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Exhibit 10.6
(Multicurrency-Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of May 5, 1999
XXXXXX BROTHERS FINANCIAL AND AIRCRAFT FINANCE TRUST
PRODUCTS INC.
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:-
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purposes of the relevant Transaction.
(c) Single Agreement. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
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(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
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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
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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.
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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.
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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
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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
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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.
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"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
totai 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
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been required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but for
the relevant Early Termination Date, have been required (assuming satisfaction
of each applicable condition precedent) after that Early Termination Date is to
be included. The Replacement Transaction would be subject to such documentation
as such party and the Reference Market-maker may, in good faith, agree. The
party making the determination (or its agent) will request each Reference
Market-maker to provide its quotation to the extent reasonably practicable as of
the same day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day and
time as of which those quotations are to be obtained will be selected in good
faith by the party obliged to make a determination under Section 6(e), and, if
each party is so obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the arithmetic mean of the
quotations, without regard to the quotations having the highest and lowest
values. If exactly three such quotations are provided, the Market Quotation will
be the quotation remaining after disregarding the highest and lowest quotations.
For this purpose, if more than one quotation has the same highest value or
lowest value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated Transactions
cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"Non-defaulting Party" has the meaning specified in Section 6(a).
"Office" means a branch or office of a party, which may be such party's head or
home office.
"Potential Event of Default" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
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"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or an applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"Stamp Tax" means any stamp, registration, documentation or similar tax.
"Tax" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax Event" has the meaning specified in Section 5(b).
"Tax Event Upon Merger" has the meaning specified in Section 5(b).
"Terminated Transactions" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"Termination Currency" has the meaning specified in the Schedule.
"Termination Currency Equivalent" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"Termination Event" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"Termination Rate" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market
17
18
18
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
XXXXXX BROTHERS FINANCIAL AIRCRAFT FINANCE TRUST
PRODUCTS INC.
(Name of Party) (Name of Party)
By /s/ Xxxxxxxx X. Xxxxx By: /s/ Xxxxx X. Xxxxx
-------------------------- -----------------------------
Name: XXXXXXXX X. XXXXX Name: Xxxxx X. Xxxxx
Title: VICE PRESIDENT Title: Authorized Signer
Date: Date: May 5, 1999
19
SCHEDULE
to the
Master Agreement
dated as of May 5, 1999
between
XXXXXX BROTHERS FINANCIAL PRODUCTS INC. ("Party A"),
a corporation organized under the laws of
the state of Delaware
and
AIRCRAFT FINANCE TRUST ("Party B"),
a business trust organized under the laws of the
state of Delaware
Part 1: Termination Provisions
In this Agreement:-
(a)"Specified Entity" means in relation to Party A for the purpose of:-
Section 5(a)(v), Not applicable.
-----------------
Section 5(a)(vi), Not applicable.
-----------------
Section 5(a)(vii), Not applicable.
-----------------
Section 5(b)(iv), Not applicable.
-----------------
and in relation to Party B for the purpose of:-
Section 5(a)(v), Not applicable.
-----------------
Section 5(a)(vi), Not applicable.
-----------------
Section 5(a)(vii), Not applicable.
-----------------
Section 5(b)(iv), Not applicable.
---------------
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) The "Cross Default" provisions of Section 5(a)(vi) will apply to Party A
and will apply to Party B.
The following provisions apply:-
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20
"Specified Indebtedness" will have the meaning specified in Section 14,
except that with respect to Party B, Specified Indebtedness as of any date
of determination thereof shall mean the then most Senior Class of the
Notes Outstanding under (and as each such term is defined in) the
Indenture.
"Threshold Amount" means, in the case of Party A, USD 20,000,000 (or its
equivalent in any other currency), and, in the case of Party B USD
20,000,000 (or its equivalent in any other currency).
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will apply
to Party A and will apply to Party B.
(e) The "Automatic Early Termination" provisions of Section 6(a) will not
apply to Party A and Party B.
(f) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement, Market Quotation and the Second Method will apply.
(g) "Termination Currency" means United States Dollars ("USD").
(h) Additional Termination Event will not apply.
Part 2: Tax Representations
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following
representation:-
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Sections 2(e), 6(d)(ii) and 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
representation made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement, and (iii) the satisfaction of the agreement
of the other party contained in Section 4(d) of this Agreement, provided
that it shall not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a form or
document under Section 4(a)(iii) by reason of material prejudice to its
legal or commercial position.
(b) Payee Representations. For the purposes of Section 3(f) of the Agreement,
each party represents that it is duly organized and validly existing under
the laws of the state of Delaware.
21
21
Part 3: Agreement to Deliver Documents
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:-
(a) Tax forms, documents or certificates to be delivered are:-
Party required
to deliver Date by which
document Form/Document/Certificate to be delivered
-------- ------------------------- ---------------
Party A Tax Forms Promptly upon the
earlier of (i)
reasonable demand by
Party B or (ii) learning
that the form or
document is required.
Party B Tax Forms Promptly upon the
earlier of (i)
reasonable demand by
Party A or (ii)
learning that the
form or document is
required.
(b) Other documents to be delivered are:-
Party required Covered
to deliver Form/Document/ Date by which by Section
document Certificate to be Delivered 3(d)
-------- ----------- --------------- ----
Party A An opinion of counsel for Promptly after Yes
Party A substantially in execution of this
the form of Exhibit A Agreement.
to this Schedule.
Party A A guarantee of Xxxxxx Upon substitution of Yes
Brothers Holdings Inc. Xxxxxx Brothers
("Holdings") in the form of Special Financing Inc.
Exhibit B to this Schedule ("LBSF") for Party A
pursuant to paragraph
(a) of Part 5 of this
Schedule
Party A An incumbency certificate Upon execution of Yes
with respect to the this Agreement.
signatory of this
agreement
22
22
Party A Audited annual financial Within 60 days after Yes
Statements of Party A, and each fiscal year end
upon substitution of LBSF of Party A
for Party A, Holdings
Party B Audited financial Within 60 days after Yes
statements of Party B each fiscal year
end of Party B
Party B An opinion of counsel for Promptly after execution Yes
Party B substantially in of this Agreement.
the form of Exhibit C to
this Schedule.
Party B An incumbency certificate Upon Execution of Yes
with respect to the this Agreement.
signatory of this
Agreement.
Party B A copy of the Trust Upon execution of this Yes
Agreement authorizing Agreement and thereafter
Party B to enter into this upon request.
Agreement and each
Transaction entered into
under this Agreement.
Part 4: Miscellaneous
(a) Addresses for Notices. For the purpose of Section 12(a):-
Address for notices or communications to Party A:-
Address: Xxxxxx Brothers Financial Products Inc.
3 World Financial Center, 00xx xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000 XXX
Attention: Documentation Group
Telephone No. (000) 000-0000
Facsimile No: (000) 000-0000
For all purposes.
23
23
Address for notices or communications to Party B:-
Address: Aircraft Finance Trust
c/o Wilmington Trust Company
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention:
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
For all purposes.
(b) Process Agent. For the purpose of Section 13(c):-
Party A appoints as its Process Agent Not applicable.
Party B appoints as its Process Agent Not applicable.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(c) of this Agreement:-
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) Credit Support Document. Details of any Credit Support Document, each of
which is incorporated by reference in, constitutes part of, and is in
connection with, this Agreement and each Confirmation (unless provided
otherwise in a Confirmation) as if set forth in full in this Agreement or
such Confirmation:-
In the case of Party A: Not applicable, but only from and after the
substitution of LBSF for Party A hereunder pursuant to paragraph (a) of
Part 5 of this Schedule, the Guarantee of Holdings in the form of Exhibit
B to this Schedule.
In the case of Party B: Security Trust Agreement as defined in the
Indenture and is supplemented by a Supplement between the Security Trustee
and Party A.
(g) Credit Support Provider.
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24
In relation to Party A: Not applicable, but only from and after the
substitution of LBSF for Party A hereunder pursuant to paragraph (a) of
Part 5 of this Schedule, Holdings.
In relation to Party B: Not applicable.
(h) Governing Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine).
(i) Jurisdiction. Section 13(b) is hereby amended by: (i) deleting in the
second line of Subparagraph (i) thereof the word "non-"; and (ii) deleting
the final paragraph thereof.
(j) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will not apply to any of the Transactions from the date of this Agreement.
(k) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
Part 5: Other Provisions
(a) Credit Assignment Event.
(i) If at any time during the term of this Agreement, the rating of the
Specified Indebtedness of Party B falls below the Assignment
Threshold Rating (as defined below) the rights and obligations of
Party A under this Agreement and all Transactions hereunder shall
without any further action by any party, but subject always to
receipt by both parties of a Rating Agency Confirmation (as defined
in the Indenture) be deemed to have been assigned and delegated to
LBSF, effective on the third Business Day following receipt by Party
A and Party B of such Rating Agency Confirmation (which Party B
undertakes to request) and Party B expressly and irrevocably
consents to such assignment and assumption, except that no such
assignment and assumption shall occur at any time after the
occurrence of any event of default under any master agreement
between Party A and LBSF. As of and from the effective date of such
assignment, LBSF shall succeed to all rights and obligations of
Party A under this Agreement and all Transactions hereunder.
Notwithstanding the above, if at the time of such assignment LBSF
and Party B are parties to a master agreement that sets forth
general terms and conditions applicable to swap and related
transactions between LBSF and Party B, the Transactions hereunder
transferred to LBSF pursuant to the above provision will be governed
by such master agreement.
25
25
"Assignment Threshold Rating" means (A) with respect to a Xxxxx'x
Investors Service Inc.: (1) long-term senior unsecured debt rating,
counterparty rating or long-term deposit-paying rating, Baa3, (2)
financial strength rating, Baa2 or (3) if (A)(1) and (A)(2) are not
available, commercial paper or short-term rating, P-3, and (B) with
respect to a Standard & Poor's Rating Group: (1) long-term unsecured
debt rating, financial programs rating or certificate of deposit
rating, BBB-, (2) claims-paying ability rating, BBB or (3) if (B)(1)
and (B)(2) are not available, commercial paper rating or short-term
rating, A-2.
(ii) Party A represents that it has provided separate consideration to
LBSF for the right to assign this Agreement and the Transactions
hereunder to LBSF pursuant to clause (i), and Party B shall not owe
Party A any termination or other payment upon any such assignment.
(iii) Notwithstanding clause (i) above, no assignment of any Transaction
to LBSF shall occur if, prior to the effective date of the
assignment described in such clause (i), Party B notifies Party A
that Party B agrees to (A) terminate all Transactions as if a
Termination Event has occurred with Party B as the Affected Party or
(B) assign all Transactions to a third party on terms acceptable to
Party A and Party B.
(iv) Notwithstanding clauses (i) through (iii) above, no transfer or
assignment payment shall be due to or owing from either Party A or
Party B other than its obligations under the Transactions.
(v) Notwithstanding the foregoing, the assignment provisions of this
paragraph shall not take effect if, at the time such assignment
would be required, Party B shall have satisfied in full all of its
payment obligations under Section 2(a) of this Agreement and shall
at such time have no future payment obligations, whether absolute or
contingent, under such Section.
Miscellaneous:
(b) Country of Domicile. The country of domicile of Party A is the United
States of America. The county of domicile of Party B is United States of
America.
(c) Confirmation. Each Confirmation supplements, forms part of, and will be
read and construed as one with, this Agreement. A form of Confirmation is
set forth as Exhibit D hereto.
(d) Transfer. (i) Section 7 of the Agreement is hereby modified as follows by
inserting the following after the word "party" but before the comma in the
third line thereof: ", provided, however, that such consent shall not be
unreasonably withheld"; and (ii) Party A consents to the assignment by
Party B of its rights under this Agreement under the Security Trust
Agreement provided, however it is expressly understood that this provision
does not alter Party A's termination rights under this Agreement.
26
26
(e) For purposes of Sections 2(d)(i)(4) and 3(f), any payee tax representation
specified in a Confirmation under this Agreement shall be deemed to be
specified in this Schedule.
(f) Trial By Jury. Each party irrevocably waives any and all rights to trial
by jury in any legal proceeding in connection with this Agreement or any
Transaction.
(g) Accuracy of Specified Information. Section 3(d) is hereby amended by
adding in the third line thereof after the word "respect" and before the
period the words "or, in the case of audited or unaudited financial
statements or balance sheets, a fair presentation of the financial
condition of the relevant person".
(h) The terms and provisions of that certain Secured Party Supplement between
Party A as Secured Party and Bankers Trust Company, as Security Trustee
relating to that certain Security Trust Agreement as so supplemented, the
"Security Trust Agreement" are hereby incorporated by reference and which
constitute a Credit Support Document under this Agreement are hereby
incorporated herein by reference as fully and with the same force and
effect as if written in full and the Transactions shall be subject
thereto. Subject to the enforcement of its rights under the Security Trust
Agreement Party A shall not take steps for the purpose of procuring the
appointment of an administrator receiver or the making of any
administrative receiver or the making of any administrative order or for
instituting any bankruptcy, reorganization, arrangement, insolvency,
winding up, liquidation, composition or any similar proceeding under the
laws of any jurisdiction with respect to Party B.
(i) Definitions. This Agreement, each Confirmation, and each Transaction are
subject to the 1991 ISDA Definitions as published by the International
Swaps and Derivatives Association, Inc. as amended, supplemented, updated,
restated, and superseded from time to time (the "Definitions"), and will
be governed in all respects by the Definitions (except that references to
"Swap Transactions" in the Definitions will be deemed to be references to
"Transactions"). The Definitions as so modified, are incorporated by
reference in, and made part of, this Agreement and each Confirmation as if
set forth in full in this Agreement and such Confirmations. Subject to
Section 1(b), in the event of any inconsistency between the provisions of
this Agreement and the Definitions, this Agreement will prevail. Also,
subject to Section 1(b), in the event of any inconsistency between the
provisions of any Confirmation and this Agreement, or the Definitions,
such Confirmation will prevail for the purpose of the relevant
Transaction.
(j) Representations. Section 3 is hereby amended by adding the following
additional Subsections:
(g) No Agency. It is entering into this Agreement and each
Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise).
27
27
(h) Eligible Swap Participant. It is an "eligible swap participant"
as defined in the Part 35 Regulations of the U.S. Commodity Futures
Trading Commission.
(i) No Reliance. Party B acknowledges and agrees that (i)
Party A is acting solely in the capacity of an arm's length contractual
counterparty, with respect to this Agreement and any Transaction
hereunder, and (ii) Party A is not acting as a financial advisor or
fiduciary of Party B (or in any similar capacity) with respect to this
Agreement and any Transaction hereunder regardless of whether Party A
provides Party B with market information or its views. Party B
represents to Party A (which representation shall be deemed to be
repeated by Party B on each date on which Transaction is entered into)
that it understands the risks of the Transactions it enters and any
legal, regulatory, tax, accounting and economic consequences arising
therefrom and that its decision to enter into each Transaction has been
based solely on the independent evaluation of Party B and its
representatives in light of Party B's financial capabilities and
objectives.
(k) Tax Forms means any form or document that may be required or reasonably
requested in order to allow the other party to make a payment under the
Transaction without any deduction or withholding for or on account of any
Tax or with such deduction or withholding at a reduced rate.
(l) "Incorporation of ISDA EMU Protocol. Annexes 1 through 5 and, for the
purpose of construing such Annexes, Section 6 (Definitions) of the ISDA
EMU Protocol published on May 6, 1998 by ISDA (the "Protocol") shall be
incorporated into this Agreement provided that such purpose, the term "the
parties", as used in the Annexes of the Protocol, shall be construed as
referring to Party A and Party B."
(m) It is agreed and understood by both parties to this Agreement that the
payment obligations under this Agreement constitute Senior Swap Payments
under and defined in the Indenture, entitled to the priority of payments
specified in Section 3.08(a)(ii) and 3.08(b)(iii) of the Indenture.
(n) Additional Definition.
"Indenture" means that certain Trust Indenture dated as of May 5, 1999
between Party B as Issuer, Bankers Trust Company as Trustee and
Resources/Phoenix, Inc. as Administrative Agent.
(o) Outstanding Specified Transactions.
Upon the effectiveness of this Agreement, unless otherwise agreed to in
writing by the parties to this Agreement with respect to specific
Specified Transactions, all Specified Transactions then outstanding
between shall be subject to the terms hereof.
28
28
The parties executing this Schedule have executed the Master Agreement and have
agreed as to the contents of this Schedule.
XXXXXX BROTHERS FINANCIAL PRODUCTS INC.
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Title: XXXXXXXX X. XXXXX
VICE PRESIDENT
----------------------------------
AIRCRAFT FINANCE TRUST
By: /s/ Xxxxx X. Xxxxx
-------------------------------------
Title: Xxxxx X. Xxxxx
Authorized Signer
----------------------------------
29
May 5, 1999
Aircraft Finance Trust
0000 Xxxxx Xxxxxx Xxxxxx
c/o Wilmington Trust Company
Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Treasurer
Ladies and Gentlemen:
I have acted as counsel to Xxxxxx Brothers Financial Products Inc., a
Delaware corporation ("Party A"), and am familiar with matters pertaining to the
execution and delivery of the Master Agreement (the "Master Agreement") dated as
of May 5, 1999 between Party A and Aircraft Finance Trust ("Party B").
In connection with this opinion, I have examined, or have had examined on
my behalf, an executed copy of the Master Agreement, certificates and statements
of public officials and officers of Party A and such other agreements,
instruments, documents and records as I have deemed necessary or appropriate for
the purposes of this opinion.
Based on the foregoing but subject to the assumptions, exceptions,
qualifications and limitations hereinafter expressed, I am of the opinion that:
1. Party A is a corporation duly incorporated, validly existing and in
good standing under the laws of the state of Delaware.
2. The execution, delivery and performance of the Master Agreement, are
within Party A's corporate power, have been duly authorized by all
corporate action and do not conflict with any provision of its
certificate of incorporation or by-laws.
3 The Master Agreement, has been duly executed and delivered and
constitutes a legal, valid and binding obligation, enforceable
against it in accordance with its terms.
4. To the best of my knowledge no consent, authorization, license or
approval of or registration or declaration with, any U.S. federal or
New York State governmental authority is required in connection with
the execution, delivery and performance of the Master Agreement, in
the case of Party A.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
30
-2-
A. My opinion in paragraph 3 above is subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors rights generally (including, without limitation, the
effect of statutory or other laws regarding fraudulent or other similar
transfers) and general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law.
B. I am a member of the Bar of the state of New York and render no opinion
on the laws of any jurisdiction other than the laws of the state of New York,
the federal laws of the United States of America and the General Corporation Law
of the state of Delaware.
C. My opinions are limited to the present laws and to the facts as they
presently exist. I assume no obligation to revise or supplement this opinion
should the present laws of the jurisdictions referred to in paragraph B above be
changed by legislative action, judicial decision or otherwise.
D. This letter is rendered to you in connection with the Master Agreement
and the transactions related thereto and may not be relied upon by any other
person or by you in any other context or for any other purpose. This letter may
not be quoted in whole or in part, nor may copies thereof be furnished or
delivered to any other person, without the prior written consent of Xxxxxx
Brothers Financial Products Inc., except that you may furnish copies hereof (i)
to your independent auditors and attorneys, (ii) to any United States, state or
local authority having jurisdiction over you or over Party A, (iii) pursuant to
the order of any legal process of any court of competent jurisdiction or any
governmental agency, and (iv) in connection with any legal action arising out of
the Master Agreement.
F. I have assumed with your permission (i) the genuineness of all
signatures by each party other than Party A, (ii) the authenticity of documents
submitted to me as originals and the conformity to authentic original documents
of all documents submitted to me as copies, and (iii) the due execution and
delivery, pursuant to due authorization, of the Master Agreement by each party
other than Party A.
Very truly yours,
31
EXHIBIT B to Schedule
GUARANTEE OF XXXXXX BROTHERS HOLDINGS INC.
XXXXXX BROTHERS SPECIAL FINANCING INC. ("Party A") and AIRCRAFT FINANCE
TRUST ("Party B") have entered into a Master Agreement dated as of May 5, 1999,
pursuant to which Party A and Party B have entered and/or anticipate entering
into one or more transactions (each a "Transaction"), the Confirmation of each
of which supplements, forms part of, and will be read and construed as one with,
the Master Agreement (collectively referred to as the "Agreement"). This
Guarantee is a Credit Support Document as contemplated in the Agreement. For
value received, and in consideration of the financial accommodation accorded to
Party A by Party B under the Agreement, XXXXXX BROTHERS HOLDINGS INC., a
corporation organized and existing under the laws of the State of Delaware
("Guarantor"), hereby agrees to the following:
(a) Guarantor hereby unconditionally guarantees to Party B the due and
punctual payment of all amounts payable by Party A under each Transaction when
and as Party A's obligations thereunder shall become due and payable in
accordance with the terms of the Agreement. In case of the failure of Party A to
pay punctually any such amounts, Guarantor hereby agrees, upon written demand by
Party B, to pay or cause to be paid any such amounts punctually when and as the
same shall become due and payable.
(b) Guarantor hereby agrees that its obligations under this Guarantee
constitute a guarantee of payment when due and not of collection.
(c) Guarantor hereby agrees that its obligations under this Guarantee
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Agreement against Party A (other than as a result of the
unenforceability thereof against Party B), the absence of any action to enforce
Party A's obligations under the Agreement, any waiver or consent by Party B with
respect to any provisions thereof, the entry by Party A and Party B into
additional Transactions under the Agreement or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor (excluding the defense of payment or statute of limitations, neither
of which are waived); provided, however, that Guarantor shall be entitled to
exercise any right that Party A could have exercised under the Agreement to cure
any default in respect of its obligations under the Agreement or to setoff,
counterclaim or withhold payment in respect of any Event of Default or potential
Event of Default in respect of Party B or any Affiliate, but only to the extent
such right is provided to Party A under the Agreement. The Guarantor
acknowledges that Party A and Party B may from time to time enter into one or
more Transactions pursuant to the Agreement and agrees that the obligations of
the Guarantor under this Guarantee will upon the execution of any such
Transaction by Party A and Party B extend to all such Transactions without the
taking of further action by the Guarantor.
32
-2-
(d) This Guarantee shall remain in full force and effect until such time
as Party B shall receive written notice of termination. Termination of this
Guarantee shall not affect Guarantor's liability hereunder as to obligations
incurred or arising out of Transactions entered into prior to the termination
hereof.
(e) Guarantor further agrees that this Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time, payment, or any
part thereof, of any obligation or interest thereon is rescinded or must
otherwise be restored by Party B upon an Event of Default as set forth in
Section 5(a)(vii) of the Agreement affecting Party A or Guarantor.
(f) Guarantor hereby waives (i) promptness, diligence, presentment, demand
of payment, protest, order and, except as set forth in paragraph (a) hereof,
notice of any kind in connection with the Agreement and this Guarantee, or (ii)
any requirement that Party B exhaust any right to take any action against Party
A or any other person prior to or contemporaneously with proceeding to exercise
any right against Guarantor under this Guarantee.
This Guarantee shall be governed by and construed in accordance with the
laws of the State of New York, without reference to choice of law doctrine. All
capitalized terms not defined in this Guarantee are defined in the Agreement.
Any notice hereunder will be sufficiently given if given in accordance
with the provisions for notices under the Agreement and will be effective as set
forth therein. All notices hereunder shall be delivered to Xxxxxx Brothers
Holdings Inc., Attention: Treasurer, at 3 World Financial Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, Xxx Xxxx 00000 (Facsimile No. (000) 000-0000) with a copy to Xxxxxx
Brothers Special Financing Inc., Attention: Notice Generation at 3 World
Financial Center, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000 (Facsimile No. (212)
528-6927).
IN WITNESS WHEREOF, Guarantor has caused this Guarantee to be executed in
its corporate name by its duly authorized officer as of the date of the
Agreement.
XXXXXX BROTHERS HOLDINGS INC.
By: ____________________________________
Title: _________________________________
33
EXHIBIT C to Schedule
[Form of Opinion of Counsel for Party B]
[Date]
Xxxxxx Brothers
Financial Products Inc.
3 World Financial Center
Xxx Xxxx, Xxx Xxxx 00000 XXX
Attention: Treasurer
Ladies and Gentlemen:
I have acted as counsel to Aircraft Finance Trust, a Delaware business
trust ("Party B"), and am familiar with matters pertaining to the execution and
delivery of the Master Agreement (the "Master Agreement") dated as of May 5,
1999 between Party B and Xxxxxx Brothers Financial Products, Inc. ("Party A").
In connection with this opinion, I have examined, or have had examined on
my behalf, an executed copy of the Master Agreement, certificates and statements
of public officials and officers of Party B and such other agreements,
instruments, documents and records as I have deemed necessary or appropriate for
the purposes of this opinion.
Based on the foregoing but subject to the assumptions, exceptions,
qualifications and limitations hereinafter expressed, I am of the opinion that:
1. Assuming the Master Agreement is within the trust power of Party B
and has been duly executed and delivered by Party B, as to which we
understand you are relying on the attached opinion of
Messrs._______, the Master Agreement constitutes a legal, valid and
binding obligation, enforceable against Party B in accordance with
its terms.
2. To the best of my knowledge no consent, authorization, license or
approval of or registration or declaration with, any U.S. federal or
State governmental authority is required in connection with the
execution, delivery and performance of the Master Agreement, by
Party B.
34
-2-
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. My opinion in paragraph 3 above is subject to the effect of any
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors rights generally (including, without limitation, the
effect of statutory or other laws regarding fraudulent or other similar
transfers) and general principles of equity, regardless of whether
enforceability is considered in a proceeding in equity or at law.
B. I am a member of the Bar of the state of the federal laws of New York
and render no opinion on the laws of any jurisdiction other than the laws of the
state of New York and the federal laws of the United States of America. As to
all matters of law of the state of Delaware referred to in the above opinion, we
have, with your permission, relied on the attached opinion of Messrs.________,
without independent investigation of the matters covered thereby.*
C. My opinions are limited to the present laws and to the facts as they
presently exist. I assume no obligation to revise or supplement this opinion
should the present laws of the jurisdictions referred to in paragraph B above be
changed by legislative action, judicial decision or otherwise.
D. I have assumed with your permission (i) the genuineness of all
signatures by each party other than Party B, (ii) the authenticity of documents
submitted to me as originals and the conformity to authentic original documents
of all documents submitted to me as copies, and (iii) the due execution and
delivery, pursuant to due authorization, of the Master Agreement by each party
other than Party B.
Very truly yours,
* To be covered by the opinion of Delaware counsel along with the
following:
1. Party B is a Delaware business trust, validly existing and in good
standing under the laws of the State of Delaware.
2. The execution, delivery and performance of the Master Agreement, in
the case of Party B are within its trust power, have been duly
authorized by all appropriate action and do not conflict with any
provision of its authorization documents.
35
EXHIBIT D to Schedule
Form of Confirmation
TO: <>
<>
<>, <>
<>
Attention: <>
Telephone: <>
Facsimile: <>
FROM: Xxxxxx Brothers Financial Products Inc.
3 World Financial Xxxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Notice Generation
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
SUBJECT: TRANSACTION (Ref: )
DATE: [date]
Dear ___________
SUBJECT: SWAP TRANSACTION (REF: )
The purpose of this communication is to set forth the terms and conditions of
the interest rate swap transaction entered into on the Trade Date referred to
below (the "Swap Transaction"), between Xxxxxx Brothers Financial Products Inc.
("Party A") and <> ("Party B"). This communication constitutes a
"Confirmation" as referred to in the Swap Agreement specified below.
1. This confirmation supplements or will supplement, forms or will form a
part of, and is or will be subject to, the Master Agreement, which the parties
have entered into, dated as of <> (the "Master Agreement"), between
Xxxxxx Brothers Financial Products Inc. and <>. All provisions
contained in, or incorporated by
36
18
reference to, the Master Agreement shall or will govern this Confirmation except
as expressly modified below.
2. This communication incorporates the definitions and provisions
contained in the 1991 ISDA Definitions (as published by the International Swaps
and Derivatives Association, Inc.) (the "Definitions").
3. The terms of the particular Swap Transaction to which this
communication relates are as follows:
Trade Date:
Effective Date:
Termination Date:
[Notional Amount:]
FIXED AMOUNTS:
Fixed Rate Payer: [Party A/B]
[Fixed Rate Payer
Calculation Amount:]
Fixed Rate Payer Payment Dates [or, [ ], subject to adjustment in
Period End Dates, if Delayed Payment accordance with the [Following/Modified
or Early Payment applies]: Following/Preceding] Business Day
Convention, with respect to a __________
Business Day and a ____________ Business
Day [,with No Adjustment of Period
End Dates]
[Fixed Amount:]
Fixed Rate:
Fixed Rate Day
Count Fraction:
FLOATING AMOUNTS:
Floating Rate Payer: [Party B/A]
[Floating Rate Payer
Calculation Amount:]
37
18
Floating Rate Payer Payment Dates [or, [ ], subject to adjustment in
Period End Dates, if Delayed Payment accordance with the [Following/Modified
or Early Payment applies]: Following/Preceding] Business Day
Convention, with respect to a _________
Business Day and a ________________
Business Day [,with No Adjustment of
Period End Dates]
Floating Rate for initial
Calculation Period:
Floating Rate Option:
Designated Maturity:
Floating Rate Spread: [plus/minus] ____% p.a.
Floating Rate Day
Count Fraction:
Reset Dates:
[Rate Cut-off Dates:]
[Method of Averaging: Unweighted/Weighted Average]
Compounding: Applicable/Inapplicable
[Compounding Dates:]
[Initial Exchanges:
Initial Exchange Date:
Initial Exchange Amount to Party A:
Initial Exchange Amount to Party B:
Final Exchanges:
Final Exchange Date:
Final Exchange Amount to Party A:
Final Exchange Amount to Party B:]
Calculation Agent:
38
18
3. Account Details
Payments to Party A
Account for payments in [first currency]: [ ]
Account for payments in [second currency]: [ ]
Payments to Party B
Account for payments in [first currency]: [ ]
Account for payments in [second currency]: [ ]
4. Offices
The Office of Party B for the Transaction is [ ].
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours sincerely,
XXXXXX BROTHERS FINANCIAL PRODUCTS INC.
By: ____________________________________
Name:
Title:
Date:
Confirmed as of the date first written:
AIRCRAFT FINANCE TRUST
By: ____________________________________
Name:
Title:
Date:
