(MULTICURRENCY -- CROSS BORDER)
ISDA
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated June 28, 2006
CHARTER MAC ORIGINATION TRUST I AND CENTERBROOK FINANCIAL LLC
("PARTY A") ("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.
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(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any deduction
or withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organized 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
authorize 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, reorganization, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
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(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, 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:--
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(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)
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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
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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)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the
nature of that Termination Event and each Affected Transaction and will
also give such other information about that Termination Event as the other
party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after
it gives notice under Section 6(b)(i) all its rights and obligations under
this Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
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
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(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.
8
(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
9
(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.
10
(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 he entered into as soon as practicable and
may he 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.
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(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
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
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(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, authorization, 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 organized, 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
13
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, organized, 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: --
(e) 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
14
(f) SUCH PARTY'S LOSS (WHETHER POSITIVE OR NEGATIVE AND WITHOUT REFERENCE TO
ANY UNPAID AMOUNTS) FOR EACH TERMINATED TRANSACTION OR GROUP OF TERMINATED
TRANSACTIONS FOR WHICH A MARKET QUOTATION CANNOT BE DETERMINED OR WOULD NOT (IN
THE REASONABLE BELIEF OF THE PARTY MAKING THE DETERMINATION) PRODUCE A
COMMERCIALLY REASONABLE RESULT.
"SPECIFIED ENTITY" has the meanings specified in the Schedule.
"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
15
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.
16
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.
CENTERBROOK FINANCIAL LLC, CHARTER MAC ORIGINATION TRUST I,
a Delaware limited liability company a Delaware statutory trust
By: CENTERBROOK HOLDINGS LLC, By: CHARTERMAC CAPITAL LLC,
its managing member its Manager
By: /S/ XXXXX XXXXXX By: /S/ XXXXXX XXXX
---------------- ---------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: President Title: Senior Vice President
(MULTICURRENCY-CROSS BORDER)
SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF JUNE 28, 2006
BETWEEN
CHARTER MAC ORIGINATION TRUST I
("PARTY A")
AND
CENTERBROOK FINANCIAL LLC
("PARTY B")
PART 1: TERMINATION PROVISIONS AND CERTAIN OTHER MATTERS
(a) "SPECIFIED ENTITY" means, in relation to Party A, for the purpose of:
SECTION 5(A)(V), none;
SECTION 5(A)(VI), none;
SECTION 5(A)(VII), none; and
SECTION 5(B)(IV), none;
and, in relation to Party B, for the purpose of:
SECTION 5(A)(V), none;
SECTION 5(A)(VI), none;
SECTION 5(A)(VII), none; and
SECTION 5(B)(IV), none.
(b) "SPECIFIED TRANSACTION," not applicable.
(c) "SPECIFIED INDEBTEDNESS," not applicable.
(d) The "BREACH OF AGREEMENT," "MISREPRESENTATION," "DEFAULT UNDER
SPECIFIED TRANSACTION" and "Cross-Default" provisions of Section 5(a)(ii), (iv),
(v) and (vi) will not apply to Party A or Party B.
(e) The "TAX EVENT," "TAX EVENT UPON MERGER," "CREDIT EVENT UPON MERGER"
and "ADDITIONAL TERMINATION EVENT" provisions of Section 5(b)(ii), (iii), (iv)
and (v) will not apply to Party A or Party B.
(f) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A or Party B.
(g) PAYMENTS ON EARLY TERMINATION. Except as set forth in any
Confirmation, upon the occurrence of an Early Termination Date, Loss and First
Method shall apply.
(h) "TERMINATION CURRENCY" means United States Dollars.
(i) "ADDITIONAL TERMINATION EVENT," as set forth in any Confirmation.
2
PART 2: TAX REPRESENTATIONS
(a) PAYER TAX REPRESENTATIONS. For the purposes of Section 3(e), each
party, when acting as payer, hereby makes the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, or any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment to be made by it to the other party under
this Agreement. In making this representation, it may rely on the
satisfaction of the agreement of the other party contained in Section
4(a)(i) and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i).
(b) PAYEE TAX REPRESENTATIONS. For the purposes of Section 3(f), neither
party, when acting as payee, makes any representations.
PART 3: AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents:
(a) Party A and Party B will deliver the forms and/or documents described
in Section 4(a)(iii) upon reasonable demand by the other party.
(b) Other documents to be delivered are:
PARTY REQUIRED COVERED BY
TO DELIVER FORM/DOCUMENT/ DATE BY WHICH SECTION 3(D)
DOCUMENT CERTIFICATE TO BE DELIVERED REPRESENTATION
-------------- ------------- --------------- --------------
Party B Custody Agreement, dated as of June Prior to or concurrently No
16, 2006 (the "Custody Agreement"), with execution and delivery
between Charter Mac Equity Issuer of this Agreement
Trust, as Depositor, and Deutsche
Bank National Trust Company, as
Custodian (the "Custodian")
Party B ISDA Master Agreement, Schedule Prior to or concurrently No
thereto and Confirmation thereunder, with execution and delivery
entered into by and between Party B of this Agreement
and the Custodian
Party B Opinion of counsel satisfactory to Upon execution and delivery No
Party A of this Agreement
Party A Opinion of counsel satisfactory to Upon execution and delivery No
Party B of this Agreement
Party A Any form or document required or As soon as practicable No
reasonably requested in order to after demand
allow a party to make payments under
each Transaction without deduction or
withholding for or on account of any
Tax or with such deduction or
withholding at a reduced rate.
3
PART 4: MISCELLANEOUS
(a) ADDRESS FOR NOTICES. For the purpose of Section 12(a):
Address for notice or communications to Party A:
Charter Mac Origination Trust I
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Address for notice or communications to Party B:
Centerbrook Financial LLC
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Any notice relating to a particular Transaction will be delivered to the address
or facsimile number specified in the Confirmation of such Transaction.
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: Not applicable.
(c) OFFICES. The provisions of Section 10(a) will 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, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) CREDIT SUPPORT DOCUMENT. With respect to Party A, the ISDA Credit
Support Annex (including Paragraph 13 - Elections and Variables) entered into by
and between Party A and Party B; and with respect to Party B: not applicable.
(g) CREDIT SUPPORT PROVIDER. With respect to Party A and Party B: not
applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to choice
of law doctrine).
(i) NETTING OF PAYMENTS. Payments under any Transactions will not be
netted and the provisions of Section 2(c) will be inapplicable to this
Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14.
(k) NO GROSS-UP FOR PARTY B. Section 2(d) of this Agreement shall not
apply to Party B and Party B shall not be obligated to gross up any payments to
Party A pursuant thereto.
4
PART 5: OTHER PROVISIONS
(a) SOURCE OF PAYMENT. Notwithstanding any other provisions of this Agreement,
payments due from Party A to Party B are limited to amounts available therefor
under the Credit Support Annex, dated as of June 28, 2006, by and between Party
A and Party B and which may be used for such purpose pursuant to the terms of
such Credit Support Annex.
(b) CONFIRMATIONS. For each Transaction entered into hereunder, Party A and
Party B will execute and deliver a Confirmation. Each Confirmation supplements,
forms part of and will be read and construed as one with this Agreement. Each
Confirmation will relate to one Transaction and will be independent of all other
Confirmations.
(C) WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING ARISING OUT
OF OR RELATING TO THIS AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
(d) TELEPHONIC RECORDING. Each party (i) consents to the recording of the
telephone conversations of trading, marketing and operations personnel of the
parties and their Affiliates in connection with this Agreement or any potential
Transaction, and (ii) agrees to obtain any necessary consent of, and give notice
of such recording to, such personnel of it and its Affiliates.
(e) ELIGIBLE CONTRACT PARTICIPANT. Each party represents to the other party
(which representation will be deemed to be repeated on each date on which a
Transaction is entered into) that it is an "eligible contract participant"
within the meaning of Section 1a(12) of the Commodity Exchange Act.
(f) RELATIONSHIP BETWEEN PARTIES. The following representation shall be
inserted as a new Section 3(g) of this Agreement:
(g) RELATIONSHIP BETWEEN PARTIES. Absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for
that Transaction, each party represents to the other party that:
(i) NON-RELIANCE. It has made its own independent decisions to
enter into that Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment and upon
advice from such advisers as it has deemed necessary. It is not
relying on any communication (written or oral) of the other party
as investment advice or as a recommendation to enter into that
Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to
enter into that Transaction. No communication (written or oral)
received from the other party shall be deemed to be an assurance
or guarantee as to the expected results of that Transaction.
(ii) ASSESSMENT AND UNDERSTANDING. In the case of Party A, it is
capable of assessing the merits of and understanding (on its own
behalf or through independent professional advice), and
understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the
risks of that Transaction.
(iii) STATUS OF PARTIES. In the case of Party A, the other party
is not acting as a fiduciary for or an adviser to it in respect
of that Transaction.
(g) ABSENCE OF LITIGATION. Section 3(c) of this Agreement is amended by
deleting the words "or, to its knowledge, threatened" in the first line thereof.
(h) NO RIGHT OF SET-OFF. There will be no right of set-off exercisable by
either party under this Agreement.
(i) NATURE OF OBLIGATIONS. Party A's obligations under this Agreement are
binding upon and against it, irrespective of any insolvency, bankruptcy,
assignment for the benefit of creditors or readjustment of the debts of, or
other similar events or proceedings affecting, any other Person (including, but
not limited to, any Refinance Entity set forth in any Confirmation or any
Affiliate of such Reference Entity), or any action by any trustee or receiver in
any court in any such proceeding or any allegation of invalidity of this
Agreement in any such proceeding.
5
Accepted and agreed:
CENTERBROOK FINANCIAL LLC, CHARTER MAC ORIGINATION TRUST I,
a Delaware limited liability company a Delaware statutory trust
By: CENTERBROOK HOLDINGS LLC, By: CHARTERMAC CAPITAL LLC,
its managing member its Manager
By: /S/ XXXXX XXXXXX By: /S/ XXXXXX XXXX
---------------- ---------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: President Title: Senior Vice President
CONFIRMATION FOR COLLATERAL SUPPORT SWAP
Date: June 28, 2006
To: CENTERBROOK FINANCIAL LLC
From: CHARTER MAC ORIGINATION TRUST I
RE: Credit Derivative Transaction with Pay-As-You-Go or Physical Settlement
--------------------------------------------------------------------------------
The purpose of this letter (the "Confirmation") is to confirm the
terms and conditions of the Credit Derivative Transaction relating to a certain
tax exempt multifamily housing revenue bond reference obligations entered into
between Charter Mac Origination Trust I ("Party A") and Centerbrook Financial
LLC ("Party B") on the Trade Date specified below (the "Transaction"). This
Confirmation constitutes a "Confirmation" as referred to in the ISDA Master
Agreement specified below.
The definitions and provisions contained in the 2003 ISDA Credit
Derivatives Definitions (the "Credit Derivatives Definitions"), as published by
the International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Credit
Derivatives Definitions and this Confirmation, this Confirmation shall govern.
This Confirmation supplements, forms a part of, and is subject to, the
ISDA Master Agreement, Schedule and Credit Support Annex, each dated as of June
28, 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.
References in this Confirmation to the "Reference Obligation" shall be
to the terms of the Reference Obligation (as defined below) set out in the
Underlying Instruments (as defined below) as amended from time to time unless
otherwise specified below.
The terms of the Transaction to which this Confirmation relates are as follows:
1. GENERAL TERMS:
Trade Date: June 28, 2006
Effective Date: June 28, 2006
Scheduled Termination Date: Sixty days after the last Reference
Obligation Put Date, subject to
adjustment in accordance with the
Following Business Day Convention.
7
Termination Date: The last to occur of:
(a) the last Floating Rate Payer Payment Date;
(b) the last Delivery Date;
(c) the last Additional Fixed Amount Payment Date; and
(d) the Scheduled Termination Date.
Floating Rate Payer: Party A (the "Seller").
Fixed Rate Payer: Party B (the "Buyer").
Calculation Agent: Party A
Calculation Agent City: New York, New York
Business Day: Notwithstanding any provision of the Credit Derivatives
Definitions to the contrary, for purposes of this
Transaction, "Business Day" means any day that is not a
Saturday, Sunday or other day on which commercial banks
in New York City are authorized or required by law to
remain closed.
Business Day Convention: Following (which, with the exception of the Effective
Date, and the period end date of each Fixed Rate Payer
Calculation Period, shall apply to any date referred to
in this Confirmation that falls on a day that is not a
Business Day).
Reference Entities: The Obligor on and Issuer of each Reference Obligation.
Reference Obligations: Each bond or other reference obligation subject to any
"Confirmation" referred to and pursuant to the ISDA
Master Agreement between Party B and Deutsche Bank
National Trust Company dated as of June 16, 2006, 2006,
as amended, supplemented or otherwise modified from
time to time.
Section 2.30 of the Credit Derivatives Definitions will
not apply to this Transaction. If, prior to the
occurrence of a Credit Event, a Reference Obligation
ceases to exist such that no further payments are or
can become due and payable by the Reference Entity in
respect of the Reference Obligation, this Transaction
will terminate as to such Reference Obligation.
Successor: Section 2.1 of the Credit Derivatives Definitions is
hereby modified by deleting the words "or a New Credit
Derivative Transaction as determined pursuant to such
Section 2.2" at the end thereof. Section 2.2 of the
Credit Derivatives Definitions is hereby deleted in its
entirety and the following inserted in place thereof:
"SECTION 2.2 SUCCESSOR. "Successor" means in relation
to the Reference Entity a direct or indirect successor
to the Reference Entity that, without contravening the
provisions of the Reference Obligation, assumes
liability in respect of the Reference Obligation by way
of merger, consolidation, amalgamation, transfer or
otherwise, whether by operation of law or pursuant to
any agreement, as determined by the Calculation Agent
(after consultation with Buyer and Seller)."
8
Reference Price: 100%
Reference Obligation
Payment Date: The date on which scheduled payments of interest on and
principal of a Reference Obligation are due and
payable, including the Reference Obligation Put Date.
Reference Obligation
Notional Amount: On the Effective Date, the Outstanding Principal Amount
of each Reference Obligation.
Following the Effective Date, the Reference Obligation
Notional Amount will be:
(i) decreased on each day on which a Principal Payment
is made by the relevant Principal Payment Amount;
(ii) decreased on the day, if any, on which a Principal
Shortfall occurs by the relevant Principal
Shortfall Amount; and
(iii) decreased on each Delivery Date by an amount
equal to the relevant Exercise Amount;
provided that if the Reference Obligation Notional
Amount would be less than zero, it shall be deemed to
be zero.
Initial Payment: Not applicable
2. FIXED PAYMENTS:
Fixed Rate Payer: Buyer
Fixed Rate Payer
Period End Dates: From and after the Effective Date, each December 1,
without Business Day Convention modification.
Fixed Rate Payer
Payment Dates: From and after the Effective Date, each December 1.
Fixed Amount: With respect to any Fixed Rate Payer Payment Date, an
amount equal to $10,000.
Additional Fixed Amount
Payment Dates: The third day after the occurrence of an Additional
Fixed Payment Event.
Additional Fixed
Payments: Following the occurrence of an Additional Fixed Payment
Event in respect of the Reference Obligation, Buyer
shall pay the relevant Additional Fixed Amount to
Seller on the related Additional Fixed Amount Payment
Date.
Additional Fixed Payment
Event: The occurrence on or after the Effective Date and on or
before the day that is one calendar year after the
later of the Termination or the Scheduled Termination
Date of a Principal Shortfall Reimbursement or an
Interest Shortfall Reimbursement.
Additional Fixed Amount: With respect to each Additional Fixed Amount Payment
Date, an amount equal to the sum of:
(a) the Principal Shortfall Reimbursement Payment
Amount (if any); and
9
(b) the Interest Shortfall Reimbursement Payment Amount
(if any).
3. FLOATING PAYMENTS:
Floating Rate Payer: Seller
Floating Rate Payer
Payment Dates: In relation to a Floating Amount Event, the third
Business Day after delivery of a notice by the
Calculation Agent to the parties or a notice by Buyer
to Seller that the Floating Amount Event has occurred
and the related Floating Amount is due and showing in
reasonable detail how such Floating Amount was
determined.
Floating Payments: If a Floating Amount Event occurs, then on the relevant
Floating Rate Payer Payment Date, Seller will pay the
relevant Floating Amount to Buyer. For the avoidance of
doubt, the Conditions to Settlement are not required to
be satisfied in respect of a Floating Payment.
Floating Amount Event: A Principal Shortfall or an Interest Shortfall.
Floating Amount: With respect to each Floating Rate Payer Payment Date,
an amount equal to the sum of:
(a) the relevant Principal Shortfall Payment Amount (if
any); and
(b) the relevant Interest Shortfall Payment Amount (if
any).
Conditions to
Settlement: Credit Event Notice
Notifying Party: Buyer
Notice of Physical Settlement
Notifying Party: Buyer or Seller
provided that if the Calculation Agent has previously
delivered a notice to the parties or Buyer has
previously delivered a notice to Seller pursuant to the
definition of "Floating Rate Payer Payment Dates" above
in respect of a Floating Amount Event, the only
Condition to Settlement with respect to any Credit
Event shall be a Notice of Physical Settlement.
The parties agree that with respect to the Transaction
and notwithstanding anything to the contrary in the
Credit Derivatives Definitions:
(a) the Conditions to Settlement may be satisfied on
more than one occasion;
(b) multiple Physical Settlement Amounts may be payable
by Seller;
(c) Buyer or Seller, when providing a Notice of
Physical Settlement, must specify an Exercise
Amount;
(d) if Buyer or Seller has delivered a Notice of
Physical Settlement that specifies an Exercise
Amount that is less than the Reference Obligation
10
Notional Amount as of the date on which such
Notice of Physical Settlement is delivered
(calculated as though Physical Settlement in
respect of all previously delivered Notices of
Physical Settlement has occurred in full), the
rights and obligations of the parties under the
Transaction shall continue and Buyer or Seller
may deliver additional Notices of Physical
Settlement with respect to such Reference
Obligation and with respect to the initial Credit
Event or with respect to any additional Credit
Event at any time thereafter;
(e) any Notice of Physical Settlement shall be
delivered no later than 30 calendar days after
the Termination Date nor no later than 30 days
before the Scheduled Termination Date; and
(f) So long as Seller is timely making Floating
Payments with respect to a Reference Obligation,
any Notice of Physical Delivery delivered by Buyer
shall be effective only with the prior written
consent of Seller.
(g) It shall be an additional Condition to Settlement,
for any Settlement initiated by Seller, that Seller
shall have posted either cash or collateral
acceptable to Buyer equal to the Physical
Settlement Amount.
Section 3.2(d) of the Credit Derivatives Definitions is
amended to delete the words "that is effective no later
than thirty calendar days after the Event Determination
Date".
Credit Events: The following Credit Events shall apply to this
Transaction (and the first sentence of Section 4.1 of
the Credit Derivatives Definitions shall be amended
accordingly):
Failure to Pay:
Payment Requirement: U.S. $1.00 (one U.S. dollar)
Obligation Acceleration:
Default Requirement: U.S. $1.00 (one U.S. dollar)
Bankruptcy
Obligation: Reference Obligation Only
4. INTEREST SHORTFALL
Interest Shortfall
Payment Amount: In respect of an Interest Shortfall, the relevant
Interest Shortfall Amount; provided that, if Interest
Shortfall Cap is applicable and the Interest Shortfall
Amount exceeds the Interest Shortfall Cap Amount, the
Interest Shortfall Payment Amount in respect of such
Interest Shortfall shall be the Interest Shortfall Cap
Amount.
Interest Shortfall Cap: Not Applicable
Actual Interest Amount: With respect to any Reference Obligation Payment Date,
payment by or on behalf of a Reference Entity of an
amount in respect of interest due under the Reference
Obligation (including, without limitation, any deferred
interest or defaulted interest but excluding payments
in respect of prepayment penalties, yield maintenance
provisions or principal, except that the Actual
11
Interest Amount shall include any payment of principal
representing capitalized interest) to the holder(s) of
the Reference Obligation in respect of the Reference
Obligation.
Expected Interest
Amount: With respect to any Reference Obligation Payment Date,
the amount of current interest (including capitalized
interest) that would accrue during the related
Reference Obligation Calculation Period calculated
using the Reference Obligation Coupon on the
Outstanding Principal Amount of the Reference
Obligation and that will be payable on the related
Reference Obligation Payment Date assuming for this
purpose that sufficient funds are available therefor in
accordance with the Underlying Instruments. The
Expected Interest Amount shall be determined without
regard to (i) unpaid amounts in respect of accrued
interest on prior Reference Obligation Payment Dates,
or (ii) any prepayment penalties or yield maintenance
provisions.
Interest Shortfall: With respect to any Reference Obligation Payment Date,
either (a) the non-payment of an Expected Interest
Amount or (b) the payment of an Actual Interest Amount
that is less than the Expected Interest Amount.
Interest Shortfall
Amount: With respect to any Reference Obligation Payment Date,
an amount equal to the greater of:
(a) zero; and
(b) the amount equal to:
(i) the Expected Interest Amount;
minus
(ii) the Actual Interest Amount; and
Interest Shortfall
Reimbursement: With respect to any Reference Obligation Payment Date,
the payment by or on behalf of a Reference Entity of an
Actual Interest Amount in respect of the Reference
Obligation that is greater than the Expected Interest
Amount which represents payment of a past due Expected
Interest Amount.
Interest Shortfall
Reimbursement Amount: With respect to any Reference Obligation Payment Date
the amount of any Interest Shortfall Reimbursement on
such day.
Interest Shortfall
Reimbursement Payment
Amount: If Interest Shortfall Cap is not applicable, the
relevant Interest Shortfall Reimbursement Amount. If
Interest Shortfall Cap is applicable, the amount
determined pursuant to the Interest Shortfall Cap
Annex.
12
5. PRINCIPAL SHORTFALL
Principal Shortfall
Payment Amount: In respect of a Principal Shortfall, the relevant
Principal Shortfall Amount.
Actual Principal Amount: With respect to any Reference Obligation Payment Date,
payment by or on behalf of a Reference Entity of an
amount in respect of principal due under the Reference
Obligation (including, without limitation, any deferred
principal or defaulted principal and the principal
component of the purchase price of a Reference
Obligation on a Reference Obligation Put Date, but
excluding payments in respect of prepayment penalties,
yield maintenance provisions or interest, except that
the Actual Principal Amount shall exclude any payment
of principal representing capitalized interest) to the
holder(s) of the Reference Obligation in respect of the
Reference Obligation.
Expected Principal
Amount: With respect to any Reference Obligation Payment Date,
the amount of current principal that this is due and
payable on the related Reference Obligation Payment
Date assuming for this purpose that sufficient funds
are available therefor in accordance with the
Underlying Instruments. For avoidance of doubt, the
payment of the principal component of the purchase
price of a Reference Obligation on the Reference
Obligation Put Date is an Expected Principal Amount.
The Expected Principal Amount shall be determined
without regard to (i) unpaid amounts in respect of
principal due on prior Reference Obligation Payment
Dates, or (ii) any prepayment penalties, yield
maintenance provisions or unpaid interest, whether
capitalized or not.
Principal Shortfall: With respect to any Reference Obligation Payment Date,
either (a) the non-payment of an Expected Principal
Amount or (b) the payment of an Actual Principal Amount
that is less than the Expected Principal Amount.
Principal Shortfall
Amount: With respect to any Reference Obligation Payment Date,
an amount equal to the greater of:
(a) zero; and
(b) the amount equal to:
(i) the Expected Principal Amount;
minus
(ii) the Actual Principal Amount; and
Principal Shortfall
Reimbursement: With respect to any Reference Obligation Payment Date,
the payment by or on behalf of a Reference Entity of an
Actual Principal Amount in respect of the Reference
Obligation that is greater than the Expected Principal
Amount which represents payment of a past due Expected
Principal Amount.
Principal Shortfall
Reimbursement Amount: With respect to any Reference Obligation Payment Date
the amount of any Principal Shortfall Reimbursement on
such day.
Principal Shortfall
Reimbursement Payment
Amount: The relevant Principal Shortfall Reimbursement Amount.
13
6. SETTLEMENT TERMS
Settlement Method: Physical Settlement
Terms Relating to
Physical Settlement:
Physical Settlement
Period: Ten Business Days
Deliverable Obligations: Include Accrued Interest
Deliverable Obligations: Deliverable Obligation Category: Reference Obligation
Only
Physical Settlement
Amount: An amount equal to the product of the Exercise Amount
and the Reference Price.
Escrow: Applicable
Non-delivery by Buyer: If Buyer has delivered a Notice of Physical Settlement
and Buyer does not Deliver in full the Deliverable
Obligations specified in that Notice of Physical
Settlement on or prior to the Physical Settlement Date
then such Notice of Physical Settlement shall be deemed
not to have been delivered and any reference in this
Confirmation to a previously delivered Notice of
Physical Settlement shall exclude any Notice of
Physical Settlement that is deemed not to have been
delivered. Sections 9.2(c)(ii) (except for the first
sentence thereof), 9.4, 9.5, 9.6, 9.9 and 9.10 of the
Credit Derivatives Definitions shall not apply.
7. ADDITIONAL PROVISIONS
The Calculation Agent shall be responsible for determining and calculating
(i) the Fixed Amount payable on each Fixed Rate Payer Payment Date; (ii)
the occurrence of a Floating Amount Event and the related Floating Amount
and (iii) the occurrence of an Additional Fixed Payment Event and the
related Additional Fixed Amount; provided that notwithstanding the above,
each of Buyer and Seller shall be entitled to determine and calculate the
above amounts to the extent that Buyer or Seller, as applicable, has the
right to deliver a notice to the other party demanding payment of such
amount. The Calculation Agent or Buyer or Seller, as applicable, shall make
such determinations and calculations reasonably and in good faith. The
Calculation Agent or Buyer or Seller, as applicable, shall, as soon as
practicable after making any of the determinations or calculations
specified above, notify the parties or the other party, as applicable, of
such determinations and calculations.
8. OFFICES:
The Office of Seller for this Transaction is: Charter Mac Origination Trust I
000 Xxxxxxx Xxxxxx, Xxxxx Xxxxx
Xxx Xxxx, XX 00000
The Office of Buyer for this Transaction is: Centerbrook Financial LLC
000 Xxxxxxx Xxxxxx
0xx Xxxxx
Xxx Xxxx, XX 00000
14
9. NOTICE AND ACCOUNT DETAILS:
Telephone, Telex and/or
Facsimile Numbers and
Contact Details for Notices:
Buyer: Xxxxxx X. Xxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Seller: Xxxxx X. Xxxxxx
Phone: (000) 000-0000
Fax: (000) 000-0000
Account Details:
Account Details of Buyer: Deutsche Bank
ABA #000-000-000
A/C #00-000-000
Attention: Xxxxxx Xxxxxxxxx
Re: (Charter Mac Origination Trust)
Account Details of Seller: Deutsche Bank
ABA #000-000-000
A/C #00-000-000
Attention: Xxxxxx Xxxxxxxxx
Re: (Centerbrook Financial)
10. ADDITIONAL DEFINITIONS AND AMENDMENTS TO THE CREDIT DERIVATIVES DEFINITIONS
(a) References in Sections 4.1, 8.2, 9.1 and 9.2(a) of the Credit Derivatives
Definitions as well as Section 3(a)(iv) of the form of Novation Agreement
set forth in Exhibit E to the Credit Derivatives Definitions to the
Reference Entity shall be deemed to be references to both the Reference
Entity and the Insurer in respect of the Reference Policy, if applicable.
(b) (i) The definition of "Physical Settlement" in Section 8.1 of the
Credit Derivatives Definitions shall be amended by (i) deleting the
words "Physical Settlement Amount" from the last line of the second
paragraph thereof and (ii) inserting in lieu thereof the words
"Exercise Amount".
(ii) The definition of "Physical Settlement Date" in Section 8.4 of the
Credit Derivatives Definitions shall be amended by deleting the last
sentence thereof.
(c) For the purposes of this Transaction only, the following terms have the
meanings given below:
"Exercise Amount" means, for purposes of the Transaction, an amount to
which a Notice of Physical Settlement relates equal to the product of (i)
the Outstanding Principal Amount of the Reference Obligation to be
Delivered by Buyer to Seller on the applicable Physical Settlement Date;
and (ii) the Reference Price, plus any unpaid interest accrued to but not
including the Physical Settlement Date.
"Issuer" means the government or governmental agency or authority that
issued a Reference Obligation.
"Obligor" means the entity or person actually obligated pursuant to the
Underlying Instruments to make the payments of the interest on and
principal of a Reference Obligation.
"Outstanding Principal Amount" means, as of any date of determination with
respect to the Reference Obligation, the outstanding principal balance of
the Reference Obligation as of such date, which shall take into account:
(i) all payments of principal;
15
(ii) all writedowns or applied losses (however described in the Underlying
Instruments) resulting in a reduction in the outstanding principal
balance of the Reference Obligation (other than as a result of a
scheduled or unscheduled payment of principal);
(iii) forgiveness of any amount by the holders of the Reference Obligation
pursuant to an amendment to the Underlying Instruments resulting in a
reduction in the outstanding principal balance of the Reference
Obligation;
(iv) any payments reducing the amount of any reductions described in (ii)
and (iii) of this definition; and
(v) any increase in the outstanding principal balance of the Reference
Obligation that reflects a reversal of any prior reductions described
in (ii) and (iii) of this definition.
"Reference Obligation Calculation Period" means, with respect to each
Reference Obligation Payment Date, a period corresponding to the interest
accrual period relating to such Reference Obligation Payment Date pursuant
to the Underlying Instruments.
"Reference Obligation Coupon" means the periodic interest rate applied in
relation to each Reference Obligation Calculation Period on the related
Reference Obligation Payment Date, as determined in accordance with the
terms of the Underlying Instruments as at the Effective Date, without
regard to any subsequent amendment.
"Reference Obligation Put Date" means the date on which the holder of a
Reference Obligation has the right pursuant to the Underlying Instruments
to elect to call such Reference Obligation for mandatory redemption at a
price equal to par (i.e. 100%) plus accrued interest.
"Underlying Instruments" means the indenture, trust agreement, loan
agreement or other relevant agreement(s) setting forth the terms of the
Reference Obligation.
Please confirm your agreement to be bound by the terms of the foregoing by
executing a copy of this Confirmation and returning it to us by facsimile.
16
(BILATERAL FORM)
Yours sincerely,
CHARTER MAC ORIGINATION TRUST I
By: CHARTERMAC CAPITAL LLC
By: /S/ XXXXXX XXXX
---------------
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
Confirmed as of the date first above written:
CENTERBROOK FINANCIAL LLC
By: CENTERBROOK HOLDINGS LLC,
its managing member
By: /S/ XXXXX XXXXXX
----------------
Name: Xxxxx X. Xxxxxx
Title: President
ISDA(R)
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
CREDIT SUPPORT ANNEX
TO THE SCHEDULE TO THE
ISDA MASTER AGREEMENT
DATED AS OF JUNE 28, 2006
BETWEEN
CHARTER MAC ORIGINATION TRUST I AND CENTERBROOK FINANCIAL LLC
("PARTY A") ("PARTY B")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows: -
PARAGRAPH 1. INTERPRETATION
(a) DEFINITIONS AND INCONSISTENCY. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail, and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) SECURED PARTY AND PLEDGOR. All references in this Annex to the "Secured
Party" will be to either party when acting in that capacity and all
corresponding references to the "Pledgor" will be to the other party when acting
in that capacity; PROVIDED, HOWEVER, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
with respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
PARAGRAPH 2. SECURITY INTEREST
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without any further action by
either party.
PARAGRAPH 3. CREDIT SUPPORT OBLIGATIONS
(a) DELIVERY AMOUNT. Subject to Paragraphs 4 and 5, upon demand made by the
Secured Party on or promptly following a Valuation Date, if the Delivery Amount
for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer Amount,
then the Pledgor will Transfer to the Secured Party Eligible Credit Support
having a Value as of the date of Transfer at least equal to the applicable
Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise specified
in Paragraph 13, the "DELIVERY AMOUNT" applicable to the Pledgor for any
Valuation Date will equal the amount by which:
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party.
(b) RETURN AMOUNT. Subject to Paragraphs 4 and 5, upon a demand made by the
Pledgor on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds Secured Party's Minimum Transfer Amount, then
the Secured Party will Transfer to the Pledgor Posted Credit Support specified
by the Pledgor in that demand having a Value as of the date of Transfer as close
as practicable to the applicable Return Amount (rounded pursuant to Paragraph
13). Unless otherwise specified in Paragraph 13, the "RETURN AMOUNT" applicable
to the Secured Party for any Valuation Date will equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit Support held
by the Secured Party
exceeds
(ii) the Credit Support Amount.
"CREDIT SUPPORT AMOUNT" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; PROVIDED, HOWEVER, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
PARAGRAPH 4. CONDITIONS PRECEDENT, TRANSFER TIMING, CALCULATIONS AND
SUBSTITUTIONS
(a) CONDITIONS PRECEDENT. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and
6(d) is subject to the conditions precedent that:
(i) no Event of Default, Potential Event of Default or Specified Condition
has occurred and is continuing with respect to the other party; and
(ii) no Early Termination Date for which any unsatisfied payment
obligations exist has occurred or been designated as the result of an Event
of Default or Specified Condition with respect to the other party.
(b) TRANSFER TIMING. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the next Local Business Day; if
a demand is made after the Notification Time, then the relevant Transfer will be
made not later than the close of business on the second Local Business Day
thereafter.
(c) CALCULATIONS. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time. The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
2
(d) SUBSTITUTIONS.
(i) Unless otherwise specified in Paragraph 13, upon notice to the Secured
Party specifying the items of Posted Credit Support to be exchanged, the
Pledgor may, on any Local Business Day, Transfer to the Secured Party
substitute Eligible Credit Support (the "Substitute Credit Support"); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer to the
Pledgor the items of Posted Credit Support specified by the Pledgor in its
notice not later than the Local Business Day following the date on which
the Secured Party receives the Substitute Credit Support, unless otherwise
specified in Paragraph 13 (the "Substitution Date"); PROVIDED that the
Secured Party will only be obligated to Transfer Posted Credit Support with
a Value as of the date of Transfer of that Posted Credit Support equal to
the Value as of that date of the Substitute Credit Support.
PARAGRAPH 5. DISPUTE RESOLUTION
If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in case of
(I) above or (Y) the date of Transfer in the case of (II) above, (2) subject to
Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the
other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above, (3) the parties
will consult with each other in an attempt to resolve the dispute and (4) if
they fail to resolve the dispute by the Resolution Time, then:
(i) In the case of a dispute involving a Delivery Amount or Return Amount,
unless otherwise specified in Paragraph 13, the Valuation Agent will
recalculate the Exposure and the Value as of the Recalculation Date by:
(A) utilizing any calculations of Exposure for the Transactions (or
Swap Transactions) that the parties have agreed are not in dispute;
(B) calculating the Exposure for the Transactions (or Swap
Transactions) in dispute by seeking four actual quotations at
mid-market from Reference Market-makers for purposes of calculating
Market Quotation, and taking the arithmetic average of those obtained;
PROVIDED that if four quotations are not available for a particular
Transaction (or Swap Transaction), then fewer than four quotations may
be used for that Transaction (or Swap Transaction); and if no
quotations are available for a particular Transaction (or Swap
Transaction), then the Valuation Agent's original calculations will be
used for that Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13 for
calculating the Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer of
Eligible Credit Support or Posted Credit Support the Valuation Agent will
recalculate the Value as of the date of Transfer pursuant to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
PARAGRAPH 6. HOLDING AND USING POSTED COLLATERAL
(a) CARE OF POSTED COLLATERAL. Without limiting the Secured Party's rights under
Paragraph 6(c), the Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law,
and in any event the Secured Party will be deemed to have exercised reasonable
care if it exercises at least the same degree of care as it would exercise with
respect to its own property. Except as specified in the preceding sentence, the
Secured Party will have no duty with respect to Posted Collateral, including,
without limitation, any duty to collect any Distributions, or enforce or
preserve any rights pertaining thereto.
3
(b) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS.
(i) GENERAL. Subject to the satisfaction of any conditions specified in
Paragraph 13 for holding Posted Collateral, the Secured Party will be
entitled to hold Posted Collateral or to appoint an agent (a "Custodian")
to hold Posted Collateral for the Secured Party. Upon notice by the Secured
Party to the Pledgor of the appointment of a Custodian, the Pledgor's
obligations to make any Transfer will be discharged by making the Transfer
to that Custodian. The holding of Posted Collateral by a Custodian will be
deemed to be the holding of that Posted Collateral by the Secured Party for
which the Custodian is acting.
(ii) FAILURE TO SATISFY CONDITIONS. If the Secured Party or its Custodian
fails to satisfy conditions for holding Posted Collateral, then upon a
demand made by the Pledgor, the Secured Party will, not later than five
Local Business Days after the demand, Transfer or cause its Custodian to
Transfer all Posted Collateral held by it to a Custodian that satisfies
those conditions or to the Secured Party if it satisfies those conditions.
(iii) LIABILITY. The Secured Party will be liable for the acts or omissions
of its Custodian to the same extent that the Secured Party would be liable
hereunder for its own acts or omissions.
(c) USE OF POSTED COLLATERAL. Unless otherwise specified in Paragraph 13 and
without limiting the rights and obligations of the parties under Paragraphs 3,
4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or an
Affected Party with respect to a Specified Condition and no Early Termination
Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then the Secured Party
will, notwithstanding Section 9-207 of the New York Uniform Commercial Code,
have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use, commingle or
otherwise dispose of, or otherwise use in its business any Posted
Collateral it holds, free from any claim or right of any nature whatsoever
of the Pledgor, including any equity or right of redemption by the Pledgor;
and
(ii) register any Posted Collateral in the name of the Secured Party, its
Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraphs 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any Posted
Collateral pursuant to (i) or (ii) above.
(d) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) DISTRIBUTIONS. Subject to Paragraph 4(a), if the Secured Party
receives or is deemed to receive Distributions on a Local Business Day, it
will Transfer to the Pledgor not later than the following Local Business
Day any Distributions it receives or is deemed to receive to the extent
that a Delivery Amount would not be created or increased by that Transfer,
as calculated by the Valuation Agent (and the date of calculation will be
deemed to be a Valuation Date for this purpose).
(ii) INTEREST AMOUNT. Unless otherwise specified in Paragraph 13 and
subject to Paragraph 4(a), in lieu of any interest, dividends or other
amounts paid or deemed to have been paid with respect to Posted Collateral
in the form of Cash (all of which may be retained by the Secured Party),
the Secured Party will Transfer to the Pledgor at the times specified in
Paragraph 13 the Interest Amount to the extent that a Delivery Amount would
not be created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be a
Valuation Date for this purpose). The Interest Amount or portion thereof
not Transferred pursuant to this Paragraph will constitute Posted
Collateral in the form of Cash and will be subject to the security interest
granted under Paragraph 2.
PARAGRAPH 7. EVENTS OF DEFAULT
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to make, when due,
any Transfer of Eligible Collateral, Posted Collateral or the Interest
Amount, as applicable, required to be made by it and that failure continues
for two Local Business Days after notice of that failure is given to that
party;
4
(ii) that party fails to comply with any restriction or prohibition
specified in this Annex with respect to any of the rights specified in
Paragraph 6(c) and that failure continues for five Local Business Days
after notice of that failure is given to that party; or
(iii) that party fails to comply with or perform any agreement or
obligation other than those specified in Paragraphs 7(i) and 7(ii) and that
failure continues for 30 days after notice of that failure is given to that
party.
PARAGRAPH 8. CERTAIN RIGHTS AND REMEDIES
(a) SECURED PARTY'S RIGHTS AND REMEDIES. If at any time (1) an Event of Default
or Specified Condition with respect to the Pledgor has occurred and is
continuing or (2) an Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights
and remedies:
(i) all rights and remedies available to a secured party under applicable
law with respect to Posted Collateral held by the Secured Party;
(ii) any other rights and remedies available to the Secured Party under the
terms of Other Posted Support, if any;
(iii) the right to Set-off any amounts payable by the Pledgor with respect
to any Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation of the
Secured Party to Transfer that Posted Collateral); and
(iv) the right to liquidate any Posted Collateral held by the Secured Party
through one or more public or private sales or other dispositions with such
notice, if any, as may be required under applicable law, free from any
claim or right of any nature whatsoever of the Pledgor, including any
equity or right of redemption by the Pledgor (with the Secured Party having
the right to purchase any or all of the Posted Collateral to be sold) and
to apply the proceeds (or the Cash equivalent thereof) from the liquidation
of the Posted Collateral to any amounts payable by the Pledgor with respect
to any Obligations in that order as the Secured Party may elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
(b) PLEDGOR'S RIGHTS AND REMEDIES. If at any time an Early Termination Date has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the Secured Party, then (except in the case of an
Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available to a
Pledgor under applicable law with respect to Posted Collateral held by the
Secured Party;
(ii) the Pledgor may exercise any other rights and remedies available to
the Pledgor under the terms of Other Posted Support, if any;
(iii) the Secured Party will be obligated immediately to Transfer all
Posted Collateral and the Interest Amount to the Pledgor; and
(iv) to the extent that Posted Collateral or the Interest Amount is not so
Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect to any
Obligations against any Posted Collateral or the Cash equivalent of
any Posted Collateral held by the Secured Party (or any obligation of
the Secured Party to Transfer that Posted Collateral); and
(B) to the extent that the Pledgor does not Set-off under (iv)(A)
above, withhold payment of any remaining amounts payable by the
Pledgor with respect to any Obligations, up to the Value of any
remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.
5
(c) DEFICIENCIES AND EXCESS PROCEEDS. The Secured Party will Transfer to the
Pledgor any proceeds and Posted Credit Support remaining after liquidation,
Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in
full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) FINAL RETURNS. When no amounts are or thereafter may become payable by the
Pledgor with respect to any Obligations (except for any potential liability
under Section 2(d) of this Agreement), the Secured Party will Transfer to the
Pledgor all Posted Credit Support and the Interest Amount, if any.
PARAGRAPH 9. REPRESENTATIONS
Each party represents to the other party (which representation will be deemed to
be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on any
Eligible Collateral it Transfers as the Pledgor and has taken all necessary
actions to authorize the granting of that security interest and lien;
(ii) it is the sole owner of or otherwise has the right to Transfer all
Eligible Collateral it Transfers to the Secured Party hereunder, free and
clear of any security interest, lien, encumbrance or other restrictions
other than the security interest and lien granted under Paragraph 2;
(iii) upon the Transfer of any Eligible Collateral to the Secured Party
under the terms of this Annex, the Secured Party will have a valid and
perfected first priority security interest therein (assuming that any
central clearing corporation or any third-party financial intermediary or
other entity not within the control of the Pledgor involved in the Transfer
of that Eligible Collateral gives the notices and takes the action required
of it under applicable law for perfection of that interest); and
(iv) the performance by it of its obligations under this Annex will not
result in the creation of any security interest, lien or other encumbrance
on any Posted Collateral other than the security interest and lien granted
under Paragraph 2.
PARAGRAPH 10. EXPENSES
(a) GENERAL. Except as otherwise provided in Paragraphs 10(b) and 10(c), each
party will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.
(b) POSTED CREDIT SUPPORT. The Pledgor will promptly pay when due all taxes,
assessments or charges of any nature that are imposed with respect to Posted
Credit support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of that Posted Credit Support is subsequently
disposed of under Paragraph 6(c), except for those taxes, assessments and
charges that result from the exercise of the Secured Party's rights under
Paragraph 6(c).
(c) LIQUIDATION/APPLICATION OF POSTED CREDIT SUPPORT. All reasonable costs and
expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no Defaulting
Party, equally by the parties.
PARAGRAPH 11. MISCELLANEOUS
(a) DEFAULT INTEREST. A Secured Party that fails to make, when due, any
Transfer of Posted Collateral or the Interest Amount will be obliged to pay the
Pledgor (to the extent permitted under applicable law) an amount equal to
interest at the Default Rate multiplied by the Value of the items of property
that were required to be Transferred, from (and including) the date that the
Posted Collateral or Interest Amount was required to be Transferred to (but
excluding) the date of Transfer of that Posted Collateral or Interest Amount.
This interest will be calculated on the basis of daily compounding and the
actual number of days elapsed.
(b) FURTHER ASSURANCES. Promptly following a demand made by a party, the other
party will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest or lien granted under Paragraph 2, to enable that
6
party to exercise or enforce its rights under this Annex with respect to Posted
Credit Support or an Interest Amount or to effect or document a release of a
security interest on Posted Collateral or an Interest Amount.
(c) FURTHER PROTECTION. The Pledgor will promptly give notice to the Secured
Party of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that
suit, action, proceeding or lien results from the exercise of the Secured
Party's rights under Paragraph 6(c).
(d) GOOD FAITH AND COMMERCIALLY REASONABLE MANNER. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(e) DEMANDS AND NOTICES. All demands and notices given by a party under this
Annex will be made as specified in the Notices Section of this Agreement, except
as otherwise provided in Paragraph 13.
(f) SPECIFICATIONS OF CERTAIN MATTERS. Anything referred to in this Annex as
being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
PARAGRAPH 12. DEFINITIONS
As used in this Annex:--
"CASH" means the lawful currency of the United States of America.
"CREDIT SUPPORT AMOUNT" has the meaning specified in Paragraph 3.
"CUSTODIAN" has the meaning specified in Paragraphs 6(b)(i) and 13.
"DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a).
"DISPUTING PARTY" has the meaning specified in Paragraph 5.
"DISTRIBUTIONS" means, with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
"ELIGIBLE COLLATERAL" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"ELIGIBLE CREDIT SUPPORT" means Eligible Collateral and Other Eligible Support.
"EXPOSURE" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; PROVIDED that Market
Quotation will be determined by the Valuation Agent using its estimates at
mid-market of the amounts that would be paid for Replacement Transactions (as
that term is defined in the definition of "Market Quotation").
"INDEPENDENT AMOUNT" means, with respect to party, the amount specified as such
for that party in Paragraph 13; if no amount is specified, zero.
"INTEREST AMOUNT" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:
(x) the amount of Cash on that day; multiplied by
7
(y) the Interest Rate in effect for that day; divided by
(z) 360.
"INTEREST PERIOD" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
"INTEREST RATE" means the rate specified in Paragraph 13.
"LOCAL BUSINESS DAY," unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.
"MINIMUM TRANSFER AMOUNT" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
"NOTIFICATION TIME" has the meaning specified in Paragraph 13.
"OBLIGATIONS" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.
"OTHER ELIGIBLE SUPPORT" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"OTHER POSTED SUPPORT" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
"PLEDGOR" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
"POSTED COLLATERAL" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or released by the
Secured Party under Paragraph 8. Any Interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.
"POSTED CREDIT SUPPORT" means Posted Collateral and Other Posted Support.
"RECALCULATION DATE" means the Valuation Date that gives rise to the dispute
under Paragraph 5; PROVIDED, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.
"RESOLUTION TIME" has the meaning specified in Paragraph 13.
"RETURN AMOUNT" has the meaning specified in Paragraph 3(b).
"SECURED PARTY" means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
"SPECIFIED CONDITION" means, with respect to a party, any event specified as
such for that party in Paragraph 13.
"SUBSTITUTE CREDIT SUPPORT" has the meaning specified in Paragraph 4(d)(i).
"SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).
"THRESHOLD" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
8
"TRANSFER" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into one or
more bank accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid or
delivered by book-entry, payment or delivery in appropriate physical form
to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and any
other documents necessary to constitute a legally valid transfer to the
recipient;
(iii) in the case of securities that can be paid or delivered in
book-entry, the giving of written instruments to the relevant depository
institution or other entity specified by the recipient, together with a
written copy thereof to the recipient, sufficient if complied with to
result in a legally effective transfer of the relevant interest to the
recipient; and
(iv) in the case of Other Eligible Support or Other Posted Support, as
specified in Paragraph 13.
"VALUATION AGENT" has the meaning specified in Paragraph 13.
"VALUATION DATE" means each date specified in or otherwise determined pursuant
to Paragraph 13.
"VALUATION PERCENTAGE" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
"VALUATION TIME" has the meaning specified in Paragraph 13.
"VALUE" means for any Valuation Date or other date for which Value is
calculated, and subject to Paragraph 5 in the case of a dispute, with respect
to:
(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent
multiplied by the applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified as
Eligible Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified in
Paragraph 13.
9
CENTERBROOK FINANCIAL LLC, CHARTER MAC ORIGINATION TRUST I,
a Delaware limited liability company a Delaware statutory trust
By: CENTERBROOK HOLDINGS LLC, By: CHARTERMAC CAPITAL LLC,
its managing member its Manager
By: /S/ XXXXX XXXXXX By: /S/ XXXXXX XXXX
---------------- ---------------
Name: Xxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: President Title: Senior Vice President
PARAGRAPH 13 OF THE ISDA CREDIT SUPPORT ANNEX
PARAGRAPH 13. ELECTIONS AND VARIABLES
(a) SECURITY INTEREST FOR "OBLIGATIONS." The term "OBLIGATIONS" as
used in this Annex includes the following additional obligations: Not
Applicable.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "DELIVERY AMOUNT": Not applicable.
(B) "RETURN AMOUNT": Not applicable.
(C) "CREDIT SUPPORT AMOUNT": means the bonds listed on
Schedule I hereto and any bonds substituted therefor pursuant to
Paragraph 13(e).
(D) "EXPOSURE": Not applicable
(ii) ELIGIBLE Collateral: The bonds listed on Schedule I hereto
and any Multi-Family Revenue Bonds (as defined in the Operating
Agreement of Party B) that satisfy at the time of substitution thereof
the applicable Eligibility Criteria (as defined in said Operating
Agreement) (collectively, "Bonds") substituted therefor pursuant to
Paragraph 13(e) and cash.
(iii) OTHER ELIGIBLE SUPPORT. "OTHER ELIGIBLE SUPPORT" shall not
apply to Party B and Party A.
(iv) Thresholds: Not applicable.
(c) Valuation and Timing: Not applicable.
(d) Conditions Precedent and Secured Party's Rights and Remedies. The
following Termination Event(s) will be a "Specified Condition" for Party A
and Party B:
Illegality [X]
(e) Substitution. Notwithstanding any other provision of this Credit
Support Annex, Party A may substitute Bonds at any time provided that the
requirements of Paragraph 13(m)(iv) shall have been met.
(f) Dispute Resolution: Not applicable.
(g) Holding and Using Posted Collateral.
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS. Party B
and its Custodian will be entitled to hold Posted Collateral pursuant
to Paragraph 6(b).
Custodian: The Custodian is Party B, Deutsche Bank National Trust Company or a
bank or trust company located in the State of New York having total assets of at
least $10,000,000,000.
(ii) USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c)
will not apply to Party B with respect to Posted Collateral.
(h) Interest Amount: Not Applicable
(i) Alternative to Interest Amount. Not Applicable.
2
(i) Additional Representation(s). Not Applicable.
(j) Distributions: Section 6(d)(i) is amended and restated in its
entirety as follows: "Subject to Paragraph 4(a), all Distributions shall be
deposited into a separate account at the Custodian (the "Collateral
Distribution Account") in the name of Party A that will be pledged to Party
B. Party B will direct the Transfer of Distributions to Party A not later
than the Local Business Day following the Floating Rate Payer Amount Date
(as defined in Confirmation No. 001) that immediately follows the date on
which such Distributions are deposited into the Collateral Distributions
Account; provided that, prior to the Transfer of any Distributions, the
Minimum Capital Requirement (as defined in the Operating Agreement of Party
B) is met, after giving effect to any such Transfer, as determined by the
Capital Model (as defined in the Operating Agreement of Party B).
(k) DEMANDS AND NOTICES. All demands, specifications and notices under
this Annex will be made pursuant to the Notices Section of this Agreement,
unless otherwise specified here:
Party B: Same as Notices Section
Party A: Same as Notices Section
(l) Addresses for Transfers. To be advised.
(m) Other Provisions.
(i) AGREEMENT AS TO SINGLE SECURED PARTY AND PLEDGOR. Party B and
Party A agree that, notwithstanding anything to the contrary in the
recital to this Annex, Paragraph (1)(b) or Paragraph 2 or the
definitions in Paragraph 12, (A) the term "Secured Party" as used in
this Annex means only Party B, (B) the term "Pledgor" as used in this
Annex means only Party A, and (C) only Party A makes the pledge and
grant in Paragraph 2, the acknowledgment in the final sentence of
Paragraph 8(a) and the representations in Paragraph 9. Party B and
Party A further agree that, notwithstanding anything to the contrary
in the recital to this Annex or Paragraph 7, this Annex will be
considered a Credit Support Document only with respect to Party A.
(ii) The definition of "POSTED COLLATERAL" in this Annex shall
also include any and all accounts in which Cash Collateral is held.
(iii) "INDEPENDENT AMOUNT": Not applicable.
(iv) Release of Posted Collateral. Notwithstanding any other
provision of this Credit Support Annex, Bonds and any other Posted
Collateral shall only be released to Party A if the Minimum Capital
Requirement (as defined in the Operating Agreement of Party B) is met
after given effect to any such release as determined by the Capital
Model (as defined in said Operating Agreement). The timing and manner
of any such release (including without limitation any notices relating
thereto) shall be mutually agreed between Party A and Party B.
(v) The definition of "Distributions" is amended by deleting the
phrase "other than Cash" in line 1 thereof and by deleting the second
sentence thereof in its entirety.
SECTION 2. COUNTERPARTS.
This Amendment may be signed in any number of counterpart copies, but all
such copies shall constitute one and the same instrument.
SECTION 3. REPRESENTATIONS.
Each party hereto hereby represents and warrants to the other that this
Amendment has been duly authorized and validly executed by it and that the Swap
Agreement as hereby amended constitutes a valid obligation enforceable in
accordance with its terms.
3
[Signature page to Paragraph 13 of the ISDA Credit Support Annex]
Please confirm your agreement to be bound by the terms of the foregoing
by executing the copy of this Credit Support Annex enclosed for that purpose and
returning it to us.
Very truly yours,
CHARTER MAC ORIGINATION TRUST I
By: CHARTERMAC CAPITAL LLC,
its Manager
By: /S/ XXXXXX XXXX
---------------
Name: Xxxxxx X. Xxxx
Title: Senior Vice President
CENTERBROOK FINANCIAL LLC, as Secured Party
By: CENTERBROOK HOLDINGS LLC,
its managing member
By: /S/ XXXXX XXXXXX
----------------
Name: Xxxxx X. Xxxxxx
Title: President
ISDA Master Swap Agreement/Centerbrook Financial LLC
SCHEDULE I
TO PARAGRAPH 13 OF THE ISDA CREDIT SUPPORT ANNEX
XxXxxxxx Housing Finance Corporation Multifamily Housing Revenue Bonds
(Cedar Creek Village Apartments Project) Series 1986
Pulaski County, Arkansas Public Facilities Board
Multifamily Housing Revenue Bonds
(Chapel Ridge of Little Rock Project) Series 1999
Arkansas Development Finance Authority Multifamily Housing Revenue Bonds
(Chapel Ridge of Texarkana Project) Series 1999G
Housing Authority of the County of Wake Multifamily Housing Revenue Bonds
(Forest Hills Apartments Project) Series 1998
Xxxxxx County Improvement Authority Multifamily Housing Revenue Bonds
(Xxxxxxxx Garden Apartments Project) Series 1999
Xxxxx County, Indiana Multifamily Housing Revenue Bonds
(Inverness Centre Apartments Project) Series 2002A
Housing Authority of the City of Athens, Georgia
Multifamily Housing Revenue Bonds
(Oak Hill Apartments Project) Series 2002
Austin Housing Finance Corporation Multifamily Housing Revenue Bonds
(Arbors at Creekside Project) Series 0000
Xxxxxxxx xx Xxxxxxxx Housing Finance Agency Multifamily Housing Revenue Bonds
(Barnaby Manor Apartments Project) Series 0000
Xxx Xxxxxxxxx Xxxxx Housing Finance Corporation
Multifamily Housing Revenue Bonds
(Bay Colony Apartments) Series 2000
The Industrial Development Board of the Metropolitan Government of Nashville
and Davidson County Multifamily Housing Revenue Refunding Bonds
(Cedar Pointe Project) Series 0000
Xxxxxxxxxx Xxxxxxxxx Communities Development Authority
Multifamily Housing Revenue Bonds
(Riviera Apartments Project) Series 1999RR
Capital Area Housing Finance Corporation Multifamily Housing Revenue Bonds
(San Marcos Apartments Project) Series 2000
Austin Housing Finance Corporation Multifamily Housing Revenue Bonds
(Southwest Trails Apartments Project) Series 2000
Housing Finance Authority of Broward County, Florida
Multifamily Housing Revenue Bonds
(Summerlake Apartments Project) Series 2000
The Health, Educational and Housing Facilities Board of the County of Xxxxxx,
Tennessee Multifamily Housing Revenue Bonds
(Chapel Ridge of Gallatin) Series 2004A
Arkansas Development Finance Authority Multifamily Housing Revenue Bonds
(Chapel Ridge of Sherwood Project) Series 2004A
Delaware State Housing Authority Multifamily Housing Revenue Bonds
(Little Creek Apartments Development) Series 2005
Missouri Housing Development Commission Multifamily Housing Revenue Bonds
(Chapel Ridge of St. Xxxxxx) 2005 Series II
Missouri Housing Development Commission Multifamily Housing Revenue Bonds
(Chapel Ridge of Union) 2005 Series III
Housing Authority of Xxxxxxx County Multifamily Housing Revenue Bonds
(Brookside Apartments Project) Series 2005
Housing Authority of the City of Augusta, Georgia
Multifamily Housing Revenue Bonds
(Xxxxxxx House Apartments Project) Series 0000
Xxxx xx Xxxxxx Xxxxx, Xxxxxxxx Multifamily Housing Revenue Bonds
(Millwood and Woodsmill Apartments Project) Series 2004
ABAG Finance Authority for Non Profit Corporations
Multifamily Housing Revenue Bonds
(Yuba Gardens) 2005 Series A
ABAG Finance Authority for Non Profit Corporations
Multifamily Housing Revenue Bonds
(Yuba Gardens) 2005 Series B
Missouri Housing Development Commission Multifamily Housing Revenue Bonds
(Chapel Ridge of Blue Springs Apartments) 2005 Series IV
