**Exhibit 10.1****ISDA****International Swaps and Derivatives Association, Inc.****2002 MASTER AGREEMENT**dated as of December 1, 2005**BANK OFAMERICA, N.A.                    . and AMERICAN PACIFIC CORPORATION**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”) exchangedbetween the parties or otherwise effective for the purpose of confirming or evidencing thoseTransactions. This 2002 Master Agreement and the Schedule are together referred to as this “MasterAgreement”.Accordingly, the parties agree as follows:—**1. Interpretation**(a) ***Definitions***. The terms defined in Section 14 and elsewhere in this Master Agreement will havethe 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 theother provisions of this Master Agreement, the Schedule will prevail. In the event of anyinconsistency between the provisions of any Confirmation and this Master Agreement, suchConfirmation will prevail for the purpose of the relevant Transaction.(c) ***Single Agreement.***All Transactions are entered into in reliance on the fact that this MasterAgreement and all Confirmations form a single agreement between the parties (collectively referredto 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 madeby 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 inthe place of the account specified in the relevant Confirmation or otherwise pursuant tothis Agreement, in freely transferable funds and in the manner customary for payments in therequired currency. Where settlement is by delivery (that is, other than by payment), suchdelivery will be made for receipt on the due date in the manner customary for the relevantobligation unless otherwise specified in the relevant Confirmation or elsewhere in thisAgreement.Copyright© 2002 by International Swaps and Derivatives Association, Inc.

 
(iii) Each obligation of each party under Section 2(a)(i) is subject to (1)the condition precedent that no Event of Default or Potential Event of Default with respectto the other party has occurred and is continuing, (2) the condition precedent that no EarlyTermination Date in respect of the relevant Transaction has occurred or been effectivelydesignated and (3) each other condition specified in this Agreement to be a conditionprecedent for the purpose of this Section 2(a)(iii).(b) ***Change of Account***. Either party may change its account for receiving a payment or delivery bygiving notice to the other party at least five Local Business Days prior to the ScheduledSettlement Date for the payment or delivery to which such change applies unless such other partygives 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 suchamount will be automatically satisfied and discharged and, if the aggregate amount that wouldotherwise have been payable by one party exceeds the aggregate amount that would otherwise havebeen payable by the other party, replaced by an obligation upon the party by which the largeraggregate amount would have been payable to pay to the other party the excess of the largeraggregate amount over the smaller aggregate amount.The parties may elect in respect of two or more Transactions that a net amount and paymentobligation will be determined in respect of all amounts payable on the same date in the samecurrency in respect of those Transactions, regardless of whether such amounts are payable inrespect of the same Transaction. The election may be made in the Schedule or any Confirmation byspecifying that “Multiple Transaction Payment Netting” applies to the Transactions identified asbeing subject to the election (in which case clause (ii) above will not apply to suchTransactions). If Multiple Transaction Payment Netting is applicable to Transactions, it will applyto those Transactions with effect from the starting date specified in the Schedule or suchConfirmation, or, if a starting date is not specified in the Schedule or such Confirmation, thestarting date otherwise agreed by the parties in writing. This election may be made separately fordifferent groups of Transactions and will apply separately to each pairing of Offices through whichthe 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 orwithholding for or on account of any Tax unless such deduction or withholding is required byany applicable law, as modified by the practice of any relevant governmental revenueauthority, 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 orwithheld (including the full amount required to be deducted or withheld from anyadditional amount paid by X to Y under this Section 2(d)) promptly upon the earlierof determining that such deduction or withholding is required or receiving noticethat such amount has been assessed against Y;(3) promptly forward to Y an official receipt (or a certified copy), or otherdocumentation reasonably acceptable to Y, evidencing such payment to suchauthorities; and**ISDA®2002**
2

 
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Yis otherwise entitled under this Agreement, such additional amount as is necessaryto ensure that the net amount actually received by Y (free and clear ofIndemnifiable Taxes, whether assessed against X or Y) will equal the full amount Ywould have received had no such deduction or withholding been required. However, Xwill not be required to pay any additional amount to Y to the extent that it wouldnot be required to be paid but for:—(A) the failure by Y to comply with or perform any agreement contained inSection 4(a)(i), 4(a)(iii) or 4(d); or(B) the failure of a representation made by Y pursuant to Section 3(f) to beaccurate and true unless such failure would not have occurred but for (I)any action taken by a taxing authority, or brought in a court of competentjurisdiction, after a Transaction is entered into (regardless of whethersuch action is taken or brought with respect to a party to this Agreement)or (II) a Change in Tax Law. (ii) ***Liability.***If:—(1) X is required by any applicable law, as modified by the practice of anyrelevant governmental revenue authority, to make any deduction or withholding inrespect of which X would not be required to pay an additional amount to Y underSection 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 fromsuch Tax, Y will promptly pay to X the amount of such liability (including any relatedliability for interest, but including any related liability for penalties only if Y hasfailed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or4(d)).**3.** **Representations**Each party makes the representations contained in Sections 3(a), 3(b), 3(c), 3(d), 3(e) and 3(f)and, if specified in the Schedule as applying, 3(g) to the other party (which representations willbe deemed to be repeated by each party on each date on which a Transaction is entered into and, inthe case of the representations in Section 3(f), at all times until the termination of thisAgreement). If any “Additional Representation” is specified in the Schedule or any Confirmation asapplying, the party or parties specified for such Additional Representation will make and, ifapplicable, be deemed to repeat such Additional Representation at the time or times specified forsuch Additional Representation.(a) ***Basic Representations.***(i) ***Status.***It is duly organised and validly existing under the laws of the jurisdiction ofits organisation or incorporation and, if relevant under such laws, in good standing;(ii) ***Powers.***It has the power to execute this Agreement and any other documentation relatingto this Agreement to which it is a party, to deliver this Agreement and any otherdocumentation relating to this Agreement that it is required by this Agreement to deliverand to perform its obligations under this Agreement and any obligations it has under anyCredit Support Document to which it is a party and has taken all necessary action toauthorise such execution, delivery and performance;**ISDA®2002**
3

 
(iii) ***No Violation or Conflict.***Such execution, delivery and performance do not violate orconflict 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 anyof its assets or any contractual restriction binding on or affecting it or any of itsassets;(iv) ***Consents.***All governmental and other consents that are required to have beenobtained by it with respect to this Agreement or any Credit Support Document to whichit is a party have been obtained and are in full force and effect and all conditions ofany such consents have been complied with; and(v) ***Obligations Binding.***Its obligations under this Agreement and any CreditSupport Document to which it is a party constitute its legal, valid and bindingobligations, enforceable in accordance with their respective terms (subject toapplicable bankruptcy, reorganisation, insolvency, moratorium or similar laws affectingcreditors’ rights generally and subject, as to enforceability, to equitable principlesof general application (regardless of whether enforcement is sought in a proceeding inequity or at law)).(b) ***Absence of Certain Events.***No Event of Default or Potential Event of Default or, to itsknowledge, Termination Event with respect to it has occurred and is continuing and no such event orcircumstance would occur as a result of its entering into or performing its obligations under thisAgreement 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 ofits Credit Support Providers or any of its applicable Specified Entities any action, suit orproceeding at law or in equity or before any court, tribunal, governmental body, agency or officialor any arbitrator that is likely to affect the legality, validity or enforceability against it ofthis Agreement or any Credit Support Document to which it is a party or its ability to perform itsobligations under this Agreement or such Credit Support Document.(d) ***Accuracy of Specified Information.***All applicable information that is furnished in writing byor on behalf of it to the other party and is identified for the purpose of this Section 3(d) in theSchedule is, as of the date of the information, true, accurate and complete in every materialrespect.(e) ***Payer Tax Representation.***Each representation specified in the Schedule as being made by it forthe purpose of this Section 3(e) is accurate and true.(f) ***Payee Tax Representations.***Each representation specified in the Schedule as being made by itfor the purpose of this Section 3(f) is accurate and true.(g) ***No Agency.***It is entering into this Agreement, including each Transaction, as principal and notas 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 underthis Agreement or under any Credit Support Document to which it is a party:—(a) ***Furnish Specified Information.***It will deliver to the other party or, in certain cases underclause (iii) below, to such government or taxing authority as the other party reasonablydirects:-(i) any forms, documents or certificates relating to taxation specified in the Schedule orany Confirmation;(ii) any other documents specified in the Schedule or any Confirmation; and**ISDA®2002**
4

 
(iii) upon reasonable demand by such other party, any form or document that may be required orreasonably requested in writing in order to allow such other party or its Credit SupportProvider to make a payment under this Agreement or any applicable Credit Support Documentwithout any deduction or withholding for or on account of any Tax or with such deduction orwithholding at a reduced rate (so long as the completion, execution or submission of suchform or document would not materially prejudice the legal or commercial position of theparty in receipt of such demand), with any such form or document to be accurate andcompleted in a manner reasonably satisfactory to such other party and to be executed and tobe delivered with any reasonably required certification,in each case by the date specified in the Schedule or such Confirmation or, if none is specified,as soon as reasonably practicable.(b) ***Maintain Authorisations.***It will use all reasonable efforts to maintain in full force andeffect all consents of any governmental or other authority that are required to be obtained by itwith respect to this Agreement or any Credit Support Document to which it is a party and will useall 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 ordersto which it may be subject if failure so to comply would materially impair its ability to performits 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 Section3(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 uponit or in respect of its execution or performance of this Agreement by a jurisdiction in which it isincorporated, organised, managed and controlled or considered to have its seat, or where an Officethrough 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 orin respect of the other party’s execution or performance of this Agreement by any such Stamp TaxJurisdiction 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, anyCredit Support Provider of such party or any Specified Entity of such party of any of the followingevents constitutes (subject to Sections 5(c) and 6(e)(iv)) an event of default (an “Event ofDefault”) with respect to such party:—(i) ***Failure to Pay or Deliver.***Failure by the party to make, when due, any payment underthis Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) required to be made byit if such failure is not remedied on or before the first Local Business Day in the case ofany such payment or the first Local Delivery Day in the case of any such delivery after, ineach case, notice of such failure is given to the party;(ii) ***Breach of Agreement; Repudiation of Agreement.***(1) Failure by the party to comply with or perform any agreement orobligation (other than an obligation to make any payment under this Agreement ordelivery under Section 2(a)(i) or 9(h)(i)(2) or (4) or to give notice of aTermination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or4(d)) to be complied with or performed by the party in accordance with thisAgreement if such failure is not remedied within 30 days after notice of suchfailure is given to the party; or(2) the party disaffirms, disclaims, repudiates or rejects, in whole or in part, orchallenges the validity of, this Master Agreement, any Confirmation executed anddelivered by that party or any**ISDA®2002**
5

 
Transaction evidenced by such a Confirmation (or such action is taken by any personor 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 withor perform any agreement or obligation to be complied with or performed by it inaccordance with any Credit Support Document if such failure is continuing after anyapplicable grace period has elapsed;(2) the expiration or termination of such Credit Support Document or the failing orceasing of such Credit Support Document, or any security interest granted by suchparty or such Credit Support Provider to the other party pursuant to any such CreditSupport Document, to be in full force and effect for the purpose of this Agreement(in each case other than in accordance with its terms) prior to the satisfaction ofall obligations of such party under each Transaction to which such Credit SupportDocument relates without the written consent of the other party; or(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates orrejects, in whole or in part, or challenges the validity of, such Credit SupportDocument (or such action is taken by any person or entity appointed or empowered tooperate it or act on its behalf);(iv) ***Misrepresentation.***A representation (other than a representation under Section3(e) or 3(f)) made or repeated or deemed to have been made or repeated by the partyor any Credit Support Provider of such party in this Agreement or any Credit SupportDocument proves to have been incorrect or misleading in any material respect whenmade or repeated or deemed to have been made or repeated;(v) ***Default Under Specified Transaction.***The party, any Credit Support Provider of suchparty or any applicable Specified Entity of such party:—(1) defaults (other than by failing to make a delivery) under a SpecifiedTransaction or any credit support arrangement relating to a Specified Transactionand, after giving effect to any applicable notice requirement or grace period, suchdefault results in a liquidation of, an acceleration of obligations under, or anearly termination of, that Specified Transaction;(2) defaults, after giving effect to any applicable notice requirement or graceperiod, in making any payment due on the last payment or exchange date of, or anypayment on early termination of, a Specified Transaction (or, if there is noapplicable notice requirement or grace period, such default continues for at leastone Local Business Day);(3) defaults in making any delivery due under (including any delivery due on thelast delivery or exchange date of) a Specified Transaction or any credit supportarrangement relating to a Specified Transaction and, after giving effect to anyapplicable notice requirement or grace period, such default results in a liquidationof, an acceleration of obligations under, or an early termination of, alltransactions outstanding under the documentation applicable to that SpecifiedTransaction; or(4) disaffirms, disclaims, repudiates or rejects, in whole or in part, or challengesthe validity of, a Specified Transaction or any credit support arrangement relatingto a Specified Transaction that is, in either case, confirmed or evidenced by adocument or other confirming evidence executed and delivered by that party, CreditSupport Provider or Specified Entity (or such action is taken by any person orentity appointed or empowered to operate it or act on its behalf);**ISDA®2002**
6

 
(vi) ***Cross-Default.***If “Cross-Default” is specified in the Schedule as applying to the party, theoccurrence or existence of:—(1) a default, event of default or other similar condition or event (howeverdescribed) in respect of such party, any Credit Support Provider of such party orany applicable Specified Entity of such party under one or more agreements orinstruments relating to Specified Indebtedness of any of them (individually orcollectively) where the aggregate principal amount of such agreements orinstruments, either alone or together with the amount, if any, referred to in clause(2) below, is not less than the applicable Threshold Amount (as specified in theSchedule) which has resulted in such Specified Indebtedness becoming, or becomingcapable at such time of being declared, due and payable under such agreements orinstruments 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 agreementsor instruments on the due date for payment (after giving effect to any applicablenotice requirement or grace period) in an aggregate amount, either alone or togetherwith the amount, if any, referred to in clause (1) above, of not less than theapplicable Threshold Amount;(vii) ***Bankruptcy.***The party, any Credit Support Provider of such party or any applicableSpecified Entity of such party:—(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger);(2) becomes insolvent or is unable to pay its debts or fails or admits in writingits inability generally to pay its debts as they become due; (3) makes a generalassignment, arrangement or composition with or for the benefit of its creditors;(4)(A) institutes or has instituted against it, by a regulator, supervisor or anysimilar official with primary insolvency, rehabilitative or regulatory jurisdictionover it in the jurisdiction of its incorporation or organisation or the jurisdictionof its head or home office, a proceeding seeking a judgment of insolvency orbankruptcy or any other relief under any bankruptcy or insolvency law or othersimilar law affecting creditors’ rights, or a petition is presented for itswinding-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 orbankruptcy or any other relief under any bankruptcy or insolvency law or othersimilar law affecting creditors’ rights, or a petition is presented for itswinding-up or liquidation, and such proceeding or petition is instituted orpresented 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 forrelief or the making of an order for its winding-up or liquidation or (II) is notdismissed, discharged, stayed or restrained in each case within 15 days of theinstitution 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 anadministrator, provisional liquidator, conservator, receiver, trustee, custodian orother similar official for it or for all or substantially all its assets; (7) has asecured party take possession of all or substantially all its assets or has adistress, execution, attachment, sequestration or other legal process levied,enforced or sued on or against all or substantially all its assets and such securedparty maintains possession, or any such process is not dismissed, discharged, stayedor restrained, in each case within 15 days thereafter; (8) causes or is subject toany 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 consentto, approval of, or acquiescence in, any of the foregoing acts; or**ISDA®2002**
7

 
(viii) ***Merger Without Assumption.***The party or any Credit Support Provider of such partyconsolidates or amalgamates with, or merges with or into, or transfers all or substantiallyall its assets to, or reorganises, reincorporates or reconstitutes into or as, anotherentity and, at the time of such consolidation, amalgamation, merger, transfer,reorganisation, reincorporation or reconstitution:—(1) the resulting, surviving or transferee entity fails to assume all theobligations of such party or such Credit Support Provider under this Agreement orany 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 consentof the other party) to the performance by such resulting, surviving or transfereeentity of its obligations under this Agreement.(b) ***Termination Events.***The occurrence at any time with respect to a party or, if applicable, anyCredit Support Provider of such party or any Specified Entity of such party of any event specifiedbelow constitutes (subject to Section 5(c)) an Illegality if the event is specified in clause (i)below, a Force Majeure Event if the event is specified in clause (ii) below, a Tax Event if theevent is specified in clause (iii) below, a Tax Event Upon Merger if the event is specified inclause (iv) below, and, if specified to be applicable, a Credit Event Upon Merger if the event isspecified pursuant to clause (v) below or an Additional Termination Event if the event is specifiedpursuant to clause (vi) below:—(i) ***Illegality.***After giving effect to any applicable provision, disruptionfallback or remedy specified in, or pursuant to, the relevant Confirmation or elsewhere inthis Agreement, due to an event or circumstance (other than any action taken by a party or,if applicable, any Credit Support Provider of such party) occurring after a Transaction isentered into, it becomes unlawful under any applicable law (including without limitation thelaws of any country in which payment, delivery or compliance is required by either party orany Credit Support Provider, as the case may be), on any day, or it would be unlawful if therelevant payment, delivery or compliance were required on that day (in each case, other thanas a result of a breach by the party of Section 4(b)):—(1) for the Office through which such party (which will be the AffectedParty) makes and receives payments or deliveries with respect to such Transaction toperform any absolute or contingent obligation to make a payment or delivery inrespect of such Transaction, to receive a payment or delivery in respect of suchTransaction or to comply with any other material provision of this Agreementrelating to such Transaction; or(2) for such party or any Credit Support Provider of such party (which will be theAffected Party) to perform any absolute or contingent obligation to make a paymentor delivery which such party or Credit Support Provider has under any Credit SupportDocument relating to such Transaction, to receive a payment or delivery under suchCredit Support Document or to comply with any other material provision of suchCredit Support Document;(ii) ***Force Majeure Event.***After giving effect to any applicable provision, disruptionfallback or remedy specified in, or pursuant to, the relevant Confirmation or elsewhere inthis Agreement, by reason of force majeure or act of state occurring after a Transaction isentered into, on any day:—(1) the Office through which such party (which will be the Affected Party) makes andreceives payments or deliveries with respect to such Transaction is prevented fromperforming any absolute or contingent obligation to make a payment or delivery inrespect of such Transaction, from receiving a payment or delivery in respect of suchTransaction or from complying with any other material provision of this Agreementrelating to such Transaction (or would be so prevented if such payment, delivery orcompliance were required on that day), or it becomes impossible or**ISDA®2002**
8

 
impracticable for such Office so to perform, receive or comply (or it would beimpossible or impracticable for such Office so to perform, receive or comply if suchpayment, delivery or compliance were required on that day); or(2) such party or any Credit Support Provider of such party (which will be theAffected Party) is prevented from performing any absolute or contingent obligationto make a payment or delivery which such party or Credit Support Provider has underany Credit Support Document relating to such Transaction, from receiving a paymentor delivery under such Credit Support Document or from complying with any othermaterial provision of such Credit Support Document (or would be so prevented if suchpayment, delivery or compliance were required on that day), or it becomes impossibleor impracticable for such party or Credit Support Provider so to perform, receive orcomply (or it would be impossible or impracticable for such party or Credit SupportProvider so to perform, receive or comply if such payment, delivery or compliancewere required on that day),so long as the force majeure or act of state is beyond the control of such Office, suchparty or such Credit Support Provider, as appropriate, and such Office, party or CreditSupport Provider could not, after using all reasonable efforts (which will not require suchparty or Credit Support Provider to incur a loss, other than immaterial, incidentalexpenses), overcome such prevention, impossibility or impracticability;(iii) ***Tax Event.***Due to (1) any action taken by a taxing authority, or brought in a court ofcompetent jurisdiction, after a Transaction is entered into (regardless of whether suchaction is taken or brought with respect to a party to this Agreement) or (2) a Change in TaxLaw, the party (which will be the Affected Party) will, or there is a substantial likelihoodthat it will, on the next succeeding Scheduled Settlement Date (A) be required to pay to theother party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4)(except in respect of interest under Section 9(h)) or (B) receive a payment from which anamount is required to be deducted or withheld for or on account of a Tax (except in respectof interest under Section 9(h)) and no additional amount is required to be paid in respectof such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));(iv) ***Tax Event Upon Merger.***The party (the “Burdened Party”) on the next succeedingScheduled Settlement Date will either (1) be required to pay an additional amount in respectof an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest underSection 9(h)) or (2) receive a payment from which an amount has been deducted or withheldfor or on account of any Tax in respect of which the other party is not required to pay anadditional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case asa result of a party consolidating or amalgamating with, or merging with or into, ortransferring all or substantially all its assets (or any substantial part of the assetscomprising the business conducted by it as of the date of this Master Agreement) to, orreorganising, reincorporating or reconstituting into or as, another entity (which will bethe Affected Party) where such action does not constitute a Merger Without Assumption;(v) ***Credit Event Upon Merger.***If “Credit Event Upon Merger” is specified in the Schedule asapplying to the party, a Designated Event (as defined below) occurs with respect to suchparty, any Credit Support Provider of such party or any applicable Specified Entity of suchparty (in each case, “X”) and such Designated Event does not constitute a Merger WithoutAssumption, and the creditworthiness of X or, if applicable, the successor, surviving ortransferee entity of X, after taking into account any applicable Credit Support Document, ismaterially weaker immediately after the occurrence of such Designated Event than that of Ximmediately prior to the occurrence of such Designated Event (and, in any such event, suchparty or its successor, surviving or transferee entity, as appropriate, will be the AffectedParty). A “Designated Event” with respect to X means that:—(1) X consolidates or amalgamates with, or merges with or into, ortransfers all or substantially all its assets (or any substantial part of the assetscomprising the business conducted by X as of the**ISDA®2002**
9

 
date of this Master Agreement) to, or reorganises, reincorporates or reconstitutesinto or as, another entity;(2) any person, related group of persons or entity acquires directly or indirectlythe beneficial ownership of (A) equity securities having the power to elect amajority of the board of directors (or its equivalent) of X or (B) any otherownership interest enabling it to exercise control of X; or(3) X effects any substantial change in its capital structure by means of theissuance, incurrence or guarantee of debt or the issuance of (A) preferred stock orother securities convertible into or exchangeable for debt or preferred stock or (B)in the case of entities other than corporations, any other form of ownershipinterest; or(vi) ***Additional Termination Event.***If any “Additional Termination Event” is specified in theSchedule or any Confirmation as applying, the occurrence of such event (and, in such event,the Affected Party or Affected Parties will be as specified for such Additional TerminationEvent in the Schedule or such Confirmation).(c) ***Hierarchy of Events.***(i)An event or circumstance that constitutes or gives rise to an Illegality or a Force Majeure Event will not, for so long as that is the case, also constitute or give riseto an Event of Default under Section 5(a)(i), 5(a)(ii)(1) or 5(a)(iii)(1) insofar as suchevent or circumstance relates to the failure to make any payment or delivery or a failure tocomply with any other material provision of this Agreement or a Credit Support Document, asthe case may be.(ii) Except in circumstances contemplated by clause (i) above, if an event or circumstancewhich would otherwise constitute or give rise to an Illegality or a Force Majeure Event alsoconstitutes an Event of Default or any other Termination Event, it will be treated as anEvent of Default or such other Termination Event, as the case may be, and will notconstitute or give rise to an Illegality or a Force Majeure Event.(iii) If an event or circumstance which would otherwise constitute or give rise to a ForceMajeure Event also constitutes an Illegality, it will be treated as an Illegality, except asdescribed in clause (ii) above, and not a Force Majeure Event.(d) ***Deferral of Payments and Deliveries During Waiting Period.***If an Illegality or a Force MajeureEvent has occurred and is continuing with respect to a Transaction, each payment or delivery whichwould otherwise be required to be made under that Transaction will be deferred to, and will not bedue until:—(i) the first Local Business Day or, in the case of a delivery, the first LocalDelivery Day (or the first day that would have been a Local Business Day or Local DeliveryDay, as appropriate, but for the occurrence of the event or circumstance constituting orgiving rise to that Illegality or Force Majeure Event) following the end of any applicableWaiting Period in respect of that Illegality or Force Majeure Event, as the case may be; or(ii) if earlier, the date on which the event or circumstance constituting or giving rise tothat Illegality or Force Majeure Event ceases to exist or, if such date is not a LocalBusiness Day or, in the case of a delivery, a Local Delivery Day, the first following daythat is a Local Business Day or Local Delivery Day, as appropriate.(e) ***Inability of Head or Home Office to Perform Obligations of Branch.***If (i) an Illegality or aForce Majeure Event occurs under Section 5(b)(i)(1) or 5(b)(ii)(1) and the relevant Office is notthe Affected Party’s head or home office, (ii) Section 10(a) applies, (iii) the other party seeksperformance of the relevant obligation or**ISDA®2002**
10

 
compliance with the relevant provision by the Affected Party’s head or home office and (iv) theAffected Party’s head or home office fails so to perform or comply due to the occurrence of anevent or circumstance which would, if that head or home office were the Office through which theAffected Party makes and receives payments and deliveries with respect to the relevant Transaction,constitute or give rise to an Illegality or a Force Majeure Event, and such failure would otherwiseconstitute an Event of Default under Section 5(a)(i)or 5(a)(iii)(1) with respect to such party,then, for so long as the relevant event or circumstance continues to exist with respect to both theOffice referred to in Section 5(b)(i)(1) or 5(b)(ii)(1), as the case may be, and the AffectedParty’s head or home office, such failure will not constitute an Event of Default under Section5(a)(i) or 5(a)(iii)(1).**6. Early Termination; Close-Out Netting**(a) ***Right to Terminate Following Event of Default.***If at any time an Event of Default with respectto a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the“Non-defaulting Party”) may, by not more than 20 days notice to the Defaulting Party specifying therelevant Event of Default, designate a day not earlier than the day such notice is effective as anEarly Termination Date in respect of all outstanding Transactions. If, however, “Automatic EarlyTermination” is specified in the Schedule as applying to a party, then an Early Termination Date inrespect of all outstanding Transactions will occur immediately upon the occurrence with respect tosuch party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to theextent analogous thereto, (8), and as of the time immediately preceding the institution of therelevant proceeding or the presentation of the relevant petition upon the occurrence with respectto such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogousthereto, (8).(b) ***Right to Terminate Following Termination Event.***(i) ***Notice.***If a Termination Event other than a Force Majeure Event occurs, anAffected Party will, promptly upon becoming aware of it, notify the other party, specifyingthe nature of that Termination Event and each Affected Transaction, and will also give theother party such other information about that Termination Event as the other party mayreasonably require. If a Force Majeure Event occurs, each party will, promptly upon becomingaware of it, use all reasonable efforts to notify the other party, specifying the nature ofthat Force Majeure Event, and will also give the other party such other information aboutthat 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 oneAffected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the AffectedParty, the Affected Party will, as a condition to its right to designate an EarlyTermination Date under Section 6(b)(iv), use all reasonable efforts (which will not requiresuch party to incur a loss, other than immaterial, incidental expenses) to transfer within20 days after it gives notice under Section 6(b)(i) all its rights and obligations underthis Agreement in respect of the Affected Transactions to another of its Offices orAffiliates so that such Termination Event ceases to exist.If the Affected Party is not able to make such a transfer it will give notice to the otherparty to that effect within such 20 day period, whereupon the other party may effect such atransfer 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 conditionalupon the prior written consent of the other party, which consent will not be withheld ifsuch other party’s policies in effect at such time would permit it to enter intotransactions with the transferee on the terms proposed.(iii) ***Two Affected Parties.***If a Tax Event occurs and there are two Affected Parties, eachparty will use all reasonable efforts to reach agreement within 30 days after notice of suchoccurrence is given under Section 6(b)(i) to avoid that Termination Event.**ISDA®2002**
11

 
(iv) ***Right to Terminate.***(1) If:—(A) a transfer under Section 6(b)(ii) or an agreement under Section6(b)(iii), as the case may be, has not been effected with respect to allAffected Transactions within 30 days after an Affected Party gives noticeunder Section 6(b)(i); or(B) a Credit Event Upon Merger or an Additional Termination Event occurs, ora Tax Event Upon Merger occurs and the Burdened Party is not the AffectedParty,the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in thecase of a Tax Event or an Additional Termination Event if there are two AffectedParties, or the Non-affected Party in the case of a Credit Event Upon Merger or anAdditional Termination Event if there is only one Affected Party may, if therelevant Termination Event is then continuing, by not more than 20 days notice tothe other party, designate a day not earlier than the day such notice is effectiveas an Early Termination Date in respect of all Affected Transactions.(2) If at any time an Illegality or a Force Majeure Event has occurred and is thencontinuing and any applicable Waiting Period has expired:—(A) Subject to clause (B) below, either party may, by not more than 20 daysnotice to the other party, designate (I) a day not earlier than the day onwhich such notice becomes effective as an Early Termination Date in respectof all Affected Transactions or (II) by specifying in that notice theAffected Transactions in respect of which it is designating the relevant dayas an Early Termination Date, a day not earlier than two Local Business Daysfollowing the day on which such notice becomes effective as an EarlyTermination Date in respect of less than all Affected Transactions. Uponreceipt of a notice designating an Early Termination Date in respect of lessthan all Affected Transactions, the other party may, by notice to thedesignating party, if such notice is effective on or before the day sodesignated, designate that same day as an Early Termination Date in respectof any or all other Affected Transactions.(B) An Affected Party (if the Illegality or Force Majeure Event relates toperformance by such party or any Credit Support Provider of such party of anobligation to make any payment or delivery under, or to compliance with anyother material provision of, the relevant Credit Support Document) will onlyhave the right to designate an Early Termination Date under Section6(b)(iv)(2)(A) as a result of an Illegality under Section 5(b)(i)(2) or aForce Majeure Event under Section 5(b)(ii)(2) following the priordesignation by the other party of an Early Termination Date, pursuant toSection 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 therelevant Event of Default or Termination Event is then continuing.(ii) Upon the occurrence or effective designation of an Early Termination Date, no furtherpayments or deliveries under Section 2(a)(i) or 9(h)(i) in respect of the TerminatedTransactions will be required to be made, but without prejudice to the other provisions ofthis Agreement. The amount, if any, payable in respect of an Early Termination Date will bedetermined pursuant to Sections 6(e) and 9(h)(ii).**ISDA®2002**
12

 
(d) ***Calculations; Payment Date***.(i) ***Statement.***On or as soon as reasonably practicable following the occurrence of an EarlyTermination Date, each party will make the calculations on its part, if any, contemplated bySection 6(e) and will provide to the other party a statement (1) showing, in reasonabledetail, such calculations (including any quotations, market data or information frominternal sources used in making such calculations), (2) specifying (except where there aretwo Affected Parties) any Early Termination Amount payable and (3) giving details of therelevant account to which any amount payable to it is to be paid. In the absence of writtenconfirmation from the source of a quotation or market data obtained in determining aClose-out Amount, the records of the party obtaining such quotation or market data will beconclusive 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 Datewill, together with any amount of interest payable pursuant to Section 9(h)(ii)(2), bepayable (1) on the day on which notice of the amount payable is effective in the case of anEarly 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 amountpayable is effective (or, if there are two Affected Parties, after the day on which thestatement provided pursuant to clause (i) above by the second party to provide such astatement is effective) in the case of an Early Termination Date which is designated as aresult of a Termination Event.(e) ***Payments on Early Termination.***If an Early Termination Date occurs, the amount, if any, payablein respect of that Early Termination Date (the “Early Termination Amount”) will be determinedpursuant 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, theEarly Termination Amount will be an amount equal to (1) the sum of (A) the TerminationCurrency Equivalent of the Close-out Amount or Close-out Amounts (whether positive ornegative) determined by the Non-defaulting Party for each Terminated Transaction or group ofTerminated Transactions, as the case may be, and (B) the Termination Currency Equivalent ofthe Unpaid Amounts owing to the Non-defaulting Party less (2) the Termination CurrencyEquivalent of the Unpaid Amounts owing to the Defaulting Party. If the Early TerminationAmount 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 theEarly Termination Amount to the Defaulting Party.(ii) ***Termination Events.***If the Early Termination Date results from a TerminationEvent:—(1) *One Affected Party.*Subject to clause (3) below, if there is one Affected Party,the Early Termination Amount will be determined in accordance with Section 6(e)(i),except that references to the Defaulting Party and to the Non-defaulting Party willbe 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 AffectedParties, each party will determine an amount equal to the Termination CurrencyEquivalent of the sum of the Close-out Amount or Close-out Amounts (whether positiveor negative) for each Terminated Transaction or group of Terminated Transactions, asthe case may be, and the Early Termination Amount will be an amount equal to (A) thesum of (I) one-half of the difference between the higher amount so determined (byparty “X”) and the lower amount so determined (by party “Y”) and (II) theTermination Currency Equivalent of the Unpaid Amounts owing to X less (B) theTermination Currency Equivalent of the Unpaid Amounts owing to Y. If the EarlyTermination Amount is a positive number, Y will pay it to X; if it is a negativenumber, X will pay the absolute value of the Early Termination Amount to Y.**ISDA®2002**
13

 
(3) *Mid-Market Events.*If that Termination Event is an Illegality or a Force MajeureEvent, then the Early Termination Amount will be determined in accordance withclause (1) or (2) above, as appropriate, except that, for the purpose of determininga Close-out Amount or Close-out Amounts, the Determining Party will:—(A) if obtaining quotations from one or more third parties (or from any ofthe Determining Party’s Affiliates), ask each third party or Affiliate (I)not to take account of the current creditworthiness of the Determining Partyor any existing Credit Support Document and (II) to provide mid-marketquotations; and(B) in any other case, use mid-market values without regard to thecreditworthiness of the Determining Party.(iii) ***Adjustment for Bankruptcy.***In circumstances where an Early Termination Dateoccurs because Automatic Early Termination applies in respect of a party, the EarlyTermination Amount will be subject to such adjustments as are appropriate andpermitted by applicable law to reflect any payments or deliveries made by one partyto the other under this Agreement (and retained by such other party) during theperiod from the relevant Early Termination Date to the date for payment determinedunder Section 6(d)(ii).(iv) ***Adjustment for Illegality or Force Majeure Event.***The failure by a party or anyCredit Support Provider of such party to pay, when due, any Early Termination Amountwill not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) ifsuch failure is due to the occurrence of an event or circumstance which would, if itoccurred 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 otherparty if subsequently an Early Termination Date results from an Event of Default, aCredit Event Upon Merger or an Additional Termination Event in respect of which alloutstanding Transactions are Affected Transactions and (2) otherwise accrue interestin accordance with Section 9(h)(ii)(2).(v) ***Pre-Estimate.***The parties agree that an amount recoverable under this Section6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payablefor the loss of bargain and the loss of protection against future risks, and, exceptas otherwise provided in this Agreement, neither party will be entitled to recoverany additional damages as a consequence of the termination of the TerminatedTransactions.(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 AffectedParty in the case where either a Credit Event Upon Merger has occurred or any other TerminationEvent 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), bereduced by its set-off against any other amounts (“Other Amounts”) payable by the Payee to thePayer (whether or not arising under this Agreement, matured or contingent and irrespective of thecurrency, place of payment or place of booking of the obligation). To the extent that any OtherAmounts are so set off, those Other Amounts will be discharged promptly and in all respects. X willgive 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 portionof such amounts) may be converted by X into the currency in which the other is denominated at therate of exchange at which such party would be able, in good faith and using commercially reasonableprocedures, to purchase the relevant amount of such currency.**ISDA®2002**
14

 
If an obligation is unascertained, X may in good faith estimate that obligation and set off inrespect of the estimate, subject to the relevant party accounting to the other when the obligationis ascertained.Nothing in this Section 6(f) will be effective to create a charge or other security interest. ThisSection 6(f) will be without prejudice and in addition to any right of set-off, offset, combinationof accounts, lien, right of retention or withholding or similar right or requirement to which anyparty is at any time otherwise entitled or subject (whether by operation of law, contract orotherwise).**7.** **Transfer**Subject to Section 6(b)(ii) and to the extent permitted by applicable law, neither this Agreementnor any interest or obligation in or under this Agreement may be transferred (whether by way ofsecurity or otherwise) by either party without the prior written consent of the other party, exceptthat:—(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamationwith, 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 TerminationAmount payable to it by a Defaulting Party, together with any amounts payable on or with respect tothat interest and any other rights associated with that interest pursuant to Sections 8, 9(h) and11.Any purported transfer that is not in compliance with this Section 7 will be void.**8.** **Contractual Currency**(a) ***Payment in the Contractual Currency.***Each payment under this Agreement will be made in therelevant currency specified in this Agreement for that payment (the “Contractual Currency”). To theextent permitted by applicable law, any obligation to make payments under this Agreement in theContractual Currency will not be discharged or satisfied by any tender in any currency other thanthe Contractual Currency, except to the extent such tender results in the actual receipt by theparty to which payment is owed, acting in good faith and using commercially reasonable proceduresin converting the currency so tendered into the Contractual Currency, of the full amount in theContractual Currency of all amounts payable in respect of this Agreement. If for any reason theamount in the Contractual Currency so received falls short of the amount in the ContractualCurrency payable in respect of this Agreement, the party required to make the payment will, to theextent permitted by applicable law, immediately pay such additional amount in the ContractualCurrency as may be necessary to compensate for the shortfall. If for any reason the amount in theContractual Currency so received exceeds the amount in the Contractual Currency payable in respectof 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 acurrency other than the Contractual Currency is rendered (i) for the payment of any amount owing inrespect of this Agreement, (ii) for the payment of any amount relating to any early termination inrespect of this Agreement or (iii) in respect of a judgment or order of another court for thepayment of any amount described in clause (i) or (ii) above, the party seeking recovery, afterrecovery in full of the aggregate amount to which such party is entitled pursuant to the judgmentor order, will be entitled to receive immediately from the other party the amount of any shortfallof the Contractual Currency received by such party as a consequence of sums paid in such othercurrency and will refund promptly to the other party any excess of the Contractual Currencyreceived by such party as a consequence of sums paid in such other currency if such shortfall orsuch excess arises or results from any variation between the rate of exchange at which theContractual Currency is converted into the currency of the judgment or order for the purpose ofsuch judgment or order and the rate of exchange at which such party is able, acting in good faithand using**ISDA®2002**
15

 
commercially reasonable procedures in converting the currency received into the ContractualCurrency, to purchase the Contractual Currency with the amount of the currency of the judgment ororder actually received by such party.(c) ***Separate Indemnities.***To the extent permitted by applicable law, the indemnities in thisSection 8 constitute separate and independent obligations from the other obligations in thisAgreement, will be enforceable as separate and independent causes of action, will applynotwithstanding any indulgence granted by the party to which any payment is owed and will not beaffected by judgment being obtained or claim or proof being made for any other sums payable inrespect of this Agreement.(d) ***Evidence of Loss.***For the purpose of this Section 8, it will be sufficient for a party todemonstrate that it would have suffered a loss had an actual exchange or purchase been made.**9.** **Miscellaneous**(a) ***Entire Agreement.***This Agreement constitutes the entire agreement and understanding of theparties with respect to its subject matter. Each of the parties acknowledges that in entering intothis 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 whichmight otherwise be available to it in respect thereof, except that nothing in this Agreement willlimit or exclude any liability of a party for fraud.(b) ***Amendments.***An amendment, modification or waiver in respect of this Agreement will only beeffective if in writing (including a writing evidenced by a facsimile transmission) and executed byeach of the parties or confirmed by an exchange of telexes or by an exchange of electronic messageson an electronic messaging system.(c) ***Survival of Obligations.***Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligationsof 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 andprivileges 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 beexecuted and delivered in counterparts (including by facsimile transmission and byelectronic 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 fromthe moment they agree to those terms (whether orally or otherwise). A Confirmation will beentered 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 anexchange of electronic messages on an electronic messaging system or by an exchange ofe-mails, which in each case will be sufficient for all purposes to evidence a bindingsupplement to this Agreement. The parties will specify therein or through another effectivemeans that any such counterpart, telex, electronic message or e-mail constitutes aConfirmation.(f) ***No Waiver of Rights.***A failure or delay in exercising any right, power or privilege in respectof this Agreement will not be presumed to operate as a waiver, and a single or partial exercise ofany 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 notto affect the construction of or to be taken into consideration in interpreting this Agreement.**ISDA®2002**
16

 
(h) ***Interest and Compensation.***(i) Prior to Early Termination. Prior to the occurrence or effective designation of an EarlyTermination Date in respect of the relevant Transaction:—(1) *Interest on Defaulted Payments.*If a party defaults in the performance of anypayment obligation, it will, to the extent permitted by applicable law and subjectto Section 6(c), pay interest (before as well as after judgment) on the overdueamount to the other party on demand in the same currency as the overdue amount, forthe 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 orcompensation in respect of the overdue amount is due pursuant to clause (3)(B) or(C) below), at the Default Rate.(2) *Compensation for Defaulted Deliveries****.***If a party defaults in the performance ofany obligation required to be settled by delivery, it will on demand (A) compensatethe other party to the extent provided for in the relevant Confirmation or elsewherein this Agreement and (B) unless otherwise provided in the relevant Confirmation orelsewhere in this Agreement, to the extent permitted by applicable law and subjectto 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 bedelivered 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 actualdelivery (and excluding any period in respect of which interest or compensation inrespect 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 ofthe originally scheduled date for delivery, in good faith and using commerciallyreasonable 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), wouldhave been payable, it will, to the extent permitted by applicable law andsubject to Section 6(c) and clauses (B) and (C) below, pay interest (beforeas 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, forthe period from (and including) the date the amount would, but for Section2(a)(iii), have been payable to (but excluding) the date the amount actuallybecomes payable, at the Applicable Deferral Rate;(B) a payment is deferred pursuant to Section 5(d), the party which wouldotherwise have been required to make that payment will, to the extentpermitted by applicable law, subject to Section 6(c) and for so long as noEvent of Default or Potential Event of Default with respect to that partyhas occurred and is continuing, pay interest (before as well as afterjudgment) on the amount of the deferred payment to the other party on demand(after such amount becomes payable) in the same currency as the deferredpayment, for the period from (and including) the date the amount would, butfor Section 5(d), have been payable to (but excluding) the earlier of thedate the payment is no longer deferred pursuant to Section 5(d) and the dateduring the deferral period upon which an Event of Default or Potential Eventof Default with respect to that party occurs, at the Applicable DeferralRate; or(C) a party fails to make any payment due to the occurrence of an Illegalityor a Force Majeure Event (after giving effect to any deferral periodcontemplated by clause (B) above), it will, to the extent permitted byapplicable law, subject to Section 6(c) and for so long as the event orcircumstance giving rise to that Illegality or Force Majeure Event**ISDA®2002**
17

 
continues and no Event of Default or Potential Event of Default with respectto that party has occurred and is continuing, pay interest (before as wellas after judgment) on the overdue amount to the other party on demand in thesame currency as the overdue amount, for the period from (and including) thedate the party fails to make the payment due to the occurrence of therelevant Illegality or Force Majeure Event (or, if later, the date thepayment is no longer deferred pursuant to Section 5(d)) to (but excluding)the earlier of the date the event or circumstance giving rise to thatIllegality or Force Majeure Event ceases to exist and the date during theperiod upon which an Event of Default or Potential Event of Default withrespect to that party occurs (and excluding any period in respect of whichinterest or compensation in respect of the overdue amount is due pursuant toclause (B) above), at the Applicable Deferral Rate.(4) *Compensation for Deferred Deliveries.*If:—(A) a party does not perform any obligation that, but for Section 2(a)(iii),would have been required to be settled by delivery;(B) a delivery is deferred pursuant to Section 5(d); or(C) a party fails to make a delivery due to the occurrence of an Illegalityor a Force Majeure Event at a time when any applicable Waiting Period hasexpired,the party required (or that would otherwise have been required) to make the deliverywill, 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 ofclauses (A) and (B) above, such delivery is required) if and to the extent providedfor in the relevant Confirmation or elsewhere in this Agreement.(ii) ***Early Termination.***Upon the occurrence or effective designation of an Early TerminationDate in respect of a Transaction:—(1) *Unpaid Amounts.*For the purpose of determining an Unpaid Amount in respect ofthe relevant Transaction, and to the extent permitted by applicable law, interestwill accrue on the amount of any payment obligation or the amount equal to the fairmarket value of any obligation required to be settled by delivery included in suchdetermination in the same currency as that amount, for the period from (andincluding) the date the relevant obligation was (or would have been but for Section2(a)(iii) or 5(d)) required to have been performed to (but excluding) the relevantEarly Termination Date, at the Applicable Close-out Rate.(2) *Interest on Early Termination Amounts.*If an Early Termination Amount is due inrespect of such Early Termination Date, that amount will, to the extent permitted byapplicable law, be paid together with interest (before as well as after judgment) onthat amount in the Termination Currency, for the period from (and including) suchEarly Termination Date to (but excluding) the date the amount is paid, at theApplicable Close-out Rate.(iii) ***Interest Calculation.***Any interest pursuant to this Section 9(h) will be calculated onthe basis of daily compounding and the actual number of days elapsed.**ISDA®2002**
18

 
10. **Offices; Multibranch Parties**(a) If Section 10(a) is specified in the Schedule as applying, each party that enters into aTransaction through an Office other than its head or home office represents to and agrees with theother party that, notwithstanding the place of booking or its jurisdiction of incorporation ororganisation, its obligations are the same in terms of recourse against it as if it had enteredinto the Transaction through its head or home office, except that a party will not have recourse tothe head or home office of the other party in respect of any payment or delivery deferred pursuantto Section 5(d) for so long as the payment or delivery is so deferred. This representation andagreement will be deemed to be repeated by each party on each date on which the parties enter intoa Transaction.(b) If a party is specified as a Multibranch Party in the Schedule, such party may, subject toclause (c) below, enter into a Transaction through, book a Transaction in and make and receivepayments and deliveries with respect to a Transaction through any Office listed in respect of thatparty in the Schedule (but not any other Office unless otherwise agreed by the parties in writing).(c) The Office through which a party enters into a Transaction will be the Office specified forthat party in the relevant Confirmation or as otherwise agreed by the parties in writing, and, ifan Office for that party is not specified in the Confirmation or otherwise agreed by the parties inwriting, its head or home office. Unless the parties otherwise agree in writing, the Office throughwhich a party enters into a Transaction will also be the Office in which it books the Transactionand the Office through which it makes and receives payments and deliveries with respect to theTransaction. Subject to Section 6(b)(ii), neither party may change the Office in which it books theTransaction or the Office through which it makes and receives payments or deliveries with respectto a Transaction without the prior written consent of the other party.**11.** **Expenses**A Defaulting Party will on demand indemnify and hold harmless the other party for and against allreasonable out-of-pocket expenses, including legal fees, execution fees and Stamp Tax, incurred bysuch other party by reason of the enforcement and protection of its rights under this Agreement orany Credit Support Document to which the Defaulting Party is a party or by reason of the earlytermination of any Transaction, including, but not limited to, costs of collection.**12.** **Notices**(a) ***Effectiveness.***Any notice or other communication in respect of this Agreement may be given inany manner described below (except that a notice or other communication under Section 5 or 6 maynot be given by electronic messaging system or e-mail) to the address or number or in accordancewith the electronic messaging system or e-mail details provided (see the Schedule) and will bedeemed effective as indicated:—(i) if in writing and delivered in person or by courier, on the date it is delivered;(ii) if sent by telex, on the date the recipient’s answerback is received;(iii) if sent by facsimile transmission, on the date it is received by a responsibleemployee of the recipient in legible form (it being agreed that the burden of provingreceipt will be on the sender and will not be met by a transmission report generated by thesender’s facsimile machine);(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent(return receipt requested), on the date it is delivered or its delivery is attempted;(v) if sent by electronic messaging system, on the date it is received; or**ISDA®2002**
19

 
(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 aLocal 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 bedeemed given and effective on the first following day that is a Local Business Day.(b) ***Change of Details.***Either party may by notice to the other change the address, telex orfacsimile number or electronic messaging system or e-mail details at which notices or othercommunications are to be given to it.**13.** **Governing Law and Jurisdiction**(a) ***Governing Law.***This Agreement will be governed by and construed in accordance with the lawspecified in the Schedule.(b) ***Jurisdiction.***With respect to any suit, action or proceedings relating to any dispute arisingout 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) thenon-exclusive jurisdiction of the English courts if the Proceedings do not involve aConvention Court and (B) the exclusive jurisdiction of the English courts if theProceedings do involve a Convention Court; or(2) if this Agreement is expressed to be governed by the laws of the State of NewYork, to the non-exclusive jurisdiction of the courts of the State of New York andthe United States District Court located in the Borough of Manhattan in New YorkCity;(ii) waives any objection which it may have at any time to the laying of venue of anyProceedings brought in any such court, waives any claim that such Proceedings have beenbrought in an inconvenient forum and further waives the right to object, with respect tosuch 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 inany one or more jurisdictions will not preclude the bringing of Proceedings in any otherjurisdiction.(c) ***Service of Process.***Each party irrevocably appoints the Process Agent, if any, specifiedopposite its name in the Schedule to receive, for it and on its behalf, service of process in anyProceedings. If for any reason any party’s Process Agent is unable to act as such, such party willpromptly notify the other party and within 30 days appoint a substitute process agent acceptable tothe other party. The parties irrevocably consent to service of process given in the manner providedfor notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv). Nothing in this Agreement will affect theright of either party to serve process in any other manner permitted by applicable law.(d) ***Waiver of Immunities.***Each party irrevocably waives, to the extent permitted by applicable law,with respect to itself and its revenues and assets (irrespective of their use or intended use), allimmunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction ofany court, (iii) relief by way of injunction or order for specific performance or recovery ofproperty, (iv) attachment of its assets (whether before or after judgment) and (v) execution orenforcement of any judgment to which it or its revenues or assets might otherwise be entitled inany Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permittedby applicable law, that it will not claim any such immunity in any Proceedings.**ISDA®2002**
20

 
**14.** **Definitions**As used in this Agreement:—***“Additional Representation”***has the meaning specified in Section 3.***“Additional Termination Event”***has the meaning specified in Section 5(b).***“Affected Party”***has the meaning specified in Section 5(b).***“Affected Transactions”***means (a) with respect to any Termination Event consisting of anIllegality, Force Majeure Event, Tax Event or Tax Event Upon Merger, all Transactions affected bythe occurrence of such Termination Event (which, in the case of an Illegality under Section5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2), means all Transactions unless therelevant Credit Support Document references only certain Transactions, in which case thoseTransactions and, if the relevant Credit Support Document constitutes a Confirmation for aTransaction, that Transaction) and (b) with respect to any other Termination Event, allTransactions.***“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 personor 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 entityor 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 forSection 2(a)(iii)) by a Defaulting Party, the Default Rate;(ii) in respect of obligations payable or deliverable (or which would have been but forSection 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate;(iii) in respect of obligations deferred pursuant to Section 5(d), if there is no DefaultingParty 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 whereinterest 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 (butexcluding) the date (determined in accordance with Section 6(d)(ii)) on which that amount ispayable:—(1) if the Early Termination Amount is payable by a Defaulting Party, the DefaultRate;(2) if the Early Termination Amount is payable by a Non-defaulting Party, theNon-default Rate; and(3) in all other cases, the Applicable Deferral Rate; and**ISDA®2002**
21

 
(ii) for the period from (and including) the date (determined in accordance with Section6(d)(ii)) on which that amount is payable to (but excluding) the date of actual payment:—(1) if a party fails to pay the Early Termination Amount due to the occurrence of anevent or circumstance which would, if it occurred with respect to a payment ordelivery under a Transaction, constitute or give rise to an Illegality or a ForceMajeure Event, and for so long as the Early Termination Amount remains unpaid due tothe continuing existence of such event or circumstance, the Applicable DeferralRate;(2) if the Early Termination Amount is payable by a Defaulting Party (but excludingany 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 (butexcluding any period in respect of which clause (1) above applies), the Non-defaultRate; and(4) in all other cases, the Termination Rate.***“Applicable Deferral Rate”***means:—(a) for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant payerto be a rate offered to the payer by a major bank in a relevant interbank market for overnightdeposits in the applicable currency, such bank to be selected in good faith by the payer for thepurpose of obtaining a representative rate that will reasonably reflect conditions prevailing atthe time in that relevant market;(b) for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition of ApplicableClose-out Rate, the rate certified by the relevant payer to be a rate offered to prime banks by amajor bank in a relevant interbank market for overnight deposits in the applicable currency, suchbank to be selected in good faith by the payer after consultation with the other party, ifpracticable, for the purpose of obtaining a representative rate that will reasonably reflectconditions prevailing at the time in that relevant market; and(c) for purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and (b)(ii)(1) of thedefinition of Applicable Close-out Rate, a rate equal to the arithmetic mean of the rate determinedpursuant to clause (a) above and a rate per annum equal to the cost (without proof or evidence ofany actual cost) to the relevant payee (as certified by it) if it were to fund or of funding therelevant amount.***“Automatic Early Termination”***has the meaning specified in Section 6(a).***“Burdened Party”***has the meaning specified in Section 5(b)(iv).***“Change in Tax Law”***means the enactment, promulgation, execution or ratification of, or any changein or amendment to, any law (or in the application or official interpretation of any law) thatoccurs after the parties enter into the relevant Transaction.***“Close-out Amount”***means, with respect to each Terminated Transaction or each group of TerminatedTransactions and a Determining Party, the amount of the losses or costs of the Determining Partythat are or would be incurred under then prevailing circumstances (expressed as a positive number)or gains of the Determining Party that are or would be realised under then prevailing circumstances(expressed as a negative number) in replacing, or in providing for the Determining Party theeconomic equivalent of, (a) the material terms of that Terminated Transaction or group ofTerminated Transactions, including the payments and deliveries by the parties under Section 2(a)(i)in respect of that Terminated Transaction or group of Terminated Transactions that would, but forthe occurrence of the relevant Early Termination Date, have been required after that date (assumingsatisfaction of the conditions precedent in**ISDA®2002**
22

 
Section 2(a)(iii)) and (b) the option rights of the parties in respect of that TerminatedTransaction or group of Terminated Transactions.Any Close-out Amount will be determined by the Determining Party (or its agent), which will act ingood faith and use commercially reasonable procedures in order to produce a commercially reasonableresult. The Determining Party may determine a Close-out Amount for any group of TerminatedTransactions or any individual Terminated Transaction but, in the aggregate, for not less than allTerminated Transactions. Each Close-out Amount will be determined as of the Early Termination Dateor, if that would not be commercially reasonable, as of the date or dates following the EarlyTermination Date as would be commercially reasonable.Unpaid Amounts in respect of a Terminated Transaction or group of Terminated Transactions and legalfees and out-of-pocket expenses referred to in Section 11 are to be excluded in all determinationsof 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 morethird parties that may take into account the creditworthiness of the Determining Party at the timethe quotation is provided and the terms of any relevant documentation, including credit supportdocumentation, 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 morethird 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 usedby the Determining Party in the regular course of its business for the valuation of similartransactions.The Determining Party will consider, taking into account the standards and procedures described inthis 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 orrelevant market data are not readily available or would produce a result that would not satisfythose standards. When considering information described in clause (i), (ii) or (iii) above, theDetermining Party may include costs of funding, to the extent costs of funding are not and wouldnot be a component of the other information being utilised. Third parties supplying quotationspursuant to clause (i) above or market data pursuant to clause (ii) above may include, withoutlimitation, dealers in the relevant markets, end-users of the relevant product, informationvendors, brokers and other sources of market information.Without duplication of amounts calculated based on information described in clause (i), (ii) or(iii) above, or other relevant information, and when it is commercially reasonable to do so, theDetermining Party may in addition consider in calculating a Close-out Amount any loss or costincurred in connection with its terminating, liquidating or re-establishing any hedge related to aTerminated Transaction or group of Terminated Transactions (or any gain resulting from any ofthem).Commercially reasonable procedures used in determining a Close-out Amount may include thefollowing:—(1) application to relevant market data from third parties pursuant to clause (ii) above orinformation from internal sources pursuant to clause (iii) above of pricing or other valuationmodels that are, at the time of the determination of the Close-out Amount, used by the DeterminingParty in the regular course of its business in pricing or valuing transactions between theDetermining Party and unrelated third parties that are similar to the Terminated Transaction orgroup of Terminated Transactions; and**ISDA®2002**
23

 
(2) application of different valuation methods to Terminated Transactions or groups of TerminatedTransactions depending on the type, complexity, size or number of the Terminated Transactions orgroup of Terminated Transactions.***“Confirmation”***has the meaning specified in the preamble.***“consent”***includes a consent, approval, action, authorisation, exemption, notice, filing,registration or exchange control consent.***“Contractual Currency”***has the meaning specified in Section 8(a).***“Convention Court”***means any court which is bound to apply to the Proceedings either Article 17 ofthe 1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil andCommercial Matters or Article 17 of the 1988 Lugano Convention on Jurisdiction and the Enforcementof 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 thisAgreement.***“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 actualcost) to the relevant payee (as certified by it) if it were to fund or of funding the relevantamount plus 1% per annum.***“Defaulting Party”***has the meaning specified in Section 6(a).***“Designated Event”***has the meaning specified in Section 5(b)(v).***“Determining Party”***means the party determining a Close-out Amount.***“Early Termination Amount”***has the meaning specified in Section 6(e).***“Early Termination Date”***means the date determined in accordance with Section 6(a) or 6(b)(iv).***“electronic messages”***does not include e-mails but does include documents expressed in markuplanguages, 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).**ISDA®2002**
24

 
***“Indemnifiable Tax”***means any Tax other than a Tax that would not be imposed in respect of apayment under this Agreement but for a present or former connection between the jurisdiction of thegovernment or taxation authority imposing such Tax and the recipient of such payment or a personrelated to such recipient (including, without limitation, a connection arising from such recipientor related person being or having been a citizen or resident of such jurisdiction, or being orhaving been organised, present or engaged in a trade or business in such jurisdiction, or having orhaving had a permanent establishment or fixed place of business in such jurisdiction, but excludinga 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 CreditSupport Document).***“law”***includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by thepractice of any relevant governmental revenue authority), and ***“unlawful”***will be construedaccordingly.***“Local Business Day”***means (a) in relation to any obligation under Section 2(a)(i), a GeneralBusiness Day in the place or places specified in the relevant Confirmation and a day on which arelevant settlement system is open or operating as specified in the relevant Confirmation or, if aplace or a settlement system is not so specified, as otherwise agreed by the parties in writing ordetermined 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 placewhere the event or circumstance that constitutes or gives rise to the Illegality or Force MajeureEvent, as the case may be, occurs, (c) in relation to any other payment, a General Business Day inthe place where the relevant account is located and, if different, in the principal financialcentre, if any, of the currency of such payment and, if that currency does not have a singlerecognised principal financial centre, a day on which the settlement system necessary to accomplishsuch payment is open, (d) in relation to any notice or other communication, including noticecontemplated under Section 5(a)(i), a General Business Day (or a day that would have been a GeneralBusiness Day but for the occurrence of an event or circumstance which would, if it occurred withrespect to payment, delivery or compliance related to a Transaction, constitute or give rise to anIllegality or a Force Majeure Event) in the place specified in the address for notice provided bythe recipient and, in the case of a notice contemplated by Section 2(b), in the place where therelevant new account is to be located and (e) in relation to Section 5(a)(v)(2), a General BusinessDay in the relevant locations for performance with respect to such Specified Transaction.***“Local Delivery Day”***means, for purposes of Sections 5(a)(i) and 5(d), a day on which settlementsystems necessary to accomplish the relevant delivery are generally open for business so that thedelivery is capable of being accomplished in accordance with customary market practice, in theplace specified in the relevant Confirmation or, if not so specified, in a location as determinedin accordance with customary market practice for the relevant delivery.***“Master Agreement”***has the meaning specified in the preamble.***“Merger Without Assumption”***means the event specified in Section 5(a)(viii).***“Multiple Transaction Payment Netting”***has the meaning specified in Section 2(c).***“Non-affected Party”***means, so long as there is only one Affected Party, the other party.***“Non-default Rate”***means the rate certified by the Non-defaulting Party to be a rate offered to theNon-defaulting Party by a major bank in a relevant interbank market for overnight deposits in theapplicable currency, such bank to be selected in good faith by the Non-defaulting Party for thepurpose of obtaining a representative rate that will reasonably reflect conditions prevailing atthe time in that relevant market.***“Non-defaulting Party”***has the meaning specified in Section 6(a).***“Office”***means a branch or office of a party, which may be such party’s head or home office.***“Other Amounts”***has the meaning specified in Section 6(f).**ISDA®2002**
25

 
***“Payee”***has the meaning specified in Section 6(f).***“Payer”***has the meaning specified in Section 6(f).***“Potential Event of Default”***means any event which, with the giving of notice or the lapse of timeor 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 inconnection with the purchase of or conversion into the Contractual Currency.***“Relevant Jurisdiction”***means, with respect to a party, the jurisdictions (a) in which the party isincorporated, organised, managed and controlled or considered to have its seat, (b) where an Officethrough which the party is acting for purposes of this Agreement is located, (c) in which the partyexecutes this Agreement and (d) in relation to any payment, from or through which such payment ismade.***“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 Section2(a)(i) with respect to a Transaction.***“Specified Entity”***has the meaning specified in the Schedule.***“Specified Indebtedness”***means, subject to the Schedule, any obligation (whether present or future,contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.***“Specified Transaction”***means, subject to the Schedule, (a) any transaction (including an agreementwith respect to any such transaction) now existing or hereafter entered into between one party tothis Agreement (or any Credit Support Provider of such party or any applicable Specified Entity ofsuch party) and the other party to this Agreement (or any Credit Support Provider of such otherparty or any applicable Specified Entity of such other party) which is not a Transaction under thisAgreement but (i) which is a rate swap transaction, swap option, basis swap, forward ratetransaction, commodity swap, commodity option, equity or equity index swap, equity or equity indexoption, bond option, interest rate option, foreign exchange transaction, cap transaction, floortransaction, collar transaction, currency swap transaction, cross-currency rate swap transaction,currency option, credit protection transaction, credit swap, credit default swap, credit defaultoption, total return swap, credit spread transaction, repurchase transaction, reverse repurchasetransaction, buy/sell-back transaction, securities lending transaction, weather index transactionor 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 oftransaction 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 andconditions incorporated by reference in such agreement) and which is a forward, swap, future,option or other derivative on one or more rates, currencies, commodities, equity securities orother equity instruments, debt securities or other debt instruments, economic indices or measuresof 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 SpecifiedTransaction in this Agreement or the relevant confirmation.***“Stamp Tax”***means any stamp, registration, documentation or similar tax.***“Stamp Tax Jurisdiction”***has the meaning specified in Section 4(e).**ISDA®2002**
26

 
***“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 othertaxing authority in respect of any payment under this Agreement other than a stamp, registration,documentation or similar tax.***“Tax Event”***has the meaning specified in Section 5(b).***“Tax Event Upon Merger”***has the meaning specified in Section 5(b).***“Terminated Transactions”***means, with respect to any Early Termination Date, (a) if resulting froman Illegality or a Force Majeure Event, all Affected Transactions specified in the notice givenpursuant to Section 6(b)(iv), (b) if resulting from any other Termination Event, all AffectedTransactions and (c) if resulting from an Event of Default, all Transactions in effect eitherimmediately before the effectiveness of the notice designating that Early Termination Date or, ifAutomatic Early Termination applies, immediately before that Early Termination Date.***“Termination Currency”***means (a) if a Termination Currency is specified in the Schedule and thatcurrency is freely available, that currency, and (b) otherwise, euro if this Agreement is expressedto be governed by English law or United States Dollars if this Agreement is expressed to begoverned by the laws of the State of New York.***“Termination Currency Equivalent”***means, in respect of any amount denominated in the TerminationCurrency, such Termination Currency amount and, in respect of any amount denominated in a currencyother than the Termination Currency (the “Other Currency”), the amount in the Termination Currencydetermined by the party making the relevant determination as being required to purchase such amountof such Other Currency as at the relevant Early Termination Date, or, if the relevant Close-outAmount is determined as of a later date, that later date, with the Termination Currency at the rateequal to the spot exchange rate of the foreign exchange agent (selected as provided below) for thepurchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the cityin which such foreign exchange agent is located) on such date as would be customary for thedetermination of such a rate for the purchase of such Other Currency for value on the relevantEarly Termination Date or that later date. The foreign exchange agent will, if only one party isobliged to make a determination under Section 6(e), be selected in good faith by that party andotherwise will be agreed by the parties.***“Termination Event”***means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event UponMerger or, if specified to be applicable, a Credit Event Upon Merger or an Additional TerminationEvent.***“Termination Rate”***means a rate per annum equal to the arithmetic mean of the cost (without proofor evidence of any actual cost) to each party (as certified by such party) if it were to fund or offunding 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, theaggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (orthat would have become payable but for Section 2(a)(iii) or due but for Section 5(d)) to suchparty under Section 2(a)(i) or 2(d)(i)(4) on or prior to such Early Termination Date and whichremain 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 Section2(a)(iii) or 5(d)) required to be settled by delivery to such party on or prior to such EarlyTermination Date and which has not been so settled as at such Early Termination Date, an amountequal to the fair market value of that which was (or would have been) required to be deliveredand (c) if the Early Termination Date results from an Event of Default, a Credit Event UponMerger or an Additional Termination Event in respect of which all outstanding Transactions areAffected Transactions, any Early Termination Amount due prior to such Early Termination Dateand which remains unpaid as of such Early Termination Date, in each case together with anyamount of interest accrued or other**ISDA®2002**
27

 
compensation in respect of that obligation or deferred obligation, as the case may be, pursuantto Section 9(h)(ii)(1) or (2), as appropriate. The fair market value of any obligation referredto in clause (b) above will be determined as of the originally scheduled date for delivery, ingood faith and using commercially reasonable procedures, by the party obliged to make thedetermination under Section 6(e) or, if each party is so obliged, it will be the average of theTermination Currency Equivalents of the fair market values so determined by both parties.***“Waiting Period”***means:—(a) in respect of an event or circumstance under Section 5(b)(i), other than in the case of Section5(b)(i)(2) where the relevant payment, delivery or compliance is actually required on the relevantday (in which case no Waiting Period will apply), a period of three Local Business Days (or daysthat would have been Local Business Days but for the occurrence of that event or circumstance)following the occurrence of that event or circumstance; and(b) in respect of an event or circumstance under Section 5(b)(ii), other than in the case ofSection 5(b)(ii)(2) where the relevant payment, delivery or compliance is actually required on therelevant 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 orcircumstance) following the occurrence of that event or circumstance.IN WITNESS WHEREOF the parties have executed this document on the respective dates specified belowwith effect from the date specified on the first page of this document.     **BANK OF AMERICA, N.A.**   **AMERICAN PACIFIC CORPORATION**          Name: Susan K. Payunk   Name: Dana M. KelleyTitle: Senior Vice President   Title: Treasurer and Acting Chief Financial Officer**ISDA®2002**
28