Exhibit 4.4
(Multicurrency-Cross Border)
ISDA
International Swap Dealer Association, Inc.
MASTER AGREEMENT
dated as of ------------
- ------------------------------------and-----------------------------------------
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the (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 will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement
(including the Schedule), such Confirmation will prevail for the purpose of the
relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the required
currency. Where settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified in the
relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)
the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively designated and (3)
each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction.
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However,
X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representative made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.
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(ii) Liability. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section
6(c), be required to pay interest (before as well as after judgment) on
the overdue amount to the other party on demand in the same currency as
such overdue amount, for the period from (and including) the original due
date for payment to (but excluding) the date of actual payment, at the
Default Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. If, prior to the
occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant
Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction is
entered into and, in the case of the representations in Section 3(f), at
all times until the termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly 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 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)).
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(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or on
equity or before any court, tribunal, governmental body, agency of 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 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 Authorizations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated,
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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 compiled 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 compiled
with or performed by it in accordance with any Credit Support Document
if such failure is continuing after any applicable grace period has
elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction of
all obligations of such party under each Transaction to which such
Credit Support Document relates without the written consent of the
other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity
of, such Credit Support Document;
(iv) Misrepresentations. 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 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 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 or
other similar condition or event (however
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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 aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming capable at such time of
being declared, due and payable or (2) a default by such party 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 of
grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation, amalgamation
or merger); (2) becomes insolvent or is unable to pay its debts or
fails or admits in writing its inability generally to pay its debts as
they become due; (3) makes a general assignment, arrangement or
composition with or for the benefit of its creditors; (4) institutes
or has instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights, or a
petition is represented 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 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.
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party (which will be the
Affected Party):--
(1) to perform any absolute or contingent obligation to make a payment
or delivery or to receive a payment or delivery in respect of such
Transaction or to comply with any other material provision of this
Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Docuement
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent juridiction, 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 accoount of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider of 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.
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6. Early Termination
(a) Right to Terminate Following Event of Default. If if 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)(l) 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 it rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section (6)(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee
on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(l) 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 to 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
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount, if
any, payable in respect of an Early Termination Date shall be determined
pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an 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 any 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
9
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party
will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply,
an amount will be payable equal to the Non-defaulting Party's
Loss in respect of this Agreement. If that amount is a positive
number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will
pay the absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:-
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is not
the Affected Party, respectively, and, if Loss applies and fewer
than all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with
the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it
is a negative number, X will pay the absolute value of that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted
by law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages a a consequence of such
losses.
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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 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
imdemnities 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.
11
9. Miscellaneous
(a) Entire Agreement. This Agreement constitues 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 the 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
facsimilie transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transmission 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 facsimilie
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which is 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 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
exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of the
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 specifyed 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.
12
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it is
delivered;
(ii) if sent by telex, on the date the recipient's answerback is received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the
equivalent (return receipt requested), on the date that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
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 ("Proceeding"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court, located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Sections 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.
14
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, and 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
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones 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 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 remianing 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
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 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
under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such Party's Loss (whether positive or negative and without reference to any
unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for (in the reasonable belief of the party making the
determination) produce a commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
16
"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).
"Termination 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) if effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
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 reasonable determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
..................................... ...................................
(Name of Party) (Name of Party)
By:.................................. By:................................
Name: Name:
Title: Title:
Date: Date:
18
SCHEDULE
TO THE
MASTER AGREEMENT
Dated as of April __, 1998
between
BANKERS TRUST COMPANY, a New York banking corporation,
not in its individual capacity, but solely as Trustee
("Party A"), for PEOPLE'S BANK CREDIT CARD
MASTER TRUST (the "Trust")
and
LEHMAN BROTHERS FINANCIAL PRODUCTS INC.,
a corporation organized under the laws of
the State of Delaware
("Party B").
PART 1
TERMINATION PROVISIONS
----------------------
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:
Section 5(a)(v), none.
Section 5(a)(vi), none.
Section 5(a)(vii), none.
Section 5(b)(iv), none.
and in relation to Party B for the purpose of:
Section 5(a)(v), none.
Section 5(a)(vi), none.
Section 5(a)(vii), none.
Section 5(b)(iv), none.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b) as it
applies to Party B but not Party A. "MATERIALLY WEAKER" as such term is used in
Section 5(b)(iv) means that the resulting, surviving or transferee entity has
suffered a Downgrade (as defined herein except that the resulting, surviving or
transferee entity will replace Party B within the Downgrade definition).
(c) The "CROSS-DEFAULT" provisions of Section 5(a)(vi) will not apply to
Party A or Party B.
(d) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not
apply to Party A or Party B.
(e) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e):
(i) Loss will apply; provided, however, that for the avoidance of
-------- -------
doubt, if at any time and so long as Party A shall have satisfied in full
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, then unless Party B is required pursuant to
appropriate proceedings to return to Party A or otherwise returns to Party
A upon demand of Party A any portion of any such payment, (i) if Party A
shall be determining its Loss in respect of any Terminated Transaction,
such Loss shall never be a negative number, and (ii) if Party B shall be
determining its Loss in respect of any Terminated Transaction, such Loss
shall never be expressed as a positive number.
(ii) The Second Method will apply.
(f) "TERMINATION CURRENCY" means United States Dollars.
(g) ADDITIONAL TERMINATION EVENT; CREDIT DOWNGRADE.
(i) If with respect to Party B, the counterparty rating (a "Rating")
by Standard & Poor's Ratings Services, a division of The McGraw-Hill
Companies Inc. ("S&P"), Moody's Investors Service, Inc. ("Moody's") or
Fitch IBCA, Inc. ("Fitch"; Fitch, S&P and Moody's are collectively referred
to herein as the "Rating Agencies") is withdrawn by any Rating Agency or
reduced below AAA by S&P, Aa3 by Moody's or AA- by Fitch (any such
withdrawal or reduction, a "Downgrade"), Party B shall promptly notify in
writing Party A and the Rating Agencies, and shall within 30 days of the
date of such Downgrade, with the prior written confirmation of each of the
Rating Agencies that such arrangement will
-2-
not result in the reduction or withdrawal of the rating of the Series 1998-
1 Certificates in effect immediately prior to such Downgrade, at the
expense of Party B, (x) obtain a substitute cap provider ("X") that (1) is
reasonably acceptable to Party A, (2) has Ratings of AAA by S&P and at
least Aa3 by Moody's and AA- by Fitch, or has the Specified Ratings from
all the Rating Agencies and (3) is acceptable to the Rating Agencies, and
replace the Transactions outstanding hereunder with Transactions on
identical terms except that X shall be "Party B", or (y) enter into a
"Qualifying Substitute Arrangement" (as defined below) to assure
performance by Party B of its obligations under the Transactions
outstanding hereunder. In the event that Party B fails to satisfy any of
its obligations referred to in this subparagraph (i) within the time period
prescribed, such failure shall constitute an Additional Termination Event
with Party B as the Affected Party.
(ii) "Qualifying Substitute Arrangement" shall mean any arrangement
satisfactory to the Rating Agencies, including collateral, guarantees or
letters of credit, which arrangement will result in the Rating Agencies not
reducing or withdrawing the rating in effect of the Series 1998-1
Certificates outstanding immediately prior to the Downgrade.
(iii) "Specified Ratings" shall mean (A) long term unsecured debt or
long term certificate of deposit ratings of at least Aa3 by Moody's and at
least AA- by Fitch and (B) a short term unsecured debt or short term
certificate of deposit rating of A-1+ by S&P.
(h) Notwithstanding any provision contained herein, in the Agreement or in
any Confirmation (including any provision relating to Section 2(a)(iii) of the
Agreement regarding Events of Default and Potential Events of Default, Section 5
of the Agreement regarding Events of Default and Termination Events, but
excluding Section 5(b)(i) of the Agreement, or Section 6 of the Agreement
regarding Early Termination), the obligations of Party B contained herein, in
the Agreement or in any Confirmation shall be absolute, unconditional and
irrevocable and all payments required to be made by Party B hereunder, under the
Agreement and under any Confirmation shall be made without offset, counterclaim
or defense.
(i) The first sentence of Section 6(d)(ii) of the Agreement is hereby
modified to read in its entirety as follows: "An amount calculated as being due
in respect of an Early Termination Date under section 6(e) will be payable on
the day that notice of the amount payable is effective."
-3-
PART 2
TAX REPRESENTATIONS
-------------------
(a) PAYER TAX REPRESENTATIONS. For the purposes of Section 3(e) of
this Agreement, Party B will 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 Party A under this Agreement. In making
---------
this representation, it may rely on (i) the accuracy of any representation
--------------------------------------------------------------------------
made by the other party pursuant to Section 3(f) of this Agreement, (ii)
------------------------------------------------------------------------
the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii)
---------------------------------------------------------------------------
of this Agreement and the accuracy and effectiveness of any document
--------------------------------------------------------------------
provided by the other party 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) by reason of material prejudice to
---------------------------------------------------------------------------
its legal or commercial position.
--------------------------------
(b) PAYEE TAX REPRESENTATIONS. For the purposes of Section 3(f) of
this Agreement, Party A makes no representations.
PART 3
AGREEMENT TO DELIVER DOCUMENTS
------------------------------
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
Party required to Form/document/ Date by which
deliver document Certificate to be delivered
- ---------------- ----------- ---------------
Party A W-9 for the Trust Upon execution of this
Agreement.
-4-
(b) Other documents to be delivered are:
Party
required to Covered by
deliver Form/Document/ Date by which Section 3(d)
document Certificate to be delivered Representation
-------- ----------- --------------- --------------
Party A A Certificate of an Upon execution Yes.
authorized officer of of this
the party, certifying Agreement.
the names, true
signatures and
authority of the
officers of the party
signing this
Agreement.
Party A An opinion of counsel Upon execution Yes.
for Party A. of this
Agreement
Party A The relevant excerpts Upon execution Yes.
from the Trust of this
Agreement of Party A Agreement.
pursuant to which
Party A is authorized
to enter into this
Agreement.
Party B A certificate of an Upon execution Yes.
authorized officer of of this
the party, certifying Agreement.
the names, true
signatures and
authority of the
officers of the party
signing this
Agreement.
Party B Opinion of counsel to Upon execution Yes.
Party B and addressed of this
to Party A, the Agreement.
rating agencies
rating the
Certificates issued
by the Trust,
covering such other
matters as reasonably
requested by, and
satisfactory to the
addressees.
-5-
Party
required to Covered by
deliver Form/Document/ Date by which Section 3(d)
document Certificate to be delivered Representation
-------- ----------- --------------- --------------
Party B A copy of the annual Upon execution Yes.
report of Party B of this
containing audited Agreement and,
consolidated thereafter,
financial statements upon request of
for such fiscal year Party A or the
certified by Servicer.
independent public
accountants and
prepared in
accordance with
generally accepted
accounting practices
consistently applied.
-6-
PART 4
MISCELLANEOUS
-------------
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:
Address for notices or communications to Party A:
Address: Bankers Trust Company, as Trustee
for People's Bank Credit Card
Master Trust
4 Albany Street
New York, New York 10006
Attention: Corporate Trust and Agency Group (People's Bank Series
1998-1)
Facsimile No.: (212) 250-6439
Telephone No.: (212) 250-6137
(For all purposes)
With copies to the Servicer:
Address: People's Bank
Bridgeport Center
850 Main Street
Bridgeport, Connecticut 06604-4913
Attention: General Counsel and
Interest Rate Risk Manager
Address for notices or communications to Party B:
Address: Lehman Brothers Financial Products Inc.
3 World Financial Center, 12th Floor
New York, New York 10285-1200 USA
Attention: Documentation Group
Facsimile No.: (212) 526-1877
Telephone No.: (212) 528-7097
(For all purposes.)
(b) PROCESS AGENT. Not applicable.
-7-
(c) MULTIBRANCH PARTY. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(d) CALCULATION AGENT. The Calculation Agent is Party B, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(e) CREDIT SUPPORT DOCUMENT. None.
(f) CREDIT SUPPORT PROVIDER. None.
(g) 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.
(h) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
(i) NETTING OF PAYMENTS. The limitation set forth in Section 2(c)(ii) of
this Agreement will apply and therefore the netting specified in Section 2(c) of
this Agreement will be limited to the same Transaction.
PART 5
OTHER PROVISIONS
----------------
(a) RECOURSE. Notwithstanding anything to the contrary contained in this
Agreement, but subject to paragraph (f) of this Part 5, the obligations of Party
A under this Agreement shall not be recourse to Bankers Trust Company or
People's Bank, a Connecticut capital stock savings bank ("People's Bank"), as
Seller and Servicer under the Pooling and Servicing Agreement (as defined below
under "Capitalized Terms"), or any Class A Certificateholder or Class B
Certificateholder (either, any "Certificateholder") (or any person or
organization acting on behalf of Bankers Trust Company, People's Bank or any
Certificateholder or any affiliate, officer or director of Bankers Trust
Company, People's Bank or any Certificateholder) and, with respect to any
payment obligations of Party A, recourse shall be had solely to the assets of
the Trust.
(b) LIMITATION OF DEFAULTS AND TERMINATION. Notwithstanding the terms of
Sections 5 and 6 of this Agreement, if at any time and so long as Party A shall
have satisfied in full all of its payment obligations under Section 2(a)(i) of
this
-8-
Agreement and shall at the time have no future payment obligations, whether
absolute or contingent, under such Section, then unless Party B is required
pursuant to appropriate proceedings to return to Party A or otherwise returns to
Party A upon demand of Party A any portion of any such payment, the occurrence
of an event described in Section 5(a) of this Agreement with respect to Party A
shall not constitute an Event of Default or a Potential Event of Default with
respect to Party A as the Defaulting Party and (ii) Party B shall be entitled to
designate an Early Termination Date pursuant to Section 6 of this Agreement only
as a result of the occurrence of a Termination Event set forth in Section
5(b)(i) of this Agreement with respect to Party B as the Affected Party.
(c) COVENANT NOT TO INSTITUTE PROCEEDINGS. In connection with this
Agreement, Party B hereby covenants and agrees that it will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings, or other proceedings under any United States federal or state or
any foreign bankruptcy or similar law.
(d) Notwithstanding anything in Section 7 of the Agreement or any
Confirmation to the contrary, Party B hereby agrees and acknowledges that Party
A shall have the right to transfer all or a portion of its rights to payment
from Party B under any Transaction to any Person, provided that (i) neither
party is required to pay to the other party an additional amount under Section
2(d)(i)(4) or to receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) of the
Agreement or (ii) Party B has given its consent to such transfer (which consent
shall not be unreasonably withheld by Party B). Any transfer pursuant to this
paragraph (d) shall be in accordance with the provisions of Section 4.11 of the
Supplement (as defined herein). Party B hereby agrees to make such payments due
hereunder as have been transferred to the transferee designated by Party A and
to the account or accounts specified in a written notice to be provided by Party
A to Party B at least 5 Business Days prior to the effectiveness of such
transfer but not more than 30 days prior to the effectiveness of such transfer.
(e) SUCCESSORS. Notwithstanding anything in Section 7 of the Agreement,
this Schedule or any Confirmation to the contrary, the terms "Party A" and other
terms with like significance as used in the Agreement or therein shall include
all successors from time to time to Bankers Trust Company, as trustee for the
Trust and no consent of Party B shall be required for any transfer or assignment
to a successor trustee for the Trust.
-9-
(f) NO PERSONAL LIABILITY. In the absence of gross negligence, willful
misconduct, or bad faith on the part of the Trustee, the Trustee will have no
personal liability for any amounts required to be paid by the Trust under this
Agreement.
(g) AMENDMENT. No amendment, modification or waiver in respect of this
Agreement will be effective unless (i) it is in writing and executed by each of
the parties or confirmed by an exchange of telexes or facsimiles and (ii) except
as waived by the Rating Agencies, the Rating Agencies shall have received at
least 5 days prior written notice of such amendment and have advised in writing
that such amendment will not result in a downgrade or withdrawal of the then-
current rating on the Series 1998-1 Certificates.
(h) TERMINATION AT THE OPTION OF THE TRUST. Party A may, upon at least
two Business Days' prior written notice, terminate in whole or in part (which
termination shall not be deemed to constitute a Potential Event of Default or
Event of Default hereunder) any Transaction, prior to the related Termination
Date, under the Agreement; any amount paid by Party B in connection with such
termination shall be as agreed between the parties hereto, or if no agreement is
reached by 12 noon, New York City time, on the applicable Early Termination
Date, as calculated by Party B pursuant to Section 6(e)(ii)(1) as if Party A
were the sole Affected Party, on the basis of Market Quotations and Second
Method. For the avoidance of doubt, Market Quotation shall never be expressed
as being an amount payable by Party A to Party B.
(i) SCHEDULED PAYMENTS BY PARTY A. For the avoidance of doubt, Party A
has no payment obligations under Section 2(a)(i) of the Agreement other than
those specified as the Fixed Amounts in the Confirmations described in paragraph
(j) below.
(j) TRANSACTIONS. This Agreement and all Transactions relate to the
Trust's Series 1998-1 Certificates, and unless otherwise agreed to in writing by
the parties hereto, the only Transactions governed hereby shall be the two
Transactions evidenced by the Confirmations dated ________ __, 1998, and
attached as Exhibit A hereto, as such Confirmations are modified from time to
time.
(k) CAPITALIZED TERMS. Capitalized terms not otherwise defined herein or
in the Definitions shall have the meanings assigned to them in the Amended and
Restated Pooling and Servicing Agreement, dated as of March 18, 1997 (amending
and restating in the entirety, the Pooling and Servicing Agreement dated as of
June 1, 1993), by and between People's Bank as Seller and Servicer, and Party A,
as amended from time to time, as supplemented by the Series 1998-1 Supplement,
dated as of April
-10-
1, 1998 (the "Supplement") (as so supplemented, the "Pooling and Servicing
Agreement").
(l) WAIVER OF JURY TRIAL. Each party hereto hereby irrevocably waives any
and all right to trial by jury in any Proceedings.
(m) REPRESENTATIONS AND WARRANTIES. Section 3(a) is amended by adding the
following paragraph (vi):
"(vii) ELIGIBLE SWAP PARTICIPANT. It is an "eligible swap
participant" as that term is defined by the United States Commodity
Futures Trading Commission in 17 C.F.R. (S) 35.1(b)(2) and it has
entered into this Agreement and it is entering into each Transaction
in connection with its line of business (including financial
intermediation services) or the financing of its business.
(n) NO RELIANCE. Each party acknowledges and agrees that (i) it is acting
solely in the capacity of an arm's length contractual counterparty, with respect
to this Agreement and any Transaction hereunder, and (ii) it is not acting as a
financial advisor or fiduciary of the other party (or in any similar capacity)
with respect to the Agreement and any Transaction hereunder regardless of
whether it provides the other party with market information or its views. Each
party represents to the other party (which representation shall be deemed to be
repeated on each date on which any Transaction is entered into) that it
understands the risks of the Transactions it enters and any legal, regulatory,
tax, accounting and economic consequences arising therefrom and that its
decision to enter into each Transaction has been based solely on its independent
evaluation and the independent evaluation of its representatives in light of its
financial capabilities and objectives.
(o) CONSENT TO RECORDING. The parties agree that each may electronically
record all telephonic conversations between them and that any such recordings
may be submitted in evidence to any court or in any Proceedings for the purpose
of establishing any matters pertinent to any Transaction.
(p) NOTICE BY FACSIMILE. In addition to the methods outlined in Section
12(a), notices and communications (other than for the purposes of Section
13(c)), may also be sent by telecopier at the numbers specified in Part 4 of
this Schedule. Promptly after giving any such notice or communication, the
sender shall also confirm the notice or communication by telephone at the number
and to the attention of the party specified in Part 4 of this Schedule.
Provided that such
-11-
telephonic confirmation is made promptly, a notice or communication sent via
telecopier will be effective upon receipt.
(q) COUNTRY OF DOMICILE. The country of domicile of Party A is the United
States of America. The country of domicile of Party B is the United States of
America.
(r) CONFIRMATION. Each Confirmation supplements, forms part of, and will
be read and construed as one with, this Agreement.
(s) ACCURACY OF SPECIFIED INFORMATION. Section 3(d) is hereby amended by
adding in the third line thereof after the word "respect" and before the period
the words "or, in the case of audited or unaudited financial statements or
balance sheets, a fair presentation of the financial condition of the relevant
person".
(t) "FORM W-9" means United States Internal Revenue Service Form W-9 or
any successor form.
[Rest of page intentionally left blank.]
-12-
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.
BANKERS TRUST COMPANY, not in its LEHMAN BROTHERS FINANCIAL
individual capacity but solely as PRODUCTS INC.
Trustee for People's Bank Credit
Card Master Trust
By: By:
---------------------------------- ------------------------------
Name: Name:
Title: Title:
DATE: DATE:
-------------------------------- -----------------------------
-13-
[Series 1998-1]
[Class A]
CONFIRMATION
------------
Date: April __, 1998
To: Bankers Trust Company,
not in its individual
capacity, but solely as
Trustee for People's Bank
Credit Card Master Trust
Attention:
From: Lehman Brothers Financial Products Inc., (the "Cap
Provider")
Transaction
Reference Number: __________
The purpose of this letter agreement is to set forth the terms and
conditions of the Transaction entered into between us on the date hereof. This
letter constitutes a "Confirmation" as referred to in the Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA Definitions
(as published by the International Swap Dealers Association, Inc.) (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
(a) This Confirmation supplements, forms a part of, and is subject to, the
Master Agreement dated as of April __, 1998, as amended or supplemented from
time to time (the "Master Agreement") between you and us. All provisions
contained in the Master Agreement shall govern this Confirmation except as
expressly modified below. Additionally, upon the due execution and delivery of
this Confirmation, the [Class A] Confirmation dated March 18, 1998, between
People's Bank and the Cap Provider, which supplements the Master Agreement dated
as of March 18, 1998, between People's Bank and the Cap Provider shall be deemed
canceled in its entirety, and all right, title, obligations and interest created
thereunder shall cease to exist, except that this Confirmation shall be
effective.
(b) The terms of the particular Transaction to which this Confirmation
relates are as follows:
Type of Transaction: Rate Cap Transaction
Notional Amount: The Notional Amount for the period from the
Effective Date through and including the
Calculation Period commencing on the
Distribution Date in November, 2002 is U.S.
$343,000,000. Thereafter, the Notional Amount
for the applicable Calculation Period commencing
on the applicable date specified below (or, if
such day is not a Business Day, commencing on
the following Business Day) is set forth below
opposite such date:
Notional
Date Amount
---- ------
December 15, 2002 $257,250,000
January 15, 2003 $171,500,000
February 15, 2003 $ 85,750,000
March 15, 2003 $ 0
Trade Date: March 18, 1998/1/
Effective Date: April 15, 1998/2/
Effective Date
of Assignment: April __, 1998
Termination Date: The Distribution Date in March, 2003.
- ---------------
/1/ This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of April __, 1998 among People's Bank, the
Trustee and the Cap Provider (the "Assignment Agreement"), pursuant to
which People's Bank transferred all of its rights, title, obligations and
interest in and under two confirmations, dated March 18, 1998 between
People's Bank and Cap Provider. Such confirmations had a "Trade Date" of
March 18, 1998 and an "Effective Date" of April 15, 1998.
/2/ See footnote 1.
-2-
Fixed Rate Amounts:
Fixed Rate Payer: Bankers Trust Company, not in its individual
capacity, but solely as Trustee for People's
Bank Credit Card Master Trust (the "Trustee")
Fixed Rate Payer
Payment Date: Not applicable.
Fixed Amount: Zero./3/
Floating Amounts:
Floating Rate Payer: The Cap Provider
Cap Rate: 9.0% per annum
Floating Rate Payer
Payment Dates: The fourth Business Day preceding each
Distribution Date. Early Payment applies. No
adjustment of Floating Rate Payer Payment Dates,
except for any adjustment of any Distribution
Date, as provided in the definition of
"Distribution Dates".
Period End Dates: Each Distribution Date. No adjustment of Period
End Dates, except for any adjustment of any
Distribution Date, as provided in the definition
of "Distribution Dates".
Floating Rate for Initial
Calculation Period: To be determined
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One Month.
Spread: None.
Floating Rate Day Count
- ---------------
/3/ Pursuant to the Assignment Agreement, under the [Class A] confirmation,
dated March 18, 1998 executed by People's Bank and the Cap Provider,
relating to this Confirmation, the Fixed Amount was U.S.$324,135.
-3-
Fraction: Actual/360
Reset Dates: First day of each Calculation Period.
Compounding: Not applicable.
Business Days: New York, and Bridgeport, Connecticut
Calculation Agent: The Cap Provider
(c) Account Details:
Payments to Bankers Trust
Company, as Trustee
Account for payments: Bankers Trust Company
ABA No.: ___________
Account No.: __________
Reference: People's Bank 1998-1
Attention: Corporate Trust and
Agency Group
Payments to Cap Provider
Account for payments: ___________________
ABA No.: ___________
Account No.: ____________
Account Name:_________________
(4) Other Provisions:
Solely for the avoidance of doubt, in the event that the Reset
Date for any Calculation Period shall not be a London Banking
Day and the rate appearing on the Telerate Page 3750 described
in the definition of "USD-LIBOR-BBA" on the day that is two
London Banking Days preceding that Reset Date indicates that it
shall be effective for deposits commencing on the London Banking
Day immediately succeeding the Reset Date, such rate shall
nonetheless be the Floating Rate for such Calculation Period.
-4-
Credit Support Documents:
Credit Support
Documents with
respect to Cap
Provider: See Master Agreement.
Counterparty Credit
Support Documents: None.
Certain Defined Terms:
"Distribution Dates" shall mean May 15, 1998 and the fifteenth day of each
calendar month thereafter, or, if such fifteenth day is not a Business Day, the
next succeeding Business Day.
-5-
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
LEHMAN BROTHERS FINANCIAL
PRODUCTS INC.
By:______________________
Name:
Title:
-6-
Accepted and confirmed as
of the date first written:
BANKERS TRUST COMPANY, not in
its individual capacity, but
solely as Trustee for
People's Bank Credit Card
Master Trust
BY: _______________________
-7-
[Series 1998-1]
[Class B]
CONFIRMATION
------------
Date: April __, 1998
To: Bankers Trust Company, not in its individual capacity, but solely as
Trustee for People's Bank Credit Card Master Trust
Attention: Structured Finance Group
From: Lehman Brothers Financial Products Inc.
(the "Cap Provider")
Transaction
Reference Number: _________
The purpose of this letter agreement is to set forth the terms and
conditions of the Transaction entered into between us. This letter constitutes
a "Confirmation" as referred to in the Master Agreement specified below.
The definitions and provisions contained in the 1991 ISDA Definitions
(as published by the International Swap Dealers Association, Inc.) (the
"Definitions") are incorporated into this Confirmation. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern.
(a) This Confirmation supplements, forms a part of, and is subject to, the
Master Agreement dated as of April __, 1998, as amended or supplemented from
time to time (the "Master Agreement") between you and us. All provisions
contained in the Master Agreement shall govern this Confirmation except as
expressly modified below. Additionally, upon the due execution and delivery of
this Confirmation, the [Class B] Confirmation dated March 18, 1998, between
People's Bank and the Cap Provider, which supplements the Master Agreement dated
as of March 18, 1998, between People's Bank and the Cap Provider shall be deemed
cancelled in its entirety, and all right, title, obligations and interest
created thereunder shall cease to exist, except that this Confirmation shall be
effective.
(b) The terms of the particular Transaction to which this Confirmation
relates are as follows:
Type of Transaction: Rate Cap Transaction
Notional Amount: U.S.$27,000,000
Trade Date: March 18, 1998/1/
Effective Date: April 15, 1998/2/
Effective Date
of Assignment: April __, 1998
Termination Date: The Distribution Date in April 2003.
Fixed Rate Amounts:
Fixed Rate Payer: Bankers Trust Company, not in its
individual capacity, but solely as
Trustee for People's Bank Credit Card
Master Trust (the "Trustee")
Fixed Rate Payer
Payment Date: Not applicable.
Fixed Amount: Zero./3/
Floating Amounts:
Floating Rate Payer: Cap Provider
- ---------------
/1/ This Confirmation relates to an Interest Rate Cap Assignment and
Assumption Agreement, dated as of April __, 1998 among People's Bank, the
Trustee and the Cap Provider (the "Assignment Agreement"), pursuant to
which People's Bank transferred all of its rights, title, obligations and
interest in and under two confirmations, dated March 18, 1998 between
People's Bank and Cap Provider. Such confirmations had a "Trade Date" of
March 18, 1998 and an "Effective Date" of April 15, 1998.
/2/ See footnote 1.
/3/ Pursuant to the Assignment Agreement, under the [Class B] Confirmation,
dated March 18, 1998, executed by People's Bank and the Cap Provider,
relating to this Confirmation, the Fixed Amount was U.S.$29,700.
-2-
Cap Rate: 9.0% per annum
Floating Rate Payer
Payment Dates: The fourth Business Day preceding each
Distribution Date. Early Payment
applies. No adjustment of Floating Rate
Payer Payment Dates, except for any
adjustment of any Distribution Date, as
provided in the definition of
"Distribution Dates".
Period End Dates: Each Distribution Date. No adjustment of
Period End Dates, except for any
adjustment of any Distribution Date, as
provided in the definition of
"Distribution Dates".
Floating Rate for Initial
Calculation Period: To be determined.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: One Month.
Spread: None
Floating Rate Day Count
Fraction: Actual/360
Reset Dates: First day of each Calculation Period.
Compounding: Not applicable.
Business Days: New York, and Bridgeport, Connecticut
Calculation Agent: Cap Provider
(c) Account Details:
Payments to Bankers Trust
Company, as Trustee:
Account for payments: Bankers Trust Company
ABA No.: _________
Account No.: _______
-3-
Reference: People's Bank 1998-1
Attention: Corporate Trust and
Agency Group
Payments to Cap Provider:
Account for payment: ____________________
ABA No.: ___________
Account No.: __________
Account Name:__________
(d) Other Provisions: Solely for the avoidance of doubt, in
the event that the Reset Date for any
Calculatio n Period shall not be a
London Banking Day and the rate
appearing on the Telerate Page 3750
described in the definition of "USD-
LIBOR-BBA" on the day that is two London
Banking Days preceding that Reset Date
indicates that it shall be effective for
deposits commencing on the London
Banking Day immediatel y succeeding the
Reset Date, such rate shall nonetheles s
be the Floating Rate for such Calculatio
n Period.
Credit Support Documents:
Credit
Support Documents with
respect to Cap Provider: See the Master Agreement.
Credit Support Documents with
respect to Trustee: None.
Certain Defined Terms:
"Distribution Dates" shall mean May 15, 1998 and the fifteenth day of each
------------------
calendar month thereafter, or, if such fifteenth day is not a Business Day, the
next succeeding Business Day.
[Rest of page intentionally left blank]
-4-
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
LEHMAN BROTHERS FINANCIAL
PRODUCTS INC.
By:
---------------------------------
Name:
Title:
-5-
Accepted and confirmed as
of the date first written:
BANKERS TRUST COMPANY, not in
its individual capacity, but
solely as Trustee for
People's Bank Credit Card
Master Trust
By: ________________________
Name:
Title:
-6-