(Multicurrency-Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of June 26, 2001
CREDIT SUISSE FIRST BOSTON INTERNATIONAL AND LEASE INVESTMENT FLIGHT TRUST
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:-
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master Agreement,
the Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purposes of the relevant
Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely transferable
funds and in the manner customary for payments in the required currency. Where
settlement is by delivery (that is, other than by payment), such delivery will
be made for receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation or elsewhere
in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject
to (1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing, (2) the
condition precedent that no Early Termination Date in respect of the relevant
Transaction has occurred or been effectively designated and (3) each other
applicable condition precedent specified in this Agreement.
(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
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(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.
(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);
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(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such liability
(including any related liability for interest, but including any related
liability for penalties only if Y has failed to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction is
entered into and, in the case of the representations in Section 3(f), at all
times until the termination of this Agreement) that:-
(a) Basic Representations.
(i) Status. It is duly organized and validly existing under the laws
of the jurisdiction of its organization 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 authorize
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, reorganization, insolvency, moratorium or
similar laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application (regardless of
whether enforcement is sought in a proceeding in equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
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(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 Authorizations. 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, organized, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other
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party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:-
(i) Failure to Pay or Deliver. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
required to be made by it if such failure is not remedied on or before the third
Local Business Day after notice of such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to
give notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied on or before the
thirtieth day after notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of such party to
comply with or perform any agreement or obligation to be complied with or
performed by it in accordance with any Credit Support Document if such failure
is continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document or the
failing or ceasing of such Credit Support Document to be in full force and
effect for the purpose of this Agreement (in either case other than in
accordance with its terms) prior to the satisfaction of all obligations of such
party under each Transaction to which such Credit Support Document relates
without the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity of, such
Credit Support Document;
(iv) Misrepresentation. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to have
been made or repeated by the party or any Credit Support Provider of such party
in this Agreement or any Credit Support Document proves to have been incorrect
or misleading in any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit
Support Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs a liquidation of, an
acceleration of obligations under, or an early termination of, that Specified
Transaction, (2) defaults, after giving effect to any applicable notice
requirement or grace period, in making any payment or delivery due on the last
payment, delivery or exchange date of, or any payment on early termination of, a
Specified Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace period) or
(3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity appointed
or empowered to operate it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the Schedule
as applying to the party, the occurrence or existence of (1) a default, event of
default or other similar condition or event (however 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
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Threshold Amount under such agreements or instruments (after giving effect to
any applicable notice requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party:-
(1) is dissolved (other than pursuant to a consolidation, amalgamation or
merger); (2) becomes insolvent or is unable to pay its debts or fails or admits
in writing its inability generally to pay its debts as they become due; (3)
makes a general assignment, arrangement or composition with or for the benefit
of its creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors' rights,
or a petition is presented for its winding-up or liquidation, and, in the case
of any such proceeding or petition instituted or presented against it, such
proceeding or petition (A) results in a judgment of insolvency or bankruptcy or
the entry of an order for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or restrained in each
case within 30 days of the institution or presentation thereof; (5) has a
resolution passed for its winding-up, official management or liquidation (other
than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for it or
for all or substantially all its assets; (7) has a secured party take possession
of all or substantially all its assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced or sued on or against all
or substantially all its assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed or restrained, in each
case within 30 days thereafter; (8) causes or is subject to any event with
respect to it which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or indicating its
consent to, approval of, or acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with or into,
or transfers all or substantially all its assets to, another entity and, at the
time of such consolidation, amalgamation, merger or transfer:-
(1) the resulting, surviving or transferee entity fails to assume all the
obligations of such party or such Credit Support Provider under this Agreement
or any Credit Support Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably satisfactory to the
other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend (without
the consent of the other party) to the performance by such resulting, surviving
or transferee entity of its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event Upon Merger 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 aw 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;
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(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.
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
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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
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
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Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on which
notice of the amount payable is effective (in the case of an Early Termination
Date which is designated as a result of a Termination Event). Such amount will
be paid together with (to the extent permitted under applicable law) interest
thereon (before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding) the date
such amount is paid, at the Applicable Rate. Such interest will be calculated on
the basis of daily compounding and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs,
the following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the parties
fail to designate a payment measure or payment method in the Schedule, it will
be deemed that "Market Quotation" or the "Second Method", as the case may be,
shall apply. The amount, if any, payable in respect of an Early Termination Date
and determined pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date results from an Event
of Default:-
(1) First Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the
excess, if a positive number, of (A) the sum of the Settlement Amount
(determined by the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing
to the Non-defaulting Party over (B) the Termination Currency Equivalent of the
Unpaid Amounts owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive number, the
Non-defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect of the
Terminated Transactions and the Termination Currency Equivalent of the Unpaid
Amounts owing to the Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount
is a positive number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an amount
will be payable equal to the Non-defaulting Party's Loss in respect of this
Agreement. If that amount is a positive number, the Defaulting Party will pay it
to the Non-defaulting Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from
a Termination Event:-
(1) One Affected Party. If there is one Affected Party. the amount payable
will be determined in accordance with Section 6(e)(i)(3), if Market Quotation
applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting Party will be
deemed to be references to the Affected Party and the party which is not the
Affected Party, respectively, and, if Loss applies and fewer than all the
Transactions are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:- (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").
9
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.
7. Transfer
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:-
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e). Any
purported transfer that is not in compliance with this Section will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the
10
purchase of or conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) Evidence of Loss. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
9. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall 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
11
purpose of a Transaction without the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. Expenses
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support Document
to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing and delivered in person or by courier, on the date
it is delivered;
(ii) if sent by 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
12
over such party.
Nothing in this Agreement precludes either party from bringing Proceedings
in any other jurisdiction (outside, if this Agreement is expressed to be
governed by English law, the Contracting States, as defined in Section 1(3) of
the Civil Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) Service of Process. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any 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
13
which the relevant Transaction is entered into.
"Consent" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"Credit Event Upon Merger" has the meaning specified in Section 5(b).
"Credit Support Document" means any agreement or instrument that is
specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the Schedule.
"Default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"Defaulting Party" has the meaning specified in Section 6(a).
"Early Termination Date" means the date determined in accordance with
Section 6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organized, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or enforced,
this Agreement or a Credit Support Document).
"Law" includes any treaty, law, rule or regulation (as modified, in the
case of tax matters, by the practice of any relevant governmental revenue
authority) and "lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign exchange
and foreign currency deposits) (a) in relation to any obligation under Section
2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or determined pursuant
to provisions contained, or incorporated by reference, in this Agreement, (b) in
relation to any other payment, in the place where the relevant account is
located and, if different, in the principal financial center, 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
14
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or prices
from one or more leading dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount determined on the
basis of quotations from Reference Market-makers. Each quotation will be for an
amount, if any, that would be paid to such party (expressed as a negative
number) or by such party (expressed as a positive number) in consideration of an
agreement between such party (taking into account any existing Credit Support
Document with respect to the obligations of such party) and the quoting
Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in respect
of such Terminated Transaction or group of Terminated Transactions that would,
but for the occurrence of the relevant Early Termination Date, have been
required after that date. For this purpose, Unpaid Amounts in respect of the
Terminated Transaction or group of Terminated Transactions are to be excluded
but, without limitation, any payment or delivery that would, but for the
relevant Early Termination Date, have been required (assuming satisfaction of
each applicable condition precedent) after that Early Termination Date is to be
included. The Replacement Transaction would be subject to such documentation as
such party and the Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each Reference Market-maker
to provide its quotation to the extent reasonably practicable as of the same day
and time (without regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected in good faith by the
party obliged to make a determination under Section 6(e), and, if each party is
so obliged, after consultation with the other. If more than three quotations are
provided, the Market Quotation will be the arithmetic mean of the quotations,
without regard to the quotations having the highest and lowest values. If
exactly three such quotations are provided, the Market Quotation will be the
quotation remaining after disregarding the highest and lowest quotations. For
this purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If fewer than three
quotations are provided, it will be deemed that the Market Quotation in respect
of such Terminated Transaction or group of Terminated Transactions cannot be
determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof
or evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's
head or home office.
"Potential Event of Default" means any event which, with the giving of
notice or the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant
market selected by the party determining a Market Quotation in good faith (a)
from among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or to
make an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions
(a) in which the party is incorporated, organized, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to
be made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the payer of
an amount under Section 6 is entitled or subject (whether arising under this
Agreement, another contract, applicable law or otherwise) that is exercised by,
or imposed on, such payer.
15
"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.
"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 an applicable Specified Entity of such party)
and the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is a
rate swap transaction, basis swap, forward rate transaction, commodity swap,
commodity option, equity or equity index swap, equity or equity index option,
bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and additions
thereto) that is imposed by any government or other taxing authority in respect
of any payment under this Agreement other than a stamp, registration,
documentation or similar tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date
(a) if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency amount and,
in respect of any amount denominated in a currency other than the Termination
Currency (the "Other Currency"), the amount in the Termination Currency
determined by the party making the relevant determination as being required to
purchase such amount of such Other Currency as at the relevant Early Termination
Date, or, if the relevant Market Quotation or Loss (as the case may be), is
determined as of a later date, that later date, with the Termination Currency at
the rate equal to the spot exchange rate of the foreign exchange agent (selected
as provided below) for the purchase of such Other Currency with the Termination
Currency at or about 11:00 a.m. (in the city in which such foreign exchange
agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant
Early Termination Date or that later date. The foreign exchange agent will, if
only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the
parties.
16
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or an
Additional Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of
the cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become payable
but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to
such Early Termination Date and which remain unpaid as at such Early Termination
Date and (b) in respect of each Terminated Transaction, for each obligation
under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii))
required to be settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market value of that which was (or would have
been) required to be delivered as of the originally scheduled date for delivery,
in each case together with (to the extent permitted under applicable law)
interest, in the currency of such amounts, from (and including) the date such
amounts or obligations were or would have been required to have been paid or
performed to (but excluding) such Early Termination Date, at the Applicable
Rate. Such amounts of interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. The fair market value of any
obligation referred to in clause (b) above shall be reasonably determined by the
party obliged to make the determination under Section 6(e) or, if each party is
so obliged, it shall be the average of the Termination Currency Equivalents of
the fair market values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on the
first page of this document.
CREDIT SUISSE FIRST BOSTON INTERNATIONAL LEASE INVESTMENT FLIGHT TRUST
(Name of Party) (Name of Party)
By /s/ Xxx Xxxxxxx By: /s/ Xxxxx X. Xxxxxxxx
---------------------- --------------------------
Name: Xxx Xxxxxxx Name: Xxxxx X. Xxxxxxxx
Title: Vice President Title: Administrative Account
Manager
By: /s/ Xxxxxx Xxxxxx
----------------------
Name: Xxxxxx Xxxxxx
Title: Attorney-in-Fact
17
SCHEDULE
to the
MASTER AGREEMENT
dated as of June 26, 2001 between
CREDIT SUISSE FIRST BOSTON INTERNATIONAL ("PARTY A")
and LEASE INVESTMENT FLIGHT TRUST ("PARTY B")
PART 1. TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" means, with respect to Party A and Party B for all
purposes of this Agreement, none.
(b) "SPECIFIED TRANSACTION" has its meaning as defined in Section 14 of this
Agreement.
(c) "CROSS DEFAULT" applies to Party A and does not apply to Party B.
"SPECIFIED INDEBTEDNESS" has its meaning as defined in Section 14 of this
Agreement.
"THRESHOLD AMOUNT" means, with respect to Party A, an amount (including its
equivalent in another currency) equal to 2% of its stockholders' equity as
reflected on its most recent financial statements or call reports.
(d) "CREDIT EVENT UPON MERGER" applies to Party A and does not apply to Party
B.
(e) "AUTOMATIC EARLY TERMINATION" does not apply to either party.
(f) PAYMENTS ON EARLY TERMINATION. "Market Quotation" and the "Second Method"
apply.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) LIMITATION ON DEFAULTS BY PARTY B.
(i) The Events of Default specified in Section 5 of this Agreement shall
not apply to Party B except for the following:
(A) Section 5(a)(i) of this Agreement (Failure to Pay or Deliver),
(B) Section 5(a)(iii) of this Agreement (Credit Support Default),
(C) Section 5(a)(viii) of this Agreement (Merger without Assumption).
(i) ADDITIONAL TERMINATION EVENTS.
(i) The occurrence of any of the following events shall be an Additional
Termination Event:
(A) the unsecured and unsubordinated debt, deposit or letter of credit
obligations of Party A are rated below (x) the Minimum Rating by any
Rating Agency, and Party A fails to provide Credit
1
Support (as defined in Part 6 below) or to make a Permitted Transfer
(as defined in Part 6 below) within 30 days of Party B's request
therefor or (y) the Required Rating by any Rating Agency, and Party A
fails to make a Permitted Transfer within 30 days of Party B's request
therefor;
(B) the Security Trustee declares an Additional Termination Event and
designates an Early Termination Date by notice given to Party A in
order to realize upon the Swap Collateral as described in paragraph
(b) of Part 6 of this Schedule; or
(C) Party B fails to comply with sub-paragraph (g) of Part 6 of this
Schedule; any representation made by Party B in sub-paragraph (g) of
Part 6 of this Schedule fails to be true and correct; any "Default
Notice" is given or any "Acceleration Default" occurs under the
Indenture.
(ii) For purposes of the right to terminate under Section 6(b)(iv), Party A
will be the Affected Party for any Additional Termination Event described
in clause (A) of sub-paragraph (i) above, and Party B will be the Affected
Party for the other Additional Termination Event.
(iii) Notwithstanding which party is the Affected Party for any Additional
Termination Event, upon the occurrence of an Early Termination Date for any
Additional Termination Event, Party A shall make the calculations under
Section 6(e) of this Agreement as though it were the non-Affected Party for
purposes of Section 6(e)(ii)(1) of this Agreement.
(iv) "MINIMUM RATING" means a short term rating of "P-1" and a long term
rating of "A2" from Moody's and a short term rating of F1 from Fitch.
(v) "REQUIRED RATING" means a short term rating of "A-1" from S&P and a
short-term rating of "F2" from Fitch.
(vi) "RATING AGENCY" means each of Standard & Poor's Ratings Services, a
division of XxXxxx-Xxxx, Inc. ("S&P"), Xxxxx'x Investor Services, Inc
("MOODY'S") and Xxxxx, Inc. ("FITCH"), in each only so long as any such
Person is, at the time of determination, rating the Notes issued under the
Indenture.
PART 2. TAX PROVISIONS
(a) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, each party makes the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement.
In making this representation, a party may rely on (i) the accuracy of any
representations made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any
2
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, provided that
it shall not be a breach of this representation where reliance is placed on
clause (ii) above and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement:
(i) Party A makes no representations..
(ii) Party B represents that it is a statutory business trust formed under
the laws of the State of Delaware.
(c) MODIFIED TAX PROVISIONS.
Notwithstanding any contrary provision in this Agreement, Party A may not
designate an Early Termination Date in respect of any Tax Event or Tax Event
Upon Merger, and Party A's sole remedy in respect thereof shall be to make a
Permitted Transfer.
PART 3. DOCUMENTS
(a) DELIVERY OF DOCUMENTS. When it delivers this Agreement, each party shall
also deliver its Closing Documents to the other party in form and substance
reasonably satisfactory to the other party. For each Transaction, a party
shall deliver, promptly upon request, a duly executed incumbency
certificate for the person(s) executing the Confirmation for that
Transaction on behalf of that party.
(b) CLOSING DOCUMENTS.
(i) For Party A, "CLOSING DOCUMENTS" mean:
(A) evidence reasonably satisfactory to Party B as to the names, true
signatures and authority of the officers or officials signing this
Agreement or any Confirmation on Party A's behalf; and
(B) opinions of Party A's counsel in the form of Exhibit B-1 and B-2
hereto addressed to Party B.
(ii) For Party B, "CLOSING DOCUMENTS" mean:
(A) opinions of Party B's counsel addressed to Party A in the form of
Exhibit C-1 [Delaware formation and powers] and C-2 [enforceability
under New York law] hereto;
(B) a copy, certified by the secretary or assistant secretary of the
Owner Trustee (as defined in the Indenture) of Party B, of the
resolutions of Party B's Controlling Trustees (as defined in the
Indenture) authorizing the execution, delivery and performance by
Party B of this Agreement and authorizing Party B to enter into
Transactions hereunder; and
(C) a duly executed certificate of the secretary or assistant
secretary of the Owner Trustee of Party B certifying the name and true
signature of each person authorized by the Owner Trustee
3
(in its capacity as such and not in its individual capacity ) to
execute this Agreement and Transactions for Party B.
(c) CONFIRMATIONS. Confirmations shall be substantially in the form of Exhibit
"A" hereto unless otherwise agreed in writing by the Party A and Party B
with the consent of the Security Trustee .
PART 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES.
TO PARTY A:
(1) Address for notices or communications to Party A (other than by
facsimile):
Address: One Cabot Square Attention: (1) Head of Credit Risk Management;
Xxxxxx X00 0XX (2) Managing Director - Operations Department
England (3) Managing Director - Legal Department
Telex No.: 264521 Answerback: CSFBI G
(For all purposes.)
(2) For the purpose of facsimile notices or communications under this
Agreement (other than a notice or communication under Section 5 or 6):
Facsimile No.: 020 7888 2686
Attention: Managing Director - Legal Department
Telephone number for oral confirmation of receipt of facsimile in
legible form: 020 b7888 2028 Designated responsible employee for the
purposes of Section 12(a)(iii): Senior Legal Secretary
TO PARTY B
LEASE INVESTMENT FLIGHT TRUST
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Corporate Trust Administration
(b) "CALCULATION AGENT" means Party A.
(c) PROCESS AGENT. For the purposes of Section 13(c):
Party A appoints as its Process Agent: Credit Suisse First Boston, Eleven
Madison Avenue, New York, NY 10010 (attention: General Counsel, Legal and
Compliance Department).
Party B appoints as its Process Agent: None
(d) OFFICES. Section 10(a) applies.
4
(e) MULTIBRANCH PARTY. Neither party is a Multibranch Party.
(f) CREDIT SUPPORT DOCUMENT.
(i) For Party A, the following is a Credit Support Document: Credit Support
Annex dated as of the date hereof or any guarantee provided under clause
(d) of Part 6 below.
(ii) For Party B, the following is a Credit Support Document: the Security
Trust Agreement (as defined in the Indenture) and the supplement thereto
between the Security Trustee (as defined in the Indenture) and Party A .
(g) CREDIT SUPPORT PROVIDER.
(i) For Party A, Credit Support Provider means: any provider of a guarantee
constituting Credit Support under clause (d) of Part 6 below.
(ii) For Party B, Credit Support Provider means: none specified.
(h) "AFFILIATE" has its meaning as defined in Section 14 of this Agreement.
(i) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law (and not the law of conflicts) of the State of New
York.
(j) WAIVER OF JURY TRIAL. To the extent permitted by applicable law, each party
irrevocably waives any and all right to trial by jury in any legal
proceeding in connection with this Agreement, any Credit Support Document
to which it is a party, or any Transaction.
(k) NETTING OF PAYMENTS. Subparagraph of Section 2(c) of this Agreement will
apply from the date of this Agreement. Nevertheless, to reduce settlement
risk and operational costs, the parties agree that they will endeavour to
net across as many Transactions as practicable wherever the paties can
administratively do so.
(l) RECORDED CONVERSATIONS. Each party may electronically record all telephone
conversations between them in connection with this Agreement or any
Transaction, and any such recordings may be submitted in evidence in any
proceeding to establish any matters pertinent to this Agreement or any
Transaction.
(m) ADDITIONAL REPRESENTATIONS. Section 3 of this Agreement is amended by
adding the following Sections 3(g), 3(h) and (3)(i):
"(g) NON-RELIANCE. For any Relevant Agreement: (i) it acts as principal and
not as agent, (ii) it acknowledges that the other party acts only at arm's
length and is not its agent, broker, advisor or fiduciary in any respect,
and any agency, brokerage, advisory or fiduciary services that the other
party (or any of its affiliates) may otherwise provide to the party (or to
any of its affiliates) excludes the Relevant Agreement, (iii) it is relying
solely upon its own evaluation of the Relevant Agreement (including the
present and future results, consequences, risks, and benefits thereof,
whether financial, accounting, tax, legal, or otherwise) and upon advice
from its own professional advisors, (iv) it understands the Relevant
Agreement and those risks, has determined they are appropriate for
5
it, and willingly assumes those risks, and (v) it has not relied and will
not be relying upon any evaluation or advice (including any recommendation,
opinion, or representation) from the other party, its affiliates or the
representatives or advisors of the other party or its affiliates (except
representations expressly made in the Relevant Agreement or an opinion of
counsel required thereunder).
RELEVANT AGREEMENT" means this Agreement, each Transaction, each
Confirmation, any Credit Support Document, and any agreement (including any
amendment, modification, transfer or early termination) between the parties
relating thereto or to any Transaction.
(h) COMMODITY EXCHANGE ACT. Each party represents to the other party as of
the date hereof and on each date hereafter on which a Transaction is
entered into between them that:
(1) each Transaction is intended to be exempt from, or otherwise not
subject to regulation under, the Commodity Exchange Act; and
(2) such party is an "eligible contract participant" within the
meaning of Section 1a(12) of the Commodity Exchange Act.
PART 5. ISDA DEFINITIONS
(a) INCORPORATION. This Agreement and each Transaction are subject to the 1991
ISDA Definitions, as amended and supplemented by the 1998 Supplement to the
ISDA Definitions, published by the International Swaps and Derivatives
Association, Inc. (together, the "ISDA Definitions") and will be governed
by the provisions of the ISDA Definitions, without regard to any amendments
to the ISDA Definitions subsequent to the date hereof. The provisions of
the ISDA Definitions are incorporated by reference in, and shall be deemed
part of, this document and each Confirmation.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
this document and the ISDA Definitions, this document will prevail.
PART 6. OTHER PROVISIONS
(a) PERMITTED TRANSFERS.
(i) Notwithstanding Section 7 of this Agreement, Party A may make a
Permitted Transfer without the prior written consent of Party B if either
of the following events occurs:
(A) the unsecured and unsubordinated debt, obligations of Party A are
rated below the Required Rating or the Minimum Rating by any Rating
Agency at the time of the transfer; or
(B) any Tax Event or Tax Event Upon Merger exists with respect to
Party A at the time of the transfer.
(ii) "PERMITTED TRANSFER" means a transfer, in whole but not in part, of
all of Party A's rights and obligations under this Agreement and which
meets all of the following requirements:
(A) the transferee is a recognized dealer in interest rate swaps
organized under the laws
6
of the United States of America or a jurisdiction located in the
United States of America reasonably acceptable to Party B;
(B) the unsecured and unsubordinated debt, deposit or letter of credit
obligations of the transferee are rated at least equal to the Required
Rating and the Minimum Rating by each Rating Agency;
(C) neither an Event of Default with respect to the transferee nor a
Termination Event would exist immediately after that transfer;
(D) the transferee executes and delivers a written agreement
reasonably satisfactory to Party B and the Security Trustee under the
Security Trust Agreement in which the transferee, among other things,
legally and effectively accepts all the rights and assumes all the
obligations of Party A under this Agreement and executes a supplement
to the Security Trust Agreement in substantially the same form as
executed by Party A;
(E) each Rating Agency is notified of the proposed transfer and there
is submitted to each Rating Agency the name of the proposed
transferee, drafts of the documents referred to in clause (C) above
and such information as the Rating Agencies may reasonably request in
connection with such proposed transfer.
(b) PERMITTED SECURITY INTEREST. For purposes of Section 7 of this Agreement,
Party A hereby consents to the Permitted Security Interest, subject to the
provisions of paragraph (c) below.
"PERMITTED SECURITY INTEREST" means the collateral assignment by Party B of
the Swap Collateral to the Security Trustee pursuant to the Security Trust
Agreement, and the granting to the Security Trustee of a security interest
in the Swap Collateral pursuant to the Security Trust Agreement.
"SWAP COLLATERAL" means all right, title and interest of Party B in this
Agreement, each Transaction hereunder, any Credit Support Document and all
present and future amounts payable by Party A (and any Credit Support
Provider) to Party B under or in connection with this Agreement or any
Transaction governed by this Agreement, whether or not evidenced by a
Confirmation, including, without limitation, any transfer or termination of
any such Transaction.
(c) EFFECT OF PERMITTED SECURITY INTEREST.
(i) The Permitted Security Interest shall not impair the right of Party A
to designate an Early Termination Date in accordance with the terms of this
Agreement or to make the determinations and calculation that it is entitled
to make under this Agreement. Party A agrees that all payments to be made
to it hereunder by Party B shall be made solely from and to the extent of
Available Collections and that all such payments and (except as provided in
the immediately preceding sentence) the exercise of rights and remedies in
respect of this Agreement by Party A shall be subject to the Security Trust
Agreement, including without limitation Article VII thereof.
(ii) Party A's consent to the Permitted Security Interest is expressly
limited to the encumbrance of the Swap Collateral in favor of the Security
Trustee for the benefit of the secured parties under the Security Trust
Agreement, and Party A does not consent to the sale or transfer by the
Security Trustee of the Swap Collateral to any other person or entity
(other than a successor to the Security
7
Trustee under the Security Trust Agreement acting in that capacity), and
the manner in which the Security Trustee may realize upon the Swap
Collateral shall be to declare an Additional Termination Event and
designate an Early Termination Date by notice given to Party A pursuant to
the Additional Termination Event provisions of this Schedule.
(iii) Party B hereby acknowledges that, as a result of the Permitted
Security Interest, all of its rights under this Agreement, including any
Transaction, have been assigned to the Security Trustee pursuant to the
Security Trust Agreement, and notwithstanding any other provision in this
Agreement, all such rights of Party B and its exercise of such rights are
subject to the terms of the Security Trust Agreement and the Indenture.
Party A shall be entitled to and shall follow any instruction given by the
Security Trustee that Party B would be entitled to give without the further
consent of Party B, without any duty to inquire of, or give notice to,
Party B and notwithstanding any contrary or inconsistent instruction given
by Party B. If Party B gives any notice to Party A for the purposes of
exercising any of Party B's rights under this Agreement, Party A shall have
the option of treating that notice as void unless that notice is signed by
the Security Trustee acknowledging its consent to the provisions of that
notice.
(iv) Until receipt by Party A of written notice from the Security Trustee
to the contrary, Party A and Party B may enter into any Transactions
hereunder without giving prior notice to, or obtaining the prior consent
of, the Trustee provided that such Transactions meet the requirements of
Section 5.02(e)(iv) of the Indenture.
(d) CHANGE IN PARTY A'S RATING.
(i) if at any time the unsecured and unsubordinated debt, obligations of
Party A are not rated at least equal to the Minimum Rating by any Rating
Agency, Party A may, and at Party B's request shall within 30 days after
such request, either
(A) provide collateral in accordance with the terms of the Credit
Support Annex;
(B) obtain an absolute and unconditional guarantee of its obligations
under this Agreement, reasonably satisfactory to Party B and the
Security Trustee from a guarantor (a "Qualified Provider") that meets
the requirements of subclauses (ii)(A) and (ii)(C) of clause (a) of
this Part 6 and whose unsecured and unsubordinated debt, deposit or
letters of credit obligations are then rated at least equal to the
Minimum Rating (such guarantee or any collateral under subclause (A)
above, "CREDIT SUPPORT"); or
(C) make a Permitted Transfer in accordance with clause (a) of this
Part 6.
Party A shall notify each Rating Agency of the proposed action, and provide
them with the name of any guarantor, draft of any proposed guaranty and
such information as the Rating Agencies may reasonably request in
connection with any such action (or, in the case of clause (C), as is
required by subclause (ii) of clause (a) of this Part 6)
(ii) if at any time the unsecured and unsubordinated debt, obligations of
Party A are not rated at least equal to the Required Rating, Party A shall
within 30 days of Party B's request therefor, make a Permitted Transfer in
accordance with clause (a) of this Part 6.
8
(e) PAYMENTS. All payments to Party B under this Agreement or any Transaction
shall be made to the "Collection Account" as defined in the Indenture.
(f) SET-OFF. The following Set-off provisions shall apply:
In connection with the Permitted Security Interest, Party A hereby waives
any and all right to counterclaim or set-off against the Swap Collateral,
whether arising by contract, operation of law or otherwise, provided that
nothing herein shall be construed as limiting the provisions contained in
Sections 2(c) and 6(e) of this Agreement with respect to the netting of the
parties respective obligations under this Agreement
(g) INDENTURE.
(i) On the date Party B executes and delivers this Agreement and on each
date on which a Transaction is entered into, Party B hereby represents and
warrants to Party A: that this Agreement constitutes a "Swap Agreement"
under the Indenture; that Party A constitutes a "Swap Provider " under the
Indenture; that the payment to be made by Party B hereunder constitute
Senior Swap Payments under the Indenture; that no Default Notice with
respect to the Senior Class has been given and no "Acceleration Event" has
occurred and is continuing under the Indenture; that nothing herein
violates or conflicts with any of the provisions of any of the Indenture or
any other documents executed in connection therewith. In addition, on each
date on which a Transaction is entered into, Party B hereby represents and
warrants to Party A: that the Transaction meets all of the requirements of
Section 5.02(e)(iv) of the Indenture and does not violate or conflict with
any of the provisions of any of the Indenture or any other documents
executed in connection therewith; and that, under the terms of the
Indenture, neither the consent of the Trustee nor of the Security Trustee
is required for Party B to enter into that Transaction or (subject to the
terms of the Security Trust Agreement and the supplement thereto executed
by Party A) for Party A to be entitled to the rights, interests and
benefits granted to Party A under the Indenture and the Security Trust
Agreement for that Transaction.
(h) CONSENT TO NOTICE & COMMUNICATIONS. Party B hereby consents to the
execution by Party A of a supplement to the Security Trust Agreement and
the giving to the Trustee and the Security of notice by Party A of Party
A's address and telecopy and telephone numbers for all purposes of the
Indenture and the Security Trust Agreement, and in addition, Party A shall
also be entitled at any time to provide the Trustee and the Security
Trustee with copies of this Agreement, including all Confirmations. In
addition, Party A shall not be precluded from communicating with the
Trustee, the Security Trustee or the Administrative Agent (as defined in
the Indenture) in connection with any of Party A's rights or remedies under
this Agreement, Indenture or the Security Trust Agreement.
(i) NO BANKRUPTCY PETITION. With respect to any amounts owed by Party B under
this Agreement, Party A agrees that, prior to the date which is at least
one year and one day after all of the Notes (as defined in the Indenture)
have been paid in full, it will not, prior to the expiration of the
aforementioned one-year and one-day period or, if longer, the applicable
preference period then in effect, institute against, or join any other
person or entity in instituting against, Party B any bankruptcy,
reorganization, arrangement, insolvency, moratorium or liquidation
proceedings under federal or state bankruptcy or similar laws, provided
that nothing herein shall preclude, or be deemed to estop, Party A from (i)
taking any action prior to the expiration of the aforementioned
9
one-year and one-day period of, if longer, the applicable preference period
then in effect in (A) any case or proceeding voluntarily filed or commenced
by Party B or (B) in any involuntary case or insolvency proceeding filed or
commenced against party B or any of its properties any legal action that is
not a bankruptcy, reorganization, arrangement, insolvency, moratorium or
liquidation proceeding.
(j) CHANGE OF ACCOUNT. Section 2(b) of this Agreement is hereby amended by the
addition of the following after the word "delivery" in the first line
thereof:
"to another account in the same legal and tax jurisdiction as the original
account:
10
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
By: /s/ Xxx Xxxxxxx
--------------------------------
Name: Xxx Xxxxxxx
Title: Vice President
By: /s/ Xxxxxx Xxxxxx
--------------------------------
Name: Xxxxxx Xxxxxx
Title: Attorney-in-Fact
LEASE INVESTMENT FLIGHT TRUST
BY WILMINGTON TRUST COMPANY,
NOT IN ITS INDIVIDUAL CAPACITY BUT
SOLELY AS THE OWNER TRUSTEE
By: /s/ Xxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Administrative Account
Manager
11
EXHIBIT A
SWAP TRANSACTION
CONFIRMATION
DATE: ________________________
TO: ________________________ ("Counterparty")
ADDRESS: ________________________
FAX: ________________________
ATTN: ________________________
FROM: CREDIT SUISSE FIRST BOSTON INTERNATIONAL ("CSFB")
REF. NO. ________________________
Dear ___________________:
This confirms the terms of the Transaction described below between Counterparty
and CSFB. This Transaction is subject to the 1991 ISDA Definitions, as amended
and supplemented by the 1998 Supplement to the 1991 ISDA Definitions, published
by the International Swaps and Derivatives Association, Inc. (together, the
"ISDA Definitions"), which are incorporated herein by reference. Fixed Amounts
and Floating Amounts for each applicable Payment Date hereunder will be
calculated in accordance with the ISDA Definitions, and if any Fixed Amount and
Floating Amount are for the same Payment Date hereunder, then those amounts
shall not be payable and instead the Fixed Rate Payer shall pay the positive
difference, if any, between the Fixed Amount and the Floating Amount, and the
Floating Rate Payer shall pay the positive difference, if any, between the
Floating Amount and the Fixed Amount.
Transaction Type: Interest Rate Swap
----------------
Currency for Payments: U.S. Dollars
---------------------
Notional Amount: [$_________________] [for a Calculation
--------------- Period, the amount set forth opposite
that Calculation Period on attachment I
hereto]
Term
----
Trade Date: __________________
Effective Date: __________________
Termination Date: __________________, subject to the
Modified Following Business Day
Convention
Fixed Amounts
-------------
A-1
Fixed Rate Payer: [Counterparty] [CSFB]
Payment Dates: __________________
[___ New York Banking Days after Period
End Dates]
[Period End Dates: ________________]
Business Day Convention: [Modified Following] [Following]
[Preceding]
Business Day: [New York] [New York and London]
Fixed Rate: _____%
Fixed Rate Day Count Fraction: ______________
Floating Amounts
----------------
Floating Rate Payer: [CSFB] [Counterparty]
Payment Dates: ________________
[___ New York Banking Days after Period
End Dates]
[Period End Dates: ________________]
Business Day Convention: [Modified Following] [Following]
[Preceding]
Business Day: [New York] [New York and London]
Floating Rate for initial
Calculation Period: [Determined two London Banking Days
before the Effective Date] [______%
(includes Spread)]
Floating Rate Option: ____________
Designated Maturity: ____________
Spread: [None] [Plus/Minus ________%]
Floating Rate Day Count
Fraction: _______________
Floating Rate determined: [Two London Banking Days prior to each
Reset Date] [On each Reset Date]
Reset Dates: The first day of each [Calculation]
[Compounding] Period
[Each New York Banking Day in the
[Calculation] [Compounding] Period]
[Method of Averaging: [Unweighted Average] [Weighted Average]
Compounding: [Inapplicable] [Applicable]
[Compounding Dates: ____________________]]
Rounding convention: 5 decimal places per the ISDA Definitions
Calculation Agent: CSFB
-----------------
Payments to CSFB:
----------------
A-2
CSFB Settlements:
----------------
CSFB Address:
------------
Payments to Counterparty: as specified in the Schedule to the
------------------------ Master Agreement.
.
Documentation
This Confirmation supplements, forms part of and will be governed by the Master
Agreement dated as of ____________ between Counterparty and CSFB.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing a copy of this Confirmation and returning it to us by fax
at [ ] (attention Derivatives Documentation).
Very truly yours,
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
By: ___________________________
Name:
Title:
By: ___________________________
Name:
Title:
Accepted and confirmed as
of the date first above written:
_____________________________________
By:______________________________
Name:
Title:
A-3
ATTACHMENT I
Calculation Period Notional Amount
------------------ ---------------
(from and including, to but excluding)
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
_____________ to _____________ $__________________
Dates subject to the Business Day convention set forth in the Confirmation.
X-0
XXXXXXX X-0
[Form of Opinion of Counsel to Party A]
[Date]
Party B
[Address]
Re: Master Swap Agreement
Ladies and Gentlemen:
I am the [title] and have acted as counsel to Credit Suisse
First Boston International ("Party A") in connection with the Master Swap
Agreement dated as of June __, 2001 (the "Agreement") between Party A and Lease
Investment Flight Trust ("Party B"). All capitalized terms defined in the
Agreement are used with the same meanings, unless otherwise defined, in this
opinion letter.
In rendering the opinions expressed below, I have examined
(a)(i) the Agreement and (ii) the Credit Support Annex (collectively with the
Agreement, the "Documents") and (b) such corporate records of Party A and such
other documents as I have deemed necessary as a basis for the opinions expressed
below. In my examination, I have assumed the genuineness of all signatures, the
authenticity of documents submitted to me as originals, the conformity with
authentic original documents of all documents submitted to me as copies and, in
the case of documents executed prior to the date of this opinion letter, that
there has been no course of conduct that would alter the terms of these
documents from those reviewed by me. As to relevant facts, I have relied upon
statements of governmental officials.
In rendering the opinions expressed below, I have assumed
(except, to the extent set forth below, as to Party A) that all of the documents
referred to in this opinion have been duly authorized by, have been or will be
executed and delivered by, and constitute legal, valid, binding and enforceable
obligations of, all of the parties to those documents, that all signatories to
those documents have been duly authorized and that all such parties are duly
organized and validly existing and have the power and authority (corporate,
partnership, company, trust or other) or, in the case of individuals, the legal
capacity, to execute, deliver and perform those documents.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as I have deemed necessary as a basis for the opinions
expressed below, I am of the opinion that:
(i) Party A is a [ ] duly incorporated, validly existing and
in good standing under the laws of the [ ] and has the corporate power to
execute and deliver, and perform its obligations under, the Documents.
B-1-1
(ii) The execution and delivery by Party A of, and the
performance by it of its obligations under, the Documents have been duly
authorized by all necessary corporate action on its part.
(iii) Party A has duly executed and delivered the Documents.
(iv) No authorization, consent or other approval of, or
registration, declaration or other filing with, any governmental authority of
the United States of America is required on the part of Party A for the
execution and delivery by it of, or for the performance by Party A of its
obligations under, the Documents, except as may be necessary for the creation,
perfection or priority of the Liens of the Credit Support Annex.
The foregoing opinions are limited to matters involving the
federal laws of the United States of America, and we do not express any opinion
as to any other laws.
This opinion letter is provided to you by us as counsel to
Party A pursuant to the Agreement and may not be relied upon by any other person
or for any purpose other than in connection with the transactions contemplated
by the Documents without our prior written consent in each instance.
Very truly yours,
X-0-0
Xxxxxxx X-0
[Form of Opinion of Counsel to Party A]
[Date]
Party B
[Address]
Re: Master Swap Agreement
Ladies and Gentlemen:
We have acted as counsel to Credit Suisse First Boston
International ("Party A") in connection with the Master Swap Agreement dated as
of June __, 2001 (the "Agreement") between Party A and Lease Investment Flight
Trust ("Party B"). All capitalized terms defined in the Agreement are used with
the same meanings, unless otherwise defined, in this opinion letter.
In rendering the opinions expressed below, we have examined
(a)(i) the Agreement and (ii) the Credit Support Annex (collectively with the
Agreement, the "Documents") and (b) such other documents as we have deemed
necessary as a basis for the opinions expressed below. In our examination, we
have assumed the genuineness of all signatures, the authenticity of documents
submitted to us as originals, the conformity with authentic original documents
of all documents submitted to us as copies and, in the case of documents
executed prior to the date of this opinion letter, that there has been no course
of conduct that would alter the terms of these documents from those reviewed by
us.
In rendering the opinions expressed below, we have assumed
that all of the documents referred to in this opinion have been duly authorized
by, have been or will be executed and delivered by, and (except, to the extent
set forth below, as to Party A) constitute legal, valid, binding and enforceable
obligations of, all of the parties to those documents, that all signatories to
those documents have been duly authorized and that all such parties are duly
organized and validly existing and have the power and authority (corporate,
partnership, company, trust or other) or, in the case of individuals, the legal
capacity, to execute, deliver and perform those documents.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that each Document constitutes the legal,
valid and binding obligation of Party A, enforceable against it in accordance
with its respective terms, in each case except as may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent conveyance or transfer or
other similar laws relating to or affecting the rights of creditors generally
and except as the enforceability of the Documents is subject to the application
of general principles of equity (regardless of whether considered in a
proceeding in equity or at law),
B-2-1
including without limitation (a) the possible unavailability of specific
performance, injunctive relief or any other equitable remedy and (b) concepts of
materiality, reasonableness, good faith and fair dealing.
The foregoing opinions are also subject to the following
comments and qualifications:
(a) Certain remedial or procedural provisions contained in the
Credit Support Annex may be limited or rendered unenforceable by applicable law,
but those limitations do not, in our opinion but subject to the other comments
and qualifications set forth in this opinion letter, make the remedies and
procedures that are available to the Party B inadequate for the practical
realization of the substantive benefits purported to be provided to them by the
Credit Support Annex.
(b) The enforceability of provisions in the Documents to the
effect that terms may not be waived or modified except in writing may be limited
under certain circumstances.
(c) We express no opinion as to any provisions of the
Documents insofar as those provisions relate to (A) the subject matter
jurisdiction of any United States District Court to adjudicate any controversy
related to the Documents or (B) the waiver of inconvenient forum with respect to
proceedings in any United States District Court.
(d) We express no opinion as to the ownership of or title to
any property or as to the creation, perfection or priority of any liens
(including without limitation the liens of the Documents).
The foregoing opinions are limited to matters involving the
federal laws of the United States of America and the laws of the State of New
York, and we do not express any opinion as to any other laws.
This opinion letter is provided to you by us as counsel to
Party A pursuant to the Agreement and may not be relied upon by any other person
or for any purpose other than in connection with the transactions contemplated
by the Documents without our prior written consent in each instance.
Very truly yours,
B-2-2
EXHIBIT C-1
[Form of Opinion of Counsel to Party B]
[Date]
Party A
[Address]
Re: Master Swap Agreement
Ladies and Gentlemen:
We have acted as counsel to Lease Investment Flight Trust
("PARTY B") in connection with the Master Swap Agreement dated as of June __,
2001 (the "AGREEMENT") between [Credit Suisse First Boston] ("PARTY A") and
Party B. All capitalized terms defined in the Agreement are used with the same
meanings, unless otherwise defined, in this opinion letter.
In rendering the opinions expressed below, we have examined
(a)(i) the Agreement and (ii) the Credit Support Annex (collectively with the
Agreement, the "DOCUMENTS") and (b) such corporate records of Party A and such
other documents as we have deemed necessary as a basis for the opinions
expressed below. In our examination, we have assumed the genuineness of all
signatures, the authenticity of documents submitted to us as originals, the
conformity with authentic original documents of all documents submitted to us as
copies and, in the case of documents executed prior to the date of this opinion
letter, that there has been no course of conduct that would alter the terms of
these documents from those reviewed by us. As to relevant facts, we have relied
upon statements of governmental officials.
In rendering the opinions expressed below, we have assumed
(except, to the extent set forth below, as to Party B) that all of the documents
referred to in this opinion have been duly authorized by, have been or will be
executed and delivered by, and constitute legal, valid, binding and enforceable
obligations of, all of the parties to those documents, that all signatories to
those documents have been duly authorized and that all such parties are duly
organized and validly existing and have the power and authority (corporate,
partnership, company, trust or other) or, in the case of individuals, the legal
capacity, to execute, deliver and perform those documents.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:
(i) Party B is a trust duly formed and validly existing under
the laws of the State of Delaware and has the trust power to execute and
deliver, and to perform its obligations under, the Documents. Wilmington Trust
Company (the "OWNER TRUSTEE") is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of Delaware and has
the corporate power to be a trustee of Party B and (as the trustee of Party B)
to execute and deliver, and to perform the obligations of Party B under, the
Documents.
C-1-1
(ii) The execution and delivery by Party B of, and the
performance by it of its obligations under, the Documents have been duly
authorized by all necessary trust action on its part. The execution and delivery
by the Owner Trustee (as the trustee of Party B) of, and the performance by the
Owner Trustee (as the trustee of Party B) of the obligations of Party B under,
the Documents have been duly authorized by all necessary corporate action on the
part of the Owner Trustee.
(iii) Party A has duly executed and delivered the Documents.
(iv) No authorization, consent or other approval of, or
registration, declaration or other filing with, any governmental authority of
the State of Delaware is required on the part of Party B for the execution and
delivery by it of, or for the performance by Party B of its obligations under,
the Documents, except as may be necessary for the creation, perfection or
priority of the Liens of the Credit Support Annex. No authorization, consent or
other approval of, or registration, declaration or other filing with, any
governmental authority of (a) the United States of America or the State of
Delaware is required on the part of the Owner Trustee for the execution and
delivery by it (as the trustee of Party B) of, or for the performance by the
Owner Trustee (as the trustee of Party B) of Party B's obligations under, the
Documents.
The foregoing opinions are limited to matters involving the
federal laws of the United States of America and the laws of the State of
Delaware, and we do not express any opinion as to any other laws.
This opinion letter is provided to you by us as counsel to
Party B pursuant to the Agreement and may not be relied upon by any other person
or for any purpose other than in connection with the transactions contemplated
by the Documents without our prior written consent in each instance.
Very truly yours,
C-1-2
EXHIBIT C-2
[Form of Opinion of Counsel to Party B]
[Date]
Party A
[Address]
Re: Master Swap Agreement
Ladies and Gentlemen:
We have acted as counsel to Lease Investment Flight Trust
("PARTY B") in connection with the Master Swap Agreement dated as of June __,
2001 (the "AGREEMENT") between [Credit Suisse First Boston] ("PARTY A") and
Party B. All capitalized terms defined in the Agreement are used with the same
meanings, unless otherwise defined, in this opinion letter.
In rendering the opinions expressed below, we have examined
(a)(i) the Agreement and (ii) the Credit Support Annex (collectively with the
Agreement, the "DOCUMENTS") and (b) such corporate records of Party A and such
other documents as we have deemed necessary as a basis for the opinions
expressed below. In our examination, we have assumed the genuineness of all
signatures, the authenticity of documents submitted to us as originals, the
conformity with authentic original documents of all documents submitted to us as
copies and, in the case of documents executed prior to the date of this opinion
letter, that there has been no course of conduct that would alter the terms of
these documents from those reviewed by us.
In rendering the opinions expressed below, we have assumed
that all of the documents referred to in this opinion have been duly authorized
by, have been or will be executed and delivered by, and (except, to the extent
set forth below, as to Party B) constitute legal, valid, binding and enforceable
obligations of, all of the parties to those documents, that all signatories to
those documents have been duly authorized and that all such parties are duly
organized and validly existing and have the power and authority (corporate,
partnership, company, trust or other) or, in the case of individuals, the legal
capacity, to execute, deliver and perform those documents.
Based upon and subject to the foregoing and subject also to
the comments and qualifications set forth below, and having considered such
questions of law as we have deemed necessary as a basis for the opinions
expressed below, we are of the opinion that:
(i) Each Document constitutes the legal, valid and binding
obligation of Party B, enforceable against it in accordance with its respective
terms, in each case except as may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance or transfer or other similar
laws relating to or affecting the rights of creditors generally and except as
the enforceability of the Documents is subject to the application of general
principles of equity (regardless of whether considered
C-2-1
in a proceeding in equity or at law), including without limitation (a) the
possible unavailability of specific performance, injunctive relief or any other
equitable remedy and (b) concepts of materiality, reasonableness, good faith and
fair dealing.
(v) No authorization, consent or other approval of, or
registration, declaration or other filing with, any governmental authority of
the United States of America is required on the part of Party B for the
execution and delivery by it of, or for the performance by Party B of its
obligations under, the Documents, except as may be necessary for the creation,
perfection or priority of the Liens of the Credit Support Annex.
The foregoing opinions are also subject to the following
comments and qualifications:
(a) Certain remedial or procedural provisions contained in the
Credit Support Annex may be limited or rendered unenforceable by applicable law,
but those limitations do not, in our opinion but subject to the other comments
and qualifications set forth in this opinion letter, make the remedies and
procedures that are available to the Party B inadequate for the practical
realization of the substantive benefits purported to be provided to them by the
Credit Support Annex.
(b) The enforceability of provisions in the Documents to the
effect that terms may not be waived or modified except in writing may be limited
under certain circumstances.
(c) We express no opinion as to any provisions of the
Documents insofar as those provisions relate to (A) the subject matter
jurisdiction of any United States District Court to adjudicate any controversy
related to the Documents or (B) the waiver of inconvenient forum with respect to
proceedings in any United States District Court.
(d) We express no opinion as to the ownership of or title to
any property or as to the creation, perfection or priority of any liens
(including without limitation the liens of the Documents).
The foregoing opinions are limited to matters involving the
federal laws of the United States of America and the laws of the State of New
York, and we do not express any opinion as to any other laws.
This opinion letter is provided to you by us as counsel to
Party B pursuant to the Agreement and may not be relied upon by any other person
or for any purpose other than in connection with the transactions contemplated
by the Documents without our prior written consent in each instance.
Very truly yours,
C-2-2
