Exhibit 10.48
(Multicurrency- Cross Border)
[ISDA LOGO]
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of 3 DECEMBER 2003
Australia and New Zealand Banking and Australian Railroad Group Pty Ltd,
Group Limited, ABN 68 080 579 308 ("Party B")
ABN 11 005 357 522 ("Party A")
have entered and/or anticipate entering into one or more transactions
(each a "Transaction") that are or will be governed by this Master
Agreement, which includes the schedule (the "Schedule"), and the
documents and other confirming evidence (each a "Confirmation")
exchanged between the parties confirming those Transactions.
Accordingly, the parties agree as follows: --
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the
Schedule will have the meanings therein specified for the purpose of
this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master
Agreement, the Schedule will prevail. In the event of any inconsistency
between the provisions of any Confirmation and this Master Agreement
(including the Schedule), such Confirmation will prevail for the
purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in
reliance on the fact that this Master Agreement and all Confirmations
form a single agreement between the parties (collectively referred to
as this "Agreement"), and the parties would not otherwise enter into
any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery
specified in each Confirmation to be made by it, subject to
the other provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due
date for value on that date in the place of the account
specified in the relevant Confirmation or otherwise pursuant
to this Agreement, in freely transferable funds and in the
manner customary for payments in the required currency. Where
settlement is by delivery (that is, other than by payment),
such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(1)
is subject to (1) the condition precedent that no Event of
Default or Potential Event of Default with respect to the
other party has occurred and is continuing, (2) the condition
precedent that no Early Termination Date in respect of the
relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent
specified in this Agreement.
Copyright (C) 1992 by International Swap Dealers Association, Inc.
(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 representation
made by Y pursuant to Section 3(f) to be
accurate and true unless such failure would
not have occurred but for (I) any action
taken by a taxing authority, or brought in a
court of competent jurisdiction, on or after
the date on which a Transaction is entered
into (regardless of whether such action is
taken or brought with respect to a party to
this Agreement) or (II) a Change in Tax Law.
2 ISDA (R) 1992
(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
parry defaults in the performance of any obligation required to be
settled by delivery, it will compensate the other party on demand if
and to the extent provided for in the relevant Confirmation or
elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction
is entered into and, in the case of the representations in Section
3(f), at all times until the termination of this Agreement) that. --
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing
under the laws of the jurisdiction of its organisation or
incorporation and, if relevant under such laws, in good
standing;
(ii) POWERS. It has the power to execute this Agreement
and any other documentation relating to this Agreement to
which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required
by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery
and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional
documents, any order or judgment of any court or other agency
of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of
its assets;
(iv) CONSENTS. All governmental and other consents that
are required to have been obtained by it with respect to this
Agreement or any Credit Support Document to which it is a
party have been obtained and are in full force and effect and
all conditions of any such consents have been complied with;
and
(v) OBLIGATIONS BINDING. Its obligations under this
Agreement and any Credit Support Document to which it is a
party constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject
to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)).
3 ISDA(R) 1992
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential
Event of Default or, to its knowledge, Termination Event with respect
to it has occurred and is continuing and no such event or circumstance
would occur as a result of its entering into or performing its
obligations under this Agreement or any Credit Support Document to
which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its
knowledge, threatened against it or any of its Affiliates any action,
suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely
to affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its
ability to perform its obligations under this Agreement or such Credit
Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information
that is furnished in writing by or on behalf of it to the other party
and is identified for the purpose of this Section 3(d) in the Schedule
is, as of the date of the information, true, accurate and complete in
every material respect.
(e) PAPER TAX REPRESENTATION. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is
accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in
the Schedule as being made by it for the purpose of this Section 3(f)
is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or
may have any obligation under this Agreement or under any Credit
Support Document to which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other
party or, in certain cases under subparagraph (iii) below, to such
government or taxing authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to
taxation specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form
or document that may be required or reasonably requested in
writing in order to allow such other party or its Credit
Support Provider to make a payment under this Agreement or any
applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the
completion, execution or submission of such form or document
would not materially prejudice the legal or commercial
position of the party in receipt of such demand), with any
such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed
and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation
or, if none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or
other authority that are required to be obtained by it 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,
4 ISDA(R) 1992
organised, managed and controlled, or considered to have its seat, or
in which a branch or office through which it is acting for the purpose
of this Agreement is located ("Stamp Tax Jurisdiction") and will
indemnify the other party against any Stamp Tax levied or imposed upon
the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which
is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to
a party or, if applicable, any Credit Support Provider of such party or
any Specified Entity of such party of any of the following events
constitutes an event of default (an "Event of Default") with respect to
such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to
make, when due, any payment under this Agreement or delivery
under Section 2(a)(i) or 2(e) required to be made by it if
such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to the
party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply
with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or
delivery under Section 2(a)(i) or 2(e) or to give notice of a
Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed
by the party in accordance with this Agreement if such failure
is not remedied on or before the thirtieth day after notice of
such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support
Provider of such party to comply with or perform any
agreement or obligation to be complied with or
performed by it in accordance with any Credit Support
Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit
Support Document or the failing or ceasing of such
Credit Support Document to be in full force and
effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior
to the satisfaction of all obligations of such party
under each Transaction to which such Credit Support
Document relates without the written consent of the
other party; or
(3) the party or such Credit Support Provider
disaffirms, disclaims, repudiates or rejects, in
whole or in part, or challenges the validity of, such
Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or
deemed to have been made or repeated by the party or any
Credit Support Provider of such party in this Agreement or any
Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any
Credit Support Provider of such party or any applicable
Specified Entity of such party (1) defaults under a Specified
Transaction and, after giving effect to any applicable notice
requirement or grace period, there occurs a liquidation of, an
acceleration of obligations under, or an early termination of,
that Specified Transaction, (2) defaults, after giving effect
to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment,
delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default
continues for at least three Local Business Days if there is
no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in
part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act
on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence
of (1) a default, event of default or other similar condition
or event (however
5 ISDA(R) 1992
described) in respect of such party, any Credit Support
Provider of such parry or any applicable Specified Entity of
such party under one or more agreements or instruments
relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not
less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness
becoming, or becoming capable at such time of being declared,
due and payable under such agreements or instruments, before
it would otherwise have been due and payable or (2) a default
by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more
payments on the due date thereof in an aggregate amount of not
less than the applicable Threshold Amount under such
agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of
such party or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its
debts as they become due; (3) makes a general
assignment, arrangement or composition with or for
the benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment
of insolvency or bankruptcy or any other relief under
any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is
presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition
instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency
or bankruptcy or the entry of an order for relief or
the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of
the institution or presentation thereof; (5) has a
resolution passed for its winding-up, official
management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or
becomes subject to the appointment of an
administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar
official for it or for all or substantially all its
assets; (7) has a secured party take possession of
all or substantially all its assets or has a
distress, execution, attachment, sequestration or
other legal process levied, enforced or sued on or
against all or substantially all its assets and such
secured parry 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 (i) 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
6 ISDA(R) 1992
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):--
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or delivery
in respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other obligation
which the party (or such Credit Support Provider) has under
any Credit Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y) a Change in Tax Law, the party (which will be the Affected
Party) will, or there it a substantial likelihood that it will, on the
next succeeding Scheduled Payment Date (1) be required to pay to the
other party an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
is required to be deducted or withheld for or on account of a Tax
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e))
and no additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A)
or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2)receive a payment from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as applying,
the occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated as an Illegality and will not constitute an
Event of Default,
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6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(I), (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 its
rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties,
each party will use all reasonable efforts to reach agreement within 30
days after notice thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30
days after an Affected Party gives notice under Section
6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit
Event Upon Merger or an Additional Termination Event occurs,
or a Tax Event Upon Merger occurs and the Burdened Party is
not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then
8
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 as 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 an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including)
the relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from
an Event of Default:--
(1) FIRST METHOD AND MARKET QUOTATION. If the First
Method and Market Quotation apply, the Defaulting Party will
pay to the Non-defaulting Party the excess, if a positive
number, of (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) FIRST METHOD AND LOSS. If the First Method and Loss
apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss
in respect of this Agreement.
(3) SECOND METHOD AND MARKET QUOTATION. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (determined by
the
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 X less (II) the
Termination Currency Equivalent of the Unpaid Amounts owing to
Y; and
(B) if Loss applies, each party will determine its Loss
in respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it
is a negative number, X will pay the absolute value of that amount to
Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under
this Section 6(e) will be subject to such adjustments as are
appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement
(and retained by such other party) during the period from the
relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount
is payable for the loss of bargain and the loss of protection
against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
10
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 me
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the parry
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 constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
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 ("Proceedings"), each party irrevocably:
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such
party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 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
ISDA(C) 1992
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 counts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with
Section 6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
*BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT 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.
ISDA(C) 1992
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)(I) or (3)
or 6(e)(ii)(2)(A) applies, Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have
ISDA(C) 1992
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) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meanings specified in the Schedule.
ISDA(C) 1992
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"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign, exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"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
ISDA(C) 1992
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 reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Australian and New Zealand Banking Group Australian Railroad Group Pty Ltd
Limited ------------------------------- ---------------------------------
(Name of Party) (Name of Party)
By: /s/ Cameron Dare Knight Whalley By: /s/ Angela Flannery
------------------------------------ -------------------------------
Name: Cameron Dare Knight Whalley Name: Angela Flannery
Title: Associate Director Title: Attorney
Date: 3/12/03 Date: 3 December 2003
ISDA(C) 1992
18
SCHEDULE
to the
ISDA Master Agreement
dated as of 3 December 2003
between
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED, ABN 11 005 357 522 ("PARTY A")
and
AUSTRALIAN RAILROAD GROUP PTY LTD, ABN 68 080 579 308 ("PARTY B")
PART 1: TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" will not apply to Party A or to Party B.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in
Section 14 of this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply
to Party A and to Party B.
"SPECIFIED INDEBTEDNESS" means any obligation (whether present
or future, contingent or otherwise, as principal or surety or
otherwise) in respect of money borrowed or raised or under or
in respect of any finance lease, redeemable preference share,
letter of credit, bond, futures contract or a transaction of a
type described in the last 6 lines of the definition of
Specified Transaction or facility or arrangement for the
provision of any financial accommodation or financial or
banking services.
"THRESHOLD AMOUNT" means, in the case of Party A and Party B,
A$25,000,000 or its equivalent in any other currency or
currencies.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv)
will apply to Party A and to Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a)
will not apply to Party A or Party B.
(f) 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.
(g) "TERMINATION CURRENCY" means Australian dollars.
(h) Additional Termination Event will not apply.
1
PART 2: TAX REPRESENTATIONS
(a) PAYER TAX REPRESENTATIONS
For the purpose of Section 3(e) of this Agreement, each of
Party A and Party B represent that it is not required by any
applicable law, as modified by the practice of any relevant
governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any
Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the
other party under this Agreement. In making this
representation, it may rely on:
(i) the accuracy of any representations made by the other
party under Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in
Section 4(a)(i) or 4(a)(iii) of this Agreement and
the accuracy and effectiveness of any document
provided by the other party pursuant to Section
4(a)(i) or 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement.
However, it will not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not
deliver a form or document under Section 4(a)(iii) of this
Agreement because 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
and Party B make 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 a business in a country outside Australia
at or through a permanent establishment of itself in
such other countries.
PART 3: AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Sections 4(a)(i) and 4(a)(ii) of this Agreement,
each party will deliver the following documents, as applicable, to the
other party or as directed:
(a) TAX FORMS, DOCUMENTS OR CERTIFICATES TO BE DELIVERED ARE: Any
form, document or certificate requested pursuant to Section
4(a)(iii) of this Agreement.
PARTY REQUIRED TO DELIVER: Party A and Party B
DATE BY WHICH TO BE DELIVERED: On the earlier of (i) learning
that such form, document or certificate is required and (ii)
promptly following a reasonable demand by the other party.
(b) OTHER DOCUMENTS TO BE DELIVERED ARE: A list of authorised
signatories, including specimen signatures, for the party and
evidence reasonably satisfactory to the other party of the due
authorisation of the signatories to this Agreement and each
Confirmation and any other notice or communication in relation
to this Agreement on behalf of the party.
2
PARTY REQUIRED TO DELIVER: Party A and Party B.
DATE BY WHICH TO BE DELIVERED: On execution of this Agreement,
when the list of signatories is updated and at any other time
on the reasonable request of the other party.
Each of the foregoing documents is covered by the representation
contained in Section 3(d) of this Agreement.
PART 4: MISCELLANEOUS
(a) (ADDRESS FOR NOTICES) For the purpose of Section 12(a) the
notice details of the parties are as follows:
Party A
Address: ANZ Investment Bank Markets
Operations Level 12, 530 Collins
Street Melbourne Victoria 3000
Attention: Manager, Derivative Operations
Facsimile: (613) 9273 1983
Telex No.: AA151018
Telephone No.: (613) 9273 1629
SWIFT Code: ANZBAU3M
Answerback: ANZAT
PARTY B
Address: 2-10 Adams Drive
WELSHPOOL WA 6106
Attention: John Cleland
Facsimile: (61 8) 9212 2730
Electronic Messaging System: JCleland@arg.net.au
(b) PROCESS AGENT. For the purpose 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.
(c) OFFICES. The provisions of Section 10(a) will not apply to
this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this
Agreement:
(i) Party A is not a Multibranch Party.
(ii) Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A unless
otherwise specified in a Confirmation in relation to the
relevant Transaction.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support
Document.
Party A: Not applicable.
3
Party B: The Common Terms Deed.
(g) CREDIT SUPPORT PROVIDER
Credit Support Provider means in relation to Party A: Not
applicable.
Credit Support Provider means in relation to Party B:
(i) ARG Financing Pty Ltd ACN 094 806 078, Australia
Southern Railroad Pty Limited, ACN 079 444 296, AWR
Holdings WA Pty Ltd, ACN 094 693 562, Australia
Western Railroad Pty Ltd, ACN 094 792 275, WestNet
Rail Pty Ltd, ACN 094 721 301, Australian Railroad
Group Employment Pty Ltd, ACN 087 891 601, WestNet
NarrowGauge Pty Ltd, ACN 094 736, 900 and WestNet
StandardGauge Pty Ltd, ACN 094 819 360, in each case
during the period that person is a "Guarantor" under
the Common Terms Deed,; and
(ii) any other entity agreed in writing by the parties to
be a Credit Support Provider for the purposes of this
Agreement.
(h) GOVERNING LAW. This Agreement will be governed by and
construed in accordance with the laws of New South Wales.
Section 13(b)(i) is deleted and replaced with:
"submits to the non-exclusive jurisdiction of the
courts of New South Wales."
(i) NETTING OF PAYMENTS. Section 2(c)(ii) of this Agreement will
not apply to the following Transactions or groups of
Transactions (in each case starting from the date of this
Agreement):
All Transactions being of the same product type.
(j) "AFFILIATE" has the meaning given in Section 14 of this
Agreement.
Party A will be deemed to have no Affiliates for the purposes
of Section 3(c).
Party B's Affiliates for the purposes of Section 3(c) are
deemed to be ARG Financing Pty Ltd ACN 094 806 078, Australia
Southern Railroad Pty Limited, ACN 079 444 296, AWR Holdings
WA Pty Ltd, ACN 094 693 562, Australia Western Railroad Pty
Ltd, ACN 094 792 275, WestNet Rail Pty Ltd, ACN 094 721 301,
Australian Railroad Group Employment Pty Ltd, ACN 087 891 601,
WestNet NarrowGauge Pty Ltd, ACN 094 736, 900 and WestNet
StandardGauge Pty Ltd, ACN 094 819 360 , in each case during
the period that person is a "Guarantor" under the Common Terms
Deed, together with any other entity agreed in writing by the
parties to be an Affiliate for the purposes of this Agreement.
(k) TRANSACTION DOCUMENTS. Party A and Party B irrevocably agree
that this Agreement and each Confirmation is a "Hedging
Agreement" for the purposes of the Common Terms Deed.
PART 5: OTHER PROVISIONS
5.1 DEFINITIONS AND INTERPRETATION:
(a) (Definitions)
(i) Insert the following definition in Section 14:
4
"COMMON TERMS DEED" means the deed so entitled dated
on or about 1 December 2003 between Party B, Party A
and others."
(ii) Unless otherwise defined in this Agreement, or the
context otherwise requires, expressions defined in
the Common Terms Deed have the same meaning when used
in this Agreement and will continue to apply
notwithstanding any termination or avoidance of the
Common Terms Deed.
(iii) ISDA DEFINITIONS. The definitions and provisions
contained in the respective ISDA Definitions
specified below are incorporated into each
Confirmation of a Transaction between the parties
which is, or is described in its Confirmation as
being, of the type specified below. If there is an
inconsistency between those definitions and
provisions and any such Confirmation, the
Confirmation prevails.
TYPES OF TRANSACTIONS ISDA DEFINITIONS
- --------------------- ----------------
Currency option transaction or FX 1998 FX and Currency Option Definitions
transaction as published by International Swaps and
Derivatives Association, Inc., the
Emerging Markets Traders Association and
the Foreign Exchange Committee.
Forward rate agreement 2000 ISDA Definitions and Annex to the
2000 ISDA Definitions as published by
International Swaps and Derivatives
Association Inc. (the "2000 ISDA
DEFINITIONS").
Forward commodity transaction; spot 1993 ISDA Commodity Derivative
commodity transaction; Definitions as published by
commodity option transaction; International Swaps and Derivatives
commodity swap transaction; Association, Inc. as supplemented by the
commodity cap, collar or floor 2000 Supplement.
transaction
Bullion spot transaction; 1997 ISDA Bullion Definitions as
bullion forward transaction; published by International Swaps and
bullion swap transaction or Derivatives Association, Inc.
bullion option transaction
In the event of any inconsistency between the
provisions of this Agreement and any of the above
definitions, this Agreement will prevail.
(b) (INTERPRETATION)
Any reference to a:
(i) "SWAP TRANSACTION" in the 2000 ISDA Definitions is
deemed to be a reference to a "Transaction" for the
purpose of interpreting this Agreement or any
Confirmation; and
5
(ii) "TRANSACTION" in this Agreement or any Confirmation
will be taken to be a reference to a "Swap
Transaction" for the purpose of interpreting the 2000
ISDA Definitions.
5.2 PAYMENTS
(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), the first sentence is deleted and
replaced with the following sentence:
"Unless specified otherwise in this Agreement,
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, free of any set-off,
counterclaim, deduction or withholding (except as
expressly provided in this Agreement) and in the
manner customary for payment in the required
currency."
5.3 GENERAL CONDITIONS
A new Section 2(a)(iv) is inserted as follows:
"(iv) The condition precedent in section 2(a)(iii)(1) does
not apply to a payment or delivery due to be made to
a party if it has satisfied all its payment and
delivery obligations under section 2(a)(i) of this
Agreement and has no future payment or delivery
obligations, whether absolute or contingent, under
Section 2(a)(i)."
Add the following new sentence to Section 2(b):
"Each new account so designated must be in the same tax
jurisdiction as the original account."
5.4 REPRESENTATIONS
(a) Section 3(a)(v) is amended by inserting immediately after the
words "creditors' rights generally" the following:
"(including in the case of a party being a bank
authorised to carry on banking business in the
Commonwealth of Australia, Section 16 or (as
applicable) Section 13A(3) of the Banking Act 1959
(Commonwealth) and Section 86 of the Reserve Bank Act
1959 (Commonwealth)".
(b) In Section 3(a) add the following:
"(vi) CAPACITY. It is entering into this Agreement and
performing its obligations under this Agreement
solely as principal on its own behalf and not as
agent on behalf of any third party.".
(c) Section 3 is amended by adding the following paragraph (g) at
the end of it:
"(g) RELATIONSHIP BETWEEN PARTIES:
6
(i) NON-RELIANCE. It is acting as principal, and
it has made its own independent decisions to
enter into that Transaction and as to
whether that Transaction is appropriate or
proper for it based upon its own judgment
and upon advice from such advisors 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. 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. It has not
received from the other party any written or
oral assurance or guarantee as to the
expected results of that Transaction, and no
communication (written or oral) received
from the other party shall be deemed to be
an assurance or guarantee as to the expected
results of that Transaction.
(ii) ASSESSMENT AND UNDERSTANDING. It is capable
of assessing the merits of and understanding
(on its own behalf or through independent
professional advice), and understands and
accepts the terms, conditions and risks of
that Transaction. It is also capable of
assuming, and assumes, the financial and
other risks of that Transaction.
(iii) STATUS OF PARTIES. The other party is not
acting as a fiduciary or an advisor for it
in respect of that Transaction."
5.5 SET-OFF
A new Section 6(f) is inserted as follows:
"(f)(i) Any amount payable under this Agreement ("PAYER'S AMOUNT") by
one party ("PAYER") to the other party ("PAYEE") after an
Early Termination Date has occurred will, at the option of the
Payer (and without prior notice to the Payee), be set-off
against any amounts (excluding amounts which would become
payable upon the occurrence of a contingency) ("SET-OFF
AMOUNT") payable or owing but not currently payable by the
Payee to the Payer (irrespective of the currency, place of
payment or booking office of the obligation) under any other
contract between the Payee and the Payer or under Sections 8
or 11.
(ii) To effect a set-off the Payer may convert the Payer's Amount
or the Set-Off Amount into the currency in which the other is
denominated ("OTHER CURRENCY"). The conversion is to be at the
rate equal to the spot exchange rate of the foreign exchange
agent (selected as provided below) for the purchase of the
Other Currency with the currency of the Payer's Amount or
Set-off Amount as the case may be at or about 11.00 am (in
Sydney) 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 date the set-off is effected. The
foreign exchange agent will be as agreed by the parties or
failing agreement, selected by the Non-defaulting Party or
Non-affected Party (or if there are two Affected Parties, by
Party B).
(iii) The Payer must notify the Payee of any set-off effected under
this Section 6(f).
(iv) Nothing in this Section 6(f) creates a charge or other
security interest. This Section is without prejudice and in
addition to any right of set-off, combination of accounts,
7
lien or other right to which any party is at any time
otherwise entitled (whether by operation of law, contract or
otherwise)."
5.6 NOTICES
(a) Section 12(a)(iii) is replaced with:
"(iii) if sent by facsimile transmission, at the local time
(in the place of receipt of that facsimile) which
then equates to the time at which that facsimile was
sent as shown on the transmission report which is
produced by the machine from which that facsimile is
sent and which confirms transmission of that
facsimile in its entirety;"
(b) Insert an additional Section 12(a)(vi) as follows:
"(vi) if sent by prepaid post, on the second day after
posting."
5.8 THIRD PARTY PAYMENT INSTRUCTIONS
In Section 12(a) add after "Section 5 or 6":
"and instructions to make payment to an entity other than the
original party".
5.8 RECORDED CONVERSATIONS
Each party:
(a) consents to the electronic recording of the telephone
conversations of trading and marketing personnel of that party
and its Affiliates in connection with this Agreement or any
potential Transaction;
(b) agrees to obtain any necessary consent of, and give notice of
such recording to, such personnel of it and its Affiliates;
and
(c) consents to such recording being used as evidence in court
proceedings or arbitration.
5.9 POTENTIAL EVENT OF DEFAULT
The references to "Potential Event of Default" in Sections 2(a)(iii)
and 3(b) of this Agreement shall be disregarded.
5.10 FRA BASIS
Unless expressly agreed otherwise in respect of a particular
Transaction, the following provisions apply to any Transaction which
is, or is described in its Confirmation to be, an AUD or NZD forward
rate agreement ("FRA"), or an AUD or NZD rate cap transaction, rate
collar transaction or rate floor transaction.
For the purpose of the following provisions, the rate cap part of a
rate collar transaction is to be treated as a rate cap transaction and
the rate floor part of a rate collar transaction is to be treated as a
rate floor transaction.
Despite sections 6 and 8.4(b) of the 2000 ISDA Definitions, on each
Payment Date:
(a) in the case of an FRA:
8
(i) if the Floating Rate exceeds the Fixed Rate, then the
Floating Rate Payer must pay the absolute value of
the FRA Amount to the Fixed Rate Payer; and
(ii) if the Fixed Rate exceeds the Floating Rate, then the
Fixed Rate Payer must pay the FRA Amount to the
Floating Rate Payer;
(b) in the case of a rate cap transaction, if the Floating Rate
exceeds the Fixed Rate, then the Floating Rate Payer (Seller)
must pay the absolute value of the FRA Amount to the Fixed
Rate Payer (Buyer). (No corresponding payment is due from the
Fixed Rate Payer to the Floating Rate Payer);
(c) in the case of a rate floor transaction, if the Fixed Rate
exceeds the Floating Rate, then the Floating Rate Payer
(Seller) must pay the FRA Amount to the Fixed Rate Payer
(Buyer). (No corresponding payment is due from the Fixed Rate
Payer to the Floating Rate Payer).
The "FRA AMOUNT" is calculated in accordance with the following
formula:
CA X 36500 X [1/36500 + (R(1) X ND) - 1/36500 + (R(2) X ND)]
where:
CA = Calculation Amount
R1 = in the case of an FRA, the Floating Rate on the
Payment Date (expressed as a number and not a
percentage, eg 8.1875 not 8.1875%), or in the case of
a rate cap transaction or a rate floor transaction,
the Floating Rate (plus or minus the Spread, if any)
calculated disregarding section 6.2(a)(i) and section
6.2(a)(ii) of the 2000 ISDA Definitions.
R2 = in the case of an FRA, the Fixed Rate (expressed as a
number and not a percentage), or in the case of a
rate cap transaction or a rate floor transaction, the
cap rate or the floor rate respectively.
ND = the actual number of days in the Calculation Period.
Unless otherwise agreed, the Relevant Rate:
(a) in the case of A$ FRAs is "AUD-BBR-BBSW"; and
(b) in the case of NZD FRAs is "NZD-BBR-FRA".
5.11 SPOT RATE
The time for determining a Spot Rate for the purpose of Section 1.16(e)
of the 1998 FX and Currency Option Definitions published by
International Swaps and Derivatives Association Inc is to be
determined, for a European option, as at the Expiration Time, and for
an American option or a Bermuda option, as at the time when the Notice
of Exercise is given.
5.12 FRA DICTIONARY
In respect of each AUD FRA confirmed by the parties through the FRTRADE
- Forward Rate Agreement entry function of the "FINTRACS" electronic
system offered by Austraclear Limited (the "AUSTRACLEAR FUNCTION") the
parties agree that terms used on the Austraclear function will
correspond to terms in the 2000 ISDA Definitions as set out below:
9
(a) if "Y" has been selected at the "Use BBSW (Y/N)" item on the
Austraclear function, the parties will be deemed to have
selected "AUD-BBR-BBSW" as the Floating Rate Option (as
defined under the 2000 ISDA Definitions);
(b) the party nominated as "B" at the "Side of Trade" item on the
Austraclear function it will be the "Fixed Rate Payer" for the
purposes of the 2000 ISDA Definitions;
(c) the "Amount" entered on the Austraclear function will be the
"Calculation Amount" for the purposes of the 2000 ISDA
Definitions;
(d) the "Rate" entered on the Austraclear function will be the
"Fixed Rate" for the purposes of the 2000 ISDA Definitions;
(e) the "Deal Date" entered on the Austraclear function will be
the "Trade Date" for the purposes of the 2000 ISDA
Definitions;
(f) "FRA" on the Austraclear function has no equivalent under the
2000 ISDA Definitions;
(g) the party nominated as "L" at the "Side of Trade" item on the
Austraclear function will be the "Floating Rate Payer" for the
purposes of the 2000 ISDA Definitions;
(h) the "Maturity Date" entered on the Austraclear function will
be the "Termination Date" for the purposes of the 2000 ISDA
Definitions;
(i) the "Settlement Date" entered on the Austraclear function will
be the "Payment Date" for the purposes of the 2000 ISDA
Definitions; and
(j) the "Cash Element" (being the difference between the
Settlement Value and the Specified Value) on the Austraclear
function will be the "FRA Amount" for the purposes of the 2000
ISDA Definitions.
5.13 CURRENCY OPTION TRANSACTIONS
Terms defined in the 1998 FX and Currency Option Definitions will have
the same meanings in this clause, except as otherwise specifically
provided for in this clause or in a Confirmation.
(a) PREMIUM PAYMENT DATE: Unless otherwise agreed in writing by
the parties, the Premium related to a Currency Option
Transaction will be paid on its Premium Payment Date.
(b) FAILURE TO PAY PREMIUM: Unless otherwise agreed in writing by
the parties, if any Premium is not received on the Premium
Payment Date, the Seller may elect either to:
(i) accept a late payment of the Premium;
(ii) give written notice of non-payment and, if the
Premium is not received within two (2) business days
(in the jurisdiction of the Buyer) of that notice,
treat:
A. the related Currency Option Transaction as
void, or
B. treat the non-payment as an Event of Default
under Section 5(a)(i) of this Agreement.
If the Seller elects to act under either clause (b)(i) or
(b)(ii)A of the preceding sentence, the Buyer must pay all
out-of-pocket costs and actual damages incurred in
10
connection with the unpaid or late Premium or void Currency
Option Transaction including, without limitation, interest on
the Premium in the same currency as the Premium at the then
prevailing market rate and any other costs or expenses
incurred by the Seller in covering its obligations (including,
without limitation, a delta hedge) with respect to the
Currency Option Transaction.
5.14 PRIVACY PROVISIONS
If Party B supplies Party A with personal information about an
individual who is an officer, employee, agent, contractor or external
adviser of Party B, Party B agrees to tell that person that:
(a) Party A is holding personal information about that person;
(b) this personal information has been collected by Party A for
the purpose of this Agreement and any Transaction entered into
under it;
(c) this personal information may be used to enter into any
Transaction under this Agreement and to conduct Party A's
business operations (such as risk management, systems
development and testing, credit scoring, staff training and
market or customer satisfaction research) in relation to this
Agreement and Transactions;
(d) this personal information may also be used in relation to:
(i) compliance with any relevant laws, regulations, Codes
and external payment systems;
(ii) prevention and investigation of any crime or fraud
(or suspected crime or fraud);
(e) without this personal information, Party A may not be able to
enter into or conduct its business operations in relation to
Transactions under this Agreement;
(f) subject to any duty of confidentiality to Party B, this
personal information may be disclosed to the following third
party organisations for the following purposes:
(i) Party A's agents, contractors and external advisers
who Party A may engage to carry out or assist Party A
in carrying out its functions and activities under
this Agreement and the Transactions;
(ii) regulatory bodies, government agencies and law
enforcement bodies and other parties Party A is
authorised or required by law to disclose information
to;
(g) subject to the Privacy Act 1988, the person has the right to
access and correct personal information Party A holds about
him or her. Party A may charge a reasonable fee for this
access;
(h) Party A may be contacted through any of its branches.
5.15 ANTI-TERRORISM/MONEY LAUNDERING
(a) Party B acknowledges that Party A is subject to anti money
laundering laws in Australia and certain other countries which
may prohibit Party A from entering into or conducting
transactions involving a certain person or entities. Party B
agrees that Party A may, and will incur no liability from any
action Party A takes to, comply with such laws or regulations.
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(b) Party B acknowledges that money laundering includes dealing
with the proceeds of or assets used in criminal activity
(wherever committed) and any dealing with funds or assets of,
or the provision of finance to, any person or entity involved
or suspected of involvement in terrorism or any terrorist act.
(c) Party B agrees that Party A may delay, block or refuse to make
any payment if Party A believes on reasonable grounds that
making the payment may breach any law in Australia or any
other country, and Party A will incur no liability to Party B
if Party A does so.
(d) Party B agrees to provide all information to Party A which
Party A reasonably requires to comply with any law in
Australia or, if applicable to it, any other country. Party B
agrees that Party A may disclose information which Party B
provides to Party A where required by any law in Australia or
applicable law of any other country.
(e) Unless Party B has disclosed that it is acting in a trustee
capacity or on behalf of another party, Party B warrants that
it is acting on its own behalf in entering into this
Agreement.
(f) Party B declares and undertakes to Party A that the payment of
moneys by Party A in accordance with any instructions given by
Party B will not breach any law in Australia or any other
country.
5.16 FRAUD AND SECURITY
(a) Party B is responsible for the accuracy and authorisation of
all its instructions.
(b) Any credit limit for Party B is imposed for Party A's benefit.
Party B must not rely upon it as a security feature. Party A
may, in its absolute discretion, process, or decline to
process, a Transaction(s) in excess of the credit limit,
without further reference to Party B. Party A may, in its
absolute discretion, disapprove a Transaction(s) in excess of
the credit limit despite Party A having previously approved a
Transaction(s) in excess of the credit limit.
Signed for and on behalf of AUSTRALIA Signed for and on behalf of
AND NEW ZEALAND BANKING GROUP LIMITED, AUSTRALIAN RAILROAD GROUP PTY
ABN 11 005 357 522 LTD, ABN 68 080 579 308
By: /s/ Cameron Dare Knight Whalley By: /s/ Angela Flannery
---------------------------------- ---------------------------
Name: Cameron Dare Knight Whalley Name: Angela Flannery
Title: Title: Attorney
3/12/03
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