SCHEDULE
to the
MASTER AGREEMENT
dated as of ____________, _____
between
AIG Financial Products Corp. ("Party A")
and
Perpetual Trustees Consolidated Limited (ABN 81 004 029 841) in its
capacity as trustee of the Crusade Global Trust No. 1 of 2003 ("Party
B")
and
Crusade Management Limited (ABN 90 072 715 916) ("Manager")
PART 1
TERMINATION PROVISIONS AND CERTAIN OTHER MATTERS
(1) "SPECIFIED ENTITY" is not applicable in relation to Party A and Party B.
(2) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14.
(3) (i) Sections 5(a)(ii), (iv), (v), (vi), 5(b)(iii) and (iv) will not
apply to Party A or Party B. Section 5(a)(iii) will apply only
to Party A and will not apply to Party B.
(ii) Replace Section 5(a)(i) with:
"(i) FAILURE TO PAY OR DELIVER. Failure by the party to
make when due any payment under this Agreement or
delivery under Section 2(a)(i) or 2(e) required to be
made by it if such failure is not remedied at or
before 10.00 am on the tenth Local Business Day after
the due date;"
(iii) Section 5(b)(ii) will not apply to Party A as the Affected Party
(subject to Part 5(14)(iii) of this Schedule).
(4) The "BANKRUPTCY" provisions of Section 5(a)(vii) are replaced by "An
Insolvency Event under the Security Trust Deed has occurred in respect
of Party A or Party B (the party the subject of the Insolvency Event
will be the Defaulting Party); or ". In relation to Party A, the events
described in the definition of Insolvency Event (under the Security
Trust Deed) shall apply to it as if Party A was a relevant corporation
referred to in that definition. The occurrence of an Insolvency Event
under the Security Trust Deed in respect of Party B in its personal
capacity will not constitute an Event of Default provided that within
thirty Local Business Days of that occurrence, Party A, Party B and the
Manager are able to procure the novation of this Agreement and all
Transactions to a third party in respect of which the Designated Rating
Agencies confirm that the novation will not cause a reduction or
withdrawal of the rating of the Notes, and Party A and Party B agree to
execute such a novation agreement in standard ISDA form.
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(5) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a):
will not apply to Party A.
will not apply to Party B.
(6) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:
(i) Market Quotation (as amended by Part 5(24)(b)) will apply; and
(ii) the Second Method will apply.
(7) "TERMINATION CURRENCY" means the currency selected by the party which
is not the Defaulting Party or the Affected Party, as the case may be,
or where there is more than one Affected Party the currency agreed by
Party A and Party B. However, the Termination Currency shall be one of
the currencies in which payments are required to be made in respect of
Transactions. If the currency selected is not freely available, or
where there are two Affected Parties and they cannot agree on a
Termination Currency, the Termination Currency shall be United States
Dollars.
(8) "ADDITIONAL TERMINATION EVENT" means:
(i) An Event of Default (as defined in the Security Trust Deed)
occurs and the Security Trustee has declared, in accordance with
the Security Trust Deed, the Notes immediately due and payable
(and Party B is the Affected Party);
(ii) Party B becomes obliged to make a withholding or deduction in
respect of any Notes and the Notes are redeemed as a result (and
Party B is the Affected Party). Notwithstanding Section 6(b)(iv)
of the Agreement, as a result thereof, Party B must, at the
direction of the Manager, give a notice designating an Early
Termination Date in respect of this Agreement and all
Transactions;
(iii) An event set out in Section 18 (d)(i) and 18(d)(ii).
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PART 2
TAX REPRESENTATIONS
(1) PAYER TAX REPRESENTATIONS
For the purpose of Section 3(e) of the Agreement, Party A and Party B
will make the following representations:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on:
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section 4(a)(i)
or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and the other party does not deliver
a form or document under Section 4(a)(iii) of the Agreement by reason
of material prejudice to its legal or commercial position.
(2) PAYEE TAX REPRESENTATIONS
For the purpose of Section 3(f) of this Agreement:
Party A makes the following representation:
None
Party B makes the following representation:
Crusade Global Trust No. 1 of 2003 is a foreign person and is not a
U.S. branch of a foreign person. For purposes of this representation,
"foreign person" shall mean any person that is not a "U.S. Person"
within the meaning of Section 7701(a)(30) of the Internal Revenue Code
of 1986, as amended.
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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 REQUIRED TO
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE COVERED BY SECTION
DELIVERED 3(d) REPRESENTATION
Manager Legal opinions as to the validity and Upon execution and No
enforceability of the obligations of delivery of this Agreement
Party B and the Manager under this
Agreement, the Trust Deed, the
Security Trust Deed and the Notes in
form and substance and issued by
legal counsel reasonably acceptable
to Party A
Party A and Party B Certified copies of all corporate Upon execution and Yes
authorisations (to be certified by an delivery of this Agreement
Authorised Officer of the relevant
party) and any other documents with
respect to the execution, delivery
and performance of this Agreement
Party A and Party B Certificate of authority and specimen Upon execution and Yes
signatures of individuals executing delivery of this Agreement
this Agreement and Confirmations and thereafter upon
request of the other party
Manager Two complete and accurate United Upon execution and Yes
States Internal Revenue Service Form delivery of this Agreement.
W-8BEN (or any applicable successor
forms), in a manner reasonably
satisfactory to Party A
Party A Guarantee from American International At execution hereof No
Group, Inc. (the "Guarantor")
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Party A Guarantor's Annual Financial On demand in respect of No
Statements those which became publicly
available prior to execution
of this Agreement and in
respect of those which are
not publicly available at
execution hereof on demand
after becoming publicly
available after the end of
the Guarantor's relevant
financial year
Party A Incumbency certificate in respect At execution hereof No
of the Guarantor
"ANNUAL FINANCIAL STATEMENTS" means, in respect of the Guarantor, a copy of the
annual report of the Guarantor containing audited financial statements
(consolidated, if any such statements are produced) for the most recently
completed financial year at the time such accounts are delivered certified by or
reported upon by the Guarantor's independent certified public accountants,
auditors or other appropriately qualified person and prepared in accordance with
accounting principles that are generally accepted in the country in which the
party is organized together in any case with any interim financial statements
(audited or unaudited) which are generally available when such annual report is
delivered.
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PART 4
MISCELLANEOUS
(1) ADDRESS FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:
(a) Address for notice or communications to Party A:
Any notice relating to a particular Transaction shall be
delivered to the address or facsimile or telex number
specified in the Confirmation of such Transaction. Any notice
delivered for purposes of Sections 5 and 6 of this Agreement
shall be delivered to the following address:
Address for notice or communications to Party A:
AIG Financial Products Corp.
00 Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000-0000
XXX
Facsimile: (0-000) 000 0000
Telephone: (0-000) 000 0000
Attention: Chief Financial Officer (with a copy to General
Counsel)
Address for notice or communications to Party B:
Xxxxx 0, 0 Xxxxxxxxxxx Xxxxxx, Xxxxxx XXX 0000 Xxxxxxxxx
Attention: Manager, Securitisation
Telephone: (000) 0000 0000
Facsimile: (000) 0000 0000
Telex: N/A
Address for Notices to the Manager:
Xxxxx 00, 00 Xxxxxx Xxxxxx, Xxxxxx XXX 0000 Xxxxxxxxx
Attention: Middle Office Compliance Manager
Telephone: (000) 0000 0000
Facsimile: (000) 0000 0000
Telex: N/A
(2) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent:
Secretary of State, State of New York
Office of the Department of State
00 Xxxxx Xxxxxx
Xxxxxx, XX 00000
Party B appoints as its Process Agent:
CT Corporation
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
(3) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
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(4) MULTIBRANCH PARTY. For the purpose of Section 10 of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party
(5) CALCULATION AGENT. The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(6) CREDIT SUPPORT DOCUMENTS.
(i) In relation to Party A: The Guarantee of American
International Group, Inc. substantially in the form of
Appendix A hereto, to be delivered by Party A to Party B at
execution of this Agreement.
(ii) In relation to Party B: Security Trust Deed
(7) CREDIT SUPPORT PROVIDER.
In relation to Party A: American International Group, Inc.
(8) GOVERNING LAW: This Agreement and each Confirmation will be governed
by, and construed and enforced in accordance with, the law of the State
of New York (without reference to its choice of law doctrine) and each
party hereby submits to the jurisdiction of the courts of the State of
New York.
(9) NETTING OF PAYMENTS. Section 2(c)(ii) of this Agreement will apply.
(10) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
(11) All payments to be made to Party B under this Agreement by Party A must
be made to the US$Account. Any payment so made will, to the extent of
that payment, satisfy the relevant party's obligation to Party B in
respect of that payment.
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PART 5
OTHER PROVISIONS
(1) In Section 2(a)(i) add the following sentence:
"Each payment will be by way of exchange for the corresponding
payment or payments payable by the other party."
(2) In Section 2(a)(ii), after "freely transferable funds" add the words
and "free of any set-off, counterclaim, deduction or withholding
(except as expressly provided in this Agreement).
(3) Insert new Sections 2(a)(iv) and 2(a)(v) as follows:
(a) The condition precedent in Section 2(a)(iii)(1) does not apply
to a payment or delivery due to be made to a party if it has
satisfied all its payment and delivery obligations under
Section 2(a)(i) of this Agreement and has no future payment or
delivery obligations, whether absolute or contingent under
Section 2(a)(i).
(b) Where:
(i) payments are due pursuant to Section 2(a)(i) by Party
A to Party B (the "PARTY A PAYMENT") and by Party B
to Party A (the "PARTY B PAYMENT") on the same day;
and
(ii) the Security Trust Deed has become, and remains at
that time, enforceable.
then Party A's obligation to make the Party A Payment to Party
B shall be subject to the condition precedent (which shall be
an "applicable condition precedent" for the purpose of Section
2(a)(iii)(3)) that Party A first receives either:
(iii) the Party B Payment; or
(iv) confirmation from Party B's bank that it holds
irrevocable instructions to effect payment of the
Party B Payment and that cleared funds are available
to make that payment."
(4) Section 2(b) of this Agreement is hereby amended by the addition of the
following at the end thereof:-
"; provided that, following a change occurring, if any new account of
one party is not in the same jurisdiction as the original account, the
other party shall not be obliged to pay any greater amount and shall
not receive any lesser amount as a result of such change than would
have been the case if such change had not taken place."
(5) The third line of Section 2(d)(i) of this Agreement is amended by
inserting before the phrase "of any relevant governmental revenue
authority" the words ", application or official interpretation" and
inserting the words "(either generally or with respect to a party to
this Agreement)" after that phrase.
(6) Delete the word "if" at the beginning of Section 2(d)(i)(4) and insert
the following words instead:
"if and only if X is Party A and";
(7) In Section 2(d)(ii) insert the words "(if and only if Y is Party A)"
after the word "then" at the beginning of the last paragraph. Party B
will have no obligation to pay any amount to Party A under Section
2(d)(ii), and may make any payment under or in connection with this
Agreement net of any deduction or withholding referred to in Section
2(d)(i).
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(8) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury
in respect of any suit, action or proceeding relating to this Agreement
or any Credit Support Document. Each party (i) certifies that no
representative, agent or attorney of the other party or any Credit
Support Provider has represented, expressly or otherwise, that such
other party would not, in the event of such a suit, action or
proceeding, seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into this
Agreement and provide for any Credit Support Document, as applicable,
by, among other things, the mutual waivers and certifications in this
Section.
(9) 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.
(10) FURTHER REPRESENTATIONS. Party B represents to Party A (which
representations will be deemed to be repeated by Party B on each date
on which a Transaction is entered into) that:
(a) TRUST VALIDLY CREATED. The Trust has been validly created and
is in existence at the date of this Agreement.
(b) SOLE TRUSTEE. Party B has been validly appointed as trustee of
the Trust and is presently the sole trustee of the Trust.
(c) NO PROCEEDINGS TO REMOVE. No notice has been given to Party B
and to Party B's knowledge no resolution has been passed, or
direction or notice has been given, removing Party B as
trustee of the Trust.
(d) POWER. Party B has power under the Trust Deed to enter into
this Agreement and the Security Trust Deed in its capacity as
trustee of the Trust.
(e) GOOD TITLE. Party B is the equitable owner of the assets of
the Trust and has power under the Trust Deed to mortgage or
charge them in the manner provided in the Security Trust Deed
and, subject only to the Trust Deed, the Security Trust Deed
and any Security Interest permitted under the Trust Deed, as
far as Party B is aware, those assets are free from all other
Security Interests.
(11) CONTRACTING AS PRINCIPAL Party A will enter into all Transactions as
principal and not otherwise and Party B will enter into all
Transactions in its capacity as trustee of the Trust and not
otherwise."
(12) CONFIRMATIONS. For the purposes of Section 9(e)(ii) Party B (either
itself or through the Manager) will, on or promptly after the relevant
Trade Date, send Party A a Confirmation confirming that Transaction and
Party A must promptly then confirm the accuracy of and sign and return
or request the correction of such Confirmation. Notwithstanding the
provisions of Section 9(e)(ii), each Confirmation in respect of a
Transaction which is confirmed by electronic messaging system, an
exchange of telexes or an exchange of facsimiles will be further
evidenced by an original Confirmation signed by the parties, however
any failure to sign an original Confirmation will not affect the
validity or enforcement of any Swap Transaction.
(13) Section 5(b)(i) (ILLEGALITY) is amended by adding the following
paragraph at the end:
"this sub paragraph (i) does not apply to the imposition by the
Australian government or any agency of the Australian government of any
exchange control restrictions or prohibitions ("EXCHANGE CONTROLS").
For the avoidance of doubt:
(i) exchange controls do not constitute an Illegality or Event of
Default or Termination Event under this Agreement, and do not
entitle a party to terminate a Transaction or otherwise refuse
to make any payments it is obliged to make under a
Transaction; and
(ii) delivery by Party B of Australian dollar amounts required to
be paid by it under any relevant Confirmation to the bank
account specified in that confirmation will constitute
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proper payment of those amounts by Party B and Party A's
obligations under this Agreement will be unaffected by any
such exchange controls."
(14) Add a new Section 6(aa):
"(aa) RESTRICTED TERMINATION RIGHTS
(i) TERMINATION BY PARTY B: Party B must not designate an
Early Termination Date without the prior written
consent of the Note Trustee.
(ii) CONSULTATION: Each party may only designate an Early
Termination Date following prior consultation with
the other party as to the timing of the Early
Termination Date. Subject to its duties under the
Trust Deed and the Supplementary Terms Notice, Party
B may exercise any rights in its capacity as holder
of the Purchased Receivables only on the instructions
of the Note Trustee and only after consultation
between Party A and the Note Trustee.
(iii) PARTY A'S LIMITED RIGHTS IN RELATION TO TAX EVENT:
(a) Notwithstanding Part 1(3)(iii) of this
Schedule, Party A may designate an Early
Termination Date if it is an Affected Party
following a Tax Event but only if all Notes
will be redeemed at their Invested Amount
(or, if the Noteholders by Extraordinary
Resolution have so agreed, at their Stated
Amount) together with accrued interest to
(but excluding) the date of redemption.
(b) If a Tax Event occurs where Party A is the
Affected Party and Party A is unable to
transfer all its rights and obligations under
this Agreement and each Transaction to an
Affiliate pursuant to Section 6(b)(ii), Party
A may, at its cost, transfer all its rights,
powers and privileges and all its unperformed
and future obligations under this Agreement
and each Transaction to any person provided
that:
(A) each Designated Rating Agency has
confirmed in writing that the
transfer will not result in a
reduction, qualification or
withdrawal of the credit ratings
then assigned by them to the
relevant Notes; and
(B) that person has a long term credit
rating assigned by each of the
Designated Rating Agencies of at
least the long term credit rating
assigned by that Designated Rating
Agency to Party A as at the date of
this Agreement and the Standby Swap
Provider provides its written
consent to the transfer.
(iv) TRANSFER WHERE PARTY B DOES NOT GROSS-UP: If any
payment by Party B to Party A under this Agreement
is, or is likely to be, made subject to any deduction
or withholding on account of Tax, the Manger on
behalf of Party B will endeavour to procure the
substitution of Party B as principal obligor under
this Agreement in respect of each affected
Transaction of a Party B incorporated in another
jurisdiction approved by Party A, and the Note
Trustee and in respect of which the Designated Rating
Agencies confirm that the substitution will not cause
a reduction or withdrawal of the rating of Notes".
(15) In Section 6(b)(ii), add the words "so long as the transfer in respect
of that Transaction would not lead to a rating downgrade of any rated
debt of Party B that is secured under the Security Trust Deed" after
the words "ceases to exist" at the end of the first paragraph.
(16) In Section 6(e), delete the sentence "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." At the end of the first
paragraph.
(17) Section 7 of this Agreement is replaced in its entirety with the
following:
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"Subject to Section 6(b)(ii), neither this Agreement nor any interest
or obligation in or under this Agreement may be transferred (by way
of security or otherwise) by either party except that:
(a) Party B may transfer all its rights, title and interest under
this Agreement subject to and in accordance with the
provisions of the Trust Deed and the Security Trust Deed (as
such terms are defined below).
(b) Party A may transfer this Agreement, any of its interests and
obligations in and under this Agreement to another of Party
A's offices, branches or Affiliates on ten (10) Business Days'
prior written notice; PROVIDED, HOWEVER, that:
(i) if such transfer is to an entity other than American
International Group, Inc., such transfer shall be
accompanied by a guarantee of American International
Group, Inc. of such transferee's obligations in
substantially the form of the guarantee of American
International Group, Inc. set out in Appendix A to
this Agreement or by a written confirmation from
American International Group, Inc. that the original
guarantee given in connection with this Agreement
will apply to the obligations of such transferee
under this Agreement;
(ii) the transferee will not, as a result of such
transfer, be required on any succeeding Scheduled
Payment Date to withhold or deduct on account of Tax
under Section 2(d)(i) amounts in excess of that which
Party A would, on the next succeeding Scheduled
Payment Date, have been required to so withhold or
deduct;
(iii) the Designated Rating Agencies have confirmed that
such transfer will not cause a downgrading,
qualification or withdrawal of the then current
rating of the Notes;
(iv) a Termination Event or Event of Default will not
occur as a result of such transfer; and
(v) the transferee provides to Party B a legal opinion as
to the enforceability of the currency swap transfer
and if applicable, any newly issued guarantee
referred to in subparagraph (i). With respect to the
result described in subclause (ii), Party A agrees to
cause such transferee to make, and Party B agrees to
make, such Payee Representations and Payer
Representations as may reasonably be requested by the
other party in order to permit such other party to
determine that such result will not occur after such
transfer."
If a transfer is permitted pursuant to this Agreement, the
non-transferring party shall not be obliged to pay any greater amounts
and shall not receive less as a result of such transfer than would have
been the case if such transfer had not taken place.
(18) Section 12 is amended as follows:
In Section 12(a), insert "and settlement instructions requiring payment
to an entity other than the original counterparty" after "Section 5 or
6" in line 2.
(19) RELATIONSHIP BETWEEN PARTIES. The following representation shall be
inserted as a new Section 3(g) of this Agreement:
"(g) RELATIONSHIP BETWEEN PARTIES. Each party will be deemed to
represent to the other party on the date on which it enters into a
Transaction that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that
Transaction):
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(i) NON-RELIANCE. It is acting for its own account (in the
case of Party B as trustee of the Trust), and it has made its own
independent decisions to enter into that Transaction and as to whether
that Transaction is appropriate or proper for it based upon its own
judgment (and in the case of Party B, also on the judgment of the
Manager) and upon advice from such advisers as it has deemed necessary.
It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that
Transaction; it being understood that information and explanations
related to the terms and conditions of a Transaction shall not be
considered investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
(ii) ASSESSMENT AND UNDERSTANDING. It is capable of assessing
the merits of and understanding (on its own behalf or through
independent professional advice), and understands and accepts, the
terms, conditions and risks of that Transaction. It is also capable of
assuming, and assumes (in the case of Party B, subject to section (1)),
the risks of that Transaction.
(iii) STATUS OF PARTIES. The other party is not acting as a
fiduciary for or an adviser to it in respect of that Transaction (other
than in the case of Party B, the Manager)."
(iv) ELIGIBLE CONTRACT PARTICIPANT. It constitutes an
"eligible contract participant" as such term is defined in section
1(a)(12) of the Commodity Exchange Act, 7 U.S.C. Section 1(a)(12).
(20) ISDA DEFINITIONS. Reference is hereby made to the 2000 ISDA Definitions
(the "2000 Definitions") and the 1998 FX and Currency Option
Definitions (the "FX Definitions") (collectively the "ISDA
Definitions") each as published by the International Swaps and
Derivatives Association, Inc., which are hereby incorporated by
reference herein. Any terms used and not otherwise defined herein which
are contained in the ISDA Definitions shall have the meaning set forth
therein.
(21) SCOPE OF AGREEMENT. Notwithstanding anything contained in this
Agreement to the contrary, any transaction which may otherwise
constitute a "Specified Transaction" for purposes of this Agreement
which has been or will be entered into between the parties shall
constitute a "Transaction" which is subject to, governed by, and
construed in accordance with the terms of this Agreement, unless any
Confirmation with respect to a Transaction entered into after the
execution of this Agreement expressly provides otherwise.
(22) INCONSISTENCY. In the event of any inconsistency between any of the
following documents, the relevant document first listed below shall
govern: (i) a Confirmation; (ii) the Schedule and an ISDA Credit
Support Annex (as applicable); (iii) the ISDA Definitions; and (iv) the
printed form of ISDA Master Agreement and ISDA Credit Support Annex (as
applicable). In the event of any inconsistency between provisions
contained in the 2000 Definitions and the FX Definitions, the FX
Definitions shall prevail.
(23) CONSULTATION. Each party may only designate an Early Termination Date
following prior consultation with the other party as to the timing of
the Early Termination Date. Subject to its duties under the Trust Deed
and the Supplementary Terms Notice, Party B may exercise any rights in
its capacity as holder of the Purchased Receivables only in accordance
with the Transaction Documents.
(24) Section 14 of the Agreement is modified as follows :
(a) New definitions are inserted as follows:
"FUTURE OBLIGATIONS" means all payment or delivery obligations
(whether the underlying obligation was absolute or contingent
and assuming the satisfaction of each applicable condition
precedent) of a party under Section 2(a)(i) in respect of a
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,
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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).
"SECURITY TRUST DEED" means the Security Trust Deed dated on
or about the date of this Agreement between Party B as issuing
trustee, Crusade Management Limited as Manager, P.T. Limited,
as security trustee and Wilmington Trust Company as note
trustee.
"TRUST DEED" means the Master Trust Deed dated 14 March 1998
as amended by the Crusade Global Trust No. 1 of 2003
Supplementary Terms Notice dated on or about the date of this
Agreement between (amongst others) Party B, Xx.Xxxxxx Bank
Limited and the Manager ("SUPPLEMENTARY TERMS NOTICE") and
each of the following expressions has the meanings given to
them in the Trust Deed and the Supplementary Terms Notice.
"AGENCY AGREEMENT"
"ASSET"
"CLASS A NOTES"
"BANK"
"CURRENCY SWAP"
"DESIGNATED RATING AGENCY"
"EXTRAORDINARY RESOLUTION"
"FINAL MATURITY DATE"
"HEDGE AGREEMENT"
"INSOLVENCY EVENT"
"INVESTED AMOUNT"
"MORTGAGED PROPERTY"
"NOTES"
"NOTEHOLDER"
"NOTE TRUSTEE"
"PRINCIPAL PAYING AGENT"
"PURCHASED RECEIVABLES"
"SECURITY TRUST DEED"
"SECURITY TRUSTEE"
"STATED AMOUNT"
"SUPPORT FACILITY PROVIDER"
"TRUST"
"TRUST EXPENSE"
(b) The definition of "Market Quotation" is replaced with:
"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 take into account any
existing Credit Support Documents with respect to the
obligations of such party.
Each quotation will be determined as the 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 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 the
Future Obligations of both parties, and where applicable (but
without limiting the foregoing) the present value of the
difference or the differences on each Scheduled Payment Date
that would have occurred after the Early Termination Date
between (a) the Future Obligations of the other party to the
Terminated Transaction or Termination Transactions and (b) the
obligations that a quoting Reference Market-maker would have
under a transaction ("Replacement
Page 13
Transaction") that would preserve for the party making the
determination that party's Future Obligations, with such
present value being positive if (a) is greater than (b) and
negative if (a) is less than (b).
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 it's 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
the quotation or quotations are to be obtained will be
selected in god 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."
(c) TRUST DEED AND SECURITY TRUST DEED: The parties acknowledge
and agree and for the purposes of the Trust Deed and Security
Trust Deed
(i) all Transactions under this Agreement are "Hedge
Agreements";
(ii) Party A is a "Support Facility Provider",
(25) New Sections 15, 16 and 17 are added as follows:
"15. TRUSTEE PROVISIONS
(a) (A) General
Clause 30 of the Trust Deed applies to the
obligations and liabilities of the Trustee under this
agreement. Clause 16 of the Security Trust Deed
applies to govern Party A's priority to monies
received from the sale of Assets of the Trust or
other enforcement of the Charge under the Security
Trust Deed (as defined in the Security Trust Deed).
(B) Limitation of Trustee's Liability
(1) The Trustee enters into this agreement only
in its capacity as trustee of the Trust and
in no other capacity (except where the
Transaction Documents provide otherwise).
Subject to subparagraph (3) below, a
liability arising under or in connection
with this agreement or the Trust can be
enforced against the Trustee only to the
extent to which it can be satisfied out of
the assets and property of the Trust which
are available to satisfy the right of the
Trustee to be exonerated or indemnified for
the liability. This limitation of the
Trustee's liability applies despite any
other provision of this agreement and
extends to all liabilities and obligations
of the Trustee in any way connected with any
representation, warranty, conduct, omission,
agreement or transaction related to this
agreement or the Trust.
(2) Subject to subparagraph (3) below, no person
(including any Relevant Party) may take
action against the Trustee in any capacity
other than as trustee of the Trust or seek
the appointment of a receiver (except under
this agreement), or a liquidator, an
administrator or any similar person
Page 14
to the Trustee or prove in any liquidation,
administration or arrangements of or
affecting the Trustee.
(3) The provisions of this section 15 shall not
apply to any obligation or liability of the
Trustee to the extent that it is not
satisfied because under a Transaction
Document or by operation of law there is a
reduction in the extent of the Trustee's
indemnification or exoneration out of the
Assets of the Trust as a result of the
Trustee's fraud, negligence, or Default.
(4) It is acknowledged that the Relevant Parties
are responsible under the Transaction
Documents for performing a variety of
obligations relating to the Trust. No act or
omission of the Trustee (including any
related failure to satisfy its obligations
under this agreement) will be considered
fraud, negligence or Default of the Trustee
for the purpose of subparagraph (3) above to
the extent to which the act or omission was
caused or contributed to by any failure by
any Relevant Party or any person who has
been delegated or appointed by the Trustee
in accordance with this agreement or any
other Transaction Document to fulfil its
obligations relating to the Trust or by any
other act or omission of a Relevant Party or
any such person.
(5) In exercising their powers under the
Transaction Documents, each of the Trustee,
the Security Trustee and the Noteholders
must ensure that no attorney, agent,
delegate, receiver or receiver and manager
appointed by it in accordance with this
agreement has authority to act on behalf of
the Trustee in a way which exposes the
Trustee to any personal liability and no act
or omission of any such person will be
considered fraud, negligence, or Default of
the Trustee for the purpose of subparagraph
(3) above.
(6) In this clause, RELEVANT PARTIES means each
of the Manager, the Servicer, the
Calculation Agent, the Note Registrar, each
Paying Agent, the Note Trustee and each
Support Facility Provider.
(7) Nothing in this clause limits the
obligations expressly imposed on the Trustee
under the Transaction Documents.
(b) Nothing in paragraph (a) limits Party A in:
(i) obtaining an injunction or other order to
restrain any breach of this Agreement by
Party B;
(ii) obtaining declaratory relief; or
(iii) in relation to its rights under the Security
Trust Deed.
(c) Except as provided in paragraphs (a) and (b), Party A
shall not
(i) (JUDGMENT) obtain a judgment for the payment
of money or damages by Party B;
(ii) (STATUTORY DEMAND) issue any demand under
section 459E(1) of the Corporations Xxx 0000
(Cth) (or any analogous provision under any
other law) against Party B;
(iii) (WINDING UP) apply for the winding up or
dissolution of Party B;
(iv) (EXECUTION) levy or enforce any distress or
other execution to, on, or against any
assets of Party B;
(v) (COURT APPOINTED RECEIVER) apply for the
appointment by a court of a receiver to any
of the assets of Party B;
Page 15
(vi) (SET-OFF OR COUNTERCLAIM) exercise or seek
to exercise any set-off or counterclaim
against Party B; or
(vii) (ADMINISTRATOR) appoint, or agree to the
appointment, of any administrator to Party
B,
(a) or take proceedings for any of the above and Party A
waives its rights to make those applications and take
those proceedings."
"16. REPLACEMENT CURRENCY SWAP
(b) If this Agreement or any Transaction under this
Agreement is terminated, Party B must, at the
direction of the Manager, enter into one or more
currency swaps which replace the Transactions under
this Agreement (collectively a "REPLACEMENT CURRENCY
SWAP") but only on the following conditions:
(i) the Settlement Amount payable (if any) by
Party B to Party A upon termination of this
Agreement or any Transaction will be paid in
full when due in accordance with the
Supplementary Terms Notice and this
Agreement;
(ii) the Designated Ratings Agencies confirm that
the Replacement Currency Swap will not cause
a reduction or withdrawal of the ratings of
the Notes; and
(iii) the liability of Party B under the
Replacement Currency Swap is limited to at
least the same extent that its liability is
limited under this Agreement.
(c) If Party B enters into the Replacement Currency Swap
pursuant to paragraph (a) it must direct the
Replacement Currency Swap provider to pay any upfront
premium to enter into the Replacement Currency Swap
due to Party B directly to Party A in satisfaction of
and to the extent of Party B's obligation to pay the
Settlement Amount to Party A as referred to in
Section 16(a) and to the extent that such premium is
not greater than or equal to the Settlement Amount,
the balance must be satisfied by Party B as a Trust
Expense.
(d) If Party B enters into a Replacement Currency Swap
pursuant to paragraph (a), Party B must direct Party
A to pay any Settlement Amount payable by Party A to
Party B on termination of this Agreement or any
Transaction directly to the Replacement Currency Swap
provider as payment and to the extent of any premium
payable by Party B to enter into the Replacement
Currency Swap, in satisfaction of and to the extent
of Party A's obligation to pay that part of the
Settlement Amount to Party B.
"(17) APPOINTMENT OF MANAGER: Party A acknowledges that under the
Trust Deed Party B has appointed the Manager as manager of the
Trust with the powers set out in and upon and subject to the
terms of, the Trust Deed. Accordingly, subject to the terms of
the Trust Deed, the Manager:
(i) may arrange and monitor Transactions and exercise all
other rights and powers of Party B under this
Agreement; and
(ii) without limiting the generality of the foregoing, the
Manager may, issue and receive, on behalf of Party B
all notices, certificates and other communications to
or by Party A under this Agreement."
(26) New Section 18 is added as follows:
"18. RATINGS DOWNGRADE
(a) S&P Criteria:
Page 16
(i) In the event that the long term, unsecured and
unsubordinated debt obligations of the Credit Support
Provider of Party A cease to be rated at least as
high as "AA-" (or its equivalent) by S&P or the short
term, unsecured and unsubordinated debt obligations
of the Credit Support Provider of Party A cease to be
rated at least as high as A-1+ (or its equivalent) by
S&P, and as a result of such downgrade there would be
an adverse effect on the then current rating of the
Class A Notes, then Party A shall within:
(A) 30 Business Days of a downgrade of its
Credit Support Provider's long term credit
rating by S&P to not lower than A+ or a
downgrade of its short term credit rating by
S&P to not lower than A-1; or
(B) 5 Business Days of any other such withdrawal
or downgrade and for the avoidance of doubt,
if the Credit Support Provider of Party A's
long term credit rating by S&P is not lower
than A+ and the Credit Support Provider of
Party A's short term credit rating by S&P is
not lower than A-1, then paragraph (A) above
shall apply and not this paragraph (B),
(or, in either case, such greater period as is agreed
to in writing by S&P) at its cost alone and at its
election:
(C) lodge cash collateral in US$ or securities
reasonably acceptable to S&P in the Swap
Collateral Account (as defined in Section
18(a)(v)(C) below) in an amount equivalent
to the Collateral Amount as defined in
Section (18)(a)(v)(A) below. Any interest
earned on it is payable to Party A. A
discount factor approved by S&P is to be
applied to the securities. Party A will pay
any costs associated with lodgement of the
collateral; or
(D) at the cost of Party A or in return for any
monies payable to Party A in accordance with
Clause 5.21 of the Supplementary Terms
Notice (as the case may be), enter into an
agreement novating this Agreement to a
replacement counterparty proposed by any of
Party A, Party B or the Manager (if any) and
in respect of which S&P has confirmed will
result in there not being a withdrawal or
downgrade of any credit rating, assigned by
it, to the Notes; or
(E) enter into such other arrangements which S&P
has confirmed will result in there not being
a withdrawal or downgrade of any credit
rating assigned by it to the Notes.
(ii) Where Party A procures a replacement counterparty in
accordance with Section 18(a)(i)(D) above, each party
to this Agreement shall do all things reasonably
necessary to novate the relevant rights and
obligations to the replacement counterparty.
(iii) Where Party B has not established a Swap Collateral
Account and Party A is required to deposit monies
into a Swap Collateral Account, the Manager must
direct Party B to establish, as soon as is
practicable, and maintain, in the name of Party B a
Swap Collateral Account.
(iv) Party B may only make withdrawals from the Swap
Collateral Account if directed to do so by the
Manager and then only for the purpose of:
Page 17
(A) novating obligations under this Agreement in
accordance with Section 18(a)(i)(D) above or
entering into any other arrangement in
accordance with Section 18(a)(i)(E) above;
(B) refunding to Party A the amount of any
reduction in the Cash Collateral Amount,
from time to time and providing that S&P has
confirmed, in writing, that such refund will
not result in a withdrawal or downgrade of
any credit rating assigned by it to the
Notes;
(C) withdrawing any amount which has been
incorrectly deposited into the Swap
Collateral Account;
(D) paying financial institutions duty, bank
accounts debit tax or other equivalent Taxes
payable in respect of the Swap Collateral
Account; or
(E) funding the amount of any payment due to be
made by Party A under this Agreement
following the failure by Party A to make
that payment.
(v) For the purpose of Section 18(a):
(A) the COLLATERAL AMOUNT shall be an amount
equal to the greater of the following:
(1) zero; and
(2) CCR.
(B) APPROVED BANK means a Bank which has a short
term rating of at least A-1+ by S&P.
(C) SWAP COLLATERAL ACCOUNT means an account
established by Party B with an Approved Bank
outside Australia.
(vi) For the purpose of Section 18(a)(v)(A), the formula
for calculating CCR is as follows.
CCR = CR x 1.030
where
CR means MTM + VB
MTM means the xxxx-to-market value of the
Transactions outstanding under the Agreement. Party A
will have to xxxx the Transactions to market and post
collateral on a weekly basis, with a cure period of 3
days. The xxxx-to-market value should reflect the
higher of 2 bids from counterparties that will be
eligible and willing to assume Party A's role in the
Transactions in place of Party A. The xxxx-to-market
value may be a positive or negative amount. A bid has
a negative value if the payment would be from the
counterparty to Party A and has a positive value if
the payment would be from Party A to the counterparty
(for the purposes of determining a higher bid, any
bid of positive value is higher than any bid of a
negative value).
VB means the value calculated by multiplying the
Invested Amount at the time of the calculation by the
relevant percentage calculated from the following
table (for the purposes of interpreting the table,
"Counterparty
Page 18
rating" is the credit rating assigned to Party A by
S&P and "Maturities" is the period from and including
the date of calculation to but excluding the
scheduled maturity of the last expiring Transaction
outstanding under this Agreement):
VOLATILITY BUFFER (%)
COUNTERPARTY MATURITIES UP MATURITIES UP TO MATURITIES MORE
RATING TO 5 YEARS 10 YEARS THAN 10 YEARS
A+ 1.05 1.75 3.0
A 1.35 2.45 4.5
A-1* 1.5 3.15 6.0
* The A-1 rating will be taken to be the counterparty's short term rating.
(b) Xxxxx'x Criteria
In the event that (aa) the long-term, unsecured and
unsubordinated debt obligations of any Credit Support Provider
of Party A cease to be rated at least as high as "A2" (or its
equivalent) by Xxxxx'x or (bb) the short-term, unsecured and
unsubordinated debt obligations of any Credit Support Provider
of Party A cease to be rated at least as high as "Prime-1" (or
its equivalent) by Xxxxx'x, if a short-term credit rating has
been issued by Xxxxx'x, then Party A will, on a reasonable
efforts basis and at its own cost attempt to:-
(i) transfer all of its rights and obligations with
respect to this Agreement to either (x) a replacement
third party with the Required Ratings (as defined
below) domiciled in the same legal jurisdiction as
Party A or Party B or (y) a replacement third party
agreed by Xxxxx'x; or
(ii) procure another person to become co-obligor in
respect of the obligations of Party A under this
Agreement. Such co-obligor may be either (x) a person
with the Required Ratings domiciled in the same legal
jurisdiction as Party A or Party B, or (y) a person
agreed by Xxxxx'x; or
(iii) take such other action as agreed by Xxxxx'x.
Pending compliance with any of Section 18(b)(i), (b)(ii) or
(b)(iii) above, Party A will, at its own cost:
(iv) within 30 days of the occurrence of such downgrade,
put in place a xxxx-to-market collateral agreement in
a form and substance acceptable to Xxxxx'x (which may
be based on the credit support documentation
published by ISDA, or otherwise, and relates to
collateral in the form of cash or securities or both)
in support of its obligations under this Agreement
which complies with Xxxxx'x Criteria (or such other
amount as may be agreed with Xxxxx'x).
If any of Section 18(b)(i), (b)(ii) or (b)(iii) are satisfied
at any time, all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to Section
18(b)(iv) will be retransferred to Party A and Party A will
not be required to transfer any additional collateral.
For the purposes of Section 18(b), "REQUIRED RATINGS" means,
in respect of the relevant entity, its short-term, unsecured
and unsubordinated debt obligations are rated at least as high
as "Prime-1," if a short-term credit rating has been issued
Page 19
by Xxxxx'x, and its long-term, unsecured and unsubordinated
debt obligations are rated at least as high as "A2", or such
other ratings as may be agreed with Xxxxx'x from time to time.
"XXXXX'X CRITERIA" means that the amount of collateral to be
posted on a weekly basis shall equal the sum of (a) the
product of A multiplied by the xxxx-to-market value of the
outstanding Transactions as determined by Party A in good
faith on a weekly basis and (b) the product of B multiplied by
the current aggregate notional amounts of the outstanding
Transactions, where:
(i) "A" means 103% and "B" means 4.6% if the long-term,
unsecured and unsubordinated debt obligations or the
short-term, unsecured and unsubordinated debt
obligations (if a short-term credit rating has been
issued by Xxxxx'x) of the Credit Support Provider of
Party A cease to be rated as high as "A2" or
"Prime-1" by Xxxxx'x;
(ii) "A" means 0% and "B" means 0% in all other cases.
The xxxx-to-market value of the outstanding Transactions as
determined by Party A on a weekly basis will be verified (at
Party A's cost) within three (3) days by an independent third
party selected by Party A. If there is any material
discrepancy between the xxxx-to-market value as calculated by
Party A and such third party, Party A will promptly obtain
dealer quotations as specified below in "Dealer Quotation
Procedures" in order to determine the xxxx-to-market value of
the outstanding Transactions. On a monthly basis, Party A will
obtain dealer quotations in accordance with the Dealer
Quotation Procedures in order to verify its calculation of the
xxxx-to-market value of the outstanding Transactions. "DEALER
QUOTATION PROCEDURES" means that in determining or verifying,
as the case may be, the xxxx-to market value of the
outstanding Transactions, Party A will base such calculation
on the arithmetic mean of four (4) bids from counterparties
who are dealers in the relevant market. In providing such
quotations, such dealers will be asked to assume that the
party requesting the quotations is a dealer in the relevant
market of the highest credit rating from Xxxxx'x, which
satisfies all of the credit criteria which such dealer applies
generally in making such market quotations. If Party A is
unable to procure four bids, then the xxxx-to-market value
will be the arithmetic mean of the bids actually obtained.
Party A will, upon receipt of reasonable notice from Xxxxx'x,
demonstrate to Xxxxx'x the calculation by it of the
xxxx-to-market value of the outstanding Transactions is
consistent with the foregoing.
(c) Fitch Criteria
In the event that the short-term, unsecured and unsubordinated
debt obligations of any Credit Support Provider of Party A
cease to be rated at least as high as "F1" (or its equivalent)
by Fitch and as a result the then current rating of the Class
A Notes may in the reasonable opinion of Fitch be downgraded
or placed on credit watch for possible downgrade, then Party A
will, on a reasonable efforts basis, within 30 days of the
occurrence of such downgrade, at its own cost, either:-
(i) put in place an appropriate xxxx-to-market collateral
agreement (which may be based on the credit support
documentation published by ISDA, or otherwise, and
relates to collateral in the form of cash or
securities or both) in support of its obligations
under this Agreement which complies with the Fitch
Criteria (or such other amount as may be agreed with
Fitch); or
Page 20
(ii) attempt to transfer all of its rights and obligations
with respect to this Agreement to a replacement third
party whose short term unsecured and unsubordinated
debt ratings are rated at least as high as F1 (or its
equivalent) by Fitch or such other rating as is
commensurate with the rating assigned to the Class A
Notes by Fitch from time to time; or
(iii) procure another person to become co-obligor or
guarantor in respect of the obligations of Party A
under this Agreement whose short-term, unsecured and
unsubordinated debt ratings are rated at least as
high as F1 (or its equivalent) by Fitch or such other
rating as is commensurate with the rating assigned to
the Class A Notes by Fitch from time to time; or
(iv) take such other action as Party A may agree with
Fitch as will result in the rating of the Class A
Notes then outstanding being maintained.
"FITCH CRITERIA" means the amount of collateral to be posted
shall equal the sum of (i) the product of A multiplied by the
xxxx-to-market value of the outstanding Transactions
determined by Party A in good faith on each Local Business
Day, and (ii) the product of B multiplied by the current
aggregate notional amount of the outstanding Transactions,
where:
"A" means 100% and "B" means 3.5% if the xxxx-to-market value
of the outstanding Transactions is determined by Party A.
(d) Downgrade Termination Events
(i) If Party A does not take the measures described in
Section 18(b)(i), (ii), (iii) or (iv) above such
failure shall not be or give rise to an Event of
Default but shall constitute an Additional
Termination Event with respect to Party A and shall
be deemed to have occurred on the thirtieth day
following such downgrade with Party A as the sole
Affected Party and all Transactions shall be Affected
Transactions.
(ii) If Party A does not take any of the measures
described in Section 18(c)(i), (ii), (iii) or (iv)
above such failure shall not be or give rise to an
Event of Default but shall constitute an Additional
Termination Event with respect to Party A and shall
be deemed to have occurred on the thirtieth day
following such downgrade with Party A as the sole
Affected Party and all Transactions shall be Affected
Transactions.
Each Additional Termination Event described in this Section
18(d) shall, on its occurrence, constitute a "DOWNGRADE
TERMINATION EVENT".
(e) Each of Party B and the Note Trustee shall use their
reasonable endeavours to cooperate with Party A in putting in
place such credit support documentation, including agreeing to
such arrangements in such documentation as may satisfy S&P,
Xxxxx'x and Fitch with respect to the operation and management
of the collateral and entering into such documents as may
reasonably be requested by Party A in connection with the
provision of such collateral.
Page 21
Please confirm your agreement to the terms of the foregoing Schedule by signing
below.
AIG FINANCIAL PRODUCTS CORP. PERPETUAL TRUSTEES CONSOLIDATED
LIMITED as trustee of Crusade Global
Trust No. 1 of 2003
By: By:
------------------------------- -------------------------------
Name: Name:
Title: Title:
CRUSADE MANAGEMENT LIMITED
By:
-------------------------------
Name:
Title:
Page 22
APPENDIX A
FORM OF GUARANTEE OF AMERICAN
INTERNATIONAL GROUP, INC.
Guarantee, dated as of [_____ _____] 2003, by American International Group,
Inc., a Delaware corporation (the "Guarantor"), in favor of Perpetual Trustees
Consolidated Limited (ABN 81 004 029 841), a limited liability public company
organized under the laws of the State of Victoria, Australia (the "Guaranteed
Party"), in its capacity as trustee of the Crusade Global Trust No. 1 of 2003.
1. GUARANTEE
To induce the Guaranteed Party to enter into a Master Agreement, dated as of
_________ 2003, pursuant to which the Guaranteed Party, Crusade Management
Limited, as Manager, and AIG Financial Products Corp., a Delaware corporation
(the "Company"), have entered and/or anticipate entering into one or more
Transactions (as defined therein), the confirmation of each of which
supplements, forms a part of, and will be read and construed as one with, such
Master Agreement (as amended or modified from time to time, such Master
Agreement together with such confirmations are collectively referred to herein
as the "Agreement"), the Guarantor absolutely, unconditionally and irrevocably
guarantees to the Guaranteed Party and its successors, endorsees and assigns the
prompt payment when due, subject to any applicable grace period, of all present
and future payment obligations of the Company to the Guaranteed Party arising
out of Transactions entered into under the Agreement (the "Obligations"). This
Guarantee is a Credit Support Document as contemplated in the Agreement.
2. NATURE OF GUARANTEE
The Guarantor's obligations hereunder shall not be affected by the existence,
validity, enforceability, perfection or extent of any collateral therefor or by
any other circumstance relating to the Obligations that might otherwise
constitute a legal or equitable discharge of or defense to the Guarantor not
available to the Company. The Guarantor agrees that the Guaranteed Party may
resort to the Guarantor for payment of any of the Obligations whether or not the
Guaranteed Party shall have resorted to any collateral therefor or shall have
proceeded against the Company or any other obligor principally or secondarily
obligated with respect to any of the Obligations. The Guaranteed Party shall not
be obligated to file any claim relating to the Obligations in the event that the
Company becomes subject to a bankruptcy, reorganization or similar proceeding,
and the failure of the Guaranteed Party to so file shall not affect the
Guarantor's obligations hereunder. In the event that any payment to the
Guaranteed Party in respect of any Obligations is rescinded or must otherwise be
returned for any reason whatsoever, the Guarantor shall remain liable hereunder
with respect to such Obligations as if such payment had not been made. The
Guarantor reserves the right to assert defenses which the Company may have to
payment of any Obligations other than defenses arising from the bankruptcy or
insolvency of the Company and other defenses expressly waived hereby.
3. CHANGES IN OBLIGATIONS, COLLATERAL THEREFOR AND AGREEMENTS RELATING
THERETO; WAIVER OF CERTAIN NOTICES
The Guarantor agrees that the Guaranteed Party may at any time and from time to
time, either before or after the maturity thereof, without notice to or further
consent of the Guarantor, extend the time of payment of, exchange or surrender
any collateral for, or renew any of the Obligations, and may also make any
agreement with the Company or with any other party to or person liable
Page 23
on any of the Obligations or interested therein, for the extension, renewal,
payment, compromise, discharge or release thereof, in whole or in part, or for
any modification of the terms thereof or of any agreement between the Guaranteed
Party and the Company or any such other party or person, without in any way
impairing or affecting this Guarantee. The Guarantor waives notice of the
acceptance of this Guarantee and of the Obligations, presentment, demand for
payment, notice of dishonor and protest.
4. EXPENSES
The Guarantor agrees to pay on demand all fees and out of pocket expenses
(including the reasonable fees and expenses of the Guaranteed Party's counsel)
in any way relating to the enforcement or protection of the rights of the
Guaranteed Party hereunder; provided, that the Guarantor shall not be liable for
any expenses of the Guaranteed Party if no payment under this Guarantee is due.
5. SUBROGATION
Upon payment of any of the Obligations, the Guarantor shall be subrogated to the
rights of the Guaranteed Party against the Company with respect to such
Obligations, and the Guaranteed Party agrees to take at the Guarantor's expense
such steps as the Guarantor may reasonably request to implement such
subrogation; provided, however, that the Guarantor shall not be entitled to
enforce or to receive any payments arising out of, or based upon, such right of
subrogation until all amounts then due and payable by the Company under the
Agreement shall have been paid in full.
6. NO WAIVER; CUMULATIVE RIGHTS
No failure on the part of the Guaranteed Party to exercise, and no delay in
exercising, any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Guaranteed Party of any
right, remedy or power hereunder preclude any other or future exercise of any
right, remedy or power. Each and every right, remedy and power hereby granted to
the Guaranteed Party or allowed it by law or other agreement shall be cumulative
and not exclusive of any other, and may be exercised by the Guaranteed Party at
any time or from time to time.
7. REPRESENTATIONS AND WARRANTIES
The Guarantor hereby represents and warrants that:
(a) the Guarantor is duly organized, validly existing and in good standing
under the laws of the State of Delaware and has full corporate power to
execute, deliver and perform this Guarantee;
(b) the execution, delivery and performance of this Guarantee have been and
remain duly authorized by all necessary corporate action and do not
contravene any provision of the Guarantor's certificate of
incorporation or by-laws, as amended to date, or any law, regulation,
rule, decree, order, judgment or contractual restriction binding on the
Guarantor or its assets;
(c) all consents, licenses, clearances, authorizations and approvals of,
and registrations and declarations with, any governmental authority or
regulatory body necessary for the due execution, delivery and
performance of this Guarantee have been obtained and remain in
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full force and effect and all conditions thereof have been duly
complied with, and no other action by, and no notice to or filing with,
any governmental authority or regulatory body is required in connection
with the execution, delivery or performance of this Guarantee; and
(d) this Guarantee constitutes a legal, valid and binding obligation of the
Guarantor enforceable against the Guarantor in accordance with its
terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applicability relating to or affecting
creditors' rights and to general equity principles.
8. ASSIGNMENT
Neither the Guarantor nor the Guaranteed Party may assign its rights, interests
or obligations hereunder to any other person (except by operation of law)
without the prior written consent of the Guarantor or the Guaranteed Party, as
the case may be, provided, however, that the Guaranteed Party may assign its
rights, interests and obligations hereunder to an assignee or transferee to
which it has transferred its interests and obligations under the Agreement
pursuant to Section 6(b) or 7 thereof or the Schedule thereto.
9. NOTICES
All notices or demands on the Guarantor shall be deemed effective when received,
shall be in writing and shall be delivered by hand or by registered mail, or by
facsimile transmission promptly confirmed by registered mail, addressed to the
Guarantor at:
American International Group, Inc.
00 Xxxx Xxxxxx, Xxx Xxxx, XX 00000
Attention: Secretary
Fax: (000) 000-0000
or to such other address or fax number as the Guarantor shall have notified the
Guaranteed Party in a written notice delivered to the Guaranteed Party in
accordance with the Agreement.
10. CONTINUING GUARANTEE
Subject to the provisions of Section 11 hereof, this Guarantee shall remain in
full force and effect and shall be binding on the Guarantor, its successors and
assigns until all of the Obligations have been satisfied in full.
11. TERMINATION
This Guarantee may be terminated by the Guarantor upon five days' written notice
to the Guaranteed Party, provided that this Guarantee shall remain in full force
and effect with respect to Obligations incurred by the Company as a result of
Transactions entered into prior to the effective date of such termination.
12. GOVERNING LAW
THIS GUARANTEE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAWS.
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IN WITNESS WHEREOF, this Guarantee has been duly executed and delivered by the
Guarantor to the Guaranteed Party as of the date first above written.
AMERICAN INTERNATIONAL GROUP, INC.
By_____________________________________________
By_____________________________________________]
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