SCHEDULE
TO THE
ISDA MASTER AGREEMENT
DATED AS OF 2002
Between
ZURICH CAPITAL MARKETS AUSTRALIA LIMITED (ABN 99 095 545 887) ("PARTY A")
AND
ZCM MATCHED FUNDING CORP ("ZCM")
AND
PERPETUAL TRUSTEES VICTORIA LIMITED (ABN 42 004 027 258) IN ITS CAPACITY AS
TRUSTEE OF THE INTERSTAR MILLENNIUM SERIES 2002-1G TRUST ("PARTY B")
AND
INTERSTAR SECURITISATION MANAGEMENT PTY LIMITED (ACN 100 346 898)
(THE "TRUST MANAGER")
PART 1
TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" is not applicable in relation to Party A or Party B.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
(c) (i) Sections 5(a)(ii), (iii), (iv), (v), (vi), 5(b)(iii) and (iv) will
not apply to Party A or Party B.
(ii) Replace Section 5(a)(i) with:
"(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 at or before 10:00am on the tenth Local Business Day after
the due date, except that:
(A) no Event of Default shall result from Party B's failure to
pay an amount due under this Agreement where Party B has
sufficient funds with its bankers with which the bank accounts
of the Trust are held and has given instructions to those
bankers to make that payment, and that payment would have been
made but for temporary technical or administrative
difficulties outside the control of Party B (as certified by
the Trust Manager on behalf of Party B in a
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written notice to Party A within 10 Local Business Days after
the due date or immediately thereafter); and
(B) in the event that sub-paragraph (A) applies, Party A has
no obligation to make a corresponding payment under this
Agreement until such time as it actually receives funds from
Party B;".
(iii) Section 5(b)(ii) will not apply to Party A as the Affected Party
(subject to Section 6(aa)(iii) as inserted by Part 1(i) of this
Schedule).
(d) Section 5(a)(vii) "BANKRUPTCY" is replaced with the following:
"An Insolvency Event has occurred in respect of Party A or Party B."
However, the occurrence of an Insolvency Event in respect of Party B in
its personal capacity will not constitute an Event of Default provided
that within thirty Business Days of that occurrence, Party B and the Trust
Manager are able to procure the novation of this Agreement and all
Transactions to a third party (who is notified to Party A) in respect of
which the Designated Rating Agencies confirm that the novation will not
cause a reduction or withdrawal of the rating of the Class A2 Notes.
(e) Section 5(b)(i) "ILLEGALITY" is amended by adding the following paragraph
at the end:
"This sub paragraph (i) does not apply to the imposition by the Australian
government or any agency of the Australian government of any exchange
control restrictions or prohibitions ("EXCHANGE CONTROLS"). For the
avoidance of doubt:
(A) exchange controls do not constitute an Illegality or Event of
Default or Termination Event under this Agreement, and do not
entitle a party to terminate a Transaction or otherwise refuse to
make any payments it is obliged to make under a Transaction; and
(B) to the extent permitted by law, delivery by Party B of Australian
dollar amounts required to be paid by it under any relevant
Confirmation to the bank account specified in that Confirmation will
constitute proper payment of those amounts by Party B and Party A's
obligations under this Agreement will be unaffected by any such
exchange controls."
(f) For the purpose of Section 5(b)(v), "ADDITIONAL TERMINATION EVENT" means
each of the following:
(i) Party B or a Paying Agent becomes obliged to make a withholding or
deduction for or on account of Tax in respect of any Notes or any
payment to Party A under any Transaction or an Obligor becomes
obliged to make a withholding or deduction for or on account of Tax
in respect of any payout under a Purchased Loan and the Notes are
redeemed as a result in accordance with clause 6.6(d) of the Series
Notice (in which case Party A is the Affected
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Party only for the purpose of termination) (but for the purposes of
Section 6(e)(ii)(1), Party A will be the Non-defaulting Party);
(ii) Party A fails to comply with the requirements of Part 5(r) of this
Schedule (in which case Party A is the Affected Party); and
(iii) an Event of Default (as defined in the Security Trust Deed) occurs
and the Security Trustee enforces the security under the Security
Trust Deed (in which case Party B is the Affected Party (unless the
Event of Default results from a failure by Party A to fulfil its
obligations under this Agreement, in which case Party A is the
Affected Party)).
(g) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a):
will not apply to Party A.
will not apply to Party B.
(h) Section 6(a) is amended by replacing "20 days" in line 3 with "10 Local
Business Days".
(i) Add a new Section 6(aa) after Section 6(a):
"(aa) RESTRICTED TERMINATION RIGHTS
(i) TERMINATION BY PARTY B: Subject to Part 5(s) of
this Schedule, Party B must not designate an Early
Termination Date without the prior written consent
of the Note Trustee.
(ii) CONSULTATION: Each Party may only designate an
Early Termination Date following prior
consultation with the other Party as to the timing
of the Early Termination Date. Subject to its
duties under the Master Trust Deed and the Series
Notice, Party B may exercise any rights in its
capacity as holder of the Purchased Loans only on
the instructions of the Note Trustee and only
after consultation between Party A and the Note
Trustee.
(iii) TRANSFER WHERE PARTY B DOES NOT GROSS-UP: If any
payment by Party B to Party A under this Agreement
is, or is likely to be, made subject to any
deduction or withholding on account of Tax, Party
B will endeavor to procure the substitution as
principal obligor under this Agreement in respect
of each affected Transaction of a Party B
incorporated in another jurisdiction approved by
Party A and the Note Trustee
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and in respect of which the Designated Rating
Agencies confirm that the substitution will not
cause a reduction or withdrawal of the rating of
the Class A2 Notes."
(j) In Section 6(b)(ii), add the words "or to any other person" after the word
"Affiliates" in the second last line of the first paragraph and add the
words "so long as the transfer in respect of that Transaction would not
lead to a downgrade or withdrawal of the rating of any Class A2 Notes"
after the words "ceases to exist" at the end of the first paragraph.
(k) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation will apply; and
(ii) the Second Method will apply.
(l) In Section 6(e), delete the sentence at the end of the first paragraph:
"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."
(m) "TERMINATION CURRENCY" means United States Dollars.
(n) (i) Replace paragraph (a) of Section 7 with the following:
"(a) (i) (subject to sub-paragraph (ii)) Party A may make such a
transfer, without the prior consent of any Designated Rating Agency
or the other parties, pursuant to a consolidation, amalgamation
with, or merger with or into, or transfer of all or substantially
all of its assets to, or reorganisation, incorporation,
reincorporation or reconstitution into or as another entity (but
without prejudice to any other right or remedy under this
Agreement); and
(ii) the transfer referred to in sub-paragraph (i) may only be
made where the transferee of all of Party A's interest or obligation
in or under this Agreement has a long term credit rating of at least
AA - and a short term credit rating of A-1+ from S&P and a long term
credit rating of at least A2 and a short term credit rating of at
least P-1 from Moody's; and"
(ii) Add a new paragraph to Section 7, immediately below paragraph (b):
"(c) in the event that a trustee is appointed as a successor to
Party B under the Master Trust Deed and the Series Notices (the
"SUCCESSOR TRUSTEE"), Party A undertakes that it shall (unless, at
the time the Successor Trustee is so appointed, Party A is entitled
to terminate the Transaction under Section 6, in which case it may)
execute a novation agreement novating to the Successor Trustee the
Transaction on the same terms or on other terms to be agreed between
Party A, Party B and the Successor Trustee, and give
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written notice to each Designated Rating Agency of such novation."
PART 2
TAX REPRESENTATIONS
(a) PAYER TAX REPRESENTATIONS
For the purpose of Section 3(e), each of Party A and Party B makes the
following representation:
It is not required by any current 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)) to be made by it to the other party under this Agreement. In making
this representation, it may rely on:
(i) the satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) and the accuracy and effectiveness of any document
provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii); and
(ii) the satisfaction of the agreement of the other party contained in
Section 4(d),
provided that it shall not be a breach of this representation where
reliance is placed on paragraph (i) 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 purpose of Section 3(f), each of Party A and Party B makes the
following representation:
It is an Australian resident and does not derive the payments under this
Agreement in part or in whole in carrying on business in a country outside
Australia at or through a permanent establishment of itself in that
country.
PART 3
DOCUMENTS TO BE DELIVERED
For the purposes of Section 4(a)(i) and (ii) each party agrees to deliver the
following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:
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PARTY REQUIRED TO DOCUMENT DATE BY WHICH TO BE DELIVERED
DELIVER
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Party A and Any document or certificate (i) On the execution of this Agreement;
Party B. reasonably required or and
reasonably requested by a
party in connection with its (ii) subsequently, upon demand.
obligations to make a payment
under this Agreement which
would enable that party to
make the payment free from
any deduction or withholding
for or on account of Tax or
as would reduce the rate at
which deduction or
withholding for or on account
of Tax is applied to that
payment.
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(b) Other documents to be delivered are:
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PARTY REQUIRED TO DOCUMENT DATE BY WHICH TO BE COVERED BY
DELIVER DELIVERED SECTION 3(D)
REPRESENTATIONS
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Party A, Party B and A copy of the power of On execution and Yes.
the Trust Manager. attorney authorising delivery of this
execution by the attorney of Agreement.
this Agreement.
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Party A, Party B and A list of authorised On execution of any Yes.
the Trust Manager. signatories for the party and relevant Confirmation.
evidence satisfactory in form
and substance to the other
parties of the authority of
the authorised signatories of
the party to execute each
Confirmation on behalf of
that party.
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Trust Manager. A copy of the Master Trust On execution and Yes.
Deed, the Series Notice, the delivery of this
Security Trust Deed, the Note Agreement or in the
Trust Deed, the Notice of case of a document not
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Creation of Trust and the executed as at the
Agency Agreement. date of this
Agreement, upon
execution of that
document.
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Trust Manager A copy of an Australian legal [*] 2002. No.
opinion addressed to, among
others, Party A in form and
substance satisfactory to
Party A.
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Trust Manager A copy of an Australian tax [*] 2002. No.
opinion addressed to, among
others, Party A in form and
substance satisfactory to
Party A.
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Trust Manager A copy of any notice provided At such time as the Yes.
by the Trust Manager to Class relevant notice is
A2 Noteholders. provided by the Trust
Manager to Class A2
Noteholders.
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PART 4
MISCELLANEOUS
(a) ADDRESS FOR NOTICES: For the purpose of Section 12(a) of this Agreement:
ADDRESS FOR NOTICES TO PARTY A:
[* ZCMA TO PROVIDE]
ADDRESS FOR NOTICES TO PARTY B:
Level 7, 9 Castlereagh Street, Sydney, New South Wales, 2000
Attention: Manager Securitisation
Facsimile: 612 9221 7870
Telex: N/A
ADDRESS FOR NOTICE TO THE TRUST MANAGER:
Level 31, 367 Collins Street, Melbourne, Victoria, 3000, Australia
Attention: Managing Director
Facsimile: 613 9621 2368
Telex: N/A
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(b) PROCESS AGENT: For the purposes of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
OFFICES: The provisions of Section 10(a) will not apply to this
Agreement.
(c) MULTIBRANCH PARTY: For the purposes of Section 10(c) of this Agreement:
Party A is not a multibranch Party.
Party B is not a multibranch Party.
(d) CALCULATION AGENT: The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(e) CREDIT SUPPORT DOCUMENT: Details of any Credit Support Document:
(i) In relation to Party A: Nil.
(ii) In relation to Party B: Nil.
(f) CREDIT SUPPORT PROVIDER:
(i) In relation to Party A: Nil.
(ii) In relation to Party B: Nil.
(g) GOVERNING LAW: This Agreement will be governed by and construed in
accordance with the laws of New South Wales, Australia.
(h) NETTING OF PAYMENTS: Sub-paragraph (ii) of Section 2(c) will not apply.
(i) "AFFILIATE" will have the meaning specified in Section 14. For the
purposes of Section 3(c), neither Party A nor Party B is deemed to have
any Affiliates.
PART 5
OTHER PROVISIONS
(a) In Section 2(a)(i) add the following sentence:
Each payment will be by way of exchange for the corresponding payment or
payments payable by the other party."
(b) In Section 2(a)(ii), after "freely transferable funds" add "free of any
set-off, counterclaim, deduction or withholding (except as expressly
provided in this Agreement)".
(c) Add the following new sentence to Section 2(b):
"Each new account so designed must be in the same tax jurisdiction
as the original account."
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(d) Delete the word "if" at the beginning of Section 2(d)(i)(4) and insert the
following words instead:
"if and only if X is Party A and".
(e) In Section 2(d)(ii) insert the words "(if and only if Y is Party A)" after
the word "then" at the beginning of the last paragraph. Party B will have
no obligation to pay any amount to Party A under Section 2(d)(ii), and may
make any payment under or in connection with this Agreement net of any
deduction or withholding referred to in Section 2(d)(i).
(f) ADDITIONAL REPRESENTATIONS: In Section 3 add the following immediately
after paragraph (f):
"(g) NON ASSIGNMENT. It has not assigned (whether absolutely, in
equity or otherwise) or declared any trust over any of its rights
under this Agreement or any Transaction (other than, in respect of
Party B, the trust created pursuant to the Master Trust Deed and the
Series Notice) and has not given any floating charge over its rights
under this Agreement or any Transaction in the case of Party A, or
any charge over the assets of the Trust (other than under the
Security Trust Deed), in the case of Party B."
(g) In Section 4 add a new paragraph as follows:
"(f) CONTRACTING AS PRINCIPAL. Party A will enter into all
Transactions as principal and not otherwise and Party B will enter
into all Transactions in its capacity as trustee of the Trust and
not otherwise. Any reference to Party B in this Agreement is in its
capacity as trustee of the Trust."
(h) CONFIRMATIONS. With respect to each Transaction entered into pursuant to
this Agreement and for the purposes of Section 9(e)(ii), Party A will, on
or promptly after the relevant Trade Date, send Party B (with a copy to
the Trust Manager) a Confirmation confirming that Transaction and both
Party B and the Trust Manager must promptly then confirm the accuracy of
or request the correction of such Confirmation. Notwithstanding the
provisions of Section 9(e)(ii), where a Transaction is confirmed by means
of facsimile or an electronic messaging system, such message will
constitute a Confirmation even where not so specified in that
Confirmation.
(i) Section 12 is amended as follows:
(i) In Section 12(a), delete the words "(except that a notice or other
communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system)" in lines 2 and 3.
(ii) Section 12(a)(iii) is replaced with:
"(iii) if sent by facsimile transmission, on the date a transmission
report is produced by the machine from which the facsimile was sent
which indicates that the facsimile was sent in its entirety to the
facsimile number of the recipient notified for the purpose of this
Section, unless the recipient notifies the sender within one Local
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Business Day of the facsimile being sent that the facsimile was not
received in its entirety and in legible form."
(iii) In Section 12(a)(v), replace the words "electronic message is
received" with "the facsimile transmission confirming the electronic
message is sent and deemed effective in accordance with
sub-paragraph (iii)".
(j) Section 14 of the Agreement is modified as follows :
(i) New definitions are inserted as follows:
"ACCEPTABLE ARRANGEMENT" means an arrangement which each relevant
Designated Rating Agency has confirmed in writing will result in the
avoidance or reversal of any Note Downgrade.
"APPROVED BANK" means a Bank which has a short term credit rating of
A-1+ from S&P and at least P-1 from Moody's.
"AUD SWAP COLLATERAL ACCOUNT" means a Swap Collateral Account
established and maintained in Australia.
"CASH COLLATERAL AMOUNT" means, at any time, an amount equal to the
greater of:
(a) CCR; and
(b) an amount acceptable to Moody's and sufficient to maintain the
credit rating assigned to the Notes by Moody's immediately
prior to the relevant Downgrade.
"CCR" means the amount calculated as follows:
CCR = CR X 1.030
"CR" means MTM + VB.
"DOWNGRADE" means the withdrawal or downgrade of ZCM's credit rating
by a Designated Rating Agency resulting in ZCM having:
(a) a short term credit rating of less than A-1+ by S&P;
(b) a long term credit rating of less than A2 by Moody's; or
(c) a short term credit rating of less than P-1 by Moody's.
"ELIGIBLE INVESTMENT" means:
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(a) obligations of the Federal Government of the United States or
certain agencies of that government;
(b) commercial paper that, at the time of investment therein, is
rated at least "P-1" by Moody's and "A-1+" by S&P;
(c) demand and time deposits in, certificates of deposit of,
bankers' acceptances issued by, and federal funds sold by, any
depository institution or trust company, provided that, at the
time of investment therein, the short-term deposit rating of
such depository institution or trust company is at least "P-1"
by Moody's and "A-1+" by S&P;
(d) demand and time deposits and certificates of deposit issued by
any bank or trust company or savings and loan association and
fully insured by the Bank Insurance Fund or Savings
Association Insurance Fund administered by the Federal Deposit
Insurance Corporation;
[(e) repurchase agreements with respect to the investments
specified above issued by any bank or broker dealer rate at
least "Aa3" by Moody's and at least "AA-" by S&P;] and
(f) non-U.S. money market funds rated long term "Aaa" by Moody's
and "AAA" by S&P.
"MASTER TRUST DEED" means that the Master Trust Deed dated 2
December 1999 between Perpetual Trustees Victoria Limited and
Interstar Securities (Australia) Pty Limited.
"MAJOR DOWNGRADE" means a Downgrade resulting in ZCM having:
(a) a short term credit rating of less than A-1 by S&P; or
(b) a long term credit rating of less than A3 by Moody's.
"MINOR DOWNGRADE" means any Downgrade which is not a Major
Downgrade.
"MORTGAGED PROPERTY" has the meaning given in the Security Trust
Deed.
"MTM" means the mark-to-market value of the Transactions outstanding
under this Agreement. Party A will have to mark the Transactions to
market and post collateral on a weekly basis, with a cure period of
3 days. The mark-to-market value should reflect the higher of 2 bids
from counterparties that will be eligible and willing to assume
Party A's role in the Transactions in place of Party A. The
mark-to-market value may be a positive or negative
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amount. A bid has a negative value if the payment would be from the
counterparty to Party A and has a positive value if the payment
would be from Party A to the counterparty (for the purposes of
determining a higher bid, any bid of positive value is higher than
any bid of a negative value).
"NOTE DOWNGRADE" means any actual or proposed withdrawal or
downgrade of the rating assigned to any Class of Notes by a
Designated Rating Agency which results or would result in any rating
assigned to that Class of Notes being less than that specified in
clause 4.2(f) of the Series Notice.
"REPLACEMENT CURRENCY SWAP GUARANTOR" means a person that has agreed
to replace ZCM as Currency Swap Guarantor and has a credit rating
not less than:
(a) A-1+ (short term) by S&P;
(b) A2 (long term) by Moody's; and
(c) P-1 (short term) by Moody's.
"SERIES NOTICE" means the Series Notice dated on or about the date
of this Agreement in relation to the Trust.
"SWAP COLLATERAL ACCOUNT" means an account in the name of Party B
with an Approved Bank.
"TRUST" means the Interstar Millennium Series 2002-1G Trust.
"USD SWAP COLLATERAL ACCOUNT" means a Swap Collateral Account
established and maintained outside Australia.
"VB" means the value calculated by multiplying the Principal Amount
of the Class A2 Notes at the time of the calculation by the relevant
percentage calculated from the following table (for the purposes of
interpreting the table, "Counterparty rating" is the credit rating
assigned to Party A by S&P and "Maturities" is the period from and
including the date of calculation to but excluding the scheduled
maturity of the last expiring Transaction outstanding under this
Agreement):
VOLATILITY BUFFER (%)
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COUNTERPARTY RATING MATURITIES UP MATURITIES UP TO MATURITIES MORE
TO 5 YEARS 10 YEARS THAN 10 YEARS
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A+ 1.05 1.75 3.0
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A 1.35 2.45 4.5
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A-1* 1.5 3.15 6.0
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* The A-1 rating will be taken to be the counterparty's short term
rating.
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(ii) The definition of Tax is replaced with:
"TAX" has the meaning given in the Master Trust Deed.
(iii) Insert the following additional paragraph at the end of
Section 14:
"Words and expressions which are defined or incorporated by
reference in the Series Notice have the same meanings when
used in this Agreement."
(k) MASTER TRUST DEED, SERIES NOTICE AND SECURITY TRUST DEED: The parties
acknowledge and agree and for the purposes of the Master Trust Deed, the
Series Notice and the Security Trust Deed:
(a) all Transactions under this Agreement are "Hedge Agreements"; and
(b) Party A is a "Support Facility Provider".
(l) ISDA DEFINITIONS: This Agreement, each Confirmation and each Transaction
are subject to the 2000 ISDA Definitions (as published by the
International Swap & Derivatives Association, Inc.) as amended from time
to time (the "ISDA DEFINITIONS"), and will be governed in all respects by
any provisions set forth in the ISDA Definitions. The ISDA Definitions are
incorporated by reference in, and shall be deemed to be part of, this
Agreement and each Confirmation.
(m) INCONSISTENCY: In the event of any inconsistency between any two or more
of the following documents, they shall take precedence over each other in
the following descending order:
(i) any Confirmation;
(ii) the Schedule to the Master Agreement;
(iii) the other provisions of the Master Agreement; and
(iv) the ISDA Definitions.
(n) Any reference to a:
(i) "Swap Transaction" in the ISDA Definitions is deemed to be a
reference to a "Transaction" for the purpose of interpreting this
Agreement or any Confirmation; and
(ii) "Transaction" in this Agreement or any Confirmation is deemed to be
a reference to a "Swap Transaction" for the purposes of interpreting
the ISDA Definitions.
(o) Insert new Sections 15, 16 and 17 as follows:
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"15. LIMITATION OF PARTY B'S LIABILITY
(a) Party B enters into this Agreement only in its capacity as trustee
of the Trust and in no other capacity. A liability incurred by Party
B acting in its capacity as trustee of the Trust arising under or in
connection with this Agreement is limited to and can be enforced
against Party B only to the extent to which it can be satisfied out
of the assets of the Trust out of which Party B is actually
indemnified for the liability. This limitation of the Party B's
liability applies despite any other provision of this Agreement and
extends to all liabilities and obligations of Party B in any way
connected with any representation, warranty, conduct, omission,
agreement or transaction related to this Agreement.
(b) The parties other than Party B may not sue Party B in any capacity
other than as trustee of the Trust or seek the appointment of a
receiver (except in relation to the assets of the Trust),
liquidator, administrator or similar person to Party B or prove in
any liquidation, administration or arrangements of or affecting
Party B (except in relation to the assets of the Trust).
(c) The provisions of this Section 15 do not apply to any obligation or
liability of Party B to the extent that it is not satisfied because
under a Transaction Document or by operation of law there is a
reduction in the extent of Party B's indemnification out of the
assets of the Trust as a result of the Party B's fraud, negligence
or wilful default.
(d) It is acknowledged that the Relevant Parties are responsible under
the Transaction Documents for performing a variety of obligations
relating to the Trust. No act or omission of Party B (including any
related failure to satisfy its obligations or breach of
representation or warranty under the Transaction Documents) will be
considered fraud, negligence or wilful default of Party B for the
purpose of paragraph (c) of this Section 15 to the extent to which
the act or omission was caused or contributed to by any failure by
the Relevant Parties (other than a person whose acts or omissions
Party B is liable for in accordance with the Transaction Documents)
to fulfil its obligations relating to the Trust or by any other act
or omission of the Relevant Parties (other than a person whose acts
or omissions Party B is liable for in accordance with the
Transaction Documents) regardless of whether or not that act or
omission is purported to be done on behalf of Party B.
(e) No attorney, agent, receiver or receiver and manager appointed in
accordance with a Transaction Document has authority to act on
behalf of Party B in a way which exposes Party B to any personal
liability and no act or omission of any such person will be
considered fraud, negligence or wilful default of Party B for the
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purpose of paragraph (c) of this Section 15, provided (in the case
of any person selected and appointed by Party B) that Party B has
exercised reasonable care in the selection of such persons.
(f) In this Section 15, "Relevant Party" means each of the Trust
Manager, the Servicer, the Calculation Agent, each Paying Agent, the
Note Trustee and any Support Facility Provider (as those terms are
defined in the Master Trust Deed and the Series Notice).
16. REPLACEMENT CURRENCY SWAP
(a) If this Agreement is terminated, Party B must, at the direction of
the Trust Manager, enter into one or more currency swaps which
replace the Transactions under this Agreement (in a form reasonably
satisfactory to Party B)(collectively a "REPLACEMENT CURRENCY SWAP")
but only on the following conditions:
(i) the Settlement Amount payable (if any) by Party B to Party A
upon termination of this Agreement will be paid in full when
due in accordance with the Series Notice and this Agreement;
(ii) the Designated Ratings Agencies confirm that the Replacement
Currency Swap will not cause a reduction or withdrawal of the
rating of the Class A2 Notes; and
(iii) the liability of Party B under the Replacement Currency Swap
is limited to at least the same extent that its liability is
limited under this Agreement.
(b) If the conditions in Section 16(a) are satisfied, Party B must, at
the direction of the Trust Manager, enter into the Replacement
Currency Swap and if it does so it must direct the Replacement
Currency Swap provider to pay any upfront premium to enter into the
Replacement Currency Swap due to Party B directly to Party A in
satisfaction of and to the extent of Party B's obligation to pay the
Settlement Amount to Party A as referred to in Section 16(a) and to
the extent that such premium is not greater than or equal to the
Settlement Amount, the balance must be satisfied by Party B as an
Expense of the Trust.
(c) If the conditions in Section 16(a) are satisfied and Party B has
entered into the Replacement Currency Swap, Party B must direct
Party A to pay any Settlement Amount payable by Party A to Party B
on termination of this Agreement directly to the Replacement
Currency Swap provider as payment and to the extent of any premium
payable by Party B to enter into the Replacement Currency Swap, in
satisfaction of and to the extent of Party A's obligation to pay
that part of the Settlement Amount to Party B.
17. NOVATION
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Party A may at any time novate its obligations under this Agreement
to any of its Affiliates (the "NEW COUNTERPARTY") provided that:
(a) the New Counterparty provides a legal opinion to Party B that
this Agreement, as novated, is valid, binding and enforceable
against it (subject to equitable doctrines and creditors'
rights generally); and
(b) the Designated Ratings Agencies confirm that the novation to
the New Counterparty will not cause a reduction or withdrawal
of the rating of the Class A2 Notes.
Party B and the Trust Manager will execute all such documents (each
in a form reasonably satisfactory to Party B) as are reasonably
necessary to give effect to that novation."
(p) TELEPHONE RECORDING: Each party consents to the recording of the
telephone conversations of trading and marketing personnel in
connection with this Agreement or any potential Transaction and
consents to such recording being used as evidence in court
proceedings.
(q) RELATIONSHIP BETWEEN PARTIES: Each party will be deemed to represent
to each other party on the date on which it enters into a
Transaction that:
(i) NON-RELIANCE. It is acting for its own account (or, in the
case of Party B, as trustee of the Trust), and it has made its
own independent decisions to enter into that Transaction and
as to whether that Transaction is appropriate or proper for it
based upon its own judgment (in the case of Party B, also on
the judgment of the Trust Manager) and upon advice from such
advisers as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as
investment advice or as a recommendation to enter into that
Transaction; it being understood that information and
explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a
recommendation to enter into that Transaction. No
communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
(ii) EVALUATION AND UNDERSTANDING. It is capable of evaluating and
understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable
of assuming, and assumes, the financial and other risks of
that Transaction.
(iii) NON-FIDUCIARY. No other party is acting as a fiduciary for it
or as an advisor to it for the Transaction.
(r) Insert new Section 18 as follows:
RATING DOWNGRADE
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(a) ZCM agrees that if Party A is obliged to make a payment under
a Confirmation that ZCM has accepted or countersigned and ZCM
receives notice from the Trust Manager requiring ZCM to make
that payment, ZCM will comply with that notice by making the
payment specified in the notice. The Trust Manager must give
such notice to ZCM by not later than [2.00pm (Sydney time)] on
the relevant Payment Date.
(b) ZCM shall make such payment in full, without any set off,
counterclaim or exercise of any similar right or defence,
other than any netting permitted under this Agreement.
(c) If ZCM receives a notice under Section 18(a) on or before
[2.00 pm (Sydney time)] on a Business Day, it will make the
payment specified in that notice by not later than [4.00 pm
(Sydney time)] on that Business Day. If it receives a notice
after [2.00 pm (Sydney time)] on a Business Day it will make
the payment not later than [4.00 pm (Sydney time)] on the next
Business Day.
(d) ZCM's obligations under this Section 18 with respect to a
Confirmation commence on the Effective Date (specified in such
Confirmation) and terminate on the earlier of the Maturity
Date and the date on which the Confirmation is otherwise
terminated in accordance with its terms.
(e) If, at any time, ZCM is Downgraded and the downgrade
constitutes a Minor Downgrade, Party A shall, within 30 days
(or such greater period as agreed by the relevant Designated
Rating Agency), comply with Sections 18(g)(i) and 18(h).
(f) If, at any time, ZCM is Downgraded and the downgrade
constitutes a Major Downgrade, Party A shall, within 5
Business Days (or such greater period as agreed by the
relevant Designated
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Rating Agency) comply with Sections 18(g)(ii) or (g)(iii) and
18(h).
(g) Where Party A is required to comply with this Section 18(g) it
must, at its cost:
(i) (in relation to Section 18(e)) deposit into a USD Swap
Collateral Account and maintain in that USD Swap
Collateral Account (whilst the relevant Downgrade
subsists) sufficient funds to ensure that the amount
standing to the credit of the USD Swap Collateral
Account is not less than the Cash Collateral Amount;
(ii) procure, from a Replacement Currency Swap Guarantor, a
guarantee to honour Party A's obligations under this
Agreement; or
(iii) enter, or procure entry, into an Acceptable Arrangement.
(h) Where Party A is required to comply with this Section 18(h),
it must, as soon as practicable, deposit into an AUD Swap
Collateral Account, all amounts received by it from Party B
under this Agreement during the Quarterly Period in which the
relevant Downgrade occurred.
(i) Where Party A is required to comply with Section 18(g) and
fails to do so within the relevant time, ZCM must, at its
cost, either:
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(i) deposit into, and maintain in, a USD Swap Collateral
Account, the Cash Collateral Amount in accordance
with Section 18(g)(i);
(ii) procure, from a Replacement Currency Swap Guarantor,
a guarantee to honour Party A's obligations under
this Agreement; or
(iii) enter, or procure entry, into an Acceptable Arrangement.
(j) Where either ZCM or Party A procures a Replacement Currency
Swap Guarantor in accordance with Section 18(g)(ii) or
18(i)(ii), each party to this Agreement shall do all things
necessary to novate the obligations of ZCM under this
Agreement to the Replacement Currency Swap Guarantor.
(k) If, at any time, ZCM's obligations under this Agreement are
novated in accordance with Section 18(g)(ii) or 18(i)(ii) or
any Acceptable Arrangement is entered into in accordance with
Section 18(g)(iii) or 18(i)(iii) which results in ZCM being
replaced as Currency Swap Guarantor, ZCM shall be immediately
entitled to any Cash Collateral Amount which it has deposited
in a USD Swap Collateral Account.
(l) Where Party B has not established a Swap Collateral Account
and either Party A or ZCM is required to deposit monies into a
Swap Collateral Account, the Trust Manager must direct Party B
to, and Party B must, establish, as soon as practicable, and
maintain, in the name of Party B an account with an Approved
Bank, which account shall be, for the purposes of this Section
18, if established and maintained in Australia, the "AUD SWAP
COLLATERAL ACCOUNT" and if established and maintained outside
Australia, the . "USD SWAP COLLATERAL ACCOUNT".
(m) Party B may only make withdrawals from the USD Swap Collateral
Account if directed to do so by the Trust Manager and then
only for the purpose of:
(i) novating ZCM's obligations under this Agreement in
accordance with Section 18(g)(ii) or 18(i)(ii) or
entering into any other Acceptable Arrangement in
accordance with 18(g)(iii) or 18(i)(iii);
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(ii) refunding to Party A or ZCM (whichever provided the
relevant Cash Collateral Amount) the amount of any
reduction in the Cash Collateral Amount, from time to
time, and provided the Designated Rating Agencies have
confirmed in writing that such refund will not result in
a Note Downgrade;
(iii) withdrawing any amount which has been incorrectly
deposited into the USD Swap Collateral Account;
(iv) paying any bank accounts debit tax or other equivalent
Taxes payable in respect of the USD Swap Collateral
Account; or
(v) funding the amount of any payment due to be made by
Party A under this Agreement following the failure by
Party A to make that payment.
(n) Notwithstanding any other provision of this Agreement, the
parties agree that on each Payment Date while a Downgrade is
subsisting, the Trust Manager must direct Party B to, and
Party B must:
(i) deposit into an AUD Swap Collateral Account each amount
payable by it on that Payment Date under clause
6.5(a)(v)(C) and clause 6.6(a)(i)(C) of the Series
Notice; and
(ii) on each Quarterly Payment Date, pay the balance of that
AUD Swap Collateral Account to Party A in satisfaction
of Party B's obligations under this Agreement.
(o) Party B, at the direction of the Trust Manager, may only
invest any amounts standing to the credit of:
(a) an AUD Swap Collateral Account, in Liquid Authorised
Investments; and
(b) a USD Swap Collateral Account, in Eligible Investments,
in each case, that mature on or prior to the next Quarterly
Payment Date.
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(p) All interest accrued on, and other income derived from the
investment of, any amounts credited to a Swap Collateral
Account will be payable monthly to:
(a) in relation to a AUD Swap Collateral Account, Party A;
and
(b) in relation to a USD Swap Collateral Account, the party
that provided the relevant Cash Collateral Amount.
(s) Any payment under this Agreement and each Transaction is subject to
clause 29 of the Master Trust Deed, clause 6 of the Series Notice
and clause 16 of the Security Trust Deed.
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