1
(Multicurrency--Cross Border)
EXHIBIT 10.24
[ISDA LOGO]
International Swap Dealers Association, Inc.
MASTER AGREEMENT
Dated as of August 1, 1995
--------------
XXXXXXX XXXXX CAPITAL SERVICES, INC. and T & W FUNDING COMPANY IV, L.L.C.
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) Definitions. The terms defined in Section 14 and in the Schedule
will have the meanings therein specified for the purpose of this Master
Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
2
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction.
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties make
and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, then in effect. If a party is so
required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving notice
that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net
amount actually received by Y (free and clear of Indemnifiable
Taxes, whether assessed against X or Y) will equal the full amount
Y would have received had no such deduction or withholding been
required. However, X will not be required to pay any additional
amount to Y to the extent that it would not be required to be paid
but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (II) a Change in Tax
Law.
2
3
(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 court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) Consents. All governmental and other consents that are required
to have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) Obligations Binding. Its obligations under this Agreement and
any Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
3
4
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) Absence of Litigation. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) Accuracy of Specified Information. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) Payee Tax Representations. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-
(a) Furnish Specified Information. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to
be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated.
4
5
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, and Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section 2(a)(i)
or 2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d) to be complied with
or performed by the party in accordance with this Agreement if such
failure is not remedied on or before the thirtieth day after notice of
such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any applicable
grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be in
full force and effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) Misrepresentation. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction. (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
5
6
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 a petition instituted
or presented against it, such proceeding or petition (A) results
in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an analogous
effect to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any
of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support
Provider of such party consolidates or amalgamates with or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer.--
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit Support
Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or
pursuant to an agreement reasonably satisfactory to the other
party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of
its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party
or, if applicable any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event
6
7
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below: --
(i) Illegality. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into, or
due to the promulgation of, or any change in, the interpretation by any
court, tribunal or regulatory authority with competent jurisdiction of
any applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party
to perform, any contingent or other obligation which the party
(or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either
case as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) Additional Termination Event. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
7
8
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:-
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the case
of a Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant Termination Event is then
8
9
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving details
of the relevant account to which any amount payable to it is to be paid.
In the absence of written confirmation from the source of a quotation
obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of
any Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such amount
is paid, at the Applicable Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an
Event of Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of
this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A)
the sum of the Settlement Amount (determined by the
9
10
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party
will pay it to the Non-defaulting Party; if it is a negative
number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply,
an amount will be payable equal to the Non-defaulting Party's Loss
in respect of this Agreement. If that amount is a positive
number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will
pay the absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if
Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed to
be references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than
all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions,
and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of
the party with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the Termination
Currency Equivalent of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable equal
to one-half of the difference between the Loss of the party
with the higher Loss ("X") and the Loss of the party with the
lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if
it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will
be subject to such adjustments as are appropriate and permitted by law
to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
10
11
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 lender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this Agreement,
(ii) for the payment of any amount relating to any early termination in respect
of this Agreement or (iii) in respect of a judgment or order of another court
for the payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term "rate of exchange" includes, without limitation, any premiums
and costs of exchange payable in connection with the purchase of or conversion
into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
11
12
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 to it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by
facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which
in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organization of such party, the
obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees
and Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document
12
13
to which the Defaulting Party is a party by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on
the date it is delivered;
(ii) if sent by telex, on the date the recipient's
answerback is received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile
machine);
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the
date that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date
that electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system details
at which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) Governing Law. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the laws
of the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such
party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgment Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any
13
14
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute process
agent acceptable to the other party. The parties irrevocably consent to service
of process given in the manner provided for notices in Section 12. Nothing in
this Agreement will affect the right of either party to serve process in any
other manner permitted by law.
(D) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified
as such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14
15
"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(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority)
and "LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for
performance with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any gain
resulting from any of them). Loss includes losses and costs (or gains) in
respect of any payment or delivery required to have been made (assuming
satisfaction of each applicable condition precedent) on or before the relevant
Early Termination Date and not made, except, so as to avoid duplication, if
Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a
party's legal fees and out-of-pocket expenses referred to under Section 11. A
party will determine its Loss as of the relevant Early Termination Date, or, if
that is not reasonably practicable, as of the earliest date thereafter as is
reasonably practicable. A party may (but need not) determine its Loss by
reference to quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition
precedent) by the parties under Section 2(a)(i) in respect of such Terminated
Transaction or group of Terminated Transactions that would, but for the
occurrence of the relevant Early Termination Date, have
15
16
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as
of the same day and time (without regard to different time zones) on or as soon
as reasonably practicable after the relevant Early Termination Date. The day
and time as of which those quotations are to be obtained will be selected in
good faith by the party obliged to make a determination under Section 6(e),
and, if each party is so obliged, after consultation with the other. If more
than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
lowest values. If exactly three such quotations are provided, the Market
Quotation will be the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation has the same
highest value or lowest value, then one of such quotations shall be
disregarded. If fewer than three quotations are provided, it will be deemed
that the Market Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
16
17
"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).
"Terminated Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obligated to make a determination under Section 6(e), be selected
in good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
18
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for such 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.
XXXXXXX XXXXX CAPITAL SERVICES, INC. T&W FUNDING COMPANY IV, L.L.C.
------------------------------------ ------------------------------
(Name of Party) (Name of Party)
By: /s/ XXX XXXXXX By: /s/ XXX XXXXX
-------------------------------- -------------------------
Name: Xxx Xxxxxx Name: Xxx Xxxxx
Title: VP Title:
Date: 8/23/95 Date: 8/9/95
18
19
SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF AUGUST 1, 1995
BETWEEN
XXXXXXX XXXXX CAPITAL SERVICES, INC.
("PARTY A")
and
T&W FUNDING COMPANY IV, L.L.C.
("PARTY B")
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
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 unless another meaning is specified here: No change from Section
14.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party A and
not to Party B.
If such provisions apply:-
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section 14 of this
Agreement unless another meaning is specified here: No change from Section 14.
"THRESHOLD AMOUNT" means, in respect of Party A, U.S. $20,000,000 or its
equivalent in other currencies.
19
20
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will apply to
Party A and not to Party B. Notwithstanding Section 5(b)(iv) of the Agreement
"Credit Event Upon Merger" means that a Designated Event (as defined below)
occurs with respect to Party A or its Specified Entity and such action does not
constitute an event described in Section 5(a)(viii) but that, in the reasonable
opinion of MBIA Insurance Corporation ("MBIA"), the creditworthiness of the
successor, surviving or transferee entity (which will be the Affected Party) is
materially weaker than that of its predecessor, immediately prior to the
occurrence of the Designated Event. For purposes hereof, a Designated Event
means that, after the Trade Date of a Transaction:
(i) Party A consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets (or any substantial part
of the assets comprising the business conducted by Party A as of the
Trade Date of that Transaction) to, or receives all or substantially all
the assets and obligations of, another entity;
(ii) any person or entity acquires directly or indirectly the beneficial
ownership of equity securities having the power to elect a majority of
the board of directors of Party A; or
(iii) Party A enters into any agreement providing for any of the
foregoing.
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not apply
to Party A or to Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:-
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) ADDITIONAL TERMINATION EVENT will apply. The following shall constitute
and Additional Termination Event:
The rating of the long-term unsecured senior debt of Xxxxxxx Xxxxx &
Co. is downgraded to below (i) A- as determined by Standard & Poor's, a
division of The McGraw Hill Companies, Inc. or (ii) A3 as determined by
Xxxxx'x Investors Service Inc., in either case Party A shall be the
Affected Party.
PART 2
TAX REPRESENTATIONS
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
Party A and Party B will make no representations:-
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make no representations.
20
21
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:- None.
(b) Other Documents to be delivered are: -
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION 3(d)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
------------------ -------------- ------------------- -----------------------
Party A. Annual audited financial Promptly after request. Yes.
statements (in the case
of Party A, of its Credit
Support Provider) prepared
in accordance with generally
accepted accounting principles
in the country in which the
party is organized.
Party A. Quarterly unaudited financial Promptly after request. Yes.
statements (in the case of
Party A, of its Credit Support
Provider) prepared in
accordance with generally
accepted accounting principles
in the country in which the
party is organized.
Party A. A duly executed copy of the At execution hereof. No.
Credit Support Document
specified in Part 4 of the
Schedule.
Party A/Party B. Certificate or other documents At the execution of this Yes.
evidencing the authority of the Agreement, and, if a
party entering into this Agreement Confirmation so requires
or a Confirmation, as the case may it on or before the date set
be. forth therein.
21
22
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION 3(d)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
------------------- ------------------------------ ---------------------------- -----------------------
Party A/Party B. Opinion of outside counsel At the execution of this No.
substantially in the form of Agreement, and, if a
Exhibit B hereto and otherwise Confirmation so requires it,
in form and substance on or before the date
acceptable to Party A. specified therein.
PART 4
MISCELLANEOUS
(a) ADDRESSES FOR NOTICES: For the purpose of Section 12(a) of this Agreement:-
Address for notices or communications to Party A:-
Address: Xxxxxxx Xxxxx World Headquarters, World Financial Center, North
Tower, 22nd Floor, 000 Xxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Swap Group
Telex No.: 6716341 Answerback: MLB SCTR
Facsimile No.: 000 000-0000 Telephone No.: 000 000-0000
(For all purposes)
Address for notices or communications to Party B:-
Address: T&W Funding Company IV, L.L.C., 0000 Xxxxxxx Xxxxxxx Xxxx,
Xxxxxx, XX 00000
Attention: Xxxx Xxxxx
Facsimile No.: 000 000-0000 Telephone No.: 000 000-0000
With copy to:
Address: Norwest Bank Minnesota, National Association, Norwest Center,
6th and Marquette, Xxxxxxxxxxx, XX 00000-0000
Attention: Xxx Xxxxxxxx
Facsimile No.: 000 000-0000 Telephone No.: 000 000-0000
With copy to:
Address: MBIA Insurance Corporation, 000 Xxxx Xxxxxx, Xxxxxx, XX 00000
Attention: Investment Portfolio Management - Structured Finance
Facsimile No.: 000 000-0000 Telephone No.: 000 000-0000
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):-
Party A appoints as its Process Agent: Not Applicable.
Party B appoints as its Process Agent: Not Applicable.
22
23
(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, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:-
Party A:- Guarantee of Xxxxxxx Xxxxx & Co., Inc. ("ML & Co.") in the form
attached hereto as Exhibit A.
Party B:- None.
(g) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A, ML & Co.
Credit Support Provider means in relation to Party B, Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine.
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
will not apply to all Transactions under this Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
PART 5
OTHER PROVISIONS
(1) Section 3 of the Agreement is hereby amended by adding at the end thereof
the following subsection (g):
"(g) ELIGIBLE SWAP PARTICIPANT. It is an "eligible swap participant"
within the meaning of Part 35.1(b)(2) of the General Regulations under the
Commodity Exchange Act."
(2) Party B acknowledges and agrees that (i) Party A is acting solely in the
capacity of an arm's-length contractual counterparty, with respect to this
Agreement and any Transaction hereunder, (ii) Party A is not acting as a
financial advisor or fiduciary of Party B (or in any similar capacity) with
respect to this Agreement and any Transaction hereunder and (iii) any advice
given by Party A under or in connection with this Agreement or any Transaction
is and will be merely incidental to the provision of Party A's services
hereunder and does not and will not serve as a primary basis of any investment
decision by Party B. Party B represents to Party A (which representation shall
be deemed to be repeated by Party B on each date on which a Transaction is
entered into) that its decision to enter into each Transaction has been based
solely on the independent evaluation of Party B and its representatives.
23
24
(3) Notwithstanding the terms of Sections 5 and 6 of this Agreement, if at any
time and so long as one of the parties to this Agreement ("X") shall have
satisfied in full all its payment and delivery obligations under Section 2(a)(i)
of this Agreement and shall at the time have no future payment or delivery
obligations, whether absolute or contingent, under such Section, then unless the
other party ("Y") is required pursuant to appropriate proceedings to return to X
or otherwise returns to X upon demand of X any portion of any such payment or
delivery, (a) the occurrence of an event described in Section 5(a) of this
Agreement with respect to X, any Credit Support Provider of X or any Specified
Entity of X shall not constitute an Event of Default or a Potential Event of
Default with respect to X as the Defaulting Party and (b) Y shall be entitled to
designate an Early Termination Date pursuant to Section 6 of this Agreement only
as a result of the occurrence of a Termination Event set forth in Section
5(b)(i) of this Agreement with respect to Y as the Affected Party.
(4) Sole Transaction. Notwithstanding anything else in this Agreement to the
contrary, only one Transaction shall be governed by this Agreement, which shall
be a fully paid transaction, where Party B is the party which has fully paid its
obligations with respect to such Transaction (a "Party B Fully Paid
Transaction"). No other Transaction may be executed under this Agreement without
the prior written consent of MBIA Insurance Corporation ("MBIA").
(5) No suspension of payments. Notwithstanding Section 2(a)(iii) of this
Agreement, Party A shall not suspend any payments due under Section 2(a)(iii)
unless Party A is also able to designate an Early Termination Event pursuant to
Part 5(3) of this Schedule.
(6) Third-party beneficiary. Party A and Party B hereby each acknowledge and
agree that MBIA shall be an express third-party beneficiary (and not merely and
incidental third-party beneficiary) of this Agreement and the obligations of
such party under the Party B Fully Paid Transaction, and as such, entitled to
enforce the Agreement and the terms of any such Party B Fully Paid Transaction
against such party on its own behalf and/or on behalf of the holders of the T&W
Funding Company IV, L.L.C. Lease-Backed Notes, Series 0000-0, ("xxx Notes")
issued by T&W Funding Company IV, L.L.C.
(7) Assignment on Claim. Party A and Party B hereby acknowledge that to the
extent of payments made by MBIA under any Note Insurance Policy issued by MBIA
relating to the Notes ("the Note Insurance Policy"), Party B has agreed to
assign its right to receive payments under the Party B Fully Paid Transaction
(including, but not limited to, the right to receive payment from Party B and
the enforcement of any remedies) to MBIA. Party A agrees to such assignment if
any claim is ever paid under any Note Insurance Policy relating to the Notes;
but Party A shall be under no obligation to make any payments to MBIA which
would otherwise have been made to Party B until after notice of such claim and
receipt of a copy of such assignment. Party B hereby acknowledges and agrees
that upon receipt of such instrument of assignment by Party A, all amount owed
by Party A to Party B under this Agreement shall be paid to MBIA until MBIA
directs otherwise and payments of such amounts by Party A shall constitute
performance of the related obligation of Party A hereunder.
(8) Assignments. No Party B Fully Paid Transaction may be assigned by either
Party A or Party B without the prior written consent of MBIA. However, Party A
may make such an assignment to an Affiliate of Party A without MBIA's prior
written consent, if Party A's Credit Support Provider provides a guaranty of the
Transaction substantially in the form attached hereto.
(9) Amendment/waivers. No provision of this Agreement may be amended or waived
without the prior written consent of MBIA.
24
25
EXHIBIT A
GUARANTEE OF XXXXXXX XXXXX & CO., INC.
FOR VALUE RECEIVED, receipt of which is hereby acknowledged, XXXXXXX
XXXXX & CO., INC., a corporation duly organized and existing under the laws of
the State of Delaware ("ML & CO."), hereby unconditionally guarantees to T&W
FUNDING COMPANY IV, L.L.C. (the "Company"), the due and punctual payment of any
and all amounts payable by Xxxxxxx Xxxxx Capital Services, Inc., a corporation
organized under the laws of the State of Delaware ("MLCS"), under the terms of
the Master Agreement between the Company and MLCS, dated as of August 1, 1995
(the "Agreement"), including, in case of default, interest on any amount due,
when and as the same shall become due and payable, whether on the scheduled
payment dates, at maturity, upon declaration of termination or otherwise,
according to the terms thereof. In case of the failure of MLCS punctually to
make any such payment, ML & Co. hereby agrees to make such payment, or cause
such payment to be made, promptly upon demand made by the Company to ML & Co.;
provided, however that delay by the Company in giving such demand shall in no
event affect ML & Co.'s obligations under this Guarantee. This Guarantee shall
remain in full force and effect or shall be reinstated (as the case may be) if
at any time any payment guaranteed hereunder, in whole or in part, is rescinded
or must otherwise be returned by the Company upon the insolvency, bankruptcy or
reorganization of MLCS or otherwise, all as though such payment had not been
made.
ML & Co. hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Agreement; the absence of any action to enforce the same; any waiver or consent
by the Company concerning any provisions thereof; the rendering of any judgment
against MLCS or any action to enforce the same; or any other circumstances that
might otherwise constitute a legal or equitable discharge of a guarantor or a
defense of a guarantor. ML & Co. covenants that this guarantee will not be
discharged except by complete payment of the amounts payable under the
Agreement. This Guarantee shall continue to be effective if MLCS merges or
consolidates with or into another entity, loses its separate legal identity or
ceases to exist.
ML & Co. hereby waives diligence; presentment; protest; notice of protest,
acceleration, and dishonor; filing of claims with a court in the event of
insolvency or bankruptcy of MLCS; all demands whatsoever, except as noted in the
first paragraph hereof; and any right to require a proceeding first against
MLCS.
ML & Co. hereby certifies and warrants that this Guarantee constitutes the
valid obligation of ML & Co. and complies with all applicable laws.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
Notwithstanding the foregoing, in the event that MLCS transfers its
obligations to any Affiliate (as defined in the Agreement) pursuant to the
Agreement, the obligations of the Affiliate under such transaction shall be
guaranteed hereunder.
This Guarantee becomes effective concurrent with the effectiveness of the
Agreement, according to its terms.
1
26
IN WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed
in its corporate name by its duly authorized representative.
XXXXXXX XXXXX & CO., INC.
By:
----------------------------------
Name:
Title:
Date:
---------------------------
2
27
EXHIBIT B
[LETTERHEAD OF PARTY B'S COUNSEL]
[DATE]
Xxxxxxx Xxxxx Capital Services, Inc.
World Xxxxxxxxx Xxxxxx Xxxxx Xxxxx
Xxx Xxxx, XX 00000-0000
and
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, X.X. 00000
Dear Sirs:
This opinion is furnished to you pursuant to a Master Agreement dated as
of_____________, 19__ (the "Agreement"), between _____________ ("_________")and
Xxxxxxx Xxxxx Capital Services, Inc. ("MLCS"). Terms defined in the Agreement
are used herein as defined in the Agreement.
I am counsel to _______________________ and in that capacity have examined such
documents and have conducted such investigations of fact and law as I have
deemed necessary or advisable for the opinions expressed herein. The opinions
expressed herein are limited to questions arising under the laws of ___________.
Upon the basis of the foregoing, I am of the opinion that:
1. ________ is a ________ validly organized and existing and in good
standing under the laws of ____________________.
2. The execution, delivery and performance of the Agreement and any
Confirmation, dated on or prior to the date hereof, by _____ are within
___________ 's [corporate] power, have been duly authorized by all necessary
corporate action and do not conflict with, or constitute a default under any
provisions of ____'s articles of incorporation or by-laws (or equivalent
constituent documents) or any applicable law or regulation or of any agreement,
decree, order, judgment, injunction or other instrument known to me and binding
on or affecting ____________'s property or assets.
3. The Agreement has been duly executed and delivered by
___________ and constitutes, and when duly executed and delivered any
Confirmation, dated on or prior to the date hereof, together with the Agreement,
will constitute, a valid and binding obligation of _____________ enforceable
against _________ in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, moratorium, or
other laws affecting the enforcement of creditor's rights generally or by
general equity principles; provided that such counsel does not express any
opinion as to the binding effect of any provision of the Agreement that purports
to make any determination conclusive or conclusive absent manifest error unless
such determination is made reasonably and in good faith.
4. To the best of my knowledge, no consent, authorization, license
or approval of, or registration filing, or declaration with, any governmental
authority of ________________ is required in connection with the execution,
delivery and performance of the Agreement or any Confirmation by
______________________.
28
XXXXXXX XXXXX LOGO
XXXXXXXX X. XXXXXX
Vice President
Senior Counsel
Office of General Counsel
World Financial Center
Xxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
000 000 0000
FAX 000 000 0000
August 24, 1995
T & W Funding Company IV, L.L.C.
0000 Xxxxxxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Dear Sirs:
This opinion is furnished to you pursuant to the Master Agreement,
dated as of August 1, 1995 (the "Agreement"), between T & W Funding Company IV,
L.L.C. and Xxxxxxx Xxxxx Capital Services, Inc. ("MLCS"). Capitalized terms used
but not defined herein have the meanings set forth in the Agreement.
I am employed by Xxxxxxx Xxxxx & Co., Inc. and act as counsel to
MLCS, and in that capacity I have examined such documents and have conducted
such investigations of fact and law as I have deemed necessary or advisable for
the opinions expressed herein. In connection therewith, I have relied as to
certain matters on information obtained from public officials, and employees,
representatives and officers of MLCS and other sources believed by me to be
reliable, and I have assumed that the signatures on all documents examined by me
are genuine and that the Agreement has been duly executed and delivered by you
pursuant to appropriate corporate authority, assumptions which I have not
independently verified.
Upon the basis of the foregoing, I am of the opinion that:
1. MLCS is a corporation validly organized and existing and in good
standing under the laws of the State of Delaware.
2. The execution, delivery and performance of the Agreement, and
any Confirmation dated on or prior to the date hereof, by MLCS are within MLCS's
corporate power, have been duly authorized by all necessary corporate action and
do not conflict with, or constitute a default under, any provisions of MLCS's
certificate of incorporation or by-laws or any applicable law or regulation or
any agreement, decree, order, judgment, injunction or other instrument known to
me and binding on or affecting MLCS's property or assets.
29
XXXXXXX XXXXX LOGO
T&W Funding Company IV, L.L.C.
MBIA Insurance Corporation
August 24, 1995
Page Two
3. The Agreement has been duly executed and delivered by MLCS and
constitutes and when duly executed and delivered any Confirmation dated on or
prior to the date hereof, together with the Agreement, will constitute, a valid
and binding obligation of MLCS enforceable against MLCS in accordance with its
terms, except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization, moratorium or other laws affecting the enforcement
of creditors' rights generally or by general equity principles; provided that I
do not express any opinion as to the binding effect of any provision of the
Agreement that purports to make any determination conclusive or conclusive
absent manifest error unless such determination is made reasonably and in good
faith.
4. To the best of my knowledge, no consent, authorization, license
or approval of, or registration, filing, or declaration with, any governmental
authority of the United States or the State of New York is required in
connection with the execution, delivery and performance of the Agreement or any
Confirmation dated on or prior to the date hereof by MLCS.
I am a member of the bar of the State of New York, and the opinions
expressed herein are limited to questions arising under the laws of the State of
New York and, to the extent relevant to the opinions expressed herein, the
Delaware General Corporation Law and the Federal laws of the United States.
This opinion is provided solely for your benefit in connection with
the Agreement and may not be relied on by, nor copies hereof delivered to, any
other person or entity without my prior written consent.
Very truly yours,
/s/ XXXXXXXX X. XXXXXX
Xxxxxxxx X. Xxxxxx
Vice President and Senior Counsel
30
XXXXXXXX X. XXXXXX
Vice President
Senior Counsel
Office of General Counsel
World Financial Center
North Tower
XXXXXXX XXXXX LOGO Xxx Xxxx, Xxx Xxxx 00000-0000
000 000 0000
FAX 000 000 0000
August 23, 1995
T & W Funding Company IV, L.L.C.
0000 Xxxxxxx Xxxxxxx Xxxx
Xxxxxx, XX 00000
MBIA Insurance Corporation
000 Xxxx Xxxxxx
Xxxxxx, Xxx Xxxx 00000
Dear Sirs:
I am an attorney employed by Xxxxxxx Xxxxx & Co., Inc., a corporation
organized under the laws of the State of Delaware ("Xxxxxxx Xxxxx"), and am
delivering this opinion in connection with the Guarantee of Xxxxxxx Xxxxx
furnished to you pursuant to the Master Agreement (the "Agreement"), dated as of
August 1, 1995 between Xxxxxxx Xxxxx Capital Services, Inc. and T & W Funding
Company IV, L.L.C..
I have examined originals or copies, certified or otherwise identified
to my satisfaction, of such documents, corporate records, certificates of public
officials and other instruments and have conducted such other investigations of
fact and law as I have deemed necessary or appropriate for purposes of this
opinion.
Upon the basis of the foregoing, I am of the opinion that:
(1) Xxxxxxx Xxxxx is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware.
(2) The Guarantee has been duly authorized, executed and delivered by
Xxxxxxx Xxxxx and constitutes the valid and legally binding obligation
of Xxxxxxx Xxxxx enforceable in accordance with its terms, subject, as
to enforcement, to bankruptcy, insolvency, reorganization and other laws
of general applicability relating to or affecting creditors' rights and
to general equity principles.
(3) Xxxxxxx Xxxxx is not required to obtain any authorization, consent,
approval, exemption or license from, or to file any registration with
any governmental authority of the United States of America or the State
of New York as a condition to the validity of, or for the execution,
delivery, and performance of, the Guarantee, or to the exercise by you
of your rights thereunder.
31
XXXXXXX XXXXX LOGO
August 23, 1995
Page Two
(4) The execution, delivery and performance of the Guarantee by Xxxxxxx
Xxxxx will not contravene or constitute a default under any statute,
regulation, or rule of any governmental authority of the United States
of America or the State of New York, the violation of which would have a
material adverse effect on Xxxxxxx Xxxxx'x ability to perform its
obligations under the Guarantee, under its certificate of incorporation
or by-laws (or equivalent constituent documents) or, to the best of my
knowledge, under any order judgement, mortgage, indenture, contract or
other undertaking to which Xxxxxxx Xxxxx is a party or by which Xxxxxxx
Xxxxx or any of Xxxxxxx Xxxxx'x property or assets is bound,
I have relied as to certain matters on information obtained from public
officials, officers of Xxxxxxx Xxxxx and other sources believed by me to be
responsible and I have assumed that the signatures on all documents examined by
me are genuine, assumptions which I have not independently verified.
This opinion is limited to the laws of the State of New York, the Delaware
General Corporation Law and the Federal laws of the United States. The opinions
in this letter are expressed solely as of the date hereof for your benefit and
for the benefit of your successors and permitted assigns under the Agreement and
may not be relied upon in any manner or for any purposes by any other person.
Very truly yours,
/s/ XXXXXXXX X. XXXXXX
----------------------------
Xxxxxxxx X. Xxxxxx
Senior Counsel
32
GUARANTEE OF XXXXXXX XXXXX & CO., INC.
FOR VALUE RECEIVED, receipt of which is hereby acknowledged, XXXXXXX
XXXXX & CO., INC., a corporation duly organized and existing under the laws of
the State of Delaware ("ML & CO."), hereby unconditionally guarantees to T&W
FUNDING COMPANY IV L.L.C. (the "Company"), the due and punctual payment of any
and all amounts payable by Xxxxxxx Xxxxx Capital Services, Inc., a corporation
organized under the laws of the State of Delaware ("MLCS"), under the terms of
the Master Agreement between the Company and MLCS, dated as of August 1, 1995
(the "Agreement"), including, in case of default, interest on any amount due,
when and as the same shall become due and payable, whether on the scheduled
payment dates, at maturity, upon declaration of termination or otherwise,
according to the terms thereof. In case of the failure of MLCS punctually to
make any such payment, ML & Co. hereby agrees to make such payment, or cause
such payment to be made, promptly upon demand made by the Company to ML & Co.;
provided, however that delay by the Company in giving such demand shall in no
event affect ML & Co.'s obligations under this Guarantee. This Guarantee shall
remain in full force and effect or shall be reinstated (as the case may be) if
at any time any payment guaranteed hereunder, in whole or in part, is rescinded
or must otherwise be returned by the Company upon the insolvency, bankruptcy or
reorganization of MLCS or otherwise, all as though such payment had not been
made.
ML & Co. hereby agrees that its obligations hereunder shall be
unconditional, irrespective of the validity, regularity or enforceability of the
Agreement; the absence of any action to enforce the same; any waiver or consent
by the Company concerning any provisions thereof; the rendering of any judgment
against MLCS or any action to enforce the same; or any other circumstances that
might otherwise constitute a legal or equitable discharge of a guarantor or a
defense of a guarantor. ML & Co. covenants that this guarantee will not be
discharged except by complete payment of the amounts payable under the
Agreement. This Guarantee shall continue to be effective if MLCS merges or
consolidates with or into another entity, loses its separate legal identity or
ceases to exist.
ML & Co. hereby waives diligence; presentment; protest; notice of protest,
acceleration, and dishonor; filing of claims with a court in the event of
insolvency or bankruptcy of MLCS; all demands whatsoever, except as noted in the
first paragraph hereof; and any right to require a proceeding first against
MLCS.
ML & Co. hereby certifies and warrants that this Guarantee constitutes the
valid obligation of ML & Co. and complies with all applicable laws.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
This Guarantee may be terminated at any time by notice by ML & Co. to the
Company given in accordance with the notice provisions of the Agreement,
effective upon receipt of such notice by the Cornpany or such later date as may
be specified in such notice; provided, however, that this Guarantee shall
continue in full force and effect with respect to any obligation of MLCS under
the Agreement entered into prior to the effectiveness of such notice of
termination.
This Guarantee becomes effective concurrent with the effectiveness of the
Agreement, according to its terms.
1
33
IN WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed in
its corporate name by its duly authorized representative.
XXXXXXX XXXXX & CO., INC.
By: /s/ XXXXXXX XXXXX
---------------------------
Name: Xxxxxxx Xxxxx
Title: Designated Signatory
Date: August 9, 1995
-------------------------
2
