Exhibit 4.1
SERIES SUPPLEMENT
REPACKAGED GE GLOBAL INSURANCE FLOATING RATE
TRUST CERTIFICATES,
SERIES 2002-1 TRUST
between
XXXXXX ABS CORPORATION,
as Depositor,
and
U.S. BANK TRUST NATIONAL ASSOCIATION,
as Trustee,
TRUST CERTIFICATES
Dated as of November 15, 2002
Table of Contents
Page
Section 1. Incorporation of Standard Terms...................................1
Section 2. Definitions.......................................................2
Section 3. Designation of Trust and Certificates.............................9
Section 4. Trust Certificates................................................9
Section 5. Distributions....................................................10
Section 6. Early Redemption of Certificates.................................10
Section 7. Partial Unwind of Certificates...................................12
Section 8. Trustee's Fees...................................................14
Section 9. Swap Payments....................................................14
Section 10. Notices of Swap Termination Events..............................15
Section 11. Miscellaneous...................................................15
Section 12. Governing Law...................................................18
Section 13. Counterparts....................................................18
Section 14. Termination of the Trust........................................18
Section 15. Sale of Underlying Securities...................................18
Section 16. Amendments......................................................18
Section 17. Voting of Underlying Securities, Modification of Underlying
Securities Indenture............................................18
Section 18. Additional Depositor Representation.............................20
SCHEDULE I SERIES 2002-1 UNDERLYING SECURITIES SCHEDULE
EXHIBIT A FORM OF TRUST CERTIFICATE
EXHIBIT B FORM OF SWAP AGREEMENT
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SERIES SUPPLEMENT
REPACKAGED GE GLOBAL INSURANCE FLOATING RATE TRUST CERTIFICATES
SERIES 2002-1 TRUST
SERIES SUPPLEMENT, Repackaged GE Global Insurance Floating Rate
Trust Certificates Series 2002-1, dated as of November 15, 2002 (the "Series
Supplement"), by and between XXXXXX ABS CORPORATION, as Depositor (the
"Depositor"), and U.S. BANK TRUST NATIONAL ASSOCIATION, as Trustee (the
"Trustee").
W I T N E S S E T H:
WHEREAS, the Depositor desires to create the Trust designated
herein (the "Trust") by executing and delivering this Series Supplement, which
shall incorporate the terms of the Standard Terms for Trust Agreements, dated
as of January 16, 2001 (the "Standard Terms" and, together with this Series
Supplement, the "Trust Agreement"), by and between the Depositor and the
Trustee, as modified by this Series Supplement;
WHEREAS, the Depositor desires to deposit into the Trust the
Underlying Securities set forth on Schedule I attached hereto (the "Underlying
Securities Schedule") the general terms of which are described in the
Prospectus Supplement under the heading "Description of the Underlying
Securities";
WHEREAS, the Depositor desires that the Trust enter into a swap
agreement pursuant to which the Trust will exchange interest payments due on
the Underlying Securities for payments from the Swap Counterparty which will
be passed through the Certificateholders;
WHEREAS, in connection with the creation of the Trust, the deposit
therein of the Underlying Securities and the entering into the Swap Agreement
thereby, it is desired to provide for the issuance of trust certificates
evidencing undivided interests in the Trust; and
WHEREAS, the Trustee has joined in the execution of the Standard
Terms and this Series Supplement to evidence the acceptance by the Trustee of
the Trust.
NOW, THEREFORE, in consideration of the foregoing premises and the
mutual covenants expressed herein, it is hereby agreed by and between the
Depositor and the Trustee as follows:
Section 1. Incorporation of Standard Terms. Except as otherwise provided
herein, all of the provisions of the Standard Terms are hereby incorporated
herein by reference in their entirety, and this Series Supplement and the
Standard Terms shall form a single agreement between the parties. In the event
of any inconsistency between the provisions of this Series Supplement and the
provisions of the Standard Terms, the provisions of this Series Supplement
will control with respect to the Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1 Certificates and the transactions described
herein.
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Section 2. Definitions.
(a) Except as otherwise specified herein or as the context may otherwise
require, the following terms shall have the respective meanings set forth
below for all purposes under this Series Supplement. (Section 2(b) below sets
forth terms listed in the Standard Terms which are not applicable to this
Series.) Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Standard Terms.
"Affiliated Owner" shall have the meaning set forth in Section
7(a).
"Available Funds" shall mean, for any Distribution Date, Available
Interest Funds and Available Principal Funds for such Distribution Date.
"Available Interest Funds" shall mean, for any Distribution Date,
the sum of (i) all amounts received from the Swap Counterparty pursuant to the
Swap Agreement during the preceding Interest Accrual Period and (ii) any
amounts with respect to interest on the Underlying Securities actually
received by the Trust pursuant to the Underlying Securities Indenture on such
Distribution Date and not required to be paid to the Swap Counterparty
pursuant to the Swap Agreement.
"Available Principal Funds" shall mean all amounts received from
the Underlying Securities Issuer with respect to principal on the Underlying
Securities on the Final Scheduled Distribution Date or any other date.
"Business Day" shall mean any day other than a Saturday, a Sunday
or a day on which banking institutions in New York, New York are authorized or
obligated by law or executive order to be closed.
"Calculation Agent" shall mean Xxxxxx Brothers Derivative
Products Inc.
"Certificate Account" shall have the meaning specified in the
Standard Terms.
"Certificates" shall mean the Certificates, in the form attached
hereto as Exhibit A, to be issued by the Trust representing a proportionate
undivided beneficial ownership interest in certain distributions to be made by
the Trust and having the characteristics described herein and in the
Certificates.
"Closing Date" shall mean November 15, 2002.
"Code" means the Internal Revenue Code of 1986, as amended.
"Corporate Trust Office" shall mean the office of U.S. Bank Trust
National Association located at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000.
"Currency" shall mean United States Dollars.
"Depository" shall mean The Depository Trust Company, its nominees
and their respective successors.
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"Discontinuation Date" shall mean the date determined by the
Depositor within a reasonable time following the Underlying Securities
Issuer's either (x) having stated in writing that it intends permanently to
cease filing reports required under the Exchange Act or (y) having failed to
file any required reports for one full calendar year.
"Distribution Date" shall mean February 15th, May 15th, August
15th and November 15th of each year (or if such date is not a Business Day,
the next succeeding Business Day), commencing on February 15, 2003, and ending
on the earlier of the Final Scheduled Distribution Date and any date on which
all Underlying Securities are redeemed pursuant to the Underlying Securities
Indenture or prepaid or liquidated in whole for any reason other than at their
maturity.
"Early Termination Date" shall mean the date so designated as such
in accordance with the terms of the Swap Agreement.
"Early Termination Payment" shall mean, with respect to any Early
Termination Date, the amount payable by the Swap Counterparty or the Trust, as
applicable, on such Early Termination Date pursuant to the Swap Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended.
"Exchange Act" shall mean the Securities and Exchange Act of 1934,
as amended, and the rules and regulations promulgated thereunder.
"Exercise Date" shall mean the date on which an Affiliated Owner
delivers a Partial Unwind Agreement to the Trustee, accompanied by a
certificate of the Marketing Agent pursuant to Section 7(a) hereof.
"Final Scheduled Distribution Date" shall mean February 15, 2026,
or, if such day is not a Business Day, the next succeeding Business Day.
"Interest Accrual Period" shall mean for any Distribution Date,
the period from and including the preceding Distribution Date (or in the case
of the first Interest Accrual Period, from and including November 15, 2002) to
but excluding the current Distribution Date.
"Interest Distribution Amount" shall mean, with respect to each
Distribution Date, an amount equal to the product of (i) the outstanding
Certificate Principal Amount, (ii) the applicable Interest Rate for the
preceding Interest Accrual Period and (iii) the actual number of days in such
Interest Accrual Period divided by 360, as determined in accordance with the
terms of the Swap Agreement.
"Interest Rate" shall mean, for each Interest Accrual Period,
Three-Month LIBOR for the related LIBOR Determination Date plus 0.50%.
"LIBOR Determination Date" shall mean for the first Interest
Accrual Period, November 13, 2002, and for any subsequent Interest Accrual
Period, the second London Banking Day preceding the commencement of such
Interest Accrual Period.
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"London Banking Day" shall mean, any day on which commercial banks
are open for business (including dealings in foreign exchange and foreign
currency deposits) in London.
"Liquidation Price" shall mean the price at which the Trustee
sells the Underlying Securities.
"Liquidation Proceeds" shall mean (i) with respect to a
liquidation of the Underlying Securities in accordance with the Sale
Procedures, the net proceeds received from the sale by the Marketing Agent, in
accordance with the Sale Procedures, of the entire principal amount of the
Underlying Securities or (ii) with respect to an Underlying Acceleration
Termination, the payments received by the Trustee in respect of the related
acceleration of the Underlying Securities.
"Marketing Agent" shall mean Xxxxxx Brothers Inc.
"Maturity Date" shall have the meaning specified in Schedule I
hereto.
"Moody's" shall mean Xxxxx'x Investors Service, Inc.
"Optional Termination Amount" shall mean, in connection with the
execution of the Partial Unwind Agreement, the principal amount of Underlying
Securities corresponding to the principal amount of an Affiliated Owner's
Certificates to be redeemed pursuant to such Partial Unwind Agreement.
"Ordinary Expenses" shall mean the Trustee's ordinary expenses and
overhead in connection with its services as Trustee, including the items
referred to in the definition of Ordinary Expenses in the Standard Terms.
"Partial Unwind Agreement" means an agreement between an
Affiliated Owner and the Swap Counterparty, and subject to countersignature by
the Trustee on behalf of the Trust.
"Partial Unwind Amount" means the dollar amount (which shall,
except in the case of the Depositor or any Affiliate thereof, be at least
$1,000,000) specified in the related Partial Unwind Agreement, which dollar
amount corresponds to the principal amount of the Certificates to be delivered
to the Trustee and the principal amount of Underlying Securities to be
delivered or sold by the Trustee, in each case in accordance with Section
7(a).
"Partial Unwind Date" has the meaning specified in Section 7(a).
"Plan" means (a) an employee benefit plan (as defined in Section
3(3) of ERISA), (b) a plan described in Section 4975(e)(1) of the Code or (c)
any entity whose underlying assets are treated as assets of any such plan by
reason of such plan's investment in the entity.
"Prepaid Ordinary Expenses" shall be zero for this Series.
"Pro Rata Share" shall mean, with respect to any
Certificateholder, a fraction the numerator of which equals the Outstanding
principal amount of the Certificates owned by such
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Certificateholder and the denominator of which equals the aggregate
Outstanding principal amount of the Certificates.
"Prospectus Supplement" shall mean the Prospectus Supplement,
dated November 12, 2002, relating to the Certificates.
"Rating Agency" shall mean Moody's and S&P.
"Record Date" shall mean, with respect to each Distribution Date,
the day immediately preceding the related Distribution Date.
"Required Percentage-Amendment" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Percentage-Direction of Trustee" shall be 66-2/3% of the
aggregate Voting Rights.
"Required Percentage-Remedies" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Percentage-Removal" shall be 66-2/3% of the aggregate
Voting Rights.
"Required Rating" shall mean, in the case of Moody's, the rating
assigned to the Underlying Securities by Moody's as of the Closing Date, and,
in the case of S&P, the rating assigned to the Underlying Securities by S&P as
of the Closing Date.
"S&P" shall mean Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc.
"Sale Procedure" shall mean the process by which the Marketing
Agent, on behalf of the Trust, will sell the Underlying Securities to the
solicited bidder (which bidders will be determined by the Marketing Agent in
its sole and absolute discretion and which bidders may include Xxxxxx Brothers
Inc. or any of its affiliates but in any case shall include at least two
bidders which are not affiliated with Xxxxxx Brothers Inc.; provided, however,
that neither Xxxxxx Brothers Inc. or any of its affiliates is obligated to
bid, and that such bidders need not be limited to recognized broker dealers;
and provided further that if Xxxxxx Brothers Inc. or any of its affiliates are
bidders, any bid made by them shall not be greater than the fair value of the
Underlying Securities) that provides the highest firm bid for the Underlying
Securities. In the sole judgement of the Marketing Agent, bids may be
evaluated on the basis of bids for all or a portion of the Underlying
Securities being sold or any other basis selected in a commercially reasonable
manner by the Marketing Agent.
"Securities Act" shall mean the United States Securities Act of
1933, as amended.
"Series" shall mean Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1.
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"Special Redemption Date" shall mean the tenth Business Day
following the Discontinuation Date.
"Special Termination Event" shall mean a Swap Termination Event
caused by the occurrence of (i) an event specified in Sections 5(a)(i) of the
Swap Agreement, (ii) an event specified in Section 5(a)(vii) of the Swap
Agreement or (iii) a Trigger Event.
"Swap Agreement" shall mean the ISDA Master Agreement dated as of
the Closing Date, between the Trust and the Swap Counterparty (including the
Schedule thereto) as supplemented by the Confirmation dated November 15, 2002,
in the form attached hereto as Exhibit B.
"Swap Termination Event" shall mean the occurrence of any event
that would constitute an "Event of Default" or "Termination Event" under the
Swap Agreement.
"Swap Counterparty" shall mean Xxxxxx Brothers Derivative Products
Inc, or any permitted successor or assign thereto.
"Swap Redemption Date" shall mean the fifth Business Day following
any Early Termination Date.
"Telerate Page 3750" shall mean the display on the Dow Xxxxx
Telerate Service on page 3750 (or any other page as may replace such page on
that service for the purpose of displaying LIBOR).
"Three-Month LIBOR" shall mean, with respect to any LIBOR
Determination Date, the London interbank offered rate for three-month (such
period being referred to as the "Index Maturity") United States dollar
deposits, commencing on the second London Banking Day immediately following
such LIBOR Determination Date, which appears on Telerate Page 3750 as of 11:00
A.M., London time, on such LIBOR Determination Date. If Telerate Page 3750 is
unavailable at such time, LIBOR for the appropriate Index Maturity will be
determined at approximately 11:00 A.M., London time, on such LIBOR
Determination Date on the basis of the rate at which LIBOR having such Index
Maturity is offered by four major banks selected by the Calculation Agent in
the London interbank market commencing on the second London Banking Day
immediately following such LIBOR Determination Date. The Calculation Agent
will request the principal London office of each of such banks to provide a
quotation of its rate. If at least two such quotations are provided, LIBOR for
such Index Maturity will be the arithmetic mean of such quotations. If fewer
than two quotations are provided, LIBOR for a given Index Maturity for such
LIBOR Determination Date will be the arithmetic mean of LIBOR quoted at
approximately 11:00 A.M., New York City time, on such LIBOR Determination Date
by three major banks in New York City selected by the Calculation Agent for
LIBOR having such Index Maturity, commencing on the second London Banking Day
immediately following such LIBOR Determination Date; provided, however, that
if the banks selected as aforesaid by the Calculation Agent are not quoting as
mentioned in this sentence, LIBOR for such Index Maturity will be LIBOR for
such Index Maturity in effect on such LIBOR Determination Date.
"Trigger Event" shall have the meaning specified in the Swap
Agreement.
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"Trustee Fee" shall mean the amount paid to the Trustee by the
Depositor on the Closing Date.
"Trust Property" shall mean the Underlying Securities described on
Schedule I hereto and the Swap Agreement and the Certificate Account; each
subject to the obligations of the Trust under the Swap Agreement.
"Underlying Acceleration Termination" shall have the meaning
specified in the Swap Agreement.
"Underlying Securities" shall mean $12,000,000 aggregate principal
amount of 7.00% Notes, issued by the Underlying Securities Issuer, as set
forth in Schedule I attached hereto.
"Underlying Securities Indenture" shall mean the indenture dated
February 1, 1996, between the Underlying Securities Issuer and the Underlying
Securities Trustee, pursuant to which the Underlying Securities were issued.
"Underlying Securities Issuer" shall mean GE Global Insurance
Holding Corporation.
"Underlying Securities Trustee" shall mean JPMorgan Chase,
successor by merger to The Chase Manhattan Bank, National Association.
"Underwriter" shall mean Xxxxxx Brothers Inc.
"Universal Business Day" shall mean a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) in Frankfurt, London, New York and Tokyo.
"Voting Rights" shall be allocated among all Certificateholders in
proportion to the then unpaid Certificate Principal Amounts of their
respective Certificates.
(b) The terms listed below are not applicable to this Series.
"Accounting Date"
"Administrative Fees"
"Advance"
"Allowable Expense Amounts"
"Basic Documents"
"Call Premium Percentage"
"Credit Support"
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"Credit Support Instrument"
"Credit Support Provider"
"Cut-off Date"
"Eligible Expense"
"Eligible Investment"
"Exchange Rate Agent"
"Fixed Pass-Through Rate"
"Guaranteed Investment Contract"
"Letter of Credit"
"Limited Guarantor"
"Limited Guaranty"
"Minimum Wire Denomination"
"Optional Exchange Dates"
"Pass-Through Rate"
"Place of Distribution"
"Purchase Price"
"Required Premium"
"Required Principal"
"Requisite Reserve Amount"
"Retained Interest"
"Sub-Administration Account"
"Sub-Administration Agreement"
"Sub-Administration Agent"
"Surety Bond"
"Swap Guarantee"
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"Swap Guarantor"
Section 3. Designation of Trust and Certificates. The Trust created
hereby shall be known as the "Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1 Trust." The Certificates evidencing certain
undivided ownership interests therein shall be known as "Repackaged GE Global
Insurance Floating Rate Trust Certificates, Series 2002-1."
(a) The Certificates shall be held through the Depository in book-entry
form and shall be substantially in the form attached hereto as Exhibit A. The
Certificates shall be issued in denominations of $1,000. Except as provided in
the Standard Terms, the Trust shall not issue additional Certificates or incur
any indebtedness.
(b) The Certificates have an initial aggregate certificate principal
amount (the "Certificate Principal Amount") of $12,000,000.
(c) The holders of the Certificates will be entitled to receive on each
Distribution Date the Interest Distribution Amount. On the Distribution Date
occurring in February 2003, the Trustee shall cause the Trust to pay to the
Depositor the amount of interest accrued and paid on the Underlying Securities
from August 15, 2002, to but not including the Closing Date. If the Depositor
is not paid any such amount on such date, it shall have a claim for such
amount. If Available Funds are insufficient to pay such amount, the Trustee
will pay the Depositor its pro rata share, based on the ratio the amount owed
the Depositor bears to all amounts owed with respect to the Certificates in
respect of principal and accrued interest, of any proceeds from the recovery
on the Underlying Securities.
(d) The Depositor may sell to the Trustee additional Underlying
Securities on any date hereafter upon at least 3 Business Days' notice to the
Trustee (or such shorter period as shall be mutually satisfactory to the
Depositor and the Trustee) and upon (i) satisfaction of the Rating Agency
Condition, (ii) prior consent of the Swap Counterparty and (iii) delivery of
an Opinion of Counsel to the effect that the sale of such additional
Underlying Securities will not cause the Trust to be taxed as an association
or publicly traded partnership taxable as a corporation for federal income tax
purposes. Each condition to be satisfied with respect to a sale of Underlying
Securities on or prior to the Closing Date shall be satisfied with respect to
a sale of additional Underlying Securities no later than the date of sale
thereof, each representation and warranty set forth in the Standard Terms to
be made on the Closing Date shall be made on such date of sale, and from and
after such date of sale, all Underlying Securities held by the Trustee shall
be held on the same terms and conditions. Upon such sale to the Trustee, the
Trustee shall deposit such additional Underlying Securities in the Certificate
Account, and shall authenticate and deliver to the Depositor, on its order,
Certificates in a Certificate Principal Balance equal to the principal amount
of such additional Underlying Securities. Any such additional Certificates
authenticated and delivered shall have the same terms and rank pari passu with
the Certificates previously issued in accordance with this Series Supplement.
Section 4. Trust Certificates. The Trustee hereby acknowledges receipt,
on or prior to the Closing Date, of:
(a) the Underlying Securities set forth on Schedule I hereto;
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(b) the duly authorized and executed Swap Agreement; and
(c) all documents required to be delivered to the Trustee pursuant to
Section 2.01 of the Standard Terms.
Section 5. Distributions.
(a) Except as otherwise provided in Section 3(c) and Section 6, on each
applicable Distribution Date, the Trustee shall apply Available Funds in the
Certificate Account as follows:
(i) The Trustee will pay from Available Interest Funds:
(1) first, to the Trustee, as reimbursement for any
Extraordinary Trust Expenses incurred by the Trustee in accordance
with Section 8(b) below and approved by 100% of the
Certificateholders; and
(2) second, to the holders of the Certificates, interest
accrued and unpaid, pro rata in proportion to their entitlements
thereto;
provided, however, if the Trustee has not received any amounts of
Available Interest Funds on or prior to the related Distribution Date, such
amounts shall be applied in accordance with this Section 5(a) promptly upon
receipt of such amounts.
(ii) On the Final Scheduled Distribution Date, the Trustee will pay
from Available Principal Funds, first, to the Trustee, as reimbursement
for any Extraordinary Trust Expenses incurred by the Trustee in
accordance with Section 8(b) below and approved by 100% of the
Certificateholders; and second, to the Certificateholders, pro rata, from
Available Principal Funds, the then outstanding principal on the
Certificates.
(iii) any Available Funds remaining in the Certificate Account after
the payments set forth in clauses 5(a)(i) and 5(a)(ii) above shall be
paid to the Trustee as reasonable compensation for services rendered to
the Depositor, up to $1,000.
Any portion of the Available Funds (i) that does not constitute principal of,
or interest on, the Underlying Securities, (ii) that is not received in
connection with a redemption, prepayment or liquidation of the Underlying
Securities and (iii) for which allocation by the Trustee is not otherwise
contemplated by this Series Supplement, shall be remitted by the Trustee to
the Depositor.
Section 6. Early Redemption of Certificates.
(a) If a Special Termination Event occurs, the Trustee shall, no later
than one Business Day following the applicable Early Termination Date, notify
the Certificateholders of the occurrence of such Special Termination Event.
Subject to the next succeeding sentence, the Trustee shall, on the applicable
Swap Redemption Date, distribute to each Certificateholder its Pro Rata Share
of (i) the Underlying Securities in-kind and (ii) any Early Termination
Payment received by the Trust from the Swap Counterparty in connection with
such Special Termination Event. Notwithstanding the preceding sentence, the
Certificateholders may elect, by affirmative
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vote of 100% of the Certificates outstanding, to notify the Trustee no later
than three Business Days prior to the applicable Swap Redemption Date, to
direct the Marketing Agent to sell, in accordance with the Sale Procedures,
the entire principal balance of the Underlying Securities held by the Trust
for settlement on the Early Termination Date and distribute to each
Certificateholder on such date its Pro Rata Share of the sum of (i) the
Liquidation Proceeds and (ii) any Early Termination Payment received by the
Trust from the Swap Counterparty in connection with such Special Termination
Event.
(b) If a Swap Termination Event occurs that is not a Special Termination
Event, promptly following the applicable Early Termination Date, the Trustee
will direct the Marketing Agent to sell, in accordance with the Sale
Procedures, the entire principal balance of the Underlying Securities held by
the Trust for settlement on the Early Termination Date and distribute to each
Certificateholder on such date the greater of (a) zero and (b) its Pro Rata
Share of (i) the Liquidation Proceeds plus (ii) any Early Termination Payment
received by the Trust from the Swap Counterparty in connection with such
Special Termination Event, minus (iii) any Early Termination Payment paid by
the Trust to the Swap Counterparty in connection with such Special Termination
Event.
(c) Notwithstanding Section 3.12 of the Standard Terms, if the Underlying
Securities Issuer ceases to file periodic reports as required under the
Exchange Act, the Depositor shall within a reasonable time after the
Discontinuation Date, (i) subject to the second succeeding sentence and
subject to the consent of the Swap Counterparty in accordance with the terms
of the Swap Agreement, instruct the Trustee to (A) distribute to each
Certificateholder, on the Special Redemption Date, its Pro Rata Share of the
Underlying Securities and (B) assign to each Certificateholder its Pro Rata
Share of all rights and obligations of the Trust in and to the Swap Agreement.
If the Swap Counterparty does not consent to the assignment of the Swap
Agreement to the Certificateholders, and subject to the next succeeding
sentence, the Trustee will direct the Marketing Agent to sell, in accordance
with the Sale Procedures, the entire principal balance of the Underlying
Securities held by the Trust for settlement on the Early Termination Date and
distribute to each Certificateholder on such date the greater of (a) zero and
(b) its Pro Rata Share of (i) the Liquidation Proceeds plus (ii) any Early
Termination Payment received by the Trust from the Swap Counterparty in
connection with the related Swap Termination Event, minus (iii) any Early
Termination Payment paid by the Trust to the Swap Counterparty in connection
with such Swap Termination Event. Notwithstanding the foregoing subject to the
consent of the Swap Counterparty in accordance with the terms of the Swap
Agreement, the Certificateholders may elect, by affirmative vote of 100% of
the Certificates outstanding, to notify the Trustee no later than three
Business Days prior to the applicable Special Redemption Date to take another
action (which proposed action must be reasonably acceptable to the Trustee)
with respect to the Underlying Securities and the Swap Agreement as may be
agreed upon by the Certificateholders and the Swap Counterparty, including,
without limitation, transferring the Underlying Securities and the Swap
Agreement to a new special purpose entity and to receive, instead of the
Underlying Securities and the Swap Agreement, interests in such special
purpose entity.
(d) If the Trustee receives non-cash property in respect of the
Underlying Securities as a result of a payment default on the Underlying
Securities (including from the sale thereof), the Trustee will promptly give
notice to the Depository, or for any Certificates which are not
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then held by DTC or any other depository, directly to the registered holders
of the Certificates then outstanding and unpaid. Such notice shall state that
the Trustee shall and the Trustee shall, not later than 30 days after the
receipt of such property, allocate and distribute such property to the Holders
of Certificates then outstanding and unpaid (after deducting the costs
incurred in connection therewith) their pro rata portion of such property.
Property other than cash will be liquidated by the Trustee, and the proceeds
thereof distributed in cash, only to the extent necessary to avoid
distribution of fractional securities to Certificateholders. In-kind
distribution of such property to Certificateholders, based on the market value
of such property as of the date of distribution to Certificateholders, will be
deemed to reduce the Certificate Principal Amount on a dollar-for-dollar
basis.
Section 7. Partial Unwind of Certificates.
(a) If the beneficial owner of any Certificate is Xxxxxx Brothers Inc. or
any affiliate thereof (an "Affiliated Owner"), and such Affiliated Owner has
been a registered Certificateholder for at least six calendar months, and
subject to agreement by the two parties as to the termination payment owed
under the Swap Agreement, the Swap Counterparty shall enter into a Partial
Unwind Agreement with such Affiliated Owner. In the event an Affiliated Owner
and the Swap Counterparty enter into and deliver to the Trustee a Partial
Unwind Agreement, specifying a date (the "Partial Unwind Date"), which is at
least five Business Days thereafter, on which the Affiliated Owner and the
Swap Counterparty propose that the actions referred to in the fourth
succeeding sentence would occur, the Trustee may, in its sole discretion (but
shall not be obligated to) countersign such Partial Unwind Agreement;
provided, however, that (i) no Affiliated Owner will be permitted to enter
into a Partial Unwind Agreement prior to the one-year anniversary of the
Closing Date, (ii) no Affiliated Owner will be permitted to enter into a
Partial Unwind Agreement more frequently than once in any six month calendar
period and (iii) each Partial Unwind Agreement shall be in a minimum amount of
$1,000,000. Any such Partial Unwind Agreement shall specify a Partial Unwind
Date which is on or before the next succeeding Distribution Date (so that no
Distribution Date falls between the date such Partial Unwind Agreement (as
executed by an Affiliated Owner and the Swap Counterparty) is delivered to the
Trustee and a Distribution Date). In addition, in determining whether to
countersign a Partial Unwind Agreement, the Trustee may rely on a
certification of the Marketing Agent, which the Marketing Agent shall provide,
as to whether entering into and giving effect to such Partial Unwind Agreement
(a) will expose the Trust to any liability or expense or (b) have an adverse
impact on or consequence for the Trust including (x) the treatment of the
Certificates and the Trust for Federal income tax purposes (as specified in
the Trust Agreement), or (y) under the Investment Company Act, ERISA or the
Code or (c) would adversely affect in any material respect the interests of
any Certificateholder (other than the applicable Affiliated Owner). The
Trustee shall also be entitled to receive an Opinion of Counsel with respect
to the foregoing legal matters and the cost of such Opinion of Counsel shall
be borne by the applicable Affiliated Owner. In order to give effect to the
provisions of a Partial Unwind Agreement which the Trustee has elected to
countersign, the Trustee shall, effective on such Partial Unwind Date and upon
confirmation to the Trustee from the Swap Counterparty that such Affiliated
Owner has paid to the Swap Counterparty any breakage or termination payment
due under the Swap Agreement in connection with the partial termination
provided for in the Partial Unwind Agreement, deliver to such Affiliated
Owner, against tender by such Affiliated Owner or its nominee of a Certificate
having a principal balance equal to the Partial Unwind
12
Amount, either Underlying Securities having a principal amount equal to the
Partial Unwind Amount or the cash proceeds from the sale by the Marketing
Agent on behalf of such Certificateholder of such Underlying Securities (as
specified in the Partial Unwind Agreement) plus (to the extent such has
actually been paid to the Trustee by the Swap Counterparty) any breakage or
termination payment payable by the Swap Counterparty in connection with the
partial termination provided for in the Partial Unwind Agreement. Failure by
the Trustee to execute and deliver to such Certificateholder and Swap
Counterparty a Partial Unwind Agreement by not later than the second Business
Day before the proposed Partial Unwind Date shall be deemed to constitute
notice by the Trustee that it has elected not to countersign such Partial
Unwind Agreement. In the event that the Trustee elects not to countersign a
Partial Unwind Agreement, the Trust shall continue as if no Partial Unwind
Agreement had been tendered to the Trustee for countersignature. The execution
by such Certificateholder and the Swap Counterparty of such Partial Unwind
Agreement, taken together with the countersignature by the Trustee of such
Partial Unwind Agreement, shall be deemed to constitute an amendment to this
Trust Agreement under subsection 10.01(a) and, accordingly, shall not require
the consent of any Certificateholder other than the applicable Affiliated
Owner. In the event the Trustee elects to countersign a Partial Unwind
Agreement, the Trustee shall notify each Rating Agency rating such series of
Certificates of such Partial Unwind of Underlying Securities.
(b) Certificates with respect to which a Partial Unwind Agreement relates
shall be delivered to the Trustee on the Partial Unwind Date. Each such
Certificate not so delivered shall be deemed delivered on the books of the
Trustee on the Partial Unwind Date. With respect to each Certificate deemed
delivered to the Trustee, the Trustee shall make any required payments or
deliveries on such Partial Unwind Date (or such later date as the Trustee is
actually in receipt of such payments or deliveries) to the applicable
Affiliated Owner listed on the Certificate Register and such Certificate shall
be deemed cancelled.
(c) If the Underlying Securities underlying the Certificates with respect
to which a Partial Unwind Agreement shall have occurred are held by the
Trustee in certificated form, the Trustee shall, if necessary, request the
registrar for such Underlying Securities to deliver to the Trustee in
certificated form in appropriate denominations the Underlying Securities
evidenced by the Certificates so surrendered for withdrawal and, if the
requested Underlying Securities are received within 30 calendar days, the
Trustee shall deliver such Underlying Securities to the applicable Affiliated
Owner without unreasonable delay. If the requested certificated Underlying
Securities are not received within 30 calendar days, the Trustee shall
re-deliver the surrendered Certificates to such Affiliated Owner; provided,
however, the Trustee shall continue to seek to obtain the requested
certificated Underlying Securities and shall re-deliver the surrendered
Certificates, if the Affiliated Owner so requests and directs the Trustee and
delivers its Certificates.
(d) If the Underlying Securities underlying the Certificates with respect
to which a Partial Unwind Agreement shall have occurred are held by the
Trustee in book-entry form, the Trustee shall arrange for beneficial ownership
thereof to be transferred to the applicable Affiliated Owner, or its designee,
on the records of the Clearing Agency with which the certificate evidencing
such Underlying Securities is on deposit.
13
(e) Delivery of Underlying Securities in certificated form and
re-delivery of any Certificate pursuant to paragraph (c) above shall be made
by the Trustee at its Corporate Trust Office in New York City, except that, at
the written request, risk and expense of the Affiliated Owner surrendering
such Certificates and for the account of the Affiliated Owner thereof, such
delivery may be made at such other place as may be designated by such
Affiliated Owner and reasonably agreed to by the Trustee.
(f) Upon delivery by the Trustee of any Underlying Security to an
Affiliated Owner pursuant to this Section 7, such Underlying Security and the
surrendered Certificate shall cease to be entitled to the benefit of this
Trust Agreement for all purposes of this Trust Agreement and the Trustee shall
have no further obligation to such Affiliated Owner with respect thereto.
(g) The Affiliated Owner who surrenders Certificates to the Trustee as
provided herein in return for the Underlying Securities (whether in
certificated form or by book-entry) may not thereafter redeposit such
Underlying Securities with the Trustee and receive the benefit of this Trust
Agreement.
(h) As a condition precedent to the delivery of Underlying Securities to
an Affiliated Owner upon delivery of a Partial Unwind Agreement, the Trustee
may require payment by such Affiliated Owner of a sum sufficient for
reimbursement of any tax or other governmental charge with respect thereto and
any other reasonable out-of-pocket costs or expenses incurred by the Trustee
in connection with such delivery, including the costs of delivery to any
office other than the Trustee's designated office in New York City.
Section 8. Trustee's Fees.
(a) As compensation for its services hereunder, the Trustee shall be
entitled to the Trustee Fee and any amounts payable under clauses 5(a)(iii)
above. The Trustee Fee shall be paid by the Depositor and not from Trust
Property. The Trustee shall bear all Ordinary Expenses. Failure by the
Depositor to pay such amount shall not entitle the Trustee to any payment or
reimbursement from the Trust, nor shall such failure release the Trustee from
the duties it is required to perform under the Trust Agreement.
(b) Extraordinary Trust Expenses shall not be paid out of the Trust
Property unless all the holders of the Certificates then outstanding have
directed the Trustee to incur such Extraordinary Trust Expenses. The Trustee
may incur other Extraordinary Trust Expenses if any lesser percentage of the
Certificateholders requesting such action pursuant hereto reimburse the
Trustee for the cost thereof from their own funds in advance. If Extraordinary
Trust Expenses are not approved unanimously as set forth in the first sentence
of this Section 8(b), such Extraordinary Trust Expenses shall not be an
obligation of the Trust, and the Trustee shall not file any claim against the
Trust therefor notwithstanding failure of Certificateholders to reimburse the
Trustee.
Section 9. Swap Payments. The Trust shall pay to the Swap Counterparty,
(i) all interest payments paid to the Trust in respect of the Underlying
Securities on the date such amounts are received by the Trust, excluding any
amount of interest that accrued with respect to the Underlying Securities from
the Underlying Securities Payment Date next preceding the Closing
14
Date to, but excluding, the Closing Date and (ii) upon the occurrence of a
Swap Termination Event, other than a Special Termination Event, an amount
equal to any Early Termination Payment owed by it to the Swap Counterparty
under the Swap Agreement. All amounts received by the Trustee from the Swap
Counterparty on any date under the Swap Agreement shall be deposited into the
Certificate Account on such date.
Section 10. Notices of Swap Termination Events.
As promptly as practicable after, and in any event within 30 days after,
the occurrence of any Swap Termination Event actually known to the Trustee,
the Trustee shall give notice of such Swap Termination Event to the
Depository, or, if any Certificates are not then held by DTC or any other
depository, directly to the registered holders of such Certificates.
Section 11. Miscellaneous.
(a) The provisions of Section 4.04, Advances, of the Standard Terms shall
not apply to the Repackaged GE Global Insurance Floating Rate Trust
Certificates, Series 2002-1 Certificates.
(b) The provisions of Section 4.07, Optional Exchange, of the Standard
Terms shall not apply to the Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1 Certificates.
(c) The Trustee shall simultaneously forward reports to
Certificateholders and to the Swap Counterparty pursuant to Section 4.03 of
the Standard Terms and to the New York Stock Exchange.
(d) Except as expressly provided herein, the Certificateholders shall not
be entitled to terminate the Trust or cause the sale or other disposition of
the Underlying Securities.
(e) The provisions of Section 3.07(d) of the Standard Terms shall not
apply to the Repackaged GE Global Insurance Floating Rate Trust Certificates,
Series 2002-1 Certificates.
(f) The outstanding principal balance of the Certificates shall not be
reduced by the amount of any Realized Losses (as defined in the Standard
Terms).
(g) The Trust may not engage in any business or activities other than in
connection with, or relating to, the holding, protecting and preserving of the
Trust Property and the issuance of the Certificates, and other than those
required or authorized by the Trust Agreement or the Swap Agreement or
incidental and necessary to accomplish such activities. The Trust may not
issue or sell any certificates or other obligations other than the
Certificates or otherwise incur, assume or guarantee any indebtedness for
money borrowed. Notwithstanding Section 3.05 of the Standard Terms, funds on
deposit in the Certificate Account shall not be invested. Section 2.01(f) of
the Standard Terms shall be superseded by this provision.
(h) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee may be removed upon 60 days prior written notice delivered by the
holders of Certificates
15
representing the Required Percentage-Removal. Section 2.01(f) of the Standard
Terms shall be superseded by this provision.
(i) In the event that the Internal Revenue Service challenges the
characterization of the Trust as a grantor trust, the Trustee shall then file
such forms as the Depositor may specify to establish the Trust's election
pursuant to Section 761 of the Code to exclude the Trust from the application
of Subchapter K of the Code and is hereby empowered to execute such forms on
behalf of the Certificateholders.
(j) Notwithstanding anything in the Standard Terms to the contrary, the
Trustee, upon written direction by the Depositor, will execute the
Certificates.
(k) In relation to Section 7.01(f) of the Standard Terms, any periodic
reports filed by the Trustee pursuant to the Exchange Act in accordance with
the customary practices of the Depositor, need not contain any independent
reports.
(l) Notwithstanding anything in the Trust Agreement to the contrary, the
Trustee will have no recourse to the Underlying Securities.
(m) The Trust will not merge or consolidate with any other entity without
written confirmation from each Rating Agency that such merger or consolidation
will not result in the qualification, reduction or withdrawal of its
then-current rating on the Certificates.
(n) All directions, demands and notices hereunder or under the Standard
Terms shall be in writing and shall be delivered as set forth below (unless
written notice is otherwise provided to the Trustee).
If to the Depositor, to:
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Credit Trading
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Trustee, to:
U.S. Bank Trust National Association
000 Xxxx Xxxxxx Xxx
Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Rating Agencies, to:
Xxxxx'x Investors Service, Inc.
16
00 Xxxxxx Xxxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: CBO/CLO Monitoring Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
and to:
Standard & Poor's Ratings Services
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Structured Finance Surveillance Group
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the New York Stock Exchange, to:
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Swap Counterparty, to:
Xxxxxx Brothers Derivative Products Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Documentation Manager
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Any notices given to the Depositor under this Agreement shall also
be given to the Swap Counterparty.
(o) Each of the representations, covenants and agreements made herein by
each of the Depositor and the Trustee are for the benefit of the
Certificateholders.
(p) The provisions of the Section 2.01(d)(iii) of the Standard Terms shall not
apply to the Repackaged GE Global Insurance Floating Rate Trust Certificates,
Series 2002-1 Certificates and the following shall be deemed to be inserted in
its place:
"at the time of delivery of the Underlying Securities, the
Depositor owns such Underlying Securities, has the right to transfer its
interest in such Underlying Securities and such Underlying Securities are free
and clear of any lien, pledge, encumbrance, right, charge, claim or other
security interest; and"
17
Section 12. Governing Law. THIS SERIES SUPPLEMENT AND THE TRANSACTIONS
DESCRIBED HEREIN SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED
WITHIN THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CHOICE OF LAWS
PROVISIONS THEREOF.
Section 13. Counterparts. This Series Supplement may be executed in any
number of counterparts, each of which shall be deemed to be an original, and
all such counterparts shall constitute but one and the same instrument.
Section 14. Termination of the Trust. The Trust shall terminate upon the
earliest to occur of (i) the distribution in full of all amounts due to the
Certificateholders following a Swap Termination Event; (ii) the Final
Scheduled Distribution Date and (iii) the expiration of 21 years from the
death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx, the late
Ambassador of the United States to the Court of St. Xxxxx, living on the date
hereof.
Section 15. Sale of Underlying Securities. In the event of a sale of the
Underlying Securities pursuant to Section 6 hereof, the Marketing Agent shall
sell the Underlying Securities in accordance with the Sale Procedure.
Section 16. Amendments. Notwithstanding anything in the Trust Agreement
to the contrary, in addition to the other restrictions on modification and
amendment contained therein, the Trustee shall not enter into any amendment or
modification of the Trust Agreement which would adversely affect in any
material respect the interests of the holders of any class of Certificates
without the consent of the holders of 100% of such class of Certificates;
provided, however, that no such amendment or modification will be permitted
which would cause the Trust to be taxed as an association or publicly traded
partnership taxable as a corporation for federal income tax purposes. The
Trustee shall not enter into any amendment or modification of the Trust
Agreement that would affect the method, amount or timing of payments due to
the Swap Counterparty or the consent rights of the Swap Counterparty hereunder
without the prior written consent of the Swap Counterparty. Unless otherwise
agreed, the Trustee shall provide five Business Days written notice to each
Rating Agency and the Swap Counterparty before entering into any amendment or
modification of the Trust Agreement pursuant to this Section 16.
Section 17. Voting of Underlying Securities, Modification of Underlying
Securities Indenture, Modification of Swap Agreement.
(a) The Trustee, as holder of the Underlying Securities, has the right to
vote and give consents and waivers in respect of the Underlying Securities as
permitted by the Depository and except as otherwise limited by the Trust
Agreement. In the event that the Trustee receives a request from the
Depository, the Underlying Securities Trustee or the Underlying Securities
Issuer for its consent to any amendment, modification or waiver of the
Underlying Securities, the Underlying Securities Indenture or any other
document thereunder or relating thereto, or receives any other solicitation
for any action with respect to the Underlying Securities, the Trustee shall
mail a notice of such proposed amendment, modification, waiver or solicitation
to the Swap Counterparty and each Certificateholder of record as of such date.
Notwithstanding anything in the Trust Agreement to the contrary, until a Swap
Termination Event has occurred, the Swap
18
Counterparty shall have all rights to vote on any matters with respect to the
Underlying Securities. During the continuance of a Swap Termination Event, the
Certificateholders shall have all rights to vote on any matters with respect
to the Underlying Securities, and in such event: (i) the Trustee shall request
instructions from the Certificateholders as to whether or not to consent to or
vote to accept such amendment, modification, waiver or solicitation; (ii) the
Trustee shall consent or vote, or refrain from consenting or voting, in the
same proportion (based on the relative outstanding Certificate Principal
Amounts of the Certificates) as the Certificates of the Trust were actually
voted or not voted by the Certificateholders thereof as of a date determined
by the Trustee prior to the date on which such consent or vote is required.
However, notwithstanding anything in the Trust Agreement to the contrary
(including this Section 17), the Trustee shall at no time vote on or consent
to any matter (A) unless such vote or consent would not (based on an opinion
of counsel) cause the Trust to be taxed as an association or publicly traded
partnership taxable as a corporation under the Code, (B) which would alter the
timing or amount of any payment on the Underlying Securities, including,
without limitation, any demand to accelerate the Underlying Securities, except
in the event of a default under the Underlying Securities or an event which
with the passage of time would become an event of default under the Underlying
Securities and with (prior to a Swap Termination Event) the consent of the
Swap Counterparty or (during the continuance of a Swap Termination Event) the
unanimous consent of holders of all outstanding Certificates, or (C) which
would result in the exchange or substitution of any of the outstanding
Underlying Securities pursuant to a plan for the refunding or refinancing of
such Underlying Securities except in the event of a default under the
Underlying Securities Indenture and only with the consent of (prior to a Swap
Termination Event) the Swap Counterparty or (during the continuance of a Swap
Termination Event) Certificateholders representing 100% of the Certificates.
The Trustee shall have no liability for any failure to act resulting from late
return of, or failure to return, directions requested by the Trustee from the
Certificateholders or the Swap Counterparty.
(b) In the event that an offer is made by the Underlying Securities
Issuer to issue new obligations in exchange and substitution for any of the
Underlying Securities, pursuant to a plan for the refunding or refinancing of
the outstanding Underlying Securities or any other offer is made for the
Underlying Securities, the Trustee shall notify the Swap Counterparty and the
Certificateholders of such offer promptly. The Trustee must reject any such
offer unless, prior to the occurrence of a Swap Termination Event, the Trustee
is directed by the Swap Counterparty to accept such offer and the Trustee has
received the tax opinion described above. During the continuance of a Swap
Termination Event, the Trustee must reject any such offer unless a default on
the Underlying Securities shall have occurred, and the Trustee is directed by
affirmative vote of the holders of 100% of the Certificates to accept such
offer and the Trustee has received the tax opinion described above. If
pursuant to the preceding two sentences, the Trustee accepts any such offer
the Trustee shall promptly notify the Rating Agencies.
(c) If an event of default under the Underlying Securities Indenture
occurs and is continuing, and if directed by the Swap Counterparty, or, during
the continuance of a Swap Termination Event, a majority of the outstanding
Certificateholders, the Trustee shall vote the Underlying Securities in favor
of directing, or take such other action as may be appropriate to direct, the
Underlying Securities Trustee to declare the unpaid principal amount of the
Underlying Securities and any accrued and unpaid interest thereon to be due
and payable.
19
(d) Until a Responsible Officer of the Trustee has actual knowledge of
the occurrence of an event that would constitute a Swap Termination Event, the
Trustee shall be entitled to assume (and shall be fully protected, indemnified
and held harmless in doing so, in accordance with Section 7.12 of the Standard
Terms) that no Swap Termination Event has occurred and may accordingly seek
instructions under this Section 17 exclusively from the Swap Counterparty.
(e) The Trustee shall not consent to any amendment to the Swap Agreement
unless (i) it shall have received the prior consent to such amendment of
Certificateholders representing 66 2/3% of the aggregate Voting Rights and
(ii) each Rating Agency shall have confirmed in writing that such amendment
will not result in a reduction or withdrawal of the then current rating of the
Certificates; provided, however, the Trustee may consent to any amendment to
the Swap Agreement without the consent of the certificateholders to cure any
ambiguity in, or to correct or supplement any provision of the Swap Agreement
which may be inconsistent with any other provision thereof, or to otherwise
cure any defect therein, provided that any such amendment does not materially
adversely affect the interest of the certificateholders and that each Rating
Agency shall have given its prior written confirmation that such amendment
will not result in a reduction or withdrawal of the then current rating of the
Certificates; provided further, however, that notwithstanding anything to the
contrary, the Trustee shall not consent to any amendment to the Swap Agreement
that alters the timing or amount of any payment on the Swap Agreement unless
(i) it shall have received the prior consent to such amendment of
certificateholders representing 100% of the aggregate Voting Rights and (ii)
each Rating Agency been given prior written notice of any such amendment (and
no rating confirmation shall be required).
Section 18. Additional Depositor Representation. It is the express intent
of the parties hereto that the conveyance of the Underlying Securities by the
Depositor to the Trustee be, and be construed as, a sale of the Underlying
Securities by the Depositor and not a pledge of any Underlying Securities by
the Depositor to secure a debt or other obligation of the Depositor. In the
event that, notwithstanding the aforementioned intent of the parties, any
Underlying Securities are held to be property of the Depositor, then, it is
the express intent of the parties that such conveyance be deemed a pledge of
such Underlying Securities by the Depositor to the Trustee to secure a debt or
other obligation of the Depositor, pursuant to Section 10.07 of the Standard
Terms. In connection with any such grant of a security interest in the
Underlying Securities, the Depositor hereby represents and warrants to Trustee
as follows:
(i) In the event the Underlying Securities are held to be property of
the Depositor, then the Trust Agreement creates a valid and
continuing security interest (as defined in the applicable Uniform
Commercial Code) in the Underlying Securities in favor of the
Trustee which security interest is prior to all other liens, and is
enforceable as such as against creditors of, and purchasers from,
the Depositor.
(ii) The Underlying Securities have been credited to a trust account (the
"Securities Account") of the Trustee, or its authorized agent, in
accordance with Section 2.01 of the Standard Terms. The Trustee, as
securities intermediary for the Securities Account, has agreed to
treat the Underlying Securities as "financial assets" within the
meaning of the Uniform Commercial Code.
20
(iii) Immediately prior to the transfer of the Underlying Securities to
the Trust, Depositor owned and had good and marketable title to the
Underlying Securities free and clear of any lien, claim or
encumbrance of any Person.
(iv) Depositor has received all consents and approvals required by the
terms of the Underlying Securities to the transfer to the Trustee of
its interest and rights in the Underlying Securities as contemplated
by the Trust Agreement.
(v) Depositor has taken all steps necessary to cause the Trustee, as
securities intermediary for the Securities Account, to identify on
its records that the Trustee, as the trustee of the Trust, is the
Person having a security entitlement against the securities
intermediary in the Securities Account.
(vi) Depositor has not assigned, pledged, sold, granted a security
interest in or otherwise conveyed any interest in the Underlying
Securities (or, if any such interest has been assigned, pledged or
otherwise encumbered, it has been released). Depositor has not
authorized the filing of and is not aware of any financing
statements against Depositor that includes a description of the
Underlying Securities. Depositor is not aware of any judgment or tax
lien filings against Depositor.
(vii) The Securities Account is not in the name of any Person other than
the Trust. Depositor has not consented to the compliance by the
Trustee, as securities intermediary, with entitlement orders of any
Person other than the Trustee, as trustee of the Trust.
21
IN WITNESS WHEREOF, the parties hereto have caused this Series
Supplement to be duly executed by their respective authorized officers as of
the date first written above.
XXXXXX ABS CORPORATION,
as Depositor
By:___________________________
Name:
Title:
U.S. BANK TRUST NATIONAL ASSOCIATION, not
in its individual capacity but solely
as Trustee on behalf of the Repackaged
GE Global Insurance Floating Rate Trust
Certificates, Series 2002-1 Trust
By:___________________________
Name:
Title:
22
SCHEDULE I
REPACKAGED GE GLOBAL INSURANCE FLOATING RATE TRUST CERTIFICATES
SERIES 2002-1
UNDERLYING SECURITIES SCHEDULE
Underlying Securities: 7.00% Notes.
Issuer: GE Global Insurance Holding Corporation
CUSIP Number: 36158F AA 8.
Principal Amount Deposited: $12,000,000.
Original Issue Date: The Underlying Securities were issued on
February 21, 1996.
Principal Amount of
Underlying Securities
Originally Issued: $600,000,000.
Maturity Date: February 15, 2026.
Interest Rate: 7.00% per annum.
Interest Payment Dates: February 15th and August 15th.
Record Dates: February 1st and August 1st.
I-1
EXHIBIT A
FORM OF TRUST CERTIFICATE
TRUST CERTIFICATE
NUMBER 1 $12,000,000
CUSIP NO. 76027X AA 4
SEE REVERSE FOR CERTAIN DEFINITIONS
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION
("DTC"), TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR
IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND
ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF
FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE
REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE REPRESENTS A PROPORTIONATE UNDIVIDED BENEFICIAL
OWNERSHIP INTEREST IN THE TRUST AND DOES NOT EVIDENCE AN OBLIGATION OF, OR AN
INTEREST IN, AND IS NOT GUARANTEED BY THE DEPOSITOR OR THE TRUSTEE OR ANY OF
THEIR RESPECTIVE AFFILIATES. NEITHER THIS CERTIFICATE NOR THE TRUST ASSETS ARE
INSURED OR GUARANTEED BY ANY GOVERNMENTAL AGENCY OR ANY OTHER PERSON.
A-1
XXXXXX ABS CORPORATION
$12,000,000
REPACKAGED GE GLOBAL INSURANCE FLOATING RATE TRUST CERTIFICATES
SERIES 2002-1
INTEREST RATE: THREE-MONTH LIBOR PLUS 0.50%
evidencing a proportionate undivided beneficial ownership interest
in the Trust, as defined below, the property of which consists principally of
$12,000,000 aggregate principal amount of 7.00% Capital Securities due 2026,
issued by GE Global Insurance Holding Corporation (the "Underlying Securities
Issuer") and all payments received thereon, deposited in trust by Xxxxxx ABS
Corporation (the "Depositor"), and certain rights of the Trust under the Swap
Agreement (the "Trust Property").
THIS CERTIFIES THAT CEDE & CO. is the registered owner of an
aggregate of $12,000,000 principal amount nonassessable, fully-paid,
proportionate undivided beneficial ownership interest in the Repackaged GE
Global Insurance Floating Rate Trust Certificates Series 2002-1 Trust, formed
by the Depositor.
A-2
The Trust was created pursuant to a Standard Terms for Trust
Agreements, dated as of January 16, 2001 (the "Standard Terms"), between the
Depositor and U.S. Bank Trust National Association, a national banking
association, not in its individual capacity but solely as Trustee (the
"Trustee"), as supplemented by the Series Supplement in respect of the
Repackaged GE Global Insurance Floating Rate Trust Certificates, Series
2002-1, dated as of November 15, 2002 (the "Series Supplement" and, together
with the Standard Terms, the "Trust Agreement"), between the Depositor and the
Trustee. This Certificate does not purport to summarize the Trust Agreement
and reference is hereby made to the Trust Agreement for information with
respect to the interests, rights, benefits, obligations, proceeds and duties
evidenced hereby and the rights, duties and obligations of the Trustee with
respect hereto. A copy of the Trust Agreement may be obtained from the Trustee
by written request sent to the Corporate Trust Office. Capitalized terms used
but not defined herein have the meanings assigned to them in the Trust
Agreement.
This Certificate is one of the duly authorized Certificates
designated as the "Repackaged GE Global Insurance Floating Rate Trust
Certificates, Series 2002-1" (herein called the "Certificates"). This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Trust Agreement, to which Trust Agreement the Holder of this
Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound. The Trust Property consists of: (i) Underlying Securities
described in the Trust Agreement, (ii) all payments on or collections in
respect of the Underlying Securities accrued on or after November 15, 2002,
together with any and all income, proceeds and payments with respect thereto;
provided, however, that any income from the investment of Trust funds in
certain permitted investments ("Eligible Investments") does not constitute
Trust Property and (iii) the rights of the Trust under the Swap Agreement
(subject to the Trust's obligations to the Swap Counterparty under the Swap
Agreement).
Subject to the terms and conditions of the Trust Agreement
(including the availability of funds for distributions) and until the
obligation created by the Trust Agreement shall have terminated in accordance
therewith, distributions will be made on each Distribution Date, to the Person
in whose name this Certificate is registered on the applicable Record Date, in
an amount equal to such Certificateholder's proportionate undivided beneficial
ownership interest in the amount required to be distributed to the Holders of
the Certificates on such Distribution Date. The Record Date applicable to any
Distribution Date is the close of business on the day immediately preceding
such Distribution Date (whether or not a Business Day). If a payment with
respect to the Underlying Securities is made to the Trustee after the date on
which such payment was due, then the Trustee will distribute any such amounts
received on the next occurring Business Day.
Each Certificateholder, by its acceptance of a Certificate,
covenants and agrees that such Certificateholder will not at any time
institute against the Trust, or join in any institution against the Trust of,
any bankruptcy proceedings under any United States Federal or state bankruptcy
or similar law in connection with any obligations relating to the Certificates
or the Trust Agreement.
Distributions made on this Certificate will be made as provided in
the Trust Agreement by the Trustee by wire transfer in immediately available
funds, or check mailed to the Certificateholder of record in the Certificate
Register without the presentation or surrender of
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this Certificate or the making of any notation hereon, except that with
respect to Certificates registered on the Record Date in the name of the
nominee of the Clearing Agency (initially, such nominee shall be Cede & Co.),
payments will be made by wire transfer in immediately available funds to the
account designated by such nominee. Except as otherwise provided in the Trust
Agreement and notwithstanding the above, the final distribution on this
Certificate will be made after due notice by the Trustee of the pendency of
such distribution and only upon presentation and surrender of this Certificate
at the Corporate Trust Office or such other location as may be specified in
such notice.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall
for all purposes have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed
by or on behalf of the Trustee, by manual signature, this Certificate shall
not entitle the Holder hereof to any benefit under the Trust Agreement or be
valid for any purpose.
THIS CERTIFICATE SHALL BE CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS CONFLICT OF LAW PROVISIONS,
AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE HOLDER HEREOF SHALL BE
DETERMINED IN ACCORDANCE WITH SUCH LAWS.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be
duly executed as of the date set forth below.
REPACKAGED GE GLOBAL INSURANCE FLOATING
RATE TRUST CERTIFICATES, SERIES 2002-1
By: U.S. BANK TRUST NATIONAL ASSOCIATION
not in its individual capacity but solely as
Trustee,
By:
---------------------------------
Authorized Signatory
Dated: November 15, 2002
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1, described in the Trust Agreement referred
to herein.
U.S. BANK TRUST NATIONAL ASSOCIATION not in its individual capacity but solely
as Trustee,
By:
---------------------
Authorized Signatory
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(REVERSE OF CERTIFICATE)
The Certificates are limited in right of distribution to certain
payments and collections respecting the Swap Agreement and the Underlying
Securities, all as more specifically set forth herein and in the Trust
Agreement. The registered Holder hereof, by its acceptance hereof, agrees that
it will look solely to the Trust Property (to the extent of its rights
therein) for distributions hereunder.
The Trust Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor and the Trustee and the rights of the
Certificateholders under the Trust Agreement at any time by the Depositor and
the Trustee with the consent of the Swap Counterparty and the Holders of the
Certificates in the manner set forth in the Series Supplement and the Standard
Terms. Any such consent by the Holder of this Certificate (or any predecessor
Certificate) shall be conclusive and binding on such Holder and upon all
future Holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange hereof or in lieu hereof whether or not a
notation of such consent is made upon this Certificate. The Trust Agreement
also permits the amendment thereof, in certain limited circumstances, without
the consent of the Holders of any of the Certificates.
The Certificates are issuable in fully registered form only in
denominations of $1,000.
As provided in the Trust Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is
registerable in the Certificate Register upon surrender of this Certificate
for registration of transfer at the offices or agencies of the Certificate
Registrar maintained by the Trustee in the Borough of Manhattan, the City of
New York, duly endorsed by or accompanied by an assignment in the form below
and by such other documents as required by the Trust Agreement, and thereupon
one or more new Certificates of the same class in authorized denominations
evidencing the same principal amount will be issued to the designated
transferee or transferees. The initial Certificate Registrar appointed under
the Trust Agreement is U.S. Bank Trust National Association.
No service charge will be made for any registration of transfer or
exchange, but the Trustee may require exchange of a sum sufficient to cover
any tax or other governmental charge that may be imposed in connection with
any transfer or exchange of Certificates.
The Depositor and the Trustee and any agent of the Depositor or
the Trustee may treat the Person in whose name this Certificate is registered
as the owner hereof for all purposes, and neither the Depositor, the Trustee,
nor any such agent shall be affected by any notice to the contrary.
It is the intention of the parties to the Trust Agreement that the
Trust created thereunder shall constitute a fixed investment trust for federal
income tax purposes under Treasury Regulation Section 301.7701-4, and the
Certificateholder agrees to treat the Trust, any distributions therefrom and
its beneficial interest in the Certificates consistently with such
characterization.
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The Trust and the obligations of the Depositor and the Trustee
created by the Trust Agreement with respect to the Certificates shall
terminate upon the earliest to occur of (i) the distribution in full of all
amounts due to the Certificateholders following a Swap Termination Event; (ii)
the Final Scheduled Distribution Date and (iii) the expiration of 21 years
from the death of the last survivor of the descendants of Xxxxxx X. Xxxxxxx,
the late Ambassador of the United States to the Court of St. Xxxxx, living on
the date hereof.
An employee benefit plan subject to the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), a plan described in Section
4975(e) of the Code, an entity whose underlying assets include plan assets by
reason of any such plan's investment in the entity, including an individual
retirement account or Xxxxx plan (any such, a "Plan") may purchase and hold
Certificates if the Plan can represent and warrant that its purchase and
holding of the Certificates would not be prohibited under ERISA or the Code.
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ASSIGNMENT
FOR VALUE RECEIVED the undersigned hereby sells, assigns and
transfers unto
PLEASE INSERT SOCIAL SECURITY
OR OTHER IDENTIFYING NUMBER
OF ASSIGNEE
(Please print or type name and address, including postal zip code, of
assignee) the within Certificate, and all rights thereunder, hereby
irrevocably constituting and appointing ______________________ Attorney to
transfer said Certificate on the books of the Certificate Register, with full
power of substitution in the premises.
Dated:
*
Signature Guaranteed:
*
*NOTICE: The signature to this assignment must correspond with the name as it
appears upon the face of the within Certificate in every particular, without
alteration, enlargement or any change whatever. Signatures must be guaranteed
by an "eligible guarantor institution" meeting the requirements of the
Certificate Registrar, which requirements include membership or participation
in the Security Transfer Agent Medallion Program ("STAMP") or such other
"signature guarantee program" as may be determined by the Certificate
Registrar in addition to, or in substitution for, STAMP, all in accordance
with the Securities Exchange Act of 1934, as amended.
A-8
EXHIBIT B
FORM OF SWAP AGREEMENT
(Multicurrency - Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of November 15, 2002
REPACKAGED GE GLOBAL
XXXXXX BROTHERS DERIVATIVE INSURANCE FLOATING RATE TRUST
PRODUCTS INC. and CERTIFICATES, SERIES 2002-1 TRUST
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming
those Transactions.
Accordingly, the parties agree as follows: --
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.
1
(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:-
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(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.
(ii) Liability. If: --
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount of
such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that: --
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform
its obligations under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken all
necessary action to authorise such execution, delivery and performance;
(iii) No 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
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court or other agency of government applicable to it or any of its assets
or any contractual restriction binding on or affecting it or any of its
assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
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,
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in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of
this Agreement by a jurisdiction in which it is incorporated, organised,
managed and controlled, or considered to have its seat, or in which a branch
or office through which it is acting for the purpose of this Agreement is
located ("Stamp Tax Jurisdiction") and will indemnify the other party against
any Stamp Tax levied or imposed upon the other party or in respect of the
other party's execution or performance of this Agreement by any such Stamp Tax
Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the
other party.
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;
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(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however described)
in respect of such party, any Credit Support Provider of such party or
any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or becoming capable
at such time of being declared, due and payable under such agreements or
instruments, before it would otherwise have been due and payable or (2) a
default by such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more payments on
the due date thereof in an aggregate amount of not less than the
applicable Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding
or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or
the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution
or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, 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. --
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(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii)
below, and, if specified to be applicable, a Credit Event Upon Merger if the
event is specified pursuant to (iv) below or an Additional Termination Event
if the event is specified pursuant to (v) below: --
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or
such Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action is
taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable Tax in respect of which
the other party is not required to pay an additional amount (other than
by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of
a party consolidating or amalgamating with, or merging with or into, or
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
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Credit Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its successor
or transferee, as appropriate, will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as
an Early Termination Date in respect of all outstanding Transactions. If,
however, "Automatic Early Termination" is specified in the Schedule as
applying to a party, then an Early Termination Date in respect of all
outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as the
other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the
Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after notice
thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) Right to Terminate. If: --
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(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect
to all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the case
of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event
or an Additional Termination Event if there is more than one Affected
Party, or the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if there is
only one Affected Party may, by not more than 20 days notice to the other
party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date so
designated, whether or not the relevant Event of Default or Termination
Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early Termination
Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in
respect of the Terminated Transactions will be required to be made, but
without prejudice to the other provisions of this Agreement. The amount,
if any, payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable detail,
such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence
of written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of
such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
notice of the amount payable is effective (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: --
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(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party over (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party. If that amount
is a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to
the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is
a negative number, the Non-defaulting Party will pay the absolute
value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3),
if Market Quotation applies, or Section 6(e)(i)(4), if Loss
applies, except that, in either case, references to the Defaulting
Party and to the Non-defaulting Party will be deemed to be
references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than
all the Transactions are being terminated, Loss shall be calculated
in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties: --
(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.
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(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate
and permitted by law to reflect any payments or deliveries made by
one party to the other under this Agreement (and retained by such
other party) during the period from the relevant Early Termination
Date to the date for payment determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount is
payable for the loss of bargain and the loss of protection against
future risks and except as otherwise provided in this Agreement
neither party will be entitled to recover any additional damages as
a consequence of such losses.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that: --
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(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
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exchange" includes, without limitation, any premiums and costs of exchange
payable in connection with the purchase of or conversion into the Contractual
Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall he entered into as soon as practicable
and may he executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange
of electronic messages on an electronic messaging system, which in each
case will be sufficient for all purposes to evidence a binding supplement
to this Agreement. The parties will specify therein or through another
effective means that any such counterpart, telex or electronic message
constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. Offices; Multibranch Parties
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it
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had entered into the Transaction through its head or home office. This
representation will be deemed to be repeated by such party on each date on
which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support
Document to which the Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to, costs of
collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by xxxxx, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission is
received by a responsible employee of the recipient in legible form (it
being agreed that the burden of proving receipt will be on the sender and
will not be met by a transmission report generated by the sender's
facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(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: --
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(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United States
District Court located in the Borough of Manhattan in New York City, if
this Agreement is expressed to be governed by the laws of the State of
New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim that
such Proceedings have been brought in an inconvenient forum and further
waives the right to object, with respect to such Proceedings, that such
court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the
Civil Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable
to the other party. The parties irrevocably consent to service of process
given in the manner provided for notices in Section 12. Nothing in this
Agreement will affect the right of either party to serve process in any other
manner permitted by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to the extent permitted by applicable law, that it will not claim any such
immunity in any Proceedings.
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;
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(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"Burdened Party" has the meaning specified in Section 5(b).
"Change in Tax Law" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is specified
as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed
in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to
such recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case
of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and
foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference, in this
Agreement, (b) in relation to any other payment, in the place where the
relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment, (c) in relation to any notice
or other communication, including notice contemplated under Section 5(a)(i),
in the city specified in the address for notice provided by the recipient and,
in the case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to such
Specified Transaction.
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"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating,
liquidating, obtaining or reestablishing any hedge or related trading position
(or any gain resulting from any of them). Loss includes losses and costs (or
gains) in respect of any payment or delivery required to have been made
(assuming satisfaction of each applicable condition precedent) on or before
the relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does
not include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or
by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have been required after that date. For this purpose, Unpaid Amounts in
respect of the Terminated Transaction or group of Terminated Transactions are
to be excluded but, without limitation, any payment or delivery that would,
but for the relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be
subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the
extent reasonably practicable as of the same day and time (without regard to
different time zones) on or as soon as reasonably practicable after the
relevant Early Termination Date. The day and 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.
-16-
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention
or withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or
imposed on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of :--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meanings specified in the Schedule. "Specified
Indebtedness" means, subject to the Schedule, any obligation (whether present
or future, contingent or otherwise, as principal or surety or otherwise) in
respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any 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.
-17-
"Termination Currency Equivalent" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or
prior to such Early Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated Transaction, for each
obligation under Section 2(a)(i) which was (or would have been but for Section
2(a)(iii)) required to be settled by delivery to such party on or prior to
such Early Termination Date and which has not been so settled as at such Early
Termination Date, an amount equal to the fair market value of that which was
(or would have been) required to be delivered as of the originally scheduled
date for delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been
required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the 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.
REPACKAGED GE GLOBAL INSURANCE
XXXXXX BROTHERS DERIVATIVE FLOATING RATE TRUST CERTIFICATES,
PRODUCTS INC. SERIES 2002-1 TRUST
(Name of Party) (Name of Party)
By:.................................... By:..............................
Name: Name:
Title: Title:
Date: Date:
-18-
SCHEDULE
to the Master Agreement
dated as of November 15, 2002
between
XXXXXX BROTHERS DERIVATIVE PRODUCTS INC. ("Party A"),
a corporation organized under
the laws of
the State of Delaware
and
REPACKAGED GE GLOBAL INSURANCE FLOATING RATE
TRUST CERTIFICATES, SERIES 2002-1 TRUST("Party B")
a trust created under the laws of the State of New York
pursuant to the Trust Agreement (as defined herein)
Part 1. Termination Provisions.
In this Agreement:-
(a) "Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v) Not Applicable.
Section 5(a)(vi) Not Applicable.
Section 5(a)(vii) Not Applicable.
Section 5(b)(iv) Not Applicable.
and in relation to Party B for the purpose of:-
Section 5(a)(v) Not Applicable.
Section 5(a)(vi) Not Applicable.
Section 5(a)(vii) Not Applicable.
Section 5(b)(iv) Not Applicable.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) Failure to Pay or Deliver. Section 5(a) is hereby amended by replacing the
word "third" with the word "tenth" in the last line of subsection (i) thereof.
(d) Section 5(a) is hereby amended by: (1) deleting the word "or" at the end
of Subsection (vii) thereof; (2) deleting the period at the end of Subsection
(viii) thereof and replacing it with "; or" and (3) adding the following
Subsection (ix) at the end of such Section 5(a):
(ix) Underlying Securities Termination Default. An Underlying Securities
Termination Default shall have occurred and be continuing.
1
For the purpose of the foregoing Event of Default, the Defaulting Party
shall be Party B.
(e) The provisions of Section 5(a) (as modified by (c) and (d) above) and
Section 5(b) will apply to Party A and to Party B as follows:-
Section 5(a) Party A Party B
------------ ------- -------
(i) "Failure to Pay or Deliver" Applicable. Applicable.
(ii) "Breach of Agreement" Not Applicable. Not Applicable.
(iii) "Credit Support Default" Not Applicable. Not Applicable.
(iv) "Misrepresentation" Not Applicable. Not Applicable.
(v) "Default under Specified Transaction" Not Applicable. Not Applicable.
(vi) "Cross Default" Not Applicable. Not Applicable.
(vii) "Bankruptcy" Applicable. Not Applicable.
(viii) "Merger Without Assumption" Not Applicable. Not Applicable.
(ix) "Underlying Securities Termination
Default" Not Applicable. Applicable.
Section 5(b) Party A Party B
------------ ------- -------
(i) "Illegality" Applicable. Applicable.
(ii) "Tax Event" Not Applicable. Not Applicable.
(iii) "Tax Event Upon Merger" Not Applicable. Not Applicable.
(iv) "Credit Event Upon Merger" Not Applicable. Not Applicable.
(v) "Additional Termination Event" Applicable. Applicable.
(f) The following shall each be specified as "Additional Termination Events"
pursuant to Section 5(b)(v):
Partial Unwind. The exercise of a partial unwind of the Underlying
Securities by a Certificateholder in accordance with Section 7 of
the Series Supplement, in which case, (1) a portion of the Notional
Amount of the Transactions equal to the related Partial Unwind
Amount shall be terminated and (2) the Early Termination Date with
respect to such portion of the Notional Amount of the Transactions
shall be the related Partial Unwind Date. For the purposes the
foregoing Additional Termination Event, Party A shall be the
Affected Party.
Trigger Event. The occurrence of a Trigger Event, in which case the
entire Notional Amount of the Transaction shall be terminated. Each
of the following events shall constitute a Trigger Event:
(1) Downgrade. Party A ceases to maintain a Single A Quality
financial program, counterparty or similar rating from both of the
Relevant Rating Agencies;
(2) Failure To Deliver Collateral. The occurrence of an Event of
Default under the ISDA Master Agreement dated July 16, 1998 between
Party A and
-2-
LBSF (the "Offsetting Transaction Master Agreement") as a result of
LBSF's failure to deliver, or procure delivery of, collateral to
Party A in the amounts and within the time required (subject to any
applicable cure period) thereunder and under the terms of any
applicable Credit Support Document, as such may be amended from
time to time without the consent of, or notice to, Party B,
provided such amendments are consistent with the requirements of
Party A's financial program as represented to the Relevant Rating
Agencies;
(3) Bankruptcy. LBHI or LBSF: (A) is dissolved (other than pursuant
to a consolidation, amalgamation or merger); (B) becomes insolvent
or is unable to pay its debts or fails or admits in writing its
inability generally to pay its debts as they become due; (C) makes
a general assignment, arrangement or composition with or for the
benefit of its creditors; (D) institutes or has instituted against
it a proceeding seeking a judgment of insolvency or bankruptcy or
any other relief under any bankruptcy or insolvency law or other
similar law affecting creditors' rights, or a petition is presented
for its winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it, such
proceeding or petition (x) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making of an
order for its winding-up or liquidation or (y) is not dismissed,
discharged, stayed or restrained in each case within 30 days of the
institution or presentation thereof; (E) has a resolution passed
for its winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (F) seeks or
becomes subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(G) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter; (H)
causes or is subject to any event with respect to it which, under
the applicable laws of any jurisdiction, has an analogous effect to
any of the events specified in clauses (A) through (G) inclusive;
or (I) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing
acts; and
(4) Capital Requirement. Party A shall fail to maintain capital in
the amount consistent with its financial program as represented to
the Relevant Rating Agencies.
For the purposes of the foregoing Additional Termination Event,
Party A shall be the Affected Party.
Underlying Acceleration Termination. The occurrence of an
Underlying Acceleration Termination, in which case, (1) the entire
Notional Amount of the Transaction shall be terminated and (2) the
Early Termination Date shall be the
-3-
date of receipt by Party B of the related accelerated payments. For
the purposes of the foregoing Additional Termination Event, Party B
shall be the Affected Party.
(g) Event of Default or Other Termination Event After Trigger Event. If a
Trigger Event shall have occurred and an event or circumstance which would
otherwise constitute or give rise to (1) an Event of Default with Party A as
the Defaulting Party (other than an Event of Default pursuant to Sections
5(a)(vii) or 5(a)(ix)), (2) a Termination Event other than a Trigger Event
shall occur, or (3) a Credit Assignment Event (as defined in part 5(a)(1)
hereof), such Trigger Event will prevail and such other event or circumstance
will not constitute an Event of Default, a Termination Event or a Credit
Assignment Event, as the case may be.
(h) Effect of Trigger Event. Notwithstanding anything to the contrary
contained in this Agreement, if a Trigger Event occurs the following
provisions shall apply:
(1) Notice. Party A shall, within one Business Day of becoming
aware of such occurrence, notify Party B by facsimile transmission
or electronic messaging system (the date such notice is
transmitted, the "Notice Date"), specifying the nature of the
Trigger Event and designating the Early Termination Date in respect
of all Transactions. The Early Termination Date so designated shall
be no later than the fifth Universal Business Day following such
Notice Date. The Early Termination Date so designated shall be
subject to change as specified in paragraph (h)(4)(a) below and, in
the case of affected Transactions only, as specified in paragraph
(h)(4)(b) below.
(2) Market Quotation. For the purposes of determining the
Settlement Amount pursuant to Section 6(e)(iv), the "Market
Quotation" of a Terminated Transaction (which may be positive or
negative) shall be the amount determined by Party A, using Market
Rates and Volatilities and by polling the Dealer Group as required,
to be the mid-market value of the Transaction as of the close of
business (New York time) on the Early Termination Date. Party A
shall perform such determinations in good faith in accordance with
its usual operating procedures and pursuant to industry standards.
For purposes of this definition, if the Market Quotation of a
Terminated Transaction represents an amount payable to Party A, it
shall be expressed as a negative number, and if the Market
Quotation represents an amount payable to Party B, it shall be
expressed as a positive number. For purposes of determining the
Settlement Amount, Unpaid Amounts (which shall be determined by
Party A) in respect of the Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that
would, but for the Early Termination Date, have been required
(assuming satisfaction of each applicable condition precedent)
after the Early Termination Date is to be included. Party A shall
notify Party B of the Market Quotation of each Terminated
Transaction, the Settlement Amount and the Termination Currency
Equivalent of any Unpaid Amounts within two Business Days following
the Early Termination Date.
(3) Payment Date. The amount calculated as being due as a result of
a Termination Event that arises as a result of a Trigger Event
pursuant to Section 6(e)(iv) will be payable, in the case of an
amount due and owing to
-4-
Party A, within ten Universal Business Days following the Early
Termination Date, and in the case of an amount due and owing to
Party B, within ten Universal Business Days following the Early
Termination Date. Party A and Party B agree that the party that is
required to pay such amount shall be required to pay interest on
such amount for the period from (and including) the Early
Termination Date to (but excluding) the date payment is required to
be made, at the Agreed Interest Rate. If either party fails to pay
such amount on the due date, such failure shall constitute a breach
of this Agreement, but shall not constitute an Event of Default
(including an Event of Default pursuant to Section 5(a)(i) or
5(a)(ii)) for purposes of this Agreement. In the event of any such
failure by either party, such party shall be required to pay
interest on such overdue amount for the period from (and including)
such due date to (but excluding) the date of actual payment, at the
default rate, which is the Agreed Interest Rate plus 3% per annum.
Interest payable under this paragraph will be calculated on the
basis of daily compounding and the actual number of days elapsed
divided by 360.
(4) Effect of Market Disruption Event. (a) In the event that a
Market Disruption Event exists on any Early Termination Date, such
date shall not be an Early Termination Date for any outstanding
Transaction. In such event Party A shall notify Party B and the
earlier to occur of (i) the next succeeding Universal Business Day
on which a Market Disruption Event does not exist and (ii) the
eighth Universal Business Day following the day on which notice of
the occurrence of a Trigger Event was given shall be considered the
Early Termination Date for all outstanding Transactions and a
Settlement Amount shall be obtained for that Early Termination Date
in accordance with the terms set forth in this paragraph (h). As
used herein, "Market Disruption Event" means any of the following
events, the existence of which shall be determined by Party A: (i)
any suspension or material limitation of trading (excluding daily
settlement limits in the normal course of trading) on the New York
Stock Exchange, London Stock Exchange or other recognized stock
exchange the effect of which on financial markets makes it
impracticable or inadvisable, in the view of Party A, to proceed
with the determination of the Settlement Amount, (ii) the
declaration of a banking moratorium by the Bank of England, United
States federal authorities, New York State or other recognized
international, national or regional banking authority authorities
the effect of which on financial markets makes it impracticable or
inadvisable, in the view of Party A, to proceed with the
determination of the Settlement Amount, (iii) the occurrence of any
outbreak or escalation of hostilities or a declaration by the
United States of a national emergency or war the effect of which on
financial markets makes it impracticable or inadvisable, in the
view of Party A, to proceed with the determination of the
Settlement Amount, or (iv) the occurrence of any other calamity or
crisis or any other event the effect of which, in the view of Party
A and a majority of eleven randomly selected unaffiliated Qualified
Counterparties of Party A (who are not Affiliates of Party A) whose
Settlement Amounts otherwise would have been determined on such
Early Termination Date, makes it impracticable or inadvisable to
proceed with the determination of such Settlement Amounts on such
Early Termination Date.
-5-
(b) If on an Early Termination Date as to which there is no Market
Disruption Event, there are conditions in a local market that, in
the judgment of Party A, materially would impede its ability to
determine the Market Quotation for certain Transactions in that
market (a "Local Market Disruption Event"), Party A shall notify
Party B of those conditions no later than one hour prior to the
scheduled time for determining the Market Quotation for such
affected Transactions on that date. Upon receipt of such notice,
Party B shall have the right to delay the Early Termination Date
for the affected Transactions (without affecting the Early
Termination Date for any other Transactions under this Agreement)
by notifying Party A within one hour of its election to exercise
that right (to be subsequently confirmed in writing). In such
event, the Early Termination Date for each such affected
Transaction shall be the next day on which Party A and Party B
agree that the Local Market Disruption Event ceases to exist, but
in any case not later than the due date for Settlement Amount
payments owed to Party A with respect to unaffected Transactions as
provided in paragraph (h)(3). Market Quotations so obtained for any
affected Transaction shall be included in the calculation of the
Settlement Amount to paid as provided in paragraph (h)(3). No delay
in the Early Termination Date for any affected Transaction as
provided above shall affect the days on which payments would
otherwise be required to be made pursuant to paragraph (h)(3) had
no such delay occurred, it being understood, however, that interest
shall begin to accrue pursuant to such paragraph with respect to
any such affected Transaction only from (and including) the delayed
Early Termination Date.
(5) Payments on Early Termination. This Agreement shall be amended
by adding the following new subsection (v) to Section 6(e):
"(v) Trigger Event. If an Early Termination Date results from
a Trigger Event, Party A shall determine the Settlement Amount
of all Terminated Transactions on such date, and the amount
payable will be equal to (A) the Settlement Amount in respect
of the Terminated Transactions plus (B) the Termination
Currency Equivalent of Unpaid Amounts owing to Party B minus
(C) the Termination Currency Equivalent of Unpaid Amounts
owing to Party A. If that amount is a positive number, Party A
will pay it to Party B; if it is a negative number, no amount
will be paid by Party B to Party A. For purposes of
determining the Settlement Amount under this subsection,
clause (b) of the definition of Settlement Amount shall not
apply."
(i) Automatic Early Termination. The "Automatic Early Termination" provisions
of Section 6(a) will not apply to Party A or Party B.
(j) Effect of Underlying Acceleration Termination. No Early Termination
Payment shall be payable by either party upon the occurrence of an Underlying
Acceleration Termination unless another Early Termination Event shall have
occurred on or prior to the Early Termination Date for such Underlying
Acceleration Termination, in which case, the Early Termination Payment, if
any, for such other Early Termination Event, shall be payable.
-6-
(k) Additional Definitions.
As used in this Schedule, the following terms shall have the following
meanings:
"Agreed Interest Rate" for any day means the overnight ask rate in effect
for such day, as set forth opposite the caption "ON" under the heading
"Euro-Dollar" on Telerate Page 4756 (or any successor page thereto), as
of 11:00 a.m., New York time, on such day.
"Business Day" means any day (which is neither a Saturday nor a Sunday)
nor a day on which banks in New York City or the place of payment in
respect of the Underlying Securities are authorized or required to be
closed.
"Dealer Group" means the following entities and such other entities as
may be selected by Party A from time to time: JPMorgan Chase Bank,
Citibank, N.A., Barclays Bank PLC, Xxxxxxx Xxxxx Capital Services, Inc.,
Deutsche Bank AG, The Royal Bank of Scotland plc, HSBC Bank USA, Sumitomo
Mitsui Banking Corporation, Bank of Tokyo-Mitsubishi Limited, Westpac
Bank Corp., Xxxxxxx Xxxxx & Co. and BNP Paribas.
Notwithstanding the definition of Dealer Group, (i) for U.S. dollar and
Canadian dollar information, the dealers that may be polled shall be
JPMorgan Chase Bank, Citibank, N.A., Deutsche Bank AG, Xxxxxxx Xxxxx
Capital Services, Inc., and Xxxxxxx Xxxxx & Co.; and (ii) for European
currency information, the dealers that may be polled shall be those
listed in clause (i) of this paragraph and, in addition, Barclays Bank
PLC, Deutsche Bank AG, The Royal Bank of Scotland plc and BNP Paribas.
"LBHI" means Xxxxxx Brothers Holdings Inc.
"LBSF" means Xxxxxx Brothers Special Financing Inc.
"Market Rates and Volatilities" means, in the case of interest rates and
volatilities, the interest rates and volatilities obtained from the
Telerate and Reuters screens where practicable and from polling the
Dealer Group and, in the case of foreign exchange rates and volatilities
and other pricing parameters, the foreign exchange rates and volatilities
or pricing parameters obtained from polling the Dealer Group. In each
case, for all rates, volatilities or other parameters obtained, at least
five members of the Dealer Group shall be polled, the highest and lowest
of such returns (including, in the case of interest rates and
volatilities, the rates and volatilities obtained from the Telerate and
Reuters screens, if any) shall be discarded and the simple mathematical
average of the remaining values shall be used to perform the applicable
determination.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Person" means any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality
thereof.
-7-
"Relevant Rating Agencies" means, S&P and Moody's, or such of them as
then assigns a financial program, counterparty or similar rating to Party
A at Party A's request, or any other nationally recognized rating agency
then rating Party A at Party A's request (each, individually, a Relevant
Rating Agency).
"S&P" means Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc.
"Single A Quality" means, in the case of S&P, A, in the case of Moody's,
A, in the case of Fitch, Inc., A, and, in the case of any other Relevant
Rating Agency, a designation of similar quality.
"Universal Business Day" means a day on which commercial banks are open
for business (including dealings in foreign exchange and foreign currency
deposits) in Frankfurt, London, New York, Tokyo and the city in which
Party B's head or home office is located.
(l) "Termination Currency" means United States Dollars ("USD").
Part 2. Tax Representations.
(A) Payer Tax Representation. For the purpose of Section 3(e) of this
Agreement, Party A and Party B each make the following representations:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from
any payment (other than interest under Section 2(e), 6(d)(ii), or 6(e) of
this Agreement) to be made by it to the other party under this Agreement.
In making this representation, it may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement, and the accuracy and
effectiveness of any document provided by the other party pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the
satisfaction of the agreement of the other party contained in Section
4(d) of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other
party does not deliver a form or document under Section 4(a)(iii) by
reason of material prejudice to its legal or commercial position.
(B) Payee Tax Representations. For the purpose of Section 3(f) of this
Agreement, Party A makes the following representations:-
(i) The following representation applies to Party A:-
Party A is a corporation organized under the laws of the State of
Delaware.
(ii) The following representation applies to Party B:-
-8-
Party B is a trust that has not elected to be treated as a
corporation for U.S. federal income tax purposes.
Part 3. Agreement to Deliver Documents.
For the purpose of Section 4(a)(i) and Section 4(a)(ii) of this Agreement,
Party A and Party B each agree to deliver the following documents, as
applicable:-
(a) Tax forms, documents or certificates to be delivered are:
Party Form, Document Date by which Covered by
required to or Certificate to be Delivered Section 3(d)
deliver document -------------- --------------- ------------
----------------
Party A A complete and executed U.S. Internal (i) Before the first Payment No
Revenue Service Form W-9 (or any successor Date under this Agreement,
thereto), that eliminates U.S. federal (ii) promptly upon reasonable
backup withholding tax on payments under demand by Party B, and (iii)
this Agreement. promptly upon learning that
any such Form previously
provided by Party A has become
obsolete or incorrect.
Party B A complete and executed U.S. Internal (i) Before the first Payment No
Revenue Service Form W-9 (or any successor Date under this Agreement,
thereto) and a complete and executed U.S. (ii) promptly upon reasonable
Internal Revenue Service Form W-8BEN, demand by Party A, and (iii)
W-8IMY, W-8ECI or W-9 (or any successor promptly upon learning that
thereto) from each Certificateholder (and, any such Form previously
where applicable, such forms from the provided by Party B has become
beneficial owners of such Certificates) and obsolete or incorrect.
in any case in which the Certificateholder
is eligible for the benefits of an income
tax treaty with the United States, a Form
W-8BEN including a claim of treaty benefits
under Part II, claiming such benefits with
-9-
respect to all payments received with
respect to the Certificates, and with Part
III marked, in each case that eliminates
U.S. federal withholding tax and backup
withholding on payments under this
Agreement.
(b) Other documents to be delivered are:
Party Form, Document Date by which Covered by
required to or Certificate to be Delivered Section 3(d)
deliver document -------------- --------------- ------------
----------------
Party A An opinion of counsel to Party A Promptly after execution of No
substantially in the form of this Agreement.
Exhibit B to this Schedule.
Party A An incumbency certificate with Upon execution of this Yes
respect to the signatory of this Agreement.
Agreement.
Party B An opinion of counsel to Party B Promptly after execution of No
substantially in the form of this Agreement.
Exhibit C to this Schedule.
Party B (with respect to An incumbency certificate with Upon execution of this Yes
the Trustee) respect to the signatory of this Agreement.
Agreement.
Party B (with respect to A certified copy of the Upon execution of this Yes
the Trustee) resolution or resolutions or Agreement (unless an
applicable Bylaws (the Authorizing Resolution has
"Authorizing Resolution") of the previously been furnished by
Board of Directors or loan the Trustee to Party A) and,
committee of the Trustee, with respect to each Swap
certified by a secretary, or an Transaction
assistant
-10-
Party Form, Document Date by which Covered by
required to or Certificate to be Delivered Section 3(d)
deliver document -------------- --------------- ------------
----------------
secretary of the not covered by a previously
Trustee, pursuant to which the furnished Authorizing Resolution,
Trustee is authorized, on behalf within five Business Days of
of the Trust, to enter into this the Trade Date.
Agreement and each Swap
Transaction entered into under
this Agreement.
Party B A certified copy of the Trust Upon execution of this Yes
Agreement and each amendment Agreement and on the date of
thereof. each amendment thereof.
Part 4. Miscellaneous.
(a) Addresses for Notices. For purpose of Section 10(a):
Address for notices or communications to Party A:-
Address: Xxxxxx Brothers Derivative Products Inc.
c/x Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Documentation Manager
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Address for notices or communications to Party B:-
Address: U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust
Facsimile No.: (000) 000-0000
(b) Process Agent. For the purpose of Section 13(c):--
Party A appoints as its Process Agent: Not Applicable.
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Party B appoints as its Process Agent: Not Applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:--
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A. The failure of
Party A to perform its obligations as Calculation Agent shall not be construed
as an Event of Default or Termination Event.
(f) Credit Support Document. Details of any Credit Support Document:-
In the case of Party A, not applicable.
In the case of Party B, not applicable.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not Applicable.
Credit Support Provider means in relation to Party B: Not Applicable.
(h) Limitation on Trustee Liability. In the absence of negligence, willful
misconduct or bad faith on the part of the Trustee, the Trustee shall have no
personal liability for the payment of any indebtedness or expenses of Party B
or be personally liable for the breach or any failure of any obligation,
representation, warranty or covenant made or undertaken by Party B under this
Transaction or the Trust Agreement within the scope of the Trustee's discharge
of its duties under this Transaction or the Trust Agreement or for any amounts
due under this Transaction from Party B, such amounts to be paid solely from
the assets of Party B in accordance with the Trust Agreement.
(i) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without regard to choice of
law doctrine).
(j) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the
second line of subparagraph (i) thereof the word "non-"; and (ii) deleting the
final paragraph thereof.
(k) Netting of Payments. Section 2(c)(ii) will not apply to all Transactions.
(l) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
Part 5. Other Provisions.
(a) Credit Assignment Event.
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(i) A "Credit Assignment Event" shall occur if at any time during the
term of this Agreement, the Certificates cease to meet the Minimum Rating
Requirement (as defined below) from both Xxxxx'x and S&P. Following the
occurrence of a Credit Assignment Event, the rights and obligations of
Party A under this Agreement and all Transactions hereunder shall
automatically, and without any further action by any party, be deemed to
have been assigned and delegated to LBSF, effective on the third Business
Day following notification by Party A to Party B of such assignment and
Party B expressly and irrevocably consents to such assignment and
assumption, except that no such assignment and assumption shall occur at
any time after the occurrence of any event of default under any master
agreement between Party A and LBSF. As of and from the effective date of
such assignment, LBSF shall succeed to all rights and obligations of
Party A under this Agreement and all Transactions hereunder.
"Minimum Rating Requirement" means (A) with respect to Xxxxx'x, a
long-term credit rating of at least Baa3; and (B) with respect to S&P,
long-term credit rating of at least BBB-.
(ii) Party A represents that it has provided separate consideration to
LBSF for the right to assign this Agreement and the Transactions
hereunder to LBSF pursuant to clause (i), and Party B shall not owe Party
A any termination or other payment upon any such assignment.
(iii) Notwithstanding clauses (i) and (ii) above, no transfer or
assignment payment shall be due to or owing from either Party A or Party
B other than its obligations under the Transactions.
(iv) Notwithstanding the foregoing, the assignment provisions of this
paragraph shall not take effect if, at the time such assignment would be
required, Party B shall have satisfied in full all of its payment
obligations under Section 2(a) of this Agreement and shall at such time
have no future payment obligations, whether absolute or contingent, under
such Section.
(v) The assignment provisions of this paragraph shall not take effect if,
at the time such assignment would be required, LBSF or its guarantor
shall have a long-term credit rating lower than that assigned to the
Certificates. In such case, Party A shall be permitted to assign its
rights and obligations under this agreement, without the consent of any
party, to an entity that has (or whose guarantor has) a long-term credit
rating not lower than that assigned to the Certificates.
(vi) Upon an assignment pursuant to this Part 5(a), a Trigger Event shall
cease to constitute an Additional Termination Event.
(b) Confirmation. Each Confirmation supplements, forms part of, and will be
read and construed as one with the Agreement. A form of Confirmation is set
forth as Exhibit A hereto.
(c) Early Termination. Notwithstanding any other provision of this Agreement,
in the event of the occurrence of an Event of Default with respect to Party A,
Party B shall not be entitled to designate an Early Termination Date unless
directed to do so by a majority of the holders of the Certificates. In
addition, the Early Termination Date so designated shall be at least
-13-
five Business Days following the date on which Party B receives such direction
from a majority of the holders of the Certificates.
(d) No Bankruptcy Petition. Prior to the date that is one year and one day
after the date upon which the trust created under the Trust Agreement is
terminated in accordance with the terms thereof, Party A shall not institute
against, or join any other person in instituting against, the trust created
thereby, any bankruptcy, reorganization, arrangement, insolvency or
liquidation proceedings, or other proceedings under any federal or state
bankruptcy or similar law.
(e) Transfer. Section 7 is hereby amended by: (i) adding the words "(which
consent may not be unreasonably withheld)" after the word "consent" in the
second line thereof, (ii) adding the words "(and notice of the transferee to)"
after the word "of" in the third line thereof, (iii) adding the words "and the
consent of holders of 100% of the then outstanding Certificates, and each
Rating Agency shall have given its prior written confirmation that such
transfer will not result in a reduction or withdrawal of the then current
rating of the Certificates" after the word "party" in the third line thereof,
(iv) adding the words "(subject to providing written notice of the transferee
to the other party)" after the word "transfer" in the fourth and seventh line
thereof, (v) deleting the word "and" at the end of the sixth line thereof,
(vi) adding the word "and" after the words "Section 6(e)" in the eighth line
thereof and (vii) adding the following section (c) at the start of the ninth
line thereof "(c) unless Party A otherwise consents in its sole discretion, no
transfer may be made by Party B of all or part of its interest in this
Agreement unless the transferee has a Single A Quality financial program,
counterparty or similar rating from a Relevant Rating Agency." Party B shall
not consent to any transfer or assignment by Party A of its rights and
obligations hereunder unless holders of 100% of the outstanding Certificates
have consented to such assignment or transfer.
(f) Commencement of Voluntary Bankruptcy. So long as Party A is solvent, Party
A shall not (i) admit in writing its inability generally to pay its debts as
they become due; (ii) make a general assignment, arrangement or composition
with or for the benefit of its creditors; (iii) institute a proceeding seeking
a judgment of insolvency or bankruptcy or any other relief in respect of Party
A under any bankruptcy or insolvency law or other similar law affecting
creditors' rights; (iv) pass a resolution for its winding-up, official
management or liquidation (other than pursuant to a consolidation,
amalgamation or merger); or (v) seek the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets.
(g) No Capital Contribution to Party A. Party A, LBHI and LBSF have each
acknowledged to and agreed with each other, and Party B hereby acknowledges,
that neither LBHI nor LBSF nor any Affiliate of Party A is under any
obligation whatsoever (whether express or implied) to contribute capital to
Party A. Party B represents and warrants to Party A that in executing and
delivering this Agreement, and performing its obligations hereunder, Party B
is relying on the credit of Party A alone, and not on the credit of any other
entity that may be affiliated with Party A.
(h) Intention to Enter into a "Swap Agreement". Each of Party A and Party B
hereby acknowledges and agrees that this Agreement and all Additional Direct
Agreements and each Transaction hereunder or thereunder is intended to be a
"swap agreement" as that term is defined
-14-
in the U.S. Bankruptcy Code (as amended from time to time) and that the rights
granted to each party under Section 6 include a contractual right to terminate
a "swap agreement" and to offset and net out termination values and payments
in conjunction therewith.
(i) Waiver of Right to Trial by Jury. Each party hereby irrevocably waives, to
the fullest extent permitted by applicable law, any right it may have to a
trial by jury in respect of any suit, action or proceeding relating to this
Agreement or any Credit Support Document. Each party (i) certifies that no
representative, agent or attorney of the other party or any Credit Support
Provider has represented, expressly or otherwise, that such other party would
not, in the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have been
induced to enter into this Agreement and provide for any Credit Support
Document, as applicable, by, among other things, the mutual waivers and
certifications in this section.
(j) Accuracy of Specified Information. Section 3(d) is hereby amended by
adding in the third line thereof after the word "respect" and before the
period the words "or, in the case of audited or unaudited financial
statements, a fair presentation, in all material respects, of the financial
condition of the relevant person."
(k) Additional Representations. For purposes of Section 3 of this Agreement,
the following shall be added, immediately following paragraph (f) thereof:
(g) No Agency. It is entering into this Agreement and each Transaction
as principal (and not as agent or in any other capacity, fiduciary
or otherwise); provided, that the Trustee is acting not in its
individual capacity but solely as Trustee for Party B.
(h) Eligible Contract Participant. It is an "eligible contract
participant" as that term is defined in the Commodity Exchange Act,
as amended.
(i) Non-Reliance. Party A is acting for its own account, and it has made
its own independent decisions to enter into that Transaction and as
to whether that Transaction is appropriate or proper for it based
upon its own judgment and upon advice from such advisers as it has
deemed necessary. Party B is entering into the Transaction pursuant
to the terms of the Trust Agreement. Neither party is relying on any
communication (written or oral) of the other party as investment
advice or as a recommendation to enter into that Transaction; it
being understood that information and explanations related to the
terms and conditions of a Transaction shall not be considered
investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received from the
other party shall be deemed to be an assurance or guarantee as to
the expected results of that Transaction.
Assessment and Understanding. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the risks of that Transaction.
-15-
Status of Parties. The other party is not acting as a fiduciary for
or an adviser to it in respect of that Transaction.
(l) No Setoff to Party A Affiliates. Party B agrees that all payments required
to be made by it under this Agreement shall be made without setoff or
counterclaim for, and that it shall not withhold payment or delivery under
this Agreement in respect of, any default by any Affiliate of Party A under
any Other Agreement or any amount relating to any Other Agreement between
Party B and such Affiliate of Party A or between an Affiliate of Party B and
such Affiliate of Party A. As used herein, "Other Agreement" means any
agreement, including, but not limited to, (i) any transaction (including an
agreement with respect thereto) which is a rate swap transaction, basis swap,
forward rate transaction, commodity swap, commodity option, interest rate
option, foreign exchange transaction, cap transaction, floor transaction,
currency option or any other similar transaction (including any option with
respect to any of these transactions), (ii) any liability, claim or obligation
(whether present or future, contingent or otherwise), or (iii) any combination
of one or more of the transactions described above. This paragraph (l) shall
supersede any setoff right contained in any Other Agreement or any agreement
relating to any Other Agreement between Party B and any such Affiliate of
Party A or between an Affiliate of Party B and such Affiliate of Party A.
(m) Pledge of Swap Payment Rights and Other Property by Party A. Party A has
pledged its rights to receive payments under this Agreement and under certain
other swap agreements entered into or to be entered into by Party A ("Other
Swap Agreements"), and has pledged or will pledge certain other property for
the benefit of Party B and the counterparties under such Other Swap
Agreements, ratably to secure Party A's obligations to make certain payments
to Party B and such counterparties under this Agreement and the Other Swap
Agreements. To the extent of any payments made by the provider(s) of any
Qualified Credit Enhancement (as defined in Party A's Operating Guidelines)
for the benefit of Party B, such provider(s) will be subrogated to the rights
of Party B under this Agreement; provided that such provider(s) shall not be
entitled to enforce such subrogation hereunder until all obligations of Party
A to Party B under this Agreement shall have been paid in full.
(n) Partial Unwind. Section 7 of the Series Supplement and all other
provisions of the Trust Agreement relating to the partial unwind of the
Underlying Securities shall apply to the Certificates; provided, however, only
Xxxxxx Brothers Inc. or any affiliate thereof which is a beneficial owner of a
Certificate will be permitted under the Trust Agreement to enter into a
Partial Unwind Agreement.
(o) Notices. For the purposes of subsections (iii) and (v) of Section 12(a),
the date of receipt shall be presumed to be the date sent if sent on a Local
Business Day or, if not sent on a Local Business Day, the date of receipt
shall be presumed to be the first Local Business Day following the date sent.
(p) Service of Process. The penultimate sentence of Section 13(c) shall be
amended by adding the following language at the end thereof: "if permitted in
the jurisdiction where the proceedings are initiated and in the jurisdiction
where service is to be made."
(q) Additional Definitions.
-16-
"Certificates" shall mean Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1 Trust Certificates, due August 21,
2035, issued pursuant to the Trust Agreement.
"Liquidation Proceeds" shall have the meaning specified therefor in the
Trust Agreement.
"Market Agent" shall mean Xxxxxx Brothers Inc. as market agent of the
Trust under the Market Agent Agreement.
"Market Agent Agreement" shall mean the Market Agent Agreement, dated
November 15, 2002, between the Market Agent and the Trust.
"Trigger Event Special Redemption Date" shall have the meaning specified
therefor in the Trust Agreement
"Trust Agreement" shall mean, collectively, the Series Supplement (the
"Series Supplement"), dated as of November 15, 2002, which supplements
and amends the Standard Terms for Trust Agreements ("Standard Terms"),
dated as of January 16, 2001, each between Xxxxxx ABS Corporation, as
depositor, and U.S. Bank Trust National Association, as trustee, as the
same may be amended or supplemented from time to time as provided
therein.
"Trustee" shall mean U.S. Bank Trust National Association, as Trustee of
Party B, and any additional or successor trustee of Party B.
"Underlying Securities" shall have the meaning specified therefor in the
Trust Agreement.
"Underlying Acceleration Termination" shall mean the occurrence of an
event of default with respect to the Underlying Securities (other than an
Underlying Securities Termination Default), which event results in the
acceleration and final payment of the Underlying Securities.
"Underlying Securities Termination Default" shall mean the occurrence of
any of the following events: (i) the failure by the Underlying Securities
Issuer to pay interest or principal with respect to the Underlying
Securities within any applicable grace period after the same shall become
due or (ii) any event of bankruptcy, insolvency or reorganization that
would be an event of default under the Underlying Securities Indenture.
Terms used herein and not otherwise defined shall have the meaning
ascribed to them in the Trust Agreement.
-17-
The parties executing this Schedule have executed the Master
Agreement and have agreed as to the contents of this Schedule.
XXXXXX BROTHERS DERIVATIVE PRODUCTS INC.
By:__________________________________
Name:
Title:
REPACKAGED GE GLOBAL INSURANCE
FLOATING RATE TRUST CERTIFICATES,
SERIES 2002-1 TRUST
By: U.S. Bank Trust National Association,
not in its individual capacity but
solely as Trustee under the Trust
Agreement
By:_________________________________
Name:
Title:
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EXHIBIT A TO SCHEDULE
---------------------
FORM OF CONFIRMATION
Confirmation
------------
DATE: November 15, 2002
TO: Repackaged GE Global Insurance Floating Rate Trust Certificates,
Series 2002-1 Trust
FROM: Xxxxxx Brothers Derivative Products Inc.
SUBJECT: INTEREST RATE SWAP TRANSACTION
To U.S. Bank Trust National Association, as Trustee:
The purpose of this communication is to set forth the terms and
conditions of the transaction entered into on the Trade Date referred to below
(the "Transaction"), between Xxxxxx Brothers Derivative Products Inc. ("Party
A") and Repackaged GE Global Insurance Floating Rate Trust Certificates,
Series 2002-1 Trust ("Party B"), a trust created under the laws of the State
of New York pursuant to that certain Series Trust Agreement, dated November
15, 2002, which incorporates the Standard Terms for Trust Agreements
(collectively, the "Trust Agreement"). This communication constitutes a
"Confirmation" as referred to in the Master Agreement specified below.
1. This Confirmation supplements, forms a part of and is subject to
the 1992 ISDA Master Agreement (Multicurrency - Cross Border), (the "Master
Agreement") (including the Schedule thereto), dated as of November 15, 2002,
between Party A and Party B. All provisions contained in, or incorporated by
reference to, such Master Agreement shall govern this Confirmation except as
expressly modified below.
2. This communication incorporates the definitions and provisions
contained in the 2000 ISDA Definitions (as published by the International
Swaps and Derivatives Association, Inc.) (the "Definitions"). In addition,
certain capitalized terms used herein but not defined herein shall have the
meaning ascribed to them in the Trust Agreement.
3. The terms of the particular Transaction to which this
communication relates are as follows:
Party A: Xxxxxx Brothers Derivative Products Inc.
Party B: Repackaged GE Global Insurance Floating Rate Trust Certificates,
Series 2002-1 Trust
A-1
Trade Date: November 15, 2002
Effective Date: November 15, 2002
Scheduled Termination Date: February 15, 2026
Calculation Agent: Party A
Business Days: Any day which is neither a Saturday nor a Sunday) nor a day
on which banks in New York City and the place of payment in
respect of the Underlying Securities are authorized or
required to be closed, subject to the Modified Following
Business Day Convention.
The "Modified Following Business Day Convention" shall apply
if the specified day is not a Business Day and shall mean the
first following day that is a Business Day unless that day
falls in the next calendar month, in which case that date will
be first preceding day that is a Business Day.
Notional Amount: $12,000,000, subject to reduction as a result of an early
termination of all or a portion of the Transaction. The
Notional Amount shall at all times equal the outstanding
principal amount of the Certificates. See "Early Termination
Payment" below
Party A Floating Rate Payer Payment Amounts:
Party A Payment Dates: The 15th day of each February, May, August and November,
commencing in February 2003 and ending on February 15, 2026
(or if any such day is not a Business Day, the next following
Business Day).
Party A Floating Rate for the Initial
Calculation Period: 1.90% (inclusive of the Floating Rate Spread)
Party A Floating Rate Option: USD-LIBOR-BBA (Telerate Page 3750)
Designated Maturity: Three Months
Party A Floating Rate Spread: plus 0.50%
Party A Day Count Fraction: Actual/360
Reset Dates: The first day of each Calculation Period.
A-2
Other: Party A will have no obligation to make a Party A Floating
Rate Payment Amount unless and until Party B has made the
related payment, if any, to Party A.
Party B Fixed Rate Payment Amounts:
Party B Fixed Rate Payment Amounts: Any amounts received by Party B in respect of interest on the
Underlying Securities; provided, that the Initial Accrued
Interest in respect of the Underlying Securities shall be paid
in accordance with the terms of the Trust Agreement.
Party B Payment Dates: Any date on which distributions are received by Party B in
respect of interest on the Underlying Securities, commencing
in February 2003.
Underlying Securities: Issuer: GE Global Insurance Holding
Corporation
Maturity Date: February 15, 2026
Coupon: 7.00%
Day Count: 30/360
Payment Dates: The 15th day of each February and
August (subject to applicable
grace periods) commencing in
February 2003 and ending on the
Final Scheduled Distribution Date
Other:
In the event of a discrepancy between the Party B Fixed Rate
Payment Amounts due in respect of any Calculation Period and
the interest amount payable on the Underlying Securities for
the related period (as calculated in accordance with the terms
of the Underlying Securities), the terms of the Underlying
Securities shall govern the calculation of the Party B Fixed
Rate Payment Amount for such Calculation Period.
Early Termination Payment: Section 6(e) of the Master Agreement is hereby deleted, other
than with respect to Section 6(e)(iv) and 6(e)(v), and
replaced with the following:
(e) Payments on Early Termination.
(i) If notice is given designating an Early Termination Date
in respect of a portion of the Notional Amount equal to the
Partial Unwind Amount in connection with the exercise by a
Certificateholder of the partial unwind provisions of Section
7 of the Series Supplement, Party A and
A-3
such exercising Certificateholder shall agree in accordance
with such Section 7 of the Series Supplement on the
termination payment to be paid by either such party on such
Early Termination Date; provided, however, that under no
circumstances will such termination payment be paid by Party B
or the assets of Party B
(ii) If an Early Termination Date is designated in respect of
the entire Notional Amount of the Transaction, Market
Quotation and Second Method shall be used to calculate any
termination payments owing by either party under Section 6(e)
of the Master Agreement.
(iii) No termination payment shall be payable by Party B to
Party A following the occurrence of a Special Termination
Event. a "Special Termination Event" is an Early Termination
event caused by the occurrence of (A) an event specified in
Section 5(a)(i) of the Master Agreement, (B) an event
specified in Section 5(a)(vii) of the Master Agreement or (C)
a Trigger Event.
(iv) No Early Termination Payment shall be payable by either
party upon the occurrence of an Underlying Acceleration
Termination unless another Early Termination Event shall have
occurred on or prior to the Early Termination Date for such
Underlying Acceleration Termination, in which case, the Early
Termination Payment, if any, for such other Early Termination
Event, shall be payable.
Amendment: Section 9(b) of the Master Agreement is hereby deleted and
replaced with the following:
No amendment to this Agreement shall be effective unless each
of the parties hereto shall have consented to such amendment
in writing.
4. Other Terms
(a) Interpretation. Each reference to the singular shall include the plural
and vice versa.
A-4
(b) Transfer. Neither party may transfer this Transaction or any interest in
or under this Transaction without the prior written consent of the
nontransferring party and the consent of holders of 100% of the then
outstanding Certificates, and each Rating Agency shall have given its prior
written confirmation that such transfer will not result in a reduction or
withdrawal of the then current rating of the Certificates. Any purported
transfer without such consents and such confirmation will be void.
(c) Limitation on Trustee Liability. In the absence of negligence, willful
misconduct or bad faith on the part of the Trustee, the Trustee shall have no
personal liability for the payment of any indebtedness or expenses of Party B
or be personally liable for the breach or any failure of any obligation,
representation, warranty or covenant made or undertaken by Party B under this
Transaction or the Trust Agreement within the scope of the Trustee's discharge
of its duties under this Transaction or the Trust Agreement or for any amounts
due under this Transaction from Party B, such amounts to be paid solely from
the assets of Party B in accordance with the Trust Agreement.
5. Account Details
Payments to Party A
Account for payments: []
Payments to Party B
Account for payments: []
A-5
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing the copy of this Confirmation enclosed for that
purpose and returning it to us.
Yours sincerely,
XXXXXX BROTHERS DERIVATIVE PRODUCTS INC.
By:______________________________________
Name:
Title:
Confirmed as of the date first written:
REPACKAGED GE GLOBAL INSURANCE FLOATING RATE TRUST CERTIFICATES,
SERIES 2002-1 TRUST
By: U.S. BANK TRUST NATIONAL ASSOCIATION, not in its
individual capacity but solely as
Trustee under the Trust Agreement
By:_____________________________________________
Name:
Title:
A-6
EXHIBIT B TO SCHEDULE
---------------------
FORM OF OPINION OF COUNSEL FOR PARTY A
November 15, 2002
To the Persons listed on
Schedule A hereto
Re: Xxxxxx ABS Corporation
Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1
--------------------------------------------
Ladies and Gentlemen:
We have acted as special New York counsel in connection with (i) the
transfer of $12,000,000 aggregate principal amount of 7.00% Notes due 2026
(the "Underlying Securities") of GE Global Insurance Holding Corporation (the
"Underlying Securities Issuer"), by Xxxxxx ABS Corporation ("LABS") to the
Repackaged GE Global Insurance Floating Rate Trust Certificates, Series 2002-1
Trust (the "Trust") established by LABS and (ii) the issuance by the Trust on
November 15, 2002 (the "Closing Date") of the Repackaged GE Global Insurance
Floating Rate Trust Certificates, Series 2002-1 (the "Certificates"), issued
pursuant to a Standard Terms for Trust Agreements, dated as of January 16,
2001 (the "Standard Terms"), between LABS and U.S. Bank Trust National
Association, as trustee (the "Trustee"), as supplemented by a Series
Supplement, dated as of November 15, 2002 (the "Series Supplement" and,
together with the Standard Terms, the "Trust Agreement"), between LABS and the
Trustee. Capitalized terms defined in the Trust Agreement and used but not
otherwise defined herein are used herein as so defined.
In connection with this opinion, we have examined and are familiar with
originals or copies certified or otherwise identified to our satisfaction of:
(i) the Trust Agreement; (ii) the Securities Account Control Agreement dated
as of November 15, 2002 between LABS and U.S. Bank Trust National Association
as trustee and securities intermediary; (iii) the form of the Certificates;
(iv) the Swap Agreement (comprised of the ISDA Master Agreement between the
Trust and Xxxxxx Brothers Derivative Products Inc. (the "Swap Counterparty"),
dated as of November 15, 2002, the Schedule thereto dated November 15, 2002
and the Confirmation thereunder dated November 15, 2002) (the "Swap
Agreement"); (v) an Underwriting Agreement dated November 12, 2002 (the
"Underwriting Agreement") between LABS and Xxxxxx; and (vi) such corporate
records, agreements, documents and other instruments, and such certificates or
comparable documents of public officials and of officers and representatives
of LABS, and have made such inquiries of such officers and representatives, as
we have deemed relevant and necessary as a basis for the opinions hereinafter
set forth.
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In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies and the
authenticity of the originals of such latter documents. As to all questions of
fact material to this opinion that have not been independently established, we
have relied upon certificates or comparable documents of officers and
representatives of LABS, the Swap Counterparty and the Trustee and upon the
representations and warranties of the Swap Counterparty and the Trust
contained in the Swap Agreement. We have also assumed (i) the due organization
and valid existence of the Swap Counterparty and the Trustee, (ii) that the
Swap Counterparty and the Trustee have all requisite corporate power and
authority to execute and deliver the Swap Agreement and to perform their
obligations thereunder, (iii) the due and valid authorization by all necessary
corporate action of the Swap Counterparty and the Trustee of the execution,
delivery and performance by them of the Swap Agreement, (iv) the due and valid
execution and delivery by the Swap Counterparty and the Trustee of the Swap
Agreement and (v) that the Swap Agreement constitutes the legal, valid and
binding obligations of the Trust, enforceable against the Trust in accordance
with its terms.
Based on the foregoing, and subject to the qualifications stated herein,
we are of the opinion that:
1. The Swap Agreement constitutes the legal, valid and binding obligation of
the Swap Counterparty, enforceable against the Swap Counterparty in accordance
with its terms.
2. The execution and delivery by the Swap Counterparty of the Swap Agreement
and the performance by Swap Counterparty of its obligations thereunder will
not conflict with, constitute a default under, or violate any New York,
Delaware corporate or federal law or regulation (other than federal and state
securities or blue sky laws, as to which we express no opinion in this
paragraph).
3. The Swap Agreement is not subject to regulation under the Commodity
Exchange Act, as amended, or the rules and regulations thereunder.
* * * *
The opinion set forth above is subject to the following qualifications,
assumptions and exceptions:
(a) (i) Our opinion is subject to the effect of any applicable
bankruptcy, insolvency, reorganization, moratorium or other similar law of
general application affecting creditors' or secured creditors' rights and to
the effect of general principles of equity including (without limitation)
concepts of materiality, reasonableness, good faith and fair dealing, and
other similar doctrines affecting the enforceability of agreements generally
(regardless of whether considered in a proceeding in equity or at law), (ii)
the enforcement of the Swap Agreement may be subject to limitations imposed by
public policy, although except as noted in (iii) and (iv) below and in our
general qualifications below, we are not aware of any such limitations that
would be relevant to such enforcement, (iii) such enforcement may be
conditioned upon the party seeking enforcement having acted in a commercially
reasonable manner and in good faith in performing
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its obligations and exercising its rights and remedies thereunder and (iv)
such enforcement is subject to the discretion of a court to invalidate or
decline to enforce any right, remedy or provision of the Swap Agreement
(including, without limitation, the termination payment provisions thereof)
determined by it to be a penalty.
(b) We express no opinion as to any provision of the Swap Agreement (i)
regarding severability of the provisions thereof; (ii) providing that every
right and remedy shall be cumulative and in addition to every other right and
remedy, or that any failure or delay in exercising any right, power or
privilege shall not impair any right or remedy or constitute a waiver thereof
(or, in each case, terms to like effect); (iii) regarding specific performance
or the grant of any power of attorney; (iv) pursuant to which any limitation
with respect to the time within which legal proceedings may be commenced is
purported to be waived or(v) regarding the choice of New York law provided for
in the Swap Agreement.
We are members of the bar of the State of New York, and we do not express
any opinion as to any laws other than the law of the State of New York, the
General Corporation Law of the State of Delaware and the federal laws of the
United States.
The opinions set forth herein are expressly subject to there being no
additional facts which would materially affect the validity of the assumptions
and conclusions set forth herein or upon which this opinion is based.
The opinions expressed herein are being delivered to you as of the date
hereof, and we assume no obligation to advise you of any changes of law or
fact that may occur after the date hereof, notwithstanding that such changes
may affect the legal analysis or conclusions contained herein. This opinion
letter is solely for your benefit in connection with the transactions
contemplated in the Swap Agreement and may not be relied on in any manner for
any other purpose or by any other person or transmitted to any other person
without our prior written consent.
Very truly yours,
B-3
Schedule A
Xxxxxx ABS Corporation
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx Brothers Derivative Products Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Standard & Poor's,
a division of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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November 15, 2002
To the Addressees Listed on the Attached Schedule I
Ladies and Gentlemen:
I have acted as counsel to Xxxxxx Brothers Derivative Products Inc.,
a Delaware corporation ("Party A"), and am familiar with matters pertaining to
the execution and delivery of the 1992 ISDA Master Agreement
(Multicurrency--Cross Border) (the "Master Agreement") dated as of November
15, 2002 between Party A and the Repackaged GE Global Insurance Floating Rate
Trust Certificates, Series 2002-1 Trust ("Party B"). The Master Agreement is
supplemented by a confirmation of swap transaction dated as of November 15,
2002 between Party A and Party B (the "Confirmation"), and the Master
Agreement and the Confirmation together constitute one agreement.
In connection with this opinion, I have examined or have had
examined on my behalf an executed copy of the Master Agreement and the
Confirmation, certificates and statements of public officials and officers
and/or employees of Party A and such other agreements, instruments, documents
and records as I have deemed necessary or appropriate for the purposes of this
opinion.
Based upon the foregoing, but subject to the assumptions,
exceptions, qualifications and limitations hereinafter expressed, I am of the
opinion that:
1. Party A is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware.
2. The execution, delivery and performance of the Master Agreement
and the Confirmation are within the corporate power of Party A, have been duly
authorized by all necessary corporate action and do not conflict with any
provision of its certificate of incorporation or by-laws.
3. The Master Agreement and the Confirmation have been duly executed
and delivered by Party A and constitute legally valid and binding obligations
of Party A enforceable against it in accordance with their respective terms.
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The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. My opinion in paragraph 3 above is subject to the effect of any
bankruptcy, insolvency, reorganization, receivership, moratorium or similar
laws affecting the enforcement of creditors' rights generally (including,
without limitation, the effect of statutory or other laws regarding fraudulent
or other similar transfers) and general principles of equity, regardless of
whether enforceability is considered in a proceeding in equity or at law.
B. I am a member of the Bar of the State of New York and render no
opinion on the laws of any jurisdiction other than the laws of the State of
New York, the federal laws of the United States of America and the General
Corporation Law of the State of Delaware.
C. My opinions are limited to the present laws and to the facts as
they presently exist and no opinion is to be inferred or implied beyond the
matters expressly so stated. I assume no obligation to revise or supplement
this opinion should the present laws of the jurisdictions referred to in
paragraph B above be changed by legislative action, judicial decision or
otherwise.
D. This letter is rendered to you in connection with the Master
Agreement and the Confirmation and the transactions related thereto and may
not be relied upon by any other person, entity or agency or by you in any
other context or for any other purpose, except that Xxxxxx Xxxxxx Xxxxx & Xxxx
LLP, counsel to Party A, may rely on this opinion in connection with an
opinion to be rendered by them of even date herewith. This letter may not be
quoted in whole or in part, nor may copies thereof be furnished or delivered
to any other person, without the prior written consent of Xxxxxx Brothers
Derivative Products Inc., except that you may furnish copies hereof (i) to
your independent auditors and attorneys, (ii) to any United States, state or
local authority having jurisdiction over you or over Party A, (iii) pursuant
to the order of any legal process of any court of competent jurisdiction or
any governmental agency, and (iv) in connection with any legal action arising
out of the Master Agreement or the Confirmation.
E. I have assumed with your permission (i) the genuineness of all
signatures by each party other than Party A, (ii) the authenticity of
documents submitted to me as originals and the conformity to authentic
original documents of all documents submitted to me as copies, and (iii) the
due execution and delivery, pursuant to due authorization, of the Master
Agreement and the Confirmation by each party thereto other than Party A.
Very truly yours,
B-6
SCHEDULE I
Xxxxx'x Investors Service, Inc.
00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Standard and Poor's, a
Division of The XxXxxx-Xxxx Companies, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
U.S. Bank Trust National Association
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
New York Stock Exchange, Inc.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
B-7
EXHIBIT C TO SCHEDULE
---------------------
FORM OF OPINION OF COUNSEL FOR PARTY B
November 15, 2002
Standard and Poor's, a Division of
Xxxxxx Brothers Inc. The XxXxxx-Xxxx Companies, Inc.
000 Xxxxxxx Xxxxxx 00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Xxxxxx ABS Corporation Xxxxx'x Investors Service, Inc.
000 Xxxxxxx Xxxxxx 00 Xxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000 Xxx Xxxx, Xxx Xxxx 00000
Re: Repackaged GE Global Insurance Floating Rate Trust Certificates,
Series 2002-1 Trust (the "Trust" or the "Issuer")
---------------------------------------------------------------
Dear Ladies and Gentlemen:
We have acted as special counsel to U.S. Bank Trust National
Association as trustee (the "Trustee") in connection with a Standard Terms For
Trust Agreements, dated as of January 16, 2001 (as supplemented by the Series
Supplement, Series 2002-1 dated as of November 15, 2002, and collectively
referred to herein as the "Trust Agreement"), between Xxxxxx ABS Corporation,
a Delaware corporation (the "Depositor") and the Trustee. Pursuant to the
Trust Agreement, the Trust shall issue certain Certificates on the Closing
Date (the "Securities").
For purposes of giving the opinion hereinafter set forth, we have
examined executed or conformed counterparts, or copies otherwise proved to our
satisfaction, of the Trust Agreement, the Securities, the Securities Account
Control Agreement dated as of the date hereof (the "Control Agreement") among
the Depositor, the Trustee and U.S. Bank Trust National Association, as
securities intermediary (the "Securities Intermediary") and the ISDA Master
Agreement between the Trust and Xxxxxx Brothers Derivative Products Inc. (the
"Swap Counterparty"), the Schedule thereto and the Confirmation thereunder,
each dated as of the date hereof (collectively, the "Swap Agreement", which
together with the Trust Agreement, the Securities, and the Control Agreement
are hereinafter collectively referred to herein as the "Documents").
Capitalized terms used and not otherwise defined herein shall have the
respective meanings ascribed thereto in the Documents, as applicable.
We have also obtained or have been furnished with, and have relied
exclusively upon, the Trust Permit and the Charter of the Office of the
Comptroller of the Currency in rendering this opinion. We have made no other
investigations or examinations in rendering this opinion, and our opinions
expressed herein are solely in reliance on the aforementioned documents and on
the Documents. With respect to all documents examined by us, we have
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assumed that (i) all signatures on documents examined by us are genuine, (ii)
all documents submitted to us as originals are authentic, and (iii) all
documents submitted to us as copies conform with the original copies of those
documents.
For the purpose of this opinion, we have assumed (i) the legal
capacity for all purposes relevant hereto of all natural persons, (ii) the due
authorization, execution and delivery by all parties thereto of all documents
examined by us, (iii) that each party to the Documents (other than the Trustee
and the Securities Intermediary) has the power and authority to enter in and
perform all of its obligations thereunder, (iv) that the Documents are the
legal, valid and binding obligations of the Issuer enforceable against the
Issuer in accordance with their terms, and (v) that the Issuer is an "eligible
contract participant" as that term is defined in the Commodity Exchange Act.
Based upon the foregoing, and having regard to legal considerations
which we deem relevant, we are of the opinion that:
1. The Trustee is a national banking association with trust powers
validly existing, duly organized and in good standing under the laws of the
United States of America. The Trustee has all requisite power to execute and
deliver the Documents, perform its obligations thereunder, and to authenticate
the Securities. The Securities Intermediary has all requisite power to execute
and deliver the Control Agreement and to perform its obligations thereunder;
2. The Documents have been duly executed and delivered by the
Trustee and the Control Agreement has been duly executed and delivered by the
Securities Intermediary;
3. The Securities have been authenticated by a duly authorized
signatory of the Trustee; and
4. The Trust Agreement and the Control Agreement each constitutes
the legal, valid and binding obligation of the Trustee, enforceable against
the Trustee in accordance with its terms. The Swap Agreement constitutes the
legal, valid and binding obligation of the Trustee on behalf of the Trust,
enforceable against the Trustee on behalf of the Trust in accordance with its
terms. The Control Agreement constitutes the legal, valid and binding
obligation of the Securities Intermediary, enforceable against the Securities
Intermediary in accordance with its terms.
The opinions set forth above are subject to the following
qualifications and exceptions:
(a) Our opinions in paragraph 4 above are subject to the effect of
applicable receivership, conservatorship, insolvency, reorganization,
moratorium, fraudulent transfer or similar laws of general application
affecting creditors' or secured creditors' rights.
(b) Our opinions in paragraph 4 above are subject to the effect of
general principles of equity, including, without limitation, concepts of
materiality, diligence, reasonableness, good faith and fair dealing, election
of remedies, estoppels and other similar
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doctrines affecting the enforceability of agreements generally in any
proceeding in equity or at law.
(c) The enforceability of provisions in the Documents to the effect
that terms may not be waived or modified except in writing may be limited
under certain circumstances.
(d) The availability of specific performance, injunctive relief and
other equitable remedies is subject to the discretion of the tribunal before
which any proceeding therefor may be brought.
(e) We express no opinion as to the enforceability of provisions of
the Documents to the extent they contain forum selection provisions or waivers
of any constitutional rights or remedies.
(f) We express no opinion as to the enforceability of provisions of
the Documents to the extent they contain cumulative remedies to the extent
such cumulative remedies purport to compensate, or would have the effect of
compensating, the party entitled to the benefits thereof in an amount in
excess of the actual loss suffered by such party.
(g) We express no opinion as to the enforceability of provisions of
the Documents to the extent they contain remedies that are determined to
result in a penalty, or otherwise to result in a recovery that is determined
to be unreasonable in relation to the actual damages or grossly
disproportionate to the actual damages suffered.
(h) We express no opinion with respect to (i) the compliance with,
or the effect of non-compliance with, any federal or state securities laws or
regulations, the Commodity Exchange Act, as amended, or the rules and
regulations of the Commodity Futures Trading Commission promulgated
thereunder, (ii) the creation, validity, perfection or priority of any
security interest granted under any Document, (iii) any indemnification or
contribution provision under any Document or (iv) Section 6(e) of the ISDA
Master Agreement insofar as it relates to the amount of damages payable by a
party upon termination.
The foregoing opinions are limited to matters involving the laws of
the State of New York and the federal laws of the United States of America. We
express no opinion as to any matter other than as expressly set forth above,
and no other opinion may be implied or interpreted herefrom. Our opinions are
rendered only with respect to such laws, and the rules, regulations and orders
thereunder, that are currently in effect, and we disclaim any obligation to
advise you of any change in law or fact that occurs after the date hereof.
This letter is furnished by us solely for your benefit in connection
with the transactions referred to in the Documents and may not be circulated
to, or relied upon by, any other person without our prior written consent.
Sincerely,
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