EXHIBIT 10.11
(MULTICURRENCY -- CROSS BORDER)
ISDA(R)
INTERNATIONAL SWAP DEALERS ASSOCIATION, INC.
MASTER AGREEMENT
dated as of ______________
and
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have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner
customary
for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party ("X") will:
(1) promptly notify the other party ("Y") of such requirement;
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(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However,
X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.
(ii) LIABILITY. If:
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any deduction
or withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount
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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 organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under
such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
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(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it
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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, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of such party
to comply with or perform any agreement or obligation to be complied
with or performed by it in accordance with any Credit Support Document
if such failure is continuing after any applicable grace period has
elapsed;
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(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction of
all obligations of such party under each Transaction to which such
Credit Support Document relates without the written consent of the
other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity
of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation under
Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them (individually
or collectively) in an aggregate amount of not less than the applicable
Threshold Amount (as specified in the Schedule) which has resulted in such
Specified Indebtedness becoming, or becoming capable at such time of being
declared, due and payable under such agreements or instruments, before it
would otherwise have been due and payable or (2) a default by such party,
such Credit Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under
such agreements or instruments (after giving effect to any applicable
notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:
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(1) is dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as
they become due; (3) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (4) institutes
or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights, or a
petition is presented for its winding-up or liquidation, and, in the
case of any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief or the
making of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case within 30
days of the institution or presentation thereof; (5) has a resolution
passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other similar
official for it or for all or substantially all its assets; (7) has a
secured party take possession of all or substantially all its assets
or has a distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or substantially
all its assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or restrained, in
each case within 30 days thereafter; (8) causes or is subject to any
event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified
in clauses (1) to (7) (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:
(1) the resulting, surviving or transferee entity fails to assume all
the obligations of such party or such Credit Support Provider under
this Agreement or any Credit Support Document to which it or its
predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified
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pursuant to (iv) below or an Additional Termination Event if the event is
specified pursuant to (v) below:
(i) ILLEGALITY. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party (which will be the
Affected Party):
(1) to perform any absolute or contingent obligation to make a payment
or delivery or to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this
Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken
or brought with respect to a party to this Agreement) or (y) a Change in
Tax Law, the party (which will be the Affected Party) will, or there is a
substantial likelihood that it will, on the next succeeding Scheduled
Payment Date (1) be required to pay to the other party an additional amount
in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount is required to be deducted or withheld for or
on account of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be paid in
respect of such Tax under Section 2(d)(i)(4) (other than by reason of
Section 2(d)(i)(4)(A) or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets, to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the
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resulting, surviving or transferee entity is materially weaker than that of
X, such Credit Support Provider or such Specified Entity, as the case may
be, immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the Schedule
or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will, promptly
upon becoming aware of it, notify the other party, specifying the nature of
that Termination Event and each Affected Transaction and will also give
such other information about that Termination Event as the other party may
reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(i)(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.
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If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days
after notice thereof is given under Section 6(b)(i) on action to avoid
that Termination Event.
(iv) RIGHT TO TERMINATE. If:
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a Credit
Event Upon Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then continuing, designate
a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any,
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contemplated by Section 6(e) and will provide to the other party a
statement (1) showing, in reasonable detail, such calculations (including
all relevant quotations and specifying any amount payable under Section
6(e)) and (2) giving details of the relevant account to which any amount
payable to it is to be paid. In the absence of written confirmation from
the source of a quotation obtained in determining a Market Quotation, the
records of the party obtaining such quotation will be conclusive evidence
of the existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an Event
of Default:
(1) First Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect
of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the sum
of the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid
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Amounts owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party will
pay it to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to the
Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a
negative number, the Non-defaulting Party will pay the absolute value
of that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the Transactions
are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions, and
an amount will be payable equal to (I) the sum of (a) one-half of
the difference between the Settlement Amount of the party with
the higher Settlement Amount ("X") and the Settlement Amount of
the party with the lower Settlement Amount ("Y") and (b) the
Termination Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the Transactions
are being terminated, in respect of all Terminated Transactions)
and an amount will be payable equal to one-half of the difference
between the Loss of the party with the higher Loss ("X") and the
Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by law to
reflect any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the period from
the
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relevant Early Termination Date to the date for payment determined under
Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate of
loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant
14
to the judgment or order, will be entitled to receive immediately from the other
party the amount of any shortfall of the Contractual Currency received by such
party as a consequence of sums paid in such other currency and will refund
promptly to the other party any excess of the Contractual Currency received by
such party as a consequence of sums paid in such other currency if such
shortfall or such excess arises or results from any variation between the rate
of exchange at which the Contractual Currency is converted into the currency of
the judgment or order for the purposes of such judgment or order and the rate of
exchange at which such party is able, acting in a reasonable manner and in good
faith in converting the currency received into the Contractual Currency, to
purchase the Contractual Currency with the amount of the currency of the
judgment or order actually received by such party. The term "rate of exchange"
includes, without limitation, any premiums and costs of exchange payable in
connection with the purchase of or conversion into the Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
15
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable and
may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
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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
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
17
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 Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
18
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
19
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be
20
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
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"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"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).
22
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
23
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
....................................... ......................................
(Name of Party) (Name of Party)
By:___________________________________ By:___________________________________
Name:_________________________________ Name:_________________________________
Title:________________________________ Title:________________________________
Date:_________________________________ Date:_________________________________
24
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of October __, 2005
between
[BANK] and NISSAN AUTO LEASE TRUST 2005-A
("[Bank]") (the "Counterparty")
PART 1
TERMINATION PROVISIONS
In this Agreement:-
(1) "Specified Entity" shall not apply.
(2) The "Breach of Agreement" provisions of Section 5(a)(ii) will apply to
[Bank] and will not apply to the Counterparty.
(3) The "Credit Support Default" provisions of Section 5(a)(iii) will apply to
[Bank] and will not apply to the Counterparty.
(4) The "Misrepresentation" provisions of Section 5(a)(iv) will apply to
[Bank] and will not apply to the Counterparty.
(5) The "Default Under Specified Transaction" provisions of Section 5(a)(v)
will not apply to [Bank] and will not apply to the Counterparty.
(6) The "Cross Default" provisions of Section 5(a)(vi) will not apply to the
Counterparty. The "Cross Default" provisions of Section 5(a)(vi) will
apply to [Bank] and for such purpose:
(a) "Specified Indebtedness" will have the meaning specified in Section
14, except that such term shall not include obligations in respect
of deposits received in the ordinary course of such party's banking
business.
(b) "Threshold Amount" means, with respect to [Bank], an amount equal to
three percent of the shareholders' equity of [Bank].
(7) The "Merger Without Assumption" provisions of Section 5(a)(viii) will
apply to [Bank] and will not apply to the Counterparty.
(8) The "Tax Event" provisions of Section 5(b)(ii) will apply to [Bank] and
will not apply to the Counterparty; provided, however, that, as they apply
to [Bank], the provisions of Section 5(b)(ii) shall be amended by adding
the words "or be required to pay an excise tax pursuant to Section 4371 of
the US federal income tax code of 1986, as amended," immediately prior to
the second word "or" in the seventh line of that section.
(9) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will apply to
[Bank] and will not apply to the Counterparty.
(10) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to [Bank] and will not apply to the Counterparty.
(11) The "Additional Termination Event" provisions of Section 5(b)(v) will
apply as set forth in Part 1 (15) hereof.
(12) The "Automatic Early Termination" provisions of Section 6(a) will not
apply to [Bank] and will not apply to the Counterparty.
(13) "Termination Currency" means United States Dollars.
(14) For purposes of computing amounts payable on early termination:
(a) Market Quotation will apply to this Agreement; and
(b) The Second Method will apply to this Agreement.
(15) The occurrence of each of the following events shall constitute an
"Additional Termination Event" for purposes of Section 5(b)(v):
(a) either (1) the Notes are accelerated following an Indenture
Default (as defined in Section 5.01 of the Indenture) and such
acceleration has not been waived pursuant to Section 5.02 or Section
5.12 of the Indenture, or (2) the Trust Estate is liquidated
pursuant to Section 5.04(a)(iv) of the Indenture (either such event,
a "Liquidation Event"). Upon the occurrence of a Liquidation Event
[Bank] may, provided such Additional Termination Event is
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of the Transaction
that is subject to this Agreement. If an event or circumstance which
would constitute an Event of Default by [Bank] under this Agreement
gives rise to an Indenture Default under the Indenture, it will be
treated as an Event of Default by [Bank] and not as an Additional
Termination Event. If this Additional Termination Event occurs, the
Counterparty shall be the sole Affected Party; or
(b) without the consent of [Bank] (which consent shall not be
unreasonable denied), the Indenture is amended or supplemented in
any manner which would adversely affect any of [Bank]'s rights or
obligations under this Agreement. If this Additional Termination
Event occurs, the Counterparty shall be the sole Affected Party; or
(c) the occurrence of an Additional Termination Event as forth in
Part 5 (10) hereof. If this Additional Termination Event occurs,
[Bank] shall be the sole Affected Party and all Transactions then
outstanding between the parties shall be Affected Transactions; or
26
(d) the failure by the Counterparty to comply with or perform any
agreement or obligation to be complied with or performed by it in
accordance with any Approved Credit Support Document if such failure
is continuing after any applicable grace period has elapsed. If this
Additional Termination Event occurs, the Counterparty shall be the
sole Affected Party and all Transactions then outstanding between
the parties shall be Affected Transactions.
PART 2
TAX REPRESENTATIONS
(1) Payer Tax Representation:
For the purpose of Section 3(e) of this Agreement, [Bank] and Counterparty
each make the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, it may rely on:
(i) the accuracy of any representations made by the other party pursuant
to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant
to Section 4(a)(i) or 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a
breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under
Section 4(a)(iii) of this Agreement by reason of material prejudice
to its legal or commercial position.
(2) Payee Tax Representation:
For the purpose of Section 3(f), [Bank] and Counterparty each represent,
respectively, that it is a United States Person for U.S. federal income
tax purposes and either (a) is a financial institution or (b) is not
acting as an agent for a person that is not a United States Person for
U.S. federal income tax purposes
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Sections 4(a)(i) and (ii), each party agrees to deliver the
following documents, as applicable:
27
(1) For the purpose of Sections 4(a)(i) and (ii) of this Agreement,
Counterparty agrees to deliver a complete and accurate United States
Internal Revenue Service Form W-9 (or any applicable successor form), in a
manner reasonably satisfactory to [Bank], (I) upon execution of this
Agreement; (II) promptly upon reasonable demand of [Bank], and (III)
promptly upon learning that any such form previously filed by Counterparty
has become obsolete or incorrect.
(2) [Bank] will, on demand, deliver a certificate (or, if available, the
current authorized signature book of [Bank]) specifying the names, title
and specimen signatures of the persons authorized to execute this
Agreement and each Confirmation on its behalf.
(3) The Counterparty will, on demand, deliver a certificate (or, if available,
the current authorized signature book of the Counterparty) specifying the
names, title and specimen signatures of the persons authorized to execute
this Agreement and each Confirmation on its behalf.
(4) The Counterparty will, upon execution of this Agreement, deliver a
conformed copy of the Indenture.
(5) Each party will, upon execution of this Agreement, deliver a legal opinion
of counsel in form and substance satisfactory to the other party regarding
this Agreement and any other matters as such other party may reasonably
request.
(6) The Counterparty shall supply (and/or shall instruct the Trustee to
supply) [Bank] with copies of all accountings and reports required to be
supplied to an entity that is a Noteholder (as defined in the Indenture).
Copies of such accountings and/or reports shall be delivered to [Bank] at
the following address:
[Bank]
Each of the foregoing documents (other than the legal opinions described in (5)
above) is covered by the representation contained in Section 3(d) of this
Agreement.
PART 4
MISCELLANEOUS
(1) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to
choice of law doctrine.
(2) NOTICES.
(a) In connection with Section 12(a), all notices to [Bank] shall, with
respect to any particular Transaction, be sent to the address, telex
number or facsimile number specified in the relevant Confirmation
and any notice for purposes of Sections 5 or 6 of the Agreement
shall be sent to the address or telex number specified below:
[Bank]
(b) In connection with Section 12(a), all notices to the Counterparty
shall, with respect to any particular Transaction, be sent to the
address, telex number or facsimile number
28
specified in the relevant Confirmation and any notice for purposes
of Sections 5 or 6 of the Agreement shall be sent to the address or
telex number specified below:
Nissan Auto Lease Trust 2005-A
c/o Wilmington Trust Company, as Owner Trustee
Xxxxxx Square North
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn: Corporate Trust Administration
with a copy to the Administrative Agent (as defined in the
Indenture) at:
Nissan Motor Acceptance Corporation, as Administrative Agent
000 Xxxx 000xx Xxxxxx
Xxxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn: Treasurer
with a copy to the Indenture Trustee (as defined in the Indenture)
at:
U.S. Bank National Association, as Indenture Trustee
Wrigley Building
000 X. Xxxxxxxx Xxx., 0xx Xxxxx
Xxxxxxx, XX 00000
Facsimile No.: 000-000-0000
Attn: Nissan Auto Lease Trust 2005-A
(3) NETTING OF PAYMENTS. Section 2(c)(ii) of this Agreement will apply, with
the effect that payment netting will not take place with respect to
amounts due and owing in respect of more than one Transaction.
(4) OFFICES; MULTIBRANCH PARTY. For purposes of Section 10:
(a) Section 10(a) will apply; and
(b) For the purpose of Section 10(c):
(i) [Bank] is a Multibranch Party and may act through its London
and New York Offices.
(ii) The Counterparty is not a Multibranch Party.
(5) CREDIT SUPPORT DOCUMENTS.
With respect to [Bank], if applicable, any Third Party Credit Support
Document delivered by [Bank] shall constitute a Credit Support Document.
With respect to [Bank] and the Counterparty, if applicable, any Approved
Credit Support Document shall constitute a Credit Support Document.
29
(6) CREDIT SUPPORT PROVIDER.
With respect to [Bank], the party guaranteeing [Bank]'s obligations
pursuant to a Third Party Credit Support Document, if any, shall be a Credit
Support Provider.
(7) PROCESS AGENTS. The Counterparty appoints as its Process Agent for the
purpose of Section 13(c): Not applicable
PART 5
OTHER PROVISIONS
(1) ISDA DEFINITIONS. Reference is hereby made to the 2000 ISDA Definitions
(the "ISDA Definitions") each as published by the International Swaps and
Derivatives Association, Inc., which are hereby incorporated by reference
herein. Any terms used and not otherwise defined herein which are
contained in the ISDA Definitions shall have the meaning set forth
therein.
(2) TRANSACTIONS. The only Transaction that may be entered into pursuant to
this Agreement is the Transaction being executed on the date hereof
pursuant to which the Counterparty is the buyer of an interest rate cap
and has satisfied all its payment obligations under Section 2(a)(i) of
this Agreement, and shall at the time have no future payment obligations,
whether absolute or contingent, under such Section.
(3) INCONSISTENCY. In the event of any inconsistency between any of the
following documents, the relevant document first listed below shall
govern: (i) a Confirmation; (ii) the Schedule; (iii) the ISDA Definitions;
and (iv) the printed form of ISDA Master Agreement.
(4) CALCULATION AGENT. The Calculation Agent will be [Bank].
(5) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of
any suit, action or proceeding relating to this Agreement or any Credit
Support Document. Each party (i) certifies that no representative, agent
or attorney of the other party or any Credit Support Provider has
represented, expressly or otherwise, that such other party would not, in
the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have
been induced to enter into this Agreement and provide for any Credit
Support Document, as applicable, by, among other things, the mutual
waivers and certifications in this Section.
(6) SEVERABILITY. In the event any one or more of the provisions contained in
this Agreement should be held invalid, illegal, or unenforceable (in whole
or in part) in any respect, the remaining terms, provisions, covenants and
conditions hereof shall continue in full force and effect as if this
Agreement had been executed with the invalid or unenforceable portion
eliminated, so long as this Agreement as so modified continues to express,
without material change the original intentions of the parties as to the
subject matter of this Agreement and the deletion of such portion of this
Agreement will not substantially impair the respective benefits or
expectations of the parties to this Agreement; provided, however, that
this severability provision shall not be applicable if any provision of
Section 2, 5, 6 or 13 (or any definition or provision in Section 14 to the
extent it relates to, or is used in or in connection with any such
Section) shall be so held to be invalid or unenforceable.
30
(7) NO GROSS-UP FOR COUNTERPARTY. Section 2(d) of the Agreement shall not
apply with respect to the Counterparty so that the Counterparty shall not
be obligated to gross up pursuant thereto.
(8) [BANK] ACKNOWLEDGMENT. Notwithstanding anything to the contrary in this
Agreement, [Bank] hereby
(a) acknowledges and agrees that the Counterparty has assigned all of its
right, title and interest in, to and under this Agreement to the Indenture
Trustee for the benefit of the Noteholders pursuant to the Indenture and
that in the event of an Indenture Default (as defined in the Indenture)
the Indenture Trustee shall be entitled to exercise all rights and
remedies of a secured party with respect to this Agreement; and
(b) agrees that, unless notified in writing by the Indenture Trustee of
other payment instructions, any and all amounts payable by [Bank] to the
Counterparty shall be paid to the Indenture Trustee.
(9) NO PETITION; LIMITED RECOURSE. [Bank] hereby agrees that it shall not
institute against, or join any other Person in instituting against the
Counterparty any bankruptcy, reorganization, arrangement, insolvency,
moratorium or liquidation proceedings or other proceedings under U.S.
federal or state or other bankruptcy or similar laws. Notwithstanding the
foregoing, nothing herein shall prevent [Bank] from participating in any
such proceeding once commenced.
[Bank] hereby acknowledges and agrees that the Counterparty's obligations
hereunder will be solely the limited recourse obligations of the
Counterparty, and that [Bank] will not have any recourse to any of the
directors, officers, employees, shareholders or affiliates of the
Counterparty with respect to any claims, losses, damages, liabilities,
indemnities or other obligations in connection with any transactions
contemplated hereby. Notwithstanding any other provisions hereof, recourse
in respect of any obligations of the Counterparty to [Bank] hereunder or
thereunder will be limited to the Collateral (as defined in the Indenture)
and on the exhaustion thereof all claims against the Counterparty arising
from this Confirmation or any other transactions contemplated hereby or
thereby shall be extinguished.
(10) RATINGS DOWNGRADE PROVISIONS. Unless written notification to the contrary
has been received from the Rating Agencies, following the occurrence of a
Ratings Event, the parties shall comply with the following provisions, as
applicable.
I. If a Ratings Event shall occur and be continuing with respect to
[Bank], then [Bank] shall, within 5 Local Business Days of the occurrence
of such Ratings Event, give notice of the occurrence of such Ratings Event
to Counterparty. Following such notice, [Bank] may either
(A) at its sole option and expense, provide, or cause to be
provided, a Third Party Credit Support Document to Counterparty; or
(B) at its sole option and expense, use reasonable efforts to
transfer [Bank]'s rights and obligations under the Agreement and all
Confirmations to another party; or
Each of I(A) and I(B) above shall be subject to satisfaction of the Rating
Agency Condition.
If, on or prior to the date that is 30 calendar days after the occurrence
of a Ratings Event, [Bank] has provided a Third Party Credit Support
Document as provided in I(A) above and the Rating Agency Condition has
been satisfied, then, for so long as such Third Party Credit Support
31
Document is in effect and the Rating Agency Condition continues to be
satisfied, [Bank] shall have no further obligations in respect of this
Part 5(10)(I).
If,
(i) on or prior to the date that is 30 calendar days after the
occurrence of a Ratings Event, [Bank] has not provided a Third Party
Credit Support Document as provided in I(A) above or transferred its
rights and obligations as provided in I(B) above, or
(ii) [Bank] has provided a Third Party Credit Support Document as
provided in I(A) above but such Third Party Credit Support Document
has ceased to be in effect and/or the Rating Agency Condition is no
longer satisfied,
then, on the first Local Business Day following the date that is 30
calendar days after the occurrence of the Ratings Event (in respect of (i)
above) or on the first Local Business Day following the date on which the
Third Party Credit Support Document referred to in (ii) above has ceased
to be in effect and/or fails to satisfy the Rating Agency Condition,
[Bank] shall deliver Eligible Collateral to Counterparty in accordance
with the terms of an Approved Credit Support Document. Notwithstanding the
foregoing, [Bank]'s obligations under this Part 5(10)(I) to post Eligible
Collateral under the Approved Credit Support Document shall remain in
effect only for so long as a Ratings Event is continuing with respect to
[Bank].
The failure by [Bank] to comply with the provisions hereof shall
constitute an Additional Termination Event, with [Bank] as the sole
Affected Party and all Transactions then outstanding between the parties
as Affected Transactions.
II. As used herein:
"Approved Credit Support Document" means a security agreement in the form
of the 1994 ISDA Credit Support Annex (ISDA Agreements Subject to New York
Law Only), as modified by the Paragraph 13 thereto, which Paragraph 13
will be in the form of Annex A to this Agreement;
"Fitch" means Fitch, Inc. or any successor thereto.
"Indenture" means the Indenture, dated as of October [ ], 2005 between the
Counterparty and U.S. Bank National Association, as Indenture Trustee;
"Moody's" means Xxxxx'x Investors Service, Inc. or any successor thereto;
"Rating Agencies" means S&P, Xxxxx'x and Xxxxx;
"Rating Agency Condition" has the meaning specified in the Indenture;
"Ratings Event" shall occur with respect to [Bank] (to the extent that
[Bank]'s relevant obligations are rated by Moody's, S&P or Fitch) if (a)
[Bank]'s long-term senior unsecured debt rating is lower than A1 by
Moody's or lower than A+ by S&P or lower than [ ] by Fitch or (b) [Bank]'s
short-term debt rating is lower than P-1 by Moody's or lower than A-1 by
S&P or lower than [ ] by Fitch or (c) any of the Rating Agency ratings set
forth in (a) or (b) above is suspended or withdrawn;
"S&P" means by Standard & Poor's Ratings Service or any successor thereto;
and
32
"Third Party Credit Support Document" means any agreement or instrument
(including any guarantee, insurance policy, security agreement or pledge
agreement) whose terms provide for the guarantee of [Bank]'s obligations
under this Agreement by a third party.
(11) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding at the
end thereof the following paragraphs:
"(g) It is an "eligible contract participant" under, and as defined in,
Section 1a(12) of the Commodity Exchange Act, as amended.
(h) Each party will be deemed to represent to the other party on the date
on which it enters into a Transaction that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary for that Transaction):
(i) NON-RELIANCE. It is acting for its own account, and it has made
its own independent decisions to enter into that Transaction and as
to whether that Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisers as it has
deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation
to enter into that Transaction; it being understood that information
and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a
recommendation to enter into that Transaction. No communication
(written or oral) received from the other party shall be deemed to
be an assurance or guarantee as to the expected results of that
Transaction.
(ii) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the
merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the
terms, conditions and risks of that Transaction. It is also capable
of assuming, and assumes, the risks of that Transaction.
(iii) STATUS OF PARTIES. The other party is not acting as a
fiduciary for or an adviser to it in respect of that Transaction."
(12) AMENDMENT TO SECTION 7 OF THE AGREEMENT. Section 7 of the Agreement is
hereby amended by adding the words "and the confirmation of the Rating
Agencies" immediately following the word "party" in the third line
thereof.
(13) MODIFICATION TO DEFINITION OF INDEMNIFIABLE TAX. The definition of
"Indemnifiable Tax" in Section 14 is hereby modified by inserting "(i)"
between the words "than" and "a" in the first line thereof and by
inserting the following clause immediately before the period at the end
thereof: ", and (ii) any Tax that results as a result of the status of
Counterparty as a bank (as that term is used in Section 881(c)(3)(A) of
the Internal Revenue Code of 1986, as amended), or an entity that is
licensed or regulated as a bank by the banking authorities of any
jurisdiction".
(14) NO SET-OFF. Without affecting the provisions of this Agreement requiring
the calculation of certain net payment amounts, all payments under this
Agreement will be made without Set-off or counterclaims.
(15) AMENDMENT TO SECTION 9(b) OF THE AGREEMENT. Section 9(b) of the Agreement
is amended by adding the following sentence immediately following the end
of the first sentence thereof:
33
"In addition, no amendment modification or waiver in respect of this
Agreement will be effective unless it is approved by the Rating
Agencies."
(16) AMENDMENT TO SECTION 6(e) OF THE AGREEMENT. Section 6(e) of the Agreement
is amended by deleting the last sentence of the introductory paragraph
thereof.
34
Please confirm your agreement to the terms of the foregoing Schedule by
signing below.
[BANK]
By:
---------------------------
Name:
Title:
NISSAN AUTO LEASE TRUST 2005-A
By:
------------------------
Name:
Title:
35
ANNEX A
PARAGRAPH 13 TO
CREDIT SUPPORT ANNEX
to the Schedule to the
Master Agreement
dated as of October __, 2005
between
[BANK] and NISSAN AUTO LEASE TRUST 2005-A
("[BANK]") ("COUNTERPARTY")
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used in
this Annex includes no additional obligations with respect to either
party.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a).
(B) "Return Amount" has the meaning specified in Paragraph 3(b).
(C) "Credit Support Amount" shall not have the meaning specified
in Paragraph 3(b) and, instead, will have the following meaning:
"Credit Support Amount" means, for any Valuation Date, (i) the
Secured Party's Modified Exposure for that Valuation Date minus (ii)
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.
(ii) Eligible Collateral. The following items will qualify as "Eligible
Collateral":
[Bank] "Valuation
Percentage"
------ -----------
(A) USD Cash X 100%
(B) Negotiable debt obligations issued by the U.S. Treasury X 98.8%
Department having a remaining maturity of one year or less
from the Valuation Date
36
(C) Negotiable debt obligations issued by the U.S. Treasury X 92%
Department having a remaining maturity of more than one year
but less than ten years from the Valuation Date
(D) Negotiable debt obligations issued by the U.S. Treasury X 84%
Department having a remaining maturity of ten years or more
from the Valuation Date
(E) Agency Securities having a remaining maturity of one year or X 98.4%
less from the Valuation Date
(F) Agency Securities having a remaining maturity of more than X 90%
one year but less than ten years from the Valuation Date
(G) Agency Securities having a remaining maturity of ten years X 82%
or more from the Valuation Date
(H) USD denominated Commercial Paper rated A1/P1 by S&P and X 97%
Moody's respectively, that (a) settles within DTC, (b) is
not issued by [Bank] or any of its Affiliates and (c) has a
remaining maturity of 30 days or less from the Valuation Date
For purposes of the foregoing:
(a) "Agency Securities" means negotiable debt obligations which are
fully guaranteed as to both principal and interest by the Federal
National Mortgage Association, the Government National Mortgage
Association or the Federal Home Loan Mortgage Corporation, but
excluding (i) interest only and principal only securities and (ii)
Collateralized Mortgage Obligations, Real Estate Mortgage Investment
Conduits and similar derivative securities.
(b) "DTC" shall mean The Depository Trust & Clearing Corporation, or
its successor.
(c) "Moody's" shall mean Xxxxx'x Investors Service, Inc., or its
successor.
(d) "S&P" shall mean Standard & Poor's Ratings Group, or its
successor.
(e) Eligible Collateral of the type described in Paragraph
13(b)(ii)(H) may never constitute more than 20% of the total Value
of Posted Collateral.
(f) With respect to Posted Collateral consisting of Eligible
Collateral of the type described in Paragraph 13(b)(ii)(H), the
aggregate Value of such Posted Collateral issued by the same issuer
may never be greater than 33% of the aggregate Value of all Posted
Collateral consisting of Eligible Collateral of the type described
in Paragraph 13(b)(ii)(H).
37
(iii) Other Eligible Support. There shall be no "Other Eligible Support"
for purposes of this Annex, unless agreed in writing between the
parties.
(iv) Thresholds.
(A) "Independent Amount" means zero.
(B) "Threshold" shall not apply with respect to the Counterparty
and, with respect to [Bank], shall mean the amounts determined
on the basis of the lower of the Credit Ratings set forth in
the following table, provided, however, that if (i) [Bank] has
no Credit Rating, or (ii) an Event of Default has occurred and
is continuing with respect to [Bank], [Bank]'s Threshold shall
be U.S.$0:
CREDIT RATING THRESHOLD
(S&P /Xxxxx'x/Fitch) [Bank]
-------------------- ---------
S&P: (long-term senior unsecured debt of Infinity
[Bank]) A+ or above.
S&P: (short-term senior unsecured debt of
[Bank]) A-1 or above
Moody's (long-term senior unsecured debt of
[Bank]): A1 or above.
Moody's (short-term senior unsecured debt of
[Bank]): P-1 or above.
Fitch: (long-term senior unsecured debt of
[Bank]) [ ] or above.
Fitch: (short-term senior unsecured debt of
[Bank]) [ ] or above
38
S&P: (long-term senior unsecured debt of US$0
[Bank]) lower than A+
S&P: (short-term senior unsecured debt of
[Bank]) lower than A-1
Moody's (long-term senior unsecured debt of
[Bank]): lower than A1
Moody's (short-term senior unsecured debt
of [Bank]): lower than P-1
Fitch: (long-term senior unsecured debt of
[Bank]) lower than [ ]
Fitch: (short-term senior unsecured debt of
[Bank]) lower than [ ]
As used herein:
"Credit Rating" means, with respect to S&P, Moody's or Fitch, as
applicable, the rating assigned by such agency to the long-term
senior unsecured debt of [Bank] or to the short-term senior
unsecured debt of [Bank], as applicable.
(C) "Minimum Transfer Amount", with respect to a party on any
Valuation Date, means U.S. $250,000.
(D) Rounding. The Delivery Amount and the Return Amount will be
rounded up and down to the nearest integral multiple of
$100,000, respectively.
(c) Valuation and Timing.
(i) "Valuation Agent" means [Bank].
(ii) "Valuation Date" means weekly on the last Local Business Day of each
week or more frequently if agreed in writing by the parties.
(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.
(iv) "Notification Time" means 12:00 p.m., New York time, on a Local
Business Day.
(d) Conditions Precedent. With respect to [Bank], any Additional Termination
Event (if [Bank] is the Affected Party with respect to such Termination Event)
will be a "Specified Condition".
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
39
(ii) Consent. Inapplicable.
(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.
(ii) Value. For the purposes of Paragraphs 5(i)(C) and 5(ii), the Value
of Posted Credit Support other than Cash will be calculated as
follows:
(A) with respect to any Eligible Collateral except Cash, the
sum of (I) (x) the mean of the high bid and low asked prices quoted
on such date by any principal market maker for such Eligible
Collateral chosen by the Disputing Party, or (y) if no quotations
are available from a principal market maker for such date, the mean
of such high bid and low asked prices as of the first day prior to
such date on which such quotations were available, plus (II) the
accrued interest on such Eligible Collateral (except to the extent
Transferred to a party pursuant to any applicable provision of this
Agreement or included in the applicable price referred to in (I) of
this clause (A)) as of such date; multiplied by the applicable
Valuation Percentage.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. Counterparty 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) Counterparty is not a Defaulting Party and
(2) Posted Collateral may be held only in the following
jurisdictions: New York State.
Initially, the Custodian for Counterparty is: None
(ii) Use of Posted Collateral. The provisions of Paragraph 6(c)(i) will
not apply to Counterparty but the provisions of Paragraph 6(c)(ii)
will apply to the Counterparty.
(h) Distributions and Interest Amount.
(i) Interest Rate. "Interest Rate" for any day means, the Federal Funds
Overnight Rate. For the purposes hereof, "Federal Funds Overnight
Rate" means, for any day, an interest rate per annum equal to the
rate published as the Federal Funds Effective Rate that appears on
Telerate Page 118 for such day.
(ii) Transfer of Interest Amount. The Transfer of the Interest Amount
will be made monthly on the second Local Business Day of each
calendar month.
(iii) Alternative to Interest Amount. The provisions of Paragraph 6(d)(ii)
will apply.
(i) Additional Representation(s). Not Applicable.
40
(j) Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support means: Not Applicable.
(ii) "Transfer" with respect to Other Eligible Support and Other Posted
Support means: Not Applicable
(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:
Counterparty:
[Bank]:
(l) Addresses for Transfers.
Counterparty: as set forth in notices to [Bank] from time to time
[Bank]:
(m) Other Provisions:
(i) Modification to Paragraph 1: The following subparagraph (b) is
substituted for subparagraph (b) of this Annex:
(b) Secured Party and Pledgor. All references in this Annex to the
"Secured Party" will be to Counterparty and all corresponding
references to the "Pledgor" will be to [Bank].
(ii) Modification to Paragraph 2: The following Paragraph 2 is
substituted for Paragraph 2 of this Annex:
Paragraph 2. Security Interest. The Pledgor hereby pledges to 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.
41
(iii) Modification to Paragraph 9: The following first clause of
Paragraph 9 is substituted for the first clause of Paragraph 9 of this
Annex:
Paragraph 9. Representations. The Pledgor represents to the Secured
Party (which representations will be deemed to be repeated as of
each date on which it Transfers Eligible Collateral) that:
(iv) Modifications to Paragraph 12: The following definitions of
"Pledgor" and "Secured Party" are substituted for the definitions of those
terms contained in Paragraph 12 of this Annex:
"Pledgor" means [Bank], 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).
"Secured Party" means Counterparty, 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.
(v) Addition to Paragraph 12: The following definitions of
"Modified Exposure" shall be added immediately after the definition of the
term "Minimum Transfer Amount" and immediately prior to the definition of
the term "Notification Time" in Paragraph 12 of this Annex:
"Modified Exposure" means, for any Valuation Date, an amount equal
to the greater of (i) the Secured Party's Exposure for that
Valuation Date, (ii) the amount of the next scheduled payment that
is required to be made by [Bank] pursuant to the Transaction and
(iii) one percent of the outstanding Notional Amount of the
Transaction.
(vi) Modification to Paragraph 12: Clause "(B)" of the definition
of "Value" will be substituted to read in its entirety as follows:
"(B) a security, the bid price obtained by the Valuation Agent from
one of the Pricing Sources multiplied by the applicable Valuation
Percentage, if any;"
(vii) Addition to Paragraph 12: The following definition of "Pricing
Sources" shall be added immediately after the definition of the term
"Posted Credit Support" and immediately prior to the definition of the
term "Recalculation Date" in Paragraph 12 of this Annex:
"Pricing Sources" means the sources of financial information
commonly known as Bloomberg, Bridge Information Services, Data
Resources Inc., Interactive Data Services, International Securities
Market Association, Xxxxxxx Xxxxx Securities Pricing Service, Xxxxxx
Data Corporation, Reuters, Wood Gundy, Trepp Pricing, XX Xxxxx, S&P
and Telerate.
ACCEPTED AND AGREED:
[BANK]
42
By:
--------------------------------
Name:
Title:
NISSAN AUTO LEASE TRUST 2005-A
By:
--------------------------------
Name:
Title:
43
