EXHIBIT 99.2
(Multicurrency-Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of July 28, 2006
XXXXXXX XXXXX MITSUI MARINE and GSAA HOME EQUITY TRUST 2006-12
DERIVATIVE PRODUCTS, L.P.
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming
those Transactions.
Accordingly, the parties agree as follows:
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master
Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the
Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purposes of the
relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single
agreement between the parties (collectively referred to as this
"Agreement"), and the parties would not otherwise enter into any
Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in
each Confirmation to be made by it, subject to the other
provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due date
for value on that date in the place of the account specified in
the relevant Confirmation or otherwise pursuant to this Agreement,
in freely transferable funds and in the manner customary for
payments in the required currency. Where settlement is by delivery
(that is, other than by payment), such delivery will be made for
receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation
or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is
subject to (1) the condition precedent that no Event of Default or
Potential Event of Default with respect to the other party has
occurred and is continuing, (2) the condition precedent that no
Early Termination Date in respect of the relevant Transaction has
occurred or been effectively designated and (3) each other
applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a
reasonable objection to such change.
(c) Wetting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been payable by one
party exceeds the aggregate amount that would otherwise have been payable by
the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties
make and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If a
party is so required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to
be deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving
notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that
the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal
the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to pay
any additional amount to Y to the extent that it would not be
required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure
would not have occurred but for (I) any action taken by a
taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction is
entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (II) a
Change in Tax Law.
2 ISDA(R) 1992
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or
effective designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that:--
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) No isolation or Conflict. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
3 ISDA(R) 1992
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
4. Agreements
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) Furnish Specified Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and
to be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to
maintain in full force and effect all consents Of any governmental or other
authority that are required to be obtained by it with respect to this
Agreement or any Credit Support Document to which it is a party and will use
all reasonable efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning
of such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated,
4 ISDA(R) 1992
organised, managed and controlled, or considered to have its seat, or in which
a branch or office through which it is acting for the purpose of this
Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party's execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) Failure to Pay or Deliver. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) Breach of Agreement. Failure by the party to
comply with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or delivery under
Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be
complied with or performed by the party in accordance with this
Agreement if such failure is not remedied on or before the thirtieth day
after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be in
full force and effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
5 ISDA(R) 1992
described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and
payable or (2) a default by such party, such Credit Support Provider or
such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less
than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or
grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable
to pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for
the benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment of
insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting
creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it,
such proceeding or petition (A) results in a judgment of
insolvency or bankruptcy or the entry of an order for relief
or the making of an order for its winding-up or liquidation
or (B) is not dismissed, discharged, stayed or restrained in
each case within 30 days of the institution or presentation
thereof; (5) has a resolution passed for its winding-up,
official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or
other similar official for it or for all or substantially
all its assets; (7) has a secured party take possession of
all or substantially all its assets or has a distress,
execution, attachment, sequestration or other legal process
levied, enforced or sued on or against all or substantially
all its assets and such secured party maintains possession,
or any such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8)
causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses
(1) to (7) (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of,
or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges
with or into, or transfers all or substantially all its assets to,
another entity and, at the time of such consolidation, amalgamation,
merger or transfer: --
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any event specified below constitutes an
Illegality if the event is specified in (i) below, a Tax Event if the event is
specified in (ii) below or a Tax Event Upon Merger if the event is specified
in (iii) below, and, if specified to be applicable, a Credit Event
6 ISDA(R) 1992
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered
into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority with
competent jurisdiction of any applicable law after such date, it
becomes unlawful (other than as a result of a breach by the party
of Section 4(b)) for such party (which will be the Affected
Party): --
(1) to perform any absolute or contingent obligation to make
a payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which
the party (or such Credit Support Provider) has under any
Credit Support Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of whether
such action is taken or brought with respect to a party to this
Agreement) or (y) a Change in Tax Law, the party (which will be
the Affected Party) will, or there is a substantial likelihood
that it will, on the next succeeding Scheduled Payment Date (1) be
required to pay to the other party an additional amount in respect
of an Indemnifiable Tax under Section 2(d)(i)(4) (except in
respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2)
receive a payment from which an amount is required to be deducted
or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional
amount is required to be paid in respect of such Tax under Section
2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on
the next succeeding Scheduled Payment Date will either (1) be
required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount has been deducted or withheld for or
on account of any Indemnifiable Tax in respect of which the other
party is not required to pay an additional amount (other than by
reason of Section 2(d)(i)(4)(A) or (B)), in either case as a
result of a party consolidating or amalgamating with, or merging
with or into, or transferring all or substantially all its assets
to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section
5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party
("X"), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or merges
with or into, or transfers all or substantially all its assets to,
another entity and such action does not constitute an event
described in Section 5(a)(viii) but the creditworthiness of the
resulting, surviving or transferee entity is materially weaker
than that of X, such Credit Support Provider or such Specified
Entity, as the case may be, immediately prior to such action (and,
in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as
applying, the occurrence of such event (and, in such event, the
Affected Party or Affected Parties shall be as specified for such
Additional Termination Event in the Schedule or such
Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also
constitutes an Illegality, it will be treated as an Illegality and will not
constitute an Event of Default.
7 ISDA(R) 1992
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an
Event of Default with respect to a party (the "Defaulting Party") has occurred
and is then continuing, the other party (the "Non-defaulting Party") may, by
not more than 20 days notice to the Defaulting Party specifying the relevant
Event of Default, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all outstanding
Transactions. If, however, "Automatic Early Termination" is specified in the
Schedule as applying to a party, then an Early Termination Date in respect of
all outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(l), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its right
to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the case of a
Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an
Additional Termination Event if there is more than one Affected Party, or the
party which is not the Affected Party in the case of a Credit Event Upon
Merger or an Additional Termination Event if there is only one Affected Party
may, by not more than 20 days notice to the other party and provided that the
relevant Termination Event is then
8 ISDA(R) 1992
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving details
of the relevant account to which any amount payable to it is to be paid.
In the absence of written confirmation from the source of a quotation
obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such amount
is paid, at the Applicable Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and
a payment method, either the "First Method" or the "Second Method". If
the parties fail to designate a payment measure or payment method in the
Schedule, it will be deemed that "Market Quotation" or the "Second
Method", as the case may be, shall apply. The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default: --
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the
9 ISDA(R) 1992
Non-defaulting Party) in respect of the Terminated Transactions and
the Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If
that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is
a negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3),
if Market Quotation applies, or Section 6(e)(i)(4), if Loss
applies, except that, in either case, references to the Defaulting
Party and to the Non-defaulting Party will be deemed to be
references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than
all the Transactions are being terminated, Loss shall be calculated
in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with
the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will
be subject to such adjustments as are appropriate and permitted by law
to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future risks and except as
otherwise provided in this Agreement neither party will be entitled to
recover any additional damages as a consequence Of such losses.
10 ISDA(R) 1992
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be
void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment
will refund promptly the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) o5 (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.
11 ISDA(R) 1992
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall he entered into as soon as practicable
and may he executed and delivered in counterparts (including by
facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which
in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of
booking office or jurisdiction of incorporation or organisation of such party,
the obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a Transaction is
entered into.
(b) Neither party may change the Office through which it makes
and receives payments or deliveries for the purpose of a Transaction without
the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support
Document
12 ISDA(R) 1992
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York
City, if this Agreement is expressed to be governed by the laws of the
State of New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing, in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside if this Agreement is expressed to be
governed by English law, the Contracting States, as defined in Section 1(3) of
the Civil Jurisdiction and Judgments Xxx 0000 or any modification, extension
or 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
13 ISDA(R) 1992
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute
process agent acceptable to the other party. The parties irrevocably consent
to service of process given in the manner provided for notices in Section 12.
Nothing in this Agreement will affect the right of either party to serve
process in any other manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.
14. Definitions
As used in this Agreement:--
"Additional Termination Event" has the meaning specified in Section 5(b).
"Affected Party" has the meaning specified in Section 5(b).
"Affected Transactions" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly; by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control"
of any entity or person means ownership of a majority of the voting power of
the entity or person.
"Applicable Rate" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14 ISDA(R) 1992
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or
by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have
15 ISDA(R) 1992
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is
to be included. The Replacement Transaction would be subject to such
documentation as such party and the Reference Market-maker may, in good faith,
agree. The party making the determination (or its agent) will request each
Reference Market-maker to provide its quotation to the extent reasonably
practicable as of the same day and time (without regard to different time
zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if
more than one quotation has the same highest value or lowest value, then one
of such quotations shall be disregarded. If fewer than three quotations are
provided, it will be deemed that the Market Quotation in respect of such
Terminated Transaction or group of Terminated Transactions cannot be
determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head
or home office.
"Potential Event of Default" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention
or withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or
imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of: -
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule.
16 ISDA(R) 1992
"Specified Indebtedness" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto)
that is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation
or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that
Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or
prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market
17 ISDA(R) 1992
value of that which was (or would have been) required to he delivered as of
the originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or
would have been required to have been paid or performed to (but excluding) such
Early Termination Date, at the Applicable Rate. Such amounts of interest will
be calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b)
above shall be reasonably determined by the party obliged to make the
determination under Section 6(c) 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 will effect from the date specified on the first page
of this document.
XXXXXXX XXXXX MITSUI MARINE GSAA HOME EQUITY TRUST 2006-12
DERIVATIVE PRODUCTS, L.P.
By: GSMMDPGP, Inc By: JPMorgan Chase Bank, National
General Partner Association, not in its
individual capacity but solely as
Securities Administrator, on behalf
of GSAA Home Equity Trust 2006-12
By: /s/ Xxxxx Xxxxx By /s/ Xxxxxxx X. Xxxxxxx
---------------------------- --------------------------------
Name: Xxxxx Xxxxx Name: Xxxxxxx X. Xxxxxxx
Title: Vice President Title: Vice President
Date: Date:
18
EXECUTION COPY
--------------
SCHEDULE
to the
MASTER AGREEMENT
dated as of July 28, 2006
between
XXXXXXX XXXXX MITSUI MARINE
DERIVATIVE PRODUCTS, L.P.
a limited partnership organized
under the laws of Delaware
("Party A"),
-------
and
GSAA HOME EQUITY TRUST 2006-12
a trust organized
under the laws of the State of New York
("Party B").
-------
Part 1. Termination Provisions.
(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" shall have the meaning specified in Section
14 of this Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii) will not
apply to Party A or Party B.
(d) The "Credit Support Default" provisions of Section 5(a)(iii) will
apply to Party A and will not apply to Party B.
(e) The "Misrepresentation" provisions of Section 5(a)(iv) will not
apply to Party A or Party B.
(f) The "Cross Default" provisions of Section 5(a)(vi) will not apply
to Party A or Party B.
(g) With respect to Party B only, Section 5(a)(vii)(2) is hereby
amended as follows:
"(2) becomes insolvent or is unable to pay its debts (other than
payments due to holders of its subordinate certificates) or fails
or admits in writing its inability generally to pay its debts
(other than payments to holders of its subordinate certificates)
as they become due"
(h) The "Merger without Assumption" provisions of Section 5(a)(viii)
will apply to Party A and will not apply to Party B.
(i) "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not
apply to Party A or Party B.
(j) The "Automatic Early Termination" provisions of Section 6(a) will
not apply to Party A or Party B.
(k) Payments on Early Termination. For the purpose of Section 6(e):
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(l) "Termination Currency" means U.S. Dollars.
(m) The "Additional Termination Event" provisions of Section 5(b)(v)
will apply as set forth in Part 5(m) hereof.
(n) The "Default under Specified Transaction" provisions of Section
5(a)(v) will not apply to Party A or Party B.
(o) The "Tax Event" provisions of Section 5(b)(ii) will apply to Party
A and will not apply to Party B.
(p) The "Tax Event Upon Merger" provisions of Section 5(b)(iii) will
apply to Party A and will not apply to Party B.
2
Part 2. Tax Representations.
(a) Payer Representations. For purposes of Section 3(e) of this
Agreement, Party A and Party B each make the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on account of any Tax from any payment (other than interest under
Section 2(e), 6(d)(ii) or 6(e) 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 subclause (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.
Party A Payee Representations. For the purpose of Section 3(f) of this
Agreement, Party A makes the following representations:
(i) It is a "U.S. payee" within the meaning of Treasury Regulation Section
1.1441-5(b).
(ii) It is a United States person within the meaning of Section 7701(a)(30)
of the Internal Revenue Code of 1986, as amended.
Party B Payee Representations. For the purpose of Section 3(f) of this
Agreement, Party B makes the following representation:
(i) It is a trust created under an agreement governed by New York law.
Part 3. Agreement to Deliver Documents.
For the purpose of Section 4(a), each party agrees to deliver the
following documents, as applicable:
(a) Tax forms, documents, or certificates to be delivered are:
Party A agrees to complete, execute, and deliver to Party B, United
States Internal Revenue Service Form W-9 or any successor of such form:
(i) on a date which is before the first scheduled payment date under
this Agreement; (ii) promptly upon reasonable demand by Party B; and
(iii) promptly upon learning that any such forms previously provided by
Party A has become obsolete or incorrect.
3
Party B agrees to complete, execute, and deliver to Party A, United
States Internal Revenue Service Form W-9 or any successor of such forms:
(i) on a date which is before the first scheduled payment date under
this Agreement; (ii) promptly upon reasonable demand by Party A; and
(iii) promptly upon learning that any such forms previously provided by
Party B has become obsolete or incorrect.
(b) Other documents to be delivered are:
Party required Covered by
to deliver Form/Document/ Date by which Section 3(d)
document Certificate to be delivered Representation
Party A Power of Attorney At execution of this Yes
with respect to Agreement
Party A
Party A Support Agreement At execution of this Yes
dated as of October Agreement
8, 1993 among Party
A, Mitsui Marine and
Fire Insurance Co.,
Ltd. ("Mitsui
Marine"), and The
Xxxxxxx Sachs Group,
Inc. ("Goldman
Group") (the
"Support Agreement")
accompanied by a
certificate of an
authorized officer
of Party A,
certifying that it
is a true, complete
and correct copy of
the original Support
Agreement
Party A Guaranty dated as of At execution of this Yes
December 20, 2000 Agreement
between Mitsui
Marine and Xxxxxxx
Sachs Group (the
"Guaranty"),
accompanied by a
certificate
certifying that it
is a true, complete
and correct copy of
the original
Guaranty
Party A Most recently prepared As soon as possible Yes
annual balance sheet of following request of
Party A Party B
4
Party A Legal opinions with respect At execution of this No
to Party A Agreement
Party B Incumbency At execution of this Yes
certificate or other Agreement
documents evidencing
the authority,
incumbency and
specimen signature
of each person
executing this
Agreement, any
Credit Support
Document or any
Confirmation, as the
case may be.
Party B Servicer Remittance Reports Promptly upon Yes
becoming available
Party B Legal opinion with respect At execution of this No
to Party B Agreement
Party B An executed copy of the Within 30 days after No
Master Servicing and Trust the date of this
Agreement, dated as of July Agreement
1, 2006, (the "Master
Servicing and Trust
Agreement") among GS
Mortgage Securities Corp.,
as depositor, U.S. Bank
National Association, as
trustee, Deutsche Bank
National Trust Company and
Xxxxx Fargo Bank, National
Association as custodians,
and JPMorgan Chase Bank,
National Association, as
master servicer and
securities administrator.
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a): Address
for notices or communications to Party A:
Address: 00 Xxxxx Xxxxxx
0
Xxx Xxxx, Xxx Xxxx 00000
U.S.A.
Attention: Swap Administration
Telex No.: 421344
Answerback: GOLSAX
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Electronic Messaging
System Details: None
With a copy to
Address: 00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
X.X.X.
Attention: Treasury Administration
Telex No.: 421344
Answerback: GOLSAX
Facsimile No.: (000) 000-0000
Telephone No.: (000) 000-0000
Electronic Messaging
System Details: None
Addresses for Notices. For the purpose of Section 12(a): Address for
notices or communications to Party B:
Address: JPMorgan Chase Bank, National
Association
0 Xxx Xxxx Xxxxx,
0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Worldwide Securities
Services/Structured Finance
Services-GSAA HOME EQUITY TRUST
2006-12
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable
Party B appoints as it Proces Agent: Not Applicable
With a copy to:
6
Address Standard & Poor's Ratings Services,
a division of McGraw Hill, Inc.
00 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Residential Mortgage Surveillance
Group
Facsimile 212-438-2652
With a copy to:
Address Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Residential Mortgage Backed
Securities Group
Facsimile 000-000-0000
(c) Offices; Multibranch Parties.
(i) The provisions of Section 10(a) will be applicable.
(ii) For the purpose of Section 10(c):
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(d) Calculation Agent. The Calculation Agent is Party A.
(e) Credit Support Document. Details of any Credit Support Document.
(i) With respect to Party A, (A) the Support Agreement, (B) the
Guaranty and (C) any Credit Support Annex that may be entered into
in connection with any of the events described in Part 5(m)(ii) of
this Schedule.
(ii) With respect to Party B, not applicable.
Each Credit Support Document is incorporated by reference into and
constitutes part of this Agreement and each Confirmation as if set
forth in full in this Agreement or such Confirmation.
7
(f) Credit Support Provider.
(i) Credit Support Provider means in relation to Party A, Goldman
Group and Mitsui Marine; provided that all defaults by,
misrepresentations of, actions or failures to act by, or
circumstances or events applicable to a "Credit Support
Provider" as such term is used in this Agreement shall be
deemed in all such circumstances to refer to defaults
simultaneously in effect with respect to both Goldman Group
and Mitsui Marine, misrepresentations made by both Goldman
Group and Mitsui Marine, actions or failures to act
simultaneously by both Goldman Group and Mitsui Marine, and
circumstances or events simultaneously applicable to both
Goldman Group and Mitsui Marine.
(ii) Credit Support Provider means in relation to Party B, Not
Applicable.
(g) Governing Law. This Agreement and each Confirmation will be
governed by, and construed and enforced in accordance with, the substantive
law of the State of New York, without reference to its choice of law doctrine.
(h) 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.
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) will apply
to Transactions with effect from the date of this Agreement. Notwithstanding
anything to the contrary in Section 2(c), amounts that are payable with
respect to the same Calculation Period shall be netted, as provided in Section
2(c), even if such amounts are not due on the same Payment Date.
(j) "Affiliate" will have the meaning specified in Section 14; provided,
however, Party B shall be deemed to have no Affiliates.
Part 5. Other Provisions.
(a) Accuracy of Specified Information. With respect to Party A, 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 or balance sheets, a fair presentation of the
financial condition of the relevant person."
(b) Transfer. Section 6 and 7 are hereby amended by:
(i) adding in the third line thereof after the word "party," the
words "which consent shall not be unreasonably withheld or
delayed" and adding in the third line thereof after the
clause "that: -" the words "provided that the Rating Agency
Condition is satisfied in all events (including in the event
of a transfer under Section 6(b)(ii));
8
(ii) adding in the second line of subparagraph (a) thereof after
the words "assets to," the words "or reorganization,
incorporation, reincorporation, reconstitution, or
reformation into or as";
(iii) deleting at the end of subparagraph (a) thereof the word
"and";
(iv) deleting in the second line of subparagraph (b) thereof the
period and replacing it with "; and";
(v) adding after subparagraph (b) thereof the following
subparagraph (c):
(c) in addition to, and not in lieu of, the preceding
transfer rights, Party A may, without recourse by Party B or
Party A's transferee to or against Party A, transfer this
Agreement, in whole, but not in part, to any of Party A's
Affiliates or any of the Affiliates of Goldman Group pursuant
to documentation prepared by Party A, provided that:
(i) either (A) such transferee must have a long-term,
unsecured, unsubordinated debt obligation ratings
or financial program ratings (or other similar
ratings) by S&P which are equal to or greater
than the comparable long-term, unsecured,
unsubordinated debt obligation ratings or
financial program ratings (or other similar
ratings) of Party A immediately prior to such
transfer, or (B) the obligations transferred to
such transferee must be guaranteed by Party A
pursuant to a guaranty in substantially the form
of the Guaranty of the Credit Support Provider or
other agreement or instrument consented to by
Party B or other agreement or instrument mutually
agreed upon by both parties and satisfactory to
S&P;
(ii) the transferee will not, as a result of such
transfer, be required to withhold or deduct on
account of a Tax under Section 2(d)(i) on the
next succeeding Scheduled Payment Date an amount
in excess of that which Party A would have been
required to so withhold or deduct on the next
succeeding Scheduled Payment Date in the absence
of such transfer unless the transferee will be
required to make payments of additional amounts
pursuant to Section 2(d)(i)(4) in respect of such
excess;
(iii) an Event of Default or a Termination Event does
not occur as a result of such transfer;
9
(iv) the Rating Agency Condition is satisfied. With
respect to the results described in subclause
(ii) above, Party A will cause the transferee to
make, and Party B will make, such reasonable
Payer Tax Representations and Payee Tax
Representations as may be mutually agreed upon
by the transferee and Party B in order to permit
such parties to determine that such results will
not occur upon or after the transfer;
(v) Party A agrees to transfer only to a transferee
in a jurisdiction, which it is aware is a
"netting" jurisdiction, that is in which, by
opinion of counsel published by ISDA, netting
under this Agreement shall be enforceable; and
(vi) Party A will be responsible for any costs or
expenses incurred in connection with such
transfer.
(vi) adding at the end of Section 7 the following sentence:
Except as may otherwise be stated in Section 7(c) hereof or in the
documentation evidencing a transfer, a transfer of all of the
obligations of Party A made in compliance with this Section will
constitute an acceptance and assumption of such obligations (and
any related interests so transferred) by the transferee, a
novation of the transferee in place of Party A with respect to
such obligations (and any related interests so transferred), and a
release and discharge by Party B of Party A from, and an agreement
by Party B not to make any claim for payment, liability, or
otherwise against Party A with respect to, such obligations from
and after the effective date of the transfer.
(c) Set-Off. Notwithstanding the last sentence of the first paragraph
of Section 6(e) of this Agreement, but without affecting the provisions of
this Agreement requiring the calculation of certain net payment amounts, as a
result of an Event of Default or Termination Event or otherwise, all payments
under this Agreement will be made without set-off or counterclaim.
(d) Reference Market-makers. The definition of "Reference Market-makers"
in Section 14 is hereby amended by adding in the fourth line thereof after the
word "credit" the words "or to enter into transactions similar in nature to
Transactions".
(e) Severability. If any term, provision, covenant, or condition of
this Agreement, or the application thereof to any party or circumstance, shall
be held to be invalid or unenforceable (in whole or in part) for any reason,
the remaining terms, provisions, covenants, and conditions hereof shall
continue in full force and effect as if this Agreement had been executed with
the invalid or unenforceable portion eliminated, so long as this Agreement as
so modified continues to express, without material change, the original
intentions of the parties as to the subject matter
10
of this Agreement and the deletion of such portion of this Agreement will not
substantially impair the respective benefits or expectations of the parties to
this Agreement; provided, however, that this severability provision shall not
be applicable if any provision of Section 2, 5, 6, or 13 (or any definition or
provision in Section 14 to the extent it relates to, or is used in or in
connection with any such Section) shall be so held to be invalid or
unenforceable.
(f) 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 trial by jury in respect of any suit, action
or proceeding relating to this Agreement.
(g) Credit Support Default. Subparagraph (3) of Section 5(a)(iii) is
hereby amended by adding in the second line thereof after the word
"Document" and before the semicolon the words "(or such action is
taken by any person or entity appointed or empowered to operate it
or act on its behalf)."
(h) Additional Representations. Section 3 is hereby amended by adding
the following additional subsections:
(i) No Agency. With respect to Party A, it is entering into this
Agreement and each Transaction as principal (and not as agent or
in any other capacity, fiduciary or otherwise) and, with respect
to Party B, JPMorgan Chase Bank, National Association is entering
into the Agreement in its capacity as Securities Administrator of
Party B.
(ii) Eligible Contract Participant. It is an "eligible contract
participant" as defined in the U.S. Commodity Exchange Act.
(iii) Non-Reliance. Party A is acting for its own account and
JPMorgan Chase Bank, National Association is acting as Securities
Administrator for Party B. It has made its own independent
decisions to enter into that Transaction and as to whether that
Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisers as it has deemed
necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood
that information and explanations related to the terms and
conditions of a Transaction shall not be considered investment
advice or a recommendation to enter into that Transaction. No
communication (written or oral) received from the other party
shall be deemed to be an assurance or guarantee as to the expected
results of that Transaction.
(iv) Assessment and Understanding; Status of Parties. 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
11
assumes, the risks of that Transaction. The other party is
not acting as a fiduciary for or an adviser to it in respect
of that Transaction.
(i) RESERVED.
(j) Regarding Party A. Party B acknowledges and agrees that Party A has
had and will have no involvement in and, accordingly, accepts no
responsibility for: (i) the establishment, structure, or choice of assets of
Party B; (ii) the selection of any person performing services for or acting on
behalf of Party B; (iii) the selection of Party A as the counterparty; (iv)
the terms of the Certificates; (v) the preparation of or passing on the
disclosure and other information contained in any prospectus or prospectus
supplement for the Certificates, the Master Servicing and Trust Agreement, or
any other agreements or documents used by Party B or any other party in
connection with the marketing and sale of the Certificates; (vi) the ongoing
operations and administration of Party B, including the furnishing of any
information to Party B which is not specifically required under this
Agreement; or (vii) any other aspect of Party B's existence except for those
matters specifically identified in this Agreement.
(k) No Recourse. The Certificates represent an equity interest in Party
B only and the foregoing does not represent an interest in or obligation of
Party A, and no recourse may be had by the holders of the Certificates against
Party A or its assets with respect to the Notes and the Certificates and/or
this Agreement.
(1) Indemnifiable Tax. Party A agrees that Party B will not be required
to pay any additional amounts pursuant to Section 2(d)(i)(4) of the Agreement
in respect of an Indemnifiable Tax. If Party A is required to pay additional
amounts in respect of a withholding tax pursuant to Section 2(d)(i)(4) of this
Agreement, Party A may transfer this Agreement, subject to satisfaction of the
Rating Agency Condition, as provided in Section 6(b)(ii) of this Agreement and
such transfer shall not require the consent of Party B to the extent it is in
conformance with the provisions of Section 7(c), as amended herein.
(m) Additional Termination Events.
(i) It shall be an Additional Termination Event, with Party A as
the sole Affected Party, if the Depositor determines at any
time that it is required for purposes of compliance with Item
1115(b) of Regulation AB to provide any financial or other data
relating to Party A and, within 15 calendar days of such
determination, Party A fails to assign this Agreement and all
of its obligations hereunder to a substitute counterparty that
(A) has agreed to provide any financial or other data required
under Regulation AB, (B) has agreed to provide indemnifications
relating to such financial or other data acceptable to the
Depositor, (C) satisfies the Rating Agency Condition and (D) is
approved by the Depositor (which approval shall not be
unreasonably withheld). For the avoidance of doubt, unless
otherwise specified in this Agreement, Party A shall be under
no obligation to provide any such financial or other data,
whether in connection with this Termination Event or otherwise.
For
12
purposes of this Termination Event, (i) "Commission" shall mean
the Securities and Exchange Commission, (ii) "Depositor" shall
mean GS Mortgage Securities Corp., and (iii) "Regulation AB"
shall mean the Asset Backed Securities Regulation AB, 17 C.F.R.
ss.ss.229.1100-229.1123, as such may be amended from time to
time, and subject to such clarification and interpretation as
have been provided by the Commission in the adopting release
(Asset-Backed Securities, Securities Act Release No. 33-8518,
70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of
the Commission, or as may be provided by the Commission or its
staff from time to time.
(ii) It shall also be an Additional Termination Event if (i) an
Optional Termination Date is designated pursuant to the Master
Servicing and Trust Agreement (a "Redemption Termination") and
(ii) there remains no more than 5 Business Days prior to the
proposed Redemption Date. In the case of a Redemption
Termination, both Party A and Party B shall have the right to
cause a termination of this Agreement and, for purposes of
Section 6(e)(ii) of this Agreement, Party B shall be the sole
Affected Party. Following notification from the Securities
Administrator that it has received a redemption notice, Party A
shall provide the Securities Administrator from time to time,
upon request, with good faith estimates of the amount that
would be payable under Section 6(e)(ii) in the event of such
Redemption Termination. Any termination payment payable in
respect of such Additional Termination Event shall be paid on
the relevant Redemption Date.
(iii)(I) It shall also be an Additional Termination Event,
with Party A as the sole Affected Party (except as expressly
provided herein) if Party A, a replacement counterparty, or a
person or an entity that guarantees the obligations of Party A
or a replacement counterparty, as the case may be, has a rating
that does not satisfy the Required Hedge Counterparty Rating
(but is at least "BBB-" or "A-3" (if applicable) by S&P and at
least Al by Moody's and none of the following events has
occurred:
(A) within 30 days of such failure to satisfy the
Required Hedge Counterparty Rating, Party A or
such replacement counterparty, as the case may be,
transfers this Agreement, in whole, but not in
part, to a counterparty that satisfies the
Required Hedge Counterparty Rating, subject to
satisfaction of the Rating Agency Condition;
(B) within 30 days of such failure to satisfy the
Required Hedge Counterparty Rating, Party A or
such replacement counterparty, as the case may be,
collateralizes its Exposure to Party B pursuant to
an ISDA Credit Support Annex, subject to
satisfaction of the Rating Agency Condition, as
applicable; provided that such ISDA Credit Support
Annex shall be made a Credit Support Document for
Party A
13
pursuant to an amendment of this Agreement in a
form acceptable to the Securities Administrator
which amendment shall also be subject to
satisfaction of Rating Agency Condition;
(C) within 30 days of such failure to satisfy the
Required Hedge Counterparty Rating, the
obligations of Party A or such replacement
counterparty, as the case may be, under this
Agreement are guaranteed by a person or entity
that satisfies the Required Hedge Counterparty
Rating, subject to satisfaction of the Rating
Agency Condition; or
(D) within 30 days of such failure to satisfy the
Required Hedge Counterparty Rating, Party A or
such replacement counterparty, as the case may be,
takes such other steps, if any, to enable the
Issuer to satisfy the Rating Agency Condition.
(II) It shall also be an Additional Termination Event,
with Party A as the sole Affected Party (except as
expressly provided herein) if Party A, a replacement
counterparty, or a person or an entity that guarantees
the obligations of Party A or a replacement
counterparty, as the case may be, has a rating
withdrawn or reduced below "BBB-" or "A-3" (if
applicable) by S&P or of less than "Al" by Moody's and
within 7 days thereafter, Party A or such replacement
counterparty, as the case may be, while
collateralizing its Exposure to Party B, fails to
transfer this Agreement, in whole, but not in part, to
a counterparty that satisfies the Required Hedge
Counterparty Rating, subject to satisfaction of the
Rating Agency Condition.
Upon downgrade of Party A below the Required Hedge
Counterparty Rating or below "BBB-" or "A-3" (if applicable)
by S&P or below "Al: by Moody's, or if S&P or Moody's
withdraws its ratings for any reason, Party A will promptly
give notice of the circumstances to Party B and to the
rating agencies that at the time are providing ratings for
the Certificates.
Party B shall be entitled to (A)(1) in case of an Additional
Termination Event described in Part 5(m)(iii)(I), designate
a date that is not earlier than the expiration of the 30 day
period referred to in Part 5(m)(iii)(I) as an Early
Termination Date in respect of all transactions under this
Agreement by giving notice to Party A at least 10 days prior
to the date so designated (which notice may be given prior
to the expiration of such 30 day period) and (2) in case of
an Additional Termination Event described in this Part
5(m)(iii)(II), immediately designate an Early Termination
Date, in respect of all transactions under this Agreement by
giving notice to Party A and (B) no
14
later than the respective dates specified in clause (A)(1)
and (A)(2), transfer the rights and obligations of Party A
hereunder to a counterparty that satisfies the Required
Hedge Counterparty Rating, subject to satisfaction of the
Rating Agency Condition.
In connection with a transfer of this Agreement as described
in this Part 5(m)(iii), Party A shall, at its sole cost and
expense, use commercially reasonable efforts to seek a
replacement counterparty. In addition, if Party A pursues
any of the alternative actions contemplated in paragraphs
(A), (B), (C) and (D) of Part 5(m)(iii)(I) above, it shall
do so at its sole cost and expense.
As used herein, "Required Hedge Counterparty Rating" means,
with respect to a counterparty or entity guaranteeing the
obligations of such counterparty, (x) either (i) if such
counterparty or entity has only a long-term rating by
Moody's, a long-term senior, unsecured debt obligation
rating, financial program rating or other similar rating (as
the case may be, the "Long-Term rating") of at least "Aa3"
by Moody's and if rated "Aa3" by Xxxxx'x is not on negative
credit watch by Moody's or (ii) if such counterparty or
entity has a Long-Term Rating and a short-term rating by
Moody's, a Long-Term Rating of at least "Al" by Moody's and
a short-term rating of "P-1" by Moody's and, in each case,
such rating is not on negative credit watch by Moody's and
(y) (i) a short-term rating of at least "A-1" by S&P or (ii)
if such counterparty or entity does not have a short-term
rating by S&P, a Long-Term Rating of at least "A+" by S&P.
For the purposes of determining the Settlement Amount with
respect to the designation of an Early Termination Date
arising from the Additional Termination Event specified in
Party 5(m)(iii), both Party A and Party B shall be Affected
Parties. If the Settlement Amount calculated pursuant to
this subclause (iii) is an amount owing by Party B to Party
A, then such payment shall be a Swap Termination Payment
payable by Party B to Party A in accordance with the
priority of payments described in the Master Servicing and
Trust Agreement; provided, however, that (a) if Party A does
not after the exercise of commercially reasonable efforts
cause any of the conditions specified in Part
5(m)(iii)(I)(A) to (D) to be satisfied, Party B shall use
commercially reasonable efforts to enter into a replacement
Transaction(s) with a counterparty acceptable to the Rating
Agencies, in respect of the Affected Transaction(s) relating
to the Additional Termination Event; and (b) where multiple
quotations are available such replacement Transaction(s)
shall be entered into based on the quoted price(s) that
would result in the largest payment made to Party B by the
replacement counterparty (it being understood that Party A
may be permitted to actively solicit and obtain such
quotations on behalf of Party B); and (c) to the extent that
payments are received by Party B as a result of entering
into such replacement Transaction(s), then Party A shall
have first priority as to such payments
15
versus all other creditors of Party B and Party B shall pay
the lesser of (x) the amount so received and (y) the Swap
Termination Payment to the extent not already paid by Party B
over to Party A immediately upon receipt.
As used herein, "Exposure" means, as of any date of
determination, the amount, if any, that would be payable to
Party B by Party A under this Agreement if an Early
Termination Date were to occur as of such date of
determination as a result of a Termination Event, Party A were
the sole Affected Party, all Transactions were terminated in
connection with such Early Termination Date and (solely for
purposes of determining Exposure) the amount of such payment
were calculated using Market Quotation.
For any Additional Termination Event, the date that Party A or
Party B, as the case may be, specifies in its notice of its
election to terminate shall be the Early Termination Date for the
Transactions; provided, that solely in the case of an Additional
Termination Event described in subclause (ii) above, the Early
Termination Date shall be no earlier than the 3rd Business Day
preceding the Redemption Date and no later than the Redemption
Date.
(n) Indemnifiable Tax. The definition of "Indemnifiable Tax" in Section
14 is hereby amended by adding the following sentence at the end thereof:
Notwithstanding the foregoing, "Indemnifiable Tax" also means any
Tax imposed in respect of a payment under this Agreement by reason
of a Change in Tax Law by a government or taxing authority of a
Relevant Jurisdiction of the party making such payment, unless the
other party is incorporated, organized, managed and controlled, or
considered to have its seat in such jurisdiction, or is acting for
purposes of this Agreement through a branch or office located in
such jurisdiction.
(o) Limited Recourse; Non-petition. Party A agrees that the obligations
of Party B hereunder are limited recourse obligations payable solely from the
assets of Party B, and due to the extent funds are available for the payment
thereof in accordance with the priority of payments described in the Master
Servicing and Trust Agreement. Party A agrees that it will not, prior to the
date which is at least one year and one day or, if longer, the then applicable
preference period following the payment in full of all the Certificates issued
pursuant to the Master Servicing and Trust Agreement and the expiration of all
applicable preference periods under Title 11 of the United States Code or
other applicable law relating to any such payment, acquiesce, petition or
otherwise invoke or cause Party B to invoke the process of any governmental
authority for the purpose of commencing or sustaining a case (whether
voluntary or involuntary) against Party B under any bankruptcy, insolvency or
similar law or appointing a receiver, liquidator, assignee, securities
administrator, custodian, sequestrator or other similar official of Party B or
any substantial part of its property or ordering the winding-up or liquidation
of the affairs of Party B. Nothing contained herein shall prohibit Party A
from submitting a claim, or proof of claim, in any proceeding or process
instituted by or against Party B by any person other than Party A or its
16
Affiliates. Party A and Party B agree that this Part 5(o) shall survive the
termination of this Agreement for any reason whatsoever.
(p) Securities Administrator Capacity. It is expressly understood and
agreed by the parties hereto that insofar as this Agreement is executed by the
Securities Administrator (i) this Agreement is executed and delivered by
JPMorgan Chase Bank, National Association, not in its individual capacity but
solely as Securities Administrator under the Master Servicing and Trust
Agreement in the exercise of the powers and authority conferred to and vested
in it thereunder and (ii) under no circumstances shall JPMorgan Chase Bank,
National Association in its individual capacity be personally liable for the
payment of any indebtedness or expenses or be personally liable for the breach
or failure of any obligation, representation, warranty or covenant made or
undertaken under this Agreement on behalf of Party B or any assignee.
(q) Additional Party A Covenant. Following a failure to satisfy the
Required Hedge Counterparty Rating in accordance with Part 5(m)(iii)(I), Party
A shall take the actions described in accordance with Part 5(m)(iii)(I)(A),
(B), (C) or (D). Following a failure to satisfy the rating requirements set
forth in Part 5(m)(iii)(lI), Party A shall take the actions described in
accordance with Part 5(m)(iii)(II).
(r) Agreements: Furnish Specified Information. Section 4(a) is hereby
amended by adding at the end thereof the following paragraph:
Notwithstanding the foregoing provisions of this Section 4(a), the
parties agree that, pursuant to the terms of the Power of Attorney
with respect to Party A referred to in Part 3(b) of this Schedule,
any one or more of the officers of Party A's general partner who
has been designated as an agent and attorney in fact of Party A
will so deliver to Party B or such government or taxing authority
the specified or requested forms, documents, or certificates.
(s) Confirmations. Transactions shall be promptly confirmed by the
parties by Confirmations exchanged by mail, telex, facsimile or other
electronic means. Where a Transaction is confirmed by means of an electronic
messaging system that the parties have elected to use to confirm such
Transaction (i) such confirmation will constitute a "Confirmation" as referred
to in this Agreement even where not so specified in the confirmation and (ii)
such Confirmation will supplement, form part of, and be subject to this
Agreement and all provisions in this Agreement will govern the Confirmation
except as modified therein.
(t) Tax Documentation. Section 4(a)(iii) of the Agreement is hereby
amended by adding prior to the existing text:
"upon the earlier of learning that any such form or document is
required or"
(u) Inconsistency-Trade Call. In the event of any inconsistency between
a telephone conversation, including a trade call and a Confirmation signed by
both parties, the Confirmation shall govern.
17
(v) Condition Precedent. The condition precedent in Section 2(a)(iii)(1)
does not apply to a payment and delivery owing by a party if the other party
shall have satisfied in full all its payment or delivery obligations under
Section 2(a)(i) and shall at the relevant time have no future payment or
delivery obligations, whether absolute or contingent, under Section 2(a)(i).
(w) Definitions. This Agreement shall be subject to the 2000
Definitions (the "2000 Definitions") as published by the International Swaps
and Derivatives Association Inc. The provisions of the 2000 Definitions are
incorporated by reference in and shall be deemed a part of this Agreement,
except that all references in the 2000 Definitions to a "Swap Transaction"
shall be deemed references to a "Transaction" for the purposes of this
Agreement. Capitalized terms used and not otherwise defined herein (or in the
2000 Definitions) shall have the respective meanings ascribed to such terms in
the Master Servicing and Trust Agreement referred to in Part 3(b). If in
relation to any Transaction there is any inconsistency between the 2000
Definitions, this Agreement, the Master Servicing and Trust Agreement, any
Confirmation and any other definitions published by ISDA that are incorporated
into any Confirmation, the following will prevail for purposes of such
Transaction in the order of precedence indicated: (i) such Confirmation
(without reference to any definitions or provisions incorporated therein);
(ii) the Master Servicing and Trust Agreement; (iii) this Agreement; (iv) such
other definitions; and (v) the 2000 Definitions.
(x) Amendments. Section 9(b) is hereby amended as follows:
(i) by inserting the following phrase immediately prior to the
period at the end of the sentence: "and the Rating Agency
Condition is satisfied"; and
(ii) by adding the following text thereto immediately following
the first sentence: "Amendments to this Agreement or the Schedule
may not be effected in a Confirmation."
(y) "Rating Agency Condition" means, with respect to any action to
which a Rating Agency Condition applies, that each rating agency then rating
the Certificates shall have been given ten days (or such shorter period as is
acceptable to each such rating agency) prior notice of that action and that
each such rating agency shall have notified the Securities Administrator in
writing that such action will not result in a reduction, qualification or
withdrawal of the then current rating of the Certificates that it maintains.
18
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.
XXXXXXX XXXXX MITSUI MARINE
DERIVATIVE PRODUCTS, L.P.
By: GSMMDPGP, Inc.,
General Partner
By: /s/ Xxxx Xxxxx
----------------------------
Name: Xxxxx Xxxxx
Title: Vice President
Date:
GSAA. HOME EQUITY TRUST 2006-12
By: JPMorgan Chase Bank, National
Association, not in its
individual capacity but solely as
Securities Administrator, on
behalf of GSAA Home Equity Trust
2006-12
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
Date:
