(Multicurrency -- Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of January 31, 2006
THE ROYAL BANK JPMORGAN CHASE BANK, N.A., not in its individual
OF SCOTLAND PLC and capacity, but solely as TRUSTEE FOR THE BENEFIT OF
THE CERTIFICATEHOLDERS OF THE POPULAR ABS, INC.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-A
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject
to (1) the condition precedent that no Event of Default or Potential
Event of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
(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:--
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(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true unless
such failure would not have occurred but for (I) any
action taken by a taxing authority, or brought in a
court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to
a party to this Agreement) or (II) a Change in Tax Law.
(ii) LIABILITY. If: --
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the laws
of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to 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
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court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) CONSENTS. All governmental and other consents that are required
to have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and
any Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(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
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accurate and completed in a manner reasonably satisfactory to such other
party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section 2(a)(i)
or 2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with
or performed by the party in accordance with this Agreement if such
failure is not remedied on or before the thirtieth day after notice of
such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or obligation
to be complied with or performed by it in accordance 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
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(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit
Support Provider of such party or any applicable Specified Entity of
such party (1) defaults under a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, there
occurs a liquidation of, an acceleration of obligations under, or an
early termination of, that Specified Transaction, (2) defaults, after
giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or
exchange date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local Business
Days if there is no applicable notice requirement or grace period) or
(3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule
as applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however described)
in respect of such party, any Credit Support Provider of such party or
any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them (individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and
payable or (2) a default by such party, such Credit Support Provider or
such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less
than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or
grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights,
or a petition is presented for its winding-up or liquidation,
and, in the case of any such proceeding or petition instituted
or presented against it, such proceeding or petition (A) results
in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an 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
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(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer: --
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit Support
Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or
pursuant to an agreement reasonably satisfactory to the other
party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of
its obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event
Upon Merger if the event is specified pursuant to (iv) below or an Additional
Termination Event if the event is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into, or
due to the promulgation of, or any change in, the interpretation by any
court, tribunal or regulatory authority with competent jurisdiction of
any applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party): --
(1) to perform any absolute or contingent obligation to make
a payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which the
party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
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);
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(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality
under Section 5(b)(i)(1) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is 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.
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(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. If: --
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a Tax
Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the case
of a Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving details
of the relevant account to which any amount payable to it is to be paid.
In the absence of written confirmation from the source of a quotation
obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of
any Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
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.
9
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an
Event of Default: --
(1) First Method and Market Quotation. If the First Method
and Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss in
respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it
is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount
to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event: --
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is
not the Affected Party, respectively, and, if Loss applies and
fewer than all the Transactions are being terminated, Loss shall
be calculated in respect of all Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties: --
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be payable
equal to (I) the sum of (a) one-half of the difference
between the Settlement Amount of the party with the
higher Settlement Amount ("X") and the Settlement Amount
of the party with the lower Settlement Amount ("Y") and
(b) the Termination Currency Equivalent of the Unpaid
Amounts owing to X less (II) the Termination Currency
Equivalent of the Unpaid Amounts owing to Y; and
10
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than all
the Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of
the party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of
that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will
be subject to such adjustments as are appropriate and permitted by law
to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that: --
(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)
11
in respect of a judgment or order of another court for the payment of any amount
described in (i) or (ii) above, the party seeking recovery, after recovery in
full of the aggregate amount to which such party is entitled pursuant to the
judgment or order, will be entitled to receive immediately from the other party
the amount of any shortfall of the Contractual Currency received by such party
as a consequence of sums paid in such other currency and will refund promptly to
the other party any excess of the Contractual Currency received by such party as
a consequence of sums paid in such other currency if such shortfall or such
excess arises or results from any variation between the rate of exchange at
which the Contractual Currency is converted into the currency of the judgment or
order for the purposes of such judgment or order and the rate of exchange at
which such party is able, acting in a reasonable manner and in good faith in
converting the currency received into the Contractual Currency, to purchase the
Contractual Currency with the amount of the currency of the judgment or order
actually received by such party. The term "rate of exchange" includes, without
limitation, any premiums and costs of exchange payable in connection with the
purchase of or conversion into the Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
9. MISCELLANEOUS
(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
12
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 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.
13
(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 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.
14
"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.
"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).
15
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have 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.
16
"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 meanings specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
17
"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 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.
18
In connection with this Agreement, Greenwich Capital Markets, Inc. has acted as
agent on behalf of THE ROYAL BANK OF SCOTLAND PLC. Greenwich Capital Markets,
Inc. has not guaranteed and is not otherwise responsible for the obligations of
THE ROYAL BANK OF SCOTLAND PLC under this Agreement.
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.
THE ROYAL BANK OF SCOTLAND PLC JPMORGAN CHASE BANK, N.A., not in
By: Greenwich Capital Markets, Inc., its individual capacity, but solely
its agent as TRUSTEE FOR THE BENEFIT OF THE
CERTIFICATEHOLDERS OF THE POPULAR
ABS, INC. MORTGAGE PASS-THROUGH
CERTIFICATES, SERIES 2006-A
By: /Xxxxxxxx Xxxxx/ By: /Xxxxx X. Xxxxxxxx/
------------------------ -------------------------------
Name: Xxxxxxxx Xxxxx Name: Xxxxx X. Xxxxxxxx
Title: Managing Director Title: Assistant Vice President
Date: January 31, 2006 Date: January 31, 2006
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of January 31, 2006
between
THE ROYAL BANK OF SCOTLAND PLC ("PARTY A")
and
JPMORGAN CHASE BANK, N.A.
not in its individual capacity, but solely as
TRUSTEE FOR THE BENEFIT OF THE CERTIFICATEHOLDERS OF THE POPULAR ABS,
INC. MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-A ("PARTY B")
SCHEDULE TO THE MASTER AGREEMENT
PART 1. TERMINATION PROVISIONS
(A) "SPECIFIED ENTITY" None specified.
(B) "SPECIFIED TRANSACTION" has its meaning as defined in Section 14
of this Agreement.
(C) "CROSS DEFAULT" applies to Party A and does not apply to Party
B.
"SPECIFIED INDEBTEDNESS" has its meaning as defined in
Section 14 of this Agreement.
"THRESHOLD AMOUNT" means, with respect to Party A, an amount
(including its equivalent in another currency) equal to the
higher of $10,000,000 or 2% of its stockholders' equity as
reflected on its most recent financial statements or call
reports.
(D) "CREDIT EVENT UPON MERGER" applies to Party A and does not apply
to Party B. For the avoidance of doubt, only Party B shall have
the right to designate an Early Termination Date in connection
with a Credit Event upon Merger.
(E) "AUTOMATIC EARLY TERMINATION" does not apply to either party.
(F) PAYMENTS ON EARLY TERMINATION. Except as otherwise provided in
this Schedule, "Market Quotation" and the "Second Method" apply.
(G) "TERMINATION CURRENCY" means United States Dollars.
(H) LIMITATION ON DEFAULTS BY PARTY B. The following Events of
Default specified in Section 5 of this Agreement shall not apply
to Party B:
(A) Section 5(a)(ii) Breach of Agreement;
(B) Section 5(a)(iii) Credit Support Default, except due to
a default under Paragraph 7(i) of the Credit Support
Annex;
(C) Section 5(a)(iv) Misrepresentation;
(D) Section 5(a)(v) Default under Specified Transaction; and
(E) Section 5(a)(vii)(2) Bankruptcy.
(I) ADDITIONAL TERMINATION EVENTS.
(i) Unless otherwise specified in a Confirmation, the
occurrence of any of the following events shall be an
Additional Termination Event:
(A) Standard & Poor's Ratings Services, a division
of the XxXxxx-Xxxx Companies, Inc. ("S&P") or
Xxxxx'x Investors Service, Inc. ("XXXXX'X")
rates the creditworthiness of Party A's
unsecured and unsubordinated debt, deposit or
letter of credit obligations below investment
grade (investment grade being a long-term rating
of at least BBB+ for S&P and Baa1 for Xxxxx'x,
and a short-term rating of A-1 from S&P) and
Party A fails to make a Permitted Transfer (as
defined in
1
Section (a) of Part 6 of this Schedule) in
accordance with the provisions of Part 1(i)(iii)
of this Schedule.
(B) [RESERVED]
(ii) For purposes of the right to terminate under Section
6(b)(iv), Party A will be the sole Affected Party for
any Additional Termination Events described above.
Notwithstanding which party is the Affected Party for
any Additional Termination Event, upon the occurrence of
an Early Termination Date for any Additional Termination
Event, Party A shall make the calculations under Section
6(e) of this Agreement as though it were the party that
is not the Affected Party for purposes of Section
6(e)(ii)(1) of this Agreement, provided that any Market
Quotation for any Transaction terminated pursuant to
Clause (A) of subparagraph (i) above shall be the
Reference Market-Maker's price for entering into a
Replacement Transaction with a creditworthy counterparty
in which the Reference Market-Maker would take the side
that Party B had taken in the Terminated Transaction,
known as the "offered side". Party B agrees to give
written notice to each of S&P (for so long as any
Certificates (as defined in the Pooling and Servicing
Agreement) are deemed outstanding under the Pooling and
Servicing Agreement and rated by S&P) and Moody's (for
so long as any Certificates are deemed outstanding under
the Pooling and Servicing Agreement and rated by
Moody's) in the event it declares an Additional
Termination Event and designates an Early Termination
Date in the event of a credit downgrade event with
respect to Party A as provided in subparagraph (i)(A)
above.
(iii) In the event either S&P or Moody's rates the
creditworthiness of Party A's unsecured and
unsubordinated debt, deposit or letter of credit
obligations below investment grade as provided in Part
1(i)(i)(A) above and Party A fails to make a Permitted
Transfer of the Affected Transactions within thirty days
of the occurrence of such credit downgrade event, then,
beginning on the Over-Collateralization Commencement
Date and continuing until Party A has made a Permitted
Transfer of the Affected Transactions, Party A shall
transfer to Party B's Custodian under the Credit Support
Annex an amount of Eligible Collateral having a Value at
least equal to the greatest of (x) Party A's Exposure
under the Affected Transactions, (y) the amount of the
next payment due from Party A to Party B under the
Affected Transactions, or (z) one percent of the
Transactional Notional Amount (as hereinafter defined).
The posting of such collateral by Party A shall have the
effect that no Additional Termination Event under Part
1(i)(i)(A) shall exist with respect to the Affected
Transactions unless Party A has not made a Permitted
Transfer of the Affected Transactions within 60 days
after the occurrence of such credit downgrade event.
Party A shall continue to post collateral following such
60 day period in accordance with the terms of this
Agreement until the earlier to occur of consummation of
a Permitted Transfer of the Affected Transactions or
termination of this Agreement. At all times following
the occurrence of an Over-Collateralization Commencement
Date, Party A will continue to use commercially
reasonable efforts to find a
2
replacement party which meets the requirements of Part
6(a)(ii) below. The term "Transactional Notional Amount"
shall mean, as of the date of determination, an amount
equal to the aggregate Notional Amount outstanding at
the beginning of and for the current Calculation Period
under the Affected Transactions.
(iv) "Over-Collateralization Commencement Date" means the
first Business Day following the thirty-day period after
the occurrence of the credit downgrade event described
in Part 1(i)(i)(A) above.
(J) EVENTS OF DEFAULT. An Event of Default shall not occur with
respect to Party A under Section 5(a)(v)(1) or (2) or Section
5(a)(vi) when the failure to pay or deliver, or the default,
event of default or other similar condition or event, as the
case may be, arises solely (i) out of a wire transfer problem or
an operational or administrative error or omission (so long as
the required funds or property required to make that payment or
delivery were otherwise available to Party A), or (ii) from the
general unavailability of the relevant currency due to exchange
controls or other similar governmental action, but in either
case only if the payment or delivery is made within three Local
Business Days after the problem has been corrected, the error or
omission has been discovered or the currency becomes generally
available.
PART 2. TAX PROVISIONS
(A) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e) of
this Agreement, each party makes the following representation:
It is not required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for
or on account of any Tax from any payment (other than interest
under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
made by it to the other party under this Agreement.
In making this representation, a party may rely on (i) the
accuracy of any representations made by the other party pursuant
to Section 3(f) of this Agreement, (ii) the satisfaction of the
agreement contained in Section 4(a)(i) or 4(a)(iii) of this
Agreement, and the accuracy and effectiveness of any document
provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement, and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of this
Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) above and
the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice to its legal
or commercial position.
(B) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of
this Agreement:
(i) Party A makes the following representations:
Each payment received or to be received by it in
connection with this Agreement in respect of any
Transactions will be effectively connected with its
conduct of a trade or business in the United States.
3
(ii) Party B makes the following representations:
JPMorgan Chase Bank, N.A. is a national banking
association and not a foreign corporation for United
States tax purposes. Popular ABS, Inc. Mortgage
Pass-Through Certificates, Series 2006-A is a New York
common law trust and not a foreign trust for United
States tax purposes.
(C) TAX FORMS.
(i) DELIVERY OF TAX FORMS. For the purpose of Section
4(a)(i), and without limiting Section 4(a)(iii), each
party agrees to duly complete, execute and deliver to
the other party the tax forms specified below with
respect to it (A) before the first Payment Date under
this Agreement, (B) promptly upon reasonable demand by
the other party and (C) promptly upon learning that any
such form previously provided by the party has become
obsolete or incorrect.
(ii) TAX FORMS TO BE DELIVERED BY PARTY A: None specified.
(iii) TAX FORMS TO BE DELIVERED BY PARTY B: A correct,
complete and duly executed U.S. Internal Revenue Service
Form W-9 (or successor thereto) that eliminates U.S.
federal backup withholding tax on payments to Party B
under this Agreement.
(iv) ADDITIONAL FORMS. Each party agrees to deliver to the
other party, upon reasonable demand by such other party,
any other tax form that may be required or reasonably
requested in writing in order to allow such other party
to make a payment under this Agreement without deduction
or withholding for or on account of any tax imposed by
any government or other taxing authority in respect of
any such payment (other than a stamp, registration,
documentation or similar tax), or with such deduction or
withholding at a reduced rate, which form shall be
correct, complete and duly executed.
(D) MODIFIED TAX PROVISIONS.
(i) Party A's obligation under Section 2(d)(i)(4) of this
Agreement shall apply whether or not a Tax is an
Indemnifiable Tax, and for that purpose the definition
of "Indemnifiable Tax" is hereby amended to mean any Tax
assessed against Party A for any amount payable to Party
B under or in connection with this Agreement.
(ii) Party B's obligations under Section 2(d)(i) of this
Agreement shall be limited to complying with clauses
(1), (2) and (3) thereof at any time any of Party B's
obligations in respect of the "Certificates" under the
Pooling and Servicing Agreement remain outstanding and
Party B shall not be obligated to pay any amount under
clause (4) thereof until all such obligations in respect
of such "Certificates" have been paid in full.
(iii) Notwithstanding any contrary provision in this
Agreement, Party A may not designate an Early
Termination Date in respect of any Tax Event or Tax
Event Upon Merger, and Party A's sole remedy in respect
thereof shall be to make a Permitted Transfer (as
defined below).
4
PART 3. DOCUMENTS
(A) DELIVERY OF DOCUMENTS. When it delivers this Agreement, each
party shall also deliver its Closing Documents to the other
party in form and substance reasonably satisfactory to the other
party. For each Transaction, a party shall deliver, promptly
upon request, a duly executed incumbency certificate for the
person(s) executing the Confirmation for that Transaction on
behalf of that party.
(B) CLOSING DOCUMENTS.
(i) For Party A, "CLOSING DOCUMENTS" mean:
(A) an opinion of Party A's counsel, addressed to
Party B covering Party A's Basic Representations
under Section 3(a) as they relate to this
Agreement;
(B) a copy, certified by the Secretary or Assistant
Secretary of Party A, of the resolutions of
Party A's board of directors authorizing the
execution, delivery and performance by Party A
of this Agreement and authorizing Party A to
enter into Transactions hereunder;
(C) a duly executed certificate of the Secretary or
Assistant Secretary of Party A certifying the
name and true signature of each person
authorized to execute this Agreement and enter
into Transactions for Party A; and
(D) each Credit Support Document (if any) specified
for Party A in this Schedule, together with a
duly executed incumbency certificate for the
person(s) executing that Credit Support
Document, or in lieu thereof, a copy of the
relevant pages of its official signature book.
(ii) For Party B, "CLOSING DOCUMENTS" mean:
(A) an opinion of Party B's counsel addressed to
Party A covering Party B's Basic Representations
under Section 3(a) as they relate to this
Agreement;
(B) a copy, certified by the secretary or assistant
secretary of Party B, of the resolutions of
Party B's board of directors authorizing the
execution, delivery and performance by Party B
of this Agreement and authorizing Party B to
enter into Transactions hereunder; and
(C) a duly executed certificate of the secretary or
assistant secretary of Party B certifying the
name and true signature of each person
authorized to execute this Agreement and enter
into Transactions for Party B.
PART 4. MISCELLANEOUS
(A) ADDRESSES FOR NOTICES. For purposes of Section 12(a) of this
Agreement, all notices to a party shall, with respect to any
particular Transaction, be sent to its address, telex number or
facsimile number specified in the relevant Confirmation,
provided that any
5
notice under Section 5 or 6 of this Agreement, and any notice
under this Agreement not related to a particular Transaction,
shall be sent to a party at its address, telex number or
facsimile number specified below, provided further that any
notice under the Credit Support Annex shall be sent to a party
at its address, telex number or facsimile number specified in
the Credit Support Annex.
TO PARTY A:
THE ROYAL BANK OF SCOTLAND PLC
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Legal Department-Derivatives Documentation
Fax: 000-000-0000/34
Phone: 000-000-0000/32
TO PARTY B:
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but solely as
TRUSTEE FOR THE BENEFIT OF THE CERTIFICATEHOLDERS
OF THE POPULAR ABS, INC. MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-A
4 New York Plaza, 6th Floor
New York, New York 10004
Attention: Xxxx X. XxXxxxxxx, Worldwide Securities
Services/Structured Finance Services, Popular ABS 2006-A
(Adjustable Rate Certificates, Corridor)
Fax: 000-000-0000
Phone: 000-000-0000
WITH A COPY TO:
Equity One, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
(B) PROCESS AGENT. For the purpose of Section 13(c) of this
Agreement, neither party appoints a Process Agent hereunder.
(C) OFFICES. Section 10(a) applies.
(D) MULTIBRANCH PARTY. Neither party is a Multibranch Party.
(E) "CALCULATION AGENT" means Party A.
(F) CREDIT SUPPORT DOCUMENT.
(i) For Party A, the following is a Credit Support Document:
The Credit Support Annex dated the date hereof and duly
executed and delivered by Party A and Party B.
(ii) For Party B, the following is a Credit Support Document:
none specified.
6
(G) CREDIT SUPPORT PROVIDER.
(i) For Party A, Credit Support Provider means: none
specified.
(ii) For Party B, Credit Support Provider means: none
specified.
(H) GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York (and not
the law of conflicts except with respect to Sections 5-1401 and
5-1402 of the New York General Obligations Law).
(I) WAIVER OF JURY TRIAL. To the extent permitted by applicable law,
each party irrevocably waives any and all right to trial by jury
in any legal proceeding in connection with this Agreement, any
Credit Support Document to which it is a party, or any
Transaction.
(J) NETTING OF PAYMENTS. Section 2(c) of this Agreement will not
apply.
(K) "AFFILIATE" has its meaning as defined in Section 14 of this
Agreement.
PART 5. OTHER PROVISIONS
(A) ISDA PUBLICATIONS.
2000 ISDA DEFINITIONS. This Agreement and each Transaction are
subject to the 2000 ISDA Definitions (including its Annex)
published by the International Swaps and Derivatives
Association, Inc. (together, the "2000 ISDA DEFINITIONS") and
will be governed by the provisions of the 2000 ISDA Definitions.
The provisions of the 2000 ISDA Definitions are incorporated by
reference in, and shall form part of, this Agreement and each
Confirmation. Any reference to a "Swap Transaction" in the 2000
ISDA Definitions is deemed to be a reference to a "Transaction"
for purposes of this Agreement or any Confirmation, and any
reference to a "Transaction" in this Agreement or any
Confirmation is deemed to be a reference to a "Swap Transaction"
for purposes of the 2000 ISDA Definitions. The provisions of
this Agreement (exclusive of the 2000 ISDA Definitions) shall
prevail in the event of any conflict between such provisions and
the 2000 ISDA Definitions.
(B) ADDITIONAL REPRESENTATIONS. Section 3 is amended by adding the
following Sections 3(g), (h), (i) and (j):
"(g) NON-RELIANCE. For any Relevant Agreement: (i) it acts as
principal and not as agent, (ii) it acknowledges that the other
party acts only arm's length and is not its agent, broker,
advisor or fiduciary in any respect, and any agency, brokerage,
advisory or fiduciary services that the other party (or any of
its affiliates) may otherwise provide to the party (or to any of
its affiliates) excludes the Relevant Agreement, (iii) it is
relying solely upon its own evaluation of the Relevant Agreement
(including the present and future results, consequences, risks,
and benefits thereof, whether financial, accounting, tax, legal,
or otherwise) and upon advice from its own professional
advisors, (iv) it understands the Relevant Agreement and those
risks, has determined they are appropriate for it, and willingly
assumes those risks, (v) it has not relied and will not be
relying upon any evaluation or advice (including any
recommendation, opinion, or representation) from the other
party, its affiliates or the representatives or advisors of the
7
other party or its affiliates (except representations expressly
made in the Relevant Agreement or an opinion of counsel required
thereunder); and (vi) if a party is acting as a Calculation
Agent or Valuation Agent, it does so not as the other party's
agent or fiduciary, but on an arm's length basis for the purpose
of performing an administrative function in good faith.
"RELEVANT AGREEMENT" means this Agreement, each Transaction,
each Confirmation, any Credit Support Document, and any
agreement (including any amendment, modification, transfer or
early termination) between the parties relating thereto or to
any Transaction.
(h) ELIGIBILITY. It is an "eligible contract participant" within
the meaning of the Commodity Exchange Act (as amended by the
Commodity Futures Modernization Act of 2000).
(i) FDIC REQUIREMENTS. If it is a bank subject to the
requirements of 12 U.S.C. ss. 1823(e), its execution, delivery
and performance of this Agreement (including the Credit Support
Annex and each Confirmation) have been approved by its board of
directors or its loan committee, such approval is reflected in
the minutes of said board of directors or loan committee, and
this Agreement (including the Credit Support Annex and each
Confirmation) will be maintained as one of its official records
continuously from the time of its execution (or in the case of
any Confirmation, continuously until such time as the relevant
Transaction matures and the obligations therefor are satisfied
in full).
(j) ERISA. It is not (i) an employee benefit plan as defined in
Section 3(3) of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or a plan as defined in Section
4975(e)(1) of the Internal Revenue Code of 1986, as amended (the
"Code"), subject to Title I of ERISA or Section 4975 of the
Code, or a plan as so defined but which is not subject to Title
I of ERISA or Section 4975 of the Code but is subject to another
law materially similar to Title I of ERISA or Section 4975 of
the Code (each of which, an "ERISA Plan"), (ii) a person or
entity acting on behalf of an ERISA Plan, or (iii) a person or
entity the assets of which constitute assets of an ERISA Plan.
(C) RECORDED CONVERSATIONS. Each party and any of its Affiliates may
electronically record any of its telephone conversations with
the other party or with any of the other party's Affiliates in
connection with this Agreement or any Transaction.
(D) CONFIRMATION PROCEDURES. Upon receipt thereof, Party B shall
examine the terms of each Confirmation sent by Party A, and
unless Party B objects to the terms within three New York
Business Days after receipt of that Confirmation, those terms
shall be deemed accepted and correct absent manifest error, in
which case that Confirmation will be sufficient to form a
binding supplement to this Agreement notwithstanding Section
9(e)(ii) of this Agreement.
(E) CHANGE OF ACCOUNT. Any account designated by a party pursuant to
Section 2(b) shall be in the same legal and tax jurisdiction as
the original account.
8
PART 6. ADDITIONAL TERMS RELATING TO THE POOLING AND SERVICING AGREEMENT
(A) PERMITTED TRANSFERS.
(i) Subject to what may otherwise be provided in a
Confirmation and notwithstanding Section 7 of this
Agreement, Party A may make a Permitted Transfer (as
hereinafter defined) without the prior written consent
of Party B, and at Party A's own cost and expense, if
one or more of the following events occurs:
(A) the unsecured and unsubordinated debt, deposit
or letter of credit obligations of Party A are
rated below investment grade by S&P or Xxxxx'x
as described in Part 1(i) of this Schedule at
the time of the transfer.
(B) any Tax Event or Tax Event Upon Merger exists
with respect to Party A at the time of the
transfer.
(C) Party A acting in a commercially reasonable
manner cannot comply with a Regulation AB
Request (as defined below).
(ii) "PERMITTED TRANSFER" means a transfer, in whole but not
in part, of all of Party A's rights and obligations
under this Agreement and which meets all of the
following requirements:
(A) the transferee is a recognized dealer in
interest rate swaps organized under the laws of
the United States of America or a jurisdiction
located in the United States of America (or
another jurisdiction reasonably acceptable to
Party B);
(B) S&P (for as long as any Certificates are deemed
outstanding under the Pooling and Servicing
Agreement and rated by S&P) and Xxxxx'x (for so
long as any Certificates are deemed outstanding
under the Pooling and Servicing Agreement and
rated by Xxxxx'x) confirm that such transfer
will not result in a reduction or withdrawal of
their then current rating on any outstanding
class of Certificates under the Pooling and
Servicing Agreement;
(C) neither an Event of Default with respect to the
transferee nor a Termination Event would exist
immediately after that transfer;
(D) the transferee executes and delivers a written
agreement reasonably satisfactory to Party B in
which the transferee, among other things,
legally and effectively accepts all the rights
and assumes all the obligations of Party A under
this Agreement;
(E) Party B will not be required to pay to the
transferee an 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)) greater than the amount
in respect of which Party B would have been
required to pay to Party A in the absence of
such transfer; and
9
(F) Party B will not receive a payment from which an
amount has been withheld or deducted, on account
of a Tax under Section 2(d)(i) (except in
respect of interest under Section 2(e),
6(d)(ii), or 6(e)), in excess of that which
Party A would have been required to so withhold
or deduct in the absence of such transfer,
unless the transferee would be required to make
additional payments pursuant to Section
2(d)(i)(4) corresponding to such withholding or
deduction.
"POOLING AND SERVICING AGREEMENT" means that certain
Pooling and Servicing Agreement, dated as of January 1,
2006 by and among Popular ABS, Inc., a Delaware
corporation, as depositor, Equity One, Inc., a Delaware
corporation, as a seller and as servicer, JPMorgan Chase
Bank, N.A., as trustee, and the other sellers named
therein relating to the creation and issuance of the
Popular ABS, Inc. Mortgage Pass-Through Certificates,
Series 2006-A. Any terms used but not otherwise defined
herein or in the 2000 ISDA Definitions shall have the
meanings set forth in the Pooling and Servicing
Agreement.
(B) EFFECT OF POOLING AND SERVICING AGREEMENT.
(i) Each of Party A and Party B acknowledges that Party B
has entered into this Agreement for the benefit of the
Holders of the Adjustable Rate Certificates (as defined
in the Pooling and Servicing Agreement) under the
Pooling and Servicing Agreement. Nothing herein shall be
construed as requiring the consent of any Holder (as
defined in the Pooling and Servicing Agreement) for the
performance by Party B of any of its obligations
hereunder and Party A may exercise its rights and
remedies under this Agreement without the consent of any
Holder, except as otherwise provided in this Agreement.
(ii) [RESERVED]
(iii) Except as expressly provided in this Agreement for any
Permitted Transfer, Event of Default, Termination Event
or Additional Termination Event, neither Party A nor
Party B may enter into any agreement to transfer or
dispose of any Transaction, whether in the form of a
termination, unwind, transfer, or otherwise without
written confirmation by each of Xxxxx'x (for so long as
any Certificates are deemed outstanding under the
Pooling and Servicing Agreement and are rated by
Xxxxx'x) and S&P (for so long as any Certificates are
deemed outstanding under the Pooling and Servicing
Agreement and are rated by S&P) that such transfer or
disposition will not cause the reduction or withdrawal
of their then current rating on such Certificates.
(iv) No amendment, modification or waiver in respect of this
Agreement will be effective unless (A) evidenced by a
writing executed by each party hereto, and (B) Xxxxx'x
(for so long as any Certificates are deemed outstanding
under the Pooling and Servicing Agreement and rated by
Xxxxx'x) and S&P (for so long as any Certificates are
deemed outstanding under the Pooling and Servicing
Agreement and rated by S&P) confirm in writing that such
amendment, modification or waiver will not cause the
reduction or withdrawal of their then current rating on
such Certificates.
10
(v) Party B shall promptly provide Party A with copies of
any amendment to the Pooling and Servicing Agreement and
any notice of termination or liquidation of the Trust
Fund (as defined in the Pooling and Servicing
Agreement), provided that the failure to provide such
amendments or notices shall not constitute an Event of
Default hereunder.
(C) [RESERVED]
(D) LIMITED TRANSACTIONS. Notwithstanding any provision in this
Agreement to the contrary, the parties hereto agree that the
Transactions evidenced by the Confirmations dated the date
hereof (Reference Nos. IRG6916572, IRG6916573) shall be the only
Transactions governed by this Agreement.
(E) PAYMENTS. All payments to Party B under any Transaction shall be
made as specified in the applicable confirmation.
(F) SET-OFF. Party A and Party B hereby waive any and all right of
set-off with respect to any amounts due under this Agreement or
any Transaction.
(G) NO BANKRUPTCY PETITION. Party A agrees that, prior to the date
which is at least one year and one day after all Certificates
under the Pooling and Servicing Agreement have been paid in
full, it will not institute against, or join any other person or
entity in instituting against, Party B any involuntary
bankruptcy or insolvency petition or proceeding provided that
nothing herein shall preclude, or be deemed to estop, Party A
from taking any action in any case or proceeding voluntarily
filed or commenced by or on behalf of Party B or in any
involuntary case or proceeding after it has commenced.
(H) REGULATION AB REQUEST. Subject to Part 6(a) Party A hereby
agrees to cooperate in a commercially reasonable manner with any
request from Party B, acting reasonably, to provide any
information Party B deems necessary under Regulation AB of the
Securities Act of 1933, as amended (each such request, a
"Regulation AB Request"), and Party A shall promptly provide
such information.
11
In connection with this Agreement, Greenwich Capital Markets, Inc. has acted as
agent on behalf of Party A. Greenwich Capital Markets, Inc. has not guaranteed
and is not otherwise responsible for the obligations of Party A under this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized signatories as of the date hereof.
THE ROYAL BANK OF SCOTLAND PLC
By: Greenwich Capital Markets, Inc., its agent
By: /Xxxxxxxx Xxxxx/
-------------------------------
Name: Xxxxxxxx Xxxxx
Title: Managing Director
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity, but solely as
TRUSTEE FOR THE BENEFIT OF THE
CERTIFICATEHOLDERS OF THE POPULAR ABS, INC.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-A
By: /Xxxxx X. Xxxxxxxx/
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
12
(ONE-WAY PLEDGE BY THE ROYAL BANK OF SCOTLAND PLC)
(ISDA AGREEMENTS SUBJECT TO NEW YORK LAW ONLY)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA MASTER AGREEMENT
dated as of January 31, 2006
between
THE ROYAL BANK OF SCOTLAND PLC ("PARTY A")
and
JPMORGAN CHASE BANK, N.A.,
NOT IN ITS INDIVIDUAL CAPACITY, BUT SOLELY AS
TRUSTEE FOR THE BENEFIT OF THE CERTIFICATEHOLDERS
OF THE POPULAR ABS, INC. MORTGAGE
PASS-THROUGH CERTIFICATES, SERIES 2006-A ("PARTY B")
CREDIT SUPPORT ANNEX
This Annex supplements, forms part of, and is subject to, the ISDA Master
Agreement referred to above (this "AGREEMENT"), is part of its Schedule and is a
Credit Support Document under this Agreement with respect to each party.
Upon the occurrence of an Over-Collateralization Commencement Date, Party A
shall be obligated to transfer Eligible Collateral in accordance with the terms
of this Annex. If Party A has made a Permitted Transfer under this Agreement
(including a Permitted Transfer following the occurrence of an
Over-Collateralization Commencement Date), then Party A's obligations to
transfer Eligible Collateral under this Annex will immediately cease and Party B
will, upon demand by Party A, return, or cause its Custodian to return, all
Collateral held under this Annex.
Accordingly, the parties agree as follows:
PARAGRAPHS 1 - 12. INCORPORATION
Paragraphs 1 through 12 inclusive of the ISDA Credit Support Annex (Bilateral
Form) (ISDA Agreements Subject to New York Law Only) published in 1994 by the
International Swaps and Derivatives Association, Inc. are incorporated herein by
reference and made a part hereof, except that Paragraph 1(b) is hereby amended
in its entirety to read as follows:
"(b) SECURED PARTY AND PLEDGOR. Notwithstanding anything contained in this
Annex to the contrary, (i) all references in this Annex to the "Secured
Party", and all references to "other party" in Paragraphs 2, 9 and 11(b)
of this Annex, will be to Party B exclusively, and (ii) all references
in this Annex to the "Pledgor" and all references to "Each party" or "a
party" in Paragraphs 2, 9 and 11(b) of this Annex, will be to Party A
exclusively."
PARAGRAPH 13. ELECTIONS AND VARIABLES
(a) SECURITY INTEREST FOR "OBLIGATIONS". The term "OBLIGATIONS" as
used in this Annex includes no obligations of Secured Party and,
for purposes of the definition of Obligations in Paragraph 12,
includes no additional obligations of Pledgor.
(b) CREDIT SUPPORT OBLIGATIONS.
(I) DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT
SUPPORT AMOUNT.
A. "DELIVERY AMOUNT" has the meaning specified in
Paragraph 3(a).
B. "RETURN AMOUNT" has the meaning specified in
Paragraph 3(b).
C. "CREDIT SUPPORT AMOUNT" for any Valuation Date
associated with an Over-Collateralization Commencement
Date and any weekly Valuation Date thereafter until
termination of this Agreement or consummation of a
Permitted Transfer shall not have its meaning as defined
in Paragraph 3, but shall mean the greatest of (X) Party
A's Exposure under the Affected Transactions on that
Valuation Date, (Y) the amount of the next payment due
from Party A to Party B under the Affected Transactions
on the next scheduled Payment Date to occur after that
Valuation Date under this Agreement or (Z) one percent
of the Transactional Notional Amount in effect on that
Valuation Date.
1
(ii) ELIGIBLE COLLATERAL The following items will
qualify as "ELIGIBLE COLLATERAL":
VALUATION
PERCENTAGE
----------
A. CASH: U.S. Dollars in depositary account 100%
form.
B. U.S. TREASURY SECURITIES: negotiable debt 98.60%
obligations issued by the U.S. Treasury
Department ("TREASURIES") having a remaining
maturity of up to and not more than one year.
C. Treasuries having a remaining maturity of 94.10%
greater than 1 year but not more than 5 years.
D. Treasuries having a remaining maturity of 90.70%
greater than 5 years but not more than 10 years.
E. Treasuries having a remaining maturity of 85.30%
greater than 10 years but not more than 20
years.
F. Treasuries having a remaining maturity of 85.30%
greater than 20 years but not more than 30
years.
G. AGENCY SECURITIES. negotiable debt obligations 98.20%
of the Federal National Mortgage Association,
(FNMA), Federal Home Loan Mortgage Corporation
(FHLMC), Federal Home Loan Banks (FHLB), Federal
Farm Credit Banks (FFCB), Student Loan Marketing
Association (SLMA), Tennessee Valley Loan
Authority (TVA) (collectively, "AGENCY
SECURITIES") having a remaining maturity of not
more than one year.
H. Agency Securities having a remaining maturity 93.30%
of greater than 1 year but not more than 5
years.
2
I. Agency Securities having a remaining maturity 88.60%
of greater than 5 years but not more than 10
years.
J. Agency Securities having a remaining maturity 80.80%
of greater than 10 years but not more than 20
years.
K. Agency Securities having a remaining 80.80%
maturity of greater than 20 years but not
more than 30 years.
L. FHLMC CERTIFICATES. Mortgage participation 93%
certificates issued by FHLMC evidencing
undivided interests or participations in pools
of first lien conventional or FHA/VA residential
mortgages or deeds of trust, guaranteed by
FHLMC, and having a remaining maturity of not
more than 30 years.
M. FNMA CERTIFICATES. Mortgage-backed pass-through 90%
certificates issued by FNMA evidencing undivided
interests in pools of first lien mortgages or
deeds of trust on residential properties,
guaranteed by FNMA, having a remaining maturity
of not more than 30 years.
N. GNMA CERTIFICATES. Mortgage-backed pass-through 90.60%
certificates issued by private entities,
evidencing undivided interests in pools of first
lien mortgages or deeds of trust on single
family residences, guaranteed by the Government
National Mortgage Association (GNMA) with the
full faith and credit of the United States, and
having a remaining maturity of not more than 30
years.
(iii) OTHER ELIGIBLE SUPPORT. Not applicable.
(IV) THRESHOLDS.
A. "INDEPENDENT AMOUNT" means for Pledgor: zero
"INDEPENDENT AMOUNT" means for Secured Party:
zero
3
B. "THRESHOLD" means, for Pledgor: zero.
C. "MINIMUM TRANSFER AMOUNT" is $100,000 for any
Delivery Amount of Pledgor and $100,000 for any
Return Amount of Secured Party.
D. ROUNDING: The Delivery Amount and the Return
Amount will be rounded down to the nearest
integral multiple of $10,000.
(c) VALUATION AND TIMING.
(i) "VALUATION AGENT" means, for purposes of
Xxxxxxxxxx 0, 0(x)(xx), 0 xxx 0(x), xxx Xxxxxxx.
(xx) "VALUATION DATE" means in connection with an
Over-Collateralization Commencement Date, the
second New York Business Day prior to such
Over-Collateralization Commencement Date (such
Over-Collateralization Commencement Date, the
"Collateral Support Commencement Date") and
thereafter any Local Business Day provided that
there shall be one Valuation Date per week on a
date selected by the Valuation Agent, which
shall be the same calendar day each week to the
extent practicable, on a reasonably consistent
basis. If the Delivery Amount for the Valuation
Date associated with the Collateral Support
Commencement Date or weekly Valuation Date
equals or exceeds the Pledgor's Minimum Transfer
Amount, then the demand by the Secured Party
referred to in Paragraph 3(a) of this Annex
shall be deemed to have been given (A) with
respect to the Collateral Support Commencement
Date, on the first New York Business Day
preceding the Collateral Support Commencement
Date, prior to the Notification Time, and (B)
with respect to the weekly Valuation Date, on
that weekly Valuation Date prior to the
Notification Time, and, subject to the terms and
conditions of this Annex, the Pledgor will
Transfer to the Secured Party the amount of
Eligible Collateral it is required to Transfer
with respect to that Valuation Date in
accordance with Paragraph 3(a) and Paragraph
4(b) of this Annex.
(iii) "VALUATION TIME" means the close of business in
New York City on the Local Business Day before
the Valuation Date or date of calculation as
applicable; provided that the calculations of
Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "NOTIFICATION TIME" means 11:00 a.m., New York
time, on a Local Business Day.
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. No
Specified Conditions apply.
(e) SUBSTITUTION.
(i) "SUBSTITUTION DATE" has the meaning specified in
Paragraph 4(d)(ii).
4
(ii) CONSENT. The Pledgor is not required to obtain
the Secured Party's consent for any substitution
pursuant to Paragraph 4(d).
(f) DISPUTE RESOLUTION.
(i) "RESOLUTION TIME" means 1:00 p.m., New York
time, on the Local Business Day following the
date on which the notice is given that gives
rise to a dispute under Paragraph 5.
(ii) VALUE. For the purpose of Paragraphs 5(i)(C) and
5(ii), the Value of Posted Credit Support other
than Cash will be calculated based upon the
mid-point between the bid and offered purchase
rates or prices for that Posted Credit Support
as reported on the Bloomberg electronic service
as of the Resolution Time, of if unavailable, as
quoted to the Valuation Agent as of the
Resolution Time by a dealer in that Posted
Credit Support of recognized standing selected
in good faith by the Valuation Agent, which
calculation shall include any unpaid interest on
that Posted Credit Support.
(iii) ALTERNATIVE. The provisions of Paragraph 5 will
apply.
(g) HOLDING AND USING POSTED COLLATERAL.
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL;
CUSTODIANS. Secured Party will not be entitled
to hold Posted Collateral itself, and instead
the Secured Party will be entitled to hold
Posted Collateral through a Custodian pursuant
to Paragraph 6(b), provided that (1) Posted
Collateral may be held only in New York City or
an alternative jurisdiction within the United
States acceptable to Party A, and (2) the
Custodian shall at all times be a bank or trust
company with total assets in excess of $10
billion and having a rating assigned to its
unsecured and unsubordinated long-term debt or
deposit obligations of at least BBB+ from S&P
and Baa1 from Xxxxx'x. Initially the Custodian
will be JPMorgan Chase Bank, N.A.
(ii) USE OF POSTED COLLATERAL. The provisions of
Paragraph 6(c) of the Credit Support Annex will
not apply to Secured Party and without prejudice
to Secured Party's rights under Paragraph 8 of
the Credit Support Annex, Secured Party will not
take any action specified in such Section 6(c).
(h) INTEREST AMOUNT.
(i) INTEREST RATE. The "INTEREST RATE" for any day
will be the Federal Funds (Effective) rate
published in N.Y. Federal Reserve Statistical
Release H.15(519) for that day (or if that day
is not a New York Business Day, then for the
next preceding New York Business Day).
For the purpose of computing the Interest
Amount, the amount of interest computed for each
day of the Interest Period shall be compounded
daily.
5
(ii) TRANSFER OF INTEREST AMOUNT. The Transfer of the
Interest Amount will be made on the first Local
Business Day of each calendar month and on any
Local Business Day that Posted Collateral in the
form of Cash is Transferred to the Pledgor
pursuant to Paragraph 3(b).
(iii) ALTERNATIVE TO INTEREST AMOUNT. The provisions
of Paragraph 6(d)(ii) will apply.
(i) ADDITIONAL REPRESENTATION(S). Not applicable.
(j) OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT. Not applicable.
(k) DEMANDS AND NOTICES. All demands, specifications and notices
under this Annex will be made to a party as follows unless
otherwise specified from time to time by that party for purposes
of this Annex in a written notice given to the other party:
TO PLEDGOR:
THE ROYAL BANK OF SCOTLAND PLC
000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Legal Department - Derivatives Documentation
Fax: (000) 000-0000/34
Phone: (000) 000-0000/32
TO SECURED PARTY:
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity but solely as
TRUSTEE FOR THE BENEFIT OF THE CERTIFICATEHOLDERS
OF THE POPULAR ABS, INC. MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-A
4 New York Plaza, 6th Floor
New York, New York 10004
Attention: Xxxx X. XxXxxxxxx, Worldwide Securities
Services/Structured Finance Services, Popular ABS 2006-A
(Adjustable Rate Certificates, Corridor)
Fax: 000-000-0000
Phone: 000-000-0000
WITH A COPY TO:
Equity One, Inc.
000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000
Attention: Chief Financial Officer
Fax: (000) 000-0000
(l) ADDRESSES FOR TRANSFERS.
(i) For each Transfer hereunder to Pledgor,
instructions will be provided by Pledgor for
that specific Transfer.
(ii) For each Transfer hereunder to Secured Party,
instructions will be provided by Secured Party
for that specific Transfer.
6
In connection with this Agreement, Greenwich Capital Markets, Inc. has acted as
agent on behalf of Party A. Greenwich Capital Markets, Inc. has not guaranteed
and is not otherwise responsible for the obligations of Party A under this
Agreement.
IN WITNESS WHEREOF, the parties have executed this Credit Support Annex as of
the date hereof.
THE ROYAL BANK OF SCOTLAND PLC
By: Greenwich Capital Markets, Inc., its agent
By: /Xxxxxxxx Xxxxx/
------------------------
Name: Xxxxxxxx Xxxxx
Title: Managing Director
JPMORGAN CHASE BANK, N.A.,
not in its individual capacity, but solely as
TRUSTEE FOR THE BENEFIT OF THE
CERTIFICATEHOLDERS OF THE POPULAR ABS, INC.
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2006-A
By: /Xxxxx X. Xxxxxxxx/
-------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
7
[LOGO OF RBS]
Memorandum January 31, 2006
To JPMorgan Chase Bank, National Association not in its
individual capacity, but solely as Trustee for the
Benefit of the Certificateholders of the Popular ABS,
Inc. Mortgage Pass-Through Certificates, Series 2006-A
("COUNTERPARTY")
Address c/o XX Xxxxxx Xxxxx Bank, National Association
Four Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000 XXX
Fax: 000-000-0000
Phone: 000-000-0000
Attention Xxxx X. XxXxxxxxx, Worldwide Securities
Services/Structured Finance Services Popular ABS 2006-A
cc Xxxxx Xxxxx and Xxxxx Xxxxxxx
Address 000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000 XXX
Reference Number IRG6916573
RATE CAP TRANSACTION CONFIRMATION
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the Rate Cap Transaction entered into between Counterparty and The Royal Bank of
Scotland plc ("RBS") on the Trade Date specified below (the "TRANSACTION").
This confirms the terms of the Transaction described below between Counterparty
and RBS. This Transaction is subject to the 2000 ISDA Definitions (the "ISDA
DEFINITIONS") published by the International Swaps and Derivatives Association,
Inc., which are incorporated herein by reference. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern. This Confirmation supplements, forms part of, and
will be governed by that certain Master Agreement between the parties dated as
of January 31, 2006.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
customary for payments in the required currency.
1 The terms of the particular Transaction to which the Confirmation
relates are as follows:
Transaction Type: Rate Cap Corridor
Currency for Payments: U.S. Dollars
Notional Amount: For a Calculation Period, the amount set forth opposite that
Calculation Period on Attachment I hereto.
TERM:
Trade Date: January 19, 2006
Effective Date: January 25, 2011
Termination Date: February 25, 2014, subject to the Following Business Day Convention.
FIXED AMOUNT:
Fixed Amount Payer: Counterparty
Fixed Amount: USD 55,000
Fixed Rate Payer Payment Date: January 31, 2006
FLOATING AMOUNTS:
Floating Rate Payer: RBS
Cap Rate: For each Floating Rate Payer Period End Date, the percentage set
forth in Attachment I as the Cap Rate for such Floating Rate Payer
Period End Date.
Floating Rate Payer Period End Dates: Monthly on the 25th of each month, commencing February 25, 2011,
through and including the Termination Date, subject to the Following
Business Day Convention.
Floating Rate Payer Payment Dates: Early Payment shall be applicable. The Floating Rate Payer Payment
Dates shall be one New York Banking Day prior to each Floating Rate
Payer Period End Date.
Business Day Convention: Following
Business Day: New York
Floating Rate for initial Calculation Determined two London Banking Days prior to the Effective Date.
Period:
Floating Rate Option: USD-LIBOR-BBA, provided, however, that if the Floating Rate Option
for any Calculation Period is greater than 10.50000%, then the Cap
Rate for such Calculation Period shall be deemed to be 10.50000%.
2
Designated Maturity: 1 Month
Spread: None
Floating Rate Day Count Fraction: Actual/360
Floating Rate determined: Two London Banking Days prior to each Reset Date.
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Rounding Convention: 5 decimal places per the ISDA Definitions.
2 The additional provisions of this Confirmation are as follows:
Calculation Agent: RBS
RBS Payment Instructions: For the account of the The Royal Bank of Scotland Financial Markets
Fixed Income and Interest Rate Derivative Operations, London SWIFT
XXXXXX0XXXX with JPMorgan Chase Bank, New York XXXXXX00 Account
Number 400930153/ABA 000000000
RBS Contacts: 000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Legal Department - Derivatives Documentation
Telephone: (000) 000-0000/2532
Facsimile: (000) 000-0000/2534
Please quote transaction reference number.
Payments to Counterparty: XX Xxxxxx Xxxxx Bank, N.A.
ABA # 000000000
Account # 507947541
FFC: 10500252.3
Ref.: Popular 0000-X Xxxxxxxx Xxxxxxx Account
3
NO LIABILITY OF THE TRUSTEE:
It is expressly understood and agreed by the parties hereto that (a) this
Confirmation is executed and delivered by JPMorgan Chase Bank, National
Association, not individually or personally but solely as trustee for the
benefit of the Certificateholders of the Popular ABS Mortgage Pass-Through
Certificates Series 2006-A, in the exercise of the powers and authority
conferred and vested in it under the Pooling and Servicing Agreement ("the
Pooling Agreement") dated as of January 1, 2006, among Popular ABS, Inc., Equity
One, Inc., Popular Financial Services, LLC, Popular Financial Funding, LLC and
JPMorgan Chase Bank, National Association as trustee, (b) each of the
representations, undertakings and agreements herein made on behalf of the
Counterparty is made and intended not as personal representations, undertakings
and agreements of JPMorgan Chase Bank, National Association but is made and
intended for the purpose of binding only the trust created pursuant to the
Pooling Agreement and (c) under no circumstances shall JPMorgan Chase Bank,
National Association be personally liable for the payment of any indebtedness or
expenses of the Counterparty or be liable for the breach or failure of any
obligations, representation, warranty or covenant made or undertaken by the
Counterparty under this Confirmation.
This Confirmation is governed by the law (but not the law of conflicts) of the
State of New York.
4
This Transaction has been entered into by Greenwich Capital Markets, Inc., as
agent for The Royal Bank of Scotland plc. Greenwich Capital Markets, Inc. has
not guaranteed and is not otherwise responsible for the obligations of The Royal
Bank of Scotland plc under this Transaction.
THE ROYAL BANK OF SCOTLAND PLC
By: Greenwich Capital Markets, Inc., its agent
By: /Xxxxxxx Xxxxxxxxx/
--------------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
Accepted and confirmed as of date first above written:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
not in its individual capacity, but solely as
Trustee for the Benefit of the
Certificateholders of the Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2006-A
By: /Xxxxx X. Xxxxxxxx/
--------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
5
ATTACHMENT I
AMORTIZATION SCHEDULE, subject to adjustment in accordance with the Following
Business Day Convention
CAP RATE
FROM AND INCLUDING TO BUT EXCLUDING NOTIONAL AMOUNT (USD) (PER CENT.)
---------------------- ------------------ -------------------- -------------
1/25/2011 2/25/2011 77,121,151.01 10.00180
2/25/2011 3/25/2011 0 0.00000
3/25/2011 4/25/2011 73,451,670.96 9.97910
4/25/2011 5/25/2011 71,682,553.87 10.30000
5/25/2011 6/25/2011 69,955,761.92 9.96280
6/25/2011 7/25/2011 68,270,317.24 10.30040
7/25/2011 8/25/2011 66,625,243.56 9.95660
8/25/2011 9/25/2011 65,019,461.63 9.94520
9/25/2011 10/25/2011 63,452,012.95 10.26490
10/25/2011 11/25/2011 61,921,962.89 9.92240
11/25/2011 12/25/2011 60,428,400.12 10.24780
12/25/2011 1/25/2012 58,970,478.27 9.92200
1/25/2012 2/25/2012 57,547,351.44 9.91060
2/25/2012 3/25/2012 0 0.00000
3/25/2012 4/25/2012 4,801,920.16 9.88760
4/25/2012 5/25/2012 53,477,988.67 10.20530
5/25/2012 6/25/2012 52,185,528.87 9.87080
6/25/2012 7/25/2012 50,923,808.65 10.19010
7/25/2012 8/25/2012 49,692,059.01 9.84990
8/25/2012 9/25/2012 48,489,543.88 9.83850
9/25/2012 10/25/2012 47,315,554.89 10.15460
10/25/2012 11/25/2012 46,169,401.24 9.81560
11/25/2012 12/25/2012 45,050,409.21 10.13470
12/25/2012 1/25/2013 43,957,936.64 9.79710
1/25/2013 2/25/2013 42,891,264.10 9.78570
2/25/2013 3/25/2013 0 0.00000
3/25/2013 4/25/2013 40,833,032.15 9.76290
4/25/2013 5/25/2013 39,840,268.69 10.07660
5/25/2013 6/25/2013 38,870,962.22 9.74010
6/25/2013 7/25/2013 37,924,547.24 10.05310
7/25/2013 8/25/2013 37,000,472.16 9.71750
8/25/2013 9/25/2013 36,098,199.00 9.70620
9/25/2013 10/25/2013 35,217,203.01 10.01800
10/25/2013 11/25/2013 34,356,972.39 9.68360
11/25/2013 12/25/2013 33,517,007.92 9.99470
12/25/2013 1/25/2014 32,696,822.63 9.66110
1/25/2014 2/25/2014 31,895,941.57 9.64980
6
[LOGO OF THE RBS]
Memorandum January 31, 2006
To JPMorgan Chase Bank, National Association not in its
individual capacity, but solely as Trustee for the Benefit of
the Certificateholders of the Popular ABS, Inc. Mortgage
Pass-Through Certificates, Series 2006-A ("COUNTERPARTY")
Address c/o XX Xxxxxx Xxxxx Bank, National Association
Four Xxx Xxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000 XXX
Fax: 000-000-0000
Phone: 000-000-0000
Attention Xxxx X. XxXxxxxxx, Worldwide Securities Services/Structured
Finance Services Popular ABS 2006-A
cc Xxxxx Xxxxx and Xxxxx Xxxxxxx
Address 000 Xxxxxxxxxx Xxxxx
Xxxxxxx, XX 00000 XXX
Reference Number IRG6916572
--------------------------------------------------------------------------------
RATE CAP TRANSACTION CONFIRMATION
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the Rate Cap Transaction entered into between Counterparty and The Royal Bank of
Scotland plc ("RBS") on the Trade Date specified below (the "TRANSACTION").
This confirms the terms of the Transaction described below between Counterparty
and RBS. This Transaction is subject to the 2000 ISDA Definitions (the "ISDA
DEFINITIONS") published by the International Swaps and Derivatives Association,
Inc., which are incorporated herein by reference. In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern. This Confirmation supplements, forms part of, and
will be governed by that certain Master Agreement between the parties dated as
of January 31, 2006.
Each party will make each payment specified in this Confirmation as being
payable by it, not later than the due date for value on that date in the place
of the account specified below, in freely transferable funds and in the manner
customary for payments in the required currency.
1 The terms of the particular Transaction to which the Confirmation
relates are as follows:
Transaction Type: Rate Cap
Currency for Payments: U.S. Dollars
Notional Amount: For a Calculation Period, the amount set
forth opposite that Calculation Period on
Attachment I hereto.
TERM:
Trade Date: January 19, 2006
Effective Date: January 31, 2006
Termination Date: January 25, 2011, subject to the
Following Business Day Convention.
FIXED AMOUNT:
Fixed Amount Payer: Counterparty
Fixed Amount: USD 1,830,000
Fixed Rate Payer Payment Date: January 31, 2006
FLOATING AMOUNTS:
Floating Rate Payer: RBS
Cap Rate: For each Floating Rate Payer Period End
Date, the percentage set forth in
Attachment I as the Cap Rate for such
Floating Rate Payer Period End Date.
Floating Rate Payer Period End Monthly on the 25th of each month,
Dates: commencing February 25, 2006,
through and including the
Termination Date, subject to the
Following Business Day Convention.
Floating Rate Payer Payment Dates: Early Payment shall be applicable. The
Floating Rate Payer Payment Dates shall
be one New York Banking Day prior to each
Floating Rate Payer Period End Date.
Business Day Convention: Following
Business Day: New York
Floating Rate for initial Determined two London Banking Days prior to
Calculation Period: the Effective Date.
Floating Rate Option: USD-LIBOR-BBA
Designated Maturity: 1 Month
Spread: None
2
Floating Rate Day Count Fraction: Actual/360
Floating Rate determined: Two London Banking Days prior to each Reset
Date.
Reset Dates: The first day of each Calculation Period.
Compounding: Inapplicable
Rounding Convention: 5 decimal places per the ISDA Definitions.
2 The additional provisions of this Confirmation are as follows:
Calculation Agent: RBS
RBS Payment Instructions: For the account of the The Royal Bank of
Scotland Financial Markets Fixed Income and
Interest Rate Derivative Operations, London
SWIFT XXXXXX0XXXX with JPMorgan Chase Bank,
New York XXXXXX00 Account Number
400930153/ABA 000000000
RBS Contacts: 000 Xxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Legal Department - Derivatives
Documentation
Telephone: (000) 000-0000/2532
Facsimile: (000) 000-0000/2534
Please quote transaction reference number.
Payments to Counterparty: XX Xxxxxx Xxxxx Bank, N.A.
ABA # 000000000
Account # 507947541
FFC: 10500252.4
Ref.: Popular 2006-A Cap Reserve Account
NO LIABILITY OF THE TRUSTEE:
It is expressly understood and agreed by the parties hereto that (a) this
Confirmation is executed and delivered by JPMorgan Chase Bank, National
Association, not individually or personally but solely as trustee for the
benefit of the Certificateholders of the Popular ABS Mortgage Pass-Through
Certificates Series 2006-A, in the exercise of the powers and authority
conferred and vested in it under the Pooling and Servicing Agreement ("the
Pooling Agreement") dated as of January 1, 2006, among Popular ABS, Inc., Equity
One, Inc., Popular Financial Services, LLC, Popular Financial Funding, LLC and
JPMorgan Chase Bank, National Association as trustee, (b) each of the
representations, undertakings and agreements herein made on behalf of the
Counterparty is made and intended not as personal representations, undertakings
and agreements of JPMorgan Chase Bank, National Association but is made and
intended for the purpose of binding only the trust created pursuant to the
Pooling Agreement and (c) under no circumstances shall JPMorgan Chase Bank,
National Association be personally liable for the payment of any indebtedness or
expenses of the Counterparty or be liable for the breach or failure of any
obligations, representation, warranty or covenant made or undertaken by the
Counterparty under this Confirmation.
3
GOVERNING LAW:
This Confirmation is governed by the law (but not the law of conflicts) of the
State of New York.
AMENDMENTS TO SCHEDULE:
For the purposes of this Transaction, Part 1(i) of the Schedule to the Master
Agreement is deleted in its entirety and is replaced with the following
provision:
"If a Ratings Event (as defined below) occurs with respect to Party A
(or any applicable credit support provider), then Party A shall, within 30 days
of such Ratings Event subject to the Rating Agency Condition (as hereinafter
defined) and at its own expense (unless, within 30 days of such Ratings Event,
each of S&P and Xxxxx'x has reconfirmed the rating of the Certificates which was
in effect immediately prior to such Ratings Event), (i) assign this Transaction
hereunder to a third party that meets or exceeds, or as to which any applicable
credit support provider of such third party meets or exceeds, the Approved
Ratings Thresholds (as defined below) on terms substantially similar to this
Confirmation, (ii) obtain a guaranty of Party A's obligations under this
Transaction from a third party that meets or exceeds the Approved Ratings
Threshold, in form and substance, (iii) post collateral, or (iv) establish any
other arrangement satisfactory to each Rating Agency, which will be sufficient
to restore the immediately prior ratings of the Certificates. For purposes of
this Transaction, a "RATINGS EVENT" shall occur with respect to Party A (or any
applicable credit support provider), if its short-term unsecured and
unsubordinated debt ceases to be rated at least "A-1" by S&P, its short-term
unsecured and unsubordinated debt ceases to be rated at least "P-1" by Xxxxx'x
and its long-term unsecured and unsubordinated debt ceases to be rated at least
"A1" by Xxxxx'x (including in connection with a merger, consolidation or other
similar transaction by Party A or any applicable credit support provider) such
ratings being referred to herein as the "APPROVED RATINGS THRESHOLDS." If a
Further Ratings Event (as defined below) occurs with respect to Party A (or any
applicable credit support provider), then Party A shall, within (10) days of
such Downgrade Event subject to the Rating Agency Condition (as hereinafter
defined) and at its own expense (unless, within 10 days of such Ratings Event,
S&P has reconfirmed the rating of the Certificates which was in effect
immediately prior to such Further Ratings Event), (i) assign this Transaction
hereunder to a third party that meets or exceeds, or as to which any applicable
credit support provider of such third party meets or exceeds, the Approved
Ratings Thresholds on terms substantially similar to this Confirmation or (ii)
obtain a guaranty of Party A's obligations under this Transaction from a third
party that meets or exceeds the Approved Ratings Threshold. For purposes of this
Transaction, a "FURTHER RATINGS EVENT" shall occur with respect to Party A (or
any applicable credit support provider), if its long-term unsecured and
unsubordinated debt ceases to be rated at least "BBB-" by S&P or such rating is
withdrawn by S&P (including in connection with a merger, consolidation or other
similar transaction by Party A or any applicable credit support provider).
"RATING AGENCY CONDITION" means, with respect to any particular proposed act or
omission to act hereunder that the party acting or failing to act must consult
with each Rating Agency then providing a rating of the Certificates and receive
from each Rating Agency a prior written confirmation that the proposed action or
inaction would not cause a downgrade or withdrawal of the then-current rating of
the Certificates."
For the purposes of this Transaction, Part 6(a)(i)(A) of the Schedule to the
Master Agreement is deleted in its entirety and replaced with the following:
"a Ratings Event or Further Ratings Event occurs."
4
For the Purposes of this Transaction, Part (6)(a)(ii)(B) of the Schedule to the
Master Agreement is amended by inserting the words "Except with respect to a
Ratings Event or Further Ratings Event (such events already subject to the
Rating Agency Condition as described above)" at the beginning of the first
sentence of Part 6(a)(ii)(B).
5
This Transaction has been entered into by Greenwich Capital Markets, Inc., as
agent for The Royal Bank of Scotland plc. Greenwich Capital Markets, Inc. has
not guaranteed and is not otherwise responsible for the obligations of The Royal
Bank of Scotland plc under this Transaction.
THE ROYAL BANK OF SCOTLAND PLC
By: Greenwich Capital Markets, Inc., its agent
By: /Xxxxxxx Xxxxxxxxx/
-----------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Vice President
Accepted and confirmed as of date first above written:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
not in its individual capacity, but solely as
Trustee for the Benefit of the
Certificateholders of the Popular ABS, Inc.
Mortgage Pass-Through Certificates, Series 2006-A
By: /Xxxxx X. Xxxxxxxx/
-----------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Assistant Vice President
6
ATTACHMENT I
AMORTIZATION SCHEDULE, subject to adjustment in accordance with the Following
Business Day Convention
NOTIONAL AMOUNT CAP RATE
FROM AND INCLUDING TO BUT EXCLUDING (USD) (PER CENT.)
---------------------- ------------------ ------------------ ------------
1/31/2006 2/25/2006 326,042,000.00 4.59730
2/25/2006 3/25/2006 318,003,108.54 4.59730
3/25/2006 4/25/2006 310,090,676.81 4.59730
4/25/2006 5/25/2006 302,292,106.86 4.59730
5/25/2006 6/25/2006 294,433,958.18 4.59730
6/25/2006 7/25/2006 286,593,324.97 4.59730
7/25/2006 8/25/2006 278,688,797.24 4.59730
8/25/2006 9/25/2006 270,796,017.01 4.59730
9/25/2006 10/25/2006 262,876,907.94 4.59730
10/25/2006 11/25/2006 254,920,310.31 4.59730
11/25/2006 12/25/2006 247,215,559.65 4.59730
12/25/2006 1/25/2007 239,688,446.99 4.59730
1/25/2007 2/25/2007 232,399,560.97 4.59730
2/25/2007 3/25/2007 225,309,893.38 4.59730
3/25/2007 4/25/2007 218,322,244.88 4.59730
4/25/2007 5/25/2007 211,613,703.14 4.59730
5/25/2007 6/25/2007 205,059,196.52 4.59730
6/25/2007 7/25/2007 198,710,823.28 4.59730
7/25/2007 8/25/2007 192,507,975.28 4.59730
8/25/2007 9/25/2007 186,499,671.60 4.59730
9/25/2007 10/25/2007 180,654,298.35 4.59730
10/25/2007 11/25/2007 174,942,589.17 4.59730
11/25/2007 12/25/2007 169,409,251.35 4.59730
12/25/2007 1/25/2008 163,992,363.83 4.59730
1/25/2008 2/25/2008 81,616,424.78 5.76400
2/25/2008 3/25/2008 79,807,238.36 5.76420
3/25/2008 4/25/2008 78,038,258.01 5.76240
4/25/2008 5/25/2008 76,308,579.08 5.76250
5/25/2008 6/25/2008 74,617,317.66 5.76160
6/25/2008 7/25/2008 72,963,610.17 5.76120
7
NOTIONAL AMOUNT CAP RATE
FROM AND INCLUDING TO BUT EXCLUDING (USD) (PER CENT.)
---------------------- ------------------ ------------------ ------------
7/25/2008 8/25/2008 71,346,612.84 5.76010
8/25/2008 9/25/2008 69,765,501.25 5.76020
9/25/2008 10/25/2008 68,219,469.85 5.75860
10/25/2008 11/25/2008 66,707,731.59 5.75730
11/25/2008 12/25/2008 65,229,517.37 5.75690
12/25/2008 1/25/2009 63,784,154.49 5.75740
1/25/2009 2/25/2009 60,035,587.14 5.82420
2/25/2009 3/25/2009 58,725,172.86 5.82620
3/25/2009 4/25/2009 57,443,186.12 5.82700
4/25/2009 5/25/2009 56,189,008.67 5.82970
5/25/2009 6/25/2009 54,962,035.79 5.83210
6/25/2009 7/25/2009 53,761,676.05 5.83300
7/25/2009 8/25/2009 52,587,351.05 5.83400
8/25/2009 9/25/2009 51,438,495.04 5.83610
9/25/2009 10/25/2009 50,314,554.70 5.83700
10/25/2009 11/25/2009 49,214,988.84 5.83790
11/25/2009 12/25/2009 48,139,268.13 5.83920
12/25/2009 1/25/2010 47,086,874.84 5.83990
1/25/2010 2/25/2010 46,057,302.60 5.87650
2/25/2010 3/25/2010 45,050,056.10 5.87790
3/25/2010 4/25/2010 44,064,650.89 5.87850
4/25/2010 5/25/2010 43,100,613.13 5.88120
5/25/2010 6/25/2010 42,157,479.30 5.88280
6/25/2010 7/25/2010 41,234,796.08 5.88440
7/25/2010 8/25/2010 40,332,120.01 5.88540
8/25/2010 9/25/2010 39,448,975.08 5.88700
9/25/2010 10/25/2010 38,584,980.74 5.88830
10/25/2010 11/25/2010 37,739,721.96 5.88970
11/25/2010 12/25/2010 36,912,792.74 5.89080
12/25/2010 1/25/2011 36,103,972.18 5.89100
8
