(Multicurrency--Cross Border)
ISDA-Registered Trademark-
INTERNATIONAL SWAP DEALERS ASSOCIATION, INC.
MASTER AGREEMENT
dated as of ____________________
______________________________ and ______________________________________
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other
confirming evidence (each a "Confirmation") exchanged between the parties
confirming those Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the
Schedule will prevail. In the event of any inconsistency between the
provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. OBLIGATIONS.
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date in
respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified in
this Agreement.
Copyright -C- 1992 by International Swap Dealers Association, Inc.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to
which such change applies unless such other party gives timely notice of a
reasonable objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to
make payment of any such amount will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been
payable by one party exceeds the aggregate amount that would otherwise have
been payable by the other party, replaced by an obligation upon the party by
whom the larger aggregate amount would have been payable to pay to the other
party the excess of the larger aggregate amount over the smaller aggregate
amount.
The parties may elect in respect of two or more Transactions that a net
amount will be determined in respect of all amounts payable on the same date
in the same currency in respect of such Transactions, regardless of whether
such amounts are payable in respect of the same Transaction. The election may
be made in the Schedule or a Confirmation by specifying that subparagraph
(ii) above will not apply to the Transactions identified as being subject to
the election, together with the starting date (in which case subparagraph
(ii) above will not, or will cease to, apply to such Transactions from such
date). This election may be made separately for different groups of
Transactions and will apply separately to each pairing of Offices through
which the parties make and receive payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect.
If a party is so required to deduct or withhold, then that party ("X")
will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving notice that
such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would
have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to
the extent that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.
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(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make any
deduction or withholding in respect of which X would not be required
to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount of
such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section 6(c),
be required to pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such overdue
amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment, at the Default Rate. Such
interest will be calculated on the basis of daily compounding and the actual
number of days elapsed. If, prior to the occurrence or effective designation
of an Early Termination Date in respect of the relevant Transaction, a party
defaults in the performance of any obligation required to be settled by
delivery, it will compensate the other party on demand if and to the extent
provided for in the relevant Confirmation or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction is
entered into and, in the case of the representations in Section 3(f), at all
times until the termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the laws of
the jurisdiction of its organisation or incorporation and, if relevant
under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
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(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur as a
result of its entering into or performing its obligations under this
Agreement or any Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding
at law or in equity or before any court, tribunal, governmental body, agency
or official or any arbitrator that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of the
date of the information, true, accurate and complete in every material
respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may
have any obligation under this Agreement or under any Credit Support Document
to which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and completed
in a manner reasonably satisfactory to such other party and to be
executed and to be delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or,
if none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning
of such failure.
(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,
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organised, managed and controlled, or considered to have its seat, or in
which a branch or office through which it is acting for the purpose of this
Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other
party against any Stamp Tax levied or imposed upon the other party or in
respect of the other party's execution or performance of this Agreement by any
such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section 2(a)(i)
or 2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with
or performed by the party in accordance with this Agreement if such
failure is not remedied on or before the thirtieth day after notice of
such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be in
full force and effect for the purpose of this Agreement (in either
case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
5
described) in respect of such party, any Credit Support Provider of such
party or any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and
payable or (2) a default by such party, such Credit Support Provider or
such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less
than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement
or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party or
any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to pay
its debts or fails or admits in writing its inability generally to
pay its debts as they become due; (3) makes a general assignment,
arrangement or composition with or for the benefit of its
creditors; (4) institutes or has instituted against it a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented for its
winding-up or liquidation, and, in the case of any such proceeding
or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or
the entry of an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed, discharged,
stayed or restrained in each case within 30 days of the institution
or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant
to a consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its assets;
(7) has a secured party take possession of all or substantially all
its assets or has a distress, execution, attachment, sequestration
or other legal process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter; (8)
causes or is subject to any event with respect to it which, under
the applicable laws of any jurisdiction, has an analogous effect to
any of the events specified in clauses (1) to (7)(inclusive); or
(9) takes any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it or
its predecessor was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by such
resulting, surviving or transferee entity of its obligations under
this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality
if the event is specified in (i) below, a Tax Event if the event is specified
in (ii) below or a Tax Event Upon Merger if the event is specified in (iii)
below, and, if specified to be applicable, a Credit Event
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Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or
such Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either
case as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
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6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and
is then continuing, the other party (the "Non-defaulting Party") may, by not
more than 20 days notice to the Defaulting Party specifying the relevant
Event of Default, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all outstanding
Transactions. If, however, "Automatic Early Termination" is specified in the
Schedule as applying to a party, then an Early Termination Date in respect of
all outstanding Transactions will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section
5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as
of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant petition upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to
the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its right
to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. IF:--
(1) a transfer under Section 6(b)(ii) or an agreement under Section
6(b)(iii), as the case may be, has not been effected with respect
to all Affected Transactions within 30 days after an Affected Party
gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the case
of a Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant Termination Event is then
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continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the
date so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions
of this Agreement. The amount, if any, payable in respect of an
Early Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and
will provide to the other party a statement (1) showing, in
reasonable detail, such calculations (including all relevant
quotations and specifying any amount payable under Section 6(e)) and
(2) giving details of the relevant account to which any amount
payable to it is to be paid. In the absence of written confirmation
from the source of a quotation obtained in determining a Market
Quotation, the records of the party obtaining such quotation will be
conclusive evidence of the existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of
any Early Termination Date under Section 6(e) will be payable on
the day that notice of the amount payable is effective (in the case
of an Early Termination Date which is designated or occurs as a
result of an Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable
is effective (in the case of an Early Termination Date which is
designated as a result of a Termination Event). Such amount will be
paid together with (to the extent permitted under applicable law)
interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early
Termination Date to (but excluding) the date such amount is paid,
at the Applicable Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date
occurs, the following provisions shall apply based on the parties'
election in the Schedule of a payment measure, either "Market Quotation"
or "Loss", and a payment method, either the "First Method" or the
"Second Method". If the parties fail to designate a payment measure or
payment method in the Schedule, it will be deemed that "Market
Quotation" or the "Second Method", as the case may be, shall apply. The
amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from
an Event of Default;--
(1) FIRST METHOD AND MARKET QUOTATION. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) FIRST METHOD AND LOSS. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if
a positive number, the Non-defaulting Party's Loss in respect
of this Agreement.
(3) SECOND METHOD AND MARKET QUOTATION. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) the sum of the Settlement Amount (determined by the
9
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) SECOND METHOD AND LOSS. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount
to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results
from a Termination Event:--
(1) ONE AFFECTED PARTY. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is
not the Affected Party, respectively, and, if Loss applies and
fewer than all the Transactions are being terminated, Loss
shall be calculated in respect of all Terminated Transactions.
(2) TWO AFFECTED PARTIES. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the Terminated
Transactions, and an amount will be payable equal to (I)
the sum of (a) one-half of the difference between the
Settlement Amount of the party with the higher Settlement
Amount ("X") and the Settlement Amount of the party with
the lower Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less
(II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of
the party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of
that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are appropriate
and permitted by law to reflect any payments or deliveries made
by one party to the other under this Agreement (and retained by such
other party) during the period from the relevant Early Termination
Date to the date for payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount is
payable for the loss of bargain and the loss of protection against
future risks and except as otherwise provided in this Agreement
neither party will be entitled to recover any additional damages
as a consequence of such losses.
10
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of
the other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to
any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will
be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable
law, any obligation to make payments under this Agreement in the Contractual
Currency will not be discharged or satisfied by any tender in any currency
other than the Contractual Currency, except to the extent such tender results
in the actual receipt by the party to which payment is owed, acting in a
reasonable manner and in good faith in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency
of all amounts payable in respect of this Agreement. If for any reason the
amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount in
the Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the
payment will refund promptly the amount of such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early
termination in respect of this Agreement or (iii) in respect of a judgment or
order of another court for the payment of any amount described in (i) or (ii)
above, the party seeking recovery, after recovery in full of the aggregate
amount to which such party is entitled pursuant to the judgment or order,
will be entitled to receive immediately from the other party the amount of
any shortfall of the Contractual Currency received by such party as a
consequence of sums paid in such other currency and will refund promptly to
the other party any excess of the Contractual Currency received by such party
as a consequence of sums paid in such other currency if such shortfall or
such excess arises or results from any variation between the rate of exchange
at which the Contractual Currency is converted into the currency of the
judgment or order for the purposes of such judgment or order and the rate of
exchange at which such party is able, acting in a reasonable manner and in
good faith in converting the currency received into the Contractual Currency,
to purchase the Contractual Currency with the amount of the currency of the
judgment or order actually received by such party. The term "rate of
exchange" includes, without limitation, any premiums and costs of exchange
payable in connection with the purchase of or conversion into the Contractual
Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and
independent causes of action, will apply notwithstanding any indulgence
granted by the party to which any payment is owed and will not be affected by
judgment being obtained or claim or proof being made for any other sums
payable in respect of this Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had
an actual exchange or purchase been made.
11
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and
supersedes all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced
by a facsimile transmission) and executed by each of the parties or confirmed
by an exchange of telexes or electronic messages on an electronic messaging
system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and 6
(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including by
facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created by an exchange of telexes or by an exchange
of electronic messages on an electronic messaging system, which in each
case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that
right, power or privilege or the exercise of any other right, power or
privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of
booking office or jurisdiction of incorporation or organisation of such
party, the obligations of such party are the same as if it had entered into
the Transaction through its head or home office. This representation will be
deemed to be repeated by such party on each date on which a Transaction is
entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a
Transaction will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including legal
fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any Credit
Support Document
12
to which the Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to, costs of
collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered
(or attempted) or received, as applicable, after the close of business on a
Local Business Day, in which case that communication shall be deemed given
and effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction 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
13
reason any party's Process Agent is unable to act as such, such party will
promptly notify the other party and within 30 days appoint a substitute
process agent acceptable to the other party. The parties irrevocably
consent to service of process given in the manner provided for notices in
Section 12. Nothing in this Agreement will affect the right of either party
to serve process in any other manner permitted by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues
and assets (irrespective of their use or intended use), all immunity on the
grounds of sovereignty or other similar grounds from (i) suit, (ii)
jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or enforcement of
any judgment to which it or its revenues or assets might otherwise be
entitled in any Proceedings in the courts of any jurisdiction and irrevocably
agrees, to the extent permitted by applicable law, that it will not claim
any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b)
with respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control"
of any entity or person means ownership of a majority of the voting power of
the entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party,
the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified
as such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
14
"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.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be
its total losses and costs (or gain, in which case expressed as a negative
number) in connection with this Agreement or that Terminated Transaction or
group of Terminated Transactions, as the case may be, including any loss of
bargain, cost of funding or, at the election of such party but without
duplication, loss or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading position (or any
gain resulting from any of them). Loss includes losses and costs (or gains)
in respect of any payment or delivery required to have been made (assuming
satisfaction of each applicable condition precedent) on or before the
relevant Early Termination Date and not made, except, so as to avoid
duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss
does not include a party's legal fees and out-of-pocket expenses referred to
under Section 11. A party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but need
not) determine its Loss by reference to quotations of relevant rates or
prices from one or more leading dealers in the relevant markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an
amount, if any, that would be paid to such party (expressed as a negative
number) or by such party (expressed as a positive number) in consideration of
an agreement between such party (taking into account any existing Credit
Support Document with respect to the obligations of such party) and the
quoting Reference Market-maker to enter into a transaction (the "Replacement
Transaction") that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions
that would, but for the occurrence of the relevant Early Termination Date,
have
15
been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be
subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the
extent reasonably practicable as of the same day and time (without regard to
different time zones) on or as soon as reasonably practicable after the
relevant Early Termination Date. The day and time as of which those
quotations are to be obtained will be selected in good faith by the party
obliged to make a determination under Section 6(e), and, if each party is so
obliged, after consultation with the other. If more than three quotations are
provided, the Market Quotation will be the arithmetic mean of the quotations,
without regard to the quotations having the highest and lowest values. If
exactly three such quotations are provided, the Market Quotation will be the
quotation remaining after disregarding the highest and lowest quotations. For
this purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If fewer than three
quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it)
if it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head
or home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice
or the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria
that such party applies generally at the time in deciding whether to offer or
to make an extension of credit and (b) to the extent practicable, from among
such dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organised, managed and controlled or
considered to have its seal, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention
or withholding or similar right or requirement to which the payer of an
amount under Section 6 is entitled or subject (whether arising under this
Agreement, another contract, applicable law or otherwise) that is exercised
by, or imposed on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to
any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not
(in the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
16
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or surety
or otherwise) in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter
entered into between one party to this Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the other party to this Agreement (or any Credit Support Provider of such
other party or any applicable Specified Entity of such other party) which is
a rate swap transaction, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency option or any
other similar transaction (including any option with respect to any of these
transactions), (b) any combination of these transactions and (c) any other
transaction identified as a Specified Transaction in this Agreement or the
relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment
or fee of any nature (including interest, penalties and additions thereto)
that is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation
or similar tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date
(a) if resulting from a Termination Event, all Affected Transactions and (b)
if resulting from an Event of Default, all Transactions (in either case) in
effect immediately before the effectiveness of the notice designating that
Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated
in the Termination Currency, such Termination Currency amount and, in respect
of any amount denominated in a currency other than the Termination Currency
(the "Other Currency"), the amount in the Termination Currency determined by
the party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or,
if the relevant Market Quotation or Loss (as the case may be), is determined
as of a later date, that later date, with the Termination Currency at the
rate equal to the spot exchange rate of the foreign exchange agent (selected
as provided below) for the purchase of such Other Currency with the
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
17
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 affect from the date specified on the first page
of this document.
Toyota Motor Credit Corporation
------------------------------- -------------------------------
(Name of Party) (Name of Party)
By: By:
-------------------------------- ---------------------------
Name: Name:
Title: Title:
Date:
Date:
18
SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF DECEMBER [ ], 1998
BETWEEN
TOYOTA MOTOR CREDIT CORPORATION.
("PARTY A")
AND
TOYOTA AUTO LEASE TRUST 1998-C
("PARTY B")
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" has the meaning specified in Section 14.
(c) The "BREACH OF AGREEMENT" provisions of Section 5(a)(ii) will not apply to
Party B.
The "CREDIT SUPPORT DEFAULT" provisions of Section 5(a)(iii) will not apply
to Party A or Party B.
The "MISREPRESENTATION" provisions of Section 5(a)(iv) will not apply to
Party B.
The "Default UNDER SPECIFIED TRANSACTION" provisions of Section 5(a)(v)
will not apply to Party A and will not apply to Party B.
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" provisions of Section 6(a) will not apply
to Party A and will not apply to Party B; PROVIDED, HOWEVER, where an Event
of Default specified
in Sections 5(a)(vii) (1), (3), (4), (5), (6) or, to the extent analogous
thereto, (8), is governed by a system of law which does not permit
termination to take place upon or after the occurrence of the relevant
Event of Default in accordance with the terms of this Agreement, then the
Automatic Early Termination provision of Section 6(a) will apply to
Party A and Party B.
If an Early Termination Date occurs under Section 6(a) as a result of
Automatic Early Termination, the Defaulting Party shall fully indemnify the
Non-defaulting Party on demand against all expense, loss, damage or
liability that the Non-defaulting Party may incur in respect of this
Agreement and each Transaction as a consequence of movements in interest,
currency, exchange or other relevant rates or prices or Market Quotations
between the Early Termination Date and the Local Business Day on which the
Non-defaulting Party first becomes aware that the Early Termination Date
has occurred under Section 6(a). The Non-defaulting Party may for this
purpose convert any expense, loss, damage or liability to the Termination
Currency.
(f) PAYMENTS ON EARLY TERMINATION. "Market Quotation" and "Second Method" will
apply for the purpose of Section 6(e) of this Agreement; PROVIDED, HOWEVER,
that in the case of an Event of Default as described under Section 5(a)(i)
or 5(a)(vii) with respect to Party A as the Defaulting Party, the related
Settlement Amount, if negative, will be deemed to be zero.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) The "TAX EVENT" provisions of Section 5(b)(ii) are hereby amended by (i)
inserting "(I)" after the caption "Tax Event." at the beginning thereof and
(ii) inserting "and (II) at least 51% by Voting Interests of the
Certificateholders (as defined in the Trust Agreement) directs the Trustee
to terminate this Agreement and to liquidate the assets of Party B" at the
end thereof before the semicolon.
(i) The "TAX EVENT UPON MERGER" provisions of Section 5(b)(iii) are hereby
amended by (i) inserting "(I)" after the caption "Tax Event Upon Merger."
at the beginning thereof and (ii) inserting "and (II) at least 51% by
Voting Interests of the Certificateholders directs the Trustee to terminate
this Agreement and to liquidate the assets of Party B" at the end thereof
before the semicolon.
(j) ADDITIONAL TERMINATION EVENT will apply. Any of the following shall
constitute an Additional Termination Event:
(i) INSOLVENCY OF TRANSFEROR. The Transferor shall file a petition
commencing a voluntary case under any chapter of the Federal
bankruptcy laws; or the Transferor shall file a petition or answer or
consent seeking reorganization, arrangement, adjustment, or
composition under any other similar applicable Federal law, or shall
consent to the filing of any such petition, answer, or consent; or the
Transferor shall appoint, or consent to the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator or
other similar official in bankruptcy or insolvency of it or of any
substantial part of its property, or shall
2
make any assignment for the benefit of creditors, or shall admit in
writing its inability to pay its debts generally as they become due;
or any order for relief against the Transferor shall have been
entered by a court having jurisdiction in the premises under any
chapter of the Federal bankruptcy laws; or a decree or order by a
court having jurisdiction in the premises shall have been entered
approving as properly filed a petition seeking reorganization,
arrangement, adjustment, or composition of the Transferor under any
other similar applicable Federal Law; or a decree or order of a court
having jurisdiction in the premises for the appointment of a
custodian, receiver, liquidator, trustee, assignee, sequestrator or
other similar official in bankruptcy or insolvency of the Transferor
or of any substantial part of its property, or for the winding up or
liquidation of its affairs, shall have been entered (in which event
Party B shall be the Affected Party).
(ii) INVESTMENT COMPANY. Party B or the Transferor becomes subject
to registration as an "investment company" for purposes of the
Investment Company Act of 1940, as amended (in which event Party B
shall be the Affected Party).
Part 2. Tax Representations
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
each of Party A and Party B makes the following representation:
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement. In
making this representation, 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 of the other party
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d)
of this Agreement, PROVIDED that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other party
does not deliver a form or document under Section 4(a)(iii) by reason of
material prejudice to its legal or commercial position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified below:
(A) Party A makes the following representation: It is a corporation
duly organized and incorporated under the laws of the State of
California.
(B) Party B makes the following representation: It is a trust
organized or formed under the laws of the State of California.
Part 3. Agreement to Deliver Documents
3
For the purpose of Section 4(a) of this Agreement, each party agrees to deliver
the following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:
PARTY REQUIRED TO DATE BY WHICH TO BE
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DELIVERED
-------- ------------------------- ---------
Party A and Party B Any document required or Promptly upon the
reasonably requested to allow earlier of (i)
the other party to make reasonable demand by the
payments under this Agreement other party and (ii)
without any deduction or learning that the form
withholding for or on account or document is required
of any Tax or with such
deduction or withholding at a
reduced rate
(b) Other documents to be delivered are:
COVERED BY
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE SECTION 3(d)
DELIVER DOCUMENT CERTIFICATE DELIVERED REPRESENTATION
---------------- ----------- --------- --------------
Party A and Party B Certificate or other At or promptly Yes
documents evidencing following the
the authority of the execution of this
party entering into Agreement, and, if
this Agreement and a Confirmation so
the persons acting requires it on or
on behalf of such before the date set
party forth therein
Party A and Party B Legal Opinions in At or promptly No
the form reasonably following the
acceptable to the execution of this
other party Agreement
Part 4. Miscellaneous
(a) ADDRESSES FOR NOTICES: For the purpose of Section 12(a) of this Agreement:
Address for notices or communications to Party A:
Address: 00000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Corporate Treasury Manager
Telex No.: 3719707
Facsimile No.: 000-000-0000
Answerback: TMSUSA Z
(For all purposes)
4
Address for notices or communications to Party B:
Address: Toyota Auto Lease Trust 1998-C
c/o [Trustee]
[Address]
Attention: Structured Finance Group /[Name]
Fax: (000)000-0000
(For all purposes)
(b) PROCESS AGENT. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not Applicable
Party B appoints as its Process Agent: Not Applicable
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10:
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. Party A will be the Calculation Agent. All
calculations by the Calculation Agent (the "CA") shall be made in good
faith and through the exercise of the CA's commercially reasonable
judgment.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
Party A: Not Applicable
Party B: Not Applicable
(g) CREDIT SUPPORT PROVIDER.
Party A: Not Applicable
Party B: Not Applicable
(h) GOVERNING LAW. This Agreement and each Confirmation will be governed by
and construed in accordance with the laws of the State of New York, without
reference to its choice of law doctrine.
(i) WAIVER OF JURY TRIAL. Each party waives, to the fullest extent permitted
by applicable law, any right it may have to a trial by jury in respect of
any proceedings relating to this Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
5
Part 5. Other Provisions
(a) GROSS-UP, LIABILITY. Neither Party A nor Party B will in any circumstance
be required to pay additional amounts in respect of any Indemnifiable Tax
or be under any obligation to pay to the other any amount in respect of any
liability of such other for or on account of any Tax and, accordingly,
Section 2(d)(i)(4) and Section 2(d)(ii) of this Agreement shall not apply.
(b) EARLY TERMINATION.
(i) Section 6(b)(ii) is hereby amended to read in its entirety as follows:
TRANSFER TO AVOID TERMINATION EVENT.
(1) If an Illegality under Section 5(b)(i)(1) or a Tax Event or a Tax
Event Upon Merger occurs, if Party A is the Affected Party it will, and, if
Party B is the Affected Party it may request Party A to, as a condition to
its right, if any, to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require Party A 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 so that such Termination Event ceases to exist.
If Party A is not able to make such a transfer it will give notice to the
other party to that effect within such 20 day period.
Any such transfer under this Section 6(b)(ii)(1) 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.
(2) No transfer or substitution pursuant to this Section 6(b)(ii) shall
occur unless and until the Trustee has received the written affirmation of
each of Standard & Poor's and Xxxxx'x that such transfer or substitution
shall not adversely affect the then-current ratings of the Certificates (as
defined in the Trust Agreement).
(c) Section 6(b)(iii) shall not apply.
(d) Section 6(b)(iv) is hereby amended by (i) deleting (A) the words "a Credit
Event Upon Merger" and (B) the words "or a Tax Event Upon Merger occurs and
the Burdened Party is not the Affected Party," from clause (2) of said
Section 6(b)(iv) and (ii) deleting the words from and including "either
party in the case of" to the end of Section 6(b)(iv) and adding the words
"either party in the case of an Illegality or an Additional Termination
Event, or Party B in the case of a Tax Event or a Tax Event upon Merger
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." at the end of said Section
6(b)(iv).
6
(e) Section 7 is hereby amended to read in its entirety as follows:
Except as stated under Section 6(b)(ii) and as provided in this Section 7,
and except for the assignment by way of security in favor of the Trustee
under the Trust Agreement, neither Party A nor Party B is permitted to
assign, novate or transfer as a whole or in part any of its rights,
obligations or interests under this Agreement. Party A may transfer this
Agreement to another party (the "Transferee") on ten Business Days' prior
written notice, PROVIDED that (i) such notice shall be accompanied by a
guarantee of Party A of such Transferee's obligations in form and substance
reasonably satisfactory to the Trustee; (ii) Party A delivers an opinion of
independent counsel of recognized standing in form and substance reasonably
satisfactory to the Trustee confirming that as of the date of such transfer
the Transferee will not, as a result of such transfer, be required to
withhold or deduct on account of tax under this Agreement; (iii) a
Termination Event or Event of Default does not occur under this Agreement
as a result of such transfer and (iv) the Trustee has received written
affirmation of Standard & Poor's and Xxxxx'x (or their successors) that
such transfer shall not adversely affect the then-current ratings of the
Certificates. In addition, in the event the long-term debt rating of Party
A is reduced to a level below "Aa2" by Xxxxx'x (or its successor) or "AA-"
by Standard & Poor's (or its successor) or the short-term debt rating of
Party A is reduced to a level below P-1 by Xxxxx'x or A-1+ by Standard
Poor's, Party A may assign this Agreement to another party and thereby be
released from its obligations under this Agreement, PROVIDED that (i) such
Transferee, by a written instrument, accepts all of the obligations of
Party A under this Agreement to the reasonable satisfaction of the Trustee,
(ii) Party A delivers an opinion of independent counsel of recognized
standing in form and substance reasonably satisfactory to the Trustee
confirming that as of the date of such transfer the Transferee will not, as
a result of such transfer, be required to withhold or deduct on account of
tax under this Agreement, (iii) a Termination Event or Event of Default
does not occur under this Agreement as a result of such transfer and (iv)
the ratings assigned to the Certificates after such assignment and release
will be at least equal to the ratings assigned by Xxxxx'x and Standard &
Poor's (or their successors) to the Certificates at the time of such
reduction of the rating of Party A's long-term debt. Any cost of such
transfer will be borne by Party A or such Transferee and not by Party B.
(f) ADDITIONAL REPRESENTATIONS. Section 3 is hereby amended by adding at the
end thereof the following Subparagraphs:
(g) It is entering into this Agreement and any other documentation
relating to this Agreement as principal (and not as agent or in any other
capacity, fiduciary or otherwise).
(h) It is an "eligible swap participant" as defined in 17 C.F.R. Section
35.1(b)(2) and has entered into this Agreement and each Transaction in
connection with its line of business including financial intermediation
services or the financing of its business.
(i) It hereby acknowledges and agrees that this Agreement and each
Transaction hereunder or thereunder is intended to be a "swap agreement" as
that term is defined in the U.S. Bankruptcy Code (as amended from time to
time) and that the rights granted to each party under Section 6 include a
contractual right to terminate a "swap agreement"
7
and to offset and net out termination values and payment amounts in
connection therewith.
(g) AMENDMENTS. Section 9(b) of this Agreement is hereby amended to read:
AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing and executed by each of the
parties; PROVIDED, HOWEVER, that all such amendments, modifications or
waivers shall require the written affirmation of each of Standard & Poor's
and Xxxxx'x that such amendments, modifications or waivers shall not
adversely affect the then-current ratings of the Certificates.
(h) CONFIRMATIONS. Each Confirmation supplements, forms part of, and will be
read and construed as one with this Agreement.
(i) ADDITIONAL DEFINITIONS. Terms defined or referred to in the Trust
Agreement shall bear the same respective meanings herein. "Trust
Agreement" shall mean the 1998-C Securitization Trust Agreement, dated as
of November [ ], 1998, between Toyota Leasing, Inc. and [ ], as
trustee.
(j) INTEREST RATE AND CURRENCY EXCHANGES DEFINITIONS. Reference is hereby made
to the 1991 ISDA Definitions (the "Definitions"), published by the
International Swaps and Derivatives Association, Inc., which are hereby
incorporated by reference herein without regard to any revision or
subsequent edition thereof.
(k) Section 2(b) is hereby amended to read in its entirety as follows:
CHANGE OF ACCOUNT. Party A may change its account for receiving
payment or delivery by giving notice to Party B at least five Local
Business Days prior to the scheduled date for payment or delivery to
which such change applies unless Party B gives timely notice of a
reasonable objection to such change. Party B may change its account
for receiving payment or delivery by giving notice to Party A at least
five Local Business Days prior to the scheduled date for payment or
delivery to which such change applies unless Party A gives timely
notice of a reasonable objection to such change.
(l) PAYMENTS FROM PARTY B. Notwithstanding anything contained in this
Agreement to the contrary, any amount required to be paid by Party B
pursuant to this Agreement will be payable only to the extent and in
accordance with the priority provided in the Trust Agreement.
(m) NO SET-OFF. Without affecting the provisions of this Agreement requiring
the calculation of certain net payment amounts, all payments under this
Agreement will be made without set-off or counterclaims.
(n) INCONSISTENCY. In the event of an inconsistency among or between any of
the following documents, the relevant document first listed below shall
govern.
(i) Part 5(l) of the Schedule;
8
(ii) Part 5(m) of the Schedule;
(iii) Confirmation;
(iv) Schedule;
(v) Definitions;
(vi) Sections 1 through 14 of this Agreement.
(o) DEFAULT INTEREST; OTHER AMOUNTS. Section 2(e) of this Agreement is hereby
amended by adding the following at the end of the first sentence thereof:
; PROVIDED, HOWEVER, that this Section 2(e) shall not apply to either
Party A or Party B if its failure to pay is caused solely by such party
becoming required to deduct or withhold on account of any Tax as set out
in Section 2(d)(i).
9
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized officers as of November [ ], 1998.
TOYOTA MOTOR CREDIT CORPORATION
By:____________________________
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President and General Manager
Date:
TOYOTA AUTO LEASE TRUST 1998-C
By: [TRUSTEE],
as 1998-C Securitization Trustee
By:__________________________________
Name:
Title:
Date:
10
Class A-2 Confirmation to the
ISDA Master Agreement
dated as of December [-], 1998
Toyota Auto Lease Trust 1998-C
c/o [Trustee]
[-]
[-]
Re: Transaction Ref. No. 2 between Toyota Motor Credit Corporation ("Party A")
and Toyota Auto Lease Trust 1998-C ("Party B")
Dear Sirs:
The purpose of this letter agreement is to confirm the terms and
conditions of the Swap Transaction entered into between you and us on the
Trade Date specified below (the "Transaction"). This letter agreement
constitutes a "Confirmation" as referred to in the ISDA Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA
Definitions (as published by the International Swaps and Derivatives
Association, Inc.) (the "Definitions") are incorporated in this Confirmation.
In the event of any inconsistency between those Definitions and this
Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to, the
ISDA Master Agreement, dated as of December [-], 1998, as amended and
supplemented from time to time (the "Agreement"), between you and us. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below. Expressions used herein and not defined herein or
in the Definitions shall bear the meaning ascribed thereto in the Agreement.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
Party A: Toyota Motor Credit Corporation
Party B: Toyota Auto Lease Trust 1998-C
Trade Date: November [-], 1998
Effective Date: December [-], 1998
Termination Date: Class A-2 Targeted Maturity Date (as defined
in the Trust Agreement), subject to
adjustment in accordance with the Following
Business Day Convention.
Party A Floating Amounts:
Party A Floating Rate
Payer: Party A
Party A Floating Rate
Payer Notional Amount: [The Class A-2 Certificate Balance (as
defined in the Trust Agreement) on the last
day of the Calculation Period.]
Party A Floating Rate Payer
Period End Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25, 1999, up
to and including the Termination Date,
subject to adjustment in accordance with the
Following Business Day Convention.
Party A Floating Rate Payer
Payment Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25, 1999, up
to and including the Termination Date,
subject to adjustment in accordance with the
Following Business Day Convention.
[Party A will provide or cause to be provided
to [Trustee] a notice as to the amount to be
paid on each Party A Floating Rate Payer
Payment Date on the second Business Day prior
to each such Party A Floating Rate Payer
Payment Date.]
Party A Floating Rate Option: USD-LIBOR-BBA.
Designated Maturity: 3 months, with the exception of the initial
Calculation Period, [in which case the
Designated Maturity shall be the linear
interpolation of [-] months.]
Spread: Plus [-]%
Party A Floating Rate
for the initial
Calculation Period: [-]% (excluding the Spread)
Party A Floating Rate
Day Count Fraction: Actual/360
2
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable.
Party B Fixed Amounts:
Party B Fixed Rate Payer: Party B
Party B Fixed Rate Payer
Notional Amount: [The Class A-2 Certificate Balance on the
last day of the Calculation Period.]
Party B Fixed Rate Payer
Period End Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25, 1999, up
to and including the Termination Date, with
no adjustment, with the exception of the
Termination Date, which shall be subject to
adjustment in accordance with the Following
Business Day Convention.
Party B Fixed Rate Payer
Payment Dates: Each March 25, June 25, September 25 and
December 25, commencing on March 25, 1999, up
to and including the Termination Date,
subject to adjustment in accordance with the
Following Business Day Convention.
Party B Fixed Rate: [-]%
Party B Fixed Rate
Day Count Fraction: 30/360
Business Days: "Business Day" as defined in the Trust
Agreement
Calculation Agent: Party A
3. Details of Variation to Agreement:
Taxation: If, as a result of the occurrence of any of the events described
in Section 5(b)(ii) or 5(b)(iii) of the Agreement, on any Party B Fixed Rate
Payer Payment Date Party A receives a payment from Party B from which an
amount has been deducted or withheld for or on account of a Tax, the payment
obligations of Party B hereunder with respect to such Payment Date shall be
reduced by the amount of any taxes so deducted or withheld and Party A's
payment obligations with respect to such Payment Date shall be reduced in
proportion to the amount by which Party
3
B's payment obligations are so reduced. If, as a result of the occurrence of
any of the events described in Section 5(b)(ii) or 5(b)(iii) of the
Agreement, on any Party A Floating Rate Payer Payment Date Party B receives a
payment from Party A from which an amount has been deducted or withheld for
or on account of a Tax, the payment obligations of Party A hereunder with
respect to such Payment Date shall be reduced by the amount of any taxes so
deducted or withheld and the payment obligations of Party B with respect to
such Payment Date shall remain the same.
Interest Deferral: If on any Party B Fixed Rate Payer Payment Date, the
amount allocated under the Trust Agreement and paid by Party B to Party A is
less than the Party B Fixed Amount due on such date (the amount of any such
insufficiency, the "Swap Interest Shortfall Amount"), the obligation of Party
A to pay Party A Floating Amounts on the corresponding Party A Floating Rate
Payer Payment Date will be reduced in the same proportion as the proportion
that such Swap Interest Shortfall Amount represents of the Party B Fixed
Amount otherwise due on such date. If on a subsequent Party B Fixed Rate
Payer Payment Date, amounts are available and are paid by Party B to Party A
pursuant to the Trust Agreement to reimburse all or any part of such Swap
Interest Shortfall Amount, then the obligation of Party A to pay Party A
Floating Amounts on the corresponding Party A Floating Rate Payer Payment
Date will be increased in the same proportion as the proportion that the
amount of such reimbursement represents of the Party B Fixed Amount otherwise
due on such date. If a Swap Interest Shortfall Amount shall exist on any
Early Termination Date, for purposes of computing the Market Quotation, the
aggregate amount of all outstanding Swap Interest Shortfall Amounts shall be
due on the first Party B Fixed Rate Payer Payment Date following the Early
Termination Date and the amount due from Party A on the first Party A
Floating Rate Payer Payment Date following the Early Termination Date will be
increased in the same proportion as the proportion that the amount of such
outstanding Swap Interest Shortfall Amounts represents of the Party B Fixed
Amount that would otherwise be due on such date.
Extension: If on the Party B Final Exchange Date, the
[Class A-2 Certificate Balance] has not been reduced to zero, the Termination
Date shall be extended to the Extension Period End Date, being the earlier of
(i) the Party A Floating Rate Payer Payment Date (as defined in Section 4
below) on which the Class A-2 Certificate Balance is reduced to zero and (ii)
the Stated Maturity Date (as defined in the Trust Agreement) for the Class
A-2 Certificates, subject to adjustment in accordance with the Following
Business Day Convention. The period from the Class A-2 Targeted Maturity
Date to the Extension Period End Date is referred to herein as the "Extension
Period".
4. During the Extension Period, instead of the Party B Fixed Amounts and
the Party A Floating Amounts described above in Section 2, the following
provisions will be applicable:
Party A Floating Amount
Floating Rate Payer: Party A
Party A Floating Rate
Payer Notional Amount: The Class A-2 Certificate Balance on the
last day of the Calculation Period.
4
Initial Extension Period
Calculation Period: Commencing on the Class A-2 Targeted
Maturity Date.
Party A Floating Rate Payer
Period End Dates: The 25th of each month commending [-]
25, [-], subject to adjustment in
accordance with the Following Business
Day Convention, [and the Extension
Period End Date, subject to adjustment
in accordance with the Following
Business Day Convention].
Party A Floating Rate Payer
Payment Dates: The 25th day of each month commencing
[-] 25, [-], subject to adjustment in
accordance with the Following Business
Day Convention, [and the Extension
Period End Date, subject to adjustment
in accordance with the Following
Business Day Convention].
[Party A will provide or cause to be
provided to [Trustee] a notice as to
the amount to be paid on each Party A
Floating Rate Payer Payment Date on
the second Business Day prior to
each such Party A Floating Rate Payer
Payment Date.]
Party A Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 month
Spread: Plus [-]%
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period.
Compounding: Inapplicable.
Party B Fixed Amount
Fixed Rate Payer: Party B
5
Party B Fixed Rate
Payer Notional Amount: The Class A-2 Certificate Balance on the
last day of the Collection Period.
Initial Extension Period
Calculation Period: Commencing on the Class A-2 Targeted
Maturity Date.
Party B Fixed Rate
Payer Period End Dates: (i) The 25th day of each month, with no
adjustment [and (ii) the Extension
Period End Date, which shall be subject
to adjustment in accordance with the
Following Business Day Convention].
Party B Fixed Rate
Payer Payment Dates: The 25th day of each month, subject to
adjustment in accordance with the
Following Business Day Convention, [and
the Extension Period End Date, subject
to adjustment in accordance with the
Following Business Day Convention].
Party B Fixed Rate: [-]%
Fixed Rate
Day Count Fraction: 30/360
Reset Dates: First day of each Calculation Period.
5. Account Details
Payments to Party A:
Account for Payments in USD: [-]
Payments to Party B:
Account for Payments in USD: [-]
6. Party A Documentation and Operations Officers
Documentation: [-]
Operations: [-]
6
7. Relationship between Parties:
Each party will be deemed to represent to the other party on the date on
which it enters into the Agreement that (absent a written agreement between
the parties that expressly imposes affirmative obligations to the contrary):
NON-RELIANCE. It is acting for its own account, and it has made its own
independent decisions to enter into the Agreement and as to whether the
Agreement 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 the Agreement; it
being understood that information and explanations related to the terms and
conditions of the Agreement shall not be considered investment advice or a
recommendation to enter into the Agreement. No communication (written or
oral) received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of the Agreement.
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
the Agreement. It is also capable of assuming, and assumes, the risks of
the Agreement.
STATUS OF PARTIES. The other party is not acting as a fiduciary for or as
adviser to it in respect of the Agreement.
8. Governing Law: New York
7
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that
purpose and returning it to us.
TOYOTA MOTOR CREDIT
CORPORATION
By:
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
and General Counsel
Confirmed as of the date first written:
TOYOTA AUTO LEASE TRUST 1998-C
By: [TRUSTEE],
as 1998-C Securitization Trustee
By:
-------------------------------------
Name:
Title:
8
