Exhibit 10.6
 
ISDA®
International Swaps and Derivatives Association, Inc.
 
2002 MASTER AGREEMENT
dated as of December 30, 2010
 
SOVEREIGN BANK
and
RANOR, INC.

 
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 feet
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this “Agreement” and the parties would
not otherwise enter into any Transactions.
 
2. Obligations
 
(a) General Conditions.
 
(i) Each party will make each payment or delivery specified in each Confirmation
to be made by it, subject to the other provisions of this Agreement.
 
(ii) Payments under this Agreement will be made on the due date for value on
that date in the place of the account specified in the relevant Confirmation or
otherwise pursuant to this Agreement, in freely transferable funds and in the
manner customary for payments in the required currency. Where settlement is by
delivery (that is, other than by payment), such delivery will be made for
receipt on the due date in the manner customary for the relevant obligation
unless otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
 
(iii) Each obligation of each party undo- 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 the Early Termination Date in respect of file 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).
 
 
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(b) Change of Account. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the Scheduled 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 feat 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 m respect of the same Transaction, The
election may he made m 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, fee 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 foil 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
 
 
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(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)(m) or 4(d); or
 
(B) fee 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 (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 token 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 foiled 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(4), 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(1), 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 organized and validly existing under the laws of the
jurisdiction of its organization 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 authorize such execution,
delivery and performance;
 
 
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(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, reorganization, 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 title.
 
(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 aid 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:
 
 
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(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 &e 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 me Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
 
(b) Maintain Authorizations. 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, organized, 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:
 
 
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(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 patty to comply with or perform any agreement or obligation
(other than an obligation to make any payment under taxis 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;
 
(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 bas elapsed;
 
(2) the expiration or termination of such Credit Support Document or the tailing
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 fee purpose of
this Agreement (is 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;
 
 
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(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 an 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 all 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, referenced 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:
 
 
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(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 wife primary insolvency,
rehabilitative or regulatory jurisdiction over it in the jurisdiction of its
incorporation or organization 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 effecting 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 o£ 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 reorganizes, reincorporates
or reconstitutes into or as, another entity and, at the time of such
consolidation, amalgamation, merger, transfer, reorganization, 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.
 
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 ell 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 die 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
is respect of the Affected Transactions to another of its Offices or Affiliates
so that such Termination Event ceases to exist
 
 
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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 alter 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 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.
 
 
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(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) lie 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,
 
 
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(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
Hon-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 credit Worthiness 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)(i).
 
(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)(m)(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
son 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).
 
 
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(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 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).
 
6. 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.
 
 
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7. 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
fee 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 me 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 me 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 m 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.
 
8. 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.
 
 
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(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 m 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.
 
 
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(2) Compensation for Defaulted Deliveries. If a party defaults in the
performance of any obligations 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 deterred payment, for the period from (and
including) the dale the amount would, but for Section 5(d), have been payable to
(but excluding) fee earlier of the date (he payment is no longer deferred
pursuant to Section 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 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.
 
 
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(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.
 
(i) 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 Stir market value of any obligation required to be settled by delivery
included m 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 bees 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 fee period from
(and including) such Early Termination Date to (but excluding) the date the
amount is paid, at the Applicable Close-out Rate.
 
(ii) 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.
 
9. Offices; Multibranch Parties
 
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction trough an Office other man 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 organization, 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 deli
very 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).
 
 
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(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.
 
10. 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.
 
11. 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 is 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 mall (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.
 
 
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(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.
 
12. 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 is
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, wife 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.
 
 
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13. 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 Hon-defaulting Party, die 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 mat amount is payable;
 
 
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(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) m ail 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 fee 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, fee 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 fee 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) and clauses (a)(iv), (b)(i)(3) and
(b)(n)Q) of the definition of Applicable Close-out Rate, a rate equal to die
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 fond or of funding the
relevant amount.
 
“Automatic Early Termination” has the meaning specified in Section 6(a).
 
 
20

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“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 realized under then prevailing
circumstances (expressed as a negative number) in replacing, or in providing for
file 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 patties under Section 2(a)(i) in respect of mat
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 die 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, die Determining Party may include costs of funding, to the extern
costs of funding are not and would not be a component of the other information
being utilized. 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.
 
 
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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 b determining a Closeout 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 me preamble.
 
“consent” includes a consent, approval, action, authorization, 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.
 
 
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“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 me 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 organized, present or engaged in a trade or business hi
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 m the place or places specified in die 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 (he 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 recognized 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 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.
 
 
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“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 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 in Section 6(1).
 
“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, wife 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.
 
 
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“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seal, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
 
“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)(1) 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 surely 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 delimit 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, 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 say stamp, documentation or similar tax.
 
“Stamp Tax Jurisdiction” has the meaning 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 man 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.
 
 
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“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 tee laws
of the Sate of Hew 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 fie 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 me purchase of such Other
Currency for value on we 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 effected 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.
 
 
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“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 fee 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
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.
 
 
 
SOVEREIGN BANK
 
By: /s/ Stephen R. Andrews                                                   
Name: Stephen R. Andrews
Title: Senior Vice President
Date: December 30, 2010
RANOR, INC.
 
By: /s/ Stanely
Youtt                                                                                                                             
 
Name: Stanley Youtt
Title: President and CEO
Date: December 28, 2010

 
 
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ISDA®
International Swap and Derivatives Association, Inc.

SCHEDULE
 
to the
Master Agreement

dated as of

December 30, 2010

between

SOVEREIGN BANK
And
RANOR, INC.
(“Party A”)
 
(“Party B”)

 
 
Part 1. Termination Provisions.

In The Agreement:

(a)
“Specified Entity” means in relation to Party A for the purpose of:

Section 5(a)(v),
None;

Section 5(a)(vi),
None;

Section 5(a)(vii),
None; and

Section 5(b)(v),
None;

 
and in relation to Party B for the purpose of:

Section 5(a)(v),
None;

Section 5(a)(vi),
None;

Section 5(a)(vii),
None; and

Section 5(b)(v),
None.

 
If a party or any Credit Support Provider of a party is a partnership, then for
purposes of Section 5(a)(v), 5(a)(vi), 5(a)(vii) and 5(b)(v), “Specified Entity”
also means each general partner of that partnership.

 (b)           “Specified Transaction” will have the meaning specified in
Section 14 of this Agreement.

(c)  
The “Cross Default” provisions of Section 5(a)(vi) will apply to Party A and to
Party B.

“Specified Indebtedness” will have the meaning specified in Section 14 of this
Agreement; provided, however, that indebtedness or obligations in respect of
deposits received in the ordinary course of the banking business shall not
constitute Specified Indebtedness.
 
 
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“Threshold Amount” will mean

(i)  
with respect to Party A, the greater of $100,000,000 or 2% of stockholders’
equity of Party A as reflected on its most recent financial statements , and

(ii)  
with respect to Party B, an amount equal to any amount of Specified
Indebtedness.

(d)  
The “Credit Event Upon Merger” provisions of Section 5(b)(v) will apply to Party
A and to Party B.

(e)  
The “Automatic Early Termination” provisions of Section 6(a) will not apply to
Party A or to Party B.

(f)  
“Termination Currency” will mean U.S. Dollars as per Section 14 of this
Agreement.

(g)  
Payments On Early Termination. If an Early Termination Date occurs for any
reason, the amount, if any, payable in respect of that Early Termination Date
(the “Early Termination Amount”) will be determined pursuant to Section 6(e) and
will be subject to Section 6(f). Party A will always be the Determining Party
for the purpose of determining the Close-out Amount, notwithstanding any
provision in Section 6(e) or 6(f).

(h)  
Additional Termination Event. In addition to the Termination Events specified in
Section 5(b), the occurrence of either of the following shall constitute an
Additional Termination Event, subject to Section 5(b)(vi):

(i)  
Both (a) all of the principal, interest, fees and other amounts owing by Party B
(which will be the Affected Party) under or in respect of the Financial
Agreement shall have been paid in full and (b) all commitments of Party A to
make extensions of credit under or in respect of, or as contemplated by, the
Financial Agreement shall have expired or been terminated in accordance with
their terms.

(ii)  
If a party (which will be the Affected Party), or Specified Entity of that party
is a natural person, the death of, or the appointment of a guardian for that
natural person.

 
 (i)
The following provision is hereby added to Section 5(a) of the Agreement as an
Event of Default:

 
“(ix) Unsatisfied Judgments. With respect to Party B, the party, any Credit
Support Provider of such party or any Specified Entity of such party for the
purpose of Section 5(a)(vii) has a final judgment issued against it by a court
of competent jurisdiction and such judgment is not discharged or its execution
stayed pending appeal within 30 days of such judgment or such judgment is not
discharged within 30 days of the expiration of any such stay.”

Part 2.
Tax Representations.

(a)
Payer Representations. For the purpose of Section 3(e) of this Agreement, Party
A and Party B each makes the following representation:

It is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 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.
 
 
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(b)
Payee Representations. For the purpose of Section 3(f) of this Agreement, Party
A and Party B each makes the following representation:

It is a “U.S. person” (as that term is used in section 1.l441-4(a)(3)(ii) of
United States Treasury Regulations) for United States federal income tax
purposes.

Part 3.                      Agreement to Deliver Documents.

For the purpose of Section 4(a) of this Agreement, each party agrees to deliver
the following documents, as applicable:

Party required to deliver document
Form/Document Certificate
Date by which to be delivered
Covered by Section 3(d)
Representation?
Party B
A certificate of an authorized officer for such party and any Credit Support
Provider of
such party certifying the authority, names and true signatures of the officers
signing this Agreement, each Confirmation and any Credit Support Document,
reasonably
satisfactory in form and substance to Party A.
Upon execution of this Agreement and as deemed necessary for any further
documentation.
 
Yes
Party B
Certified copies of documents evidencing each action taken by Party B and any
Credit Support Provider of such party to authorize its execution of this
Agreement,
each Confirmation, and any Credit Support Document referred to in Part 3 of
this Schedule, and the performance of its obligations hereunder as well
as its bylaws and articles of incorporation.
Upon execution of this Agreement.
Yes
Party B
Annual financial statements prepared in a form acceptable to Party A.
Promptly upon request.
Yes
Party B
Quarterly financial statements prepared in a form acceptable to Party A.
Promptly upon request.
Yes
Party B
A written opinion of legal counsel to Party B and any Credit Support Provider
for Party B reasonably satisfactory in form and substance to Party A.
Upon execution of this Agreement if requested and as deemed necessary.
No
Party B
Such other documents as Party A may reasonably request in
connection with each transaction.
Promptly upon request.
Yes

 
 
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Part 4. Miscellaneous.

(a)
 
Addresses for Notices. For the purpose of Section 12(a) of this Agreement:

 
Address for notices or communications to Party A:
Sovereign Bank
Derivatives Desk
75 State Street
MA1-SST-0413
Boston, MA 02109
 
Attention: Nancy Cronin
 
Telephone Number: 617-757-5501
Facsimile Number: 617-346-7494
E-Mail: ncronin@sovereignbank.com
 
 
Address for notices or communications to Party B:
Ranor, Inc.
 
Ranor, Inc.
Attention: Mary Desmond
 
Telephone Number: 978-874-0591 ext 102
Facsimile Number: 978-874-2748
E-Mail: desmondm@ranor.com
Electronic Messaging System Details:
Specific Instructions:

(b) Process Agent. For the purpose of Section 13(c) of this Agreement
 
Party A appoints as its Process
Agent:                                                                           Not
Applicable
Party B appoints as its Process
Agent:                                                                           Not
Applicable

(c)           Offices. The provisions of Section 10(a) will not apply to this
Agreement.

(d)
Multibranch Party. For the purpose of Section 10 of this Agreement, neither
Party A nor Party B is a Multibranch Party.

(e)
Calculation Agent. The Calculation Agent is Party A.

(f)
 “Credit Support Document” means each document which, by its terms, secures,
guarantees or otherwise supports Party B’s obligations hereunder from time to
time, whether or not this Agreement, any Transaction, or any type of Transaction
entered into hereunder is specifically referenced or described in any such
document.

(g)           “Credit Support Default” is amended by adding at the end of
Section 5(a)(iii):

“(4) any default, event of default or other similar condition or event (however
described) exists under any Credit Support Document, any action is taken to
realize upon any collateral provided to secure such party’s obligations
hereunder or under any Transaction, or the other party fails at any time to have
a valid and perfected first priority security interest in any such collateral.”
 
 
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(h)
Definitions. Section 14 of this Agreement is hereby amended to add the following
definitions in their appropriate alphabetical order:

 
“Stockholders Equity” means, at any time, the sum (as shown on the most recent
Annual Audited Financial Statements of the applicable Party at such time) of (i)
its capital stock (including preferred stock) outstanding, taken at par value,
(ii) its capital surplus and (iii) its retained earnings, minus (iv) treasury
stock, each to be determined in accordance with generally accepted accounting
principles.

 
“Financial Agreement” for the purposes hereof, means each existing or future
agreement or instrument relating to any loan or extension of credit from Party A
to Party B (whether or not anyone else is a Party hereto), as the same exists
when executed and without regard to any termination or cancellation thereof, or
unless consented to in writing by Party A, any amendment, modification,
addition, waiver or consent thereto or thereof.

(i)
“Credit Support Provider” means each party to a Credit Support Document that
provides or is expected to provide security, a guaranty or other credit support
for Party B’s obligations hereunder.

(j)
Governing Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York without reference to choice of law
doctrine.

(k)
Netting of Payments. “Multiple Transaction Payment Netting” will apply for the
purpose of Section 2(c) of this Agreement to all Transactions in each case
starting from the date of this Agreement.

(l)           “Affiliate” will have the meaning specified in Section 14 of this
Agreement.

(m)           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.

(n)           No Agency. The provisions of Section 3(g) will apply to this
Agreement.

(o)
Consent to Recording. 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, (ii)
agrees to obtain any necessary consent of, and give any necessary notice of such
recording to, its relevant personnel and (iii) agrees, to the extent permitted
by applicable law, that recordings may be submitted in evidence in any
Proceedings.

(p)  
Waiver of Jury Trial. To the extent permitted by applicable law, each party
irrevocably waives any and all right to trial by jury in any legal proceeding in
connection with this Agreement, any Credit Support Document to which it is a
party, or any Transaction.

(q)
Joint Party. If more than one entity or natural person is executing this
Agreement as Party B, then

 
 
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(i)  
the obligations of the party B hereunder and under each Transaction shall be the
joint and several obligations of each such entity or natural person,

(ii)  
any Event of Default or Potential Event of Default occurring with respect to any
such entity or natural person shall be an Event of Default or Potential Event of
Default, respectively, with respect to party B,

(iii)  
the death, release or discharge, in whole or in part, of any such entity or
natural person, or the occurrence of any bankruptcy, liquidation, dissolution or
any other event described in Section 5(a)(vii) with respect to any such entity
or natural person, shall not discharge or affect the liabilities of any other
such entity or natural person, shall not discharge or affect the liabilities of
any other such entity or natural person;

(iv)  
unless the context otherwise requires, each reference herein or in any
Confirmation to “party” shall, as applied to Party B, be construed as a joint
and several reference to each such entity or natural person; and

(v)  
any person or entity receiving notices given to Party B, at the address shown
above shall be deemed to receive such notices on behalf of each such entity or
person.

(r) 
Severability. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions of the Agreement or affecting the validity or
enforceability of such provisions in any other jurisdiction. The Parties hereto
shall endeavor in good faith negotiations to replace the prohibited or
unenforceable provisions with a valid provision, the economic effect of which
comes as close as possible to that of the prohibited or unenforceable provision.

 
Part 5. Other Provisions.
 
 (a)
2000 ISDA Definitions. The definitions and provisions contained in the 2000 ISDA
Definitions (the “2000 Definitions”) and the 1998 FX and Currency Option
Definitions (the “FX Definitions”) as published by the International Swaps and
Derivatives Association, Inc. are incorporated into this Agreement by reference.
For these purposes, all references in the 2000 Definitions to a “Swap
Transaction” and all references in the FX Definitions to a “FX Transaction” or
“Currency Option” shall be deemed to apply to each Transaction under this
Agreement. With respect to FX Transactions, in the event of any inconsistency
between the 2000 Definitions and the FX Definitions, the FX Definitions will
prevail. Any definitions incorporated into a Confirmation shall prevail over the
provisions of this Agreement, or the 2000 Definitions or the FX Definitions.

(b)
Right of Set-off. If any amount payable hereunder is not paid as and when due,
the party (“Party X”) obligated to make that payment hereby authorizes the other
party (“Party Y”) and each Affiliate of Party Y to proceed, to the fullest
extent permitted by applicable law, without prior notice, by Right of Set-off,
banker’s lien, counterclaim or otherwise, against any assets of Party X that may
at any time be in the possession of Party Y or that Affiliate, at any branch or
office, to the full extent of all amounts payable to Party Y hereunder.

 
 
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In addition, if a party would, but for this provision, have an obligation to pay
the other party any amount calculated pursuant to Section 6(e) in connection
with early termination which occurs on the ground of (i) a Termination Event in
which that other party is the only Affected Party or (ii) an Event of Default
with respect to that other party at a time when any amount is payable (whether
at such time or in the future or upon the occurrence of a contingency) to that
party or its Affiliate by that other party under any other agreement between
them or any instrument or undertaking of that other party (each such amount, an
“Other Obligation”), the party that, but for this provision would have an
obligation to make a payment hereunder is authorized by that other party to
Set-off that obligation hereunder against any Other Obligation, without prior
notice. If an obligation is unascertained, the party exercising a Right of
Set-off hereunder 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.

If the party exercises a Right of Set-off hereunder, it shall give the other
party notice of the amounts of the obligations hereunder and the Other
Obligations reduced and discharged by the Set-off, as soon as practicable after
the Set-off is effected.
 

Nothing in this provision, titled Right of Set-off, shall be effective to create
a charge or other security interest. This provision, titled Right of Set-off,
shall be without prejudice and in addition to any Right of Setoff, combination
of accounts, lien or other right to which any party is at any time otherwise
entitled (whether by operation of law or otherwise).

(c)  
Confirmations. For each Transaction Party A and Party B agree to enter into
hereunder, Party A shall promptly send to Party B a Confirmation setting forth
the terms of such Transaction. Party B shall execute and return the Confirmation
to Party A or request correction of any error within two Local Business Days of
trade date. Failure of Party B to respond within such period shall not affect
the validity or enforceability of such Transaction and shall be deemed to be an
affirmation of such terms.

(d)  
Notice of Event of Default. Each party agrees, upon learning of the occurrence
of any event or commencement of any condition that constitutes an Event of
Default or a Potential Event of Default with respect to itself, promptly to give
the other party notice of such event or condition. Failure to give notice within
30 days of learning of such event or condition shall constitute an Event of
Default with respect to such party.

(e)  
Change of Account. Section 2(b) of this Agreement is hereby amended by the
addition of the following after the word “delivery” in the first line thereof:

“to another account in the same legal and tax jurisdiction as the original
account,”

(f)  
Consent to Transfer. Section 7 of this Agreement is amended by deleting the word
“and” at the end of paragraph (a); replacing the period at the end of paragraph
(b) with the phrase “; and”; and inserting the following paragraph:

“(c)           Party A may transfer, without the consent of Party B (or any
Credit Support Provider and Specified Entity of Party B), this Agreement and all
or any portion of the Transactions under this Agreement in the event that any of
Party B’s obligation(s) to Party A or its Affiliates, as identified in Part 3 of
this Agreement, are sold, transferred, or otherwise assigned by Party A to
another party, in which case Party B (and each Credit Support Provider and
Specified Entity of Party B) shall execute, or cause to be executed, such
documents, instruments and agreements, including without limitation, amendments
to this Agreement, as Party A shall deem necessary to effect the foregoing,
including, but not limited to any release by Party B (or any Credit Support
Provider or Specified Entity of Party B) of Party A’s obligations under this
Agreement.”
 
 
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(g)  
Pari Passu Basis of Security for Obligations. All of the obligations of Party B
(or any Credit Support Provider or Specified Entity of Party B) under this
Agreement shall be secured on a pari passu basis by all of the collateral
provided to secure Party B’s obligations under any Financial Agreement unless it
would result in a default under any such Financial Agreement.

(h)  
Covenants of Financial Agreements.

(i)           Party B shall provide Party A at all times hereunder with the same
covenant protection as Party A requires of Party B under Financial Agreements.
Therefore, in addition to the Cross Default provisions of this Agreement, and
notwithstanding the satisfaction of any obligation or promise to pay money to
Party A under any Financial Agreement, or the termination or cancellation of any
Financial Agreement, Party B hereby agrees to perform, comply with and observe
for the benefit of Party A hereunder all affirmative and negative covenants
contained in each Financial Agreement applicable to Party B (excluding any
obligation or promise to pay money under any Financial Agreement) at any time
Party B has any obligation (whether absolute or contingent) under this
Agreement.

(ii)           For purposes hereof: (A) the affirmative and negative covenants
of each Financial Agreement applicable to Party B (together with related
definitions and ancillary provisions, but in any event excluding any obligation
or promise to pay money under any Financial Agreement) are incorporated (and
upon execution of any future Financial Agreement, shall automatically be
incorporated) by reference herein (mutatis mutandis): (B) if other lenders or
creditors are parties to any Financial Agreement then references therein to the
lenders or creditors shall be deemed references to Party A: and (C) for any such
covenant applying only when any loan, other extension of credit, obligation or
commitment under the Financial Agreement is outstanding, that covenant shall be
deemed to apply hereunder at any time Party B has any obligation (whether
absolute or contingent) under this agreement.

(iii)           Notwithstanding the foregoing, if the incorporation of any
provision by reference from any Financial Agreement would result in the
violation by Party B of the terms of that Financial Agreement, this Agreement
shall not incorporate that provision.

(i)
Representations. The introductory clause of Section 3 of this Agreement is
hereby amended to read in its entirety as follows:

“Each party makes each of the representations contained in Section 3 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 Sections 3(a) and 3(f), at all times until the termination of
this Agreement), absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that Transaction. 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, absent a written
agreement between the parties that expressly imposes affirmative obligations to
the contrary for that Transaction.”
 
 
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(j)
Accuracy of Specified Information. Section 3(d) is hereby amended by adding in
the third line thereof after the word “respect” and before the period:

 
“or, in the case of audited or unaudited financial statements, a fair
presentation of the financial condition of the relevant party”

(k)  
Additional Representations. For purposes of Section 3 of this Agreement, the
following shall be added, immediately following paragraph (g) thereof and the
parties agree that each additional representation contained in this Part 5(k)
shall be deemed repeated by the party making such representation on each date on
which a Transaction is entered into:

 
(h)
This Agreement and each Transaction constitutes a “swap agreement” within the
meaning of Commodity Futures Trading Commission (“CFTC”) regulations Section
35.1(b)(1).

 
(i)
It is an “eligible swap participant” within the meaning of CFTC Regulations
Section 35.1(b)(2).

 
(j)
Neither this Agreement nor any Transaction is one of a fungible class of
agreements that are standardized as to their material economic terms, within the
meaning of CFTC Regulations Section 35.2(b).

 
(k)
The creditworthiness of the other party was or will be a material consideration
in entering into or determining the terms of this Agreement and each
Transaction, including pricing, cost or credit enhancement terms of the
Agreement or Transaction, within the meaning of CFTC Regulations Section
35.2(c).

 
(l)
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 rather than for any speculative
purpose.

  
 (m)
The individual(s) executing and delivering this Agreement and any other
documentation (including any Credit Support Document) relating to this Agreement
to which it is a party or that it is required to deliver are duly empowered and
authorized to do so, and it has duly executed and delivered this Agreement and
any Credit Support Documents to which it is a party.

 
(n)  
Party B represents and warrants that, since the date of Party B’s (and any
Credit Support Provider’s or Specified Entity’s) latest audited financial
statements, there has been no material adverse change in its financial condition
or results of operations which has not been disclosed to Party A.

 
(o)
Non-Reliance. In connection with the negotiation of, the entering into, and the
confirming of the execution of this Agreement, and Credit Support Document to
which it is a party, each Transaction, and any other documentation relating to
this Agreement to which it is a party or that it is required by this Agreement
to deliver:

 
 
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(i)
it is not relying (for purposes of making any investment decision or otherwise)
upon any advice, counsel, or representations (whether written or oral) of the
other party to this Agreement, such Credit Support Document, each Transaction or
such other documentation other than the representations expressly set forth in
this Agreement, such Credit Support Document and in any Confirmation;

 
(ii)
it has consulted with its own legal, regulatory, tax, business, investment,
financial and accounting advisors to the extent it has deemed necessary, and it
has made its own independent investment, hedging and trading decisions
(including decisions regarding the suitability of any Transaction pursuant to
this Agreement) based upon any advice from such advisors as it has deemed
necessary and not upon any view expressed by the other party to this Agreement,
such Credit Support Document, each Transaction or such other documentation;

 
(iii)
it is capable of assessing the merits of and of understanding (on its own behalf
or through independent professional advice) and understands all the terms,
conditions, and risks (economic and otherwise) of the Agreement, such Credit
Support Document, each Transaction, and such other documentation and is capable
of assuming and willing to assume (financially and otherwise) those terms,
conditions, and risks;

 
(iv)
it is entering into this Agreement, such Credit Support Document, each
Transaction, and such other documentation for the purposes of managing its
borrowings or investments, hedging its underlying assets or liabilities or in
connection with a line of business and not for purposes of speculation;

 

 
(v)
it is entering into this Agreement, such Credit Support Document, each
Transaction, and such other documentation as principal, and not as agent or in
any other capacity, fiduciary or otherwise.

 

 
(vi)
 it is acting for its own account, and it has made its own independent decisions
to enter into that Transaction and as to whether that Transaction is appropriate
or proper for it based upon its own judgment and upon advice from such advisers
as it has deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation to enter
into that Transaction, it being understood that information and explanations
related to the terms and conditions of a Transaction will not be considered
investment advice or a recommendation to enter into that Transaction. 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.

 
SOVEREIGN BANK
 
RANOR, INC.
 
By:
/s/ Stephen R. Andrews
 
By:
/s/ Stanley Youtt                                           
Name:
Stephen R. Andrews
 
Name:
Stanley Youtt
Title:
Senior Vice President
 
Title:
President & CEO

 
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