Document/Exhibit Description Pages Size
1: 8-K Current Report 5 22K
2: EX-1.1 Underwriting Agreement 24± 109K
3: EX-4.1 Pooling and Servicing Agreement 384± 1.44M
4: EX-4.2 Mortgage Loan Purchase Agreement 15± 63K
5: EX-10.1 Flow Sale and Servicing Agreement 120± 507K
6: EX-10.2 Mortgage Loan Purchase and Warranties Agreement 65± 242K
7: EX-10.3 Assignment, Assumption and Recognition Agreement 4 19K
8: EX-10.4 Interest Rate Swap Agreement 52± 181K
EXHIBIT 10.4
ISDA
International Swaps and Derivatives Association, Inc.
2002 MASTER AGREEMENT
dated as of August 10, 2006
BANK OF AMERICA, N.A., ABFC 2006-0PT1 TRUST
and
a national banking association a common law trust organized and
organized under the laws of the existing under the laws of the
United States of America State of New York, with Wells Fargo
Bank, N.A. as trustee, and not in
its individual capacity
("Party A") ("Party B")
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this 2002 Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties or otherwise
effective for the purpose of confirming or evidencing those Transactions. This
2002 Master Agreement and the Schedule are together referred to as this "Master
Agreement".
Accordingly, the parties agree as follows:
1. Interpretation
(a) Definitions. The terms defined in Section 14 and elsewhere in this Master
Agreement 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, 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.
Copyright (C) 2002 by International Swaps and Derivatives Association, Inc.
ISDA(R) 2002
(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 condition specified in this Agreement to be a condition
precedent for the purpose of this Section 2(a)(iii).
(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 Settlement 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 of Payments. 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 which 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
and payment obligation will be determined in respect of all amounts payable on
the same date in the same currency in respect of those Transactions, regardless
of whether such amounts are payable in respect of the same Transaction. The
election may be made in the Schedule or any Confirmation by specifying that
"Multiple Transaction Payment Netting" applies to the Transactions identified as
being subject to the election (in which case clause (ii) above will not apply to
such Transactions). If Multiple Transaction Payment Netting is applicable to
Transactions, it will apply to those Transactions with effect from the starting
date specified in the Schedule or such Confirmation, or, if a starting date is
not specified in the Schedule or such Confirmation, the starting date otherwise
agreed by the parties in writing. This election may be made separately for
different groups of Transactions and will apply separately to each pairing of
Offices through which the parties make and receive payments or deliveries.
(d) Deduction or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any
deduction or withholding for or on account of any Tax unless such deduction
or withholding is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, then in effect. If
a party is so required to deduct or withhold, then that party ("X") will:
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y under
this Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified copy),
or other documentation reasonably acceptable to Y, evidencing such
payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the
payment to which Y is otherwise entitled under this Agreement, such
additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X or Y) will equal the full amount Y would have
received had no such deduction or withholding been required. However,
X will not be required to pay any additional amount to Y to the extent
that it would not be required to be paid but for:
(A) the failure by Y to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to Section
3(f) to be accurate and true unless such failure would not have
occurred but for (I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, after 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)).
3. Representations
Each party makes the representations contained in Sections 3(a), 3(b), 3(c),
3(d), 3(e) and 3(f) and, if specified in the Schedule as applying, 3(g) 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). If any "Additional Representation" is specified in the Schedule or
any Confirmation as applying, the party or parties specified for such Additional
Representation will make and, if applicable, be deemed to repeat such Additional
Representation at the time or times specified for such Additional
Representation.
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under
such laws, in good standing;
(ii) Powers. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to deliver
this Agreement and any other documentation relating to this Agreement that
it is required by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any Credit Support
Document to which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) No Violation or Conflict. Such execution, delivery and performance do
not violate or conflict with any law applicable to it, any provision of its
constitutional documents, any order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in full
force and effect and all conditions of any such consents have been complied
with; and
(v) Obligations Binding. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal, valid
and binding obligations, enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights generally and
subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(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, any of its Credit Support Providers or any of its applicable
Specified Entities 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.
(g) No Agency. It is entering into this Agreement, including each Transaction,
as principal and not as agent of any person or entity.
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 clause (iii) below, to such government or taxing authority
as the other party reasonably directs:
(i) any forms, documents or certificates relating to taxation specified in
the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation; and
(iii) upon reasonable demand by such other party, any form or document that
may be required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction
or withholding for or on account of any Tax or with such deduction or
withholding at a reduced rate (so long as the completion, execution or
submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with
any such form or document to be accurate and completed in a manner
reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) Maintain Authorisations. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) Comply With Laws. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) Tax Agreement. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled or considered to have its seat, or where an 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 (subject to Sections 5(c)
and 6(e)(iv)) 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
9(h)(i)(2) or (4) required to be made by it if such failure is not remedied
on or before the first Local Business Day in the case of any such payment
or the first Local Delivery Day in the case of any such delivery after, in
each case, notice of such failure is given to the party;
(ii) Breach of Agreement; Repudiation of Agreement.
(1) 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 9(h)(i)(2) or (4) 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 within 30 days after notice of such failure is
given to the party; or
(2) the party disaffirms, disclaims, repudiates or rejects, in whole
or in part, or challenges the validity of, this Master Agreement, any
Confirmation executed and delivered by that party or any Transaction
evidenced by such a Confirmation (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(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, or any
security interest granted by such party or such Credit Support
Provider to the other party pursuant to any such Credit Support
Document, to be in full force and effect for the purpose of this
Agreement (in each case other than in accordance with its terms) prior
to the satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without the
written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims,
repudiates or rejects, in whole or in part, or challenges the validity
of, such Credit Support Document (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(iv) Misrepresentation. A representation (other than a representation under
Section 3(e) or 3(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 (other than by failing to make a delivery) under a
Specified Transaction or any credit support arrangement relating to a
Specified Transaction and, after giving effect to any applicable
notice requirement or grace period, such default results in 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 due on the last payment or
exchange date of, or any payment on early termination of, a Specified
Transaction (or, if there is no applicable notice requirement or grace
period, such default continues for at least one Local Business Day);
(3) defaults in making any delivery due under (including any delivery
due on the last delivery or exchange date of) a Specified Transaction
or any credit support arrangement relating to a Specified Transaction
and, after giving effect to any applicable notice requirement or grace
period, such default results in a liquidation of, an acceleration of
obligations under, or an early termination of, all transactions
outstanding under the documentation applicable to that Specified
Transaction; or
(4) disaffirms, disclaims, repudiates or rejects, in whole or in part,
or challenges the validity of, a Specified Transaction or any credit
support arrangement relating to a Specified Transaction that is, in
either case, confirmed or evidenced by a document or other confirming
evidence executed and delivered by that party, Credit Support Provider
or Specified Entity (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)
where the aggregate principal amount of such agreements or
instruments, either alone or together with the amount, if any,
referred to in clause (2) below, is 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 under such agreements or instruments on the due date for
payment (after giving effect to any applicable notice requirement or
grace period) in an aggregate amount, either alone or together with
the amount, if any, referred to in clause (1) above, of not less than
the applicable Threshold Amount;
(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)(A)
institutes or has instituted against it, by a regulator, supervisor or
any similar official with primary insolvency, rehabilitative or
regulatory jurisdiction over it in the jurisdiction of its
incorporation or organisation or the jurisdiction of its head or home
office, 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 by it or such regulator, supervisor
or similar official, or (B) 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 such proceeding or petition is instituted or
presented by a person or entity not described in clause (A) above and
either (I) 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 (II) is not dismissed, discharged, stayed
or restrained in each case within 15 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 15 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) above (inclusive); or (9) takes any action in
furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, or reorganises,
reincorporates or reconstitutes into or as, another entity and, at the time
of such consolidation, amalgamation, merger, transfer, reorganisation,
reincorporation or reconstitution:
(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; 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 (subject to Section 5(c))
an Illegality if the event is specified in clause (i) below, a Force Majeure
Event if the event is specified in clause (ii) below, a Tax Event if the event
is specified in clause (iii) below, a Tax Event Upon Merger if the event is
specified in clause (iv) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to clause (v) below or an
Additional Termination Event if the event is specified pursuant to clause (vi)
below:
(i) Illegality. After giving effect to any applicable provision, disruption
fallback or remedy specified in, or pursuant to, the relevant Confirmation
or elsewhere in this Agreement, due to an event or circumstance (other than
any action taken by a party or, if applicable, any Credit Support Provider
of such party) occurring after a Transaction is entered into, it becomes
unlawful under any applicable law (including without limitation the laws of
any country in which payment, delivery or compliance is required by either
party or any Credit Support Provider, as the case may be), on any day, or
it would be unlawful if the relevant payment, delivery or compliance were
required on that day (in each case, other than as a result of a breach by
the party of Section 4(b)):
(1) for the Office through which such party (which will be the
Affected Party) makes and receives payments or deliveries with respect
to such Transaction to perform any absolute or contingent obligation
to make a payment or delivery in respect of such Transaction, 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) for such party or any Credit Support Provider of such party (which
will be the Affected Party) to perform any absolute or contingent
obligation to make a payment or delivery which such party or Credit
Support Provider has under any Credit Support Document relating to
such Transaction, to receive a payment or delivery under such Credit
Support Document or to comply with any other material provision of
such Credit Support Document;
(ii) Force Majeure Event. After giving effect to any applicable provision,
disruption fallback or remedy specified in, or pursuant to, the relevant
Confirmation or elsewhere in this Agreement, by reason of force majeure or
act of state occurring after a Transaction is entered into, on any day:
(1) the Office through which such party (which will be the Affected
Party) makes and receives payments or deliveries with respect to such
Transaction is prevented from performing any absolute or contingent
obligation to make a payment or delivery in respect of such
Transaction, from receiving a payment or delivery in respect of such
Transaction or from complying with any other material provision of
this Agreement relating to such Transaction (or would be so prevented
if such payment, delivery or compliance were required on that day), or
it becomes impossible or impracticable for such Office so to perform,
receive or comply (or it would be impossible or impracticable for such
Office so to perform, receive or comply if such payment, delivery or
compliance were required on that day); or
(2) such party or any Credit Support Provider of such party (which
will be the Affected Party) is prevented from performing any absolute
or contingent obligation to make a payment or delivery which such
party or Credit Support Provider has under any Credit Support Document
relating to such Transaction, from receiving a payment or delivery
under such Credit Support Document or from complying with any other
material provision of such Credit Support Document (or would be so
prevented if such payment, delivery or compliance were required on
that day), or it becomes impossible or impracticable for such party or
Credit Support Provider so to perform, receive or comply (or it would
be impossible or impracticable for such party or Credit Support
Provider so to perform, receive or comply if such payment, delivery or
compliance were required on that day),
so long as the force majeure or act of state is beyond the control of
such Office, such party or such Credit Support Provider, as appropriate,
and such Office, party or Credit Support Provider could not, after using
all reasonable efforts (which will not require such party or Credit
Support Provider to incur a loss, other than immaterial, incidental
expenses), overcome such prevention, impossibility or impracticability;
(iii) Tax Event. Due to (1) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, after a Transaction is
entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (2) 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 Settlement Date
(A) 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 9(h)) or (B) 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 9(h)) 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));
(iv) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Settlement 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 9(h)) or (2)
receive a payment from which an amount has been deducted or withheld for or
on account of any 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 (or any substantial part of the assets
comprising the business conducted by it as of the date of this Master
Agreement) to, or reorganising, reincorporating or reconstituting into or
as, another entity (which will be the Affected Party) where such action
does not constitute a Merger Without Assumption;
(v) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified in
the Schedule as applying to the party, a Designated Event (as defined
below) occurs with respect to such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party (in each case,
"X") and such Designated Event does not constitute a Merger Without
Assumption, and the creditworthiness of X or, if applicable, the successor,
surviving or transferee entity of X, after taking into account any
applicable Credit Support Document, is materially weaker immediately after
the occurrence of such Designated Event than that of X immediately prior to
the occurrence of such Designated Event (and, in any such event, such party
or its successor, surviving or transferee entity, as appropriate, will be
the Affected Party). A "Designated Event" with respect to X means that:
(1) X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets (or any substantial part
of the assets comprising the business conducted by X as of the date of
this Master Agreement) to, or reorganises, reincorporates or
reconstitutes into or as, another entity;
(2) any person, related group of persons or entity acquires directly
or indirectly the beneficial ownership of (A) equity securities having
the power to elect a majority of the board of directors (or its
equivalent) of X or (B) any other ownership interest enabling it to
exercise control of X; or
(3) X effects any substantial change in its capital structure by means
of the issuance, incurrence or guarantee of debt or the issuance of
(A) preferred stock or other securities convertible into or
exchangeable for debt or preferred stock or (B) in the case of
entities other than corporations, any other form of ownership
interest; or
(vi) 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
will be as specified for such Additional Termination Event in the Schedule
or such Confirmation).
(c) Hierarchy of Events.
(i) An event or circumstance that constitutes or gives rise to an
Illegality or a Force Majeure Event will not, for so long as that is the
case, also constitute or give rise to an Event of Default under Section
5(a)(i), 5(a)(ii)(1) or 5(a)(iii)(1) insofar as such event or circumstance
relates to the failure to make any payment or delivery or a failure to
comply with any other material provision of this Agreement or a Credit
Support Document, as the case may be.
(ii) Except in circumstances contemplated by clause (i) above, if an event
or circumstance which would otherwise constitute or give rise to an
Illegality or a Force Majeure Event also constitutes an Event of Default or
any other Termination Event, it will be treated as an Event of Default or
such other Termination Event, as the case may be, and will not constitute
or give rise to an Illegality or a Force Majeure Event.
(iii) If an event or circumstance which would otherwise constitute or give
rise to a Force Majeure Event also constitutes an Illegality, it will be
treated as an Illegality, except as described in clause (ii) above, and not
a Force Majeure Event.
(d) Deferral of Payments and Deliveries During Waiting Period. If an Illegality
or a Force Majeure Event has occurred and is continuing with respect to a
Transaction, each payment or delivery which would otherwise be required to be
made under that Transaction will be deferred to, and will not be due until:
(i) the first Local Business Day or, in the case of a delivery, the first
Local Delivery Day (or the first day that would have been a Local Business
Day or Local Delivery Day, as appropriate, but for the occurrence of the
event or circumstance constituting or giving rise to that Illegality or
Force Majeure Event) following the end of any applicable Waiting Period in
respect of that Illegality or Force Majeure Event, as the case may be; or
(ii) if earlier, the date on which the event or circumstance constituting
or giving rise to that Illegality or Force Majeure Event ceases to exist
or, if such date is not a Local Business Day or, in the case of a delivery,
a Local Delivery Day, the first following day that is a Local Business Day
or Local Delivery Day, as appropriate.
(e) Inability of Head or Home Office to Perform Obligations of Branch. If (i) an
Illegality or a Force Majeure Event occurs under Section 5(b)(i)(1) or
5(b)(ii)(1) and the relevant Office is not the Affected Party's head or home
office, (ii) Section 10(a) applies, (iii) the other party seeks performance of
the relevant obligation or compliance with the relevant provision by the
Affected Party's head or home office and (iv) the Affected Party's head or home
office fails so to perform or comply due to the occurrence of an event or
circumstance which would, if that head or home office were the Office through
which the Affected Party makes and receives payments and deliveries with respect
to the relevant Transaction, constitute or give rise to an Illegality or a Force
Majeure Event, and such failure would otherwise constitute an Event of Default
under Section 5(a)(i)or 5(a)(iii)(1) with respect to such party, then, for so
long as the relevant event or circumstance continues to exist with respect to
both the Office referred to in Section 5(b)(i)(1) or 5(b)(ii)(1), as the case
may be, and the Affected Party's head or home office, such failure will not
constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1).
6. Early Termination; Close-Out Netting
(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 other than a Force Majeure 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 the other party such other
information about that Termination Event as the other party may reasonably
require. If a Force Majeure Event occurs, each party will, promptly upon
becoming aware of it, use all reasonable efforts to notify the other party,
specifying the nature of that Force Majeure Event, and will also give the
other party such other information about that Force Majeure Event as the
other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If 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, other than immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section 6(b)(i) all its rights
and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days after
the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject to
and conditional upon the prior written consent of the other party, which
consent will not be withheld if such other party's policies in effect at
such time would permit it to enter into transactions with the transferee on
the terms proposed.
(iii) Two Affected Parties. If 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 of such occurrence is given under
Section 6(b)(i) to avoid that Termination Event.
(iv) Right to Terminate.
(1) If:
(A) 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
(B) 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,
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 are two Affected Parties, or the Non-affected Party in
the case of a Credit Event Upon Merger or an Additional Termination
Event if there is only one Affected Party may, if the relevant
Termination Event is then continuing, by not more than 20 days notice
to the other party, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all
Affected Transactions.
(2) If at any time an Illegality or a Force Majeure Event has occurred
and is then continuing and any applicable Waiting Period has expired:
(A) Subject to clause (B) below, either party may, by not more
than 20 days notice to the other party, designate (I) a day not
earlier than the day on which such notice becomes effective as an
Early Termination Date in respect of all Affected Transactions or
(II) by specifying in that notice the Affected Transactions in
respect of which it is designating the relevant day as an Early
Termination Date, a day not earlier than two Local Business Days
following the day on which such notice becomes effective as an
Early Termination Date in respect of less than all Affected
Transactions. Upon receipt of a notice designating an Early
Termination Date in respect of less than all Affected
Transactions, the other party may, by notice to the designating
party, if such notice is effective on or before the day so
designated, designate that same day as an Early Termination Date
in respect of any or all other Affected Transactions.
(B) An Affected Party (if the Illegality or Force Majeure Event
relates to performance by such party or any Credit Support
Provider of such party of an obligation to make any payment or
delivery under, or to compliance with any other material
provision of, the relevant Credit Support Document) will only
have the right to designate an Early Termination Date under
Section 6(b)(iv)(2)(A) as a result of an Illegality under Section
5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2)
following the prior designation by the other party of an Early
Termination Date, pursuant to Section 6(b)(iv)(2)(A), in respect
of less than all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or 6(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 9(h)(i) 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 will be determined
pursuant to Sections 6(e) and 9(h)(ii).
(d) Calculations; Payment Date.
(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 any quotations, market data or information
from internal sources used in making such calculations), (2) specifying
(except where there are two Affected Parties) any Early Termination Amount
payable and (3) 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 or market data obtained in determining a
Close-out Amount, the records of the party obtaining such quotation or
market data will be conclusive evidence of the existence and accuracy of
such quotation or market data.
(ii) Payment Date. An Early Termination Amount due in respect of any Early
Termination Date will, together with any amount of interest payable
pursuant to Section 9(h)(ii)(2), be payable (1) on the day on which 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 (2) on
the day which is two Local Business Days after the day on which notice of
the amount payable is effective (or, if there are two Affected Parties,
after the day on which the statement provided pursuant to clause (i) above
by the second party to provide such a statement is effective) in the case
of an Early Termination Date which is designated as a result of a
Termination Event.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
amount, if any, payable in respect of that Early Termination Date (the "Early
Termination Amount") will be determined pursuant to this Section 6(e) and will
be subject to Section 6(f).
(i) Events of Default. If the Early Termination Date results from an Event
of Default, the Early Termination Amount will be an amount equal to (1) the
sum of (A) the Termination Currency Equivalent of the Close-out Amount or
Close-out Amounts (whether positive or negative) determined by the
Non-defaulting Party for each Terminated Transaction or group of Terminated
Transactions, as the case may be, and (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (2)
the Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If the Early Termination 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
the Early Termination Amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:
(1) One Affected Party. Subject to clause (3) below, if there is one
Affected Party, the Early Termination Amount will be determined in
accordance with Section 6(e)(i), except that references to the
Defaulting Party and to the Non-defaulting Party will be deemed to be
references to the Affected Party and to the Non-affected Party,
respectively.
(2) Two Affected Parties. Subject to clause (3) below, if there are
two Affected Parties, each party will determine an amount equal to the
Termination Currency Equivalent of the sum of the Close-out Amount or
Close-out Amounts (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions, as the case may be,
and the Early Termination Amount will be an amount equal to (A) the
sum of (I) one-half of the difference between the higher amount so
determined (by party "X") and the lower amount so determined (by party
"Y") and (II) the Termination Currency Equivalent of the Unpaid
Amounts owing to X less (B) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y. If the Early Termination Amount is a
positive number, Y will pay it to X; if it is a negative number, X
will pay the absolute value of the Early Termination Amount to Y.
(3) Mid-Market Events. If that Termination Event is an Illegality or a
Force Majeure Event, then the Early Termination Amount will be
determined in accordance with clause (1) or (2) above, as appropriate,
except that, for the purpose of determining a Close-out Amount or
Close-out Amounts, the Determining Party will:
(A) if obtaining quotations from one or more third parties (or
from any of the Determining Party's Affiliates), ask each third
party or Affiliate (I) not to take account of the current
creditworthiness of the Determining Party or any existing Credit
Support Document and (II) to provide mid-market quotations; and
(B) in any other case, use mid-market values without regard to
the creditworthiness of the Determining Party.
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because Automatic Early Termination applies in
respect of a party, the Early Termination Amount will be subject to such
adjustments as are appropriate and permitted by applicable 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) Adjustment for Illegality or Force Majeure Event. The failure by a
party or any Credit Support Provider of such party to pay, when due, any
Early Termination Amount will not constitute an Event of Default under
Section 5(a)(i) or 5(a)(iii)(1) if such failure is due to the occurrence of
an event or circumstance which would, if it occurred with respect to
payment, delivery or compliance related to a Transaction, constitute or
give rise to an Illegality or a Force Majeure Event. Such amount will (1)
accrue interest and otherwise be treated as an Unpaid Amount owing to the
other party if subsequently an Early Termination Date results from an Event
of Default, a Credit Event Upon Merger or an Additional Termination Event
in respect of which all outstanding Transactions are Affected Transactions
and (2) otherwise accrue interest in accordance with Section 9(h)(ii)(2).
(v) Pre-Estimate. The parties agree that 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 the termination of the Terminated Transactions.
(f) Set-Off. Any Early Termination Amount payable to one party (the "Payee") by
the other party (the "Payer"), in circumstances where there is a Defaulting
Party or where there is one Affected Party in the case where either a Credit
Event Upon Merger has occurred or any other Termination Event in respect of
which all outstanding Transactions are Affected Transactions has occurred, will,
at the option of the Non-defaulting Party or the Non-affected Party, as the case
may be ("X") (and without prior notice to the Defaulting Party or the Affected
Party, as the case may be), be reduced by its set-off against any other amounts
("Other Amounts") payable by the Payee to the Payer (whether or not arising
under this Agreement, matured or contingent and irrespective of the currency,
place of payment or place of booking of the obligation). To the extent that any
Other Amounts are so set off, those Other Amounts will be discharged promptly
and in all respects. X will give notice to the other party of any set-off
effected under this Section 6(f).
For this purpose, either the Early Termination Amount or the Other Amounts (or
the relevant portion of such amounts) may be converted by X into the currency in
which the other is denominated at the rate of exchange at which such party would
be able, in good faith and using commercially reasonable procedures, to purchase
the relevant amount of such currency.
If an obligation is unascertained, X may in good faith estimate that obligation
and set off in respect of the estimate, subject to the relevant party accounting
to the other when the obligation is ascertained.
Nothing in this Section 6(f) will be effective to create a charge or other
security interest. This Section 6(f) will be without prejudice and in addition
to any right of set-off, offset, combination of accounts, lien, right of
retention or withholding or similar right or requirement to which any party is
at any time otherwise entitled or subject (whether by operation of law, contract
or otherwise).
7. Transfer
Subject to Section 6(b)(ii) and to the extent permitted by applicable law,
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
Early Termination Amount payable to it by a Defaulting Party, together with any
amounts payable on or with respect to that interest and any other rights
associated with that interest pursuant to Sections 8, 9(h) and 11.
Any purported transfer that is not in compliance with this Section 7 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 good faith and using
commercially reasonable procedures in converting the currency so tendered into
the Contractual Currency, of the full amount in the Contractual Currency of all
amounts payable in respect of this Agreement. If for any reason the amount in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect of this Agreement, the party required to
make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to
compensate for the shortfall. If for any reason the amount in the Contractual
Currency so received exceeds the amount in the Contractual Currency payable in
respect of this Agreement, the party receiving the payment will refund promptly
the amount of such excess.
(b) Judgments. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in clause (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 purpose of such
judgment or order and the rate of exchange at which such party is able, acting
in good faith and using commercially reasonable procedures 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.
(c) Separate Indemnities. To the extent permitted by applicable law, the
indemnities in this Section 8 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. Each of the
parties acknowledges that in entering into this Agreement it has not relied on
any oral or written representation, warranty or other assurance (except as
provided for or referred to in this Agreement) and waives all rights and
remedies which might otherwise be available to it in respect thereof, except
that nothing in this Agreement will limit or exclude any liability of a party
for fraud.
(b) Amendments. An amendment, modification or waiver in respect of this
Agreement will only be effective if 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 by an exchange of 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 and by electronic messaging system), 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 will 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, by an exchange of
electronic messages on an electronic messaging system or by an exchange of
e-mails, 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,
electronic message or e-mail constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) Headings. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
(h) Interest and Compensation.
(i) Prior to Early Termination. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction:
(1) Interest on Defaulted Payments. If a party defaults in the
performance of any payment obligation, it will, to the extent
permitted by applicable law and subject to Section 6(c), pay interest
(before as well as after judgment) on the overdue amount to the other
party on demand in the same currency as the overdue amount, for the
period from (and including) the original due date for payment to (but
excluding) the date of actual payment (and excluding any period in
respect of which interest or compensation in respect of the overdue
amount is due pursuant to clause (3)(B) or (C) below), at the Default
Rate.
(2) Compensation for Defaulted Deliveries. If a party defaults in the
performance of any obligation required to be settled by delivery, it
will on demand (A) compensate the other party to the extent provided
for in the relevant Confirmation or elsewhere in this Agreement and
(B) unless otherwise provided in the relevant Confirmation or
elsewhere in this Agreement, to the extent permitted by applicable law
and subject to Section 6(c), pay to the other party interest (before
as well as after judgment) on an amount equal to the fair market value
of that which was required to be delivered in the same currency as
that amount, for the period from (and including) the originally
scheduled date for delivery to (but excluding) the date of actual
delivery (and excluding any period in respect of which interest or
compensation in respect of that amount is due pursuant to clause (4)
below), at the Default Rate. The fair market value of any obligation
referred to above will be determined as of the originally scheduled
date for delivery, in good faith and using commercially reasonable
procedures, by the party that was entitled to take delivery.
(3) Interest on Deferred Payments. If:
(A) a party does not pay any amount that, but for Section
2(a)(iii), would have been payable, it will, to the extent
permitted by applicable law and subject to Section 6(c) and
clauses (B) and (C) below, pay interest (before as well as after
judgment) on that amount to the other party on demand (after such
amount becomes payable) in the same currency as that amount, for
the period from (and including) the date the amount would, but
for Section 2(a)(iii), have been payable to (but excluding) the
date the amount actually becomes payable, at the Applicable
Deferral Rate;
(B) a payment is deferred pursuant to Section 5(d), the party
which would otherwise have been required to make that payment
will, to the extent permitted by applicable law, subject to
Section 6(c) and for so long as no Event of Default or Potential
Event of Default with respect to that party has occurred and is
continuing, pay interest (before as well as after judgment) on
the amount of the deferred payment to the other party on demand
(after such amount becomes payable) in the same currency as the
deferred payment, for the period from (and including) the date
the amount would, but for Section 5(d), have been payable to (but
excluding) the earlier of the date the payment is no longer
deferred pursuant to Section 5(d) and the date during the
deferral period upon which an Event of Default or Potential Event
of Default with respect to that party occurs, at the Applicable
Deferral Rate; or
(C) a party fails to make any payment due to the occurrence of an
Illegality or a Force Majeure Event (after giving effect to any
deferral period contemplated by clause (B) above), it will, to
the extent permitted by applicable law, subject to Section 6(c)
and for so long as the event or circumstance giving rise to that
Illegality or Force Majeure Event continues and no Event of
Default or Potential Event of Default with respect to that party
has occurred and is continuing, pay interest (before as well as
after judgment) on the overdue amount to the other party on
demand in the same currency as the overdue amount, for the period
from (and including) the date the party fails to make the payment
due to the occurrence of the relevant Illegality or Force Majeure
Event (or, if later, the date the payment is no longer deferred
pursuant to Section 5(d)) to (but excluding) the earlier of the
date the event or circumstance giving rise to that Illegality or
Force Majeure Event ceases to exist and the date during the
period upon which an Event of Default or Potential Event of
Default with respect to that party occurs (and excluding any
period in respect of which interest or compensation in respect of
the overdue amount is due pursuant to clause (B) above), at the
Applicable Deferral Rate.
(4) Compensation for Deferred Deliveries. If:
(A) a party does not perform any obligation that, but for Section
2(a)(iii), would have been required to be settled by delivery;
(B) a delivery is deferred pursuant to Section 5(d); or
(C) a party fails to make a delivery due to the occurrence of an
Illegality or a Force Majeure Event at a time when any applicable
Waiting Period has expired,
the party required (or that would otherwise have been required) to
make the delivery will, to the extent permitted by applicable law and
subject to Section 6(c), compensate and pay interest to the other
party on demand (after, in the case of clauses (A) and (B) above, such
delivery is required) if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
(ii) Early Termination. Upon the occurrence or effective designation of an
Early Termination Date in respect of a Transaction:
(1) Unpaid Amounts. For the purpose of determining an Unpaid Amount in
respect of the relevant Transaction, and to the extent permitted by
applicable law, interest will accrue on the amount of any payment
obligation or the amount equal to the fair market value of any
obligation required to be settled by delivery included in such
determination in the same currency as that amount, for the period from
(and including) the date the relevant obligation was (or would have
been but for Section 2(a)(iii) or 5(d)) required to have been
performed to (but excluding) the relevant Early Termination Date, at
the Applicable Close-out Rate.
(2) Interest on Early Termination Amounts. If an Early Termination
Amount is due in respect of such Early Termination Date, that amount
will, to the extent permitted by applicable law, be paid together with
interest (before as well as after judgment) on that amount in the
Termination Currency, for the period from (and including) such Early
Termination Date to (but excluding) the date the amount is paid, at
the Applicable Close-out Rate.
(iii) Interest Calculation. Any interest pursuant to this Section 9(h) will
be calculated on the basis of daily compounding and the actual number of
days elapsed.
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 and agrees with the other party that, notwithstanding the place of
booking or its jurisdiction of incorporation or organisation, its obligations
are the same in terms of recourse against it as if it had entered into the
Transaction through its head or home office, except that a party will not have
recourse to the head or home office of the other party in respect of any payment
or delivery deferred pursuant to Section 5(d) for so long as the payment or
delivery is so deferred. This representation and agreement will be deemed to be
repeated by each party on each date on which the parties enter into a
Transaction.
(b) If a party is specified as a Multibranch Party in the Schedule, such party
may, subject to clause (c) below, enter into a Transaction through, book a
Transaction in and make and receive payments and deliveries with respect to a
Transaction through any Office listed in respect of that party in the Schedule
(but not any other Office unless otherwise agreed by the parties in writing).
(c) The Office through which a party enters into a Transaction will be the
Office specified for that party in the relevant Confirmation or as otherwise
agreed by the parties in writing, and, if an Office for that party is not
specified in the Confirmation or otherwise agreed by the parties in writing, its
head or home office. Unless the parties otherwise agree in writing, the Office
through which a party enters into a Transaction will also be the Office in which
it books the Transaction and the Office through which it makes and receives
payments and deliveries with respect to the Transaction. Subject to Section
6(b)(ii), neither party may change the Office in which it books the Transaction
or the Office through which it makes and receives payments or deliveries with
respect to a Transaction without the prior written consent of the other party.
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,
execution 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 described below (except that a notice or
other communication under Section 5 or 6 may not be given by electronic
messaging system or e-mail) to the address or number or in accordance with the
electronic messaging system or e-mail 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 it 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 it is delivered or its
delivery is attempted;
(v) if sent by electronic messaging system, on the date it is received; or
(vi) if sent by e-mail, on the date it is delivered,
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 will be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Details. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system or e-mail
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
any dispute arising out of or in connection with this Agreement ("Proceedings"),
each party irrevocably:
(i) submits:
(1) if this Agreement is expressed to be governed by English law, to
(A) the non-exclusive jurisdiction of the English courts if the
Proceedings do not involve a Convention Court and (B) the exclusive
jurisdiction of the English courts if the Proceedings do involve a
Convention Court; or
(2) if this Agreement is expressed to be governed by the laws of the
State of New York, 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;
(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; and
(iii) agrees, to the extent permitted by applicable law, that the bringing
of Proceedings in any one or more jurisdictions will not 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(a)(i), 12(a)(iii) or 12(a)(iv).
Nothing in this Agreement will affect the right of either party to serve process
in any other manner permitted by applicable law.
(d) Waiver of Immunities. Each party irrevocably waives, to the 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 or order for specific performance or
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 Representation" has the meaning specified in Section 3.
"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, Force Majeure Event, Tax Event or Tax Event Upon
Merger, all Transactions affected by the occurrence of such Termination Event
(which, in the case of an Illegality under Section 5(b)(i)(2) or a Force Majeure
Event under Section 5(b)(ii)(2), means all Transactions unless the relevant
Credit Support Document references only certain Transactions, in which case
those Transactions and, if the relevant Credit Support Document constitutes a
Confirmation for a Transaction, that Transaction) and (b) with respect to any
other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"Agreement" has the meaning specified in Section 1(c).
"Applicable Close-out Rate" means:
(a) in respect of the determination of an Unpaid Amount:
(i) 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;
(ii) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate;
(iii) in respect of obligations deferred pursuant to Section 5(d), if there
is no Defaulting Party and for so long as the deferral period continues,
the Applicable Deferral Rate; and
(iv) in all other cases following the occurrence of a Termination Event
(except where interest accrues pursuant to clause (iii) above), the
Applicable Deferral Rate; and
(b) in respect of an Early Termination Amount:
(i) for the period from (and including) the relevant Early Termination Date
to (but excluding) the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable:
(1) if the Early Termination Amount is payable by a Defaulting Party,
the Default Rate;
(2) if the Early Termination Amount is payable by a Non-defaulting
Party, the Non-default Rate; and
(3) in all other cases, the Applicable Deferral Rate; and
(ii) for the period from (and including) the date (determined in accordance
with Section 6(d)(ii)) on which that amount is payable to (but excluding)
the date of actual payment:
(1) if a party fails to pay the Early Termination Amount due to the
occurrence of an event or circumstance which would, if it occurred
with respect to a payment or delivery under a Transaction, constitute
or give rise to an Illegality or a Force Majeure Event, and for so
long as the Early Termination Amount remains unpaid due to the
continuing existence of such event or circumstance, the Applicable
Deferral Rate;
(2) if the Early Termination Amount is payable by a Defaulting Party
(but excluding any period in respect of which clause (1) above
applies), the Default Rate;
(3) if the Early Termination Amount is payable by a Non-defaulting
Party (but excluding any period in respect of which clause (1) above
applies), the Non-default Rate; and
(4) in all other cases, the Termination Rate.
"Applicable Deferral Rate" means:
(a) for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant
payer to be a rate offered to the payer by a major bank in a relevant interbank
market for overnight deposits in the applicable currency, such bank to be
selected in good faith by the payer for the purpose of obtaining a
representative rate that will reasonably reflect conditions prevailing at the
time in that relevant market;
(b) for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition
of Applicable Close-out Rate, the rate certified by the relevant payer to be a
rate offered to prime banks by a major bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be selected in good
faith by the payer after consultation with the other party, if practicable, for
the purpose of obtaining a representative rate that will reasonably reflect
conditions prevailing at the time in that relevant market; and
(c) for purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and
(b)(ii)(1) of the definition of Applicable Close-out Rate, a rate equal to the
arithmetic mean of the rate determined pursuant to clause (a) above and 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.
"Automatic Early Termination" has the meaning specified in Section 6(a).
"Burdened Party" has the meaning specified in Section 5(b)(iv).
"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 after the parties enter into the relevant
Transaction.
"Close-out Amount" means, with respect to each Terminated Transaction or each
group of Terminated Transactions and a Determining Party, the amount of the
losses or costs of the Determining Party that are or would be incurred under
then prevailing circumstances (expressed as a positive number) or gains of the
Determining Party that are or would be realised under then prevailing
circumstances (expressed as a negative number) in replacing, or in providing for
the Determining Party the economic equivalent of, (a) the material terms of that
Terminated Transaction or group of Terminated Transactions, including the
payments and deliveries by the parties under Section 2(a)(i) in respect of that
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 (assuming satisfaction of the conditions precedent in Section
2(a)(iii)) and (b) the option rights of the parties in respect of that
Terminated Transaction or group of Terminated Transactions.
Any Close-out Amount will be determined by the Determining Party (or its agent),
which will act in good faith and use commercially reasonable procedures in order
to produce a commercially reasonable result. The Determining Party may determine
a Close-out Amount for any group of Terminated Transactions or any individual
Terminated Transaction but, in the aggregate, for not less than all Terminated
Transactions. Each Close-out Amount will be determined as of the Early
Termination Date or, if that would not be commercially reasonable, as of the
date or dates following the Early Termination Date as would be commercially
reasonable.
Unpaid Amounts in respect of a Terminated Transaction or group of Terminated
Transactions and legal fees and out-of-pocket expenses referred to in Section 11
are to be excluded in all determinations of Close-out Amounts.
In determining a Close-out Amount, the Determining Party may consider any
relevant information, including, without limitation, one or more of the
following types of information:
(i) quotations (either firm or indicative) for replacement transactions supplied
by one or more third parties that may take into account the creditworthiness of
the Determining Party at the time the quotation is provided and the terms of any
relevant documentation, including credit support documentation, between the
Determining Party and the third party providing the quotation;
(ii) information consisting of relevant market data in the relevant market
supplied by one or more third parties including, without limitation, relevant
rates, prices, yields, yield curves, volatilities, spreads, correlations or
other relevant market data in the relevant market; or
(iii) information of the types described in clause (i) or (ii) above from
internal sources (including any of the Determining Party's Affiliates) if that
information is of the same type used by the Determining Party in the regular
course of its business for the valuation of similar transactions.
The Determining Party will consider, taking into account the standards and
procedures described in this definition, quotations pursuant to clause (i) above
or relevant market data pursuant to clause (ii) above unless the Determining
Party reasonably believes in good faith that such quotations or relevant market
data are not readily available or would produce a result that would not satisfy
those standards. When considering information described in clause (i), (ii) or
(iii) above, the Determining Party may include costs of funding, to the extent
costs of funding are not and would not be a component of the other information
being utilised. Third parties supplying quotations pursuant to clause (i) above
or market data pursuant to clause (ii) above may include, without limitation,
dealers in the relevant markets, end-users of the relevant product, information
vendors, brokers and other sources of market information.
Without duplication of amounts calculated based on information described in
clause (i), (ii) or (iii) above, or other relevant information, and when it is
commercially reasonable to do so, the Determining Party may in addition consider
in calculating a Close-out Amount any loss or cost incurred in connection with
its terminating, liquidating or re-establishing any hedge related to a
Terminated Transaction or group of Terminated Transactions (or any gain
resulting from any of them).
Commercially reasonable procedures used in determining a Close-out Amount may
include the following:
(1) application to relevant market data from third parties pursuant to clause
(ii) above or information from internal sources pursuant to clause (iii) above
of pricing or other valuation models that are, at the time of the determination
of the Close-out Amount, used by the Determining Party in the regular course of
its business in pricing or valuing transactions between the Determining Party
and unrelated third parties that are similar to the Terminated Transaction or
group of Terminated Transactions; and
(2) application of different valuation methods to Terminated Transactions or
groups of Terminated Transactions depending on the type, complexity, size or
number of the Terminated Transactions or group of Terminated Transactions.
"Confirmation" has the meaning specified in the preamble.
"consent" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"Contractual Currency" has the meaning specified in Section 8(a).
"Convention Court" means any court which is bound to apply to the Proceedings
either Article 17 of the 1968 Brussels Convention on Jurisdiction and the
Enforcement of Judgments in Civil and Commercial Matters or Article 17 of the
1988 Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil
and Commercial Matters.
"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.
"Cross-Default" means the event specified in Section 5(a)(vi).
"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).
"Designated Event" has the meaning specified in Section 5(b)(v).
"Determining Party" means the party determining a Close-out Amount.
"Early Termination Amount" has the meaning specified in Section 6(e).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"electronic messages" does not include e-mails but does include documents
expressed in markup languages, and "electronic messaging system" will be
construed accordingly.
"English law" means the law of England and Wales, and "English" will be
construed accordingly.
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"Force Majeure Event" has the meaning specified in Section 5(b).
"General Business Day" means a day on which commercial banks are open for
general business (including dealings in foreign exchange and foreign currency
deposits).
"Illegality" has the meaning specified in Section 5(b).
"Indemnifiable Tax" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority),
and "unlawful" will be construed accordingly.
"Local Business Day" means (a) in relation to any obligation under Section
2(a)(i), a General Business Day in the place or places specified in the relevant
Confirmation and a day on which a relevant settlement system is open or
operating as specified in the relevant Confirmation or, if a place or a
settlement system is 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) for the purpose of determining when a Waiting
Period expires, a General Business Day in the place where the event or
circumstance that constitutes or gives rise to the Illegality or Force Majeure
Event, as the case may be, occurs, (c) in relation to any other payment, a
General Business Day 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 and, if that currency does not have a single recognised principal
financial centre, a day on which the settlement system necessary to accomplish
such payment is open, (d) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), a General Business Day (or
a day that would have been a General Business Day but for the occurrence of an
event or circumstance which would, if it occurred with respect to payment,
delivery or compliance related to a Transaction, constitute or give rise to an
Illegality or a Force Majeure Event) in the place 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
(e) in relation to Section 5(a)(v)(2), a General Business Day in the relevant
locations for performance with respect to such Specified Transaction.
"Local Delivery Day" means, for purposes of Sections 5(a)(i) and 5(d), a day on
which settlement systems necessary to accomplish the relevant delivery are
generally open for business so that the delivery is capable of being
accomplished in accordance with customary market practice, in the place
specified in the relevant Confirmation or, if not so specified, in a location as
determined in accordance with customary market practice for the relevant
delivery.
"Master Agreement" has the meaning specified in the preamble.
"Merger Without Assumption" means the event specified in Section 5(a)(viii).
"Multiple Transaction Payment Netting" has the meaning specified in Section
2(c).
"Non-affected Party" means, so long as there is only one Affected Party, the
other party.
"Non-default Rate" means the rate certified by the Non-defaulting Party to be a
rate offered to the Non-defaulting Party by a major bank in a relevant interbank
market for overnight deposits in the applicable currency, such bank to be
selected in good faith by the Non-defaulting Party for the purpose of obtaining
a representative rate that will reasonably reflect conditions prevailing at the
time in that relevant market.
"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.
"Other Amounts" has the meaning specified in Section 6(f).
"Payee" has the meaning specified in Section 6(f).
"Payer" has the meaning specified in Section 6(f).
"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.
"Proceedings" has the meaning specified in Section 13(b).
"Process Agent" has the meaning specified in the Schedule.
"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.
"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.
"Schedule" has the meaning specified in the preamble.
"Scheduled Settlement Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any transaction
(including an agreement with respect to any such transaction) 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 not
a Transaction under this Agreement but (i) which is a rate swap transaction,
swap option, 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, credit protection transaction, credit swap,
credit default swap, credit default option, total return swap, credit spread
transaction, repurchase transaction, reverse repurchase transaction,
buy/sell-back transaction, securities lending transaction, weather index
transaction or forward purchase or sale of a security, commodity or other
financial instrument or interest (including any option with respect to any of
these transactions) or (ii) which is a type of transaction that is similar to
any transaction referred to in clause (i) above that is currently, or in the
future becomes, recurrently entered into in the financial markets (including
terms and conditions incorporated by reference in such agreement) and which is a
forward, swap, future, option or other derivative on one or more rates,
currencies, commodities, equity securities or other equity instruments, debt
securities or other debt instruments, economic indices or measures of economic
risk or value, or other benchmarks against which payments or deliveries are to
be made, (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.
"Stamp Tax Jurisdiction" has the meaning specified in Section 4(e).
"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 an Illegality or a Force Majeure Event, all Affected
Transactions specified in the notice given pursuant to Section 6(b)(iv), (b) if
resulting from any other Termination Event, all Affected Transactions and (c) if
resulting from an Event of Default, all Transactions in effect either
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" means (a) if a Termination Currency is specified in the
Schedule and that currency is freely available, that currency, and (b)
otherwise, euro if this Agreement is expressed to be governed by English law or
United States Dollars if this Agreement is expressed to be governed by the laws
of the State of New York.
"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 Close-out Amount 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 Force Majeure Event, a Tax Event, 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.
"Threshold Amount" means the amount, if any, specified as such in the Schedule.
"Transaction" has the meaning specified in the preamble.
"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) or due but for Section 5(d)) to such party under Section 2(a)(i) or
2(d)(i)(4) on or prior to such Early Termination Date and which remain unpaid as
at such Early Termination Date, (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) or 5(d)) 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 and (c) if the Early
Termination Date results from an Event of Default, a Credit Event Upon Merger or
an Additional Termination Event in respect of which all outstanding Transactions
are Affected Transactions, any Early Termination Amount due prior to such Early
Termination Date and which remains unpaid as of such Early Termination Date, in
each case together with any amount of interest accrued or other compensation in
respect of that obligation or deferred obligation, as the case may be, pursuant
to Section 9(h)(ii)(1) or (2), as appropriate. The fair market value of any
obligation referred to in clause (b) above will be determined as of the
originally scheduled date for delivery, in good faith and using commercially
reasonable procedures, by the party obliged to make the determination under
Section 6(e) or, if each party is so obliged, it will be the average of the
Termination Currency Equivalents of the fair market values so determined by both
parties.
"Waiting Period" means:
(a) in respect of an event or circumstance under Section 5(b)(i), other than in
the case of Section 5(b)(i)(2) where the relevant payment, delivery or
compliance is actually required on the relevant day (in which case no Waiting
Period will apply), a period of three Local Business Days (or days that would
have been Local Business Days but for the occurrence of that event or
circumstance) following the occurrence of that event or circumstance; and
(b) in respect of an event or circumstance under Section 5(b)(ii), other than in
the case of Section 5(b)(ii)(2) where the relevant payment, delivery or
compliance is actually required on the relevant day (in which case no Waiting
Period will apply), a period of eight Local Business Days (or days that would
have been Local Business Days but for the occurrence of that event or
circumstance) following the occurrence of that event or circumstance.
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.
BANK OF AMERICA, N.A. ABFC 2006-OPT1 TRUST
By: Wells Fargo Bank, N.A., as trustee
/s/ R. Vaughn Dodd By:/s/ Graham Oglesby
----------------------------------- -----------------------------------
Name: R. Vaughn Dodd Name: Graham Oglesby
Title: Senior Vice President Title: Assistant Vice President
Date: 8/10/06 Date: 8/10/06
ISDA (R)
International Swaps and Derivatives Association, Inc.
SCHEDULE
to the
2002 Master Agreement
dated as of August 10, 2006
between
BANK OF AMERICA, N.A.,
a national banking association
organized and existing under the laws of the United States of America,
("Party A")
and
ABFC 2006-OPT1 TRUST,
a common law trust
organized and existing under the laws of the State of New York,
with Wells Fargo Bank, N.A. as trustee, and not in its individual capacity
("Party B")
Capitalized terms used herein and not otherwise defined shall have the meaning
specified in that certain Pooling and Servicing Agreement, dated as of July 1,
2006 (the "PSA") among Asset Backed Funding Corporation, as depositor (the
"Depositor"), Option One Mortgage Corporation, as Servicer, and Wells Fargo
Bank, N.A. as trustee (the "Trustee"). For the avoidance of doubt, references
herein to a particular "Section" of this Agreement are references to the
corresponding sections of the Master Agreement.
PART 1: Termination Provisions
(a) "Specified Entity" means in relation to Party A for the purpose of Sections
5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(v):
None;
"Specified Entity" means in relation to Party B for the purpose of Sections
5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(v):
None.
(b) "Specified Transaction" will have the meaning specified in Section 14.
(c) (i) The Events of Default specified under Sections 5(a)(ii), 5(a)(iii),
5(a)(iv), 5(a)(v) and 5(a)(vi) of this Agreement will not apply to Party A
or to Party B. With respect to Party B only (and the related Confirmation
only), the provisions of Section 5(a)(vii) clause 2 will not be applicable
as an Event of Default.
(ii) The Termination Event specified under Section 5(b)(ii) of the
Agreement will not apply to Party A or to Party B.
(d) The "Credit Event Upon Merger" provisions of Section 5(b)(v)
will not apply to Party A
will not apply to Party B.
(e) The "Automatic Early Termination" provision of Section 6(a)
will not apply to Party A
will not apply to Party B.
(f) "Termination Currency" means United States Dollars.
(g) Additional Termination Event will apply. Each of the following events shall
constitute an Additional Termination Event hereunder:
(i) (1) Upon the irrevocable direction to dissolve or otherwise terminate
Party B, following which all of Party B's assets will be liquidated
and the proceeds of such liquidation will be distributed in accordance
with the PSA and this Agreement; or (2) an exercise of an optional
termination of the Trust Fund pursuant to the PSA. For purposes of
Section 6 of this Agreement, Party B shall be the sole Affected Party.
(ii) An amendment and/or supplement to the PSA is made without the prior
written consent of Party A (such consent not to be unreasonably
withheld), where consent of Party A is required under the PSA. For
purposes of Section 6 of this Agreement, Party B shall be the sole
Affected Party.
(iii) Failure by Party A (following the expiration of all notice, grace
and/or cure periods) to comply with its Regulation AB (as defined
herein) requirements as set forth in Part 5(u) hereof. For purposes
of Section 6 of this Agreement, Party A shall be the sole Affected
Party.
(h) Downgrade of Party A. If a Ratings Event (as defined below) shall occur and
be continuing with respect to Party A, then Party A shall (A) within 5
General Business Days of such Ratings Event, give notice to Party B of the
occurrence of such Ratings Event, and (B) use reasonable efforts to
transfer (at its own cost) Party A's rights and obligations under this
Agreement and all Confirmations to another party, subject to satisfaction
of the Rating Agency Condition (as defined below). Unless such a transfer
by Party A has occurred within 20 General Business Days after the
occurrence of a Ratings Event, Party B shall demand that Party A post
Eligible Collateral (as designated in an approved Credit Support Annex), to
secure Party B's exposure or potential exposure to Party A, and such
Eligible Collateral shall be provided in accordance with a Credit Support
Annex to be attached hereto and made a part hereof within 10 General
Business Days of Party B's demand therefor. The Eligible Collateral to be
posted and the Credit Support Annex to be executed and delivered shall be
subject to the Rating Agency Condition. Valuation and posting of Eligible
Collateral shall be made in accordance with the terms of the Credit Support
Annex, then such valuation and posting must occur weekly. Notwithstanding
the addition of the Credit Support Annex and the posting of Eligible
Collateral, Party A shall continue to use reasonable efforts to transfer
its rights and obligations under this Agreement to an acceptable third
party; provided, however, that Party A's obligations to find a transferee
and to post Eligible Collateral under such Credit Support Annex shall
remain in effect only for so long as a Ratings Event is continuing with
respect to Party A. For the purpose of this Part 1(h), a "Ratings Event"
shall occur with respect to Party A if the long-term and short-term senior
unsecured deposit ratings of Party A cease to be at least A+ and A-1 by
Standard & Poor's Ratings Service or any successor thereto ("S&P") or at
least A1 and P-1 by Moody's Investors Service, Inc. or any successor
thereto ("Moody's") or at least A and F1 by Fitch, Inc. or any successor
thereto ("Fitch"), to the extent such obligations are rated by S&P or
Moody's or Fitch. "Rating Agency Condition" means, with respect to any
action taken or to be taken, a condition that is satisfied when S&P,
Moody's and Fitch have confirmed that such action would not result in the
downgrade, qualification (if applicable) or withdrawal of the rating then
assigned by such Rating Agency to the applicable class of Certificates.
The failure by Party A to post Eligible Collateral in accordance herewith
or to transfer its rights and obligations hereunder shall constitute an
Additional Termination Event for which Party A shall be the sole Affected
Party.
PART 2: Tax Representations
(a) Payer Tax Representations. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will make the following representation:-
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Section 9(h) of this Agreement) to be
made by it to the other party under this Agreement. In making this
representation, it may rely on (i) the accuracy of any representations made
by the other party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of
this Agreement and the accuracy and effectiveness of any document provided
by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement and (iii) the satisfaction of the agreement of the other party
contained in Section 4(d) of this Agreement, except that it will 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, Party A and Party B will make the following representations
specified below, if any:-
(i) The following representations will apply to Party A:
Party A is a national banking association created or organized under
the laws of the United States of America and the federal taxpayer
identification number is 94-1687665.
(ii) The following representations will apply to Party B:
Party B is a common law trust created or organized under the laws of
the State of New York and the federal taxpayer identification number
is ________________.
PART 3: Agreement to Deliver Documents
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents:
(a) Tax forms, documents or certificates to be delivered are:
Party required to Date by which to be
deliver document Form/Document/Certificate delivered
---------------- ------------------------- ---------------------------
Party B Internal Revenue (i) Before the first
Service Form W-9 Payment Date under this
Agreement, (ii) promptly
upon reasonable demand by
Party A and (iii) promptly
upon learning that any
such form previously
provided to Party A has
become obsolete or
incorrect
(b) Other documents to be delivered are:-
Party
required to Date by which Covered by
deliver to be Section 3(d)
document Form/Document/Certificate delivered Representation
-------- ------------------------- --------- --------------
Party A Annual Report of Bank of To be made Yes
America Corporation available on
containing audited, www.bankof
consolidated financial america.com/
statements certified by investor/
independent certified as soon as
public accountants and available and
prepared in accordance in any event
with generally accepted within 90
accounting principles in days after
the country in which such the end of
party is organized each fiscal
year of
Party A
Party A Quarterly Financial To be made Yes
Statements of Bank of available on
America Corporation www.bankof
containing unaudited, america.com/
consolidated financial investor/
statements of such party's as soon as
fiscal quarter prepared in available and
accordance with generally in any event
accepted accounting within 30
principles in the country days after
in which such party is the end of
organized each fiscal
quarter of
Party A
Party A and Certified copies of all Within 15 Yes
Party B corporate, partnership, days of the
trust or membership execution and
authorizations, as the delivery of
case may be, and any other this Agreement
documents with respect to
the execution, delivery
and performance of this
Agreement and any Credit
Support Document
Party A and Certificate of authority Upon Yes
Party B and specimen signatures of execution and
individuals executing this delivery of
Agreement and any Credit this
Support Document Agreement and
thereafter
upon request
of the other
party
Party B Credit Support Document, Within 15 Yes
if any, specified in Part days of the
4 hereof, such Credit execution and
Support Document being delivery of
duly executed if required this Agreement
Party B Legal opinion from counsel Upon No
for Party B concerning due execution and
authorization, delivery of
enforceability and related this Agreement
matters, addressed to
Party A and acceptable to
Party A.
Party B Copy of each report Upon Yes
delivered and/or made availability
available under the PSA.
PART 4: Miscellaneous
(a) Address for Notices. For the purpose of Section 12(a) of this Agreement:
Address for notice or communications to Party A:
Bank of America, N.A.
Sears Tower
233 South Wacker Drive, Suite 2800
Chicago, IL 60606
Attention: Swap Operations
Telephone No.: 312-234-2732
Facsimile No.: 866-255-1444
with a copy to:
Bank of America, N.A.
100 N. Tryon St., NC1-007-13-01
Charlotte, North Carolina 28255
Attention: Capital Markets Documentation
Facsimile No.: 704-386-4113
Address for financial statements and PSA related documents and reports to
Party A:
Bank of America, N.A.
Mail Code: NC1-027-15-01
214 North Tryon Street
Charlotte, North Carolina 28255
Attention: CR Structured Finance
Address for notice or communications to Party B:
ABFC 2006-OPT1 TRUST
9062 Old Annapolis Road
Columbia, Maryland 21045
Attention: Client Manager-Asset Backed Funding Corporation 2006-OPT
1 Trust
Telephone No.: (410) 884-7000
Facsimile No.: (410) 715-2380
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
Party B appoints as its Process Agent: The Trustee.
(c) Offices. The provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch Party. For the purpose of Section 10(b) of this Agreement:-
Party A is a Multibranch Party and may enter into a Transaction through its
Charlotte, North Carolina, Chicago, Illinois, San Francisco, California,
New York, New York, Boston, Massachusetts or London, England Office or such
other Office as may be agreed to by the parties in connection with a
Transaction.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is Party A.
(f) Credit Support Document. Details of any Credit Support Document:-
Each of the following, as amended, extended, supplemented or otherwise
modified in writing from time to time, is a "Credit Support Document":
In relation to Party A, none (unless a Credit Support Annex is entered into
in accordance with the provisions detailed in Part 1(h) of this Agreement,
in which case, such Credit Support Annex)
In relation to Party B, the PSA.
(g) Credit Support Provider.
Credit Support Provider means in relation to Party A: Not applicable.
Credit Support Provider means in relation to Party B: Not applicable.
(h) Governing Law. This Agreement and any and all controversies arising out of
or in relation to this Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to its
conflict of laws doctrine).
(i) Netting of Payments. Unless the parties otherwise so agree, "Multiple
Transaction Payment Netting" will apply for the purpose of Section 2(c) of
this Agreement, starting as of the date of this Agreement.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement.
(k) Absence of Litigation. For the purpose of Section 3(c):- "Specified Entity"
means in relation to Party A, none;
"Specified Entity" means in relation to Party B, none.
(l) No Agency. The provisions of Section 3(g) will apply to this Agreement.
(m) Additional Representation will apply. For the purpose of Section 3 of this
Agreement, each of the following will constitute an Additional
Representation:-
Relationship Between Parties. Each party will be deemed to represent to the
other party on the date on which it enters into a Transaction (and on the
date of any amendment, extension or other modification of such Transaction)
that (absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for that Transaction):-
(A) Non-Reliance. (1) it is acting for its own account and it has made its
own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon
its own judgment and upon advice from such advisors as it has deemed
necessary; (2) it is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation
to enter into that Transaction, it being understood that information
and explanations related to the terms and conditions of a Transaction
shall not be considered investment advice or a recommendation to enter
into that Transaction; (3) no communication (written or oral) received
from the other party will be deemed to be an assurance or guarantee as
to the expected results of that Transaction; (4) it is capable of
evaluating and understanding (on its own behalf or though independent
professional advice), and understand and accepts, the terms,
conditions and risks of that Transaction; and (5) it is capable of
assuming, and assumes the financial and other risks of that
Transaction.
(B) Assessment and Understanding. It is capable of assessing the merits of
and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the risks of that Transaction.
(C) Status of Parties. The other party is not acting as a fiduciary for or
an advisor to it in respect of that Transaction.
(D) Eligible Contract Participant. It is an "eligible contract
participant" as defined in Section 1a(12) of the U.S. Commodity
Exchange Act, 7 U.S.C. Section 1a(12).
(E) It has entered into this Agreement (including each Transaction
evidenced hereby) in conjunction with its line of business (including
financial intermediation services) or the financing of its business.
(F) It is entering into this Agreement, any Credit Support Document to
which it is a party, each Transaction and any other documentation
relating to this Agreement or any Transaction as principal (and not as
agent or in any other capacity, fiduciary or otherwise).
(n) Recording of Conversations. Each party (i) consents to the recording of
telephone conversations between the trading, marketing and other relevant
personnel of the parties in connection with this Agreement or any potential
Transaction and (ii) agrees, to the extent permitted by applicable law,
that recordings may be submitted in evidence in any Proceedings.
PART 5: Other Provisions
(a) Delivery of Confirmations. For each Transaction entered into hereunder,
Party A shall promptly send to Party B a Confirmation (which may be via
facsimile transmission). Party B agrees to respond to such Confirmation
within two General Business Days, either confirming agreement thereto or
requesting a correction of any error(s) contained therein. Failure by Party
A to send a Confirmation or of Party B to respond within such period shall
not affect the validity or enforceability of such Transaction. Absent
manifest error, there shall be a presumption that the terms contained in
such Confirmation are the terms of the Transaction.
(b) Waiver of Right to Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY CREDIT SUPPORT DOCUMENT
OR ANY TRANSACTION CONTEMPLATED HEREBY.
(c) 2002 Master Agreement Protocol. Annexes 1 to 18 and Section 6 of the ISDA
2002 Master Agreement Protocol as published by the International Swaps and
Derivatives Association, Inc. on July 15, 2003 are incorporated into and
apply to this Agreement. References in those definitions and provisions to
any ISDA Master Agreement will be deemed to be references to this Master
Agreement.
(d) Consent to Disclosure. Party B consents to Party A effecting such
disclosure as Party A may deem appropriate to enable Party A to transfer
Party B's records and information to process and execute Party B's
instructions, or in pursuance of Party A's or Party B's commercial
interest, to any of its Affiliates. For the avoidance of doubt, Party B's
consent to disclosure includes the right on the part of Party A to allow
access to any intended recipient of Party B's information to the records of
Party A by any means.
(e) USA PATRIOT Act Notice. Party A hereby notifies Party B that pursuant to
the requirements of the USA Patriot Act (Title III of Pub. L. 107-56
(signed into law October 26, 2001)) (the "Act"), it is required to obtain,
verify and record information that identifies Party B, which information
includes the name and address of Party B and other information that will
allow Party A to identify Party B in accordance with the Act.
(f) Representations. Section 3(a)(iii) is hereby amended by inserting the words
"or investment policies, or guidelines, procedures, or restrictions,"
immediately following the word "documents."
(g) Financial Statements. Section 3(d) is hereby amended by adding in the third
line thereof after the word "respect" and before the period:
"or, in the case of financial statements, a fair presentation of the
financial condition of the relevant party."
(h) Furnishing Specified Information. Section 4(a)(iii) is hereby amended by
inserting "promptly upon the earlier of (1)" in lieu of the word "upon" at
the beginning thereof and inserting "or (2) such party learning that the
form or document is required" before the word "any" on the first line
thereof.
(i) Set-off. Without affecting the provisions of this Agreement requiring the
calculation of certain net payment amounts, as a result of an Event of
Default or Additional Termination Event or otherwise, all payments under
this Agreement will be made without setoff or counterclaim. Section 6(f) of
this Agreement is deleted in its entirety.
(j) Additional Acknowledgments and Agreements of the Parties.
(i) No Amendment without Prior Confirmation by Rating Agencies. Section
9(b) of this Agreement is hereby amended by adding the following at
the end of such Section: ", and the Rating Agencies confirm that such
amendment will not cause the reduction, suspension or withdrawal of
the then current rating on any of the Certificates, unless such
amendment clarifies any term or provision, corrects any inconsistency,
cures any ambiguity, or corrects any typographical error in the
Agreement (in which case copies of such proposed amendment will be
provided to the Rating Agencies prior to the effectiveness of such
amendment)."
(ii) Consent by Party A to Amendments to Certain Documents. Before any
amendment or supplement is made to the PSA(where consent of Party A to
such amendment or supplement is required under the PSA), Party B shall
provide Party A with a copy of the proposed amendment or supplement
and shall obtain the written consent of Party A(which consent shall
not be unreasonably withheld) to the extent required by the PSA.
(k) Method of Notice. Section 12(a)(ii) of this Agreement is deleted in its
entirety.
(l) Definitions. Capitalized terms used within this Agreement or in the
Confirmations to the Transaction but not defined herein or therein shall
have the meanings assigned to such terms in the PSA.
(m) Notices to Certificateholders. Party B shall provide Party A with copies of
all notices given to the holders of the Certificates, and upon request,
shall provide Party A with any other notices which could be requested by
the holders of the Certificates.
(n) Further Representations of Party B:
(i) Party B represents and warrants at all times hereunder that (x) it is
not an "employee benefit plan" subject to Section 406 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or a "plan"
subject to Section 4975 of the Internal Revenue Code of 1986, as amended
(the "Code"), or any person who is acting on behalf of such an employee
benefit plan or plan (collectively, a "Plan") in connection with any
Transaction under this Agreement or (y) any Plan that purchases a
certificate issued by Party B while this Agreement is in effect (i) shall
represent or shall be deemed to represent that the purchase of such
certificate is in reliance on at least one of Prohibited Transaction Class
Exemption 84-14, 90-1, 91-38, 95-60 or 96-23 or (ii) shall provide an
opinion of counsel which states that such purchase is permissible under
applicable law and will not result in a non-exempt prohibited transaction
under ERISA or Section 4975 of the Code. It is not, and is not controlled
by, an "investment company" within the meaning of, and is not required to
register as an "investment company" under, the Investment Company Act of
1940, as amended.
(ii) Party B represents and warrants at all times hereunder that pursuant
to the terms of the PSA, there is no provision providing for the partial
liquidation of the Trust Fund.
(o) Transfer. Party A may assign its rights and obligations under this
Agreement to any entity so long as the Rating Agency Condition is
satisfied.
(p) Non-Petition. Party A hereby agrees that it will not, prior to the date
which is one year and one day after all Certificates (as such term is
defined in the PSA) issued by Party B pursuant to the PSA have been paid in
full, acquiesce, petition or otherwise invoke or cause Party B to invoke
the process of any court or governmental authority for the purpose of
commencing or sustaining a case against Party B under any federal or state
bankruptcy, insolvency or similar law or for the purpose of appointing a
receiver, liquidator, assignee, trustee, custodian, sequestrator or other
similar official for Party B or any substantial part of the property of
Party B, or for the purpose of ordering the winding up or liquidation of
the affairs of Party B. Nothing herein shall prevent Party A from
participating in any such proceeding once commenced.
(q) Limited Recourse. The obligations of Party B under this Agreement are
limited recourse obligations of Party B, payable solely from the Trust
Fund(as such term is defined in the PSA), subject to and in accordance with
the terms of the PSA, and, following realization of the Trust Fund, any
claims of Party A against Party B shall be extinguished. It is understood
that the foregoing provisions shall not (i) prevent recourse to the Trust
Fund for the sums due or to become due under any security, instrument or
agreement which is part of the Trust Fund (subject to the priority of
payments set forth in the PSA) or (ii) constitute a waiver, release or
discharge of any obligation of Party B arising under this Agreement until
the Trust Fund have been realized and the proceeds applied in accordance
with the PSA, whereupon any outstanding obligation of Party B under this
Agreement shall be extinguished. Notwithstanding the foregoing (or anything
to the contrary in this Agreement), Party B shall be liable for its own
fraud, negligence, willful misconduct and/or bad faith.
(r) Jurisdiction. Section 13(b) of this Agreement is hereby amended by: (i)
deleting the word "non-" in the second line of subparagraph (i)(2) thereof;
(ii) adding the words "except as necessary to pursue enforcement of the
judgment of any such court in other jurisdictions" to the last line of
subparagraph (i)(2) thereof; and (iii) deleting paragraph (iii) thereof.
(s) Safe Harbors. Each party to this Agreement acknowledges that:
(i) This Agreement, including any Credit Support Document, is a "master
netting agreement" as defined in the U.S. Bankruptcy Code (the
"Code"), and a "netting contract" as defined in the netting provisions
of the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), and this Agreement, including any Credit Support Document,
and each Transaction hereunder is of a type set forth in Section
561(a)(1)-(5) of the Code;
(ii) Party A is a "master netting agreement participant," a "financial
institution," a "financial participant," a "forward contract merchant"
and a "swap participant" as defined in the Code, and a "financial
institution" as defined in the netting provisions of FDICIA;
(iii) The remedies provided herein, and in any Credit Support Document, are
the remedies referred to in Section 561(a), Sections 362(b)(6), (7),
(17) and (27), and Section 362(o) of the Code, and in Section
11(e)(8)(A) and (C) of the Federal Deposit Insurance Act;
(iv) All transfers of cash, securities or other property under or in
connection with this Agreement, any Credit Support Document or any
Transaction hereunder are "margin payments," "settlement payments" and
"transfers" under Sections 546(e), (f), (g) or (j), and under Section
548(d)(2) of the Code; and
(v) Each obligation under this Agreement, any Credit Support Document or
any Transaction hereunder is an obligation to make a "margin payment,"
"settlement payment" and "payment" within the meaning of Sections 362,
560 and 561 of the Code.
(t) Trustee Capacity. It is expressly understood and agreed by the parties
hereto that insofar as this Agreement is executed by the Trustee (i) this
Agreement is executed and delivered by Wells Fargo Bank, N.A., not in its
individual capacity but solely as Trustee pursuant to the PSA referred to
in this Agreement in the exercise of the powers and authority conferred and
vested in it thereunder, (ii) each of the representations, undertakings and
agreements herein made on behalf of Party B is made and intended not as
personal representations of the Trustee, but is made and intended for the
purpose of binding only Party B and (iii) under no circumstances shall
Wells Fargo Bank, N.A. in its individual capacity be personally liable for
the payment of any indebtedness or expenses or be personally liable for the
breach or failure of any obligation, representation, warranty or covenant
made or undertaken under this Agreement. Notwithstanding the foregoing (or
anything to the contrary in this Agreement), Wells Fargo Bank, N.A. shall
be liable for its own fraud, negligence, willful misconduct and/or bad
faith.
(u) Compliance with Regulation AB. In connection with the PSA, Party B
represents that this Agreement is a derivative instrument as described in
Item 1115 of Regulation AB under the Securities Act of 1933 and the
Securities Exchange Act of 1934, as amended ("Regulation AB"), and not a
credit support contract described in Item 1114 of Regulation AB.
(a) In accordance with Regulation AB, Party A represents that: (i) the name
of the derivative counterparty is Bank of America, N.A.; (ii) the
organizational form of the derivative counterparty is a national banking
association organized under the laws of the United States; and (iii) the
general character of the business of the derivative counterparty is to be
engaged in a general consumer banking, commercial banking and trust
business, offering a wide range of commercial, corporate, international,
financial market, retail and fiduciary banking services.
(b) Party A has been advised that Party B (and/or certain Affiliates of
Party B) is required under Regulation AB to disclose certain financial
information regarding Party A depending on the applicable "significance
percentage" of this Agreement, as calculated from time to time in
accordance with Item 1115 of Regulation AB (as discussed in the PSA). Party
A has been advised by the Sponsor (as defined in the PSA) that the
applicable "significance percentage" of this Agreement is less than 10%,
and accordingly, that as of the date hereof, no financial information
regarding Party A need be disclosed in accordance with Item 1115 of
Regulation AB.
(c) If required, Party A shall provide to Party B the applicable financial
information described under Item 1115(b)(1) or (b)(2), as applicable, of
Regulation AB, including agreed upon procedure letters and related consents
of certified public accountants with respect thereto (if necessary)(the
"Reg AB Information") within five (5) Business Days of receipt of a written
request for such Reg AB Information by Party B (the "Response Period"), so
long as Party B has reasonably determined, in good faith, that such
information is required under Regulation AB; provided, however, that if
Party A is unable to provide the Reg AB Information within the Response
Period, then Party A shall, at its option, either (i) cause a Reg AB
Approved Entity (as defined below) to replace Party A as party to this
Agreement on terms substantially similar to this Agreement and provide the
required Reg AB Information(along with indemnity to the Depositer covering
such required Reg AB Information) prior to the expiration of the Response
Period or (ii) subject to the Rating Agency Condition, obtain a guarantee
from an affiliate that is a Reg AB Approved Entity and cause such affiliate
to provide the required Reg AB Information prior to the expiration of the
Response Period.
(d) "Reg AB Approved Entity" means any entity that (i) has the ability to
provide the Reg AB Information and (ii) meets or exceeds the Approved
Rating Thresholds (as defined below). If Party B requests (in writing) the
Reg AB Information from Party A, then Party B shall promptly (and in any
event within two (2) Business Days of the date of the request for the Reg
AB Information) provide Party A with a written explanation of how the
significance percentage was calculated.
(e) "Approved Rating Thresholds" means an entity that has a long-term and
short-term senior unsecured deposit rating of at least AA- and A-1 by S&P,
and AA- and F1 by Fitch, to the extent such obligations are rated by S&P
and Fitch.
IN WITNESS WHEREOF, the parties have executed this Schedule by their duly
authorized officers as of the date hereof.
BANK OF AMERICA, N.A. ABFC 2006-OPT1 TRUST
/s/ R. Vaughn Dodd
------------------------------
Name: R. Vaughn Dodd
Title: Senior Vice President By: Wells Fargo Bank, N.A., as trustee
/s/ Graham Oglesby
------------------------------
Name: Graham Oglesby
Title: Assistant Vice President
Signature Page-Schedule to the ISDA Master
[LOGO] BANK OF
AMERICA
To: ABFC 2006-OPT1 TRUST, acting through Wells Fargo
Bank, N.A. as trustee (not in its individual
capacity)
Wells Fargo Bank, N.A.
9062 Old Annapolis Road
Columbia, Maryland 21045
Attn: Client Manager - ABFC 2006-OPT1
Telephone: 410-884-2000
Facsimile: 410-715-2380
From: Bank of America, N.A.
233 South Wacker Drive - Suite 2800
Chicago Illinois 60606 U.S.A.
Department: Swaps Operations
Telephone: (+1) 312 234 2732
Fax: (+1) 866 255 1444
Date: 10th August 2006
Our Reference No: 13538867
Reference Name: Pat Duthie
Internal Tracking No: 13538867
Dear Sir/Madam,
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between ABFC 2006-OPT1 TRUST, acting through Wells
Fargo Bank, N.A. as trustee (not in its individual capacity) (each a "party" and
together "the parties") on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the ISDA
Master Agreement specified below (the "Agreement").
The definitions and provisions contained in the 2000 ISDA Definitions, as
published by the International Swaps and Derivatives Association, Inc. (the
"Definitions"), are incorporated into this Confirmation. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.
This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms a part of, and is subject to the ISDA Master Agreement dated
as of 10th August 2006, as amended and supplemented from time to time (the
"Agreement"), between the parties hereto. All provisions contained in the
Agreement govern this Confirmation except as expressly modified below.
In this Confirmation "Party A" means Bank of America, N.A. and "Party B" means
ABFC 2006-OPT1 TRUST, acting through Wells Fargo Bank, N.A. as trustee (not in
its individual capacity)
General Terms:
The terms of the particular Transaction to which this Confirmation relates are
as follows:
Notional Amount: As per Schedule A below.
Trade Date: 7th August 2006
Effective Date: 10th August 2006
Termination Date: 25th July 2011, subject to adjustment in accordance with
the Modified Following Business Day Convention
Fixed Amounts:
Fixed Rate Payer: Party B
Early Payment: Applicable, 1 Business Day prior to each Fixed Rate Payer
Period End Date
Fixed Rate Payer
Period End Dates: The 25th of each Month, commencing on 25th August 2006 and
ending on the Termination Date, subject to adjustment in
accordance with the Following Business Day Convention
Fixed Rate: 5.34500 per cent
Fixed Rate Day
Count Fraction: 30/360
Floating Amounts:
Floating Rate
Payer: Party A
Early Payment: Applicable, 1 Business Day prior to each Floating Rate
Payer Period End Date
Floating Rate Payer
Period End Dates: The 25th of each Month, commencing on 25th August 2006 and
ending on the Termination Date, subject to adjustment in
accordance with the Following Business Day Convention
Floating Rate for
initial Calculation
Period: to be determined
Floating Rate
Option: USD-LIBOR-BBA
Designated 1 Month, provided that Linear Interpolation will apply to
Maturity: the initial Calculation Period
Spread: None
Floating Rate Day
Count Fraction: Actual/360
Reset Dates: First day of each Calculation Period
Business Days: New York
Calculation Agent: Party A
Account Details:
Party A: Payments to Bank of America, N.A:
USD Fedwire
Name: Bank of America, N.A. - New York
ABA #: 026009593
Attn: BOFAUS3N
Name: Bank of America, N.A.
City: Charlotte
Acct#: 6550219386
Attn: Rate Derivative Settlements
Attn: BOFAUS6SGDS
Party B: Wells Fargo Bank N.A.
San Francisco, CA
ABA: 121000248
ACCT: 3970771416
ACCT Name: SAS Clearing
FFC: 50939401
Offices:
The Office of Party A
for this Transaction
is: Charlotte - NC, United States
Please send reset notices to fax no.
(+1) 866 218 8487
The Office of Party B
for this Transaction
is: Wells Fargo Bank, N.A.
9062 Old Annapolis Rd
Columbia, MD 21045
ATTN: ABFC 2006-OPT1 Trust
SCHEDULE A
Calculation Period
scheduled to Notional Amount
commence on: (USD):
08/10/06 1,082,162,766.00
08/25/06 1,074,465,936.00
09/25/06 1,064,381,041.00
10/25/06 1,051,908,277.00
11/27/06 1,037,062,899.00
12/26/06 1,019,875,701.00
01/25/07 1,000,393,767.00
02/26/07 978,679,890.00
03/26/07 954,813,106.00
04/25/07 928,888,429.00
05/25/07 901,101,913.00
06/25/07 871,607,797.00
07/25/07 843,015,528.00
08/27/07 815,361,646.00
09/25/07 788,615,342.00
10/25/07 762,746,818.00
11/26/07 737,727,257.00
12/26/07 713,528,785.00
01/25/08 690,124,445.00
02/25/08 667,488,167.00
03/25/08 645,594,734.00
04/25/08 624,419,759.00
05/27/08 603,939,656.00
06/25/08 81,538,509.00
07/25/08 77,056,332.00
08/25/08 72,235,399.00
09/25/08 67,785,806.00
10/27/08 64,971,643.00
11/25/08 62,795,053.00
12/26/08 60,695,050.00
01/26/09 58,668,831.00
02/25/09 56,713,696.00
03/25/09 54,827,048.00
04/27/09 53,006,386.00
05/26/09 51,249,305.00
06/25/09 45,224,972.00
07/27/09 40,757,424.00
08/25/09 39,465,239.00
09/25/09 38,216,347.00
10/26/09 37,009,224.00
11/25/09 35,842,399.00
12/28/09 34,714,458.00
01/25/10 33,624,037.00
02/25/10 32,569,822.00
03/25/10 31,550,547.00
04/26/10 30,564,993.00
05/25/10 29,611,984.00
06/25/10 28,690,388.00
07/26/10 27,799,113.00
08/25/10 26,937,107.00
09/27/10 26,103,358.00
10/25/10 25,296,887.00
11/26/10 24,516,754.00
12/27/10 23,762,050.00
01/25/11 23,031,901.00
02/25/11 22,325,463.00
03/25/11 21,641,924.00
04/25/11 20,980,498.00
05/25/11 20,340,431.00
06/27/11 14,101,030.00
| EX-10.4 | Last “Page” of 5 | TOC | 1st | Previous | Next | ↓Bottom | Just 5th |
|---|
Please confirm that the foregoing correctly sets forth the terms and conditions
of our agreement by returning via telecopier an executed copy of this
Confirmation in its entirety to the attention of Global FX and Derivative
Operations (fax no.(+1) 866 255 1444).
Accepted and confirmed as of the date
first written:
Bank of America, N.A. ABFC 2006-OPT1 TRUST, acting through
Wells Fargo Bank, N.A. as trustee (not
in its individual capacity)
By:/s/ Luis Casas By:/s/ Peter A. Gobell
----------------------------- -----------------------------
Authorized Signatory Name: Peter A. Gobell
Title: Vice President
Our Reference No: 13538867
Internal Tracking No: 13538867
Dates Referenced Herein and Documents Incorporated by Reference
↑Top
Filing Submission 0000914121-06-002702 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Sat., Apr. 20, 5:56:38.1am ET 
