(MULTICURRENCY--CROSS BORDER) Exhibit 10p
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of December 5, 2001
SUNTRUST BANK AND XXXXX & XXXXX, INC.
Party A Party B
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is, other
than by payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation unless
otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that
party ("X") will:--
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by
X to Y under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will
equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform
any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this Agreement) or
(II) a Change in Tax Law.
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(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organized and validly existing under the
laws of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment
of any court or other agency of government applicable to it or any of
its assets or any contractual restriction binding on or affecting it
or any of its assets;
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
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(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.
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(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(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
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described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making
of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case
within 30 days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter: (8) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its
obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger
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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.
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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
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an Additional Termination Event if there is only one Affected Party
may, by not more than 20 days notice to the other party and provided
that the relevant Termination Event is then continuing, designate a day
not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including)
the relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from
an Event of Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss
in respect of this Agreement.
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(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results
from a Termination Event:--
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:--
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Loss of the party with the higher Loss ("X") and
the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to
X; if it is a negative number, X will pay the absolute value
of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
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7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
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9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
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11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-- (i) if in writing and
delivered in person or by courier, on the date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details
at which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
nonexclusive 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.
13
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(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.
14
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organized, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
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.
15
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(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
16
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Terminated 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.
17
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
SUNTRUST BANK XXXXX & XXXXX, INC.
By: By:
-------------------------------- ---------------------------------
Xxxx X. Xxxxx Name:
Vice President Title:
Date: Date:
-------------------- ---------------------
18
SCHEDULE TO THE
ISDA MASTER AGREEMENT
DATED AS OF DECEMBER 5, 2001, BETWEEN
SUNTRUST BANK
("PARTY A")
AND
XXXXX & XXXXX, INC.
("PARTY B")
Part 1
Definitions
1. "Affiliate" shall have the meaning assigned to such term in Section 14
of this Agreement.
2. "Calculation Agent" shall mean Party A.
3. "Shareholders' Equity" means with respect to any entity, at any time,
the sum (as shown in the most recent annual audited financial
statements of such entity) of (i) its capital stock (including
preferred stock) outstanding, taken at par value, (ii) its capital
surplus and (iii) its retained earnings, minus (iv) treasury stock,
each to be determined in accordance with generally accepted accounting
principles.
4. "Specified Entity" shall mean for the purposes of Sections 5(a)(v),
(vi), and (vii), and Section 5(b)(iv) of this Agreement, in the case of
Party A, not applicable, and in the case of Party B, any Affiliate of
Party B.
5. "Specified Indebtedness" shall have the meaning assigned to such term
in Section 14 of this Agreement, but shall not include indebtedness in
respect of deposits received.
6. "Specified Transaction" shall have the meaning assigned to such term
in Section 14 of this Agreement.
7. "Termination Currency" shall mean United States Dollars.
8. "Threshold Amount" shall mean, for purposes of Section 5(a)(vi) of
this Agreement, (a) with respect to Party A, an amount equal to three
percent (3%) of its Shareholders' Equity, determined in accordance
with generally accepted accounting principles in such party's
jurisdiction of incorporation or organization, consistently applied,
as at the end of such party's most recently completed fiscal year, and
(b) with respect to Party B, an amount equal to $1,000,000 (or the
equivalent thereof in any other currencies), except that with respect
to indebtedness under the Loan Agreement, the Threshold Amount shall
be $0.00.
19
Part 2
Representations
1. Tax Representations. None.
2. The following paragraph is added as Section 3(g) of this Agreement:
"(g) Eligible Contract Participant. It is an Eligible Contract
Participant as defined in Section 101(12) of the Commodity Futures
Modernization Act of 2000."
Part 3
Agreements
1. Documents to be delivered. For purposes of Section 4(a) of this
Agreement, each party agrees to deliver the following documents as
applicable:
(a) Certified copies of all documents evidencing necessary
corporate authorizations, as well as other authorizations and
approvals with respect to the execution, delivery and
performance by the party of this Agreement and any Credit
Support Document.
Party required to deliver: Party B
Date by which to be delivered: Upon execution of
this Agreement
Covered by Section 3(d) Representation: Yes
(b) An incumbency certificate of an authorized officer of the
party certifying the names, true signatures and authority of
the officers of the party signing this Agreement and any
Credit Support Document.
Party required to deliver: Party B
Date by which to be delivered: Upon execution of
this Agreement
Covered by Section 3(d) Representation: Yes
(c) Such other document as the other party may reasonably request
in connection with each Transaction.
Party required to deliver: Party B
Date by which to be delivered: Promptly upon
request
Covered by Section 3(d) Representation: Yes
(d) Such other written information respecting the condition or
operations, financial or otherwise, of Party B as Party A may
reasonably request from time to time.
Party required to deliver: Party B
Date by which to be delivered: Promptly upon
request
Covered by Section 3(d) Representation: Yes
20
Part 4
Termination Provisions
1. Cross Default. The "Cross Default" provisions of Section 5(a)(vi) of
this Agreement shall apply to each of Party A and Party B.
2. Credit Event Upon Merger. The "Credit Event Upon Merger" provisions of
Section 5(b)(iv) of this Agreement shall apply to each of Party A and
Party B.
3. Automatic Early Termination. The "Automatic Early Termination"
provision of Section 6(a) of this Agreement shall not apply to either
Party A or Party B.
4. Payments on Early Termination. For purposes of Section 6(e) of this
Agreement, Second Method and Loss shall apply.
5. Additional Termination Event will not apply. Notwithstanding the
foregoing, Party A will have the right (but not the obligation) to
terminate all or a pro rata portion of any Transaction related to the
Loan Agreement and will be entitled to receive from, or will be
required to pay to, Party B the fair market value for such
termination, as determined by Party A in good faith and in accordance
with market practice and its own customary procedures, upon the
occurrence of one or more of the following events:
(a) If the indebtedness under the Loan Agreement is (for whatever
reason, in whatever manner) partially or fully paid or
discharged (except with respect to any scheduled
amortization);
(b) If Party A ceases to be a party to the Loan Agreement;
(c) If the lenders party to the Loan Agreement become secured or,
if already secured, the lenders obtain additional security
thereunder and Party A, in its capacity as a party to this
Agreement and any Transaction hereunder, is not entitled to
the same rights, privileges, and interest in the collateral
and/or guaranty agreements as the lenders are entitled to
under the Loan Agreement;
(d) If there is a default, an event of default, or other similar
condition or event (however described) in relation to Party B
under the Loan Agreement (without regard to the existence of
any waiver or forbearance agreement with respect thereto); and
(e) If the Loan Agreement is amended, restated, supplemented, or
otherwise modified and Party A does not consent, in its sole
discretion, to such amendment, restatement, supplement, or
other modification.
Party A may exercise such right to terminate, at any time in its sole
discretion, following the occurrence of any one of such events through
the Termination Date. A failure or delay in exercising the foregoing
right to terminate will not be presumed to operate as a waiver, and a
single or partial exercise of such right will not be presumed to
preclude any subsequent or further exercise of that right.
21
Part 5
Miscellaneous
1. Notices. For purposes of Section 12 of this Agreement:
(a) The address for notice or communication to Party A is:
SunTrust Capital Markets, Inc.
Financial Risk Management, Operations
000 Xxxxxxxxx Xxxxxx, X.X.
23rd Floor, Center Code 3913
Xxxxxxx, XX 00000
000-000-0000 (phone)
000-000-0000 (fax)
(b) The address for notice or communication to Party B is:
Xx. Xxxx X. Xxxxxx
Chief Financial Officer
Xxxxx & Xxxxx, Inc.
000 X. Xxxxxxxxx Xxx.
Xxxxxxx Xxxxx, XX 00000
000-000-0000 (phone)
000-000-0000 (fax)
2. Governing Law. Section 13(a) of this Agreement is hereby restated as
follows:
"(a) Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New
York without reference to choice of law doctrine."
3. Jurisdiction. Section 13(b)(i) of this Agreement is hereby restated as
follows:
"(i) submits to the nonexclusive jurisdiction of the courts of
the State of Georgia and the United States District Court
located in Atlanta, Georgia; and"
4. Process Agent. Process Agent shall not apply to this Agreement.
5. Offices. The provisions of Section 10(a) of this Agreement shall not
apply to either party.
6. Multibranch Party. For purposes of Section 10(c) of this Agreement,
neither Party A nor Party B is a Multibranch Party.
7. Credit Support Provider.
Credit Support Provider means in relation to Party A: Not applicable.
Credit Support Provider means in relation to Party B: The party, as of
any particular time and as may be acceptable to Party A, whose
undertakings or assets under the Credit Support Document secure the
timely performance of Party B's obligations under this Agreement.
8. Credit Support Document.
Credit Support Document means in relation to Party A: Not applicable.
Credit Support Document means in relation to Party B: Any guaranty,
letter of credit, credit agreement, security agreement, mortgage, deed
of trust, pledge agreement, assignment agreement, investment agreement,
surety bond, or other credit enhancement device, or any combination
thereof issued as security for the timely performance of Party B's
obligations under this Agreement, as may be acceptable to Party A,
including, without limitation, any amendments, supplements,
restatements, or other modifications, or any substitutions or
replacements thereto in form and substance satisfactory to Party A.
22
Part 6
Additional Agreements
1. Recording of Conversations. Each party (i) consents to the monitoring
or recording, at any time and from time to time, by the other party of
any and all communications between officers or employees of the
parties, (ii) waives any further notice of such monitoring or
recording, and (iii) agrees to notify (and, if required by law, obtain
the consent of) its officers and employees with respect to such
monitoring or recording.
2. Mediation and Arbitration. Notwithstanding anything to the contrary
contained herein, the parties agree to submit to mediation and, should
settlement through mediation not occur, to arbitration any and all
claims, disputes, and controversies between them (and their respective
employees, officers, directors, affiliates, attorneys, and other
agents) resulting from or arising out of this Agreement. Such
mediation and arbitration shall proceed in the jurisdiction where
Party A is located, shall be governed by the law specified in this
Agreement, and shall be conducted (a) in accordance with such rules as
may be agreed upon by the parties or (b) in the event the parties do
not reach an agreement as to such rules within thirty (30) days after
a notice of dispute, in accordance with the Commercial Mediation Rules
and Commercial Arbitration Rules of the American Arbitration
Association. If, within thirty (30) days after service of a written
demand for mediation, the mediation does not result in settlement of
the dispute, then any party may demand arbitration, and the decision
of the arbitrator(s) shall be binding on the parties. Judgment upon
the award rendered by the arbitrator(s) may be entered in any court
having jurisdiction. It is agreed that the arbitrators shall have no
authority to award treble, exemplary, or punitive damages of any type
under any circumstances, whether or not such damages may be available
under state or federal law, or under the Federal Arbitration Act, or
under the Commercial Arbitration Rules of the American Arbitration
Association, the parties hereby waiving their right, if any, to
recover any such damages.
3. Set Off. Section 6 of the Agreement is amended by adding the following
new subsection 6(f):
"(f) RIGHT OF SET-OFF. Upon the occurrence of an Event of
Default with respect to Party B, or an Illegality or Credit
Event Upon Merger where Party B is the Affected Party, Party A
will have the right (but not the obligation), without prior
notice to Party B or any other person, to set-off any
obligation of Party A or any of Party A's present or future
Affiliates, branches, or offices owing to Party B, against any
obligation of Party B owing to Party A or any of Party A's
present or future Affiliates, branches, or offices (whether or
not such obligations arise under this Agreement, whether or
not matured, whether or not contingent, and regardless of the
place of payment or booking office of the obligations). In
order to enable Party A to exercise its rights of set-off, if
an obligation is unascertained, Party A may in good faith
estimate that obligation and set-off in respect of the
estimate, subject to Party A accounting to Party B when the
obligation is ascertained.
Nothing in this Section 6(f) shall be effective to create a
charge or other security interest. This Section 6(f) shall be
without prejudice and in addition to any right of set-off,
combination of accounts, lien, or other right to which any
party is at any time otherwise entitled (whether by operation
of law, contract, or otherwise)."
4. By signing this Schedule, Party B acknowledges that it has received and
understands the SunTrust Bank "Terms of Dealing for OTC Risk Management
Transactions" and the "Risk Disclosure Statement for OTC Risk
Management Transactions" (each attached hereto and incorporated by
reference into this Agreement).
23
Please confirm your agreement to the terms of the foregoing Schedule by signing
below.
SUNTRUST BANK XXXXX & XXXXX, INC.
By: By:
------------------------------ ---------------------------
Name: Name:
Title: Title:
24
SUNTRUST BANK ("SUNTRUST")
TERMS OF DEALING FOR OTC RISK MANAGEMENT TRANSACTIONS
In connection with the negotiation, entry into, and performance from time to
time of over-the-counter ("OTC") risk management transactions, please be advised
that:
SunTrust acts as principal only and does not act as advisor, agent, broker, or
fiduciary for or with respect to any counterparty (unless otherwise expressly
agreed in a written engagement letter).
SunTrust expects that its counterparties have the authority and capacity to
enter into and perform their obligations under their OTC risk management
transactions with SunTrust, and SunTrust relies on the express and implied
representations of its counterparties with respect thereto.
SunTrust expects that its counterparties possess adequate knowledge and
experience to assess independently, or with the assistance of their own
advisors, the merits and risks of each OTC risk management transaction that the
counterparty may from time to time enter into, amend, or terminate.
SunTrust endeavors to maintain the confidentiality of all confidential
counterparty information and expects its counterparties to do the same. Unless a
counterparty gives SunTrust written notice to the contrary, each counterparty
authorizes SunTrust and all SunTrust affiliates, including SunTrust Capital
Markets, Inc. (STCM), to share with each other confidential information
concerning a counterparty and/or its accounts for marketing or other purposes
from time to time. Any trade ideas, term sheets, and other similar documents
sent to counterparties by SunTrust are not to be shared with others.
SunTrust may pay fees, commissions, and other amounts to agents, brokers, and/or
other third parties in connection with OTC risk management transactions entered
into with counterparties. SunTrust considers the amount of such fees,
commissions, and other amounts to be confidential and does not disclose the same
to its counterparties.
SunTrust may from time to time receive orders for similar or identical
transactions, and SunTrust makes no representation with respect to execution
priorities.
STCM's Authorized Officers have the authority to bind SunTrust in connection
with OTC risk management transactions. A current list of Authorized Officers may
be obtained from STCM upon request.
OTC risk management obligations of SunTrust are not FDIC insured.
25
SUNTRUST BANK ("SUNTRUST")
RISK DISCLOSURE STATEMENT FOR OTC RISK MANAGEMENT TRANSACTIONS
Over-the-counter ("OTC") risk management transactions, like other financial
transactions, involve a variety of significant potential risks. OTC risk
management transactions generally include options, forwards, swaps, swaptions,
caps, floors, collars, combination and variations of such instruments, and other
executory contractual arrangements, and may involve interest rates, currencies,
securities, commodities, equities, credit, indices, and other underlying
interests.
Before entering into any OTC risk management transaction, you should carefully
consider whether the transaction is appropriate for you in light of your
experience, objectives, financial and operational resources, and other relevant
circumstances. You should also ensure that you fully understand the nature of
the transaction and contractual relationship into which you are entering and the
nature and extent of your exposure to risk of loss, which may significantly
exceed the amount of any initial payment or investment by you.
The specific risks presented by a particular OTC risk management transaction
necessarily depend upon the character of the specific transaction and your
circumstances. In general, however, all OTC risk management transactions involve
the risk of adverse or unanticipated market developments, risk of illiquidity
and credit risk, and may involve other material risks. Equity risk management
transactions may increase or decrease in value with a change in, among other
things, stock prices and interest rates which could result in unlimited loss. In
addition, you may be subject to internal operational risks in the event that
appropriate internal systems and controls are not in place to monitor the
various risks and funding requirements to which you are subject by virtue of
your activities in the OTC risk management and related markets. OTC risk
management transactions frequently are tailored to permit parties to customize
transactions to accomplish complex financial and risk management objectives.
Such customization can also introduce significant risk factors of a complex
character.
As in any financial transaction, you must understand the requirements (including
investment restrictions), if any, applicable to you that are established by your
regulators or by your Board of Directors or other governing body. You should
also consider the tax and accounting implications of entering into any risk
management or other transaction. To the extent appropriate in light of the
specific transaction and your circumstances, you should consider consulting such
advisers as may be appropriate to assist you in understanding the risks
involved. If you are acting in the capacity of financial adviser or agent, you
must evaluate the foregoing matters in light of the circumstances applicable to
your principal.
In entering into any OTC risk management transaction, you should also take into
consideration that, unless you and SunTrust have established in writing an
express financial advisory or other fiduciary relationship or you and SunTrust
have expressly agreed in writing that you will be relying on SunTrust's
recommendations as the primary basis for making your trading or investment
decisions, SunTrust is acting solely in the capacity of an arm's-length
contractual counterparty and not in the capacity of your financial advisor or
fiduciary. In addition, SunTrust or its affiliates may from time to time have
substantial long or short positions in and may make a market in or otherwise buy
or sell instruments identical or economically related to the OTC risk management
transaction entered into with you or may have an investment banking or other
commercial relationship with the issuer of any security or financial instrument
underlying an OTC risk management transaction entered into with you.
THIS BRIEF STATEMENT DOES NOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT
ASPECTS OF ENTERING INTO OTC RISK MANAGEMENT TRANSACTIONS. YOU SHOULD REFRAIN
FROM ENTERING INTO ANY SUCH TRANSACTION UNLESS YOU FULLY UNDERSTAND ALL SUCH
RISK AND HAVE INDEPENDENTLY DETERMINED THAT THE TRANSACTION IS APPROPRIATE FOR
YOU.
26
-------------------------------------------------------------------------------
[SUNTRUST XXXXXXXX XXXXXXXX LETTERHEAD]
000 Xxxxxxxxx Xxxxxx, X.X.
23rd Floor, Center Code 3913
Xxxxxxx, Xxxxxxx 00000
Member NASD and SIPC
December 6, 2001
CONFIRMATION OF INTEREST RATE TRANSACTION
THIS LETTER AGREEMENT SHOULD BE REVIEWED, EXECUTED BY AN AUTHORIZED PERSON(S),
AND RETURNED IMMEDIATELY VIA FAX TO 000-000-0000.
(PLEASE DIRECT ANY QUESTIONS TO XXX XXXXXXXXXX AT 000-000-0000.)
Xxxx X. Xxxxxx
Chief Financial Officer
Xxxxx & Xxxxx, Inc.
000 X. Xxxxxxxxx Xxx.
Xxxxxxx Xxxxx, Xxxxxxx 00000
Ph#: 000-000-0000
Fax#: 000-000-0000
REF: 13932
Dear Xx. Xxxxxx:
The purpose of this letter agreement is to set forth the terms and
conditions of the Rate Transaction entered into between Xxxxx & Xxxxx, Inc.
("Counterparty" or "you") and SunTrust Bank ("SunTrust" or "us") on the Trade
Date specified below (the "Transaction"). SunTrust Capital Markets, Inc. acts
as agent on behalf of SunTrust with respect to this Transaction. This letter
agreement constitutes a "Confirmation" as referred to in the ISDA Master
Agreement to be entered into by the parties hereto (see Section 2(a) below).
The definitions and provisions contained in the 1991 ISDA Definitions
published by the International Swap and Derivatives Association, Inc. ("ISDA"),
as amended and supplemented by the 1998 Supplement to the 1991 ISDA Definitions
(the "Definitions"), are incorporated by reference into this Confirmation. In
the event of any inconsistency between the Definitions and this Confirmation,
this Confirmation shall govern.
This Confirmation supplements, forms a part of, and is subject to the
ISDA Master Agreement, as amended and supplemented from time to time (the "Swap
Agreement"), between you and us. All provisions contained or incorporated by
reference in the Swap Agreement shall govern this Confirmation except as
expressly modified below. Prior to the execution and delivery of such Swap
Agreement, this Confirmation alone shall constitute a complete and binding
agreement with respect to the Transaction.
Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in (or refrained from engaging in) substantial
financial transactions and has taken other material actions in reliance upon
the parties' entry in the Transaction to which this Confirmation relates on the
terms and conditions set forth below.
2
This Confirmation shall be governed by and construed in accordance
with the laws of the State of New York without reference to choice of law
doctrine.
1. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Type of Transaction: Swap Transaction
Notional Amount: $77,142,857.16 amortizing (see attached
Schedule A)
Trade Date: December 5, 2001
Effective Date: January 2, 2002
Termination Date: December 31, 2007, with adjustment in
accordance with the Modified Following
Business Day Convention
FIXED AMOUNTS:
Fixed Rate Payer: Counterparty
Fixed Rate Payer
Payment Dates: The last day of each March, June,
September, and December, beginning March
31, 2002, through and including the
Termination Date, subject to adjustment in
accordance with the Modified Following
Business Day Convention
Fixed Rate: 4.53% per annum
Fixed Rate Day Count
Fraction: Actual/360
Adjustment to Period
End Dates: Applicable
FLOATING AMOUNTS:
Floating Rate Payer: SunTrust
Floating Rate Payer
Payment Dates: The last day of each March, June,
September, and December, beginning March
31, 2002, through and including the
Termination Date, subject to adjustment in
accordance with the Modified Following
Business Day Convention
Floating Rate for
initial Calculation
Period: To be determined
Floating Rate Day
Count Fraction: Actual/360
Designated Maturity: 3 month
3
Floating Rate Option: USD-LIBOR-BBA
Spread: Inapplicable
Adjustment to Period
End Dates: Applicable
Reset Dates: The first day of each Floating Rate Payer
Calculation Period
Calculation Agent: SunTrust
Business Days: New York
2. Other Provisions
(a) Subject to the terms, conditions and limitations of any other
agreement between the parties, SunTrust shall have the right, but not
the obligation, to terminate this Transaction if seventy-five (75)
days have elapsed since the Trade Date and the Swap Agreement has not
been executed by you and received by SunTrust. If this right to
terminate is exercised, SunTrust will be entitled to receive from you
or will be required to pay to you the fair market value for such
termination as determined by SunTrust in good faith and in accordance
with market practice and its own customary procedures.
(b) You agree to provide us (i) corporate resolutions, and (ii) a
certificate of incumbency with respect to the individual(s) executing
this Confirmation, both documents evidencing your authority to enter
into this Transaction. This provision shall constitute an additional
Agreement for the purpose of Section 4 of the Swap Agreement.
(c) By signing this Confirmation, you acknowledge that you have
received and understand the SunTrust Bank "Terms of Dealing for OTC
Risk Management Transactions" and the "Risk Disclosure Statement for
OTC Risk Management Transactions" (each attached hereto and
incorporated by reference into this Confirmation).
(d) "Loan Agreement" shall mean each agreement, related by its
terms to this Transaction, to which you (as borrower) and SunTrust (or
one of its Affiliates) are or hereafter become parties (and to which
other lenders may be parties) involving the making of loans,
extensions of credit or financial accommodations thereunder or
commitments therefor, as the same exists on the Trade Date and without
regard to (i) any termination or cancellation thereof, whether by
reason of payment of all indebtedness incurred thereunder or
otherwise, or (ii) unless consented to in writing by SunTrust, any
amendment, modification, addition, waiver or consent thereto or
thereof.
4
3. Account Details
Payment to Counterparty:
Depository: [PLEASE ADVISE]
ABA #
Favor of:
Account #
Payments to SunTrust:
SunTrust Bank
ABA # 000000000
FBO: Bond Wire Clearing
Account # 0000-0000-00
Attn: Financial Risk Management, Operations
4. Offices
(a) The Office of Counterparty for the Transaction is its Daytona
Beach office; and
(b) The Office of SunTrust for the Transaction is its Atlanta
office.
By signing below, you also acknowledge and agree that we have
explained to you the risks involved in this Transaction, which risks include
but are not limited to the following:
- Market Risk: The risk that the Transaction may increase or decrease in
value with a change in, among other things, interest rates or the
yield curve; and
- Liquidity Risk: The risk that the Transaction cannot be closed out or
disposed of quickly at or near its value.
You further acknowledge and agree that you understand these risks and
the Transaction as a whole, that you are capable of managing the risks
associated with this Transaction, that the risks involved in this Transaction
are consistent with your financial goals, policies and procedures, and risk
tolerance, and that you have determined that this Transaction is appropriate
for you.
Please confirm that the foregoing correctly sets forth the terms of
our agreement by signing this copy of this Confirmation and immediately
returning it to SunTrust Capital Markets, Inc. via fax at the number indicated
on Page 1.
Very truly yours, Accepted and Confirmed as of the date
first written:
SUNTRUST BANK XXXXX & XXXXX, INC.
By: By:
--------------------------- ----------------------------------------
Xxxx X. Xxxxx Name:
Vice President Title:
5
AMORTIZATION SCHEDULE A*
PERIOD BEGIN PERIOD END NOTIONAL AMOUNT
------------ ---------- ---------------
2-Jan-02 29-Mar-02 77,142,857.16
29-Mar-02 28-Jun-02 73,928,571.45
28-Jun-02 30-Sep-02 70,714,285.74
30-Sep-02 31-Dec-02 67,500,000.03
31-Dec-02 31-Mar-03 64,285,714.32
31-Mar-03 30-Jun-03 61,071,428.61
30-Jun-03 30-Sep-03 57,857,142.90
30-Sep-03 31-Dec-03 54,642,857.19
31-Dec-03 31-Mar-04 51,428,571.48
31-Mar-04 30-Jun-04 48,214,285.77
30-Jun-04 30-Sep-04 45,000,000.06
30-Sep-04 31-Dec-04 41,785,714.35
31-Dec-04 31-Mar-05 38,571,428.64
31-Mar-05 30-Jun-05 35,357,142.93
30-Jun-05 30-Sep-05 32,142,857.22
30-Sep-05 30-Dec-05 28,928,571.51
30-Dec-05 31-Mar-06 25,714,285.80
31-Mar-06 30-Jun-06 22,500,000.09
30-Jun-06 29-Sep-06 19,285,714.38
29-Sep-06 29-Dec-06 16,071,428.67
29-Dec-06 30-Mar-07 12,857,142.96
30-Mar-07 29-Jun-07 9,642,857.25
29-Jun-07 28-Sep-07 6,428,571.54
28-Sep-07 31-Dec-07 3,214,285.83
*AMORTIZATION SCHEDULE A, subject to adjustment for the Period End Dates in
accordance with the Modified Following Business Day Convention.
6
SUNTRUST BANK ("SUNTRUST")
TERMS OF DEALING FOR OTC RISK MANAGEMENT TRANSACTIONS
In connection with the negotiation, entry into, and performance from time to
time of over-the-counter ("OTC") risk management transactions, please be
advised that:
SunTrust acts as principal only and does not act as advisor, agent, broker, or
fiduciary for or with respect to any counterparty (unless otherwise expressly
agreed in a written engagement letter).
SunTrust expects that its counterparties have the authority and capacity to
enter into and perform their obligations under their OTC risk management
transactions with SunTrust, and SunTrust relies on the express and implied
representations of its counterparties with respect thereto.
SunTrust expects that its counterparties possess adequate knowledge and
experience to assess independently, or with the assistance of their own
advisors, the merits and risks of each OTC risk management transaction that the
counterparty may from time to time enter into, amend, or terminate.
SunTrust endeavors to maintain the confidentiality of all confidential
counterparty information and expects its counterparties to do the same. Unless
a counterparty gives SunTrust written notice to the contrary, each counterparty
authorizes SunTrust and all SunTrust affiliates, including SunTrust Capital
Markets, Inc. (STCM), to share with each other confidential information
concerning a counterparty and/or its accounts for marketing or other purposes
from time to time. Any trade ideas, term sheets, and other similar documents
sent to counterparties by SunTrust are not to be shared with others.
SunTrust may pay fees, commissions, and other amounts to agents, brokers,
and/or other third parties in connection with OTC risk management transactions
entered into with counterparties. SunTrust considers the amount of such fees,
commissions, and other amounts to be confidential and does not disclose the
same to its counterparties.
SunTrust may from time to time receive orders for similar or identical
transactions, and SunTrust makes no representation with respect to execution
priorities.
STCM's Authorized Officers have the authority to bind SunTrust in connection
with OTC risk management transactions. A current list of Authorized Officers
may be obtained from STCM upon request.
OTC risk management obligations of SunTrust are not FDIC insured.
7
SUNTRUST BANK ("SUNTRUST")
RISK DISCLOSURE STATEMENT FOR OTC RISK MANAGEMENT TRANSACTIONS
Over-the-counter ("OTC") risk management transactions, like other financial
transactions, involve a variety of significant potential risks. OTC risk
management transactions generally include options, forwards, swaps, swaptions,
caps, floors, collars, combination and variations of such instruments, and
other executory contractual arrangements, and may involve interest rates,
currencies, securities, commodities, equities, credit, indices, and other
underlying interests.
Before entering into any OTC risk management transaction, you should carefully
consider whether the transaction is appropriate for you in light of your
experience, objectives, financial and operational resources, and other relevant
circumstances. You should also ensure that you fully understand the nature of
the transaction and contractual relationship into which you are entering and
the nature and extent of your exposure to risk of loss, which may significantly
exceed the amount of any initial payment or investment by you.
The specific risks presented by a particular OTC risk management transaction
necessarily depend upon the character of the specific transaction and your
circumstances. In general, however, all OTC risk management transactions
involve the risk of adverse or unanticipated market developments, risk of
illiquidity and credit risk, and may involve other material risks. Equity risk
management transactions may increase or decrease in value with a change in,
among other things, stock prices and interest rates which could result in
unlimited loss. In addition, you may be subject to internal operational risks
in the event that appropriate internal systems and controls are not in place to
monitor the various risks and funding requirements to which you are subject by
virtue of your activities in the OTC risk management and related markets. OTC
risk management transactions frequently are tailored to permit parties to
customize transactions to accomplish complex financial and risk management
objectives. Such customization can also introduce significant risk factors of a
complex character.
As in any financial transaction, you must understand the requirements
(including investment restrictions), if any, applicable to you that are
established by your regulators or by your Board of Directors or other governing
body. You should also consider the tax and accounting implications of entering
into any risk management or other transaction. To the extent appropriate in
light of the specific transaction and your circumstances, you should consider
consulting such advisers as may be appropriate to assist you in understanding
the risks involved. If you are acting in the capacity of financial adviser or
agent, you must evaluate the foregoing matters in light of the circumstances
applicable to your principal.
In entering into any OTC risk management transaction, you should also take into
consideration that, unless you and SunTrust have established in writing an
express financial advisory or other fiduciary relationship or you and SunTrust
have expressly agreed in writing that you will be relying on SunTrust's
recommendations as the primary basis for making your trading or investment
decisions, SunTrust is acting solely in the capacity of an arm's-length
contractual counterparty and not in the capacity of your financial advisor or
fiduciary. In addition, SunTrust or its affiliates may from time to time have
substantial long or short positions in and may make a market in or otherwise
buy or sell instruments identical or economically related to the OTC risk
management transaction entered into with you or may have an investment banking
or other commercial relationship with the issuer of any security or financial
instrument underlying an OTC risk management transaction entered into with you.
THIS BRIEF STATEMENT DOES NOT DISCLOSE ALL OF THE RISKS AND OTHER SIGNIFICANT
ASPECTS OF ENTERING INTO OTC RISK MANAGEMENT TRANSACTIONS. YOU SHOULD REFRAIN
FROM ENTERING INTO ANY SUCH TRANSACTION UNLESS YOU FULLY UNDERSTAND ALL SUCH
RISK AND HAVE INDEPENDENTLY DETERMINED THAT THE TRANSACTION IS APPROPRIATE FOR
YOU.
