Exhibit 10.3.5
(MULTICURRENCY-CROSS BORDER)
ISDA[REGISTERED]
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of 19 March 2007
Credit Suisse (USA), Inc and Xxxxxx Master Issuer PLC
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:?
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master Agreement,
the Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in
each Confirmation to be made by it, subject to the other provisions of
this Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is, other
than by payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation unless
otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject
to (1) the condition precedent that no Event of Default or Potential
Event of Default with respect to the other party has occurred
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and is continuing, (2) the condition precedent that no Early
Termination Date in respect of the relevant Transaction has occurred
or been effectively designated and (3) each other applicable condition
precedent specified in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:?
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the
other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party the excess
of the larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being subject to the
election, together with the starting date (in which case subparagraph (ii)
above will not, or will cease to, apply to such Transactions from such date).
This election may be made separately for different groups of Transactions and
will apply separately to each pairing of Offices through which the parties make
and receive payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made
without any deduction or withholding for or on account of any Tax
unless such deduction or withholding is required by any applicable
law, as modified by the practice of any relevant governmental revenue
authority, then in effect. If a party is so required to deduct or
withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full amount
required to be deducted or withheld from any additional amount
paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is
required or receiving notice that such amount has been
assessed against Y;
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably acceptable
to Y, evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise entitled under
this Agreement, such additional amount as is necessary to
ensure that the net amount actually received by Y (free and
clear of Indemnifiable Taxes, whether assessed against X or Y)
will equal the full amount Y would have received had no such
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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);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment obligation
will, to the extent permitted by law and subject to Section 6(c), be required
to pay interest (before as well as after judgment) on the overdue amount to the
other party on demand in the same currency as such overdue amount, for the
period from (and including) the original due date for payment to (but
excluding) the date of actual payment, at the Default Rate. Such interest will
be calculated on the basis of daily compounding and the actual number of days
elapsed. If, prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction, a party defaults in
the performance of any obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered
into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement) that:?
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the
laws of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any
other documentation relating to this Agreement to which it is a party,
to deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it
has under any Credit Support Document to
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which it is a party and has taken all necessary action to authorise
such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment
of any court or other agency of government applicable to it or any of
its assets or any contractual restriction binding on or affecting it
or any of its assets;
(iv) CONSENTS. All governmental and other consents that are
required to have been obtained by it with respect to this Agreement or
any Credit Support Document to which it is a party have been obtained
and are in full force and effect and all conditions of any such
consents have been complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and
any Credit Support Document to which it is a party constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms (subject to applicable bankruptcy,
reorganisation, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is accurate
and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:?
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:?
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
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(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment under
this Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the legal or
commercial position of the party in receipt of such demand), with any such form
or document to be accurate and completed in a manner reasonably satisfactory to
such other party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or other
authority that are required to be obtained by it with respect to this Agreement
or any Credit Support Document to which it is a party and will use all
reasonable efforts to obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:?
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) required to be made by it if such failure is not
remedied on or before the third Local Business Day after notice of
such failure is given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance
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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 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
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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 law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent
jurisdiction of any applicable law after such date, it becomes
unlawful (other than as a result of a breach by the party of Section
4(b)) for such party (which will be the Affected Party):?
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or delivery
in respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which the
party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y) a Change in Tax Law, the party (which will be the Affected
Party) will, or there is a substantial likelihood that it will, on the
next succeeding Scheduled Payment Date (1) be required to pay to the
other party an
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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.
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(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality
under Section 5(b)(i)(l) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition
to its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such
party to incur a loss, excluding immaterial, incidental expenses) to
transfer within 20 days after it gives notice under Section 6(b)(i)
all its rights and obligations under this Agreement in respect of the
Affected Transactions to another of its Offices or Affiliates so that
such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties,
each party will use all reasonable efforts to reach agreement within
30 days after notice thereof is given under Section 6(b)(i) on action
to avoid that Termination Event.
(iv) RIGHT TO TERMINATE. If:?
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30
days after an Affected Party gives notice under Section
6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party
in the case of a Tax Event Upon Merger, any Affected Party in
the case of a Tax Event or an Additional Termination Event if
there is more than one Affected Party, or the party which is
not the Affected Party in the case of a Credit Event Upon
Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the
other party and provided that the relevant Termination Event
is then 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.
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(i) STATEMENT. On or as soon as reasonably practicable following
the occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and
will provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is
to be paid. In the absence of written confirmation from the source of
a quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of
any Early Termination Date under Section 6(e) will be payable on the
day that notice of the amount payable is effective (in the case of an
Early Termination Date which is designated or occurs as a result of an
Event of Default) and on the day which is two Local Business Days
after the day on which notice of the amount payable is effective (in
the case of an Early Termination Date which is designated as a result
of a Termination Event). Such amount will be paid together with (to
the extent permitted under applicable law) interest thereon (before as
well as after judgment) in the Termination Currency, from (and
including) the relevant Early Termination Date to (but excluding) the
date such amount is paid, at the Applicable Rate. Such interest will
be calculated on the basis of daily compounding and the actual number
of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs,
the following provisions shall apply based on the parties' election in the
Schedule of a payment measure, either "Market Quotation" or "Loss", and a
payment method, either the "First Method" or the "Second Method". If the
parties fail to designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second Method", as the case
may be, shall apply. The amount, if any, payable in respect of an Early
Termination Date and determined pursuant to this Section will be subject to any
Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from
an Event of Default:?
(1) First Method and Market Quotation. If the First Method
and Market Quotation apply, the Defaulting Party will pay to
the Non-defaulting Party the excess, if a positive number, of
(A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss
in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (determined by
the 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;
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if it is a negative number, the Non-defaulting Party will pay
the absolute value of that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from
a Termination Event:?
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance with
Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:?
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be payable
equal to (I) the sum of (a) one-half of the difference
between the Settlement Amount of the party with the
higher Settlement Amount ("X") and the Settlement
Amount of the party with the lower Settlement Amount
("Y") and (b) the Termination Currency Equivalent of
the Unpaid Amounts owing to X less (II) the
Termination Currency Equivalent of the Unpaid Amounts
owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Loss of the party with the higher Loss ("X") and
the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to
X; if it is a negative number, X will pay the absolute value
of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted
by law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
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:?
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(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be
void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered into
the Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required
to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in the
Contractual Currency so received exceeds the amount in the Contractual Currency
payable in respect of this Agreement, the party receiving the payment will
refund promptly the amount of such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this Agreement,
(ii) for the payment of any amount relating to any early termination in respect
of this Agreement or (iii) in respect of a judgment or order of another court
for the payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term "rate of exchange" includes, without limitation, any premiums
and costs of exchange payable in connection with the purchase of or conversion
into the Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the
party to which any payment is owed and will not be affected by judgment being
obtained or claim or proof being made for any other sums payable in respect of
this Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
9. MISCELLANEOUS
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(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by
an exchange of telexes or electronic messages on an electronic messaging
system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be deemed an
original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the
Transaction through its head or home office. This representation will be deemed
to be repeated by such party on each date on which a Transaction is entered
into.
(b) Neither party may change the Office through which it makes and
receives payments or deliveries for the purpose of a Transaction without the
prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the
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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
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(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such
party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any 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
15
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified
as such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former
connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such
recipient (including, without limitation, a connection arising from such
recipient or related person being or having been a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having or having had a permanent
establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having
executed, delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority)
and "LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for
performance with respect to such Specified Transaction.
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"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any gain
resulting from any of them). Loss includes losses and costs (or gains) in
respect of any payment or delivery required to have been made (assuming
satisfaction of each applicable condition precedent) on or before the relevant
Early Termination Date and not made, except, so as to avoid duplication, if
Section 6(e)(i)(l) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a
party's legal fees and out-of-pocket expenses referred to under Section 11. A
party will determine its Loss as of the relevant Early Termination Date, or, if
that is not reasonably practicable, as of the earliest date thereafter as is
reasonably practicable. A party may (but need not) determine its Loss by
reference to quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition
precedent) by the parties under Section 2(a)(i) in respect of such Terminated
Transaction or group of Terminated Transactions that would, but for the
occurrence of the relevant Early Termination Date, have been required after
that date. For this purpose, Unpaid Amounts in respect of the Terminated
Transaction or group of Terminated Transactions are to be excluded but, without
limitation, any payment or delivery that would, but for the relevant Early
Termination Date, have been required (assuming satisfaction of each applicable
condition precedent) after that Early Termination Date is to be included. The
Replacement Transaction would be subject to such documentation as such party
and the Reference Market-maker may, in good faith, agree. The party making the
determination (or its agent) will request each Reference Market-maker to
provide its quotation to the extent reasonably practicable as of the same day
and time (without regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day and time as of
which those quotations are to be obtained will be selected in good faith by the
party obliged to make a determination under Section 6(e), and, if each party is
so obliged, after consultation with the other. If more than three quotations
are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation
will be the quotation remaining after disregarding the highest and lowest
quotations. For this purpose, if more than one quotation has the same highest
value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
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"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:?
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety or
otherwise) in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of
such party or any applicable Specified Entity of such party) and the other
party to this Agreement (or any Credit Support Provider of such other party or
any applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap transaction,
floor transaction, collar transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions),
(b) any combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto) that
is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation or
similar tax.
"TAX EVENT" has the meaning specified in Section 5(b).
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"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a
rate for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under
Section 2(a)(i) which was (or would have been but for Section 2(a)(iii))
required to be settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market 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.
............................. ...............................
19
Credit Suisse (USA), Inc Xxxxxx Master Issuer PLC
By: ........................ By: ............................
Name: Xxxxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxxx
Title: Vice President Title: Attorney
Date: 19 March 2007 Date: 19 March 2007
20
EXECUTION COPY
SERIES 1 CLASS B1
DRAFT
SCHEDULE TO THE MASTER AGREEMENT
19 MARCH 2007
BETWEEN
CREDIT SUISSE (USA), INC.
AND
XXXXXX MASTER ISSUER PLC
AND
THE BANK OF NEW YORK, LONDON BRANCH
dated as of 19 March 2007
between:
(1) CREDIT SUISSE (USA), INC. (PARTY A);
(2) XXXXXX MASTER ISSUER PLC (PARTY B); and
(3) THE BANK OF NEW YORK, LONDON BRANCH (the MASTER ISSUER SECURITY
TRUSTEE, which expression shall include its successors and assigns and
which has agreed to become a party to this Agreement solely for the
purpose of taking the benefit of or assuming the obligations under
Part 5(2), Part 5(12) and Part 5(7.7) of the Schedule to this
Agreement).
Part 1. TERMINATION PROVISIONS
(a) SPECIFIED ENTITY means in relation to Party A for the purpose of:
Section 5(a)(v), none;
Section 5(a)(vi), none;
Section 5(a)(vii), none;
Section 5(b)(iv), none,
and in relation to Party B for the purpose of:
Section 5(a)(v), none;
Section 5(a)(vi), none;
Section 5(a)(vii), none;
Section 5(b)(iv), none.
(b) SPECIFIED TRANSACTION will have the meaning specified in Section 14.
(c) The CROSS DEFAULT provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
(d) The CREDIT EVENT UPON MERGER provisions of Section 5(b)(iv) will not
apply to Party A and will not apply to Party B.
(e) The AUTOMATIC EARLY TERMINATION provision of Section 6(a) will not
apply to Party A and will not apply to Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purposes of Section 6(e) and
subject to Part 5(16) of this Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) Termination Currency means Sterling.
(h) ADDITIONAL TERMINATION EVENT will apply. In addition to the Additional
Termination Events set forth in Part 5(7.8) of this Agreement, the
following will each constitute an Additional Termination Event:
(i) the Additional Tax Representation (as defined in Part 5(6) of
this Agreement) proves to have been incorrect or misleading in
any material respect when made or repeated or deemed to have
been made or repeated. For the purpose of the foregoing
Additional Termination Event, Party A shall be the sole
Affected Party and all Transactions shall be Affected
Transactions.
(ii) The Relevant Notes are redeemed in full in accordance with the
provisions of Condition 5.5 (Optional Redemption for Tax and
other Reasons) of the Terms and Conditions. In relation to the
foregoing Additional Termination Event, for the purposes of
Section 6(b)(iv) both parties shall be Affected Parties and
all Transactions shall be Affected Transactions and for the
purposes of Section 6(e) Party B shall be the sole Affected
Party.
22
Part 2. TAX REPRESENTATIONS
(a) PAYER REPRESENTATIONS For the purpose of Section 3(e) of this
Agreement, Party A and Party B each make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other
party under this Agreement. In making this representation, it may rely
on (i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of
the agreement contained in Section 4(a)(i) or 4(a)(iii) of this
Agreement and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement, provided that it
will not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal
or commercial position.
(b) PAYEE REPRESENTATIONS For the purposes of Section 3(f) of this
Agreement, Party A and Party B make no representations.
Part 3. AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are: None.
(b) Other documents to be delivered are:
PARTY FORM/DOCUMENT/CERTIFICATE DATE BY COVERED BY
REQUIRED TO WHICH TO BE SECTION 3(D)
DELIVER DELIVERED REPRESENTATION
DOCUMENT
Party A and Party Appropriate evidence of its signatory's On signing of this Yes
B authority Agreement
Party B Certified copy of board resolution and On signing of this Yes
constitutional documents Agreement
Party A Legal opinion in form and substance On signing of this No
satisfactory to Party B Agreement
Party B Legal opinion in form and substance On signing of this
Agreement
Part 4. MISCELLANEOUS
(a) ADDRESSES FOR NOTICES
For the purpose of Section 12(a) of this Agreement:
23
Address for notices or communications to Party A:
Address: Credit Suisse (USA), Inc.
00 Xxxxxxx Xxxxxx
Xxx Xxxx
XX 00000
XXX
Attention: Xxx X. Xxxxx
Facsimile No.: x0 000 000 0000
Address for notices or communications to Party B:
Address: c/o Abbey National plc
Abbey Xxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Regent's Place London NW1 3AN
Attention: Company Secretary
Facsimile No.: x00 (0) 00 0000 0000
Copy: c/o Abbey National plc
Abbey House (AAM129)
000 Xxxxxxx Xxxx Xxxx
Xxxxxx Xxxxxx XX0 0XX
Attention: Securitisation Team, Retail Credit Risk
Facsimile No.: x00 (0) 0000 000 000
With a copy to the Master Issuer Security Trustee:
Address: 00xx Xxxxx, Xxx Xxxxxx Xxxxxx Xxxxxx X00 0XX
Attention: Global Structured Finance - Corporate Trustee
Facsimile No.: x00(0) 00 0000 0000/6399
(b) PROCESS AGENT For the purpose of Section 13(c) of this Agreement:
Party A appoints as its Process Agent: None.
Party B appoints as its Process Agent: None.
(c) OFFICES The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY For the purpose of Section 10(c) of this Agreement:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
24
(e) CALCULATION AGENT The Calculation Agent is Party A.
(f) CREDIT SUPPORT DOCUMENT Details of any Credit Support Document:
In respect of Party A, the Credit Support Annex dated the date hereof
between Party A and Party B and any Eligible Guarantee.
In respect of Party B, none.
(g) CREDIT SUPPORT PROVIDER Credit Support Provider means in relation to
Party A, the guarantor under any Eligible Guarantee.
Credit Support Provider means in relation to Party B, none.
(h) GOVERNING LAW This Agreement will be governed by and construed in
accordance with the laws of England and Wales.
(i) NETTING OF PAYMENTS Subparagraph (ii) of Section 2(c) of this
Agreement will apply to Transactions entered into under this
Agreement.
(j) AFFILIATE will have the meaning specified in Section 14 of this
Agreement save for the purpose of section 3(c) Absence of Litigation,
Party A shall be deemed to have no Affiliates.
Part 5 OTHER PROVISIONS
(a) NO SET-OFF
(i) All payments under this Agreement will be made without set-off or
counterclaim, except as expressly provided for in Section 6 or this
Schedule.
(ii) Section 6(e) is amended by the deletion of the following sentence:
"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."
(b) SECURITY INTEREST
Notwithstanding Section 7, Party A hereby agrees and consents to the assignment
by way of security by Party B of its interests under this Agreement (without
prejudice to, and after giving effect to, any contractual netting provision
contained in this Agreement) to the Master Issuer Security Trustee (or any
successor thereto or permitted transferee) pursuant to and in accordance with
the Master Issuer Deed of Charge and acknowledges notice of such assignment.
Each of the parties hereby confirms and agrees that the Master Issuer Security
Trustee shall not be liable for any of the obligations of Party B hereunder.
(c) DISAPPLICATION OF CERTAIN EVENTS OF DEFAULT
Section 5(a)(v) will not apply in respect of Party A.
Sections 5(a)(ii), 5(a)(iii), 5(a)(iv), 5(a)(v), 5(a)(vii)(2), (4) (to the
extent that it relates to actions taken by Party A or its Affiliates), (6), (7)
and (9), and 5(a)(viii) will not apply in respect of Party B.
Section 5(a)(vii)(8) will not apply to Party B to the extent that it relates to
Sections 5(a)(vii)(2), (4) (to the extent that it relates to actions taken by
Party A or its Affiliates), (6) and (7).
(d) ADDITIONAL CONDITIONS TO APPLICATION OF CERTAIN TERMINATION EVENTS
25
The Agreement is amended by deleting Section 6(b)(ii) in its entirety and
replacing it with the following:
"(ii) TRANSFER OR RESTRUCTURING TO AVOID TERMINATION EVENT. If either an
Illegality under Section 5(b)(i)(l) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its right to
designate an Early Termination Date under Section 6(b)(iv), within 20 days
after it gives notice under Section 6(b)(i), (A) transfer 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, provided that, in case of an Illegality, the Affected Party will only be
required to use all reasonable efforts (which will not require such party to
incur a loss, excluding immaterial, incidental expenses) to cause such a
transfer or (B) (in relation to a Tax Event or a Tax Event Upon Merger only)
replace the Affected Transaction(s) with one or more transactions which will
put the other party economically in the same position had the Tax Event or the
Tax Event Upon Merger, as applicable, not occurred and so that such Termination
Event ceases to exist.
If the Affected Party is not able to cause such a transfer or restructuring 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 or cause such a
restructuring within 30 days after the notice is given under Section 6(b)(i).
Any transfer by a party under clause (A) of this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other party,
which consent shall 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. Any restructuring by a party under clause (B) of this Section
6(b)(ii) will be subject to and conditional upon the confirmation from the
Rating Agencies that the restructuring will not adversely affect the then
current rating of the Relevant Notes and the prior written consent of the other
party, which consent shall not be unreasonably withheld."
(e) ADDITIONAL EVENT OF DEFAULT
The following will constitute an additional Event of Default with respect to
Party B:
"The Note Trustee serves a Note Enforcement Notice in relation to the Relevant
Notes pursuant to Condition 9 of the Terms and Conditions on Party B (in which
case Party B shall be the Defaulting Party)."
(f) ADDITIONAL TAX REPRESENTATION
(i) Party A makes the following representation (the ADDITIONAL TAX
REPRESENTATION), which representation shall be deemed to be repeated
at all times until the end of each Transaction:
(A) it is resident in the United Kingdom for United Kingdom tax
purposes; or
(B) it is party to each Transaction solely for the purposes of a
trade (or part of a trade) carried on by it in the United
Kingdom through a permanent establishment and otherwise than
as agent or nominee of another person (as those expressions
are construed for the purposes of paragraph 31(6)(a) and (b)
of Schedule 26 to the Finance Xxx 0000, as amended or
re-enacted from time to time); or
(C) it is resident in a jurisdiction that has a double taxation
convention or treaty with the United Kingdom which has effect
by virtue of section 788 of the Income and Corporation Taxes
Act 1988 and under which provision, whether for relief or
otherwise, in relation to interest (as defined in the relevant
treaty or convention) is made and it is party to each
Transaction otherwise than as agent or nominee for another
person (as those expressions are construed for the purposes of
paragraphs 31(7) and (8) of Schedule 26 to the Finance Xxx
0000, as amended or re-enacted from time to time).
26
(ii) Section 5(a)(iv) is amended with respect to Party A only by the
insertion of the following after the words "Section 3(e) or (f)":
"or Part 5(6) of the Schedule".
(g) RATING EVENTS
(i) INITIAL S&P RATING EVENT
In the event that the short-term, unsecured and unsubordinated
debt obligations of Party A (or its successor or permitted
transferee) or any Credit Support Provider from time to time
in respect of Party A cease to be rated at least as high as
"A-1+" by Standard & Poor's Rating Services, a division of The
XxXxxx-Xxxx Companies, Inc. (S&P) (an INITIAL S&P RATING
EVENT), then Party A will, within 30 calendar days of the
occurrence of such Initial S&P Rating Event, on a reasonable
efforts basis and at its own cost attempt either to:
(A) both:
(1) provide collateral under the provisions of the
Credit Support Annex; and
(2) provide to Party B and S&P legal opinions
satisfactory to S&P in relation to the posting
of collateral pursuant to the Credit Support
Annex if required to do so by S&P at the time
of such posting and obtain a monthly
verification of Party B's exposure by two
independent third parties that would be
eligible and willing to be transferees of Party
A's benefits and obligations under this
Agreement (the INDEPENDENT VALUATIONS) in the
event that the short-term, unsecured and
unsubordinated debt obligations of Party A (or
its successor or permitted transferee) or any
Credit Support Provider from time to time in
respect of Party A ceases to be rated at least
as high as "A-2" or the long term, unsecured
and unsubordinated debt obligations of Party A
(or its successor or permitted transferee) or
any Credit Support Provider from time to time
in respect of Party A ceases to be rated at
least as high as "BBB+" by S&P. Such
Independent Valuations will take place on the
following basis: (A) without limiting Party A's
obligation to obtain Independent Valuations
valuations may only be obtained from the same
entity or person up to four times in any 12
month period; (B) for the purposes of
collateral posting in accordance with the
Credit Support Annex, Party B's exposure shall
be deemed to be equal to the highest of the two
Independent Valuations and shall be calculated
in accordance with the Credit Support Annex;
and (C) Party A shall provide S&P with the two
Independent Valuations and its calculations
pursuant to the Credit Support Annex for the
day on which the Independent Valuations are
obtained;
(B) subject to Part 5 (17) below, transfer all of its
rights and obligations with respect of this Agreement
to a replacement third party approved by the Master
Issuer Security Trustee provided that either (1) such
transfer would maintain the ratings of the Relevant
Notes by S&P at, or restore the rating of the Relevant
Notes by S&P to, the level it would have been but for
such Initial S&P Rating Event) or (2) such replacement
third party is agreed between Party A and S&P,
provided that, in all cases, such action does not
result in any requirement for deduction or withholding
for or on account of any Tax;
(C) obtain a co-obligation or guarantee in respect of its
rights and obligations with respect to this Agreement
from a third party satisfactory to the Master Issuer
27
Security Trustee (whose consent shall be given if S&P
confirms that such co-obligation or guarantee would
maintain the rating of the Relevant Notes by S&P at,
or restore the rating of the Relevant Notes by S&P to,
the level it would have been at immediately prior to
such Initial S&P Rating Event), provided that, in all
cases, such action does not result in any requirement
for deduction or withholding for or on account of any
Tax; or
(D) take such other action as Party A may agree with S&P,
provided that, in all cases, such action does not
result in any requirement for deduction or withholding
for or on account of any Tax.
If any of subparagraphs 7.1(b), 7.1(c) or 7.1(d) above are
satisfied at any time, all collateral (or the equivalent
thereof, as appropriate) transferred by Party A pursuant to
subparagraph 7.1(a) will be transferred by Party B to Party A
and Party A will not be required to transfer any additional
collateral in respect of such Initial S&P Rating Event.
(ii) SUBSEQUENT S&P RATING EVENT
In the event that the rating of the long-term, unsecured and
unsubordinated debt obligations of Party A (or its successor
or permitted transferee) or any Credit Support Provider from
time to time in respect of Party A cease to be rated at least
as high as "BBB-" by S&P (such event, a SUBSEQUENT S&P RATING
EVENT), then Party A will within ten calendar days of the
occurrence of such Subsequent S&P Rating Event:
(i) at its own cost and expense, use its best endeavours
to take any of the actions set out in subparagraph
7.1(b) or 7.1(c) above immediately upon the occurrence
of such Subsequent S&P Rating Event or take such other
action as Party A may agree with S&P; and
(ii) if, at the time such Subsequent S&P Rating Event
occurs, Party A has provided collateral under the
Credit Support Annex pursuant to subparagraph 7.1(a)
above following an Initial S&P Rating Event, continue
to post collateral notwithstanding the occurrence of
such Subsequent S&P Rating Event until such time as
the action set out in subparagraph 7.2(a) above has
been taken.
If the action set out in subparagraph 7.2(a) above is taken at
any time, all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to subparagraph
7.1(a) above will be transferred by Party B to Party A and
Party A will not be required to transfer any additional
collateral in respect of such Subsequent S&P Rating Event.
(iii) MOODY'S DEFINITIONS
"MOODY'S SHORT-TERM RATING" means a rating assigned by Moody's under
its short-term rating scale in respect of an entity's short-term,
unsecured and unsubordinated debt obligations.
"RELEVANT ENTITIES" means Party A and any guarantor under an Eligible
Guarantee in respect of all of Party A's present and future
obligations under this Agreement.
An entity shall have the "FIRST TRIGGER REQUIRED RATINGS" (A) where
such entity is the subject of a Moody's Short-term Rating, if such
rating is "Prime-1" and its long-term, unsecured and unsubordinated
debt or counterparty obligations are rated "A2" or above by Moody's
and (B) where such entity is not the subject of a Moody's Short-term
Rating, if its long-term, unsecured and unsubordinated debt or
counterparty obligations are rated "A1" or above by Moody's.
28
the "SECOND RATING TRIGGER REQUIREMENTS" shall apply so long as no
Relevant Entity has the Second Trigger Required Ratings.
An entity shall have the "SECOND TRIGGER REQUIRED RATINGS" (A) where
such entity is the subject of a Moody's Short-term Rating, if such
rating is "Prime-2" or above and its long-term, unsecured and
unsubordinated debt or counterparty obligations are rated "A3" or
above by Moody's and (B) where such entity is not the subject of a
Moody's Short-term Rating, if its long-term, unsecured and
unsubordinated debt or counterparty obligations are rated "A3" or
above by Moody's.
(iv) SUBSEQUENT XXXXX'X RATING EVENT
So long as the Second RatingTrigger Requirements apply, Party A will
at its own cost use commercially reasonable efforts to, as soon as
reasonably practicable, procure either (A) an Eligible Guarantee in
respect of all of Party A's present and future obligations under this
Agreement to be provided by a guarantor with the First Trigger
Required Ratings and/or the Second Trigger Required Ratings or (B) a
transfer in accordance with Part 5(17) below.
(v) FITCH RATING EVENT
In the event that:
(i) the long-term, unsecured and unsubordinated debt obligations
of Party A (or its successor or permitted transferee) or any
Credit Support Provider from time to time in respect of Party
A cease to be rated at least as high as "A+" (or its
equivalent) by Fitch Ratings Ltd (FITCH); or
(ii) the short-term, unsecured and unsubordinated debt obligations
of Party A (or its successor or permitted transferee) or any
Credit Support Provider from time to time in respect of Party
A cease to be rated at least as high as "F1" (or its
equivalent) by Fitch,
and as a result of such cessation, the then current rating of the
Relevant Notes is downgraded by Fitch or placed under credit watch for
possible downgrade by Fitch (a FITCH RATING EVENT) then Party A will,
on a reasonable efforts basis within thirty days of the occurrence of
such Fitch Rating Event, at its own cost, either:
(A) provide collateral under the Credit Support Annex;
(B) transfer all of its rights and obligations with respect to
this Agreement to a replacement third party satisfactory to
the Master Issuer Security Trustee (whose consent shall be
given if Fitch confirms that such transfer would maintain the
ratings of the Relevant Notes by Fitch at, or restore the
rating of the Relevant Notes by Fitch to, the level at which
it was immediately prior to such Fitch Rating Event), provided
that, in all cases, such action does not result in any
requirement for deduction or withholding for or on account of
any Tax;
(C) obtain a co-obligation or guarantee of its rights and
obligations with respect to this Agreement from a third party
satisfactory to the Master Issuer Security Trustee (whose
consent shall be given if Fitch confirms that such
co-obligation or guarantee would maintain the rating of the
Relevant Notes by Fitch at, or restore the rating of the
Relevant Notes by Fitch to, the level at which it was
immediately prior to such Fitch Rating Event), provided that,
in all cases, such action does not result in any requirement
for deduction or withholding for or on account of any Tax; or
(D) take such other action as Party A may agree with Fitch as will
result in the rating of the Relevant Notes by Fitch following
the taking of such action being maintained at, or restored
29
to, the level at which it was immediately prior to such Fitch
Rating Event, provided that, in all cases, such action does
not result in any requirement for deduction or withholding for
or on account of any Tax.
If any of subparagraphs 7.5(ii), 7.5(iii) or 7.5(iv) above are
satisfied at any time, all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to subparagraph 7.5(i)
above will be transferred to Party A and Party A will not be required
to transfer any additional collateral in respect of such Fitch Rating
Event.
(vi) FIRST SUBSEQUENT FITCH RATING EVENT
If:
(i) the long-term, unsecured and unsubordinated debt obligations
of Party A (or its successor or permitted transferee) or any
Credit Support Provider from time to time in respect of Party
A cease to be rated at least as high as "BBB+" (or its
equivalent) by Fitch; or
(ii) the rating of the short-term, unsecured and unsubordinated
debt obligations of Party A (or its successor or permitted
transferee) or any Credit Support Provider from time to time
in respect of Party A cease to be rated at least as high as
"F2" (or its equivalent) by Fitch
(each a FIRST SUBSEQUENT FITCH RATING EVENT),
Party A will at its own cost and expense use its best endeavours to:
(A) provide collateral under the Credit Support Annex within 10
days of such First Subsequent Fitch Rating Event (provided
that the xxxx-to-market calculations and the correct and
timely posting of collateral thereunder are verified by an
independent third party (with the costs of such independent
verification being borne by Party A)); or
(B) take any of the actions set out in subparagraphs 7.5(ii),
7.5(iii) or 7.5(iv) above within 30 days of the occurrence of
such First Subsequent Fitch Rating Event.
If any of the actions set out in subparagraph 7.6(ii) above is taken
at any time, all collateral (or the equivalent thereof, as
appropriate) transferred by Party A pursuant to subparagraph 7.5(i) or
subparagraph 7.6(i) above will be transferred to Party A and Party A
will not be required to transfer any additional collateral in respect
of such First Subsequent Fitch Rating Event.
(vii) SECOND SUBSEQUENT FITCH RATING EVENT
If:
(i) the long-term, unsecured and unsubordinated debt obligations
of Party A (or its successor or permitted transferee) or any
Credit Support Provider from time to time in respect of Party
A cease to be rated at least as high as "BBB-" (or its
equivalent) by Fitch; or
(ii) the rating of the short-term, unsecured and unsubordinated
debt obligations of Party A (or its successor or permitted
transferee) or any Credit Support Provider from time to time
in respect of Party A cease to be rated at least as high as
"F3" (or its equivalent) by Fitch
(each a SECOND SUBSEQUENT FITCH RATING EVENT and together with the
First Subsequent Fitch Rating Events the SUBSEQUENT FITCH RATING
EVENTS and each a SUBSEQUENT FITCH RATING EVENT),
30
Party A will:
(A) at its own cost and expense, use its best endeavours to take
any of the actions set out in subparagraphs 7.5(ii), 7.5(iii)
or 7.5(iv) above within 30 days of the occurrence of such
Subsequent Fitch Rating Event; and
(B) if, at the time such Second Subsequent Fitch Rating Event
occurs, Party A has provided collateral under the Credit
Support Annex pursuant to subparagraph 7.5(i) above or 7.6(i)
above following a Fitch Rating Event or a First Subsequent
Fitch Rating Event, as the case may be, continue to post
collateral notwithstanding the occurrence of such Second
Subsequent Fitch Rating Event (provided that the
xxxx-to-market calculations and the correct and timely posting
of collateral thereunder are verified by an independent third
party (with the costs of such independent verification being
borne by Party A)) until such time as the action set out in
subparagraph 7.7(i) above has been taken.
If any of the actions set out in subparagraph 7.7(i) above is taken at
any time, all collateral (or the equivalent thereof, as appropriate)
transferred by Party A pursuant to subparagraph 7.5(i), subparagraph
7.6(i) or subparagraph 7.7(i) above will be transferred to Party A and
Party A will not be required to transfer any additional collateral in
respect of such Second Subsequent Fitch Rating Event.
(viii) IMPLICATIONS OF RATING EVENTS
(A) If Party A does not take any of the measures described in
subparagraph 7.1 above (and regardless of whether reasonable
efforts have been used to implement any of those measures)
such failure shall not be or give rise to an Event of Default
but shall constitute an Additional Termination Event with
respect to Party A which shall be deemed to have occurred on
the thirtieth day following the Initial S&P Rating Event with
Party A as the sole Affected Party and all Transactions as
Affected Transactions.
(B) If, at the time a Subsequent S&P Rating Event occurs, Party A
has provided collateral under the Credit Support Annex
pursuant to subparagraph 7.1(a) above and fails to continue to
post collateral pending compliance with subparagraph 7.2(a)
above, such failure will not be or give rise to an Event of
Default but will constitute an Additional Termination Event
with respect to Party A and will be deemed to have occurred on
the later of the tenth day following such Subsequent S&P
Rating Event and the thirtieth day following the Initial S&P
Rating Event with Party A as the sole Affected Party and all
Transactions as Affected Transactions. Further, an Additional
Termination Event with respect to Party A shall be deemed to
have occurred if, even if Party A continues to post collateral
as required by subparagraph 7.2(b) above, and notwithstanding
Section 5(a)(ii), Party A does not take the measure described
in subparagraph 7.2(a) above (and regardless of whether best
endeavours have been used to implement any of those measures).
Such Additional Termination Event will be deemed to have
occurred on the thirtieth day following the Subsequent S&P
Rating Event with Party A as the sole Affected Party and all
Transactions as Affected Transactions.
(C) Any failure by Party A to comply with or perform any
obligation to be complied with or performed by Party A under
the Credit Support Annex in accordance with the Moody's
provisions shall not be an Event of Default unless (A) the
Second Rating Trigger Requirements apply and at least 30 Local
Business Days have elapsed since the last time the Second
Rating Trigger Requirements did not apply and (B) such failure
is not remedied on or before the third Local Business Day
after notice of such failure is given to Party A.
(D) Each of the following shall constitute an Additional
Termination Event with Party A as Affected Party:
31
FIRSTRATING TRIGGER COLLATERAL. Party A has failed to comply with or perform
any obligation to be complied with or performed by Party A in accordance with
the Credit Support Annex and either (A) the Second Rating Trigger Requirements
do not apply or (B) less than 30 Local Business Days have elapsed since the
last time the Second Rating Trigger Requirements did not apply.
SECOND RATING TRIGGER REPLACEMENT. (A) The Second Rating Trigger Requirements
apply and 30 or more Local Business Days have elapsed since the last time the
Second Rating Trigger Requirements did not apply and (B) (i) at least one
Eligible Replacement has made a Firm Offer (which remains capable of becoming
legally binding upon acceptance) to be the transferee of a transfer to be made
in accordance with Part 5(17) below and/or (ii) at least one entity with the
Second Trigger Required Ratings has made a Firm Offer (which remains capable of
becoming legally binding upon acceptance by the offeree) to provide an Eligible
Guarantee in respect of all of Party A's present and future obligations under
this Agreement.
(E) If Party A does not take any of the measures described in subparagraph
7.5 above (and regardless of whether reasonable efforts have been used
to implement any of those measures) such failure shall not be or give
rise to an Event of Default but shall constitute an Additional
Termination Event with respect to Party A which shall be deemed to
have occurred on the thirtieth day following the Fitch Rating Event
with Party A as the sole Affected Party and all Transactions as
Affected Transactions.
(F) If Party A does not take any of the measures described in subparagraph
7.6 above (and regardless of whether reasonable efforts have been used
to implement any of those measures) such failure shall not be or give
rise to an Event of Default but shall constitute an Additional
Termination Event with respect to Party A which shall be deemed to
have occurred on the thirtieth day following the First Subsequent
Fitch Rating Event with Party A as the sole Affected Party and all
Transactions as Affected Transactions.
(G) If, at the time a Second Subsequent Fitch Rating Event occurs, Party A
has provided collateral under the Credit Support Annex pursuant to
subparagraph 7.5(i) or subparagraph 7.6(i) and fails to continue to
post collateral pending compliance with subparagraph 7.7(i) above, or
fails promptly to appoint an independent verification agent, such
failure will not be or give rise to an Event of Default but will
constitute an Additional Termination Event with respect to Party A and
will be deemed to have occurred on the later of the tenth day
following such Second Subsequent Fitch Rating Event and the thirtieth
day following any prior Fitch Rating Event or First Subsequent Fitch
Rating Event with Party A as the sole Affected Party and all
Transactions as Affected Transactions. Further, an Additional
Termination Event with respect to Party A shall be deemed to have
occurred if, even if Party A continues to post collateral as required
by subparagraph 7.7(ii) above, and notwithstanding Section 5(a)(ii),
Party A does not take the measures described in subparagraph 7.7(i)
above (and regardless of whether best endeavours have been used to
implement any of those measures). Such Additional Termination Event
will be deemed to have occurred on the thirtieth day following the
Second Subsequent Fitch Rating Event with Party A as the sole Affected
Party and all Transactions as Affected Transactions.
Each of Party B and the Master Issuer Security Trustee shall use their
reasonable endeavours to co operate with Party A in putting in place such
credit support documentation, including (without limitation) agreeing to such
arrangements in such documentation as may satisfy S&P, Moody's and/or Fitch, as
applicable, with respect to the operation and management of the collateral and
entering into such documents as may reasonably be requested by Party A in
connection with the provision of such collateral or in connection with any of
the other measures which Party A may take under this Part 5(7) following the
rating events described herein.
32
(h) ADDITIONAL REPRESENTATIONS
Section 3 is amended by the addition at the end thereof of the following
additional representations:
"(g) NO AGENCY It is entering into this Agreement and each
Transaction as principal and not as agent of any person or entity."
(i) RECORDING OF CONVERSATIONS
Each party to this Agreement acknowledges and agrees to the tape recording of
conversations between the parties to this Agreement.
(j) RELATIONSHIP BETWEEN THE PARTIES
The Agreement is amended by the insertion after Section 14 of an additional
Section 15, reading in its entirety as follows:
"15. RELATIONSHIP BETWEEN THE PARTIES
Each party will be deemed to represent to the other party on the date on which
it enters into a Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary for that
Transaction):
(a) NON RELIANCE
It is acting for its own account, and it has made its own independent decisions
to enter into that Transaction and as to whether that Transaction is
appropriate or proper for it based upon its own judgment and upon advice from
such advisers as it has deemed necessary. It is not relying on any
communication (written or oral) of the other party as investment advice or as a
recommendation to enter into that Transaction; it being understood that
information and explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a recommendation to
enter into that Transaction. It has not received from the other party any
assurance or guarantee as to the expected results of that Transaction.
(b) ASSESSMENT AND UNDERSTANDING
It is capable of assessing the merits of and understanding (on its own behalf
or through independent professional advice), and understands and accepts, the
terms, conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the financial and other risks of that Transaction.
(c) STATUS OF PARTIES
The other party is not acting as a fiduciary or an adviser for it in respect of
that Transaction."
(k) TAX
The Agreement is amended by deleting Section 2(d) in its entirety and replacing
it with the following:
"(d) Deduction or Withholding for Tax
(i) Requirement to Withhold
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 (including, for the avoidance of doubt, if such deduction or
withholding is required in order for the payer to obtain relief from Tax) by
any applicable law,
33
as modified by the practice of any relevant governmental revenue authority,
then in effect. If a party (X) is so required to deduct or withhold, then that
party (the DEDUCTING PARTY):
(1) will promptly notify the other party (Y) of such requirement;
(2) will 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 Gross Up Amount (as
defined below) paid by the Deducting Party 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) will 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 X is Party A, will promptly pay in addition to the payment
to which Party B is otherwise entitled under this Agreement,
such additional amount (the GROSS UP AMOUNT) as is necessary
to ensure that the net amount actually received by Party B
will equal the full amount which Party B would have received
had no such deduction or withholding been required.
(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 for or on account of any Tax
in respect of payments under this Agreement;
(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 that Y has satisfied or then satisfies the
liability resulting from such Tax, (A) where X is Party B, Party A
will promptly pay to Party B the amount of such liability (the
LIABILITY AMOUNT) (including any related liability for interest and
together with an amount equal to the Tax payable by Party B on receipt
of such amount but only including any related liability for penalties
if Party A has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)) and Party B will
promptly pay to the relevant government revenue authority the amount
of such liability (including any related liability for interest and
penalties) and (B) where X is Party A and Party A would have been
required to pay a Gross Up Amount to Party B, Party A will promptly
pay to the relevant government revenue authority the amount of such
liability (including any related liability for interest and
penalties).
(iii) Tax Credit etc.
Where Party A pays an amount in accordance with Section 2(d)(i)(4),
Party B undertakes as follows:
(1) to the extent that Party B obtains any credit, allowance,
set-off or repayment in respect of Tax from the tax
authorities of any jurisdiction relating to any deduction or
withholding giving rise to such payment (a TAX CREDIT), it
shall pay to Party A, as soon as practical after receipt of
the same, so much of the cash benefit (as calculated below)
relating thereto which it has received as will leave Party B
in substantially the same (but in any event no worse) position
as Party B would have been in if no such deduction or
withholding had been required;
34
(2) the "cash benefit", in the case of a credit, allowance or
set-off, will be the additional amount of Tax which would have
been payable by Party B in the relevant jurisdiction referred
to in (1) above but for the obtaining by Party B of the said
Tax Credit and, in the case of a repayment, will be the amount
of the repayment together with any related interest or similar
payment obtained by Party B;
(3) to use all reasonable endeavours to obtain any Tax Credit as
soon as is reasonably practicable and, upon request by Party
A, to supply Party A with a reasonably detailed explanation of
Party B's calculation of the amount of any such Tax Credit and
of the date on which the same is received; and
(4) to ensure that any Tax Credit obtained is paid directly to
Party A, and not applied in whole or part to pay any other
Issuer Secured Creditor or any other party, both prior to and
subsequent to any enforcement of the security constituted by
the Master Issuer Deed of Charge."
(l) SECURITY, ENFORCEMENT AND LIMITED RECOURSE
(i) Party A agrees with Party B and the Master Issuer Security
Trustee to be bound by the terms of the Master Issuer Deed of
Charge and, in particular, confirms that:
(A) other than pursuant to the Credit Support Annex as
contemplated in Part 5(7) or payment of any amount in
respect of a cash benefit related to a Tax Credit
under this Agreement, no sum shall be payable by or on
behalf of Party B to it except in accordance with the
provisions of the Master Issuer Deed of Charge; and
(B) it will not take any steps for the winding up,
dissolution or reorganisation, or for the appointment
of a receiver, administrator, administrative receiver,
trustee, liquidator, sequestrator or similar officer
of Party B or of any or all of its revenues and assets
nor participate in any ex parte proceedings nor seek
to enforce any judgment against Party B, subject to
the provisions of the Master Issuer Deed of Charge.
(ii) In relation to all sums due and payable by Party B to Party A
(other than the return of collateral under the Credit Support
Annex), Party A agrees that it shall have recourse only to
Master Issuer Available Funds, but always subject to the order
of priority of payments set out in the Master Issuer Cash
Management Agreement and the Master Issuer Deed of Charge.
(m) CONDITION PRECEDENT
Section 2(a)(iii) is amended by the deletion of the words "a Potential Event of
Default" in respect of obligations of Party A only insofar as such Potential
Event of Default relates to the potential service by the Master Issuer Security
Trustee on Party B of a Note Enforcement Notice pursuant to Condition 9 of the
Terms and Conditions. For the avoidance of doubt, such amendment shall not
apply in any other circumstances in respect of either party to this Agreement.
(n) REPRESENTATIONS
Section 3(b) is amended by the deletion of the words "or Potential Event of
Default" in respect of obligations of Party B only insofar as such Potential
Event of Default relates to the potential service by the Master Issuer Security
Trustee on Party B of a Note Enforcement Notice pursuant to Condition 9 of the
Terms and Conditions. For the avoidance of doubt, such amendment shall not
apply in any other circumstances in respect of either party to this Agreement.
35
(o) ADDITIONAL DEFINITIONS
Words and expressions defined in the Amended and Restated Master Definitions
and Construction Schedule (the MASTER SCHEDULE) and the Master Issuer Master
Definitions and Construction Schedule (the ISSUER SCHEDULE) (together the
MASTER DEFINITIONS SCHEDULE) each signed for the purposes of identification on
27 March 2007 shall, except so far as the context otherwise requires, have the
same meaning in this Agreement. In the event of any inconsistency between the
definitions in this Agreement and in the Master Definitions Schedule, the
definitions in this Agreement will prevail. In the event of any inconsistency
between the Master Schedule and the Issuer Schedule, the Issuer Schedule will
prevail. The rules of interpretation set out in the Master Definitions Schedule
will apply to this Agreement.
(p) CALCULATIONS
Notwithstanding Section 6 of this Agreement, so long as Party A is (A) the
Affected Party in respect of an Additional Termination Event or (B) the
Defaulting Party in respect of any Event of Default, paragraphs (i) to (vi)
below shall apply:
(i) The definition of "Market Quotation" shall be deleted in its entirety
and replaced with the following:
""MARKET QUOTATION" means, with respect to one or more Terminated
Transactions, a Firm Offer which is (1) made by a Reference
Market-maker that is an Eligible Replacement, (2) for an amount, if
any, that would be paid to Party B (expressed as a negative number) or
by Party B (expressed as a positive number) in consideration of an
agreement between Party B and such 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, (3) made on the basis that Unpaid
Amounts in respect of the Terminated Transaction or group of
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 and (4)
made in respect of a Replacement Transaction with terms substantially
the same as those of this Agreement (save for the exclusion of
provisions relating to Transactions that are not Terminated
Transactions). The day and time as of which Firm Offers are to be
obtained will be selected in good faith by Party B."
(ii) The definition of "Settlement Amount" shall be deleted in its entirety
and replaced with the following:
""SETTLEMENT AMOUNT" means, with respect to any Early Termination
Date, an amount (as determined by Party B) equal to the Termination
Currency Equivalent of the amount (whether positive or negative) of
any Market Quotation for the relevant Terminated Transaction or group
of Terminated Transactions that is accepted by Party B so as to become
legally binding, provided that:
(1) If, on the day falling ten Local Business Days after the day
on which the Early Termination Date is designated or such
later day as Party B may specify in writing to Party A (which
in each case may not be later than the Early Termination Date)
(such day the "Latest Settlement Amount Determination Day"),
no Market Quotation for the relevant Terminated Transaction or
group of Terminated Transactions has been accepted by Party B
so as to become legally binding and one or more Market
Quotations have been made and remain capable of becoming
legally binding upon acceptance, the Settlement Amount shall
equal the Termination Currency Equivalent of the amount
(whether positive or negative) of the lowest of such Market
Quotations (for the avoidance of doubt, the lowest of such
36
Market Quotations shall be the lowest Market Quotation of such
Market Quotations expressed as a positive number or, if any of
such Market Quotations is expressed as a negative number, the
Market Quotation expressed as a negative number with the
largest absolute value); and
(2) If, on the Latest Settlement Amount Determination Day, no
Market Quotation for the relevant Terminated Transaction or
group of Terminated Transactions is accepted by Party B so as
to become legally binding and no Market Quotations have been
made and remain capable of becoming legally binding upon
acceptance, the Settlement Amount shall equal Party B's Loss
(whether positive or negative and without reference to any
Unpaid Amounts) for the relevant Terminated Transaction or
group of Terminated Transactions.
(iii) For the purpose of paragraph (4) of the definition of Market
Quotation, Party B shall determine in its sole discretion, acting in a
commercially reasonable manner, whether a Firm Offer is made in
respect of a Replacement Transaction with commercial terms
substantially the same as those of this Agreement (save for the
exclusion of provisions relating to Transactions that are not
Terminated Transactions).
(iv) At any time on or before the Latest Settlement Amount Determination
Day at which two or more Market Quotations remain capable of becoming
legally binding upon acceptance, Party B shall be entitled to accept
only the lowest of such Market Quotations(for the avoidance of doubt,
the lowest of such Market Quotations shall be the lowest Market
Quotation of such Market Quotations expressed as a positive number or,
if any of such Market Quotations is expressed as a negative number,
the Market Quotation expressed as a negative number with the largest
absolute value).
(v) If Party B requests Party A in writing to obtain Market Quotations,
Party A shall use its reasonable efforts to do so before the Latest
Settlement Amount Determination Day.
(vi) If the Settlement Amount is a negative number, Section 6(e)(i)(3) of
this Agreement shall be deleted in its entirety and replaced with the
following:
(A) "Second Method and Market Quotation. If Second Method and
Market Quotation apply, (1) Party B shall pay to Party A an
amount equal to the absolute value of the Settlement Amount in
respect of the Terminated Transactions, (2) Party B shall pay
to Party A the Termination Currency Equivalent of the Unpaid
Amounts owing to Party A and (3) Party A shall pay to Party B
the Termination Currency Equivalent of the Unpaid Amounts
owing to Party B, provided that (i) the amounts payable under
(2) and (3) shall be subject to Section 2(c) of this Agreement
and (ii) notwithstanding any other provision of this
Agreement, Section 2(c) shall not apply in respect of any
amount payable by Party A under (3)."
(q) TRANSFERS
Section 7 of this Agreement shall not apply to Party A, who shall be required
to comply with, and shall be bound by, the following:
Without prejudice to Section 6(b)(ii), Party A may transfer all its interest
and obligations in and under this Agreement upon providing five Local Business
Days' prior written notice to the Master Issuer Security Trustee, to any other
entity (a TRANSFEREE) provided that:
(i) (i) the Transferee's short-term unsecured and unsubordinated debt
obligations are then rated not less than "A-1" by S&P and "F1" by
Fitch (or its equivalent by any substitute rating agency) or such
Transferee's obligations under this Agreement are guaranteed by an
entity whose short-term, unsecured and unsubordinated debt obligations
are then rated not less than "A-1" by S&P and "F1" by Fitch (or if the
Transferee is not rated by a Rating Agency, at such equivalent rating
by another
37
internationally recognised rating agency as is acceptable to such
rating agency) and (ii) the Transferee is an Eligible Replacement;
(ii) as of the date of such transfer, the Transferee will not, as a result
of such transfer, be required to withhold or deduct for or on account
of any Tax under this Agreement (unless the Transferee is required to
pay a Gross Up Amount in respect of such Tax);
(iii) a Termination Event or an Event of Default will not occur under this
Agreement as a result of such transfer;
(iv) no additional amount will be payable by Party B to Party A or the
Transferee on the next succeeding Scheduled Payment Date as a result
of such transfer; and
(v) (if the Transferee is domiciled in a different jurisdiction from both
Party A and Party B) S&P, Xxxxx'x and Fitch have provided prior
written notification that the then current ratings of the Relevant
Notes will not be adversely affected.
Following such transfer all references to Party A shall be deemed to be
references to the Transferee and the Transferee shall be deemed to have made
each of the representations made by Party A pursuant to this Agreement.
Save as otherwise provided for in this Agreement and notwithstanding Section 7,
Party A shall not be permitted to transfer (by way of security or otherwise)
this Agreement or any interest or obligation in or under this Agreement without
the prior written consent of the Master Issuer Security Trustee.
(r) NOTICE OF REDEMPTION OF THE NOTES
The Master Issuer Security Trustee will notify Party A promptly following it
giving or receiving any notice (including any Note Enforcement Notice) in
connection with any redemption, purchase and cancellation of all of the
Relevant Notes by the Issuer.
(s) CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
A person who is not a party to this Agreement will not have any right under the
Contracts (Rights of Third Parties) Xxx 0000 to enforce any of its terms but
this will not affect any right or remedy of a third party which exists or is
available apart from that Act.
(t) SCOPE OF AGREEMENT
The provisions of this Agreement shall not apply to any transactions other than
the Credit Support Annex attached hereto and the Currency Swap Transaction in
respect of the Series and Class of Notes identified on the first page of this
Schedule (the RELEVANT NOTES) having a Trade Date of 19 March 2007 and entered
into between Party A and Party B.
(u) RATING AGENCY NOTIFICATIONS
Notwithstanding any other provision of this Agreement, this Agreement shall not
be amended, no Early Termination Date shall be effectively designated by Party
B, and no transfer of any rights or obligations under this Agreement shall be
made unless Xxxxx'x has been given prior written notice of such amendment,
designation or transfer.
(v) DEFINITIONS
38
ELIGIBLE GUARANTEE means an unconditional and irrevocable guarantee that is
provided by a guarantor as principal debtor rather than surety and is directly
enforceable by Party B, where either (A) a reputable international law firm has
given a legal opinion confirming that none of the guarantor's payments to Party
B under such guarantee will be subject to withholding for Tax or (B) such
guarantee provides that, in the event that any of such guarantor's payments to
Party B are subject to withholding for Tax, such guarantor is required to pay
such additional amount as is necessary to ensure that the net amount actually
received by Party B (free and clear of any withholding tax) will equal the full
amount Party B would have received had no such withholding been required.
ELIGIBLE REPLACEMENT means an entity (A) with the Second Trigger Required
Ratings or (B) whose present and future obligations owing to Party B are
guaranteed pursuant to an Eligible Guarantee provided by a guarantor with the
Second Trigger Required Ratings.
FIRM OFFER means an offer which, when made, was capable of becoming legally
binding upon acceptance.
39
SIGNATORIES
CREDIT SUISSE (USA), INC. XXXXXX MASTER ISSUER PLC
By: By:
Name: Xxxxxxx Xxxxxxxx Name: Xxxxxxx Xxxxxxxx
Title: Vice President Title: Attorney
Date: 19 March 2007 Date: 19 March 2007
THE BANK OF NEW YORK, LONDON BRANCH
By:
Name: Xxxxx Xxx
Title:
Date: 19 March 2007
40
(BILATERAL FORM - TRANSFER) 1 (ISDA AGREEMENTS SUBJECT TO
ENGLISH LAW) 2
ISDA[REGISTERED]
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
dated as of 19 March 2007
between
Credit Suisse (USA), Inc and Xxxxxx Master Issuer PLC
This Annex supplements, forms part of, and is subject to, the ISDA Master
Agreement referred to above and is part of its Schedule. For the purposes of
this Agreement, including, without limitation, Sections 1(c), 2(a), 5 and 6 ,
the credit support arrangements set out in this Annex constitute a Transaction
(for which this Annex constitutes the Confirmation).
PARAGRAPH 1. INTERPRETATION
Capitalised terms not otherwise defined in this Annex or elsewhere in this
Agreement have the meanings specified pursuant to Paragraph 10, and all
references in this Annex to Paragraphs are to Paragraphs of this Annex. In the
event of any inconsistency between this Annex and the other provisions of this
Schedule, this Annex will prevail, and in the event of any inconsistency
between Paragraph 11 and the other provisions of this Annex, Paragraph 11 will
prevail. For the avoidance of doubt, references to "transfer" in this Annex
mean, in relation to cash, payment and, in relation to other assets, delivery.
PARAGRAPH 2. CREDIT SUPPORT OBLIGATIONS
(a) DELIVERY AMOUNT. Subject to Paragraphs 3 and 4, upon a demand made by
the Transferee on or promptly following a Valuation Date, if the Delivery
Amount for that Valuation Date equals or exceeds the Transferor's Minimum
Transfer Amount, then the Transferor will transfer to the Transferee Eligible
Credit Support having a Value as of the date of transfer at least equal to the
applicable Delivery Amount (rounded pursuant to Paragraph 11(b)(iii)(D)).
Unless otherwise specified in Paragraph 11(b), the "Delivery Amount" applicable
to the Transferor for any Valuation Date will equal the amount by which:
_______________________
1 This document is not intended to create a charge or other security
interest over the assets transferred under its terms. Persons intending to
establish a collateral arrangement based on the creation of a charge or other
security interest should consider using the ISDA Credit Support Deed (English
law) or the ISDA Credit Support Annex (New York law), as appropriate.
2 This Credit Support Annex has been prepared for use with ISDA Master
Agreements subject to English law. Users should consult their legal advisers as
to the proper use and effect of this form and the arrangements it contemplates.
In particular, users should consult their legal advisers if they wish to have
the Credit Support Annex made subject to a governing law other than English law
or to have the Credit Support Annex subject to a different governing law than
that governing the rest of the ISDA Master Agreement (e.g., English law for the
Credit Support Annex and New York law for the rest of the ISDA Master
Agreement).
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of the Transferor's Credit
Support Balance (adjusted to include any prior Delivery Amount and to
exclude any prior Return Amount, the transfer of which, in either
case, has not yet been completed and for which the relevant Settlement
Day falls on or after such Valuation Date).
(b) RETURN AMOUNT. Subject to Paragraphs 3 and 4, upon a demand made by
the Transferor on or promptly following a Valuation Date, if the Return Amount
for that Valuation Date equals or exceeds the Transferee's Minimum Transfer
Amount, then the Transferee will transfer to the Transferor Equivalent Credit
Support specified by the Transferor in that demand having a Value as of the
date of transfer as close as practicable to the applicable Return Amount
(rounded pursuant to Paragraph 11(b)(iii)(D)) and the Credit Support Balance
will, upon such transfer, be reduced accordingly. Unless otherwise specified in
Paragraph 11(b), the "Return Amount" applicable to the Transferee for any
Valuation Date will equal the amount by which:
(i) the Value as of that Valuation Date of the Transferor's Credit
Support Balance (adjusted to include any prior Delivery Amount and to
exclude any prior Return Amount, the tranfer of which, in either case,
has not yet been completed and for which the relevant Settlement Day
falls on or after such Valuation Date)
exceeds
(ii) the Credit Support Amount.
PARAGRAPH 3. TRANSFERS, CALCULATIONS AND EXCHANGES
(a) TRANSFERS. All transfers under this Annex of any Eligible Credit
Support, Equivalent Credit Support, Interest Amount or Equivalent Distributions
shall be made in accordance with the instructions of the Transferee or
Transferor, as applicable, and shall be made:
(i) in the case of cash, by transfer into one or more bank
accounts specified by the recipient;
(ii) in the case of certificated securities which cannot or which
the parties have agreed will not be delivered by book entry, by
delivery in appropriate physical form to the recipient or its account
accompanied by any duly executed instruments of transfer, transfer tax
stamps and any other documents necessary to constitute a legally valid
transfer of the transferring party's legal and beneficial title to the
recipient; and
(iii) in the case of securities which the parties have agreed will
be delivered by book entry, by the giving of written instructions
(including, for the avoidance of doubt, instructions given by telex,
facsimile transmission or electronic messaging system) to the relevant
depository institution or other entity specified by the recipient,
together with a written copy of the instructions to the recipient,
sufficient, if complied with, to result in a legally effective
transfer of the transferring party's legal and beneficial title to the
recipient.
Subject to Paragraph 4 and unless otherwise specified, if a demand for the
transfer of Eligible Credit Support or Equivalent Credit Support is received by
the Notification Time, then the relevant transfer will be made not later than
the close of business on the Settlement Day relating to the date such demand is
received; if a demand is received after the Notification Time, then the
relevant transfer will be made not later than the close of business on the
Settlement Day relating to the day after the date such demand is received.
2
(b) CALCULATIONS. All calculations of Value and Exposure for purposes of
Paragraphs 2 and 4(a) will be made by the relevant Valuation Agent as of the
relevant Valuation Time. The Valuation Agent will notify each party (or the
other party, if the Valuation Agent is a party) of its calculations not later
than the Notification Time on the Local Business Day following the applicable
Valuation Date (or, in the case of Paragraph 4(a), following the date of
calculation).
(c) EXCHANGES.
(i) Unless otherwise specified in Paragraph 11, the Transferor may
on any Local Business Day by notice inform the Transferee that it
wishes to transfer to the Transferee Eligible Credit Support specified
in that notice (the "New Credit Support") in exchange for certain
Eligible Credit Support (the "Original Credit Support") specified in
that notice comprised in the Transferor's Credit Support Balance.
(ii) If the Transferee notifies the Transferor that it has
consented to the proposed exchange, (A) the Transferor will be obliged
to transfer the New Credit Support to the Transferee on the first
Settlement Day following the date on which it receives notice (which
may be oral telephonic notice) from the Transferee of its consent and
(B) the Transferee will be obliged to transfer to the Transferor
Equivalent Credit Support in respect of the Original Credit Support
not later than the Settlement Day following the date on which the
Transferee receives the New Credit Support, unless otherwise specified
in Paragraph 11(d) (the "Exchange Date"); provided that the Transferee
will only be obliged to transfer Equivalent Credit Support with a
Value as of the date of transfer as close as practicable to, but in
any event not more than, the Value of the New Credit Support as of
that date.
PARAGRAPH 4. DISPUTE RESOLUTION
(a) DISPUTED CALCULATIONS OR VALUATIONS. If a party (a "Disputing Party")
reasonably disputes (I) the Valuation Agent's calculation of a Delivery Amount
or a Return Amount or (II) the Value of any transfer of Eligible Credit Support
or Equivalent Credit Support, then:
(1) the Disputing Party will notify the other party and the
Valuation Agent (if the Valuation Agent is not the other party) not
later than the close of business on the Local Business Day following,
in the case of (I) above, the date that the demand is received under
Paragraph 2 or, in the case of (II) above, the date of transfer;
(2) in the case of (I) above, the appropriate party will transfer
the undisputed amount to the other party not later than the close of
business on the Settlement Day following the date that the demand is
received under Paragraph 2;
(3) the parties will consult with each other in an attempt to
resolve the dispute; and
(4) if they fail to resolve the dispute by the Resolution Time,
then:
(i) in the case of a dispute involving a Delivery Amount
or Return Amount, unless otherwise specified in Paragraph
11(e), the Valuation Agent will recalculate the Exposure and
the Value as of the Recalculation Date by:
(A) utilising any calculations of that part of the
Exposure attributable to the Transactions that the
parties have agreed are not in dispute;
(B) calculating that part of the Exposure
attributable to the Transactions in dispute by seeking
four actual quotations at mid-market from Reference
Market-makers for purposes of calculating Market
Quotation, and taking the arithmetic average of those
obtained; provided that if four quotations are not
available for a
3
particular Transaction, then fewer than four
quotations may be used for that Transaction, and if no
quotations are available for a particular Transaction,
then the Valuation Agent's original calculations will
be used for the Transaction; and
(C) utilising the procedures specified in Paragraph
11(e)(ii) for calculating the Value, if disputed, of
the outstanding Credit Support Balance;
(ii) in the case of a dispute involving the Value of any
transfer of Eligible Credit Support or Equivalent Credit
Support, the Valuation Agent will recalculate the Value as of
the date of transfer pursuant to Paragraph 11(e)(ii).
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) as
soon as possible but in any event not later than the Notification Time on the
Local Business Day following the Resolution Time. The appropriate party will,
upon demand following such notice given by the Valuation Agent or a resolution
pursuant to (3) above and subject to Paragraph 3(a), make the appropriate
transfer.
(b) NO EVENT OF DEFAULT. The failure by a party to make a transfer of any
amount which is the subject of a dispute to which Paragraph 4(a) applies will
not constitute an Event of Default for as long as the procedures set out in
this Paragraph 4 are being carried out. For the avoidance of doubt, upon
completion of those procedures, Section 5(a)(i) of this Agreement will apply to
any failure by a party to make a transfer required under the final sentence of
Paragraph 4(a) on the relevant due date.
PARAGRAPH 5. TRANSFER OF TITLE, NO SECURITY INTEREST, DISTRIBUTIONS AND
INTEREST AMOUNT
(a) TRANSFER OF TITLE. Each party agrees that all right, title and
interest in and to any Eligible Credit Support, Equivalent Credit Support,
Equivalent Distributions or Interest Amount which it transfers to the other
party under the terms of this Annex shall vest in the recipient free and clear
of any liens, claims, charges or encumbrances or any other interest of the
transferring party or of any third person (other than a lien routinely imposed
on all securities in a relevant clearance system).
(b) NO SECURITY INTEREST. Nothing in this Annex is intended to create or
does create in favour of either party any mortgage, charge, lien, pledge,
encumbrance or other security interest in any cash or other property
transferred by one party to the other party under the terms of this Annex.
(c) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) DISTRIBUTIONS. The Transferee will transfer to the Transferor
not later than the Settlement Day following each Distributions Date
cash, securities or other property of the same type, nominal value,
description and amount as the relevant Distributions ("Equivalent
Distributions") to the extent that a Delivery Amount would not be
created or increased by the transfer, as calculated by the Valuation
Agent (and the date of calculation will be deemed a Valuation Date for
this purpose).
(ii) INTEREST AMOUNT. Unless otherwise specified in Paragraph
11(f)(iii), the Transferee will transfer to the Transferor at the
times specified in Paragraph 11(f)(ii) the relevant Interest Amount to
the extent that a Delivery Amount would not be created or increased by
the transfer, as calculated by the Valuation Agent (and the date of
calculation will be deemed a Valuation Date for this purpose).
PARAGRAPH 6. DEFAULT
If an Early Termination Date is designated or deemed to occur as a result of an
Event of Default in relation to a party, an amount equal to the Value of the
Credit Support Balance, determined as though the Early
4
Termination Date were a Valuation Date, will be deemed to be an Unpaid Amount
due to the Transferor (which may or may not be the Defaulting Party) for
purposes of Section 6(e). For the avoidance of doubt, if Market Quotation is
the applicable payment measure for purposes of Section 6(e), then the Market
Quotation determined under Section 6(e) in relation to the Transaction
constituted by this Annex will be deemed to be zero, and, if Loss is the
applicable payment measure for purposes of Section 6(e), then the Loss
determined under Section 6(e) in relation to the Transaction will be limited to
the Unpaid Amount representing the Value of the Credit Support Balance.
PARAGRAPH 7. REPRESENTATION
Each party represents to the other party (which representation will be deemed
to be repeated as of each date on which it transfers Eligible Credit Support,
Equivalent Credit Support or Equivalent Distributions) that it is the sole
owner of or otherwise has the right to transfer all Eligible Credit Support,
Equivalent Credit Support or Equivalent Distributions it transfers to the other
party under this Annex, free and clear of any security interest, lien,
encumbrance or other restriction (other than a lien routinely imposed on all
securities in a relevant clearance system).
PARAGRAPH 8. EXPENSES
Each party will pay its own costs and expenses (including any stamp, transfer
or similar transaction tax or duty payable on any transfer it is required to
make under this Annex) in connection with performing its obligations under this
Annex, and neither party will be liable for any such costs and expenses
incurred by the other party.
PARAGRAPH 9. MISCELLANEOUS
(a) DEFAULT INTEREST. Other than in the case of an amount which is the
subject of a dispute under Paragraph 4(a), if a Transferee fails to make, when
due, any transfer of Equivalent Credit Support, Equivalent Distributions or the
Interest Amount, it will be obliged to pay the Transferor (to the extent
permitted under applicable law) an amount equal to interest at the Default Rate
multiplied by the Value on the relevant Valuation Date of the items of property
that were required to be transferred, from (and including) the date that the
Equivalent Credit Support, Equivalent Distributions or Interest Amount were
required to be transferred to (but excluding) the date of transfer of the
Equivalent Credit Support, Equivalent Distributions or Interest Amount. This
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed.
(b) GOOD FAITH AND COMMERCIALLY REASONABLE MANNER. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(c) DEMANDS AND NOTICES. All demands and notices given by a party under
this Annex will be given as specified in Section 12 of this Agreement.
(d) SPECIFICATIONS OF CERTAIN MATTERS. Anything referred to in this Annex
as being specified in Paragraph 11 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
PARAGRAPH 10. DEFINITIONS
As used in this Annex:
"BASE CURRENCY" means the currency specified as such in Paragraph 11(a)(i).
5
"BASE CURRENCY EQUIVALENT" means, with respect to an amount on a Valuation
Date, in the case of an amount denominated in the Base Currency, such Base
Currency amount and, in the case of an amount denominated in a currency other
than the Base Currency (the "Other Currency"), the amount of Base Currency
required to purchase such amount of the Other Currency at the spot exchange
rate determined by the Valuation Agent for value on such Valuation Date.
"CREDIT SUPPORT AMOUNT" means, with respect to a Transferor on a Valuation
Date, (i) the Transferee's Exposure plus (ii) all Independent Amounts
applicable to the Transferor, if any, minus (iii) all Independent Amounts
applicable to the Transferee, if any, minus (iv) the Transferor's Threshold;
provided, however, that the Credit Support Amount will be deemed to be zero
whenever the calculation of Credit Support Amount yields a number less than
zero.
"CREDIT SUPPORT BALANCE" means, with respect to a Transferor on a Valuation
Date, the aggregate of all Eligible Credit Support that has been transferred to
or received by the Transferee under this Annex, together with any Distributions
and all proceeds of any such Eligible Credit Support or Distributions, as
reduced pursuant to Paragraph 2(b), 3(c)(ii) or 6. Any Equivalent Distributions
or Interest Amount (or portion of either) not transferred pursuant to Paragraph
5(c)(i) or (ii) will form part of the Credit Support Balance.
"DELIVERY AMOUNT" has the meaning specified in Paragraph 2(a).
"DISPUTING PARTY" has the meaning specified in Paragraph 4.
"DISTRIBUTIONS" means, with respect to any Eligible Credit Support comprised in
the Credit Support Balance consisting of securities, all principal, interest
and other payments and distributions of cash or other property to which a
holder of securities of the same type, nominal value, description and amount as
such Eligible Credit Support would be entitled from time to time.
"DISTRIBUTIONS DATE" means, with respect to any Eligible Credit Support
comprised in the Credit Support Balance other than cash, each date on which a
holder of such Eligible Credit Support is entitled to receive Distributions or,
if that date is not a Local Business Day, the next following Local Business
Day.
"ELIGIBLE CREDIT SUPPORT" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 11(b)(ii) including, in relation
to any securities, if applicable, the proceeds of any redemption in whole or in
part of such securities by the relevant issuer.
"ELIGIBLE CURRENCY" means each currency specified as such in Paragraph
11(a)(ii), if such currency is freely available.
"EQUIVALENT CREDIT SUPPORT" means, in relation to any Eligible Credit Support
comprised in the Credit Support Balance, Eligible Credit Support of the same
type, nominal value, description and amount as that Eligible Credit Support.
"EQUIVALENT DISTRIBUTIONS" has the meaning specified in Paragraph 5(c)(i).
"EXCHANGE DATE" has the meaning specified in Paragraph 11(d).
"EXPOSURE" means, with respect to a party on a Valuation Date and subject to
Paragraph 4 in the case of a dispute, the amount, if any, that would be payable
to that party by the other party (expressed as a positive number) or by that
party to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(1) of this Agreement if all Transactions (other than the Transaction
constituted by this Annex) were being terminated as of the relevant Valuation
Time, on the basis that (i) that party is not the Affected Party and (ii) the
Base Currency is the Termination Currency; provided that Market Quotations will
be determined by the
6
Valuation Agent on behalf of that party using its estimates at mid market of
the amounts that would be paid for Replacement Transactions (as that term is
defined in the definition of "Market Quotation").
"INDEPENDENT AMOUNT" means, with respect to a party, the Base Currency
Equivalent of the amount specified as such for that party in Paragraph
11(b)(iii)(A); if no amount is specified, zero.
"INTEREST AMOUNT" means, with respect to an Interest Period, the aggregate sum
of the Base Currency Equivalents of the amounts of interest determined for each
relevant currency and calculated for each day in that Interest Period on the
principal amount of the portion of the Credit Support Balance comprised of cash
in such currency, determined by the Valuation Agent for each such day as
follows:
(x) the amount of cash in such currency on that day; multiplied by
(y) the relevant Interest Rate in effect for that day; divided by
(z) 360 (or, in the case of pounds sterling, 365).
"INTEREST PERIOD" means the period from (and including) the last Local Business
Day on which an Interest Amount was transferred (or, if no Interest Amount has
yet been transferred, the Local Business Day on which Eligible Credit Support
or Equivalent Credit Support in the form of cash was transferred to or received
by the Transferee) to (but excluding) the Local Business Day on which the
current Interest Amount is transferred.
"INTEREST RATE" means, with respect to an Eligible Currency, the rate specified
in Paragraph 11(f)(i) for that currency.
"LOCAL BUSINESS DAY", unless otherwise specified in Paragraph 11(h), means:
(i) in relation to a transfer of cash or other property (other
than securities) under this Annex, a day on which commercial banks are
open for business (including dealings in foreign exchange and foreign
currency deposits) in the place where the relevant account is located
and, if different, in the principal financial centre, if any, of the
currency of such payment;
(ii) in relation to a transfer of securities under this Annex, a
day on which the clearance system agreed between the parties for
delivery of the securities is open for the acceptance and execution of
settlement instructions or, if delivery of the securities is
contemplated by other means, a day on which commercial banks are open
for business (including dealings in foreign exchange and foreign
currency deposits) in the place(s) agreed between the parties for this
purpose;
(iii) in relation to a valuation under this Annex, a day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) in the place of location of
the Valuation Agent and in the place(s) agreed between the parties for
this purpose; and
(iv) in relation to any notice or other communication under this
Annex, a day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits)
in the place specified in the address for notice most recently
provided by the recipient.
"MINIMUM TRANSFER AMOUNT" means, with respect to a party, the amount specified
as such for that party in Paragraph 11(b)(iii)(C); if no amount is specified,
zero.
"NEW CREDIT SUPPORT" has the meaning specified in Paragraph 3(c)(i).
"NOTIFICATION TIME" has the meaning specified in Paragraph 11(c)(iv).
7
"RECALCULATION DATE" means the Valuation Date that gives rise to the dispute
under Paragraph 4; provided, however, that if a subsequent Valuation Date
occurs under Paragraph 2 prior to the resolution of the dispute, then the
"RECALCULATION DATE" means the most recent Valuation Date under Paragraph 2.
"RESOLUTION TIME" has the meaning specified in Paragraph 11(e)(i).
"RETURN AMOUNT" has the meaning specified in Paragraph 2(b).
"SETTLEMENT DAY" means, in relation to a date, (i) with respect to a transfer
of cash or other property (other than securities), the next Local Business Day
and (ii) with respect to a transfer of securities, the first Local Business Day
after such date on which settlement of a trade in the relevant securities, if
effected on such date, would have been settled in accordance with customary
practice when settling through the clearance system agreed between the parties
for delivery of such securities or, otherwise, on the market in which such
securities are principally traded (or, in either case, if there is no such
customary practice, on the first Local Business Day after such date on which it
is reasonably practicable to deliver such securities).
"THRESHOLD" means, with respect to a party, the Base Currency Equivalent of the
amount specified as such for that party in Paragraph 11(b)(iii)(B); if no
amount is specified, zero.
"TRANSFEREE" means, in relation to each Valuation Date, the party in respect of
which Exposure is a positive number and, in relation to a Credit Support
Balance, the party which, subject to this Annex, owes such Credit Support
Balance or, as the case may be, the Value of such Credit Support Balance to the
other party.
"TRANSFEROR" means, in relation to a Transferee, the other party.
"VALUATION AGENT" has the meaning specified in Paragraph 11(c)(i).
"VALUATION DATE" means each date specified in or otherwise determined pursuant
to Paragraph 11(c)(ii).
"VALUATION PERCENTAGE" means, for any item of Eligible Credit Support, the
percentage specified in Paragraph 11(b)(ii).
"VALUATION TIME" has the meaning specified in Paragraph 11(c)(iii).
"VALUE" means, for any Valuation Date or other date for which Value is
calculated, and subject to Paragraph 4 in the case of a dispute, with respect
to:
(i) Eligible Credit Support comprised in a Credit Support Balance
that is:
(A) an amount of cash, the Base Currency Equivalent of
such amount multiplied by the applicable Valuation Percentage,
if any; and
(B) a security, the Base Currency Equivalent of the bid
price obtained by the Valuation Agent multiplied by the
applicable Valuation Percentage, if any; and
(ii) items that are comprised in a Credit Support Balance and are
not Eligible Credit Support, zero.
8
CREDIT SUPPORT ANNEX
Elections and Variables dated as of 19 March 2007
Between
CREDIT SUISSE (USA), INC.
("Party A")
and
XXXXXX MASTER ISSUER PLC
("Party B")
and
THE BANK OF NEW YORK, LONDON BRANCH
(the "Master Issuer Security Trustee")
PARAGRAPH 11. ELECTIONS AND VARIABLES
(a) Base Currency and Eligible Currency.
(i) "Base Currency" MEANS GBP.
(ii) "Eligible Currency" means the Base Currency and U.S. Dollars.
It is agreed by the parties that where the Credit Support Amount is
transferred in a currency other than the Base Currency, the Valuation
Percentage specified in Paragraph 11(b)(ii) in relation to S&P and
Fitch shall be reduced by a percentage agreed by the parties and
approved by the relevant Rating Agency ("ADDITIONAL VALUATION
PERCENTAGE").
(b) CREDIT SUPPORT OBLIGATIONS.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "DELIVERY AMOUNT" has the meaning specified in
Paragraph 2(a), as amended (I) by deleting the words
"upon a demand made by the Transferee on or promptly
following a Valuation Date" and inserting in lieu
thereof the words "not later than the close of
business on each Valuation Date" and (II) by deleting
in its entirety the sentence beginning "Unless
otherwise specified in Paragraph 11(b)" and inserting
in lieu thereof the following:
"The "DELIVERY AMOUNT" applicable to the Transferor for any
Valuation Date will equal the greatest of:
(1) the amount by which (a) the Credit Support Amount
(determined according to the Fitch Criteria) exceeds
(b) the Value (determined using the Fitch Valuation
Percentages in Paragraph 11(b)(ii)) as of such
Valuation Date of the Transferor's Credit Support
Balance (adjusted to include any prior Delivery Amount
and to exclude any prior Return Amount, the transfer
of which, in each case, has not yet been completed and
for which the relevant Settlement Day falls on or
after such Valuation Date);
(2) the amount by which (a) the Credit Support Amount
(determined according to the Xxxxx'x Criteria) exceeds
(b) the Value (determined using the applicable Xxxxx'x
Valuation Percentages in Appendix A) as of such
Valuation Date of the Transferor's Credit Support
Balance (adjusted to include any prior Delivery Amount
and to exclude any prior Return Amount, the transfer
of which, in each case, has not yet
9
been completed and for which the relevant Settlement
Day falls on or after such Valuation Date); and
(3) the amount by which (a) the Credit Support Amount
(determined according to the S&P Criteria) exceeds (b)
the Value (determined using the S&P's Valuation
Percentages in Paragraph 11(b)(ii)) as of such
Valuation Date of the Transferor's Credit Support
Balance (adjusted to include any prior Delivery Amount
and to exclude any prior Return Amount, the transfer
of which, in each case, has not yet been completed and
for which the relevant Settlement Day falls on or
after such Valuation Date)."
Provided that, in respect of any Valuation Date, the Value of
the Eligible Credit Support to be transferred under Paragraph
2(a) shall be calculated using the applicable Valuation
Percentages for the rating agency whose criteria have resulted
in the greatest amount under (1), (2) and (3) of this
Paragraph 11(b)(i)(A).
Provided further that if , in respect of any Valuation Date,
the Delivery Amount is greater than zero, the Transferor will
transfer to the Transferee sufficient Eligible Credit Support
to ensure that, immediately following such transfer, none of
the amounts calculated under (1), (2) and (3) of this
Paragraph 11(b)(i)(A) shall be greater than zero.
(B) "RETURN AMOUNT" has the meaning as specified in
Paragraph 2(b) as amended by deleting in its entirety
the sentence beginning "Unless otherwise specified in
Paragraph 11(b)" and inserting in lieu thereof the
following:
"The "RETURN AMOUNT" applicable to the Transferee for any
Valuation Date will equal the least of:
(1) the amount by which (a) the Value (determined using
the Fitch Valuation Percentages in Paragraph
11(b)(ii)) as of such Valuation Date of the
Transferor's Credit Support Balance (adjusted to
include any prior Delivery Amount and to exclude any
prior Return Amount, the transfer of which, in each
case, has not yet been completed and for which the
relevant Settlement Day falls on or after such
Valuation Date) exceeds (b) the Credit Support Amount
(determined according to the Fitch Criteria),
(2) the amount by which (a) the Value (determined using
the Xxxxx'x Valuation Percentages in Appendix A) as of
such Valuation Date of the Transferor's Credit Support
Balance (adjusted to include any prior Delivery Amount
and to exclude any prior Return Amount, the transfer
of which, in each case, has not yet been completed and
for which the relevant Settlement Day falls on or
after such Valuation Date) exceeds (b) the Credit
Support Amount (determined according to the Xxxxx'x
Criteria); and
(3) the amount by which (a) the Value (determined using
the S&P's Valuation Percentages in Paragraph
11(b)(ii)) as of such Valuation Date of the
Transferor's Credit Support Balance (adjusted to
include any prior Delivery Amount and to exclude any
prior Return Amount, the transfer of which, in each
case, has not yet been completed and for which the
relevant Settlement Day falls on or after such
Valuation Date) exceeds (b) the Credit Support Amount
(determined according to the S&P Criteria)."
10
Provided that, in respect of any Valuation Date, the Value of
the Eligible Credit Support to be transferred under Paragraph
2(b) shall be calculated using the applicable Valuation
Percentages for the rating agency whose criteria have resulted
in the lowest amount under (1), (2) and (3) of this Paragraph
11(b)(i)(B).
Provided further that in no event shall the Transferee be
required to transfer any Equivalent Credit Support under
Paragraph 2(b) if, immediately following such transfer, any of
the amounts calculated under (1), (2) and (3) of Paragraph
11(b)(i)(A) (Delivery Amount) would be greater than zero..
(C) "CREDIT SUPPORT AMOUNT" has the meaning specified
under the relevant definition of Ratings Criteria.
(ii) Eligible Credit Support. ON ANY DATE:
(A) for the purpose of Xxxxx'x the collateral specified in Appendix A will
qualify as " ELIGIBLE CREDIT SUPPORT" for Party A and Valuation Percentages
shall apply as set out in such table; and
(B) for the purpose of Fitch the following items will qualify as "ELIGIBLE
CREDIT SUPPORT " for Party A:
ELIGIBLE CREDIT SUPPORT VALUATION
PERCENTAGE
(A) cash in an Eligible Currency 100%
(B) negotiable debt obligations issued after 18 July 1984 by the For the purposes of S&P
U.S. Treasury Department having a residual maturity on such 98.8%; for the purposes of
date of less than 1 year (with local and foreign currency Fitch, the Advance Rate,
issuer ratings of AAA by S&P or above). if applicable (the
"ADVANCE RATE")
under the heading "Notes
Rating/AAA" in the table
entitled "Advance Rates
(%)" in Appendix 3 to
Fitch's Structured Finance
Report entitled
"Counterparty Risk in
Structured Finance
Transactions: Swap
Criteria" dated 13
September 2004 (the
"Fitch Report").
(C) negotiable debt obligations issued after 18 July 1984 by the For the purposes of S&P
U.S. Treasury Department having a residual maturity on such when residual maturity is
date equal to or greater than 1 year but less than 5 years (with less than 3 years in such
local and foreign currency issuer ratings of AAA by S&P or circumstances, 97.1%,
above). and when residual
maturity is less than 5
years in such
circumstances, 91.2%; for
11
the purposes of Fitch, the
Advance Rate, if
applicable.
(D) negotiable debt obligations issued after18 July 1984 by the For the purposes of S&P
U.S. Treasury Department having a residual maturity on such when residual maturity is
date equal to or greater than 5 years but less than 10 years less than 7 years in such
(with local and foreign currency issuer ratings of AAA by circumstances, 87.5%,
S&P or above). and when residual
maturity is less than 10
years in such
circumstances 83.8%; for
the purposes of Fitch, the
Advance Rate, if
applicable.
(E) negotiable debt obligations of the Federal Republic of For the purposes of S&P
Germany (with local and foreign currency issuer ratings of 83.8%; for the purposes of
AA by S&P or above) with a residual maturity of less than 10 Fitch, the Advance Rate,
years. if applicable.
(F) negotiable debt obligations of the Republic of France (with For the purposes of S&P
local and foreign currency issuer ratings of AA by S&P or 83.8%; for the purposes of
above) with a residual maturity of less than 10 years. Fitch, the Advance Rate,
if applicable.
(G) negotiable debt obligations of Belgium (with local and For the purposes of S&P
foreign currency issuer ratings of AA by S&P or above) with 83.8%; for the purposes of
a residual maturity of less than 10 years. Fitch, the Advance Rate,
if applicable.
(H) negotiable debt obligations of the United Kingdom (with For the purposes of S&P
local and foreign currency issuer ratings of AA by S&P or 83.8%; for the purposes of
above) with a residual maturity of less than 10 years. Fitch, the Advance Rate,
if applicable.
(I) negotiable debt obligations of Switzerland (with local and For the purposes of S&P
foreign currency issuer ratings of AA by S&P or above) with 83.8%; for the purposes of
a residual maturity of less than 10 years. Fitch, the Advance Rate,
if applicable.
(J) negotiable debt obligations of Italy (with local and foreign For the purposes of S&P
currency issuer ratings of AA by S&P or above) with a 83.8%; for the purposes of
residual maturity of less than 10 years. Fitch, the Advance Rate,
if applicable.
(K) negotiable debt obligations of the Netherlands (with local and For the purposes of S&P
foreign currency issuer ratings of AA by S&P or above) with 83.8%; for the purposes of
a residual maturity of less than 10 years. Fitch, the Advance Rate,
if applicable.
(L) negotiable senior debt obligations of the US Government For the purposes of S&P
National Mortgage Association, the US Federal National 97.1%; for the purposes of
12
Mortgage Association, the US Federal Home Loan Mortgage Fitch, the Advance Rate,
Corporation, the US Student Loans Marketing Association or if applicable.
a US Federal Home Loan Bank (all entities rated AAA by
S&P or above) with a residual maturity on such date equal to
or greater than 1 year but less than 3 years.
(M) negotiable senior debt obligations of the US Government For the purposes of S&P
National Mortgage Association, the US Federal National 94.3%; for the purposes of
Mortgage Association, the US Federal Home Loan Mortgage Fitch, the Advance Rate,
Corporation, the US Student Loans Marketing Association or if applicable.
a US Federal Home Loan Bank (all entities rated AAA by
S&P or above) with a residual maturity on such date equal to
or greater than 3 years but less than 5 years.
(N) negotiable senior debt obligations of the US Government For the purposes of S&P
National Mortgage Association, the US Federal National 91.5%; for the purposes of
Mortgage Association, the US Federal Home Loan Mortgage Fitch, the Advance Rate,
Corporation, the US Student Loans Marketing Association or if applicable.
a US Federal Home Loan Bank (all entities rated AAA by
S&P or above) with a residual maturity on such date equal to
or greater than 5 years but less than 7 years.
(O) negotiable senior debt obligations of the US Government For the purposes of S&P
National Mortgage Association, the US Federal National 89.3%; for the purposes of
Mortgage Association, the US Federal Home Loan Mortgage Fitch, the Advance Rate,
Corporation, the US Student Loans Marketing Association or if applicable.
a US Federal Home Loan Bank (all entities rated AAA by
S&P or above) with a residual maturity on such date equal to
or greater than 7 years but less than 10 years.
(iii) THRESHOLDS.
(A) "INDEPENDENT AMOUNT" means, for Party A and Party B,
with respect to each Transaction, zero.
(B) "THRESHOLD" means, for Party A: infinity, unless (1)
any of an Initial S&P Rating Event, a Subsequent S&P Rating
Event, , a Fitch Rating Event, a First Subsequent Fitch Rating
Event or a Second Subsequent Fitch Rating Event has occurred
and is continuing and Party A has not taken alternative action
as contemplated by Part 5 of the Schedule to the Agreement or
(2) no Relevant Entity has the First Trigger Required Ratings
and either (a) no Relevant Entity has had the First Trigger
Required Ratings since this Credit Support Annex was executed
or (b) at least 30 Local Business Days have elapsed since the
last time a Relevant Entity had the First Trigger Required
Ratings, in which case the Threshold for Party A shall be
zero; and
"THRESHOLD" means, for Party B: infinity
(C) "MINIMUM TRANSFER AMOUNT" means, with respect to Party
A, and Party B, GBP 50,000; provided, that if (1) an
Event of Default has occurred and is continuing in
respect of which Party A is the Defaulting Party, or
(2) an Additional Termination Event has occurred in
respect of which Party A is an Affected Party, the
Minimum Transfer Amount with respect to Party A shall
be zero.
13
(D) "ROUNDING". The Delivery Amount will be rounded up to
the nearest integral multiple of GBP 10,000 and the
Return Amount will be rounded down to the nearest
integral multiple of GBP 10,000, subject to the
maximum Return Amount being equal to the Credit
Support Balance.
(c) VALUATION AND TIMING.
(i) "VALUATION AGENT" means Party A in all circumstances.
(ii) "VALUATION DATE" means the first Business Day of each calendar
week; provided that if such day is not a Local Business Day
then the Valuation Date shall be the preceding day that is a
Local Business Day and provided that for so long as the Second
Rating Trigger Requirements apply, Valuation Date shall mean
each Local Business Day.
(iii) "VALUATION TIME" means the close of business on the Local
Business Day immediately preceding the Valuation Date or date
of calculation, as applicable; provided that the calculations
of Value and Exposure will be made as of approximately the
same time on the same date.
(iv) "NOTIFICATION TIME" means by 5.00p.m., London time, on a Local
Business Day.
(d) EXCHANGE DATE. "EXCHANGE DATE" has the meaning specified in Paragraph
3(c)(ii).
(e) DISPUTE RESOLUTION.
(i) "RESOLUTION TIME" means 2.00 p.m., London time, on the Local
Business Day following the date on which notice is given that
gives rise to a dispute under Paragraph 4.
(ii) "VALUE". For the purpose of Paragraphs 4(a)(4)(i)(C) and
4(a)(4)(ii), the Value of the outstanding Credit Support
Balance or of any transfer of Eligible Credit Support or
Equivalent Credit Support, as the case may be, will be
calculated as follows:
For Eligible Credit Support comprised in a Credit Support
Balance that is:
(A) an amount of cash, the Base Currency Equivalent of
such amount; and
(B) a security, the sum of (a)(x) the last bid price on
such date for such securities on the principal
national securities exchange on which such securities
are listed, multiplied by the applicable Valuation
Percentage; or (y) where any securities are not listed
on a national securities exchange, the bid price for
such securities quoted as at the close of business on
such date by any principal market maker (which shall
not be, and shall be independent from, the Valuation
Agent) for such securities chosen by the Valuation
Agent, multiplied by the applicable Valuation
Percentage; or (z) if no such bid price is listed or
quoted for such date, the last bid price listed or
quoted (as the case may be), as of the day next
preceding such date on which such prices were
available, multiplied by the applicable Valuation
percentage; plus (b) the accrued interest where
applicable on such securities (except to the extent
that such interest shall have been paid to the
Transferor pursuant to Paragraph 5(c)(ii) or included
in the applicable price referred to in subparagraph
(a) above) as of such date.
(iii) "Alternative". The provisions of Paragraph 4 will apply.
(f) DISTRIBUTION AND INTEREST AMOUNT.
14
(i) INTEREST RATE. The "INTEREST RATE" will be, with respect to
the Base Currency, such rate as may be agreed between the
parties from time to time, and subject to confirmation from
Moody's that it shall not affect the then current ratings of
the Series 1 Class B1 Master Issuer Notes. In the event that
the parties agree that Eligible Credit Support may include
currencies other than the Base Currency, the "INTEREST RATE"
with respect to each such currency shall be such rate as may
be agreed between the parties at the time that it is agreed
that Eligible Credit Support may include such currency and
subject to confirmation from Moody's that it shall not affect
the then current ratings of the Series 1 Class B1 Master
Issuer Notes.
(ii) TRANSFER OF INTEREST AMOUNT. The transfer of the Interest
Amount will be made on the first Local Business Day following
the end of each calendar month to the extent that Party B has
earned and received such amount of interest and that a
Delivery Amount would not be created or increased by that
transfer, and on any other Local Business Day on which
Equivalent Credit Support is transferred to the Transferor
pursuant to Paragraph 2(b), provided that Party B shall only
be obliged to transfer any Interest Amount to Party A to the
extent that it has received such amount.
(iii) ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph
5(c)(ii) will apply. For the purposes of calculating the
Interest Amount the amount of interest calculated for each day
of the Interest Period shall, with respect to any Eligible
Currency, be compounded daily.
(iv) INTEREST AMOUNT. The definition of "INTEREST AMOUNT" shall be
deleted and replaced with the following:
"INTEREST AMOUNT" means, with respect to an Interest Period
and each portion of the Credit Support Balance comprised of
cash in an Eligible Currency, the sum of the amounts of
interest determined for each day in that Interest Period by
the Valuation Agent as follows:
(a) the amount of such currency comprised in the Credit
Support Balance at the close of business for general
dealings in the relevant currency on such day (or, if
such day is not a Local Business Day, on the
immediately preceding Local Business Day); multiplied
by
(b) the relevant Interest Rate; divided by
(z) 360 (or in the case of Pounds Sterling, 365).
(v) "DISTRIBUTIONS" means, with respect to any Eligible Credit
Support comprised in the Credit Support Balance consisting of
securities, all principal, interest and other payments and
distributions of cash or other property which a holder of
securities of the same type, nominal value, description and
amount as such Eligible Credit Support would have received
from time to time.
(vi) "DISTRIBUTIONS DATE" means, with respect to any Eligible
Credit Support comprised in the Credit Support Balance other
than cash, each date on which a holder of such Eligible Credit
Support would have received Distributions or, if that date is
not a Local Business Day, the next following Local Business
Day.
(g) ADDRESSES FOR TRANSFERS.
Party A: Details to be obtained from:
15
Credit Suisse (USA), Inc.
00 Xxxxxxx Xxxxxx
Xxx Xxxx
XX 00000
XXX
Attention: Xxx X. Xxxxx
Facsimile No.: x0 000 000 0000
Party B: Details to be obtained from: Xxxxxx Master Issuer plc,
c/o Abbey National plc
0 Xxxxxx Xxxxxx
Xxxxxx'x Xxxxx
Xxxxxx XX0 0XX
Collateral calls /
queries should be addressed to: Xxxxxx Master Issuer plc,
c/o Abbey National plc
0 Xxxxxx Xxxxxx
Xxxxxx'x Xxxxx
Xxxxxx XX0 0XX
Attention: Company Secretary
Facsimile No.: x00 (0) 00 0000 0000
With a copy to: Xxxxxx Master Issuer plc,
c/o Abbey National plc
Abbey House (AAM 129)
000 Xxxxxxx Xxxx Xxxx
Xxxxxx Xxxxxx XX0 0XX
Attention: Securitisation Team, Retail Credit Risk
Facsimile No.: x00 (0) 0000 000 000
(h) OTHER PROVISIONS.
(i) TRANSFER TIMING
1) The final paragraph of Paragraph 3(a) shall be deleted and
replaced with the following:
"Subject to Paragraph 4, and unless otherwise specified, any
transfer of Eligible Credit Support or Equivalent Credit
Support (whether by the Transferor pursuant to Paragraph 2(a)
or by the Transferee pursuant to Paragraph 2(b)) shall be made
not later than the close of business on the Settlement Day."
2) The definition of Settlement Day shall be deleted and replaced
with the following:
"SETTLEMENT DAY" means the next Local Business Day after the
Demand Date
3) For the purposes of this Paragraph 11(h)(i):
"DEMAND DATE" means, with respect to a transfer by a party:
16
(ii) in the case of a transfer pursuant to Xxxxxxxxx 0, Xxxxxxxxx 3
or Paragraph 4(a)(2), the relevant Valuation Date (and for the
avoidance of doubt, for the purposes of Paragraph 2 and
Paragraph 4(a)(2), the Transferor will be deemed to receive
notice of the demand by the Transferee to make a transfer of
Eligible Credit Support); and
(iii) in the case of a transfer pursuant to Paragraph 3(c)(ii)(A),
the date on which the Transferee has given its consent to the
proposed exchange.
For the avoidance of doubt, on each Demand Date the Transferor
shall deliver to the Transferee and the Note Trustee a
statement showing the amount of Eligible Credit Support to be
delivered.
(iv) COSTS OF TRANSFER ON EXCHANGE
Notwithstanding Paragraph 8, the Transferor will be
responsible for, and will reimburse the Transferee for, all
transfer and other taxes and other costs involved in the
transfer of Eligible Credit Support from the Transferor to the
Transferee or in the transfer of Equivalent Credit Support
from the Transferee to the Transferor hereto.
(v) CUMULATIVE RIGHTS
The rights, powers and remedies of the Transferee under this
Annex shall be in addition to all rights, powers and remedies
given to the Transferee by this Agreement or by virtue of any
statute or rule of law, all of which rights, powers and
remedies shall be cumulative and may be exercised successively
or concurrently without impairing the rights of the Transferee
in the Credit Support Balance created pursuant to this Annex.
(vi) SINGLE TRANSFEROR AND SINGLE TRANSFEREE
Party A and Party B agree that, notwithstanding anything to
the contrary in this Annex, (including, without limitation,
the recital hereto, Paragraph 2 or the definitions in
Paragraph 10), (a) the term "Transferee" as used in this Annex
means only Party B, (b) the term "Transferor" as used in this
Annex means only Party A, (c) only Party A will be required to
make Transfers of Eligible Credit Support hereunder; and (d)
in the calculation of any Credit Support Amount, where the
Transferee's Exposure would be expressed as a negative number,
such Exposure shall be deemed to be zero.
(vii) RATINGS CRITERIA
"RATINGS CRITERIA" means, the criteria used by S&P (as set out
in S&P's Structured Finance reports entitled "Standard &
Poor's Global Interest Rate and Currency Swap Counterparty
Rating Criteria Expanded" dated 17 December 2003 and "Global
Interest Rate and Currency Swaps: Calculating the Collateral
Required Amount" dated 26 February 2004) ("S&P CRITERIA"), the
criteria used by Moody's (as set out below ("MOODY'S
CRITERIA") and/or the criteria used by Fitch (as set out in
Fitch's Structured Finance Report entitled "Counterparty Risk
in Structured Finance Transactions: Swap Criteria" dated 13
September 2004) ("FITCH CRITERIA") for the purposes of
determining the amount of Eligible Credit Support Party A is
required to transfer hereunder following a credit ratings
downgrade where Party A has opted to transfer Eligible Credit
Support in support of its obligations under this Agreement
pursuant to Part 5(7) of this Agreement.
MOODY'S CRITERIA
"Credit Support Amount" shall be:
17
1. for so long as (A) the Second Rating Trigger
Requirements do not apply or (B) less than 30 Local
Business Days have elapsed since the last time the
Second Rating Trigger Requirements did not apply, the
greater of:
(i) zero; and
(ii) the sum of (x) the Transferee's Exposure and
(y) the aggregate of the Additional First
Trigger Collateral Amounts for all Transactions
(other than the Transaction constituted by this
Annex),
(where "ADDITIONAL FIRST TRIGGER COLLATERAL AMOUNT"
means, for each Transaction, the lesser of:
(a) the sum of (x) the Party A Currency Amount for
such Transaction multiplied by 0.02 and (y)
DV01 for such Transaction multiplied by 20; and
(b) the Party A Currency Amount for such
Transaction multiplied by 0.05.
minus the Threshold in respect of Party A
2. for so long as the Second Rating Trigger Requirements
do apply and 30 or more Local Business Days have
elapsed since the last time the Second Rating Trigger
Requirements did not apply, with respect to a
Valuation Date, the greater of:
(i) zero;
(ii) the aggregate amount of the Next Payments for
all Next Payment Dates; and
(iii) the sum of (x) the Transferee's Exposure and
(y) the aggregate of the Additional Second
Trigger Collateral Amounts for all Transactions
(other than the Transaction constituted by this
Annex),
where, "ADDITIONAL SECOND TRIGGER COLLATERAL AMOUNT"
means, for each Transaction, the lesser of:
(a) the sum of (x) Party A Currency Amount for such
Transaction multiplied by 0.06 and (y) DV01 for
such Transaction multiplied by 30; and
(b) the Party A Currency Amount for such
Transaction multiplied by 0.11.
For the purpose of this definition, "DV01" means with
respect to a Transaction and any date of
determination, the estimated change in the
Transferee's Exposure with respect to such Transaction
that would result from a one basis point change in the
relevant swap curve on such date, as determined by the
Valuation Agent in good faith and in a commercially
reasonable manner. The Valuation Agent shall, upon
request of Party B, provide to Party B a statement
showing in reasonable detail such calculation;
"NEXT PAYMENT" means, in respect of each Next Payment
Date, the greater of (i) the amount of any payments
due to be made by Party A under Section 2(a) on such
Next Payment Date less any payments due to be made by
Party B under Section 2(a) on such Next Payment Date
(in each case, after giving effect to any applicable
netting under Section 2(c)) and (ii) zero.
18
"NEXT PAYMENT DATE" means each date on which the next
scheduled payment under any Transaction is due to be
paid.
Fitch Criteria
"CREDIT SUPPORT AMOUNT" shall mean at any time for the
purposes of the Fitch Criteria with respect to a
Transferor on a Valuation Date (i) at any time that
the Threshold for Party A is infinity, zero and (ii)
at any time that the Threshold for Party A is zero,
the result of the following formula:
max [MV plus VC x 105 per cent multiplied by N; 0]
where:
"MAX" means maximum;
"MV" means the Transferee's Exposure;
"VC" means the applicable volatility cushion at that
time determined by reference to the table headed
"Volatility Cushion (%)" appearing at the end of
Appendix 2 to the Fitch Criteria (and for such purpose
calculating the relevant Weighted Average Life
assuming a zero prepayment rate and zero default rate
in relation to the mortgages beneficially owned by
Party B), if applicable; and
"N" means the aggregate Currency Amounts applicable to
Party A in respect of all Transactions under this
Agreement (other than the Transaction constituted by
this Annex) outstanding at that time.
S&P Criteria
"CREDIT SUPPORT AMOUNT" shall mean (i) at any time
that the Threshold for Party A is infinity, zero and
(ii) at any time that the Threshold for Party A is
zero, an amount determined in accordance with the S&P
Criteria.
(viii) CALCULATIONS.
Paragraph 3(b) of this Annex shall be amended by inserting the
words "and shall provide each party (or the other party, if
the Valuation Agent is a party) with a description in
reasonable detail of how such calculations were made, upon
request" after the word "calculations" in the third line
thereof.
(ix) INDEPENDENT PARTY.
If Party A is at any time rated below "A3" or "Prime-2" by
Moody's or below "BBB+" or "F2" by Fitch, Party A shall (i) on
a weekly basis (on the same date that the Valuation Agent
makes its calculation), obtain a calculation from a party
which is independent to Party A's trading desk (or the
equivalent) (for example the middle office or market risk
department of Party A, Party A's auditors or a consulting firm
in derivative products appointed by Party A) to validate the
calculation of any calculation by Party A's trading desk (or
the equivalent); and (ii) upon the written request of Moody's
or Fitch, on a monthly basis, use it's best efforts to seek
two quotations from Reference Market-makers; provided that if
2 Reference Market-makers are not available to provide a
quotation, then fewer than 2 Reference Market-makers may be
used for such purpose, and if no Reference Market-makers are
available, the Master Issuer Security Trustee will determine
an alternative source, for the purpose of calculations.
19
Where more than one quotation is obtained, the quotation
representing the greatest amount of Exposure of the Transferee
shall be used by the Valuation Agent."
(x) DEFINITIONS. As used in this Annex, the following terms shall
mean:
"FITCH" means Fitch Ratings Ltd and includes any successors
thereto;
"MOODY'S" means Xxxxx'x Investors Service Limited and includes
any successors thereto;
"S&P" means Standard & Poors Rating Services, a division of
the XxXxxx-Xxxx Companies, Inc.
IN WITNESS WHEREOF the parties have signed this Annex as of the date first
above written.
CREDIT SUISSE (USA), INC. XXXXXX MASTER ISSUER PLC
By: Xxxxxxx Xxxxxxxx By: Xxxxxxx Xxxxxxxx
Title: Vice President Title: Attorney
Date: 19 March 2007 Date: 19 March 2007
By: Xxxxx Xxx By:...............................
Title:................................. Title:............................
Date: 19 March 2007................... Date:.............................
THE BANK OF NEW YORK, LONDON
BRANCH
By: Xxxxx Xxx
Title:.................................
Date: 19 March 2007
By:....................................
Title:.................................
Date:..................................
20
APPENDIX A
MOODY'S ELIGIBLE COLLATERAL AND VALUATION PERCENTAGES
FIRST TRIGGER SECOND TRIGGER
INSTRUMENT
Sterling Cash 100% 100%
EURO Cash 98% 97%
U.S. Dollar Cash 97% 95%
Fixed-Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department with Remaining Maturity
< 1 Year 97% 95%
1 to 2 years 97% 94%
2 to 3 years 97% 93%
3 to 5 years 97% 92%
5 to 7 years 97% 91%
7 to 10 years 97% 89%
10 to 20 years 97% 86%
> 20 years 97% 84%
Floating-Rate Negotiable Treasury Debt Issued by The U.S. Treasury Department
All Maturities 97% 94%
Fixed-Rate U.S. Agency Debentures with Remaining Maturity
< 1 Year 97% 94%
1 to 2 years 97% 94%
2 to 3 years 97% 93%
3 to 5 years 97% 91%
5 to 7 years 97% 90%
7 to 10 years 97% 88%
10 to 20 years 97% 85%
> 20 years 97% 83%
Floating-Rate U.S. Agency Debentures
All Maturities 97% 93%
Fixed-Rate Euro-Zone Government Bonds Rated AA3 or Above with Remaining
Maturity
< 1 Year 98% 97%
1 to 2 years 98% 96%
2 to 3 years 98% 95%
3 to 5 years 98% 93%
5 to 7 years 98% 92%
7 to 10 years 98% 91%
10 to 20 years 98% 86%
> 20 years 98% 84%
Floating-Rate Euro-Zone Government Bonds Rated AA3 or
Above
All Maturities 98% 96%
Fixed-Rate United Kingdom Gilts with Remaining Maturity
< 1 Year 100% 99%
1 to 2 years 100% 98%
2 to 3 years 100% 97%
3 to 5 years 100% 96%
21
5 to 7 years 100% 95%
7 to 10 years 100% 94%
10 to 20 years 100% 90%
> 20 years 100% 88%
Floating-Rate United Kingdom Gilts
All Maturities 100% 99%
All other zero or such other zero or such other
instruments percentage in percentage in
respect of which respect of which
Moody's has Moody's has
delivered a writted delivered a writted
ratings affirmation ratings affirmation
in relation to the in relation to the
most senior rated most senior rated
notes notes
22
EXECUTION COPY
SERIES 1 CLASS B1
Credit Suisse (USA), Inc.
Date: 19 March 2007
To: Xxxxxx Master Issuer PLC
Abbey Xxxxxxxx Xxxxx
0 Xxxxxx Xxxxxx
Regent's Place
London
NW1 3AN
Attention: Company Secretary
To: The Bank of New York, London Branch
00xx Xxxxx, Xxx Xxxxxx Xxxxxx
Xxxxxx
X00 0XX
Attention: Global Structured Finance - Corporate Trustee
Dear Sirs
CONFIRMATION - SERIES 1 CLASS B1 DOLLAR TO STERLING CURRENCY SWAP
The purpose of this letter is to confirm the terms and conditions of the swap
transaction entered into between us on the Trade Date specified below (the SWAP
TRANSACTION). This letter constitutes a CONFIRMATION as referred to in the 1992
ISDA Master Agreement (Multicurrency-Cross Border) (Series 1 Class B1) and the
Schedule thereto entered into between Credit Suisse (USA), Inc., Xxxxxx Master
Issuer PLC and The Bank of New York, London Branch (the MASTER ISSUER SECURITY
TRUSTEE) on the date hereof as amended and supplemented from time to time (the
AGREEMENT).
The definitions and provisions contained in the 2000 ISDA Definitions as
published by the International Swaps & Derivatives Association, Inc. (the
DEFINITIONS) are incorporated into this Confirmation. In the event of any
inconsistency between any of the following, the first listed shall govern: (a)
this Confirmation, (b) the Master Definitions Schedule, and (c) the
Definitions.
The term TRANSACTION as used herein shall, for the purposes of the Definitions,
have the same meaning as SWAP TRANSACTION.
1. The following terms relate to all Transactions to which this
Confirmation relates:
Party A: Credit Suisse (USA), Inc.
Party B: Xxxxxx Master Issuer PLC
Trade Date: 19 March 2007
Effective Date: 28 March 2007
Termination Date: The earlier of (a) the Party A
Payment Date falling in July
2040 and (b) the date on which
all of the Relevant Notes are
redeemed in full.
Dollar Currency Swap Rate: 1.94498 (USD per GBP)
Business Days: London, New York and TARGET
Business Day Convention: Modified Following
Calculation Agent: Party A
Relevant Notes: Series 1 Class B1 Master Issuer
Notes (Issue Number 2007-1)
Party A Floating Amounts:
Party A Currency Amount: In respect of each Party A
Calculation Period, an amount
in Dollars equal to the
principal amount outstanding of
the Relevant Notes on the first
day of such Calculation Period
(after taking into account any
redemption on such day).
Party A Payment Dates: 15th January, 15th April, 15th
July and 15th October of each
year commencing on 15th July,
2007 up to and including the
Termination Date.
Floating Rate for Party A initial Linear Interpolation based on 3
Calculation Period: month and 4 month USD-LIBOR-BBA
is applicable, except that
references to "Telerate Page
3750" will be replaced by
references to "Reuters Screen
LIBOR01 Page".
Party A Floating Rate Option: USD-LIBOR-BBA except that
references to "Telerate Page
3750" will be replaced by
references to "Reuters Screen
LIBOR01 Page".
Designated Maturity: 3 months
Spread: From and including the
Effective Date to (and
including) the Party A Payment
Date falling in January 2011
plus 0.09 per cent. per annum
and thereafter plus 0.18 per
cent. per annum.
2
Rounding: Rounded to the nearest cent
Reset Date: First day of the relevant
Calculation Period
Party A Floating Rate Day Count Actual/360
Fraction:
Party B Floating Amounts:
Party B Currency Amount: In respect of each Party B
Calculation Period, an amount
in Sterling equivalent to the
Party A Currency Amount for the
Party A Calculation Period
commencing on the first day of
such Party B Calculation
Period, converted by reference
to the Dollar Currency Swap
Rate.
Party B Payment Dates: 15th January, 15th April, 15th
July and 15th October of each
year commencing on 15th July,
2007 up to and including the
Termination Date.
Floating Rate for Party B initial Linear Interpolation based on 3
Calculation Period: month and 4 month GBP-LIBOR-BBA
is applicable, except that
references to "Telerate Page
3750" will be replaced by
references to "Reuters Screen
LIBOR01 Page".
Party B Floating Rate Option: GBP-LIBOR-BBA except that
references to "Telerate Page
3750" will be replaced by
references to "Reuters Screen
LIBOR01 Page".
Designated Maturity: 3 months
Spread: From and including the
Effective Date to (and
including) the Party B Payment
Date falling in January 2011
plus 0.11530 per cent. per
annum and thereafter plus
0.38060 per cent. per annum.
Floating Rate Day Count Fraction: Actual/365(Fixed)
Rounding: Rounded to the nearest xxxxx
Reset Date: First day of the relevant
Calculation Period
Initial Exchange:
Initial Exchange Date: 28 March 2007
Party A Initial Exchange Amount: GBP 29,409,000
Party B Initial Exchange Amount: USD 57,200,000
Interim Exchange:
Interim Exchange Dates: Each Party A Payment Date and
Party B Payment Date (other
than the Termination Date) on
which any of the
3
Relevant Notes are redeemed in
whole or in part.
Party A Interim Exchange Amount: In respect of each Interim
Exchange Date, an amount in
Dollars equal to the amount of
the Relevant Notes redeemed on
such Interim Exchange Date.
Party B Interim Exchange Amount: In respect of each Interim
Exchange Date, the Sterling
equivalent of the Party A
Interim Exchange Amount for
such Interim Exchange Date
converted by reference to the
Dollar Currency Swap Rate.
Final Exchange:
Final Exchange Date: Termination Date
Party A Final Exchange Amount: An amount in Dollars equal to
the principal amount
outstanding of the Relevant
Notes on the Final Exchange
Date (before taking into
account any redemption on such
day).
Party B Final Exchange Amount: The Sterling equivalent of the
Party A Final Exchange Amount
for the Final Exchange Date
converted by reference to the
Dollar Currency Swap Rate.
2. Deferral of Floating Amounts:
If any payment of interest under the Relevant Notes is deferred in
accordance with the terms and conditions of the Relevant Notes then a
corresponding part of the Party A Floating Amount and a pro rata part
of the Party B Floating Amount which, in each case, would otherwise be
due in respect of the relevant Party A Payment Date and Party B
Payment Date respectively, shall be deferred.
On any subsequent occasion if any payment of interest under the
Relevant Notes is deferred (including any payment of a previous
shortfall of interest under the Relevant Notes or any payment of
interest on such shortfall) in accordance with the terms and
conditions of the Relevant Notes then all or a corresponding part of
the Party A Floating Amount and a pro rata part of the Party B
Floating Amount shall be deferred.
Any such amount so deferred on the Party A Floating Amount shall be
payable on the next Party A Payment Date (together with an additional
floating amount accrued thereon at the applicable Party A Floating
Rate) and the Party A Floating Amount due on such date shall be deemed
to include such amounts.
Any such amount so deferred on the Party B Floating Amount shall be
payable on the next Party B Payment Date (together with an additional
floating amount accrued thereon accrued at the applicable Party B
Floating Rate) and the Party B Floating Amount due on such date shall
be deemed to include such amounts.
3. Additional Termination Event:
In relation to Section 5(b)(v) of the Agreement and the relevant
Additional Termination Event set out in the Schedule to the Agreement,
in the case of a redemption in full of the Relevant Notes pursuant to
Condition 5.5 of the Terms and Conditions the following provisions
apply:
4
(i) the Early Termination Date shall be deemed to occur on the day
which is 2 Local Business Days prior to the Termination Date;
(ii) notwithstanding Section 6(c)(ii) of the Agreement:
(a) Party B shall pay the Party B Final Exchange Amount to
Party A and Party A shall pay the Party A Final
Exchange Amount to Party B, in each case, on the
Termination Date; and
(b) Party A shall pay the Party A Floating Amount
calculated in respect of the final Party A Calculation
Period to Party B on the Termination Date; and
(c) Party B shall pay the Party B Floating Amount
calculated in respect of the final Party B Calculation
Period to Party A on the Termination Date (the amounts
referred to in (a), (b) and (c) together being, the
"Scheduled Payments"); and
(iii) for the purposes of Section 6(e), the Market Quotation in
respect of this Terminated Transaction shall be deemed to be
the Market Quotation determined in respect of a hypothetical
Terminated Transaction having the same terms as this
Terminated Transaction but using the anticipated rate of
reduction in the Party A Currency Amount and Party B Currency
Amount as if paragraph (ii)(a) above did not apply and as if
the Termination Date were the Party A Payment Date falling in
July 2040 LESS the Market Quotation determined in respect of a
hypothetical Terminated Transaction having the same terms as
this Terminated Transaction taking paragraph (ii)(a) above and
the actual Termination Date as determined above into account.
4. Account Details:
Payments to Party A in USD: Bank: Citibank, N.A.,
New York
Beneficiary
Account Number: 00000000
Local Agent BIC XXXXXX00
Favour: Credit Suisse
Securities USA Inc
Swift Code: XXXXXX00XXX
Payments to Party A in
Sterling: Bank: HSBC Bank Plc London
All UK Offices
Beneficiary
Account Number: 00000000
Local Agent BIC: XXXXXX00
Favour: Credit Suisse
Securities USA Inc
Swift Code: XXXXXX00XXX
Payments to Party B in USD: Correspondent
Bank: Citibank, N.A.,
New York
ABA No.: 000000000
5
Beneficiary
Bank: Citibank, N.A.,
London
Account Number: 00000000
Sort Code: 18 50 04
Beneficiary: Xxxxxx Master Issuer
PLC
IBAN No: GB 81 CITI 1850 0811
5917 11
SWIFT Code: XXXXXX0X -
Citibank London via
Citibank New York,
SWIFT code: XXXXXX00
Payments to Party B in
Sterling: Bank: Abbey National plc
Account Number: 900 35033
Sort Code: 09-02-40
Beneficiary: Xxxxxx Master Issuer
PLC
SWIFT BIC: XXXXXX0X
5. Notice Details:
Party A: Credit Suisse (USA), Inc.
Address: 00 Xxxxxxx Xxxxxx
Xxx Xxxx
XX 00000
XXX
Facsimile Number: x0 000 000 0000
Attention: Xxx X. Xxxxx
Party B: Xxxxxx Master Issuer PLC
Address: c/o Abbey National plc
0 Xxxxxx Xxxxxx
Xxxxxx'x Xxxxx
Xxxxxx
XX0 0XX
Facsimile Number: x00 (0) 00 0000 0000
Attention: Company Secretary
With a copy to: x/x Xxxxx Xxxxxxxx xxx
0
Xxxxx Xxxxx (AAM 129)
000 Xxxxxxx Xxxx Xxxx
Xxxxxx Xxxxxx
XX0 0XX
Facsimile Number: x00 (0) 0000 000 000
Attention: Securitisation Team, Retail Credit Risk
With a copy to the
Issuer Security
Trustee: The Bank of New York, London Branch
Address: 00xx Xxxxx, Xxx Xxxxxx Xxxxxx
Xxxxxx
X00 0XX
Facsimile Number: x00 (0) 00 0000 0000/6399
Attention: Global Structured Finance - Corporate Trustee
7
Yours faithfully
CREDIT SUISSE (USA), INC.
By:
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
Confirmed as of the date first written:
XXXXXX MASTER ISSUER PLC
By:
Name: Xxxxx Xxxxxxxx
Title:
THE BANK OF NEW YORK, LONDON BRANCH
By:
Name: Xxxxx Xxx
Title:
8
