
interest, dividends or other amounts paid or deemed to have been paid with
respect to Posted Collateral in the form of Cash (all of which may be
retained by the Secured Party), the Secured Party will Transfer to the
Pledgor at the times specified in Paragraph 13 the Interest
Amount to the extent that a Delivery Amount would not be created or
increased by that Transfer, as calculated by the Valuation Agent (and the
date of calculation will be deemed to be a Valuation Date for this
purpose). The Interest Amount or portion thereof not Transferred pursuant
to this Paragraph will constitute Posted Collateral in the form of Cash
and will be subject to the security interest granted under Paragraph
2.
|
Paragraph
7. Events of Default
For
purposes of Section 5(a)(iii)(1) of this Agreement. an Event of Default will
exist with respect to a party if:
|
(i)
|
that
party fails (or fails to cause its Custodian) to make, when due, any
Transfer of Eligible Collateral, Posted Collateral or the
Interest Amount, as applicable, required to be made by it and that failure
continues for two Local Business Days after notice of that failure is
given to that party;
|
|
(ii)
|
that
party fails to comply with any restriction or prohibition specified in
this Annex with respect to any of the rights specified in Paragraph 6(c)
and that failure continues for five Local Business Days after notice of
that failure is given to that party;
or
|
|
(iii)
|
that
party fails to comply with or perform any agreement or obligation other
than those specified in Paragraphs 7(i) and 7(ii) and that failure
continues for 30 days after notice of that failure is given to that
party.
|
Paragraph
8. Certain Rights and Remedies
|
(a)
|
Secured Party’s Rights and
Remedies. If at any time
(1) an Event of Default or Specified Condition with respect to the Pledgor
has occurred and is continuing or (2) an Early Termination Date has
occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Pledgor, then, unless the Pledgor
has paid in full all of its Obligations that are then due, the Secured
Party may exercise one or more of the following rights and
remedies:
|
|
(i)
|
all
rights and remedies available to a secured party under applicable law with
respect to Posted Collateral held by the Secured
Party;
|
|
(ii)
|
any
other rights and remedies available to the Secured Party under the terms
of Other Posted Support, if any;
|
|
(iii)
|
the
right to Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash equivalent of any
Posted Collateral held by the Secured Party (or any obligation of the
Secured Party to Transfer that Posted Collateral);
and
|
|
(iv)
|
the
right to liquidate any Posted Collateral held by the Secured Party through
one or more public or private sales or other dispositions with such
notice, if any, as may be required under applicable law, free from any
claim or right of any nature whatsoever of the Pledgor, including any
equity or right of redemption by the Pledgor (with the Secured Party
having the right to purchase any or all of the Posted Collateral to be
sold) and to apply the proceeds (or the Cash equivalent thereof) from the
liquidation of the Posted Collateral to any amounts payable by the Pledgor
with respect to any Obligations in that order as the Secured Party may
elect.
|
Each
party acknowledges and agrees that Posted Collateral in the form of securities
may decline speedily in value and is of a type customarily sold on a recognized
market, and, accordingly, the Pledgor is not entitled to prior notice of any
sale of that Posted Collateral by the Secured Party, except any notice that is
required under applicable law and cannot be waived.
5
|
(b)
|
Pledgor's Rights and
Remedies. If at any time an
Early Termination Date has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the Secured Party,
then (except in the case of an Early Termination Date relating to less
than all Transactions (or Swap Transactions) where the Secured Party has
paid in full all of its obligations that are then due under Section 6(e)
of this Agreement):
|
|
(i)
|
the
Pledgor may exercise all rights and remedies available to a pledgor under
applicable law with respect to Posted Collateral held by the Secured
Party;
|
|
(ii)
|
the
Pledgor may exercise any other rights and remedies available to the
Pledgor under the terms of Other Posted Support, if
any;
|
|
(iii)
|
the
Secured Party will be obligated immediately to Transfer all Posted
Collateral and the Interest Amount to the Pledgor;
and
|
|
(iv)
|
to
the extent that Posted Collateral or the Interest Amount is not so
Transferred pursuant to (iii) above, the Pledgor
may:
|
|
(A)
|
Set-off
any amounts payable by the Pledgor with respect to any Obligations against
any Posted Collateral or the Cash equivalent of any Posted Collateral held
by the Secured Party (or any obligation of the Secured Party to Transfer
that Posted Collateral); and
|
|
(B)
|
to
the extent that the Pledgor does not Set-off under (iv)(A) above, withhold
payment of any remaining amounts payable by the Pledgor with respect to
any Obligations, up to the Value of any remaining Posted Collateral held
by the Secured Party, until that Posted Collateral is Transferred to the
Pledgor.
|
|
(c)
|
Deficiencies and Excess
Proceeds. The Secured Party
will Transfer to the Pledgor any proceeds and Posted Credit Support
remaining after liquidation, Set-off and/or application under Paragraphs
8(a) and 8(b) after satisfaction in full of all amounts payable by the
Pledgor with respect to any Obligations; the Pledgor in all events will
remain liable for any amounts remaining unpaid after any liquidation,
Set-off and/or application under Paragraphs 8(a) and
8(b).
|
|
(d)
|
Final Returns. When no amounts
are or thereafter may become payable by the Pledgor with respect to any
Obligations (except for any potential liability under Section 2(d) of this
Agreement), the Secured Party will Transfer to the Pledgor all Posted
Credit Support and the Interest Amount, if
any.
|
Paragraph
9. Representations
Each
party represents to the other party (which representations will be deemed to be
repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
|
(i)
|
it
has the power to grant a security interest in and lien on any Eligible
Collateral it Transfers as the Pledgor and has taken all necessary actions
to authorize the granting of that security interest and
lien;
|
|
(ii)
|
it
is the sole owner of or otherwise has the right to Transfer all Eligible
Collateral it Transfers to the Secured Party hereunder, free and clear of
any security interest, lien, encumbrance or other restrictions other than
the security interest and lien granted under Paragraph
2;
|
|
(iii)
|
upon
the Transfer of any Eligible Collateral to the Secured Party under the
terms of this Annex, the Secured Party will have a valid and perfected
first priority security interest therein (assuming that any central
clearing corporation or any third-party financial intermediary or other
entity not within the control of the Pledgor involved in the Transfer of
that Eligible Collateral gives the notices and takes the action required
of it under applicable law for perfection of that interest);
and
|
|
(iv)
|
the
performance by it of its obligations under this Annex will not result in
the creation of any security interest, lien or other encumbrance on any
Posted Collateral other than the security interest and lien granted under
Paragraph 2.
|
6
Paragraph
10. Expenses
|
(a)
|
General. Except as
otherwise provided in Paragraphs 10(b) and l0(c), each party will pay its
own costs and expenses in connection with performing its obligations under
this Annex and neither party will be liable for any costs and expenses
incurred by the other party in connection
herewith.
|
|
(b)
|
Posted Credit
Support. The Pledgor will
promptly pay when due all taxes, assessments or charges of any nature that
are imposed with respect to Posted Credit Support held by the Secured
Party upon becoming aware of the same, regardless of whether any portion
of that Posted Credit Support is subsequently disposed of under Paragraph
6(c), except for those taxes, assessments and charges that result from the
exercise of the Secured Party's rights under Paragraph
6(c).
|
|
(c)
|
Liquidation/Application of
Posted Credit Support. All reasonable
costs and expenses incurred by or on behalf of the Secured Party or the
Pledgor in connection with the liquidation and/or application of any
Posted Credit Support under Paragraph 8 will be payable, on demand and
pursuant to the Expenses Section of this Agreement, by the Defaulting
Party or, if there is no Defaulting Party, equally by the
parties.
|
Paragraph
11. Miscellaneous
|
(a)
|
Default Interest. A Secured Party
that fails to make, when due, any Transfer of Posted Collateral or the
Interest Amount will be obligated to pay the Pledgor (to the extent
permitted under applicable law) an amount equal to interest at the Default
Rate multiplied by the Value of the items of property that were required
to be Transferred, from (and including) the date that Posted Collateral or
Interest Amount was required to be Transferred to (but excluding) the date
of Transfer of that Posted Collateral or Interest Amount. This interest
will be calculated on the basis of daily compounding and the actual number
of days elapsed.
|
|
(b)
|
Further Assurances. Promptly
following a demand made by a party, the other party will execute, deliver,
file and record any financing statement, specific assignment or other
document and take any other action that may be necessary or desirable and
reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to
enable that party to exercise or enforce its rights under this Annex with
respect to Posted Credit Support or an Interest Amount or to effect or
document a release of a security interest on Posted Collateral or an
Interest Amount.
|
|
(c)
|
Further Protection. The Pledgor will
promptly give notice to the Secured Party of, and defend against, any
suit, action, proceeding or lien that involves Posted Credit Support
Transferred by the Pledgor or that could adversely affect the security
interest and lien granted by it under Paragraph 2, unless that suit,
action, proceeding or lien results from the exercise of the Secured
Party's rights under Paragraph
6(c).
|
|
(d)
|
Good Faith and Commercially
Reasonable Manner. Performance of
all obligations under this Annex, including, but not limited to, all
calculations, valuations and determinations made by either party, will be
made in good faith and in a commercially reasonable
manner.
|
|
(e)
|
Demands and
Notices. All demands and
notices made by a party under this Annex will be made as specified in the
Notices Section of this Agreement, except as otherwise provided in
Paragraph 13.
|
|
(f)
|
Specifications of Certain
Matters. Anything referred
to in this Annex as being specified in Paragraph 13 also may be specified
in one or more Confirmations or other documents and this Annex will be
construed accordingly.
|
Paragraph
12. Definitions
7
As used in this Annex: –
“Cash” means the lawful
currency of the United States of America.
"Credit Support Amount” has the meaning
specified in Paragraph 3.
“Custodian” has the meaning
specified in Paragraphs 6(b)(i) and 13.
"Delivery Amount" has the meaning specified
in Paragraph 3(a).
“Disputing Party” has the meaning
specified in Paragraph 5.
"Distributions” means with respect to
Posted Collateral other than Cash, all principal, interest and other payments
and distributions of cash or other property with respect thereto, regardless of
whether the Secured Party has disposed of that Posted Collateral under Paragraph
6(c). Distributions will not include any item of property acquired by
the Secured Party upon any disposition or liquidation of Posted Collateral or,
with respect to any Posted Collateral in the form of Cash, any distributions on
that collateral, unless otherwise specified herein.
“Eligible Collateral" means, with respect to
a party, the items, if any, specified as such for that party in Paragraph
13.
"Eligible Credit Support” means Eligible
Collateral and Other Eligible Support.
"Exposure” means for any Valuation
Date or other date for which Exposure is calculated and subject to Paragraph 5
in the case of a dispute, the amount, if any, that would be payable to a party
that is the Secured Party by the other party (expressed as a positive number) or
by a party that is the Secured Party to the other party (expressed as a negative
number) pursuant to Section 6(e)(ii)(2)(A) of this Agreement as if all
Transactions (or Swap Transactions) were being terminated as of the relevant
Valuation Time; provided
that Market Quotation will be determined by the Valuation Agent using its
estimates at mid-market of the amounts that would be paid for Replacement
Transactions (as that term is defined in the definition of "Market
Quotation").
“Independent Amount” means, with respect to
a party, the amount specified as such for that party in Paragraph 13; if no
amount is specified, zero.
“Interest Amount" means, with respect to
an Interest Period, the aggregate sum of the amounts of interest calculated for
each day in that Interest Period on the principal amount of Posted Collateral in
the form of Cash held by the Secured Party on that day, determined by the
Secured Party for each such day as follows:
|
(x)
|
the
amount of that Cash on that day; multiplied
by
|
|
(y)
|
the
Interest Rate in effect for that day; divided
by
|
|
(z)
|
360.
|
"Interest Period” means the period from
(and including) the last Local Business Day on which an Interest Amount was
Transferred (or, if no Interest Amount has yet been Transferred, the Local
Business Day on which Posted Collateral in the form of Cash was Transferred to
or received by the Secured Party) to (but excluding) the Local Business Day on
which the current Interest Amount is to be Transferred.
"Interest Rate” means the rate
specified in Paragraph 13.
"Local Business Day,” unless otherwise
specified in Paragraph 13, has the meaning specified in the Definitions Section
of this Agreement, except that references to a payment in clause (b) thereof
will be deemed to include a Transfer under this Annex.
"Minimum Transfer Amount” means with respect to a
party, the amount specified as such for that party in Paragraph 13; if no amount
is specified, zero.
8
“Notification Time” has the meaning
specified in Paragraph 13,
"Obligations" means, with respect to
a party, all present and future obligations of that party under this Agreement
and any additional obligations specified for that party in Paragraph
13.
"Other Eligible Support” means, with respect to
a party, the items, if any, specified as such for that party in Paragraph
13.
"Other Posted Support" means all Other
Eligible Support Transferred to the Secured Party that remains in effect for the
benefit of that Secured Party.
“Pledgor” means either party,
when that party (i) receives a demand for or is required to Transfer Eligible
Credit Support under Paragraph 3(a) or (ii) has Transferred Eligible Credit
Support under Paragraph 3(a).
“Posted Collateral” means all Eligible
Collateral, other property, Distributions, and all proceeds thereof that have
been Transferred to or received by the Secured Party under this Annex and not
Transferred to the Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or
released by the Secured Party under Paragraph 8. Any Interest Amount or portion
thereof not Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted
Collateral in the form of Cash.
"Posted Credit Support” means Posted Collateral
and Other Posted Support.
“Recalculation Date” means the Valuation
Date that gives rise to the dispute under Paragraph 5; provided, however, that if a
subsequent Valuation Date occurs under Paragraph 3 prior to the resolution of
the dispute, then the "Recalculation Date" means the most recent Valuation Date
under Paragraph 3.
“Resolution Time” has the meaning
specific in Paragraph 13.
“Return Amount” has the meaning
specified in Paragraph 3(b).
“Secured Party” means either party,
when that party (i) makes a demand for or is entitled to receive Eligible Credit
Support under Paragraph 3(a) or (ii) holds or is deemed to hold Posted Credit
Support.
"Specified Condition” means, with respect to
a party, any event specified as such for that party in Paragraph
13.
"Substitute Credit
Support" has the meaning
specified in Paragraph 4(d)(i).
"Substitution Date" has the meaning
specified in Paragraph 4(d)(ii).
"Threshold" means, with respect to
a party, the amount specified as such for that party in Paragraph 13; if no
amount is specified, zero.
"Transfer" means, with respect to
any Eligible Credit Support, Posted Credit Support or Interest Amount, and in
accordance with the instructions of the Secured Party, Pledgor or Custodian, as
applicable:
|
(i)
|
in
the case of Cash, payment or delivery by wire transfer into one or more
bank accounts specified by the
recipient;
|
|
(ii)
|
in
the case of certificated securities that cannot be paid or delivered by
book-entry, payment or delivery in appropriate physical form to the
recipient or its account accompanied by any duly executed instruments of
transfer, assignments in blank, transfer tax stamps and any other
documents necessary to constitute a legally valid transfer to the
recipient;
|
|
(iii)
|
in
the case of securities that can be paid or delivered by book-entry, the
giving of written instructions to the relevant depository institution or
other entity specified by the recipient, together with a written copy
thereof to the recipient, sufficient if complied with to result in a
legally effective transfer of the relevant interest to the recipient;
and
|
9
|
(iv)
|
in
the case of Other Eligible Support or Other Posted Support, as specified
in Paragraph 13.
|
“Valuation Agent" has the meaning
specified in Paragraph 13.
"Valuation Date" means each date
specified in or otherwise determined pursuant to Paragraph 13.
“Valuation Percentage” means, for any item of
Eligible Collateral, the percentage specified in Paragraph 13.
“Valuation Time” has the meaning
specified in Paragraph 13.
"Value" means for any Valuation
Date or other date for which Value is calculated and subject to Paragraph 5 in
the case of a dispute, with respect to:.
|
(i)
|
Eligible
Collateral or Posted Collateral that
is:
|
|
(A)
|
Cash,
the amount thereof; and
|
|
(B)
|
a
security, the bid price obtained by the Valuation Agent multiplied by the
applicable Valuation Percentage, if
any;
|
|
(ii)
|
Posted
Collateral that consists of items that are not specified as Eligible
Collateral, zero: and
|
|
(iii)
|
Other
Eligible Support and Other Posted Support, as specified in Paragraph
13.
|
Paragraph
13. Elections and Variables
10
|
(a)
|
Security Interest for
"Obligations.” The term "Obligations" as used in this
Annex includes the following additional
obligation;
|
With
respect to Party A:
With
respect to Party B:
|
(b)
|
Credit
Support Obligations.
|
|
(i)
|
Delivery
Amount Return Amount and Credit Support
Amount.
|
(A) “Delivery Amount" has the meaning
specified in Paragraph 3(a), unless otherwise specified here.
(B) “Return Amount" has the meaning
specified in Paragraph 3(b), unless otherwise specified here.
(C) “Credit Support Amount” has the meaning
specified in Paragraph 3, unless otherwise specified here.
|
(ii)
|
Eligible
Collateral. The following
items will qualify as “Eligible
Collateral” for the party
specified:
|
|
Party
A
|
Party
B
|
Valuation
Percentage
|
|||
|
(A)
|
Cash
|
[ ]
|
[ ]
|
[ ]%
|
|
|
(B)
|
negotiable
debt obligations issued by the U.S. Treasury Department having an original
maturity at issuance of not more than one year (“Treasury
Bills”)
|
[ ]
|
[ ]
|
[ ]%
|
|
|
(C)
|
negotiable
debt obligations issued by the U.S. Treasury Department having an original
maturity at issuance of more than one year but not more than 10 years
(“Treasury Notes”)
|
[ ]
|
[ ]
|
[ ]%
|
|
|
(D)
|
negotiable
debt obligations issued by the U.S. Treasury Department having an original
maturity at issuance of more than 10 years (“Treasury Bonds”)
|
[ ]
|
[ ]
|
[ ]%
|
|
|
(E)
|
other:...................................................................................................................................
|
[ ]
|
[ ]
|
[ ]%
|
|
(iii)
|
Other Eligible
Support. The following
items will qualify as "Other Eligible Support"
for the party specified:
|
|
Party
A
|
Party
B
|
|||
|
(A) .....................................
|
[ ]
|
[ ]
|
|
(iv)
|
Thresholds.
|
|
(A)
|
“Independent
Amount” means with
respect to Party A:
|
$............................
|
||
|
"Independent
Amount” means with
respect to Party B:
|
$............................
|
|
(B)
|
“Threshold” means with
respect to Party A:
|
$.............................
|
||
|
"Threshold” means with
respect to Party B:
|
$.............................
|
|
(C)
|
“Minimum Transfer
Amount” means with
respect to Party A:
|
$.............................
|
||
|
“Minimum Transfer
Amount” means with
respect to Party B:
|
$.............................
|
11
|
(D)
|
Rounding. The Delivery
Amount and the Return Amount will be rounded [down to the
nearest
integral
multiple of $......./up and down to the nearest integral multiple of
$..........., respectively].
|
|||
|
(c)
|
Valuation
and Timing.
|
|
(i)
|
"Valuation Agent" means, for
purposes of Paragraphs 3, 4 and 5, the party making the demand under
Paragraph 3, and, for purposes of Paragraph 6(d), the Secured Party
receiving or deemed to receive the Distributions or the Interest Amount,
as applicable.
|
Unless
otherwise specified here:
|
(ii)
|
“Valuation Date” means:
|
|
(iii)
|
“Valuation Time"
means:
|
[ ] the
close of business in the city of the Valuation Agent on the Valuation Date or
date of calculation, as applicable:
[ ] the
close of business on the Local Business Day before the Valuation Date or date of
calculation, as applicable;
provided that the
calculations of Value and Exposure will be made as of approximately the same
time on the same date.
|
(iv)
|
“Notification Time" means 1:00 p.m.,
New York time, on a Local Business Day, unless otherwise specified
here:
|
|
(d)
|
Conditions Precedent and
Secured Party's Rights and Remedies. The following
Termination Event(s) will be a "Specified
Condition” for the party
specified (that party being the Affected Party if the Termination Event
occurs with respect to that party):
|
|
Illegality
Tax
Event
Tax
Event Upon Merger
Credit
Event Upon Merger
Additional
Termination Event(s): 1
............................................................
............................................................
|
Party
A
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
|
Party
B
[ ]
[ ]
[ ]
[ ]
[ ]
[ ]
|
1 If the
parties elect to designate an Additional Termination Event as a "Specified
Condition" then they should only designate one or more Additional
Termination Event that are designated as such in their Schedule.
|
(e)
|
Substitution.
|
|
(i)
|
"Substitution Date” has the meaning
specified in Paragraph 4(d)(ii), unless otherwise specified
here:
...........................………………………………………………………………...............…………………………
.........................……………………………………………………………………………………………………..
|
|
(ii)
|
Consent. If specified here
as applicable, then the Pledgor must obtain the Secured Party's consent
for any substitution pursuant to Paragraph 4(d): [applicable/inapplicable*
]2
|
12
|
(f)
|
Dispute
Resolution.
|
|
(i)
|
"Resolution Time” means 1:00 p.m.,
New York time, on the Local Business Day following the date on which the
notice is given that gives rise to a dispute under Paragraph 5, unless
otherwise specified here:
………………………….
………………………………………………………………………......………....................................…..
|
|
(ii)
|
Value. For the purpose
of Paragraphs 5(i)(C) and 5(ii), the Value of Posted Credit Support will
be calculated as follows:
........................................................……….……………………………………………………………………………………………
.................................................................................…………………………………………………………………………………….
|
|
(iii)
|
Alternative. The provisions of
Paragraph 5 will apply, unless an alternative dispute resolution procedure
is specified here:
...................................................……………………………………………………………………………………………………………
.................................................................................................……………………………………………………………………………...
|
|
(g)
|
Holding
and Using Posted Collateral.
|
|
(i)
|
Eligibility to Hold Posted
Collateral; Custodians. Party A and its
Custodian will be entitled to hold Posted Collateral pursuant to Paragraph
6(b); provided
that the following conditions applicable to it are
satisfied:
|
(1) Party
A is not a Defaulting Party.
(2)
Posted Collateral may be held only in the following jurisdictions:
...............................................................………...
(3)
.............................................................................………………………………………........................................................
Initially,
the Custodian for Party A is
..............................................………………………...................................................
Party B
and its Custodian will be entitled to hold Posted Collateral pursuant to
Paragraph 6(b); provided
that the
following
conditions applicable to it are satisfied:
(1) Party
B is not a
Defaulting Party.
(2)
Posted Collateral may be held only in the following jurisdictions:
....................……........................................…........
(3)
..........................................................................……………………………………….............................................................
Initially,
the Custodian for Party B is
..........................................…………………….............................................................
|
(ii)
|
Use of Posted
Collateral. The provisions of
Paragraph 6(c) will not apply to the [party/parties*] specified
here:
|
[ ]
Party A
[ ]
Party B
and [that
party/those parties* ] will not be permitted to:
.............................................................................................................
2 Parties
should consider selecting "applicable’ where substitution without consent could
give rise to a registration requirement to perfect properly the security
interest in Posted Collateral (e.g., where a party to the Annex is the New York
branch of an English bank).
|
(h)
|
Distributions and Interest
Amount
|
|
(i)
|
Interest Rate. The "Interest Rate” will be:
............................................................................................…………………............
|
13
|
(ii)
|
Transfer of Interest
Amount. The Transfer of
the Interest Amount will be made on the last Local Business Day of each
calendar month and on any Local Business Day that Posted Collateral in the
form of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b),
unless otherwise specified here:
............................................................................................................................…………….....………………………………………
|
|
(iii)
|
Alternative to Interest
Amount. The provisions of
Paragraph 6(d)(ii) will apply, unless otherwise specified
here:
.........................................................................…………………………………………………………….......………………………
...............................................................................……………………………………………………………………………………..
|
|
(i)
|
Additional
Representation(s).
|
[Party
A/Party B* ] represents to the other party (which representation(s) will be
deemed to be repeated as of each date on which it, as the Pledgor, Transfers
Eligible Collateral) that:
|
(i)
|
.................................................................................................................................................
|
|
(ii)
|
.................................................................................................................................................
|
|
(j)
|
Other
Eligible Support and Other Posted
Support.
|
|
(i)
|
“Value" with respect to
Other Eligible Support and Other Posted Support means:
..................................................................................................………………………….......
|
|
(ii)
|
"Transfer" with respect to
Other Eligible Support and Other Posted Support means:
............................................................................................ ..............………………………..
|
|
(k)
|
Demands
and Notices.
|
All
demands, specifications and notices under this Annex will be made pursuant to
the Notices Section of this Agreement, unless otherwise specified
here:
Party A:
..................................……………………………............................................................
................................................................…………….…………………........................................
Party B:
.................................................................................……………………………..............
................................................……………………………….........................................................
(l) Addresses
for Transfers.
Party A:
..................................……………………………............................................................
................................................................…………….…………………........................................
Party B:
.................................................................................……………………………..............
................................................……………………………….........................................................
Other
Provisions.
14