Exhibit 6.1
SERIES SUPPLEMENT
REPACKAGED AMERICAN GENERAL FLOATING RATE
TRUST CERTIFICATES,
SERIES 2003-1 TRUST
between
XXXXXX ABS CORPORATION,
as Depositor,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee,
TRUST CERTIFICATES
Dated as of July 2, 2003
Table of Contents
Page
Section 1. Incorporation of Standard Terms........................................................................1
-------------------------------
Section 2. Definitions............................................................................................2
-----------
Section 3. Designation of Trust and Certificates..................................................................9
-------------------------------------
Section 4. Trust Certificates.....................................................................................9
------------------
Section 5. Distributions.........................................................................................10
-------------
Section 6. Early Redemption of Certificates......................................................................11
--------------------------------
Section 7. Partial Unwind of Certificates........................................................................12
------------------------------
Section 8. Trustee's Fees........................................................................................14
--------------
Section 9. Swap Payments.........................................................................................15
-------------
Section 10. Notices of Swap Termination Events...................................................................15
----------------------------------
Section 11. Miscellaneous........................................................................................15
-------------
Section 12. Governing Law........................................................................................18
-------------
Section 13. Counterparts.........................................................................................18
------------
Section 14. Termination of the Trust.............................................................................18
------------------------
Section 15. Sale of Underlying Securities........................................................................18
-----------------------------
Section 16. Amendments...........................................................................................18
----------
Section 17. Voting of Underlying Securities, Modification of Underlying Securities Indenture.....................19
--------------------------------------------------------------------------------
Section 18. Additional Depositor Representation..................................................................21
-----------------------------------
SCHEDULE I SERIES 2003-1 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A FORM OF TRUST CERTIFICATE
EXHIBIT B FORM OF SWAP AGREEMENT
i
SERIES SUPPLEMENT
REPACKAGED AMERICAN GENERAL FLOATING RATE TRUST CERTIFICATES
SERIES 2003-1 TRUST
SERIES SUPPLEMENT, Repackaged American General Floating Rate Trust
Certificates Series 2003-1, dated as of July 2, 2003 (the "Series
Supplement"), by and between XXXXXX ABS CORPORATION, as Depositor (the
"Depositor"), and U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated herein
(the "Trust") by executing and delivering this Series Supplement, which shall
incorporate the terms of the Standard Terms for Trust Agreements, dated as of
January 16, 2001 (the "Standard Terms" and, together with this Series
Supplement, the "Trust Agreement"), by and between the Depositor and the
Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities set forth on Schedule I attached hereto (the "Underlying
Securities Schedule") the general terms of which are described in the
Prospectus Supplement under the heading "Description of the Underlying
Securities";
WHEREAS, the Depositor desires that the Trust enter into a swap
agreement pursuant to which the Trust will exchange interest payments due on
the Underlying Securities for payments from the Swap Counterparty which will
be passed through the Certificateholders;
WHEREAS, in connection with the creation of the Trust, the deposit
therein of the Underlying Securities and the entering into the Swap Agreement
thereby, it is desired to provide for the issuance of trust certificates
evidencing undivided interests in the Trust; and
WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as otherwise provided
herein, all of the provisions of the Standard Terms are hereby incorporated
herein by reference in their entirety, and this Series Supplement and the
Standard Terms shall form a single agreement between the parties. In the event
of any inconsistency between the provisions of this Series Supplement and the
provisions of the Standard Terms, the provisions of this Series Supplement
will control with respect to the Repackaged American General Floating Rate
Trust Certificates, Series 2003-1 Certificates and the transactions described
herein.
1
Section 2. Definitions.
(a) Except as otherwise specified herein or as the context may otherwise
require, the following terms shall have the respective meanings set forth
below for all purposes under this Series Supplement. (Section 2(b) below sets
forth terms listed in the Standard Terms which are not applicable to this
Series.) Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Standard Terms.
"Affiliated Owner" shall have the meaning set forth in Section 7(a).
"Available Funds" shall mean, for any Distribution Date, Available
Interest Funds and Available Principal Funds for such Distribution Date.
"Available Interest Funds" shall mean, for any Distribution Date,
the sum of (i) all amounts received from the Swap Counterparty pursuant to the
Swap Agreement during the preceding Interest Accrual Period and (ii) any
amounts representing interest on the Underlying Securities that are actually
received by the Trust pursuant to the Underlying Securities Indenture on such
Distribution Date and not required to be paid to the Swap Counterparty
pursuant to the Swap Agreement.
"Available Principal Funds" shall mean all amounts received from the
Underlying Securities Issuer or the Underlying Securities Guarantor with
respect to principal of the Underlying Securities on the Final Scheduled
Distribution Date or any other date.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to be closed.
"Calculation Agent" shall mean Xxxxxx Brothers Derivative Products
Inc.
"Certificate Account" shall have the meaning specified in the
Standard Terms.
"Certificates" shall mean the Certificates, in the form attached
hereto as Exhibit A, to be issued by the Trust representing a proportionate
undivided beneficial ownership interest in certain distributions to be made by
the Trust and having the characteristics described herein and in the
Certificates.
"Closing Date" shall mean July 2, 2003.
"Code" means the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean the office of U.S. Bank Trust
National Association located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Currency" shall mean United States Dollars.
"Depository" shall mean The Depository Trust Company, its nominees
and their respective successors.
2
"Discontinuation Date" shall mean the date determined by the
Depositor within a reasonable time following the Underlying Securities
Guarantor's either (x) having stated in writing that it intends permanently to
cease filing periodic reports required under the Exchange Act or (y) having
failed to file all required periodic reports for one full year.
"Distribution Date" shall mean January 15th, April 15th, July 15th
and October 15th of each year (or if such date is not a Business Day, the next
succeeding Business Day), commencing on July 15, 2003, and ending on the
earlier of the Final Scheduled Distribution Date and any date on which all
Underlying Securities are redeemed pursuant to the Underlying Securities
Indenture or prepaid or liquidated in whole for any reason other than at their
maturity.
"Early Termination Date" shall mean the date so designated as such
in accordance with the terms of the Swap Agreement.
"Early Termination Payment" shall mean, with respect to any Early
Termination Date, the amount payable by the Swap Counterparty or the Trust, as
applicable, on such Early Termination Date pursuant to the Swap Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the United States Securities and Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Exercise Date" shall mean the date on which an Affiliated Owner
delivers a Partial Unwind Agreement to the Trustee, accompanied by a
certificate of the Marketing Agent pursuant to Section 7(a) hereof.
"Final Scheduled Distribution Date" shall mean July 15, 2025, or, if
such day is not a Business Day, the next succeeding Business Day.
"Interest Accrual Period" shall mean for any Distribution Date, the
period from and including the preceding Distribution Date (or in the case of
the first Interest Accrual Period, from and including July 2, 2003) to but
excluding the current Distribution Date.
"Interest Distribution Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the outstanding
Certificate Principal Amount, (ii) the applicable Interest Rate for the
preceding Interest Accrual Period and (iii) the actual number of days in such
Interest Accrual Period divided by 360, as determined in accordance with the
terms of the Swap Agreement.
"Interest Rate" shall mean, 1.42054% per annum until the
Distribution Date in July 2003 and, thereafter, for each Interest Accrual
Period, Three-Month LIBOR plus 0.30%.
"LIBOR Determination Date" shall mean for each Interest Accrual
Period, the second London Banking Day preceding the commencement of such
Interest Accrual Period.
3
"London Banking Day" shall mean, any day on which commercial banks
are open for business (including dealings in foreign exchange and foreign
currency deposits) in London.
"Liquidation Price" shall mean the price at which the Trustee sells
the Underlying Securities.
"Liquidation Proceeds" shall mean (i) with respect to a liquidation
of the Underlying Securities in accordance with the Sale Procedures, the net
proceeds received from the sale by the Marketing Agent, in accordance with the
Sale Procedures, of the entire principal amount of the Underlying Securities
or (ii) with respect to an Underlying Acceleration Termination, the payments
received by the Trustee in respect of the related acceleration of the
Underlying Securities.
"Marketing Agent" shall mean Xxxxxx Brothers Inc.
"Maturity Date" shall have the meaning specified in Schedule I
hereto.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Optional Termination Amount" shall mean, in connection with the
execution of a Partial Unwind Agreement, the principal amount of Underlying
Securities corresponding to the principal amount of an Affiliated Owner's
Certificates to be redeemed pursuant to such Partial Unwind Agreement.
"Ordinary Expenses" shall mean the Trustee's ordinary expenses and
overhead in connection with its services as Trustee, including the items
referred to in the definition of Ordinary Expenses in the Standard Terms.
"Partial Unwind Agreement" means an agreement between an Affiliated
Owner and the Swap Counterparty, and subject to countersignature by the
Trustee on behalf of the Trust.
"Partial Unwind Amount" means the dollar amount (which shall, except
in the case of the Depositor or any Affiliate thereof, be at least $1,000,000)
specified in the related Partial Unwind Agreement, which dollar amount
corresponds to the principal amount of the Certificates to be delivered to the
Trustee and the principal amount of Underlying Securities to be delivered or
sold by the Trustee, in each case in accordance with Section 7(a).
"Partial Unwind Date" has the meaning specified in Section 7(a).
"Plan" means (a) an employee benefit plan (as defined in Section
3(3) of ERISA), (b) a plan described in Section 4975(e)(1) of the Code or (c)
any entity whose underlying assets are treated as assets of any such plan by
reason of such plan's investment in the entity.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Pro Rata Share" shall mean, with respect to any Certificateholder,
a fraction the numerator of which equals the Outstanding principal amount of
the Certificates owned by such
4
Certificateholder and the denominator of which equals the aggregate
Outstanding principal amount of the Certificates.
"Prospectus Supplement" shall mean the Prospectus Supplement, dated
June 20, 2003, relating to the Certificates.
"Rating Agency" shall mean Moody's and S&P.
"Record Date" shall mean, with respect to each Distribution Date,
the day immediately preceding the related Distribution Date.
"Required Percentage-Amendment" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Percentage-Direction of Trustee" shall be 66-2/3% of the
aggregate Voting Rights.
"Required Percentage-Remedies" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Percentage-Removal" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Rating" shall mean, in the case of Moody's, the rating
assigned to the Underlying Securities by Moody's as of the Closing Date, and,
in the case of S&P, the rating assigned to the Underlying Securities by S&P as
of the Closing Date.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
"Sale Procedure" shall mean the process by which the Marketing
Agent, on behalf of the Trust, will sell the Underlying Securities to the
solicited bidder (which bidders will be determined by the Marketing Agent in
its sole and absolute discretion and which bidders may include Xxxxxx Brothers
Inc. or any of its affiliates but in any case shall include at least two
bidders which are not affiliated with Xxxxxx Brothers Inc.; provided, however,
that neither Xxxxxx Brothers Inc. or any of its affiliates is obligated to
bid, and that such bidders need not be limited to recognized broker dealers;
and provided further that if Xxxxxx Brothers Inc. or any of its affiliates are
bidders, any bid made by them shall not be greater than the fair value of the
Underlying Securities) that provides the highest firm bid for the Underlying
Securities. In the sole judgement of the Marketing Agent, bids may be
evaluated on the basis of bids for all or a portion of the Underlying
Securities being sold or any other basis selected in a commercially reasonable
manner by the Marketing Agent.
"SEC Reporting Failure" shall mean the date determined by the
Depositor within a reasonable time following the Underlying Securities
Guarantor's either (x) having stated in writing that it intends permanently to
cease filing periodic reports required under the Exchange Act or (y) having
failed to file all required periodic reports for one full year.
"Securities Act" shall mean the United States Securities Act of
1933, as amended.
5
"Securities Intermediary" shall have the meaning set forth in
Section 18 hereof.
"Series" shall mean Repackaged American General Floating Rate Trust
Certificates, Series 2003-1.
"Special Redemption Date" shall mean the tenth Business Day
following the Discontinuation Date.
"Special Termination Event" shall mean a Swap Termination Event
caused by the occurrence of (i) an event specified in Sections 5(a)(i) of the
Swap Agreement, (ii) an event specified in Section 5(a)(vii) of the Swap
Agreement or (iii) a Trigger Event.
"Swap Agreement" shall mean the ISDA Master Agreement dated as of
the Closing Date, between the Trust and the Swap Counterparty (including the
Schedule thereto) as supplemented by the Confirmation dated July 2, 2003, in
the form attached hereto as Exhibit B.
"Swap Counterparty" shall mean Xxxxxx Brothers Derivative Products
Inc, or any permitted successor or assign thereto.
"Swap Termination Event" shall mean the occurrence of any event that
would constitute an "Event of Default" or "Termination Event" under the Swap
Agreement.
"Swap Redemption Date" shall mean the fifth Business Day following
any Early Termination Date.
"Telerate Page 3750" shall mean the display on the Dow Xxxxx
Telerate Service on page 3750 (or any other page as may replace such page on
that service for the purpose of displaying LIBOR).
"Three-Month LIBOR" shall mean, with respect to any LIBOR
Determination Date, the London interbank offered rate for three-month (such
period being referred to as the "Index Maturity") United States dollar
deposits, commencing on the second London Banking Day immediately following
such LIBOR Determination Date, which appears on Telerate Page 3750 as of 11:00
A.M., London time, on such LIBOR Determination Date. If Telerate Page 3750 is
unavailable at such time, LIBOR for the appropriate Index Maturity will be
determined at approximately 11:00 A.M., London time, on such LIBOR
Determination Date on the basis of the rate at which LIBOR having such Index
Maturity is offered by four major banks selected by the Calculation Agent in
the London interbank market commencing on the second London Banking Day
immediately following such LIBOR Determination Date. The Calculation Agent
will request the principal London office of each of such banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR for
such Index Maturity will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR for a given Index Maturity for such
LIBOR Determination Date will be the arithmetic mean of LIBOR quoted at
approximately 11:00 A.M., New York City time, on such LIBOR Determination Date
by three major banks in New York City selected by the Calculation Agent for
LIBOR having such Index Maturity, commencing on the second London Banking Day
immediately following such LIBOR Determination Date; provided, however, that
if the banks selected as aforesaid by
6
the Calculation Agent are not quoting as mentioned in this sentence, LIBOR for
such Index Maturity will be LIBOR for such Index Maturity in effect on such
LIBOR Determination Date.
"Trigger Event" shall have the meaning specified in the Swap
Agreement.
"Trustee Fee" shall mean the amount paid to the Trustee by the
Depositor on the Closing Date.
"Trust Property" shall mean the Underlying Securities described on
Schedule I hereto and the Swap Agreement and the Certificate Account; each
subject to the obligations of the Trust under the Swap Agreement.
"Underlying Acceleration Termination" shall have the meaning
specified in the Swap Agreement.
"Underlying Securities" shall mean $10,000,000 aggregate principal
amount of 7 1/2% Notes, issued by the Underlying Securities Issuer, as set
forth in Schedule I attached hereto.
"Underlying Securities Guarantor" shall mean American International
Group, Inc.
"Underlying Securities Indenture" shall mean the indenture dated May
15, 1995, between the Underlying Securities Issuer and the Underlying
Securities Trustee, pursuant to which the Underlying Securities were issued.
"Underlying Securities Issuer" shall mean American General
Corporation.
"Underlying Securities Trustee" shall mean Chemical Bank or any
successor thereto acting as indenture trustee pursuant to the Underlying
Securities Indenture.
"Underwriter" shall mean Xxxxxx Brothers Inc.
"Universal Business Day" shall mean a day on which commercial banks
are open for business (including dealings in foreign exchange and foreign
currency deposits) in Frankfurt, London, New York and Tokyo.
"Voting Rights" shall be allocated among all Certificateholders in
proportion to the then unpaid Certificate Principal Amounts of their
respective Certificates.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administrative Fees"
"Advance"
"Allowable Expense Amounts"
"Basic Documents"
7
"Call Premium Percentage"
"Credit Support"
"Credit Support Instrument"
"Credit Support Provider"
"Cut-off Date"
"Eligible Expense"
"Eligible Investment"
"Exchange Rate Agent"
"Fixed Pass-Through Rate"
"Guaranteed Investment Contract"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Minimum Wire Denomination"
"Optional Exchange Dates"
"Pass-Through Rate"
"Place of Distribution"
"Purchase Price"
"Required Premium"
"Required Principal"
"Requisite Reserve Amount"
"Retained Interest"
"Sub-Administration Account"
"Sub-Administration Agreement"
"Sub-Administration Agent"
8
"Surety Bond"
"Swap Guarantee"
"Swap Guarantor"
Section 3. Designation of Trust and Certificates. The Trust created
hereby shall be known as the "Repackaged American General Floating Rate Trust
Certificates, Series 2003-1 Trust." The Certificates evidencing certain
undivided ownership interests therein shall be known as "Repackaged American
General Floating Rate Trust Certificates, Series 2003-1."
(a) The Certificates shall be held through the Depository in book-entry
form and shall be substantially in the form attached hereto as Exhibit A. The
Certificates shall be issued in denominations of $1,000. Except as provided in
the Standard Terms, the Trust shall not issue additional Certificates or incur
any indebtedness.
(b) The Certificates have an initial aggregate certificate principal
amount (the "Certificate Principal Amount") of $10,000,000.
(c) The holders of the Certificates will be entitled to receive on each
Distribution Date the Interest Distribution Amount.
(d) The Depositor may sell to the Trustee additional Underlying
Securities on any date hereafter upon at least 3 Business Days' notice to the
Trustee (or such shorter period as shall be mutually satisfactory to the
Depositor and the Trustee) and upon (i) satisfaction of the Rating Agency
Condition, (ii) prior consent of the Swap Counterparty and (iii) delivery of
an Opinion of Counsel to the effect that the sale of such additional
Underlying Securities will not cause the Trust to be taxed as an association
or publicly traded partnership taxable as a corporation for federal income tax
purposes. Each condition to be satisfied with respect to a sale of Underlying
Securities on or prior to the Closing Date shall be satisfied with respect to
a sale of additional Underlying Securities no later than the date of sale
thereof, each representation and warranty set forth in the Standard Terms to
be made on the Closing Date shall be made on such date of sale, and from and
after such date of sale, all Underlying Securities held by the Trustee shall
be held on the same terms and conditions. Upon such sale to the Trustee, the
Trustee shall deposit such additional Underlying Securities in the Certificate
Account, and shall authenticate and deliver to the Depositor, on its order,
Certificates in a Certificate Principal Balance equal to the principal amount
of such additional Underlying Securities. Any such additional Certificates
authenticated and delivered shall have the same terms and rank pari passu with
the Certificates previously issued in accordance with this Series Supplement.
Section 4. Trust Certificates. The Trustee hereby acknowledges receipt,
on or prior to the Closing Date, of:
(a) the Underlying Securities set forth on Schedule I hereto;
(b) the duly authorized and executed Swap Agreement; and
9
(c) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
Section 5. Distributions.
(a) Except as otherwise provided in Section 3(c) and Section 6, on each
applicable Distribution Date, the Trustee shall apply Available Funds in the
Certificate Account as follows:
(i) The Trustee will pay from Available Interest Funds:
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 8(b) below and approved by 100% of the
Certificateholders; and
(2) second, to the holders of the Certificates, interest
accrued and unpaid, pro rata in proportion to their entitlements
thereto;
provided, however, that if the Trustee has not received any amounts
of Available Interest Funds on or prior to the related Distribution Date, such
amounts shall be applied in accordance with this Section 5(a) promptly upon
receipt of such amounts.
(ii) The Trustee will pay Available Principal Funds, first, to the
Trustee, as reimbursement for any Extraordinary Trust Expenses incurred
by the Trustee in accordance with Section 8(b) below and approved by 100%
of the Certificateholders; and second, to the Certificateholders, pro
rata, from Available Principal Funds, the then outstanding principal on
the Certificates.
(iii) any Available Funds remaining in the Certificate Account after
the payments set forth in clauses 5(a)(i) and 5(a)(ii) above shall be
paid first, to the Trustee, as reasonable compensation for services
rendered to the Depositor, up to $1,000 and, thereafter, to the
Certificateholders, pro rata.
Any portion of the Available Funds (i) that does not constitute principal of,
or interest on, the Underlying Securities, (ii) that is not received in
connection with a redemption, prepayment or liquidation of the Underlying
Securities and (iii) for which allocation by the Trustee is not otherwise
contemplated by this Series Supplement, shall be remitted by the Trustee to
the Depositor.
10
Section 6. Early Redemption of Certificates.
(a) If a Special Termination Event occurs, the Trustee shall, no later
than one Business Day following the applicable Early Termination Date, notify
the Certificateholders of the occurrence of such Special Termination Event.
Subject to the next succeeding sentence, the Trustee shall, on the applicable
Swap Redemption Date, distribute to each Certificateholder its Pro Rata Share
of (i) the Underlying Securities in-kind and (ii) any Early Termination
Payment received by the Trust from the Swap Counterparty in connection with
such Special Termination Event. Notwithstanding the preceding sentence, the
Certificateholders may elect, by affirmative vote of 100% of the Certificates
outstanding, to notify the Trustee no later than three Business Days prior to
the applicable Swap Redemption Date, to direct the Marketing Agent to sell, in
accordance with the Sale Procedures, the entire principal balance of the
Underlying Securities held by the Trust for settlement on the Early
Termination Date and distribute to each Certificateholder on such date its Pro
Rata Share of the sum of (i) the Liquidation Proceeds and (ii) any Early
Termination Payment received by the Trust from the Swap Counterparty in
connection with such Special Termination Event.
(b) If a Swap Termination Event occurs that is not a Special Termination
Event, promptly following the applicable Early Termination Date, the Trustee
will direct the Marketing Agent to sell, in accordance with the Sale
Procedures, the entire principal balance of the Underlying Securities held by
the Trust for settlement on the Early Termination Date and distribute to each
Certificateholder on such date the greater of (a) zero and (b) its Pro Rata
Share of (i) the Liquidation Proceeds plus (ii) any Early Termination Payment
received by the Trust from the Swap Counterparty in connection with such
Special Termination Event, minus (iii) any Early Termination Payment paid by
the Trust to the Swap Counterparty in connection with such Special Termination
Event.
(c) Notwithstanding Section 3.12 of the Standard Terms, upon the
occurrence of an SEC Reporting Failure, the Depositor shall within a
reasonable time after the Discontinuation Date, (i) subject to the second
succeeding sentence and subject to the consent of the Swap Counterparty in
accordance with the terms of the Swap Agreement, instruct the Trustee to (A)
distribute to each Certificateholder, on the Special Redemption Date, its Pro
Rata Share of the Underlying Securities and (B) assign to each
Certificateholder its Pro Rata Share of all rights and obligations of the
Trust in and to the Swap Agreement. If the Swap Counterparty does not consent
to the assignment of the Swap Agreement to the Certificateholders, and subject
to the next succeeding sentence, the Trustee will direct the Marketing Agent
to sell, in accordance with the Sale Procedures, the entire principal balance
of the Underlying Securities held by the Trust for settlement on the Early
Termination Date and distribute to each Certificateholder on such date the
greater of (a) zero and (b) its Pro Rata Share of (i) the Liquidation Proceeds
plus (ii) any Early Termination Payment received by the Trust from the Swap
Counterparty in connection with the related Swap Termination Event, minus
(iii) any Early Termination Payment paid by the Trust to the Swap Counterparty
in connection with such Swap Termination Event. Notwithstanding the foregoing
subject to the consent of the Swap Counterparty in accordance with the terms
of the Swap Agreement, the Certificateholders may elect, by affirmative vote
of 100% of the Certificates outstanding, to notify the Trustee no later than
three Business Days prior to the applicable Special Redemption Date to take
another action (which proposed action must be reasonably acceptable to the
Trustee) with respect to the Underlying Securities and the
11
Swap Agreement as may be agreed upon by the Certificateholders and the Swap
Counterparty, including, without limitation, transferring the Underlying
Securities and the Swap Agreement to a new special purpose entity and to
receive, instead of the Underlying Securities and the Swap Agreement,
interests in such special purpose entity.
(d) If the Trustee receives non-cash property in respect of the
Underlying Securities as a result of a payment default on the Underlying
Securities (including from the sale thereof), the Trustee will promptly give
notice to the Depository, or for any Certificates which are not then held by
DTC or any other depository, directly to the registered holders of the
Certificates then outstanding and unpaid. Such notice shall state that the
Trustee shall and the Trustee shall, not later than 30 days after the receipt
of such property, allocate and distribute such property to the Holders of
Certificates then outstanding and unpaid (after deducting the costs incurred
in connection therewith) their pro rata portion of such property. Property
other than cash will be liquidated by the Trustee, and the proceeds thereof
distributed in cash, only to the extent necessary to avoid distribution of
fractional securities to Certificateholders. In-kind distribution of such
property to Certificateholders, based on the market value of such property as
of the date of distribution to Certificateholders, will be deemed to reduce
the Certificate Principal Amount on a dollar-for-dollar basis.
Section 7. Partial Unwind of Certificates.
(a) If the beneficial owner of any Certificate is Xxxxxx Brothers Inc. or
any affiliate thereof (an "Affiliated Owner"), and such Affiliated Owner has
been a registered Certificateholder for at least six calendar months, and
subject to agreement by the two parties as to the termination payment owed
under the Swap Agreement, the Swap Counterparty shall enter into a Partial
Unwind Agreement with such Affiliated Owner, at its request. In the event an
Affiliated Owner and the Swap Counterparty enter into and deliver to the
Trustee a Partial Unwind Agreement, specifying a date (the "Partial Unwind
Date"), which is at least five Business Days thereafter, on which the
Affiliated Owner and the Swap Counterparty propose that the actions referred
to in the fourth succeeding sentence would occur, the Trustee may, in its sole
discretion (but shall not be obligated to) countersign such Partial Unwind
Agreement; provided, however, that (i) no Affiliated Owner will be permitted
to enter into a Partial Unwind Agreement prior to the one-year anniversary of
the Closing Date, (ii) no Affiliated Owner will be permitted to enter into a
Partial Unwind Agreement more frequently than once in any six month calendar
period and (iii) each Partial Unwind Agreement shall be in a minimum amount of
$1,000,000. Any such Partial Unwind Agreement shall specify a Partial Unwind
Date which is on or before the next succeeding Distribution Date (so that no
Distribution Date falls between the date such Partial Unwind Agreement (as
executed by an Affiliated Owner and the Swap Counterparty) is delivered to the
Trustee and a Distribution Date). In addition, in determining whether to
countersign a Partial Unwind Agreement, the Trustee may rely on a
certification of the Marketing Agent, which the Marketing Agent shall provide,
as to whether entering into and giving effect to such Partial Unwind Agreement
(a) will expose the Trust to any liability or expense or (b) have an adverse
impact on or consequence for the Trust including (x) the treatment of the
Certificates and the Trust for Federal income tax purposes (as specified in
the Trust Agreement), or (y) under the Investment Company Act, ERISA or the
Code or (c) would adversely affect in any material respect the interests of
any Certificateholder (other than the applicable Affiliated Owner). The
Trustee shall also be entitled to receive an Opinion of
12
Counsel with respect to the foregoing legal matters and the cost of such
Opinion of Counsel shall be borne by the applicable Affiliated Owner. In order
to give effect to the provisions of a Partial Unwind Agreement which the
Trustee has elected to countersign, the Trustee shall, effective on such
Partial Unwind Date and upon confirmation to the Trustee from the Swap
Counterparty that such Affiliated Owner has paid to the Swap Counterparty any
breakage or termination payment due under the Swap Agreement in connection
with the partial termination provided for in the Partial Unwind Agreement,
deliver to such Affiliated Owner, against tender by such Affiliated Owner or
its nominee of a Certificate having a principal balance equal to the Partial
Unwind Amount, either Underlying Securities having a principal amount equal to
the Partial Unwind Amount or the cash proceeds from the sale by the Marketing
Agent on behalf of such Certificateholder of such Underlying Securities (as
specified in the Partial Unwind Agreement) plus (to the extent such has
actually been paid to the Trustee by the Swap Counterparty) any breakage or
termination payment payable by the Swap Counterparty in connection with the
partial termination provided for in the Partial Unwind Agreement. Failure by
the Trustee to execute and deliver to such Certificateholder and Swap
Counterparty a Partial Unwind Agreement by not later than the second Business
Day before the proposed Partial Unwind Date shall be deemed to constitute
notice by the Trustee that it has elected not to countersign such Partial
Unwind Agreement. In the event that the Trustee elects not to countersign a
Partial Unwind Agreement, the Trust shall continue as if no Partial Unwind
Agreement had been tendered to the Trustee for countersignature. The execution
by such Certificateholder and the Swap Counterparty of such Partial Unwind
Agreement, taken together with the countersignature by the Trustee of such
Partial Unwind Agreement, shall be deemed to constitute an amendment to this
Trust Agreement under subsection 10.01(a) and, accordingly, shall not require
the consent of any Certificateholder other than the applicable Affiliated
Owner. In the event the Trustee elects to countersign a Partial Unwind
Agreement, the Trustee shall notify each Rating Agency rating such series of
Certificates of such Partial Unwind of Underlying Securities.
(b) Certificates with respect to which a Partial Unwind Agreement relates
shall be delivered to the Trustee on the Partial Unwind Date. Each such
Certificate not so delivered shall be deemed delivered on the books of the
Trustee on the Partial Unwind Date. With respect to each Certificate deemed
delivered to the Trustee, the Trustee shall make any required payments or
deliveries on such Partial Unwind Date (or such later date as the Trustee is
actually in receipt of such payments or deliveries) to the applicable
Affiliated Owner listed on the Certificate Register and such Certificate shall
be deemed cancelled.
(c) If the Underlying Securities underlying the Certificates with respect
to which a Partial Unwind Agreement shall have occurred are held by the
Trustee in certificated form, the Trustee shall, if necessary, request the
registrar for such Underlying Securities to deliver to the Trustee in
certificated form in appropriate denominations the Underlying Securities
evidenced by the Certificates so surrendered for withdrawal and, if the
requested Underlying Securities are received within 30 calendar days, the
Trustee shall deliver such Underlying Securities to the applicable Affiliated
Owner without unreasonable delay. If the requested certificated Underlying
Securities are not received within 30 calendar days, the Trustee shall
re-deliver the surrendered Certificates to such Affiliated Owner; provided,
however, the Trustee shall continue to seek to obtain the requested
certificated Underlying Securities and shall re-deliver the surrendered
Certificates, if the Affiliated Owner so requests and directs the Trustee and
delivers its Certificates.
13
(d) If the Underlying Securities underlying the Certificates with respect
to which a Partial Unwind Agreement shall have occurred are held by the
Trustee in book-entry form, the Trustee shall arrange for beneficial ownership
thereof to be transferred to the applicable Affiliated Owner, or its designee,
on the records of the Clearing Agency with which the certificate evidencing
such Underlying Securities is on deposit.
(e) Delivery of Underlying Securities in certificated form and
re-delivery of any Certificate pursuant to paragraph (c) above shall be made
by the Trustee at its Corporate Trust Office in New York City, except that, at
the written request, risk and expense of the Affiliated Owner surrendering
such Certificates and for the account of the Affiliated Owner thereof, such
delivery may be made at such other place as may be designated by such
Affiliated Owner and reasonably agreed to by the Trustee.
(f) Upon delivery by the Trustee of any Underlying Security to an
Affiliated Owner pursuant to this Section 7, such Underlying Security and the
surrendered Certificate shall cease to be entitled to the benefit of this
Trust Agreement for all purposes of this Trust Agreement and the Trustee shall
have no further obligation to such Affiliated Owner with respect thereto.
(g) The Affiliated Owner who surrenders Certificates to the Trustee as
provided herein in return for the Underlying Securities (whether in
certificated form or by book-entry) may not thereafter redeposit such
Underlying Securities with the Trustee and receive the benefit of this Trust
Agreement.
(h) As a condition precedent to the delivery of Underlying Securities to
an Affiliated Owner upon delivery of a Partial Unwind Agreement, the Trustee
may require payment by such Affiliated Owner of a sum sufficient for
reimbursement of any tax or other governmental charge with respect thereto and
any other reasonable out-of-pocket costs or expenses incurred by the Trustee
in connection with such delivery, including the costs of delivery to any
office other than the Trustee's designated office in New York City.
Section 8. Trustee's Fees.
(a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and any amounts payable under clauses 5(a)(iii)
above. The Trustee Fee shall be paid by the Depositor and not from Trust
Property. The Trustee shall bear all Ordinary Expenses. Failure by the
Depositor to pay such amount shall not entitle the Trustee to any payment or
reimbursement from the Trust, nor shall such failure release the Trustee from
the duties it is required to perform under the Trust Agreement.
(b) Extraordinary Trust Expenses shall not be paid out of the Trust
Property unless all the holders of the Certificates then outstanding have
directed the Trustee to incur such Extraordinary Trust Expenses. The Trustee
may incur other Extraordinary Trust Expenses if any lesser percentage of the
Certificateholders requesting such action pursuant hereto reimburse the
Trustee for the cost thereof from their own funds in advance. If Extraordinary
Trust Expenses are not approved unanimously as set forth in the first sentence
of this Section 8(b), such Extraordinary Trust Expenses shall not be an
obligation of the Trust, and the Trustee shall not
14
file any claim against the Trust therefor notwithstanding failure of
Certificateholders to reimburse the Trustee.
Section 9. Swap Payments. The Trust shall pay to the Swap Counterparty,
(i) all interest payments paid to the Trust in respect of the Underlying
Securities on the date such amounts are received by the Trust, excluding any
amount of interest that accrued with respect to the Underlying Securities from
the Underlying Securities Payment Date next preceding the Closing Date to, but
excluding, the Closing Date and (ii) upon the occurrence of a Swap Termination
Event, other than a Special Termination Event, an amount equal to any Early
Termination Payment owed by it to the Swap Counterparty under the Swap
Agreement. All amounts received by the Trustee from the Swap Counterparty on
any date under the Swap Agreement shall be deposited into the Certificate
Account on such date.
Section 10. Notices of Swap Termination Events.
As promptly as practicable after, and in any event within 30 days
after, the occurrence of any Swap Termination Event actually known to the
Trustee, the Trustee shall give notice of such Swap Termination Event to the
Depository, or, if any Certificates are not then held by DTC or any other
depository, directly to the registered holders of such Certificates.
Section 11. Miscellaneous.
(a) The provisions of Section 4.04, Advances, of the Standard Terms shall
not apply to the Repackaged American General Floating Rate Trust Certificates,
Series 2003-1 Certificates.
(b) The provisions of Section 4.07, Optional Exchange, of the Standard
Terms shall not apply to the Repackaged American General Floating Rate Trust
Certificates, Series 2003-1 Certificates.
(c) The Trustee shall simultaneously forward reports to
Certificateholders and to the Swap Counterparty pursuant to Section 4.03 of
the Standard Terms and to the New York Stock Exchange.
(d) Except as expressly provided herein, the Certificateholders shall not
be entitled to terminate the Trust or cause the sale or other disposition of
the Underlying Securities.
(e) The provisions of Section 3.07(d) of the Standard Terms shall not
apply to the Repackaged American General Floating Rate Trust Certificates,
Series 2003-1 Certificates.
(f) The outstanding principal balance of the Certificates shall not be
reduced by the amount of any Realized Losses (as defined in the Standard
Terms).
(g) The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates, and other than those
required or authorized by the Trust Agreement or the Swap Agreement or
incidental and necessary to accomplish such activities. The Trust may not
issue or sell any certificates or other obligations other than the
Certificates or otherwise incur,
15
assume or guarantee any indebtedness for money borrowed. Notwithstanding
Section 3.05 of the Standard Terms, funds on deposit in the Certificate
Account shall not be invested. Section 2.01(f) of the Standard Terms shall be
superseded by this provision.
(h) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee may be removed upon 60 days prior written notice delivered by the
holders of Certificates representing the Required Percentage-Removal. Section
2.01(f) of the Standard Terms shall be superseded by this provision.
(i) In the event that the Internal Revenue Service challenges the
characterization of the Trust as a grantor trust, the Trustee shall then file
such forms as the Depositor may specify to establish the Trust's election
pursuant to Section 761 of the Code to exclude the Trust from the application
of Subchapter K of the Code and is hereby empowered to execute such forms on
behalf of the Certificateholders.
(j) Notwithstanding anything in the Standard Terms to the contrary, the
Trustee, upon written direction by the Depositor, will execute the
Certificates.
(k) The Trustee shall appoint a firm of independent certified public
accountants to review each of the distribution reports prepared by the Trustee
pursuant to Section 4.03 of the Standard Terms and to verify (x) that such
reports and the calculations made therein were made accurately and in
accordance with the terms of the Trust Agreement and (y) that the Depositor
and the Trustee have each fulfilled their obligations under this Trust
Agreement. The Trustee shall instruct the accountants (i) to promptly report
to the Trustee any errors in such distribution reports discovered in verifying
such calculations and (ii) to render to the Trustee an annual examination
report, prepared in compliance with established or stated criteria as set
forth in the professional standards of the American Institute of Certified
Public Accountants, within 45 days (or such longer period as may be acceptable
to the Trustee) following the end of each calendar year that specifies the
calculations made in reviewing the distribution reports prepared by the
Trustee for the previous calendar year and such accountants' associated
findings.
(l) In relation to Section 7.01(f) of the Standard Terms, any periodic
reports filed by the Trustee pursuant to the Exchange Act in accordance with
the customary practices of the Depositor, need not contain any independent
reports.
(m) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee will have no recourse to the Underlying Securities.
(n) The Trust will not merge or consolidate with any other entity without
written confirmation from each Rating Agency that such merger or consolidation
will not result in the qualification, reduction or withdrawal of its
then-current rating on the Certificates.
(o) All directions, demands and notices hereunder or under the Standard
Terms shall be in writing and shall be delivered as set forth below (unless
written notice is otherwise provided to the Trustee).
16
If to the Depositor, to:
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Credit Trading
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee, to:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Rating Agencies, to:
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: CBO/CLO Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
17
If to the Swap Counterparty, to:
Xxxxxx Brothers Derivative Products Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Documentation Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any notices given to the Depositor under this Agreement shall also
be given to the Swap Counterparty.
(p) Each of the representations, covenants and agreements made herein by
each of the Depositor and the Trustee are for the benefit of the
Certificateholders.
(q) The provisions of the Section 2.01(d)(iii) of the Standard Terms
shall not apply to the Repackaged American General Floating Rate Trust
Certificates, Series 2003-1 Certificates and the following shall be deemed to
be inserted in its place:
"at the time of delivery of the Underlying Securities, the Depositor
owns such Underlying Securities, has the right to transfer its interest in
such Underlying Securities and such Underlying Securities are free and clear
of any lien, pledge, encumbrance, right, charge, claim or other security
interest; and"
Section 12. Governing Law. THIS SERIES SUPPLEMENT AND THE TRANSACTIONS
DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS
PROVISIONS THEREOF.
Section 13. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.
Section 14. Termination of the Trust. The Trust shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to the
Certificateholders following a Swap Termination Event; (ii) the Final
Scheduled Distribution Date and (iii) the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
Section 15. Sale of Underlying Securities. In the event of a sale of the
Underlying Securities pursuant to Section 6 hereof, the Marketing Agent shall
sell the Underlying Securities in accordance with the Sale Procedure.
Section 16. Amendments. Notwithstanding anything in the Trust Agreement
to the contrary, in addition to the other restrictions on modification and
amendment contained therein, the Trustee shall not enter into any amendment or
modification of the Trust Agreement which
18
would adversely affect in any material respect the interests of the holders of
any class of Certificates without the consent of the holders of 100% of such
class of Certificates; provided, however, that no such amendment or
modification will be permitted which would cause the Trust to be taxed as an
association or publicly traded partnership taxable as a corporation for
federal income tax purposes. The Trustee shall not enter into any amendment or
modification of the Trust Agreement that would affect the method, amount or
timing of payments due to the Swap Counterparty or the consent rights of the
Swap Counterparty hereunder without the prior written consent of the Swap
Counterparty. Unless otherwise agreed, the Trustee shall provide five Business
Days written notice to each Rating Agency and the Swap Counterparty before
entering into any amendment or modification of the Trust Agreement pursuant to
this Section 16.
Section 17. Voting of Underlying Securities, Modification of Underlying
Securities Indenture, Modification of Swap Agreement.
(a) The Trustee, as holder of the Underlying Securities, has the right to
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the
Depository, the Underlying Securities Trustee or the Underlying Securities
Issuer for its consent to any amendment, modification or waiver of the
Underlying Securities, the Underlying Securities Indenture or any other
document thereunder or relating thereto, or receives any other solicitation
for any action with respect to the Underlying Securities, the Trustee shall
mail a notice of such proposed amendment, modification, waiver or solicitation
to the Swap Counterparty and each Certificateholder of record as of such date.
Notwithstanding anything in the Trust Agreement to the contrary, until a Swap
Termination Event has occurred, the Swap Counterparty shall have all rights to
vote on any matters with respect to the Underlying Securities. During the
continuance of a Swap Termination Event, the Certificateholders shall have all
rights to vote on any matters with respect to the Underlying Securities, and
in such event: (i) the Trustee shall request instructions from the
Certificateholders as to whether or not to consent to or vote to accept such
amendment, modification, waiver or solicitation; (ii) the Trustee shall
consent or vote, or refrain from consenting or voting, in the same proportion
(based on the relative outstanding Certificate Principal Amounts of the
Certificates) as the Certificates of the Trust were actually voted or not
voted by the Certificateholders thereof as of a date determined by the Trustee
prior to the date on which such consent or vote is required. However,
notwithstanding anything in the Trust Agreement to the contrary (including
this Section 17), the Trustee shall at no time vote on or consent to any
matter (A) unless such vote or consent would not (based on an opinion of
counsel) cause the Trust to be taxed as an association or publicly traded
partnership taxable as a corporation under the Code, (B) which would alter the
timing or amount of any payment on the Underlying Securities, including,
without limitation, any demand to accelerate the Underlying Securities, except
in the event of a default under the Underlying Securities or an event which
with the passage of time would become an event of default under the Underlying
Securities and with (prior to a Swap Termination Event) the consent of the
Swap Counterparty or (during the continuance of a Swap Termination Event) the
unanimous consent of holders of all outstanding Certificates, or (C) which
would result in the exchange or substitution of any of the outstanding
Underlying Securities pursuant to a plan for the refunding or refinancing of
such Underlying Securities except in the event of a default under the
Underlying Securities Indenture and only with the consent of (prior to a Swap
Termination Event) the Swap Counterparty or (during the continuance of a Swap
Termination Event) Certificateholders
19
representing 100% of the Certificates. The Trustee shall have no liability for
any failure to act resulting from late return of, or failure to return,
directions requested by the Trustee from the Certificateholders or the Swap
Counterparty.
(b) In the event that an offer is made by the Underlying Securities
Issuer or any other Person to issue new obligations in exchange and
substitution for any of the Underlying Securities, pursuant to a plan for the
refunding or refinancing of the outstanding Underlying Securities or any other
offer is made for the Underlying Securities, the Trustee shall notify the Swap
Counterparty and the Certificateholders of such offer promptly. The Trustee
must reject any such offer unless, prior to the occurrence of a Swap
Termination Event, the Trustee is directed by the Swap Counterparty to accept
such offer and the Trustee has received the tax opinion described above.
During the continuance of a Swap Termination Event, the Trustee must reject
any such offer unless a default on the Underlying Securities shall have
occurred, and the Trustee is directed by affirmative vote of the holders of
100% of the Certificates to accept such offer and the Trustee has received the
tax opinion described above. If pursuant to the preceding two sentences, the
Trustee accepts any such offer the Trustee shall promptly notify the Rating
Agencies.
(c) If an event of default under the Underlying Securities Indenture
occurs and is continuing, and if directed by the Swap Counterparty, or, during
the continuance of a Swap Termination Event, a majority of the outstanding
Certificateholders, the Trustee shall vote the Underlying Securities in favor
of directing, or take such other action as may be appropriate to direct, the
Underlying Securities Trustee to declare the unpaid principal amount of the
Underlying Securities and any accrued and unpaid interest thereon to be due
and payable.
(d) Until a Responsible Officer of the Trustee has actual knowledge of
the occurrence of an event that would constitute a Swap Termination Event, the
Trustee shall be entitled to assume (and shall be fully protected, indemnified
and held harmless in doing so, in accordance with Section 7.12 of the Standard
Terms) that no Swap Termination Event has occurred and may accordingly seek
instructions under this Section 17 exclusively from the Swap Counterparty.
(e) The Trustee shall not consent to any amendment to the Swap Agreement
unless (i) it shall have received the prior consent to such amendment of
Certificateholders representing 66 2/3% of the aggregate Voting Rights and
(ii) each Rating Agency shall have confirmed in writing that such amendment
will not result in a reduction or withdrawal of the then current rating of the
Certificates; provided, however, the Trustee may consent to any amendment to
the Swap Agreement without the consent of the certificateholders to cure any
ambiguity in, or to correct or supplement any provision of the Swap Agreement
which may be inconsistent with any other provision thereof, or to otherwise
cure any defect therein, provided that any such amendment does not materially
adversely affect the interest of the certificateholders and that each Rating
Agency shall have given its prior written confirmation that such amendment
will not result in a reduction or withdrawal of the then current rating of the
Certificates; provided further, however, that notwithstanding anything to the
contrary, the Trustee shall not consent to any amendment to the Swap Agreement
that alters the timing or amount of any payment on the Swap Agreement unless
(i) it shall have received the prior consent to such amendment of
certificateholders representing 100% of the aggregate Voting Rights and (ii)
each Rating Agency
20
been given prior written notice of any such amendment (and no rating
confirmation shall be required).
Section 18. Additional Depositor Representation. It is the express intent
of the parties hereto that the conveyance of the Underlying Securities by the
Depositor to the Trustee be, and be construed as, a sale of the Underlying
Securities by the Depositor and not a pledge of any Underlying Securities by
the Depositor to secure a debt or other obligation of the Depositor. In the
event that, notwithstanding the aforementioned intent of the parties, any
Underlying Securities are held to be property of the Depositor, then, it is
the express intent of the parties that such conveyance be deemed a pledge of
such Underlying Securities and all proceeds thereof by the Depositor to the
Trustee to secure a debt or other obligation of the Depositor, pursuant to
Section 10.07 of the Standard Terms. In connection with any such grant of a
security interest in the Underlying Securities and all proceeds thereof
(including any such grant in connection with any sale of additional Underlying
Securities pursuant to Section 3(d)), the Depositor hereby represents and
warrants to Trustee as follows:
(i) In the event the Underlying Securities are held to be property of
the Depositor, then the Trust Agreement creates a valid and
continuing security interest (as defined in the UCC) in the
Underlying Securities in favor of the Securities Intermediary
which security interest is prior to all other liens, and is
enforceable as such as against creditors of, and purchasers from,
the Depositor.
(ii) The Underlying Securities have been credited to a trust account
(the "Securities Account") established in the name of the Trustee
in accordance with Section 2.01 of the Standard Terms. U.S. Bank
Trust National Association, as securities intermediary (the
"Securities Intermediary") has established the Securities Account
and has agreed to treat the Underlying Securities as "financial
assets" within the meaning of the UCC.
(iii) Immediately prior to the transfer of the Underlying Securities to
the Trust, the Depositor owned and had good and marketable title
to the Underlying Securities free and clear of any lien, claim or
encumbrance of any Person.
(iv) The Depositor has received all consents and approvals required by
the terms of the Underlying Securities for the transfer to the
Trustee all of the Depositor's interest and rights in the
Underlying Securities as contemplated by the Trust Agreement.
(v) The Depositor has taken all steps necessary to cause the
Securities Intermediary to identify on its records that the
Trustee is the Person owning the security entitlements credited to
the Securities Account.
(vi) Other than the security interest granted to the Trust pursuant to
this Agreement, the Depositor has not assigned, pledged, sold,
granted a security interest in or otherwise conveyed any interest
in the Underlying Securities (or, if any such interest has been
assigned, pledged or otherwise encumbered, it has been released).
The Depositor has not authorized the filing of and is not aware of
any
21
financing statements against the Depositor that include a
description of the Underlying Securities other than any financing
statement relating to the security interest granted to the Trust
hereunder. The Depositor is not aware of any judgment or tax lien
filings against the Depositor.
(vii) The Securities Account is not in the name of any Person other than
the Trustee. The Depositor has not consented to the compliance by
the Securities Intermediary, with entitlement orders of any Person
other than the Trustee.
22
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of
the date first written above.
XXXXXX ABS CORPORATION,
as Depositor
By:____________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION,
not in its individual capacity but solely as
Trustee on behalf of the
Repackaged American General Floating Rate
Trust Certificates,
Series 2003-1 Trust
By:____________________________
Name:
Title:
23
SCHEDULE I
REPACKAGED AMERICAN GENERAL FLOATING RATE TRUST CERTIFICATES
SERIES 2003-1
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 7 1/2% Notes.
Issuer: American General Corporation.
CUSIP Number: 000000XX0.
Principal Amount Deposited: $10,000,000.
Original Issue Date: The Underlying Securities were
issued on July 11, 1995.
Principal Amount of
Underlying Securities
Originally Issued: $150,000,000.
Maturity Date: July 15, 2025.
Interest Rate: 7 1/2% per annum.
Interest Payment Dates: January 15th and July 15th.
Record Dates: January 1st and July 1st.
I-1
EXHIBIT A
FORM OF TRUST CERTIFICATE
TRUST CERTIFICATE
-----------------
NUMBER 1 $10,000,000
CUSIP NO. 76027Y AA 2
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER
NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT
IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
A-1
XXXXXX ABS CORPORATION
$10,000,000
REPACKAGED AMERICAN GENERAL FLOATING RATE TRUST CERTIFICATES
SERIES 2003-1
INTEREST RATE: 1.42054% UNTIL THE DISTRIBUTION DATE IN JULY 2003 AND
THREE-MONTH LIBOR PLUS 0.30% THEREAFTER
evidencing a proportionate undivided beneficial ownership interest
in the Trust, as defined below, the property of which consists principally of
$10,000,000 aggregate principal amount of 7 1/2% Notes due 2025, issued by
American General Corporation (the "Underlying Securities Issuer") and all
payments received thereon, deposited in trust by Xxxxxx ABS Corporation (the
"Depositor"), and certain rights of the Trust under the Swap Agreement (the
"Trust Property").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate of $10,000,000 principal amount nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Repackaged
American General Floating Rate Trust Certificates Series 2003-1 Trust, formed
by the Depositor.
A-2
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms"), between the
Depositor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the Series Supplement in respect of the
Repackaged American General Floating Rate Trust Certificates, Series 2003-1,
dated as of July 2, 2003 (the "Series Supplement" and, together with the
Standard Terms, the "Trust Agreement"), between the Depositor and the Trustee.
This Certificate does not purport to summarize the Trust Agreement and
reference is hereby made to the Trust Agreement for information with respect
to the interests, rights, benefits, obligations, proceeds and duties evidenced
hereby and the rights, duties and obligations of the Trustee with respect
hereto. A copy of the Trust Agreement may be obtained from the Trustee by
written request sent to the Corporate Trust Office. Capitalized terms used but
not defined herein have the meanings assigned to them in the Trust Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Repackaged American General Floating Rate Trust
Certificates, Series 2003-1" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after July 2, 2003,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property and (iii) the rights of the Trust under the Swap Agreement
(subject to the Trust's obligations to the Swap Counterparty under the Swap
Agreement).
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions will be made on each Distribution Date, to the Person
in whose name this Certificate is registered on the applicable Record Date, in
an amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Certificates
or the Trust Agreement.
Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of
A-3
this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee shall be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the Corporate Trust Office or such other location as may be specified in
such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
or on behalf of the Trustee, by manual signature, this Certificate shall not
entitle the Holder hereof to any benefit under the Trust Agreement or be valid
for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
A-4
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.
REPACKAGED AMERICAN GENERAL
FLOATING RATE TRUST CERTIFICATES,
SERIES 2003-1
By: U.S. BANK TRUST NATIONAL
ASSOCIATION
not in its individual capacity but solely as
Trustee,
By:
--------------------------------------------
Authorized Signatory
Dated: July 2, 2003
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Repackaged American General Floating Rate Trust
Certificates, Series 2003-1, described in the Trust Agreement referred to
herein.
U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,
By:
--------------------------
Authorized Signatory
A-5
(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Swap Agreement and the Underlying
Securities, all as more specifically set forth herein and in the Trust
Agreement. The registered Holder hereof, by its acceptance hereof, agrees that
it will look solely to the Trust Property (to the extent of its rights
therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the Swap Counterparty and the Holders of the
Certificates in the manner set forth in the Series Supplement and the Standard
Terms. Any such consent by the Holder of this Certificate (or any predecessor
Certificate) shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not a
notation of such consent is made upon this Certificate. The Trust Agreement
also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $1,000.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, the City of
New York, duly endorsed by or accompanied by an assignment in the form below
and by such other documents as required by the Trust Agreement, and thereupon
one or more new Certificates of the same class in authorized denominations
evidencing the same principal amount will be issued to the designated
transferee or transferees. The initial Certificate Registrar appointed under
the Trust Agreement is U.S. Bank Trust National Association.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or the
Trustee may treat the Person in whose name this Certificate is registered as
the owner hereof for all purposes, and neither the Depositor, the Trustee, nor
any such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
A-6
The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i) the distribution in full of all
amounts due to the Certificateholders following a Swap Termination Event; (ii)
the Final Scheduled Distribution Date and (iii) the expiration of 21 years
from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. Xxxxx, living on
the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Xxxxx plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.
A-7
ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ______________________ Attorney to
transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-8
EXHIBIT B
FORM OF SWAP AGREEMENT
(Multicurrency - Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of July 2, 2003
REPACKAGED AMERICAN GENERAL
XXXXXX BROTHERS DERIVATIVE FLOATING RATE TRUST
PRODUCTS INC. and CERTIFICATES, SERIES 2003-1 TRUST
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: --
Section 19. 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.
Section 20. 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
B-1
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
B-2
(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:-
(i) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(ii) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have occurred
but for (I) any action taken by a taxing authority, or brought in a court
of competent jurisdiction, on or after the date on which a Transaction is
entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax Law.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount of
such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
Section 21. Representations
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction is
entered into and, in the case of the representations in Section 3(f), at all
times until the termination of this Agreement) that: --
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws
of the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
B-3
(ii) Powers. It has the power to execute this Agreement and any
other documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all
necessary action to authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and
performance do not violate or conflict with any law applicable to it, any
provision of its constitutional documents, any order or judgment of any
court or other agency of government applicable to it or any of its assets
or any contractual restriction binding on or affecting it or any of its
assets;
(iv) Consents. All governmental and other consents that are required
to have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and
any Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is accurate
and true.
(f) Payee Tax Representations. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
Section 22. 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;
B-4
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in order
to allow such other party or its Credit Support Provider to make a
payment under this Agreement or any applicable Credit Support Document
without any deduction or withholding for or on account of any Tax or with
such deduction or withholding at a reduced rate (so long as the
completion, execution or submission of such form or document would not
materially prejudice the legal or commercial position of the party in
receipt of such demand), with any such form or document to be accurate
and completed in a manner reasonably satisfactory to such other party and
to be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such
Confirmation or, if none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or other
authority that are required to be obtained by it with respect to this
Agreement or any Credit Support Document to which it is a party and will use
all reasonable efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning
of such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp
Tax levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated, organised,
managed and controlled, or considered to have its seat, or in which a branch
or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the
other party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
Section 23. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:
(i) Failure to Pay or Deliver. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section 2(a)(i)
or 2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is given
to the party;
(ii) Breach of Agreement. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or
to give notice of a Termination Event or any agreement or obligation
under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such failure
is not remedied on or before the thirtieth day after notice of such
failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with
B-5
any Credit Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support Document
to be in full force and effect for the purpose of this Agreement (in
either case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each Transaction
to which such Credit Support Document relates without the written
consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or challenges
the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to
have been made or repeated by the party or any Credit Support Provider of
such party in this Agreement or any Credit Support Document proves to
have been incorrect or misleading in any material respect when made or
repeated or deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit
Support Provider of such party or any applicable Specified Entity of such
party (1) defaults under a Specified Transaction and, after giving effect
to any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule
as applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however described)
in respect of such party, any Credit Support Provider of such party or
any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its creditors;
(4) institutes or has instituted against it a proceeding seeking a
judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or petition
instituted or presented against it, such proceeding or petition (A)
results in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation,
B-6
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));
B-7
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to pay
an additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than
by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of
a party consolidating or amalgamating with, or merging with or into, or
transferring all or substantially all its assets to, another entity
(which will be the Affected Party) where such action does not constitute
an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"), any
Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also
constitutes an Illegality, it will be treated as an Illegality and will not
constitute an Event of Default.
Section 24. 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.
B-8
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties, each
party will use all reasonable efforts to reach agreement within 30 days
after notice thereof is given under Section 6(b)(i) on action to avoid
that Termination Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section 2(a)(i)
or 2(e) in respect of the Terminated Transactions will be required to be
made, but without prejudice to the other provisions of this Agreement.
The amount, if any, payable in respect of an Early Termination Date shall
be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence
of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of
any Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective
B-9
(in the case of an Early Termination Date which is designated or occurs
as a result of an Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable is
effective (in the case of an Early Termination Date which is designated
as a result of a Termination Event). Such amount will be paid together
with (to the extent permitted under applicable law) interest thereon
(before as well as after judgment) in the Termination Currency, from (and
including) the relevant Early Termination Date to (but excluding) the
date such amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs,
the following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method", as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to
any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, an amount will be payable equal to (A)
the sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent of
the Unpaid Amounts owing to the Defaulting Party. If that amount is
a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting
Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting Party's
Loss in respect of this Agreement. If that amount is a positive
number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will pay
the absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from
a Termination Event: --
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if
Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed to
be references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than
all the Transactions are being terminated, Loss shall be calculated
in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(i) 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)
B-10
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
(ii) 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.
Section 25. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest
or obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest
in any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section
will be void.
Section 26. 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
B-11
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.
Section 27. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the
rights, powers, remedies and privileges provided in this Agreement are
cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall he entered into as soon as
practicable and may he executed and delivered in counterparts (including
by facsimile
B-12
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.
Section 28. 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.
Section 29. 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.
Section 30. 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 xxxxx, 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
B-13
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that
receipt, as applicable, is not a Local Business Day or that communication is
delivered (or attempted) or received, as applicable, after the close of
business on a Local Business Day, in which case that communication shall be
deemed given and effective on the first following day that is a Local Business
Day.
(b) Change of Addresses. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details
at which notices or other communications are to be given to it.
Section 31. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings
relating to this Agreement ("Proceedings"), each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New
York City, if this Agreement is expressed to be governed by the laws of
the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives any
claim that such Proceedings have been brought in an inconvenient forum
and further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing
Proceedings in any other jurisdiction (outside, if this Agreement is expressed
to be governed by English law, the Contracting States, as defined in Section
1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification,
extension or re-enactment thereof for the time being in force) nor will the
bringing of Proceedings in any one or more jurisdictions preclude the bringing
of Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any 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.
Section 32. Definitions
As used in this Agreement: --
B-14
"Additional Termination Event" has the meaning specified in Section
5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination
Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any
person, any entity controlled, directly or indirectly, by the person, any
entity that controls, directly or indirectly, the person or any entity
directly or indirectly under common control with the person. For this purpose,
"control" of any entity or person means ownership of a majority of the voting
power of the entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e)
of either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or
which would have been but for Section 2(a)(iii)) by a Non-defaulting Party,
the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation,
exemption, notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section
5(b).
"Credit Support Document" means any agreement or instrument that is
specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the relevant payee (as certified by
it) if it were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance
with Section 6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
B-15
"Indemnifiable Tax" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or
former connection between the jurisdiction of the government or taxation
authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection arising
from such recipient or related person being or having been a citizen or
resident of such jurisdiction, or being or having been organised, present or
engaged in a trade or business in such jurisdiction, or having or having had a
permanent establishment or fixed place of business in such jurisdiction, but
excluding a connection arising solely from such recipient or related person
having executed, delivered, performed its obligations or received a payment
under, or enforced, this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in
the case of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign exchange
and foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.
"Loss" means, with respect to this Agreement or one or more
Terminated Transactions, as the case may be, and a party, the Termination
Currency Equivalent of an amount that party reasonably determines in good
faith to be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated
Transaction or group of Terminated Transactions, as the case may be, including
any loss of bargain, cost of funding or, at the election of such party but
without duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount determined on the
basis of quotations from Reference Market-makers. Each quotation will be for
an amount, if any, that would be paid to such party (expressed as a negative
number) or by such party (expressed as a positive number) in consideration of
an agreement between such party (taking into account any existing Credit
Support Document with respect to the obligations of such party) and the
quoting Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have been required after that date. For this purpose, Unpaid Amounts in
respect of the Terminated Transaction or group of Terminated Transactions are
to be excluded but, without limitation, any payment or delivery that would,
but for the relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be
subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the
extent reasonably practicable as of the same day and time (without regard to
different time zones) on or as soon as reasonably practicable after the
relevant Early Termination Date. The day and
B-16
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than
three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest
and lowest values. If exactly three such quotations are provided, the Market
Quotation will be the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation has the same
highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed
that the Market Quotation in respect of such Terminated Transaction or group
of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the Non-defaulting Party (as
certified by it) if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such
party's head or home office.
"Potential Event of Default" means any event which, with the giving
of notice or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant
market selected by the party determining a Market Quotation in good faith (a)
from among dealers of the highest credit standing which satisfy all the
criteria that such party applies generally at the time in deciding whether to
offer or to make an extension of credit and (b) to the extent practicable,
from among such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the
jurisdictions (a) in which the party is incorporated, organised, managed and
controlled or considered to have its seat, (b) where an Office through which
the party is acting for purposes of this Agreement is located, (c) in which
the party executes this Agreement and (d) in relation to any payment, from or
through which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery
is to be made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the payer of
an amount under Section 6 is entitled or subject (whether arising under this
Agreement, another contract, applicable law or otherwise) that is exercised
by, or imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early
Termination Date, the sum of :--
(a) the Termination Currency Equivalent of the Market Quotations
(whether positive or negative) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation cannot be determined or
would not (in the reasonable belief of the party making the determination)
produce a commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
"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
B-17
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
B-18
amounts or obligations were or would have been required to have been paid or
performed to (but excluding) such Early Termination Date, at the Applicable
Rate. Such amounts of interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. The fair market value of
any obligation referred to in clause (b) above shall be reasonably determined
by the party obliged to make the determination under Section 6(e) or, if each
party is so obliged, it shall be the average of the Termination Currency
Equivalents of the fair market values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this document.
XXXXXX BROTHERS DERIVATIVE PRODUCTS INC. REPACKAGED AMERICAN GENERAL FLOATING RATE TRUST
CERTIFICATES, SERIES 2003-1 TRUST
(Party A) (Party B)
By: U.S. Bank Trust National Association, not in
its individual capacity but solely as Trustee
By: ________________________________ under the Trust Agreement
Name:
Title:
By: ________________________________
Name:
Title:
B-19
SCHEDULE
to the Master Agreement
dated as of July 2, 2003
between
XXXXXX BROTHERS DERIVATIVE PRODUCTS INC. ("Party A"),
a corporation organized under
the laws of
the State of Delaware
and
REPACKAGED AMERICAN GENERAL FLOATING RATE
TRUST CERTIFICATES, SERIES 2003-1 TRUST("Party B")
a trust created under the laws of the State of New York
pursuant to the Trust Agreement (as defined herein)
Section 33. Termination Provisions.
In this Agreement:-
(a) "Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v) Not Applicable.
---------------
Section 5(a)(vi) Not Applicable.
----------------
Section 5(a)(vii) Not Applicable.
-----------------
Section 5(b)(iv) Not Applicable.
----------------
and in relation to Party B for the purpose of:-
Section 5(a)(v) Not Applicable.
---------------
Section 5(a)(vi) Not Applicable.
----------------
Section 5(a)(vii) Not Applicable.
-----------------
Section 5(b)(iv) Not Applicable.
----------------
(b) "Specified Transaction" will have the meaning specified in Section 14
of this Agreement.
(c) Failure to Pay or Deliver. Section 5(a) is hereby amended by
replacing the word "third" with the word "tenth" in the last line of
subsection (i) thereof.
(d) Section 5(a) is hereby amended by: (1) deleting the word "or" at the
end of Subsection (vii) thereof; (2) deleting the period at the end of
Subsection (viii) thereof and replacing it with "; or" and (3) adding the
following Subsection (ix) at the end of such Section 5(a):
B-20
(ix)Underlying Securities Termination Default. An Underlying Securities
Termination Default shall have occurred and be continuing.
For the purpose of the foregoing Event of Default, the Defaulting Party
shall be Party B.
(e) The provisions of Section 5(a) (as modified by (c) and (d) above) and
Section 5(b) will apply to Party A and to Party B as follows:-
Section 5(a) Party A Party B
------------ ------- -------
(i) "Failure to Pay or Deliver" Applicable. Applicable.
(ii) "Breach of Agreement" Not Applicable. Not Applicable.
(iii) "Credit Support Default" Not Applicable. Not Applicable.
(iv) "Misrepresentation" Not Applicable. Not Applicable.
(v) "Default under Specified Transaction" Not Applicable. Not Applicable.
(vi) "Cross Default" Not Applicable. Not Applicable.
(vii) "Bankruptcy" Applicable. Not Applicable.
(viii) "Merger Without Assumption" Not Applicable. Not Applicable.
(ix) "Underlying Securities Termination
Default" Not Applicable. Applicable.
Section 5(b) Party A Party B
------------ ------- -------
(i) "Illegality" Applicable. Applicable.
(ii) "Tax Event" Not Applicable. Not Applicable.
(iii) "Tax Event Upon Merger" Not Applicable. Not Applicable.
(iv) "Credit Event Upon Merger" Not Applicable. Not Applicable.
(v) "Additional Termination Event" Applicable. Applicable.
(f) The following shall each be specified as "Additional Termination
Events" pursuant to Section 5(b)(v):
Partial Unwind. The exercise of a partial unwind of the Underlying
Securities by a Certificateholder in accordance with Section 7 of
the Series Supplement, in which case, (1) a portion of the Notional
Amount of the Transactions equal to the related Partial Unwind
Amount shall be terminated and (2) the Early Termination Date with
respect to such portion of the Notional Amount of the Transactions
shall be the related Partial Unwind Date. For the purposes the
foregoing Additional Termination Event, Party A shall be the
Affected Party.
Trigger Event. The occurrence of a Trigger Event, in which case the
entire Notional Amount of the Transaction shall be terminated. Each
of the following events shall constitute a Trigger Event:
(1) Downgrade. Party A ceases to maintain a Single A Quality
financial program, counterparty or similar rating from both of the
Relevant Rating Agencies;
B-21
(2) Failure To Deliver Collateral. The occurrence of an Event of
Default under the ISDA Master Agreement dated July 16, 1998 between
Party A and LBSF (the "Offsetting Transaction Master Agreement") as
a result of LBSF's failure to deliver, or procure delivery of,
collateral to Party A in the amounts and within the time required
(subject to any applicable cure period) thereunder and under the
terms of any applicable Credit Support Document, as such may be
amended from time to time without the consent of, or notice to,
Party B, provided such amendments are consistent with the
requirements of Party A's financial program as represented to the
Relevant Rating Agencies;
(3) Bankruptcy. LBHI or LBSF: (A) is dissolved (other than pursuant
to a consolidation, amalgamation or merger); (B) 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; (C) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (D) 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 (x) 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 (y) is not dismissed,
discharged, stayed or restrained in each case within 30 days of the
institution or presentation thereof; (E) has a resolution passed for
its winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (F) 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;
(G) 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; (H) 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 (A) through (G) inclusive; or (I)
takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing acts; and
(4) Capital Requirement. Party A shall fail to maintain capital in
the amount consistent with its financial program as represented to
the Relevant Rating Agencies.
For the purposes of the foregoing Additional Termination Event,
Party A shall be the Affected Party.
Underlying Acceleration Termination. The occurrence of an Underlying
Acceleration Termination, in which case, (1) the entire Notional
Amount of the
B-22
Transaction shall be terminated and (2) the Early Termination Date
shall be the date of receipt by Party B of the related accelerated
payments. For the purposes of the foregoing Additional Termination
Event, Party B shall be the Affected Party.
(g) Event of Default or Other Termination Event After Trigger Event. If a
Trigger Event shall have occurred and an event or circumstance which would
otherwise constitute or give rise to (1) an Event of Default with Party A as
the Defaulting Party (other than an Event of Default pursuant to Sections
5(a)(vii) or 5(a)(ix)), (2) a Termination Event other than a Trigger Event
shall occur, or (3) a Credit Assignment Event (as defined in part 5(a)(1)
hereof), such Trigger Event will prevail and such other event or circumstance
will not constitute an Event of Default, a Termination Event or a Credit
Assignment Event, as the case may be.
(h) Effect of Trigger Event. Notwithstanding anything to the contrary
contained in this Agreement, if a Trigger Event occurs the following
provisions shall apply:
(1) Notice. Party A shall, within one Business Day of becoming aware
of such occurrence, notify Party B by facsimile transmission or
electronic messaging system (the date such notice is transmitted,
the "Notice Date"), specifying the nature of the Trigger Event and
designating the Early Termination Date in respect of all
Transactions. The Early Termination Date so designated shall be no
later than the fifth Universal Business Day following such Notice
Date. The Early Termination Date so designated shall be subject to
change as specified in paragraph (h)(4)(a) below and, in the case of
affected Transactions only, as specified in paragraph (h)(4)(b)
below.
(2) Market Quotation. For the purposes of determining the Settlement
Amount pursuant to Section 6(e)(iv), the "Market Quotation" of a
Terminated Transaction (which may be positive or negative) shall be
the amount determined by Party A, using Market Rates and
Volatilities and by polling the Dealer Group as required, to be the
mid-market value of the Transaction as of the close of business (New
York time) on the Early Termination Date. Party A shall perform such
determinations in good faith in accordance with its usual operating
procedures and pursuant to industry standards. For purposes of this
definition, if the Market Quotation of a Terminated Transaction
represents an amount payable to Party A, it shall be expressed as a
negative number, and if the Market Quotation represents an amount
payable to Party B, it shall be expressed as a positive number. For
purposes of determining the Settlement Amount, Unpaid Amounts (which
shall be determined by Party A) in respect of the Terminated
Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the Early Termination Date, have
been required (assuming satisfaction of each applicable condition
precedent) after the Early Termination Date is to be included. Party
A shall notify Party B of the Market Quotation of each Terminated
Transaction, the Settlement Amount and the Termination Currency
Equivalent of any Unpaid Amounts within two Business Days following
the Early Termination Date.
(3) Payment Date. The amount calculated as being due as a result of
a Termination Event that arises as a result of a Trigger Event
pursuant to
B-23
Section 6(e)(iv) will be payable, in the case of an amount due and
owing to Party A, within ten Universal Business Days following the
Early Termination Date, and in the case of an amount due and owing
to Party B, within ten Universal Business Days following the Early
Termination Date. Party A and Party B agree that the party that is
required to pay such amount shall be required to pay interest on
such amount for the period from (and including) the Early
Termination Date to (but excluding) the date payment is required to
be made, at the Agreed Interest Rate. If either party fails to pay
such amount on the due date, such failure shall constitute a breach
of this Agreement, but shall not constitute an Event of Default
(including an Event of Default pursuant to Section 5(a)(i) or
5(a)(ii)) for purposes of this Agreement. In the event of any such
failure by either party, such party shall be required to pay
interest on such overdue amount for the period from (and including)
such due date to (but excluding) the date of actual payment, at the
default rate, which is the Agreed Interest Rate plus 3% per annum.
Interest payable under this paragraph will be calculated on the
basis of daily compounding and the actual number of days elapsed
divided by 360.
(4) Effect of Market Disruption Event. (a) In the event that a
Market Disruption Event exists on any Early Termination Date, such
date shall not be an Early Termination Date for any outstanding
Transaction. In such event Party A shall notify Party B and the
earlier to occur of (i) the next succeeding Universal Business Day
on which a Market Disruption Event does not exist and (ii) the
eighth Universal Business Day following the day on which notice of
the occurrence of a Trigger Event was given shall be considered the
Early Termination Date for all outstanding Transactions and a
Settlement Amount shall be obtained for that Early Termination Date
in accordance with the terms set forth in this paragraph (h). As
used herein, "Market Disruption Event" means any of the following
events, the existence of which shall be determined by Party A: (i)
any suspension or material limitation of trading (excluding daily
settlement limits in the normal course of trading) on the New York
Stock Exchange, London Stock Exchange or other recognized stock
exchange the effect of which on financial markets makes it
impracticable or inadvisable, in the view of Party A, to proceed
with the determination of the Settlement Amount, (ii) the
declaration of a banking moratorium by the Bank of England, United
States federal authorities, New York State or other recognized
international, national or regional banking authority authorities
the effect of which on financial markets makes it impracticable or
inadvisable, in the view of Party A, to proceed with the
determination of the Settlement Amount, (iii) the occurrence of any
outbreak or escalation of hostilities or a declaration by the United
States of a national emergency or war the effect of which on
financial markets makes it impracticable or inadvisable, in the view
of Party A, to proceed with the determination of the Settlement
Amount, or (iv) the occurrence of any other calamity or crisis or
any other event the effect of which, in the view of Party A and a
majority of eleven randomly selected unaffiliated Qualified
Counterparties of Party A (who are not Affiliates of Party A) whose
Settlement Amounts otherwise would have been determined on such
Early Termination Date, makes it impracticable or
B-24
inadvisable to proceed with the determination of such Settlement
Amounts on such Early Termination Date.
(b) If on an Early Termination Date as to which there is no
Market Disruption Event, there are conditions in a local market
that, in the judgment of Party A, materially would impede its
ability to determine the Market Quotation for certain Transactions
in that market (a "Local Market Disruption Event"), Party A shall
notify Party B of those conditions no later than one hour prior to
the scheduled time for determining the Market Quotation for such
affected Transactions on that date. Upon receipt of such notice,
Party B shall have the right to delay the Early Termination Date for
the affected Transactions (without affecting the Early Termination
Date for any other Transactions under this Agreement) by notifying
Party A within one hour of its election to exercise that right (to
be subsequently confirmed in writing). In such event, the Early
Termination Date for each such affected Transaction shall be the
next day on which Party A and Party B agree that the Local Market
Disruption Event ceases to exist, but in any case not later than the
due date for Settlement Amount payments owed to Party A with respect
to unaffected Transactions as provided in paragraph (h)(3). Market
Quotations so obtained for any affected Transaction shall be
included in the calculation of the Settlement Amount to paid as
provided in paragraph (h)(3). No delay in the Early Termination Date
for any affected Transaction as provided above shall affect the days
on which payments would otherwise be required to be made pursuant to
paragraph (h)(3) had no such delay occurred, it being understood,
however, that interest shall begin to accrue pursuant to such
paragraph with respect to any such affected Transaction only from
(and including) the delayed Early Termination Date.
(5) Payments on Early Termination. This Agreement shall be amended
by adding the following new subsection (v) to Section 6(e):
"(v) Trigger Event. If an Early Termination Date results from a
Trigger Event, Party A shall determine the Settlement Amount of
all Terminated Transactions on such date, and the amount
payable will be equal to (A) the Settlement Amount in respect
of the Terminated Transactions plus (B) the Termination
Currency Equivalent of Unpaid Amounts owing to Party B minus
(C) the Termination Currency Equivalent of Unpaid Amounts owing
to Party A. If that amount is a positive number, Party A will
pay it to Party B; if it is a negative number, no amount will
be paid by Party B to Party A. For purposes of determining the
Settlement Amount under this subsection, clause (b) of the
definition of Settlement Amount shall not apply."
(i) Automatic Early Termination. The "Automatic Early Termination"
provisions of Section 6(a) will not apply to Party A or Party B.
(j) Effect of Underlying Acceleration Termination. No Early Termination
Payment shall be payable by either party upon the occurrence of an Underlying
Acceleration
B-25
Termination unless another Early Termination Event shall have occurred on or
prior to the Early Termination Date for such Underlying Acceleration
Termination, in which case, the Early Termination Payment, if any, for such
other Early Termination Event, shall be payable.
(k) Additional Definitions.
As used in this Schedule, the following terms shall have the following
meanings:
"Agreed Interest Rate" for any day means the overnight ask rate in effect
for such day, as set forth opposite the caption "ON" under the heading
"Euro-Dollar" on Telerate Page 4756 (or any successor page thereto), as
of 11:00 a.m., New York time, on such day.
"Business Day" means any day (which is neither a Saturday nor a Sunday)
nor a day on which banks in New York City or the place of payment in
respect of the Underlying Securities are authorized or required to be
closed.
"Dealer Group" means the following entities and such other entities as
may be selected by Party A from time to time: JPMorgan Chase Bank,
Citibank, N.A., Barclays Bank PLC, Xxxxxxx Xxxxx Capital Services, Inc.,
Deutsche Bank AG, The Royal Bank of Scotland plc, HSBC Bank USA, Sumitomo
Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi Limited, Westpac
Bank Corp., Xxxxxxx Xxxxx & Co. and BNP Paribas.
Notwithstanding the definition of Dealer Group, (i) for U.S. dollar and
Canadian dollar information, the dealers that may be polled shall be
JPMorgan Chase Bank, Citibank, N.A., Deutsche Bank AG, Xxxxxxx Xxxxx
Capital Services, Inc., and Xxxxxxx Xxxxx & Co.; and (ii) for European
currency information, the dealers that may be polled shall be those
listed in clause (i) of this paragraph and, in addition, Barclays Bank
PLC, Deutsche Bank AG, The Royal Bank of Scotland plc and BNP Paribas.
"LBHI" means Xxxxxx Brothers Holdings Inc.
"LBSF" means Xxxxxx Brothers Special Financing Inc.
"Market Rates and Volatilities" means, in the case of interest rates and
volatilities, the interest rates and volatilities obtained from the
Telerate and Reuters screens where practicable and from polling the
Dealer Group and, in the case of foreign exchange rates and volatilities
and other pricing parameters, the foreign exchange rates and volatilities
or pricing parameters obtained from polling the Dealer Group. In each
case, for all rates, volatilities or other parameters obtained, at least
five members of the Dealer Group shall be polled, the highest and lowest
of such returns (including, in the case of interest rates and
volatilities, the rates and volatilities obtained from the Telerate and
Reuters screens, if any) shall be discarded and the simple mathematical
average of the remaining values shall be used to perform the applicable
determination.
"Moody's" means Xxxxx'x Investors Service, Inc.
B-26
"Person" means any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality
thereof.
"Relevant Rating Agencies" means, S&P and Moody's, or such of them as
then assigns a financial program, counterparty or similar rating to Party
A at Party A's request, or any other nationally recognized rating agency
then rating Party A at Party A's request (each, individually, a Relevant
Rating Agency).
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Single A Quality" means, in the case of S&P, A, in the case of Moody's,
A, in the case of Fitch, Inc., A, and, in the case of any other Relevant
Rating Agency, a designation of similar quality.
"Universal Business Day" means a day on which commercial banks are open
for business (including dealings in foreign exchange and foreign currency
deposits) in Frankfurt, London, New York, Tokyo and the city in which
Party B's head or home office is located.
(l) "Termination Currency" means United States Dollars ("USD").
Section 34. Tax Representations.
(A) Payer Tax Representation. For the purpose of Section 3(e) of this
Agreement, Party A and Party B each 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) of this Agreement, 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) by
reason of material prejudice to its legal or commercial position.
(B) Payee Tax Representations. For the purpose of Section 3(f) of this
Agreement, Party A makes the following representations:-
(i) The following representation applies to Party A:-
Party A is a corporation organized under the laws of the State
of Delaware.
B-27
(ii) The following representation applies to Party B:-
Party B is a trust that has not elected to be treated as a
corporation for U.S. federal income tax purposes.
Section 35. Agreement to Deliver Documents.
For the purpose of Section 4(a)(i) and Section 4(a)(ii) of this Agreement,
Party A and Party B each agree to deliver the following documents, as
applicable:-
(a) Tax forms, documents or certificates to be delivered are:
Form, Document Date by which Covered by
Party or Certificate to be Delivered Section 3(d)
required to -------------- --------------- ------------
deliver document
----------------
Party A A complete and executed U.S. Internal (i) Before the first Payment No
Revenue Service Form W-9 (or any successor Date under this Agreement,
thereto), that eliminates U.S. federal (ii) promptly upon reasonable
backup withholding tax on payments under demand by Party B, and (iii)
this Agreement. promptly upon learning that
any such Form previously
provided by Party A has become
obsolete or incorrect.
Party B A complete and executed U.S. Internal (i) Before the first Payment No
Revenue Service Form W-9 (or any successor Date under this Agreement,
thereto) and a complete and executed U.S. (ii) promptly upon reasonable
Internal Revenue Service Form W-8BEN, demand by Party A, and (iii)
W-8IMY, W-8ECI or W-9 (or any successor promptly upon learning that
thereto) from each Certificateholder (and, any such Form previously
where applicable, such forms from the provided by Party B has become
beneficial owners of such Certificates) and obsolete or incorrect.
in any case in which the Certificateholder
is eligible for the benefits of an income
tax treaty with the United States, a Form
W-8BEN including a
B-28
Form, Document Date by which Covered by
Party or Certificate to be Delivered Section 3(d)
required to -------------- --------------- ------------
deliver document
----------------
claim of treaty benefits under Part II,
claiming such benefits with respect
to all payments received with respect
to the Certificates, and with Part
III marked, in each case that eliminates
U.S. federal withholding tax and backup
withholding on payments under this
Agreement.
(b) Other documents to be delivered are:
Form, Document Date by which Covered by
Party or Certificate to be Delivered Section 3(d)
required to -------------- --------------- ------------
deliver document
----------------
Party A An opinion of counsel to Party A Promptly after execution of No
substantially in the form of this Agreement.
Exhibit B to this Schedule.
Party A An incumbency certificate with Upon execution of this Yes
respect to the signatory of this Agreement.
Agreement.
Party B An opinion of counsel to Party B Promptly after execution of No
substantially in the form of this Agreement.
Exhibit C to this Schedule.
Party B (with An incumbency certificate with Upon execution of this Yes
respect to respect to the signatory Agreement.
the Trustee) of this Agreement.
Party B (with A certified copy of the Upon execution of this Yes
respect to resolution or resolutions or Agreement (unless an
the Trustee) applicable Bylaws (the Authorizing Resolution has
"Authorizing Resolution") of the previously been furnished by
Board of Directors or loan the Trustee to Party A)
committee of the
B-29
Form, Document Date by which Covered by
Party or Certificate to be Delivered Section 3(d)
required to -------------- --------------- ------------
deliver document
----------------
Xxxxxxx,certified by a secretary, and, with respect to each Swap
or an assistant secretary of the Transaction not covered by a
Trustee, pursuant to which the previously furnished
Trustee is authorized, on behalf Authorizing Resolution,
of the Trust, to enter into this within five Business Days of
Agreement and each Swap the Trade Date.
Transaction entered into under
this Agreement.
Party B A certified copy of the Trust Upon execution of this Yes
Agreement and each amendment Agreement and on the date of
thereof. each amendment thereof.
Section 36. Miscellaneous.
(a) Addresses for Notices. For purpose of Section 10(a):
Address for notices or communications to Party A:-
Address: Xxxxxx Brothers Derivative Products Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Documentation Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Address for notices or communications to Party B:-
Address: U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Facsimile No.: (000) 000-0000
(b) Process Agent. For the purpose of Section 13(c):-
B-30
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) of this
Agreement:--
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A. The failure of
Party A to perform its obligations as Calculation Agent shall not be construed
as an Event of Default or Termination Event.
(f) Credit Support Document. Details of any Credit Support Document:-
In the case of Party A, not applicable.
In the case of Party B, not applicable.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not Applicable.
Credit Support Provider means in relation to Party B: Not Applicable.
(h) Limitation on Trustee Liability. In the absence of negligence,
willful misconduct or bad faith on the part of the Trustee, the Trustee shall
have no personal liability for the payment of any indebtedness or expenses of
Party B or be personally liable for the breach or any failure of any
obligation, representation, warranty or covenant made or undertaken by Party B
under this Transaction or the Trust Agreement within the scope of the
Trustee's discharge of its duties under this Transaction or the Trust
Agreement or for any amounts due under this Transaction from Party B, such
amounts to be paid solely from the assets of Party B in accordance with the
Trust Agreement.
(i) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law doctrine).
(j) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the
second line of subparagraph (i) thereof the word "non-"; and (ii) deleting the
final paragraph thereof.
(k) Netting of Payments. Section 2(c)(ii) will not apply to all
Transactions.
(l) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
Section 37. Other Provisions.
(a) Credit Assignment Event.
B-31
(i) A "Credit Assignment Event" shall occur if at any time during the
term of this Agreement, the Certificates cease to meet the Minimum
Rating Requirement (as defined below) from both Xxxxx'x and S&P.
Following the occurrence of a Credit Assignment Event, the rights
and obligations of Party A under this Agreement and all Transactions
hereunder shall automatically, and without any further action by any
party, be deemed to have been assigned and delegated to LBSF,
effective on the third Business Day following notification by Party
A to Party B of such assignment and Party B expressly and
irrevocably consents to such assignment and assumption, except that
no such assignment and assumption shall occur at any time after the
occurrence of any event of default under any master agreement
between Party A and LBSF. As of and from the effective date of such
assignment, LBSF shall succeed to all rights and obligations of
Party A under this Agreement and all Transactions hereunder.
"Minimum Rating Requirement" means (A) with respect to Xxxxx'x, a
long-term credit rating of at least Baa3; and (B) with respect to
S&P, long-term credit rating of at least BBB-.
(ii) Party A represents that it has provided separate consideration to
LBSF for the right to assign this Agreement and the Transactions
hereunder to LBSF pursuant to clause (i), and Party B shall not owe
Party A any termination or other payment upon any such assignment.
(iii) Notwithstanding clauses (i) and (ii) above, no transfer or
assignment payment shall be due to or owing from either Party A or
Party B other than its obligations under the Transactions.
(iv) Notwithstanding the foregoing, the assignment provisions of this
paragraph shall not take effect if, at the time such assignment
would be required, Party B shall have satisfied in full all of its
payment obligations under Section 2(a) of this Agreement and shall
at such time have no future payment obligations, whether absolute or
contingent, under such Section.
(v) The assignment provisions of this paragraph shall not take effect
if, at the time such assignment would be required, LBSF or its
guarantor shall have a long-term credit rating lower than that
assigned to the Certificates. In such case, Party A shall be
permitted to assign its rights and obligations under this agreement,
without the consent of any party, to an entity that has (or whose
guarantor has) a long-term credit rating not lower than that
assigned to the Certificates.
(vi) Upon an assignment pursuant to this Part 5(a), a Trigger Event shall
cease to constitute an Additional Termination Event.
(vii) Upon the occurrence of a Credit Assignment Event, Party A shall
provide notice to each Rating Agency within five Business Days.
(b) Confirmation. Each Confirmation supplements, forms part of, and will
be read and construed as one with the Agreement. A form of Confirmation is set
forth as Exhibit A hereto.
(c) Early Termination. Notwithstanding any other provision of this
Agreement, in the event of the occurrence of an Event of Default with respect
to Party A, Party B shall not be
B-32
entitled to designate an Early Termination Date unless directed to do so by a
majority of the holders of the Certificates. In addition, the Early
Termination Date so designated shall be at least five Business Days following
the date on which Party B receives such direction from a majority of the
holders of the Certificates.
(d) No Bankruptcy Petition. Prior to the date that is one year and one
day after the date upon which the trust created under the Trust Agreement is
terminated in accordance with the terms thereof, Party A shall not institute
against, or join any other person in instituting against, the trust created
thereby, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law.
(e) Transfer. Section 7 is hereby amended by: (i) adding the words
"(which consent may not be unreasonably withheld)" after the word "consent" in
the second line thereof, (ii) adding the words "(and notice of the transferee
to)" after the word "of" in the third line thereof, (iii) adding the words
"and the consent of holders of 100% of the then outstanding Certificates, and
each Rating Agency shall have given its prior written confirmation that such
transfer will not result in a reduction or withdrawal of the then current
rating of the Certificates" after the word "party" in the third line thereof,
(iv) adding the words "(subject to providing written notice of the transferee
to the other party)" after the word "transfer" in the fourth and seventh line
thereof, (v) deleting the word "and" at the end of the sixth line thereof,
(vi) adding the word "and" after the words "Section 6(e)" in the eighth line
thereof and (vii) adding the following section (c) at the start of the ninth
line thereof "(c) unless Party A otherwise consents in its sole discretion, no
transfer may be made by Party B of all or part of its interest in this
Agreement unless the transferee has a Single A Quality financial program,
counterparty or similar rating from a Relevant Rating Agency." Party B shall
not consent to any transfer or assignment by Party A of its rights and
obligations hereunder unless holders of 100% of the outstanding Certificates
have consented to such assignment or transfer.
(f) Commencement of Voluntary Bankruptcy. So long as Party A is solvent,
Party A shall not (i) admit in writing its inability generally to pay its
debts as they become due; (ii) make a general assignment, arrangement or
composition with or for the benefit of its creditors; (iii) institute a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
in respect of Party A under any bankruptcy or insolvency law or other similar
law affecting creditors' rights; (iv) pass a resolution for its winding-up,
official management or liquidation (other than pursuant to a consolidation,
amalgamation or merger); or (v) seek 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.
(g) No Capital Contribution to Party A. Party A, LBHI and LBSF have each
acknowledged to and agreed with each other, and Party B hereby acknowledges,
that neither LBHI nor LBSF nor any Affiliate of Party A is under any
obligation whatsoever (whether express or implied) to contribute capital to
Party A. Party B represents and warrants to Party A that in executing and
delivering this Agreement, and performing its obligations hereunder, Party B
is relying on the credit of Party A alone, and not on the credit of any other
entity that may be affiliated with Party A.
B-33
(h) Intention to Enter into a "Swap Agreement". Each of Party A and Party
B hereby acknowledges and agrees that this Agreement and all Additional Direct
Agreements and each Transaction hereunder or thereunder is intended to be a
"swap agreement" as that term is defined in the U.S. Bankruptcy Code (as
amended from time to time) and that the rights granted to each party under
Section 6 include a contractual right to terminate a "swap agreement" and to
offset and net out termination values and payments in conjunction therewith.
(i) Waiver of Right to Trial by Jury. Each party hereby irrevocably
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.
(j) Accuracy of Specified Information. Section 3(d) is hereby amended by
adding in the third line thereof after the word "respect" and before the
period the words "or, in the case of audited or unaudited financial
statements, a fair presentation, in all material respects, of the financial
condition of the relevant person."
(k) Additional Representations. For purposes of Section 3 of this
Agreement, the following shall be added, immediately following paragraph (f)
thereof:
(g) No Agency. It is entering into this Agreement and each Transaction
as principal (and not as agent or in any other capacity, fiduciary
or otherwise); provided, that the Trustee is acting not in its
individual capacity but solely as Trustee for Party B.
(h) Eligible Contract Participant. It is an "eligible contract
participant" as that term is defined in the Commodity Exchange Act,
as amended.
(i) Non-Reliance. Party A is acting for its own account, and it has made
its own independent decisions to enter into that Transaction and as
to whether that Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisers as it has
deemed necessary. Party B is entering into the Transaction pursuant
to the terms of the Trust Agreement. Neither party is 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.
B-34
Assessment and Understanding. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the risks of that Transaction.
Status of Parties. The other party is not acting as a fiduciary for
or an adviser to it in respect of that Transaction.
(l) No Setoff to Party A Affiliates. Party B agrees that all payments
required to be made by it under this Agreement shall be made without setoff or
counterclaim for, and that it shall not withhold payment or delivery under
this Agreement in respect of, any default by any Affiliate of Party A under
any Other Agreement or any amount relating to any Other Agreement between
Party B and such Affiliate of Party A or between an Affiliate of Party B and
such Affiliate of Party A. As used herein, "Other Agreement" means any
agreement, including, but not limited to, (i) any transaction (including an
agreement with respect thereto) which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction,
currency option or any other similar transaction (including any option with
respect to any of these transactions), (ii) any liability, claim or obligation
(whether present or future, contingent or otherwise), or (iii) any combination
of one or more of the transactions described above. This paragraph (l) shall
supersede any setoff right contained in any Other Agreement or any agreement
relating to any Other Agreement between Party B and any such Affiliate of
Party A or between an Affiliate of Party B and such Affiliate of Party A.
(m) Pledge of Swap Payment Rights and Other Property by Party A. Party A
has pledged its rights to receive payments under this Agreement and under
certain other swap agreements entered into or to be entered into by Party A
("Other Swap Agreements"), and has pledged or will pledge certain other
property for the benefit of Party B and the counterparties under such Other
Swap Agreements, ratably to secure Party A's obligations to make certain
payments to Party B and such counterparties under this Agreement and the Other
Swap Agreements. To the extent of any payments made by the provider(s) of any
Qualified Credit Enhancement (as defined in Party A's Operating Guidelines)
for the benefit of Party B, such provider(s) will be subrogated to the rights
of Party B under this Agreement; provided that such provider(s) shall not be
entitled to enforce such subrogation hereunder until all obligations of Party
A to Party B under this Agreement shall have been paid in full.
(n) Partial Unwind. Section 7 of the Series Supplement and all other
provisions of the Trust Agreement relating to the partial unwind of the
Underlying Securities shall apply to the Certificates; provided, however, only
Xxxxxx Brothers Inc. or any affiliate thereof which is a beneficial owner of a
Certificate will be permitted under the Trust Agreement to enter into a
Partial Unwind Agreement.
(o) Notices. For the purposes of subsections (iii) and (v) of Section
12(a), the date of receipt shall be presumed to be the date sent if sent on a
Local Business Day or, if not sent on a Local Business Day, the date of
receipt shall be presumed to be the first Local Business Day following the
date sent.
B-35
(p) Service of Process. The penultimate sentence of Section 13(c) shall
be amended by adding the following language at the end thereof: "if permitted
in the jurisdiction where the proceedings are initiated and in the
jurisdiction where service is to be made."
(q) Additional Definitions.
"Certificates" shall mean Repackaged American General Floating Rate Trust
Certificates, Series 2003-1 Trust Certificates, due July 15, 2025, issued
pursuant to the Trust Agreement.
"Liquidation Proceeds" shall have the meaning specified therefor in the
Trust Agreement.
"Market Agent" shall mean Xxxxxx Brothers Inc. as market agent of the
Trust under the Market Agent Agreement.
"Market Agent Agreement" shall mean the Market Agent Agreement, dated
July 2, 2003, between the Market Agent and the Trust.
"Trigger Event Special Redemption Date" shall have the meaning specified
therefor in the Trust Agreement
"Trust Agreement" shall mean, collectively, the Series Supplement (the
"Series Supplement"), dated as of July 2, 2003, which supplements and
amends the Standard Terms for Trust Agreements ("Standard Terms"), dated
as of January 16, 2001, each between Xxxxxx ABS Corporation, as
depositor, and U.S. Bank Trust National Association, as trustee, as the
same may be amended or supplemented from time to time as provided
therein.
"Trustee" shall mean U.S. Bank Trust National Association, as Trustee of
Party B, and any additional or successor trustee of Party B.
"Underlying Securities" shall have the meaning specified therefor in the
Trust Agreement.
"Underlying Acceleration Termination" shall mean the occurrence of an
event of default with respect to the Underlying Securities (other than an
Underlying Securities Termination Default), which event results in the
acceleration and final payment of the Underlying Securities.
"Underlying Securities Termination Default" shall mean the occurrence of
any of the following events: (i) the failure by the Underlying Securities
Issuer to pay interest or principal with respect to the Underlying
Securities within any applicable grace period after the same shall become
due or (ii) any event of bankruptcy, insolvency or reorganization that
would be an event of default under the Underlying Securities Indenture.
B-36
Terms used herein and not otherwise defined shall have the meaning
ascribed to them in the Trust Agreement.
B-37
The parties executing this Schedule have executed the Master Agreement
and have agreed as to the contents of this Schedule.
XXXXXX BROTHERS DERIVATIVE PRODUCTS INC.
By:__________________________________
Name:
Title:
REPACKAGED AMERICAN GENERAL FLOATING RATE
TRUST CERTIFICATES,
SERIES 2003-1 TRUST
By: U.S. Bank Trust National Association,
not in its individual capacity but
solely as Trustee under the
Trust Agreement
By:_________________________________
Name:
Title:
B-38
EXHIBIT A TO SCHEDULE
---------------------
FORM OF CONFIRMATION
Confirmation
------------
DATE: July 2, 2003
TO: Repackaged American General Floating Rate Trust Certificates,
Series 2003-1 Trust
FROM: Xxxxxx Brothers Derivative Products Inc.
SUBJECT: INTEREST RATE SWAP TRANSACTION
To U.S. Bank Trust National Association, as Trustee:
The purpose of this communication is to set forth the terms and
conditions of the transaction entered into on the Trade Date referred to below
(the "Transaction"), between Xxxxxx Brothers Derivative Products Inc. ("Party
A") and Repackaged American General Floating Rate Trust Certificates, Series
2003-1 Trust ("Party B"), a trust created under the laws of the State of New
York pursuant to that certain Series Trust Agreement (the "Series
Supplement"), dated July 2, 2003, which incorporates the Standard Terms for
Trust Agreements (collectively, the "Trust Agreement"). This communication
constitutes a "Confirmation" as referred to in the Master Agreement specified
below.
1. This Confirmation supplements, forms a part of and is subject to
the 1992 ISDA Master Agreement (Multicurrency - Cross Border), (the "Master
Agreement") (including the Schedule thereto), dated as of July 2, 2003,
between Party A and Party B. All provisions contained in, or incorporated by
reference to, such Master Agreement shall govern this Confirmation except as
expressly modified below.
2. This communication incorporates the definitions and provisions
contained in the 2000 ISDA Definitions (as published by the International
Swaps and Derivatives Association, Inc.) (the "Definitions"). In addition,
certain capitalized terms used herein but not defined herein shall have the
meaning ascribed to them in the Trust Agreement. In the event of any
inconsistency between this Confirmation and the Definitions or Master
Agreement, this Confirmation shall prevail.
3. The terms of the particular Transaction to which this
communication relates are as follows:
Party A: Xxxxxx Brothers Derivative Products Inc.
B-A-1
Party B: Repackaged American General Floating Rate
Trust Certificates, Series 2003-1 Trust
Trade Date: June 20, 2003
Effective Date: July 2, 2003
Scheduled Termination Date: July 15, 2025, subject to adjustment in
accordance with the Modified Following
Business Day Convention.
Calculation Agent: Party A
Business Days: Any day (which is neither a Saturday
nor a Sunday) nor a day on which banks in New
York City and the place of payment in respect
of the Underlying Securities are authorized
or required to be closed, subject to the
Modified Following Business Day Convention.
The "Modified Following Business Day
Convention" shall apply if the specified day
is not a Business Day and shall mean the
first following day that is a Business Day
unless that day falls in the next calendar
month, in which case that date will be first
preceding day that is a Business Day.
Notional Amount: $10,000,000, subject to reduction as a result
of an early termination of all or a portion
of the Transaction. The Notional Amount shall
at all times equal the outstanding principal
amount of the Certificates. See "Early
Termination Payment" below
Party A Floating Rate
Payer Payment Amounts:
Party A Payment Dates: The 15th day of each January, April, July and
October during the term of this Transaction,
commencing in July 2003 and ending on July
15, 2025, subject to adjustments in
accordance with the Modified Following
Business Day Convention.
Party A Floating Rate
for the Initial
Calculation Period: 1.42054% (inclusive of the Floating Rate
Spread)
B-A-2
Party A Floating
Rate Option: USD-LIBOR-BBA (Telerate Page 3750)
Designated Maturity: Three Months
Party A Floating Rate
Spread: plus 0.30%
Party A Day Count
Fraction: Actual/360
Reset Dates: The first day of each Calculation Period.
Other: Party A will have no obligation to make a
Party A Floating Rate Payment Amount unless
and until Party B has made the related
payment, if any, to Party A.
Party B Fixed Rate Payment Amounts:
Party B Fixed Rate
Payment Amounts: Any amounts received by Party B in respect of
interest on the Underlying Securities.
Party B Payment Dates: Any date on which distributions are received
by Party B in respect of interest on the
Underlying Securities, commencing in July
2003.
Underlying Securities: Issuer: American General Corporation
Maturity Date: July 15, 2025
Coupon: 7 1/2%
Day Count: 30/360
Payment Dates: The 15th day of each
January and July
(subject to applicable
grace periods) commencing
in July 2003 and ending
on the Final Scheduled
Distribution Date
Other: In the event of a discrepancy between the
Party B Fixed Rate Payment Amounts due in
respect of any Calculation Period and the
interest amount payable on the Underlying
Securities for the related period (as
calculated in accordance with the terms of
the Underlying Securities), the terms of the
Underlying
B-A-3
Securities shall govern the calculation of
the Party B Fixed Rate Payment Amount for
such Calculation Period.
Early Termination Payment: Section 6(e) of the Master Agreement is
hereby deleted, other than with respect to
Section 6(e)(iv) and 6(e)(v), and replaced
with the following:
(e) Payments on Early Termination.
(i) If notice is given designating an Early
Termination Date in respect of a portion of
the Notional Amount equal to the Partial
Unwind Amount in connection with the exercise
by a Certificateholder of the partial unwind
provisions of Section 7 of the Series
Supplement, Party A and such exercising
Certificateholder shall agree in accordance
with such Section 7 of the Series Supplement
on the termination payment to be paid by
either such party on such Early Termination
Date; provided, however, that under no
circumstances will such termination payment
be paid by Party B or the assets of Party B
(ii) If an Early Termination Date is
designated in respect of the entire Notional
Amount of the Transaction, Market Quotation
and Second Method shall be used to calculate
any termination payments owing by either
party under Section 6(e) of the Master
Agreement.
(iii) No termination payment shall be payable
by Party B to Party A following the
occurrence of a Special Termination Event. a
"Special Termination Event" is an Early
Termination event caused by the occurrence of
(A) an event specified in Section 5(a)(i) of
the Master Agreement, (B) an event specified
in Section 5(a)(vii) of the Master Agreement
or (C) a Trigger Event.
(iv) No Early Termination Payment shall be
payable by either party upon the occurrence
of an Underlying Acceleration Termination
unless another Early Termination Event shall
have occurred on or prior to the Early
Termination Date for such Underlying
Acceleration Termination, in
B-A-4
which case, the Early Termination Payment, if
any, for such other Early Termination Event,
shall be payable.
Amendment: Section 9(b) of the Master Agreement is
hereby deleted and replaced with the
following:
No amendment to this Agreement shall be
effective unless each of the parties hereto
shall have consented to such amendment in
writing. Notwithstanding anything contained
herein to the contrary, in connection with
any sale of additional Underlying Securities
to the Trust pursuant to Section 3(d) of the
Series Supplement, the parties hereto shall
enter into a Supplement to this Confirmation
whereby the Notional Amount shall be
increased by an amount equal to the principal
amount of the additional Underlying
Securities sold to the Trust.
4. Other Terms
(a) Interpretation. Each reference to the singular shall include the plural
and vice versa.
(b) Transfer. Neither party may transfer this Transaction or any interest in
or under this Transaction without the prior written consent of the
nontransferring party and the consent of holders of 100% of the then
outstanding Certificates, and each Rating Agency shall have given its prior
written confirmation that such transfer will not result in a reduction or
withdrawal of the then current rating of the Certificates. Any purported
transfer without such consents and such confirmation will be void.
(c) Limitation on Trustee Liability. In the absence of negligence, willful
misconduct or bad faith on the part of the Trustee, the Trustee shall have no
personal liability for the payment of any indebtedness or expenses of Party B
or be personally liable for the breach or any failure of any obligation,
representation, warranty or covenant made or undertaken by Party B under this
Transaction or the Trust Agreement within the scope of the Trustee's discharge
of its duties under this Transaction or the Trust Agreement or for any amounts
due under this Transaction from Party B, such amounts to be paid solely from
the assets of Party B in accordance with the Trust Agreement.
5. Account Details
Payments to Party A
Account for payments: JPMorgan Chase Bank
ABA # 000000000
A/C # 066143543
For the account of: Xxxxxx Brothers
Derivative Products Inc.
B-A-5
Payments to Party B
Account for payments: U.S.
Bank National Association,
Minneapolis, MN
ABA# 000 000 000 For Credit to A/C
1801 2116 7365 FBO: U.S. Bank Trust
N.A. For further Credit to A/C
4730017 OBI = CBTC 2003-1 AMERICAN
GENERAL A/C, 77135800
B-A-6
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing the copy of this Confirmation enclosed for that
purpose and returning it to us.
Yours sincerely,
XXXXXX BROTHERS DERIVATIVE PRODUCTS INC.
By:
---------------------------------------
Name:
Title:
Confirmed as of the date first written:
REPACKAGED AMERICAN GENERAL FLOATING RATE TRUST CERTIFICATES,
SERIES 2003-1 TRUST
By: U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Trustee under the Trust Agreement
By:
------------------------------------------------
Name:
Title:
B-A-7
EXHIBIT B TO SCHEDULE
---------------------
FORM OF OPINION OF COUNSEL FOR PARTY A
July 2, 2003
To the Persons listed on
Schedule A hereto
Re: Xxxxxx ABS Corporation
Repackaged American General Floating Rate
Trust Certificates, Series 2003-1
------------------------------------------------
Ladies and Gentlemen:
We have acted as special counsel in connection with (i) the transfer of
$10,000,000 aggregate principal amount of 7 1/2% Notes due 2025 (the
"Underlying Securities") of American General Corporation, by Xxxxxx ABS
Corporation ("LABS") to the Repackaged American General Floating Rate Trust
Certificates, Series 2003-1 Trust (the "Trust") established by LABS and (ii)
the issuance by the Trust on July 2, 2003 (the "Closing Date") of the
Repackaged American General Floating Rate Trust Certificates, Series 2003-1
(the "Certificates"), issued pursuant to a standard terms for trust
agreements, dated as of January 16, 2001 (the "Standard Terms"), between LABS
and U.S. Bank Trust National Association ("U.S. Bank"), as trustee (the
"Trustee"), as supplemented by a series supplement thereto, dated as of July
2, 2003 (the "Series Supplement" and, together with the Standard Terms, the
"Trust Agreement"), between LABS and the Trustee. Capitalized terms defined in
the Trust Agreement and used but not otherwise defined herein are used herein
as so defined.
In connection with this opinion, we have examined and are familiar with
originals or copies certified or otherwise identified to our satisfaction of:
(i) the Trust Agreement; (ii) a securities account control agreement dated as
of July 2, 2003 between LABS and U.S. Bank, as trustee and securities
intermediary; (iii) the form of the Certificates; (iv) an ISDA Master
Agreement, dated as of July 2, 2003 (the "ISDA Master Agreement"), between the
Trust and Xxxxxx Brothers Derivative Products Inc. (the "Swap Counterparty"),
dated as of July 2, 2003, a schedule thereto dated July 2, 2003 (the
"Schedule"), between the Trust and the Swap Counterparty and a confirmation
thereunder dated July 2, 2003 (the "Confirmation" and, together with the ISDA
Master Agreement and the Schedule, the "Swap Agreement"); (v) an underwriting
agreement dated June 20, 2003 between LABS and Xxxxxx, as underwriter; and
(vi) such corporate records, agreements, documents and other instruments, and
such certificates or comparable documents of public officials and of officers
and representatives of LABS, and have made such inquiries of such officers and
representatives, as we have deemed relevant and necessary as a basis for the
opinions hereinafter set forth.
B-B-1
As to all questions of fact material to this opinion that have not been
independently established, we have relied upon certificates or comparable
documents of officers and representatives of LABS, the Swap Counterparty and
the Trustee and upon the representations and warranties of the Swap
Counterparty and the Trust contained in the Swap Agreement. We have also
assumed (i) the due organization and valid existence of the Swap Counterparty
and the Trustee, (ii) that the Swap Counterparty and the Trustee have all
requisite corporate power and authority to execute and deliver the Swap
Agreement and to perform their obligations thereunder, (iii) the due and valid
authorization by all necessary corporate action of the Swap Counterparty and
the Trustee of the execution, delivery and performance by them of the Swap
Agreement, (iv) the due and valid execution and delivery by the Swap
Counterparty and the Trustee of the Swap Agreement, (v) that the Swap
Agreement constitutes the legal, valid and binding obligation of the Swap
Counterparty and the Trust, enforceable against the Swap Counterparty and the
Trust in accordance with its terms and (vi) the absence of any agreement or
understanding among the parties other than those contained in the Swap
Agreement or otherwise called to our attention.
Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that:
1. The execution and delivery by the Swap Counterparty of the Swap Agreement
and the performance by Swap Counterparty of its obligations thereunder
will not conflict with, constitute a default under, or violate any New
York, Delaware corporate or federal law or regulation (other than federal
and state securities or blue sky laws, as to which we express no opinion
in this paragraph).
2. The Swap Agreement is not subject to regulation under the Commodity
Exchange Act, as amended, or the rules and regulations thereunder.
* * * *
We are members of the bar of the State of New York, and we do not express
any opinion as to any laws other than the law of the State of New York, the
General Corporation Law of the State of Delaware and the federal laws of the
United States.
This opinion letter is not intended to be employed in any transaction
other than the one described above and is being delivered to you on the
understanding that neither it nor its contents may be published, communicated
or otherwise made available, in whole or in part, to any other party or
entity, without in each instance, our specific prior written consent.
Very truly yours,
B-B-2
Schedule A
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Derivative Products Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
B-B-3
July 2, 2003
To the Addressees Listed on the Attached Schedule I
Ladies and Gentlemen:
I have acted as counsel to Xxxxxx Brothers Derivative Products Inc.,
a Delaware corporation ("Party A"), and am familiar with matters pertaining to
the execution and delivery of the 1992 ISDA Master Agreement
(Multicurrency--Cross Border) (the "Master Agreement") dated as of July 2,
2003 between Party A and the Repackaged American General Floating Rate Trust
Certificates, Series 2003-1 Trust ("Party B"). The Master Agreement is
supplemented by a confirmation of swap transaction dated as of July 2, 2003
between Party A and Party B (the "Confirmation"), and the Master Agreement and
the Confirmation together constitute one agreement.
In connection with this opinion, I have examined or have had
examined on my behalf an executed copy of the Master Agreement and the
Confirmation, certificates and statements of public officials and officers
and/or employees of Party A and such other agreements, instruments, documents
and records as I have deemed necessary or appropriate for the purposes of this
opinion.
Based upon the foregoing, but subject to the assumptions,
exceptions, qualifications and limitations hereinafter expressed, I am of the
opinion that:
1. Party A is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
2. The execution, delivery and performance of the Master Agreement
and the Confirmation are within the corporate power of Party A, have been duly
authorized by all necessary corporate action and do not conflict with any
provision of its certificate of incorporation or by-laws.
3. The Master Agreement and the Confirmation have been duly executed
and delivered by Party A and constitute legally valid and binding obligations
of Party A enforceable against it in accordance with their respective terms.
B-B-4
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. My opinion in paragraph 3 above is subject to the effect of any
bankruptcy, insolvency, reorganization, receivership, moratorium or similar
laws affecting the enforcement of creditors' rights generally (including,
without limitation, the effect of statutory or other laws regarding fraudulent
or other similar transfers) and general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law.
B. I am a member of the Bar of the State of New York and render no
opinion on the laws of any jurisdiction other than the laws of the State of
New York, the federal laws of the United States of America and the General
Corporation Law of the State of Delaware.
C. My opinions are limited to the present laws and to the facts as
they presently exist and no opinion is to be inferred or implied beyond the
matters expressly so stated. I assume no obligation to revise or supplement
this opinion should the present laws of the jurisdictions referred to in
paragraph B above be changed by legislative action, judicial decision or
otherwise.
D. This letter is rendered to you in connection with the Master
Agreement and the Confirmation and the transactions related thereto and may
not be relied upon by any other person, entity or agency or by you in any
other context or for any other purpose, except that Xxxxxx Xxxxxx Xxxxx & Xxxx
LLP, counsel to Party A, may rely on this opinion in connection with an
opinion to be rendered by them of even date herewith. This letter may not be
quoted in whole or in part, nor may copies thereof be furnished or delivered
to any other person, without the prior written consent of Xxxxxx Brothers
Derivative Products Inc., except that you may furnish copies hereof (i) to
your independent auditors and attorneys, (ii) to any United States, state or
local authority having jurisdiction over you or over Party A, (iii) pursuant
to the order of any legal process of any court of competent jurisdiction or
any governmental agency, and (iv) in connection with any legal action arising
out of the Master Agreement or the Confirmation.
E. I have assumed with your permission (i) the genuineness of all
signatures by each party other than Party A, (ii) the authenticity of
documents submitted to me as originals and the conformity to authentic
original documents of all documents submitted to me as copies, and (iii) the
due execution and delivery, pursuant to due authorization, of the Master
Agreement and the Confirmation by each party thereto other than Party A.
Very truly yours,
B-B-5
SCHEDULE I
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Standard and Poor's, a
Division of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
B-B-6
EXHIBIT C TO SCHEDULE
---------------------
FORM OF OPINION OF COUNSEL FOR PARTY B
July 2, 2003
Standard and Poor's, a Division of
Xxxxxx Brothers Inc. The XxXxxx-Xxxx Companies, Inc.
000 Xxxxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx ABS Corporation Xxxxx'x Investors Service, Inc.
000 Xxxxxxx Xxxxxx 00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Re: Repackaged American General
Floating Rate Trust Certificates,
Series 2003-1 Trust (the "Trust" or the Issuer")
-------------------------------------------------
Dear Ladies and Gentlemen:
We have acted as special counsel to U.S. Bank Trust National
Association as trustee (the "Trustee") in connection with a Standard Terms For
Trust Agreements, dated as of January 16, 2001 (as supplemented by the Series
Supplement, Series 2003-1 dated as of July 2, 2003, and collectively referred
to herein as the "Trust Agreement"), between Xxxxxx ABS Corporation, a
Delaware corporation (the "Depositor") and the Trustee. Pursuant to the Trust
Agreement, the Trust shall issue certain Certificates on the Closing Date (the
"Securities").
For purposes of giving the opinion hereinafter set forth, we have
examined executed or conformed counterparts, or copies otherwise proved to our
satisfaction, of the Trust Agreement, the Securities, the Securities Account
Control Agreement dated as of the date hereof (the "Control Agreement") among
the Depositor, the Trustee and U.S. Bank Trust National Association, as
securities intermediary (the "Securities Intermediary") and the ISDA Master
Agreement between the Trust and Xxxxxx Brothers Derivative Products Inc. (the
"Swap Counterparty"), the Schedule thereto and the Confirmation thereunder,
each dated as of the date hereof (collectively, the "Swap Agreement", which
together with the Trust Agreement, the Securities, and the Control Agreement
are hereinafter collectively referred to herein as the "Documents").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed thereto in the Documents, as applicable.
We have also obtained or have been furnished with, and have relied
exclusively upon, the Trust Permit and the Charter of the Office of the
Comptroller of the Currency in rendering this opinion. We have made no other
investigations or examinations in rendering this opinion, and our opinions
expressed herein are solely in reliance on the aforementioned documents and on
the Documents. With respect to all documents examined by us, we have assumed
that (i) all signatures on documents examined by us are genuine, (ii) all
documents submitted to us as originals are authentic, and (iii) all documents
submitted to us as copies
B-C-1
conform with the original copies of those documents.
For the purpose of this opinion, we have assumed (i) the legal
capacity for all purposes relevant hereto of all natural persons, (ii) the due
authorization, execution and delivery by all parties thereto of all documents
examined by us, (iii) that each party to the Documents (other than the Trustee
and the Securities Intermediary) has the power and authority to enter in and
perform all of its obligations thereunder, (iv) that the Documents are the
legal, valid and binding obligations of the Issuer enforceable against the
Issuer in accordance with their terms, and (v) that the Issuer is an "eligible
contract participant" as that term is defined in the Commodity Exchange Act.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, we are of the opinion that:
1. The Trustee is a national banking association with trust powers
validly existing, duly organized and in good standing under the laws of the
United States of America. The Trustee has all requisite power to execute and
deliver the Documents, perform its obligations thereunder, and to authenticate
the Securities. The Securities Intermediary has all requisite power to execute
and deliver the Control Agreement and to perform its obligations thereunder;
2. The Documents have been duly executed and delivered by the
Trustee and the Control Agreement has been duly executed and delivered by the
Securities Intermediary;
3. The Securities have been authenticated by a duly authorized
signatory of the Trustee; and
4. The Trust Agreement and the Control Agreement each constitutes
the legal, valid and binding obligation of the Trustee, enforceable against
the Trustee in accordance with its terms. The Swap Agreement constitutes the
legal, valid and binding obligation of the Trustee on behalf of the Trust,
enforceable against the Trustee on behalf of the Trust in accordance with its
terms. The Control Agreement constitutes the legal, valid and binding
obligation of the Securities Intermediary, enforceable against the Securities
Intermediary in accordance with its terms.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) Our opinions in paragraph 4 above are subject to the effect of
applicable receivership, conservatorship, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws of general application
affecting creditors' or secured creditors' rights.
(b) Our opinions in paragraph 4 above are subject to the effect of
general principles of equity, including, without limitation, concepts of
materiality, diligence, reasonableness, good faith and fair dealing, election
of remedies, estoppels and other similar doctrines affecting the
enforceability of agreements generally in any proceeding in equity or at law.
B-C-2
(c) The enforceability of provisions in the Documents to the effect
that terms may not be waived or modified except in writing may be limited
under certain circumstances.
(d) The availability of specific performance, injunctive relief and
other equitable remedies is subject to the discretion of the tribunal before
which any proceeding therefor may be brought.
(e) We express no opinion as to the enforceability of provisions of
the Documents to the extent they contain forum selection provisions or waivers
of any constitutional rights or remedies.
(f) We express no opinion as to the enforceability of provisions of
the Documents to the extent they contain cumulative remedies to the extent
such cumulative remedies purport to compensate, or would have the effect of
compensating, the party entitled to the benefits thereof in an amount in
excess of the actual loss suffered by such party.
(g) We express no opinion as to the enforceability of provisions of
the Documents to the extent they contain remedies that are determined to
result in a penalty, or otherwise to result in a recovery that is determined
to be unreasonable in relation to the actual damages or grossly
disproportionate to the actual damages suffered.
(h) We express no opinion with respect to (i) the compliance with,
or the effect of non-compliance with, any federal or state securities laws or
regulations, the Commodity Exchange Act, as amended, or the rules and
regulations of the Commodity Futures Trading Commission promulgated
thereunder, (ii) the creation, validity, perfection or priority of any
security interest granted under any Document, (iii) any indemnification or
contribution provision under any Document or (iv) Section 6(e) of the ISDA
Master Agreement insofar as it relates to the amount of damages payable by a
party upon termination.
The foregoing opinions are limited to matters involving the laws of
the State of New York and the federal laws of the United States of America. We
express no opinion as to any matter other than as expressly set forth above,
and no other opinion may be implied or interpreted herefrom. Our opinions are
rendered only with respect to such laws, and the rules, regulations and orders
thereunder, that are currently in effect, and we disclaim any obligation to
advise you of any change in law or fact that occurs after the date hereof.
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Documents and may not be circulated
to, or relied upon by, any other person without our prior written consent.
Sincerely,
B-C-3
