Exhibit 10.3
(Multicurrency--Cross Border)
EXECUTION COPY
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of July 28, 2006
Credit Suisse International and Xxxxx Fargo Bank, N.A., not in its
individual capacity, but solely as
("Party A") Master Servicer, on behalf of the
Xxxxx Fargo Mortgage Backed
Securities 2006-10 Trust ("Party B")
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
(ii) Liability. If:--
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all necessary
action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision of
its constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding
in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii)upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any payment
under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give
notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party
in accordance with this Agreement if such failure is not remedied on or
before the thirtieth day after notice of such failure is given to the
party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or
the failing or ceasing of such Credit Support Document to be in full
force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction
of all obligations of such party under each Transaction to which
such Credit Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the
validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made or
repeated by the party or any Credit Support Provider of such party in this
Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation
of, an acceleration of obligations under, or an early termination of, that
Specified Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate it or act
on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default, event
of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which has
resulted in such Specified Indebtedness becoming, or becoming capable at
such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter; (8) causes or
is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect to any
of the events specified in clauses (1) to (7) (inclusive); or (9)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is
required to be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a
party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event" is
specified in the Schedule or any Confirmation as applying, the occurrence
of such event (and, in such event, the Affected Party or Affected Parties
shall be as specified for such Additional Termination Event in the
Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (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 continuing,
designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid 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.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in respect
of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding supplement to
this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(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 Xxx 0000 or any modification, extension or
reenactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified as
such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be 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 meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a) (iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency, of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
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.
Xxxxx Fargo Bank, N.A., not in its
individual capacity, but solely as
Master Servicer, on behalf of Xxxxx
Credit Suisse Fargo Mortgage Backed Securities
International 2006-10 Trust
By:/s/ Xxxxx X. Xxxxxxxxxxx By:/s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------------- --------------------------------
Name: Xxxxx X. Xxxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Authorized Signatory Title: Assistant Vice President
By:/s/ Xxxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Authorized Signatory
EXECUTION COPY
Schedule
to the
Master Agreement
dated as of July 28, 2006
between
Credit Suisse International, and Xxxxx Fargo Bank, N.A., not in its
an unlimited company incorporated individual capacity, but solely as
under the laws of England and Wales Master Servicer, on behalf of the
("Party A") Xxxxx Fargo Mortgage Backed
Securities 2006-10 Trust
("Party B")
Part 1
Termination Provisions
In this Agreement:
(a) Specified Entity. "Specified Entity" shall have no meaning in relation to
Party A or Party B.
(b) Specified Transaction. Specified Transaction will have the meaning specified
in Section 14.
(c) Certain Events of Default. The following Events of Default will apply to the
parties as specified below, and the definition of "Event of Default" in Section
14 is deemed to be modified accordingly:
Section 5(a)(i) (Failure To Pay or Deliver) will apply to Party A and
Party B.
Section 5(a)(ii) (Breach of Agreement) will not apply to Party A or Party
B.
Section 5(a)(iii) (Credit Support Default) will not apply to Party A or
Party B.
Section 5(a)(iv) (Misrepresentation) will not apply to Party A or Party B.
Section 5(a)(v) (Default Under Specified Transaction) will not apply to
Party A or Party B.
Section 5(a)(vi) (Cross Default) will not apply to Party A or Party B.
Section 5(a)(vii) (Bankruptcy) will apply to Party A and Party B.
Section 5(a)(viii) (Merger Without Assumption) will apply to Party A and
Party B.
(d) Termination Events. The "Illegality" provision of Section 5(b)(i), the "Tax
Event" provision of Section 5(b)(ii) and the "Tax Event Upon Merger" provision
of Section 5(b)(iii) will apply to both Party A and Party B. The "Credit Event
Upon Merger" provision of Section 5(b)(iv) will not apply to Party A or Party B.
(e) Automatic Early Termination. The "Automatic Early Termination" provision 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), the Second
Method and Market Quotation will apply.
(g) Termination Currency. "Termination Currency" means United States Dollars.
(h) Additional Termination Event.
Each of the following shall be an Additional Termination Event:
(1) Termination of Trust. The termination of the obligations and
responsibilities of the parties to the Pooling and Servicing Agreement
pursuant to Section 11.01 of the Pooling and Servicing Agreement. Party B
shall be the sole Affected Party with respect to such Additional
Termination Event; provided however, that notwithstanding Section (6)(iv)
of the Agreement, both Party A and Party B shall have the right to
designate an Early Termination Date with respect to this Additional
Termination Event.
(2) Counterparty Rating Agency Downgrade. If Party A no longer has a
long-term credit rating of at least A (or its equivalent) from at least
one of the Rating Agencies rating the Xxxxx Fargo Mortgage Backed
Securities 2006-10 Trust (the "Certificates") (a "Counterparty Rating
Agency Downgrade"), provided that none of the following events shall
occur: Party A shall, no later than the 30th day following the
Counterparty Rating Agency Downgrade, either (1) obtain a substitute
Counterparty that is a bank or other financial institution that has a
long-term credit rating of at least A (or its equivalent) from at least
one of the Rating Agencies rating the Certificates (the "Counterparty
Rating Requirement"), (2) obtain a guaranty of or a contingent agreement
of another person that meets the Counterparty Rating Requirement to honor
Party A's obligations hereunder, (3) post collateral under the Credit
Support Annex attached hereto and made a part hereof, or (4) restore its
long-term credit rating to at least A (or its equivalent) from at least
one of the Rating Agencies rating the Certificates. As used herein: (i)
"Moody's" means Xxxxx'x Investors Service, Inc., or any successor
nationally recognized statistical rating organization, (ii) "S&P" means
Standard & Poor's Ratings Services, a division of The XxXxxx-Xxxx
Companies, Inc. or any successor nationally recognized statistical rating
organization, (iii) "Fitch" means Fitch Ratings, or any successor
nationally recognized statistical rating organization, and (iv) "Rating
Agency" means Xxxxx'x, S&P, or Fitch. Party A shall be the sole Affected
Party with respect to this Additional Termination Event.
(3) Regulation AB 10% Disclosure Requirement. If (A) the Depositor still
has a reporting obligation with respect to this Transaction pursuant to
Regulation AB (as defined herein) and (B) Party A has not, within 30 days
after receipt of a 10% Cap Disclosure Request (as defined herein) complied
with the provisions set forth in clauses (ii) and (iii) of Part 5(l) below
(provided that if the significance percentage is 10% or more and less than
20% when the 10% Cap Disclosure Request is made or reaches 10% after a 10%
Cap Disclosure Request has been made to Party A, Party A must comply with
the provisions set forth in clauses (ii) and (iii) of Part 5(l) below
within the greater of 5 Calendar Days and 3 Business Days of Party A being
informed of the significance percentage reaching 10% or more), then an
Additional Termination Event shall have occurred with respect to Party A
and Party A shall be the sole Affected Party with respect to such
Additional Termination Event.
(4) Regulation AB 20% Disclosure Requirement. If (A) the Depositor still
has a reporting obligation with respect to this Transaction pursuant to
Regulation AB and (B) Party A has not, within 30 days after receipt of a
20% Cap Disclosure Request (as defined herein) complied with the
provisions set forth in clauses (iv) and (v) of Part 5(l) below (provided
that if the significance percentage is 20% or more when the 20% Cap
Disclosure Request is made or reaches 20% after a 20% Cap Disclosure
Request has been made to Party A, Party A must comply with the provisions
set forth in clauses (iv) and (v) of Part 5(l) below within the greater of
5 Calendar Days and 3 Business Days of Party A being informed of the
significance percentage reaching 20% or more), then an Additional
Termination Event shall have occurred with respect to Party A and Party A
shall be the sole Affected Party with respect to such Additional
Termination Event.
Part 2
Tax Representations
(a) Payer Tax Representations. For the purpose of Section 3(e), Party A and
Party B each makes the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e)) 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 representation made by the other party pursuant
to Section 3(f);
(ii) the satisfaction of the agreement of the other party contained in
Section 4(a)(i) or 4(a)(iii) and the accuracy and effectiveness of
any document provided by the other party pursuant to Section 4(a)(i)
or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d);
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii), and the other party does not deliver a
form or document under Section 4(a)(iii) by reason of material prejudice
to its legal or commercial position.
(b) Payee Tax Representations. For the purpose of Section 3(f),
(i) Party A makes the following representation to Party B:
(A) Party A is entering into each Transaction in the ordinary
course of its trade as, and is, a recognized UK bank as
defined in Section 840A of the UK Income and Corporation Taxes
Act of 1988.
(B) Party A has been approved as a Withholding Foreign Partnership
by the US Internal Revenue Service.
(C) Party A's Withholding Foreign Partnership Employer
Identification Number is 00-0000000.
(D) Party A is a partnership that agrees to comply with any
withholding obligation under Section 1446 of the Internal
Revenue Code.
(ii) Party B makes no Payee Tax Representations.
Part 3
Agreement to Deliver Documents
Each party agrees to deliver the following documents as applicable:
(a) For the purpose of Section 4(a)(i), tax forms, documents or certificates
to be delivered are:
Party required to deliver Form/Document/ Certificate Date by which to be
document delivered
Party A U.S. Internal Revenue (i) Before the first
Service Form W-8IMY or any Payment Date under
successor forms thereto this Agreement, such
form to be updated at
the beginning of each
succeeding
three-calendar-year
period after the first
payment date under
this Agreement, (ii)
promptly upon
reasonable demand by
Party B, and (iii)
promptly upon learning
that any such Form
previously provided by
Party A has become
obsolete or incorrect.
(b) For the purpose of Section 4(a)(ii), other documents to be delivered are:
Party required to deliver Form/Document/ Certificate Date by which to be Covered by Section 3(d)
document delivered Representation
Party A and Evidence reasonably Upon execution this Yes
Party B satisfactory to the other Agreement and, if
party as to the names, true requested, upon execution
signatures and authority of of any Confirmation
the officers or officials
signing this Agreement or
any Confirmation on its
behalf
Party A A copy of the annual report Upon request, as soon as Yes
for such party containing publicly available
audited or certified
financial statements for
the most recently ended
financial year
Party A An opinion of counsel to Upon execution of this No
such party reasonably Agreement
satisfactory in form and
substance to the other party
covering the enforceability
of this Agreement against
such party
Party B All opinions of counsel to Upon execution of this No
Party B, delivered as of Agreement
the Closing Date
Party B Executed copies of the Within 15 days of this No
Pooling and Servicing Agreement.
Agreement and such other
documents as
requested by Party A.
Party B Any and all executed Promptly after the date No
amendments to the Pooling of execution by Party B.
and Servicing Agreement.
Part 4
Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):
Notwithstanding Section 12 (a) of the Agreement, all notices, including those to
be given under Section 5 or Section 6 of the Agreement, may be given by
facsimile transmission or electronic messaging system.
(i) (1) Address for notices or communications to Party A:
Address: One Cabot Square Attention: (1) Head of Credit Risk Management;
Xxxxxx X00 0XX (2) Global Head of OTC Operations,
Operations Department;
(3) General Counsel Europe -
Legal and Compliance Department
Telex No.: 264521 Answerback: CSIN G
With copies to:
Address: Credit Suisse Securities (USA) LLC Attention: Xxxxxx Xxxxxx
00 Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 00000
Telephone No.: (000) 000-0000 Facsimile No.: 000-000-0000
(2) For the purpose of facsimile notices or communications under this
Agreement:
Facsimile No.: x00 (0) 000 000 0000
Attention: General Counsel Europe - Legal and Compliance Department
Telephone number for oral confirmation of receipt of facsimile in legible form: x00 (0) 000 000 0000
Designated responsible employee for the purposes of Section 12(a)(iii): Senior Legal Secretary
With a copy to:
Facsimile No. x00 (0) 000 000 0000
Head of Credit Risk Management
With a copy to:
Facsimile No. x00 (0) 000 000 0000
Global Head of OTC Operations, Operations Department.
(ii) Address for notices or communications to Party B:
Address: Xxxxx Fargo Bank, N.A. Attention: Client Manager, WFMBS 2006-10
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Telephone No.: 000-000-0000 Facsimile No.: 000-000-0000
(For all purposes.)
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Credit Suisse Securities
(USA) LLC, Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000 (Attention:
General Counsel, Legal and Compliance Department).
Party B appoints as its Process Agent: Not Applicable.
(c) Offices. With respect to Party A, the provisions of Section 10(a)
will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document:
(i) With respect to Party A: the ISDA Credit Support Annex
(ii) With respect to Party B: Not Applicable
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not
applicable.
Credit Support Provider means in relation to Party B: Not
applicable.
(h) Governing Law. This Agreement and, to the fullest extent permitted
by applicable law, all matters arising out of or relating in any way
to this Agreement, will be governed by and construed in accordance
with the laws of the State of New York without reference to choice
of law doctrine.
(i) Netting of Payments. Section 2(c)(ii) of this Agreement will not
apply to the Transactions.
(j) Affiliate. Affiliate will have the meaning specified in Section 14,
provided that Party B shall be deemed to have no Affiliates.
Part 5
Other Provisions
(a) Definitions. Unless otherwise specified in a Confirmation, this Agreement
and each Transaction between the parties are subject to the 2000 ISDA
Definitions as published by the International Swaps and Derivatives Association,
Inc. (the "2000 Definitions"), and will be governed in all relevant respects by
the provisions set forth in the 2000 Definitions, without regard to any
amendment to the 2000 Definitions subsequent to the date hereof. The provisions
of the 2000 Definitions are incorporated by reference in and shall be deemed a
part of this Agreement, except that references in the 2000 Definitions to a
"Swap Transaction" shall be deemed references to a "Transaction" for purposes of
this Agreement. Terms defined in the Confirmations have the same meanings when
used in this Agreement except where otherwise defined.
(b) Independent Reliance. The parties agree to amend Section 3 of this Agreement
by the addition of the following provision at the end thereof and marked as
subsection (g).
"(g) Independent Reliance. Party A is entering into this Agreement and
will enter into each Transaction in reliance upon such tax,
accounting, regulatory, legal, and financial advice as it deems
necessary and not upon any view expressed by the other party. Party
B is entering into this Agreement and will enter into each
Transaction in reliance upon the direction of the Depositor and not
upon any view expressed by the other party."
(c) Change of Account. Section 2(b) of this Agreement is hereby amended by the
addition of the following after the word "delivery" in the first line thereof:
"to another account in the same legal and tax jurisdiction as the original
account"
(d) Recording of Conversations. Each party to this Agreement acknowledges and
agrees to the tape recording of conversations between the parties to this
Agreement whether by one or other or both of the parties and each party hereby
consents to such recordings being used as evidence in Proceedings.
(e) Waiver of Right to Trial by Jury. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any suit, action or proceeding relating to this Agreement or any Credit
Support Document. Each party (i) certifies that no representative, agent or
attorney of the other party or any Credit Support Provider has represented,
expressly or otherwise, that such other party would not, in the event of such a
suit action or proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other party have been induced to enter into this
Agreement and provide for any Credit Support Document, as applicable by, among
other things, the mutual waivers and certifications in this Section.
(f) Pooling and Servicing Agreement.
(1) Capitalized terms used in this Agreement that are not defined herein
and are defined in the pooling and servicing agreement dated July 28,
2006, among Xxxxx Fargo Asset Securities Corporation, as Depositor, HSBC
Bank USA, National Association, as Trustee, and Party B, as Master
Servicer (the "Pooling and Servicing Agreement") shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
(2) Notwithstanding any other provision of this Agreement, Party A may
not, prior to the date which is one year and one day, or if longer the
applicable preference period then in effect, after the payment in full of
all Certificates, institute against, or join any other Person in
instituting against, the Trust any bankruptcy, reorganization,
arrangement, insolvency, moratorium or liquidation proceedings, or other
proceedings under Federal, State, or bankruptcy or similar laws. Nothing
shall preclude, or be deemed to stop, Party A (i) from taking any action
prior to the expiration of the aforementioned one year and one day period,
or if longer the applicable preference period then in effect, in (A) any
case or proceeding voluntarily filed or commenced by the Trust or (B) any
involuntary insolvency proceeding filed or commenced by a Person other
than Party A, or (ii) from commencing against the Trust or any of the
Collateral any legal action which is not a bankruptcy, reorganization,
arrangement, insolvency, moratorium, liquidation or similar proceeding.
Party A further acknowledges that Party B's obligations hereunder shall be
solely the obligations of the Trust and that recourse in respect of any
obligations of Party B hereunder will be limited to assets of the Trust as
applied in accordance with the terms of the Pooling and Servicing
Agreement and, on exhaustion thereof, all claims against Party B arising
from this Agreement or contemplated hereby shall be extinguished.
(g) Transfer. Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii), in this Section 7, and except for the
assignment by way of security in favor of the Party B under the Pooling and
Servicing Agreement, neither Party A nor Party B is permitted to assign, novate
or transfer (whether by way of security or otherwise) as a whole or in part any
of its rights, obligations or interests under this Agreement or any Transaction
without the prior written consent of the other party; provided, however, that
(i) Party A may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of
substantially all of its assets to, another entity, or an incorporation,
reincorporation or reconstitution, and (ii) with the written consent of Party B,
Party A may transfer this Agreement to any Person, including, without
limitation, another of Party A's offices, branches or affiliates (any such
Person, office, branch or affiliate, a "Transferee"); provided that, with
respect to clause (ii), (A) as of the date of such transfer the Transferee will
not be required to withhold or deduct on account of a Tax from any payments
under this Agreement unless the Transferee will be required to make payments of
additional amounts pursuant to Section 2(d)(i)(4) of this Agreement in respect
of such Tax (B) a Termination Event or Event of Default does not occur under
this Agreement as a result of such transfer; (C) such notice is accompanied by a
written instrument pursuant to which the Transferee acquires and assumes the
rights and obligations of Party A so transferred; and (D) Party A will be
responsible for any costs or expenses incurred in connection with such transfer.
Party B will execute such documentation as is reasonably deemed necessary by
Party A for the effectuation of any such transfer.
Except as specified otherwise in the documentation evidencing a transfer, a
transfer of all the obligations of Party A made in compliance with this Section
7 will constitute an acceptance and assumption of such obligations (and any
related interests so transferred) by the Transferee, a novation of the
transferee in place of Party A with respect to such obligations (and any related
interests so transferred), and a release and discharge by Party B of Party A
from, and an agreement by Party B not to make any claim for payment, liability,
or otherwise against Party A with respect to, such obligations from and after
the effective date of the transfer.
In addition, Party A may transfer this Agreement without the prior consent of
the Trustee, on behalf of Party B, to an affiliate that satisfies the
Counterparty Rating Requirement or that has furnished a guarantee of the
obligations under this Agreement from a guarantor that that satisfies the
Counterparty Rating Requirement.
(h) Notice of Certain Events or Circumstances. Each party agrees, upon learning
of the occurrence or existence of any event or condition that constitutes (or
that with the giving of notice or passage of time or both would constitute) an
Event of Default or Termination Event with respect to such party, promptly to
give the other party notice of such event or condition (or, in lieu of giving
notice of such event or condition in the case of an event or condition that with
the giving of notice or passage of time or both would constitute an Event of
Default or Termination Event with respect to the party, to cause such event or
condition to cease to exist before becoming an Event of Default or Termination
Event); provided that failure to provide notice of such event or condition
pursuant to this Part 5(h) shall not constitute an Event of Default or a
Termination Event.
(i) Regarding Party A. Party B acknowledges and agrees that Party A has had and
will have no involvement in and, accordingly Party A accepts no responsibility
for: (i) the establishment, structure, or choice of assets of the Trust; (ii)
the selection of any person performing services for or acting on behalf of Party
B or the Trust; (iii) the selection of Party A as the Counterparty; (iv) the
terms of the Certificates; (v) the preparation of or passing on the disclosure
and other information contained in any Prospectus Supplement for the
Certificates (other than the description of Party A provided by Party A to the
Depositor for inclusion in the Prospectus Supplement), the Pooling and Servicing
Agreement, or any other agreements or documents used by any party in connection
with the marketing and sale of the Certificates; (vi) the ongoing operations and
administration of the Trust, including the furnishing of any information to
Party B which is not specifically required under this Agreement; or (vii) any
other aspect of the Trust's existence.
(j) Commodity Exchange Act. Each party represents to the other party on and as
of the date hereof and on each date on which a Transaction is entered into among
them that:
(i) such party is an "eligible contract participant" as defined in the
U.S. Commodity Exchange Act (the "CEA");
(ii) neither this Agreement nor any Transaction has been executed or
traded on a "trading facility" as such term is defined in the CEA;
and
(iii) such party is entering into each Transaction in connection with its
business or a line of business and the terms of this Agreement and
each Transaction have been individually tailored and negotiated.
(k) Master Servicer Capacity. It is expressly understood and agreed by the
parties hereto that (i) this Agreement is executed and delivered by Xxxxx Fargo
Bank, N.A., not in its individual capacity, but solely as Master Servicer, on
behalf of the Xxxxx Fargo Mortgage Backed Securities 2006-10 Trust, in the
exercise of the powers and authority conferred upon and vested in it thereunder,
(ii) each of the representations, warranties, covenants, undertakings and
agreements herein made on the part of Party B has not been made or intended as a
representation, warranty, covenant, undertaking or agreement by Xxxxx Fargo
Bank, N.A., in its individual capacity, but is made and intended for the purpose
of binding only the assets of the Trust available therefor in accordance with
the terms of the Pooling and Servicing Agreement, (iii) nothing herein contained
shall be construed as creating any liability on Xxxxx Fargo Bank, N.A., in its
individual capacity, to perform any covenant either expressed or implied
contained herein, all such liability, if any, being expressly waived by the
parties hereto and by any Person claiming by, through or under the parties
hereto and (iv) under no circumstances shall Xxxxx Fargo Bank, N.A., in its
individual capacity, be liable for the payment of any indebtedness or expenses
of Party B or be liable for the breach or failure of any obligation,
representation, warranty or covenant made or undertaken by Party B under this
Agreement or any other related document, as to all of which recourse shall be
had solely to the assets of the Trust in accordance with the terms of the
Pooling and Servicing Agreement.
(l) Compliance with Regulation AB.
(i) Party A acknowledges that for so long as there are reporting
obligations with respect to this Transaction under Regulation AB, the
Depositor, acting on behalf of the Xxxxx Fargo Mortgage Backed Securities
2006-10 Trust (the "Issuing Entity"), is required under Regulation AB
under the Securities Act of 1933, as amended, and the Securities Exchange
Act of 1934, as amended ("Regulation AB"), to disclose certain information
set forth in Regulation AB regarding Party A or its group of affiliated
entities, if applicable, depending on the aggregate "significance
percentage" of this Agreement and any other derivative contracts between
Party A or its group of affiliated entities, if applicable, and Party B,
as calculated from time to time in accordance with Item 1115 of Regulation
AB.
(ii) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to nine (9)
percent or more, then the Depositor may request on a Business Day on or
after the date of such determination from Party A the same information set
forth in Item 1115(b)(1) of Regulation AB that would have been required if
the significance percentage had in fact increased to ten (10) percent,
along with any necessary auditors' consent (such request, a "10% Cap
Disclosure Request" and such requested information, subject to the last
sentence of this paragraph, is the "10% Cap Financial Disclosure"). Party
B or the Depositor shall provide Party A with the calculations and any
other information reasonably requested by Party A with respect to the
Depositor's determination that led to the 10% Cap Disclosure Request. The
parties hereto further agree that the 10% Cap Financial Disclosure
provided to meet the 10% Cap Disclosure Request may be, solely at Party
A's option, either the information set forth in Item 1115(b)(1) or Item
1115(b)(2) of Regulation AB.
(iii) So long as there are reporting obligations with respect to this
Transaction under Regulation AB, upon the occurrence of a 10% Cap
Disclosure Request, Party A, at its own expense, shall (i) provide the
Depositor with the 10% Cap Financial Disclosure, (ii) secure another
entity to replace Party A as party to this Agreement on terms
substantially similar to this Agreement which entity is able to (A)
provide the 10% Cap Financial Disclosure and (B) provide an indemnity to
the Depositor, reasonably satisfactory to the Depositor, in relation to
the 10% Cap Financial Disclosure or (iii) obtain a guaranty of Party A's
obligations under this Agreement from an affiliate of Party A that is able
to (A) provide the 10% Cap Financial Disclosure, such that disclosure
provided in respect of the affiliate will, in the judgment of counsel to
the Depositor, satisfy any disclosure requirements applicable to Party A,
and cause such affiliate to provide 10% Cap Financial Disclosure and (B)
provide an indemnity to the Depositor, reasonably satisfactory to the
Depositor, in relation to the 10% Cap Financial Disclosure. If permitted
by Regulation AB, any required 10% Cap Financial Disclosure may be
provided by incorporation by reference from reports filed pursuant to the
Securities Exchange Act.
(iv) If the Depositor determines, reasonably and in good faith, that the
significance percentage of this Agreement has increased to nineteen (19)
percent or more, then the Depositor may request on a Business Day on or
after the date of such determination from Party A the same information set
forth in Item 1115(b)(2) of Regulation AB that would have been required if
the significance percentage had in fact increased to twenty (20) percent,
along with any necessary auditors consent (such request, a "20% Cap
Disclosure Request" and such requested information is the "20% Cap
Financial Disclosure"). Party B or the Depositor shall provide Party A
with the calculations and any other information reasonably requested by
Party A with respect to the Depositor's determination that led to the 20%
Cap Disclosure Request.
(v) So long as there are reporting obligations with respect to this
Transaction under Regulation AB, upon the occurrence of a 20% Cap
Disclosure Request, Party A, at its own expense, shall (i) provide the
Depositor with the 20% Cap Financial Disclosure, (ii) secure another
entity to replace Party A as party to this Agreement on terms
substantially similar to this Agreement which entity is able to (A)
provide the 20% Cap Financial Disclosure and (B) provide an indemnity to
the Depositor, reasonably satisfactory to the Depositor, in relation to
the 20% Cap Financial Disclosure or (iii) obtain a guaranty of Party A's
obligations under this Agreement from an affiliate of Party A that is able
to (A) provide the 20% Cap Financial Disclosure, such that disclosure
provided in respect of the affiliate will, in the judgment of counsel to
the Depositor, satisfy any disclosure requirements applicable to Party A,
and cause such affiliate to provide 20% Cap Financial Disclosure and (B)
provide an indemnity to the Depositor, reasonably satisfactory to the
Depositor, in relation to the 20% Cap Financial Disclosure. If permitted
by Regulation AB, any required 20% Cap Financial Disclosure may be
provided by incorporation by reference from reports filed pursuant to the
Securities Exchange Act.
(m) Fully Paid Transactions. Notwithstanding the terms of Sections 5 and 6 of
the Agreement, if at any time and so long as Party B shall have satisfied in
full all its payment and delivery obligations under Section 2(a)(i) of the
Agreement and the Credit Support Annex and shall at the time have no future
payment or delivery obligations, whether absolute or contingent, under such
Section or the Credit Support Annex, then unless Party A is required pursuant to
appropriate proceedings to return to Party B or otherwise returns to Party B
(upon demand of Party B, or otherwise) any portion of any such payment or
delivery: (i) the occurrence of an event described in Section 5(a) of the
Agreement with respect to Party B shall not constitute an Event of Default or a
Potential Event of Default with respect to Party B as the Defaulting Party; and
(ii) Party A shall be entitled to designate an Early Termination Date pursuant
to Section 6 of the Agreement only as a result of the occurrence of a
Termination Event set forth in (i) either Section 5(b)(i) or 5(b)(ii) of the
Agreement with respect to Party A as the Affected Party or (ii) Section
5(b)(iii) of the Agreement with respect to Party A as the Burdened Party.
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized representatives as of the date of the Agreement.
Xxxxx Fargo Bank, N.A., not in its
individual capacity, but solely as
Master Servicer, on behalf of Xxxxx
Credit Suisse Fargo Mortgage Backed Securities
International 2006-10 Trust
By:/s/ Xxxxx X. Xxxxxxxxxxx By:/s/ Xxxxxxxx X. Xxxxxxxxxx
---------------------------- --------------------------------
Name: Xxxxx X. Xxxxxxxxxxx Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Authorized Signatory Title: Assistant Vice President
By:/s/ Xxxxxxxx Xxxxxxxx
---------------------
Name: Xxxxxxxx Xxxxxxxx
Title: Authorized Signatory
Solely for the purpose of paragraph Part 5(l))
Xxxxx Fargo Asset Securities Corporation
By:/s/ Xxxxxxx X. Xxxxx
----------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
[CREDIT SUISSE LOGO] CREDIT SUISSE INTERNATIONAL
One Cabot Square, Telephone 000 0000 0000
Xxxxxx X00 0XX xxx.xxxxxx-xxxxxx.xxx
Facsimile Cover Sheet
To: Xxxxx Fargo Bank, N.A., not in its
individual capacity, but solely as Master
Servicer, on behalf of the Xxxxx Fargo
Mortgage Backed Securities 2006-10 Trust
Attention: Xxxxxxxx Xxxxx, CSIN Marketer
Fax number: To be hand delivered by Xxxxxxxx Xxxxx
Date: 28 July 2006
Pages (including cover page): 9
Our Reference No: External ID: 53136142N3 / Risk ID: 447500490 and 447500496
Credit Suisse International has entered into a transaction with you as attached.
Please find attached a letter agreement (the "Confirmation") which confirms the
terms and conditions of the above transaction.
If you agree with the terms specified therein, please arrange for the
Confirmation to be signed by your authorised signatories and return a signed
copy to this office to the facsimile listed below.
For Interest Rate Products: For Equity Derivatives:
Telephone Numbers: (000) 000-0000 Telephone numbers: (000) 000-0000 /
(000) 000-0000 /
(000) 000-0000
Facsimile number: (000) 000-0000 Facsimile number: (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxxxx-xxxxxx.xxx
For Credit Derivatives:
Telephone Numbers: (000) 000-0000
Facsimile number: (000) 000-0000
Email: xxxx.xxx-xxx-xxxxxx-xx@xxxxxx-xxxxxx.xxx
We are delighted to have entered into this transaction with you.
CONFIDENTIALITY NOTICE: This facsimile is intended only for the use of the
individual or entity to which it is addressed and may contain information which
is privileged and confidential. If the reader of this message is not the
intended recipient or an employee or agent responsible for delivering the
message to the intended recipient, you are hereby notified that any
dissemination, distribution or copying of this communication is strictly
prohibited. If you have received this communication in error, please notify us
immediately by telephone and return the original message to us by mail. Thank
you.
Registered Office as above
Registered with unlimited liability in England under No. 2500199
Authorised and Regulated by the Financial Services Authority
VAT No: GB 447 0737 41
[CREDIT SUISSE LOGO] CREDIT SUISSE INTERNATIONAL
One Cabot Square, Telephone 000 0000 0000
Xxxxxx X00 0XX xxx.xxxxxx-xxxxxx.xxx
28 July 2006
Xxxxx Fargo Bank, N.A., not in its individual capacity, but solely as Master
Servicer, on behalf of the Trust created under the Pooling and Servicing
Agreement in respect of the Xxxxx Fargo Mortgage Backed Securities 2006-10 Trust
(the "Xxxxx Fargo Mortgage Backed Securities 2006-10 Trust")
External ID: 53136142N3
--------------------------------------------------------------------------------
Dear Sirs,
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Swap Transaction entered into between us on the
Trade Date specified below (the "Swap Transaction"). This Confirmation
constitutes a "Confirmation" as referred to in the Agreement specified below.
In this Confirmation "CSIN" means Credit Suisse International and "Counterparty"
means Xxxxx Fargo Bank, N.A., not in its individual capacity, but solely as
Master Servicer, on behalf of the Xxxxx Fargo Mortgage Backed Securities 2006-10
Trust.
1. The definitions and provisions contained in the 2000 ISDA
Definitions (as published by the International Swaps and Derivatives
Association, Inc.) are incorporated into this Confirmation. In the
event of any inconsistency between those definitions and provisions
and this Confirmation, this Confirmation will govern.
This Confirmation supplements, forms part of, and is subject to, the
1992 ISDA Master Agreement dated as of 28 July 2006 as amended and
supplemented from time to time (the "Agreement"), between you and
us. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
CSIN and Counterparty each represents to the other that it has
entered into this Swap Transaction in reliance upon such tax,
accounting, regulatory, legal, and financial advice as it deems
necessary and not upon any view expressed by the other.
2. The terms of the particular Swap Transaction to which this
Confirmation relates are as follows:
Transaction Type: Rate Cap Transaction
Notional Amount: USD 50,000,000, subject to
amortization as set out in the
Additional Terms
Trade Date: 14 July 2006
Effective Date: 28 July 2006
Termination Date: 25 July 2018
Fixed Amounts:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Amount: USD [______]
Fixed Rate Payer
Payment Date: 28 July 2006
Floating Amounts:
Floating Amount
Payer: CSIN
Floating Rate
Payer Period
End Dates: The 25th of each month, commencing on
25 August 2006, and ending on the
Termination Date, inclusive, subject
to No Adjustment to Period End Dates
Floating Rate Payer
Payment Dates: One Business Day prior to the Floating
Rate Payer Period End Dates
Cap Strike Rate: 5.40%
Floating Rate Option: USD-LIBOR-BBA, subject to a maximum of
8.90%
Designated Maturity: 1 month
Spread: None
Floating Rate
Day Count Fraction: 30/360
Reset Dates: The first day of each Calculation
Period
Compounding: Inapplicable
Business Days: New York
Calculation Agent: CSIN
3. Account Details:
Payments to CSIN: As advised separately in writing
Payments to
Counterparty: Xxxxx Fargo N.A.
ABA: 000-000-000
Account Number: SAS Clearing
Account Name: 0000000000
FFC: 50936601
For the purpose of facilitating this Transaction, an Affiliate of CSIN, which is
organized in the United States of America (the "Agent"), has acted as agent for
CSIN. The Agent is not a principal with respect to this Transaction and shall
have no responsibility or liability to the parties as a principal with respect
to this Transaction.
Credit Suisse International is authorized and regulated by the Financial
Services Authority and has entered into this transaction as principal. The time
at which the above transaction was executed will be notified to Counterparty on
request.
[CREDIT SUISSE LOGO]
ADDITIONAL TERMS
Calculation Period up to but excluding the
Period End Date scheduled to occur on: Notional Amount:
-------------------------------------------------------------------------
25-August-2006 USD 50,000,000.00
25-September-2006 USD 49,892,450.99
25-October-2006 USD 49,751,902.25
25-November-2006 USD 49,578,375.84
25-December-2006 USD 49,371,935.72
25-January-2007 USD 49,132,696.07
25-February-2007 USD 48,860,821.43
25-March-2007 USD 48,556,526.84
25-April-2007 USD 48,220,077.83
25-May-2007 USD 47,851,790.22
25-June-2007 USD 47,452,029.85
25-July-2007 USD 47,021,212.17
25-August-2007 USD 46,559,801.72
25-September-2007 USD 46,068,311.40
25-October-2007 USD 45,547,301.72
25-November-2007 USD 44,997,379.84
25-December-2007 USD 44,419,198.54
25-January-2008 USD 43,813,454.98
25-February-2008 USD 43,180,889.47
25-March-2008 USD 42,522,284.00
25-April-2008 USD 41,838,460.69
25-May-2008 USD 41,130,280.17
25-June-2008 USD 40,398,639.81
25-July-2008 USD 39,644,471.83
25-August-2008 USD 38,868,741.37
25-September-2008 USD 38,072,444.40
25-October-2008 USD 37,256,605.63
25-November-2008 USD 36,422,276.20
25-December-2008 USD 35,570,531.48
25-January-2009 USD 34,702,468.64
25-February-2009 USD 33,849,113.36
25-March-2009 USD 33,010,219.76
25-April-2009 USD 32,185,546.05
25-May-2009 USD 31,374,854.46
25-June-2009 USD 30,577,911.18
25-July-2009 USD 29,794,486.26
25-August-2009 USD 29,024,353.60
25-September-2009 USD 28,267,290.86
25-October-2009 USD 27,523,079.39
25-November-2009 USD 26,791,504.17
25-December-2009 USD 26,072,353.77
25-January-2010 USD 25,365,420.27
25-February-2010 USD 24,670,499.21
25-March-2010 USD 23,987,389.53
25-April 2010 USD 23,315,893.51
25-May-2010 USD 22,655,816.75
25-June-2010 USD 22,006,968.04
25-July-2010 USD 21,369,159.38
25-August-2010 USD 20,742,205.91
25-September-2010 USD 20,125,925.81
25-October-2010 USD 19,520,140.32
25-November-2010 USD 18,924,673.65
25-December-2010 USD 18,339,352.93
25-January-2011 USD 17,764,008.16
25-February-2011 USD 17,198,472.19
25-March-2011 USD 16,642,580.66
25-April-2011 USD 16,096,171.91
25-May-2011 USD 15,559,087.01
25-June-2011 USD 15,031,169.66
25-July-2011 USD 14,512,266.18
25-August-2011 USD 14,002,225.42
25-September-2011 USD 13,606,525.56
25-October-2011 USD 13,218,891.47
25-November-2011 USD 12,839,182.08
25-December-2011 USD 12,467,258.70
25-January-2012 USD 12,102,984.98
25-February-2012 USD 11,746,226.89
25-March-2012 USD 11,396,852.64
25-April-2012 USD 11,054,732.71
25-May-2012 USD 10,719,739.73
25-June-2012 USD 10,391,748.52
25-July-2012 USD 10,070,636.00
25-August-2012 USD 9,756,281.18
25-September-2012 USD 9,480,954.49
25-October-2012 USD 9,211,741.94
25-November-2012 USD 8,948,531.84
25-December-2012 USD 8,691,214.40
25-January-2013 USD 8,439,681.75
25-February-2013 USD 8,193,827.86
25-March-2013 USD 7,953,548.54
25-April-2013 USD 7,718,741.37
25-May-2013 USD 7,489,305.73
25-June-2013 USD 7,265,142.71
25-July-2013 USD 7,046,155.14
25-August-2013 USD 6,832,247.48
25-September-2013 USD 6,681,618.36
25-October-2013 USD 6,534,817.43
25-November-2013 USD 6,391,767.35
25-December-2013 USD 6,252,392.21
25-January-2014 USD 6,116,617.49
25-February-2014 USD 5,984,370.02
25-March-2014 USD 5,855,578.00
25-April-2014 USD 5,730,170.95
25-May-2014 USD 5,608,079.66
25-June-2014 USD 5,489,236.24
25-July-2014 USD 5,373,574.01
25-August-2014 USD 5,261,027.55
25-September-2014 USD 5,201,059.18
25-October-2014 USD 5,142,818.81
25-November-2014 USD 5,086,267.58
25-December-2014 USD 5,031,367.35
25-January-2015 USD 4,978,080.78
25-February-2015 USD 4,926,371.29
25-March-2015 USD 4,876,203.02
25-April-2015 USD 4,827,540.83
25-May-2015 USD 4,780,350.32
25-June-2015 USD 4,734,597.76
25-July-2015 USD 4,690,250.10
25-August-2015 USD 4,647,275.00
25-September-2015 USD 4,645,825.05
25-October-2015 USD 4,644,400.08
25-November-2015 USD 4,642,999.64
25-December-2015 USD 4,641,623.33
25-January-2016 USD 4,640,270.74
25-February-2016 USD 4,638,941.46
25-March-2016 USD 4,637,635.11
25-April-2016 USD 4,636,351.29
25-May-2016 USD 4,635,089.62
25-June-2016 USD 4,633,849.73
25-July-2016 USD 4,632,631.24
25-August-2016 USD 4,631,404.74
25-September-2016 USD 4,630,199.73
25-October-2016 USD 4,629,015.83
25-November-2016 USD 4,627,852.69
25-December-2016 USD 4,626,709.95
25-January-2017 USD 4,625,587.26
25-February-2017 USD 4,624,484.27
25-March-2017 USD 4,623,400.66
25-April-2017 USD 4,622,336.08
25-May-2017 USD 4,621,290.22
25-June-2017 USD 4,620,262.75
25-July-2017 USD 4,619,253.35
25-August-2017 USD 4,618,261.72
25-September-2017 USD 4,617,287.55
25-October-2017 USD 4,616,330.54
25-November-2017 USD 4,615,390.40
25-December-2017 USD 4,614,466.84
25-January-2018 USD 4,613,559.57
25-February-2018 USD 4,612,668.31
25-March-2018 USD 4,611,792.79
25-April-2018 USD 4,610,932.74
25-May-2018 USD 4,610,087.88
25-June-2018 USD 4,609,257.97
25-July-2018 USD 4,608,442.74
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours faithfully,
Credit Suisse International
By:/s/ Xxxxx X. Xxxxxxxxxxx
---------------------------
Name: Xxxxx X. Xxxxxxxxxxx
Title: Authorized Signatory
Confirmed as of the date first written above:
Xxxxx Fargo Bank, N.A., not in its individual capacity, but solely as Master
Servicer, on behalf of the Xxxxx Fargo Mortgage Backed Securities 2006-10 Trust
By:/s/ Xxxxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Assistant Vice President
Our Reference No: External ID: 53136142N3 / Risk ID: 447500490 and 447500496
