exhibit_10-1.htm - Generated by SEC Publisher for SEC Filing






 



EXHIBIT 10.1

 (Multicurrency—Cross Border)

ISDAÒ

International Swap Dealers Association, Inc.

MASTER AGREEMENT

dated as of......... ...................

.............and..................., as Issuer

have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will

be governed by this Master Agreement, which includes the schedule (the “Schedule”), and the documents

and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those

Transactions.

Accordingly, the parties agree as follows:—

1.         Interpretation

(a)        Definitions. The terms defined in Section 14 and in the Schedule will have the meanings therein

specified for the purpose of this Master Agreement.

(b)        Inconsistency. In the event of any inconsistency between the provisions of the Schedule and the

other provisions of this Master Agreement, the Schedule will prevail.  In the event of any inconsistency

between the provisions of any Confirmation and this Master Agreement (including the Schedule), such

Confirmation will prevail for the purpose of the relevant Transaction.

(c)        Single Agreement. All Transactions are entered into in reliance on the fact that this Master

Agreement and all Confirmations form a single agreement between the parties (collectively referred to as

this “Agreement”), and the parties would not otherwise enter into any Transactions.

2.         Obligations

(a)        General Conditions.

(i)    Each party will make each payment or delivery specified in each Confirmation to be made by

it, subject to the other provisions of this Agreement.

(ii)   Payments under this Agreement will be made on the due date for value on that date in the place

of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in

freely transferable funds and in the manner customary for payments in the required currency. Where

settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on

the due date in the manner customary for the relevant obligation unless otherwise specified in the

relevant Confirmation or elsewhere in this Agreement.

(iii)  Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent

that no Event of Default or Potential Event of Default with respect to the other party has occurred

and is continuing, (2) the condition precedent that no Early Termination Date in respect of the

relevant Transaction has occurred or been effectively designated and (3) each other applicable

condition precedent specified in this Agreement.






	
Copyright © 1992 by International Swap Dealers Association, Inc.





 


 








 



(b)        Change of Account. Either party may change its account for receiving a payment or delivery by

giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment

or delivery to which such change applies unless such other party gives timely notice of a reasonable objection

to such change.

(c)        Netting. If on any date amounts would otherwise be payable:—

(i)    in the same currency; and

(ii)   in respect of the same Transaction,

by each party to the other, then, on such date, each party’s obligation to make payment of any such amount

will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been

payable by one party exceeds the aggregate amount that would otherwise have been payable by the other

party, replaced by an obligation upon the party by whom the larger aggregate amount would have been

payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount.

The parties may elect in respect of two or more Transactions that a net amount will be determined in respect

of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of

whether such amounts are payable in respect of the same Transaction. The election may be made in the

Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions

identified as being subject to the election, together with the starting date (in which case subparagraph (ii)

above will not, or will cease to, apply to such Transactions from such date). This election may be made

separately for different groups of Transactions and will apply separately to each pairing of Offices through

which the parties make and receive payments or deliveries.

(d)        Deduction or Withholding for Tax.

(i)    Gross‐Up. All payments under this Agreement will be made without any deduction or

withholding for or on account of any Tax unless such deduction or withholding is required by any

applicable law, as modified by the practice of any relevant governmental revenue authority, then in

effect. If a party is so required to deduct or withhold, then that party (“X”) will:—

(1)    promptly notify the other party (“Y”) of such requirement;

(2)    pay to the relevant authorities the full amount required to be deducted or withheld

(including the full amount required to be deducted or withheld from any additional amount

paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such

deduction or withholding is required or receiving notice that such amount has been assessed

against Y;

(3)    promptly forward to Y an official receipt (or a certified copy), or other documentation

reasonably acceptable to Y, evidencing such payment to such authorities; and

(4)    if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is

otherwise entitled under this Agreement, such additional amount as is necessary to ensure that

the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed

against X or Y) will equal the full amount Y would have received had no such deduction or

withholding been required. However, X will not be required to pay any additional amount to

Y to the extent that it would not be required to be paid but for:—

(A)  the failure by Y to comply with or perform any agreement contained in

Section 4(a)(i), 4(a)(iii) or 4(d); or

(B)  the failure of a representation made by Y pursuant to Section 3(f) to be accurate and

true unless such failure would not have occurred but for (I) any action taken by a taxing

authority, or brought in a court of competent jurisdiction, on or after the date on which a

Transaction is entered into (regardless of whether such action is taken or brought with

respect to a party to this Agreement) or (II) a Change in Tax Law.



	
 

	
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(ii)   Liability. If:—

(1)    X is required by any applicable law, as modified by the practice of any relevant

governmental revenue authority, to make any deduction or withholding in respect of which X

would not be required to pay an additional amount to Y under Section 2(d)(i)(4);

(2)    X does not so deduct or withhold; and

(3)    a liability resulting from such Tax is assessed directly against X,

then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y

will promptly pay to X the amount of such liability (including any related liability for interest, but

including any related liability for penalties only if Y has failed to comply with or perform any

agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).

(e)        Default Interest; Other Amounts. Prior to the occurrence or effective designation of an Early

Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any

payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest

(before as well as after judgment) on the overdue amount to the other party on demand in the same currency

as such overdue amount, for the period from (and including) the original due date for payment to (but

excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of

daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation

of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of

any obligation required to be settled by delivery, it will compensate the other party on demand if and to the

extent provided for in the relevant Confirmation or elsewhere in this Agreement.

3.         Representations

Each party represents to the other party (which representations will be deemed to be repeated by each party

on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at

all times until the termination of this Agreement) that:—

(a)        Basic Representations.

(i)    Status. It is duly organised and validly existing under the laws of the jurisdiction of its

organisation or incorporation and, if relevant under such laws, in good standing;

(ii)   Powers. It has the power to execute this Agreement and any other documentation relating to

this Agreement to which it is a party, to deliver this Agreement and any other documentation relating

to this Agreement that it is required by this Agreement to deliver and to perform its obligations

under this Agreement and any obligations it has under any Credit Support Document to which it is

a party and has taken all necessary action to authorise such execution, delivery and performance;

(iii)  No Violation or Conflict. Such execution, delivery and performance do not violate or conflict

with any law applicable to it, any provision of its constitutional documents, any order or judgment

of any court or other agency of government applicable to it or any of its assets or any contractual

restriction binding on or affecting it or any of its assets;

(iv)  Consents. All governmental and other consents that are required to have been obtained by it

with respect to this Agreement or any Credit Support Document to which it is a party have been

obtained and are in full force and effect and all conditions of any such consents have been complied

with; and

(v)   Obligations Binding. Its obligations under this Agreement and any Credit Support Document

to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance 

with their respective terms (subject to applicable bankruptcy, reorganisation, insolvency,

moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability, to

equitable principles of general application (regardless of whether enforcement is sought in a

proceeding in equity or at law)).



	
 

	
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(b)        Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge,

Termination Event with respect to it has occurred and is continuing and no such event or circumstance would

occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support

Document to which it is a party.

(c)        Absence of Litigation. There is not pending or, to its knowledge, threatened against it or any of its

Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body,

agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of

this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations

under this Agreement or such Credit Support Document.

(d)        Accuracy of Specified Information. All applicable information that is furnished in writing by or on

behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of

the date of the information, true, accurate and complete in every material respect.

(e)        Payer Tax Representation. Each representation specified in the Schedule as being made by it for

the purpose of this Section 3(e) is accurate and true.

(f)        Payee Tax Representations. Each representation specified in the Schedule as being made by it for

the purpose of this Section 3(f) is accurate and true.

4.         Agreements

Each party agrees with the other that, so long as either party has or may have any obligation under this

Agreement or under any Credit Support Document to which it is a party:—

(a)        Furnish Specified Information. It will deliver to the other party or, in certain cases under

subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:—

(i)    any forms, documents or certificates relating to taxation specified in the Schedule or any

Confirmation;

(ii)   any other documents specified in the Schedule or any Confirmation; and

(iii)  upon reasonable demand by such other party, any form or document that may be required or

reasonably requested in writing in order to allow such other party or its Credit Support Provider to

make a payment under this Agreement or any applicable Credit Support Document without any

deduction or withholding for or on account of any Tax or with such deduction or withholding at a

reduced rate (so long as the completion, execution or submission of such form or document would

not materially prejudice the legal or commercial position of the party in receipt of such demand),

with any such form or document to be accurate and completed in a manner reasonably satisfactory

to such other party and to be executed and to be delivered with any reasonably required certification,

in each case by the date specified in the Schedule or such Confirmation or, if none is specified, as soon as

reasonably practicable.

(b)        Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all

consents of any governmental or other authority that are required to be obtained by it with respect to this

Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain

any that may become necessary in the future.

(c)        Comply with Laws. It will comply in all material respects with all applicable laws and orders to

which it may be subject if failure so to comply would materially impair its ability to perform its obligations

under this Agreement or any Credit Support Document to which it is a party.

(d)        Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f)

to be accurate and true promptly upon learning of such failure.

(e)        Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon

it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated,

organised, managed and controlled, or considered to have its seat, or in which a branch or office through


which it is acting for the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will indemnify

the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party’s

execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp

Tax Jurisdiction with respect to the other party.




	
 

	
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5.         Events of Default and Termination Events

(a)        Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit

Support Provider of such party or any Specified Entity of such party of any of the following events constitutes

an event of default (an “Event of Default”) with respect to such party:—

(i)    Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this

Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not

remedied on or before the third Local Business Day after notice of such failure is given to the party;

(ii)   Breach of Agreement. Failure by the party to comply with or perform any agreement or

obligation (other than an obligation to make any payment under this Agreement or delivery under

Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation

under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance

with this Agreement if such failure is not remedied on or before the thirtieth day after notice of

such failure is given to the party;

(iii)  Credit Support Default.

(1)    Failure by the party or any Credit Support Provider of such party to comply with or

perform any agreement or obligation to be complied with or performed by it in accordance

with any Credit Support Document if such failure is continuing after any applicable grace

period has elapsed;

(2)    the expiration or termination of such Credit Support Document or the failing or ceasing

of such Credit Support Document to be in full force and effect for the purpose of this Agreement

(in either case other than in accordance with its terms) prior to the satisfaction of all obligations

of such party under each Transaction to which such Credit Support Document relates without

the written consent of the other party; or

(3)    the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in

whole or in part, or challenges the validity of, such Credit Support Document;

(iv)  Misrepresentation. A representation (other than a representation under Section 3(e) or (f))

made or repeated or deemed to have been made or repeated by the party or any Credit Support

Provider of such party in this Agreement or any Credit Support Document proves to have been

incorrect or misleading in any material respect when made or repeated or deemed to have been made

or repeated;

(v)   Default under Specified Transaction.  The party, any Credit Support Provider of such party or

any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after

giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an 

acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults,

after giving effect to any applicable notice requirement or grace period, in making any payment or

delivery due on the last payment, delivery or exchange date of, or any payment on early termination

of, a Specified Transaction (or such default continues for at least three Local Business Days if there

is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or

rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity

appointed or empowered to operate it or act on its behalf);

(vi)  Cross Default.  If “Cross Default” is specified in the Schedule as applying to the party, the

occurrence or existence of (1) a default, event of default or other similar condition or event (however



	
 

	
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described) in respect of such party, any Credit Support Provider of such party or any applicable

Specified Entity of such party under one or more agreements or instruments relating to Specified

Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than

the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified

Indebtedness becoming, or becoming capable at such time of being declared, due and payable under

such agreements or instruments, before it would otherwise have been due and payable or (2) a default

by such party, such Credit Support Provider or such Specified Entity (individually or collectively)

in making one or more payments on the due date thereof in an aggregate amount of not less than the

applicable Threshold Amount under such agreements or instruments (after giving effect to any

applicable notice requirement or grace period);

(vii) Bankruptcy. The party, any Credit Support Provider of such party or any applicable Specified

Entity of such party:—

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes

insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay

its debts as they become due; (3) makes a general assignment, arrangement or composition

with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding

seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or

insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its

winding‐up or liquidation, and, in the case of any such proceeding or petition instituted or

presented against it, such proceeding or petition (A) results in a judgment of insolvency or

bankruptcy or the entry of an order for relief or the making of an order for its winding‐up or

liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days 

of the institution or presentation thereof; (5) has a resolution passed for its winding‐up, official

management or liquidation (other than pursuant to a consolidation, amalgamation or merger);

(6) seeks or becomes subject to the appointment of an administrator, provisional liquidator,

conservator, receiver, trustee, custodian or other similar official for it or for all or substantially

all its assets; (7) has a secured party take possession of all or substantially all its assets or has

a distress, execution, attachment, sequestration or other legal process levied, enforced or sued

on or against all or substantially all its assets and such secured party maintains possession, or

any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days

thereafter; (8) causes or is subject to any event with respect to it which, under the applicable

laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1)

to (7) inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval

of, or acquiescence in, any of the foregoing acts; or

(viii)     Merger Without Assumption. The party or any Credit Support Provider of such party

consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets

to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:—

(1)    the resulting, surviving or transferee entity fails to assume all the obligations of such party

or such Credit Support Provider under this Agreement or any Credit Support Document to

which it or its predecessor was a party by operation of law or pursuant to an agreement

reasonably satisfactory to the other party to this Agreement; or

(2)    the benefits of any Credit Support Document fail to extend (without the consent of the

other party) to the performance by such resulting, surviving or transferee entity of its obligations

under this Agreement.

(b)        Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit

Support Provider of such party or any Specified Entity of such party of any event specified below constitutes

an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax

Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event







	
 

	
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Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event

is specified pursuant to (v) below:—

(i)    Illegality.  Due to the adoption of, or any change in, any applicable law after the date on which

a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by

any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after

such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for

such party (which will be the Affected Party):—

(1)    to perform any absolute or contingent obligation to make a payment or delivery or to

receive a payment or delivery in respect of such Transaction or to comply with any other

material provision of this Agreement relating to such Transaction; or

(2)    to perform, or for any Credit Support Provider of such party to perform, any contingent

or other obligation which the party (or such Credit Support Provider) has under any Credit

Support Document relating to such Transaction;

(ii)   Tax Event. Due to (x) any action taken by a taxing authority, or brought in a court of competent

jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such

action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law,

the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on

the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional

amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest

under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to

be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e),

6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under

Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B));

(iii)  Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled

Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable

Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or

(2) receive a payment from which an amount has been deducted or withheld for or on account of

any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount

(other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party

consolidating or amalgamating with, or merging with or into, or transferring all or substantially all

its assets to, another entity (which will be the Affected Party) where such action does not constitute

an event described in Section 5(a)(viii);

(iv)  Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as applying

to the party, such party (“X”), any Credit Support Provider of X or any applicable Specified Entity of X

consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets

to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the 

creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such

Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action

(and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or

(v)   Additional Termination Event. If any “Additional Termination Event” is specified in the

Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the

Affected Party or Affected Parties shall be as specified for such Additional Termination Event in

the Schedule or such Confirmation).

(c)        Event of Default and Illegality. If an event or circumstance which would otherwise constitute or

give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not

constitute an Event of Default.



	
 

	
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6.         Early Termination

(a)        Right to Terminate Following Event of Default. If at any time an Event of Default with respect to

a party (the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non‐defaulting

Party” may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default,

designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of

all outstanding Transactions. If, however, “Automatic Early Termination” is specified in the Schedule as

applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur

immediately upon the occurrence with respect to such party of an Event of Default specified in

Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately

preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the

occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent

analogous thereto, (8).

(b)        Right to Terminate Following Termination Event.

(i)    Notice. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of

it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction

and will also give such other information about that Termination Event as the other party may reasonably

require.

(ii)   Transfer to Avoid Termination Event. If either an Illegality under Section 5(b)(i)(1) or a Tax

Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the

Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate

an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require 

such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after

it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of

the Affected Transactions to another of its Offices or Affiliates so that such Termination Event

ceases to exist.

If the Affected Party is not able to make such a transfer it will give notice to the other party to that

effect within such 20 day period, whereupon the other party may effect such a transfer within

30 days after the notice is given under Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the

prior written consent of the other party, which consent will not be withheld if such other party’s

policies in effect at such time would permit it to enter into transactions with the transferee on the

terms proposed.

(iii)  Two Affected Parties. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are 

two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after 

notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event.

(iv)  Right to Terminate. If:—

(1)    a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may

be, has not been effected with respect to all Affected Transactions within 30 days after an

Affected Party gives notice under Section 6(b)(i); or

(2)    an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional

Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not

the Affected Party,

either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger,

any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more

than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event

Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not

more than 20 days notice to the other party and provided that the relevant Termination Event is then


continuing, designate a day not earlier than the day such notice is effective as an Early Termination

Date in respect of all Affected Transactions.




	
 

	
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(c)        Effect of Designation.

(i)    If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early

Termination Date will occur on the date so designated, whether or not the relevant Event of Default

or Termination Event is then continuing.

(ii)   Upon the occurrence or effective designation of an Early Termination Date, no further

payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will

be required to be made, but without prejudice to the other provisions of this Agreement. The amount,

if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e).

(d)        Calculations.

(i)    Statement. On or as soon as reasonably practicable following the occurrence of an Early

Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e)

and will provide to the other party a statement (1) showing, in reasonable detail, such calculations

(including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving

details of the relevant account to which any amount payable to it is to be paid. In the absence of written

confirmation from the source of a quotation obtained in determining a Market Quotation, the records of

the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such

quotation.

(ii)   Payment Date. An amount calculated as being due in respect of any Early Termination Date

under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the

case of an Early Termination Date which is designated or occurs as a result of an Event of Default)

and on the day which is two Local Business Days after the day on which notice of the amount payable

is effective (in the case of an Early Termination Date which is designated as a result of a Termination

Event). Such amount will be paid together with (to the extent permitted under applicable law)

interest thereon (before as well as after judgment) in the Termination Currency, from (and including)

the relevant Early Termination Date to (but excluding) the date such amount is paid, at the

Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual

number of days elapsed.

(e)        Payments on Early Termination. If an Early Termination Date occurs, the following provisions

shall apply based on the parties’ election in the Schedule of a payment measure, either “Market Quotation”

or “Loss”, and a payment method, either the “First Method” or the “Second Method”. If the parties fail to

designate a payment measure or payment method in the Schedule, it will be deemed that “Market Quotation”

or the “Second Method”, as the case may be, shall apply. The amount, if any, payable in respect of an Early

Termination Date and determined pursuant to this Section will be subject to any Set‐off.

(i)    Events of Default. If the Early Termination Date results from an Event of Default:—

(1)    First Method and Market Quotation. If the First Method and Market Quotation apply, the

Defaulting Party will pay to the Non‐defaulting Party the excess, if a positive number, of (A) the

sum of the Settlement Amount (determined by the Non‐defaulting Party) in respect of the

Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing

to the Non‐defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts

owing to the Defaulting Party.

(2)    First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay

to the Non‐defaulting Party, if a positive number, the Non‐defaulting Party’s Loss in respect

of this Agreement.

(3)    Second Method and Market Quotation. If the Second Method and Market Quotation apply,

an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the







	
 

	
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Non‐defaulting Party) in respect of the Terminated Transactions and the Termination Currency

Equivalent of the Unpaid Amounts owing to the Non‐defaulting Party less (B) the Termination

Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is

a positive number, the Defaulting Party will pay it to the Non‐defaulting Party; if it is a negative

number, the Non‐defaulting Party will pay the absolute value of that amount to the Defaulting

Party.

(4)    Second Method and Loss. If the Second Method and Loss apply, an amount will be payable

equal to the Non‐defaulting Party’s Loss in respect of this Agreement. If that amount is a

positive number, the Defaulting Party will pay it to the Non‐defaulting Party; if it is a negative

number, the Non‐defaulting Party will pay the absolute value of that amount to the Defaulting

Party.

(ii)   Termination Events. If the Early Termination Date results from a Termination Event:—

(1)    One Affected Party. If there is one Affected Party, the amount payable will be determined

in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss

applies, except that, in either case, references to the Defaulting Party and to the Non‐defaulting

Party will be deemed to be references to the Affected Party and the party which is not the

Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being

terminated, Loss shall be calculated in respect of all Terminated Transactions.

(2)    Two Affected Parties. If there are two Affected Parties:—

(A)  if Market Quotation applies, each party will determine a Settlement Amount in

respect of the Terminated Transactions, and an amount will be payable equal to (I) the

sum of (a) one‐half of the difference between the Settlement Amount of the party with

the higher Settlement Amount (“X”) and the Settlement Amount of the party with the

lower Settlement Amount (“Y”) and (b) the Termination Currency Equivalent of the

Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid

Amounts owing to Y; and

(B)  if Loss applies, each party will determine its Loss in respect of this Agreement (or,

if fewer than all the Transactions are being terminated, in respect of all Terminated

Transactions) and an amount will be payable equal to one‐half of the difference between

the Loss of the party with the higher Loss (“X”) and the Loss of the party with the lower

Loss (“Y”).

If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X

will pay the absolute value of that amount to Y.

(iii)  Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs

because “Automatic Early Termination” applies in respect of a party, the amount determined under

this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to

reflect any payments or deliveries made by one party to the other under this Agreement (and retained

by such other party) during the period from the relevant Early Termination Date to the date for

payment determined under Section 6(d)(ii).

(iv)  Pre‐Estimate. The parties agree that if Market Quotation applies an amount recoverable under

this Section 6(e) is a reasonable pre‐estimate of loss and not a penalty. Such amount is payable for

the loss of bargain and the loss of protection against future risks and except as otherwise provided

in this Agreement neither party will be entitled to recover any additional damages as a consequence

of such losses.



	
 

	
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7.         Transfer

Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement

may be transferred (whether by way of security or otherwise) by either party without the prior written consent

of the other party, except that:—

(a)        a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation

with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without

prejudice to any other right or remedy under this Agreement); and

(b)        a party may make such a transfer of all or any part of its interest in any amount payable to it from

a Defaulting Party under Section 6(e).

Any purported transfer that is not in compliance with this Section will be void.

8.         Contractual Currency

(a)        Payment in the Contractual Currency. Each payment under this Agreement will be made in the

relevant currency specified in this Agreement for that payment (the  “Contractual Currency”). To the extent

permitted by applicable law, any obligation to make payments under this Agreement in the Contractual

Currency will not be discharged or satisfied by any tender in any currency other than the Contractual

Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed,

acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual

Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement.

If for any reason the amount in the Contractual Currency so received falls short of the amount in the

Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to

the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency

as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency

so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party

receiving the payment will refund promptly the amount of such excess.

(b)        Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a

currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect

of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this

Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described

in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such

party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other

party the amount of any shortfall of the Contractual Currency received by such party as a consequence of

sums paid in such other currency and will refund promptly to the other party any excess of the Contractual

 Currency received by such party as a consequence of sums paid in such other currency if such shortfall or

such excess arises or results from any variation between the rate of exchange at which the Contractual

Currency is converted into the currency of the judgment or order for the purposes of such judgment or order

and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in

converting the currency received into the Contractual Currency, to purchase the Contractual Currency with

the amount of the currency of the judgment or order actually received by such party. The term “rate of

exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the

purchase of or conversion into the Contractual Currency.

(c)        Separate Indemnities. To the extent permitted by applicable law, these indemnities constitute

separate and independent obligations from the other obligations in this Agreement, will be enforceable as

separate and independent causes of action, will apply notwithstanding any indulgence granted by the party

to which any payment is owed and will not be affected by judgment being obtained or claim or proof being

made for any other sums payable in respect of this Agreement.

(d)        Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate

that it would have suffered a loss had an actual exchange or purchase been made.



	
 

	
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9.         Miscellaneous

(a)        Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties

with respect to its subject matter and supersedes all oral communication and prior writings with respect

thereto.

(b)        Amendments. No amendment, modification or waiver in respect of this Agreement will be effective

unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the

parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system.

(c)        Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the

parties under this Agreement will survive the termination of any Transaction.

(d)        Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and

privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies

and privileges provided by law.

(e)        Counterparts and Confirmations.

(i)    This Agreement (and each amendment, modification and waiver in respect of it) may be

executed and delivered in counterparts (including by facsimile transmission), each of which will be

deemed an original.

(ii)   The parties intend that they are legally bound by the terms of each Transaction from the moment

they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as

soon as practicable and may be executed and delivered in counterparts (including by facsimile

transmission) or be created by an exchange of telexes or by an exchange of electronic messages on

an electronic messaging system, which in each case will be sufficient for all purposes to evidence

a binding supplement to this Agreement. The parties will specify therein or through another effective

means that any such counterpart, telex or electronic message constitutes a Confirmation.

(f)        No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this

Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power

or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or

privilege or the exercise of any other right, power or privilege.

(g)        Headings. The headings used in this Agreement are for convenience of reference only and are not

to affect the construction of or to be taken into consideration in interpreting this Agreement.

10.        Offices; Multibranch Parties

(a)        If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction

through an Office other than its head or home office represents to the other party that, notwithstanding the

place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such

party are the same as if it had entered into the Transaction through its head or home office. This representation

will be deemed to be repeated by such party on each date on which a Transaction is entered into.

(b)        Neither party may change the Office through which it makes and receives payments or deliveries

for the purpose of a Transaction without the prior written consent of the other party.

(c)        If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make

and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the

Office through which it makes and receives payments or deliveries with respect to a Transaction will be

specified in the relevant Confirmation.

11.        Expenses

A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all

reasonable out‐of‐pocket expenses, including legal fees and Stamp Tax, incurred by such other party by

reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document


to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including,

but not limited to, costs of collection.




	
 

	
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12.        Notices

(a)        Effectiveness. Any notice or other communication in respect of this Agreement may be given in any

manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given

by facsimile transmission or electronic messaging system) to the address or number or in accordance with

the electronic messaging system details provided (see the Schedule) and will be deemed effective as

indicated:—

(i)    if in writing and delivered in person or by courier, on the date it is delivered;

(ii)   if sent by telex, on the date the recipient’s answerback is received;

(iii)  if sent by facsimile transmission, on the date that transmission is received by a responsible

employee of the recipient in legible form (it being agreed that the burden of proving receipt will be

on the sender and will not be met by a transmission report generated by the sender’s facsimile

machine);

(iv)  if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt

requested), on the date that mail is delivered or its delivery is attempted; or

(v)   if sent by electronic messaging system, on the date that electronic message is received,

unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business

Day or that communication is delivered (or attempted) or received, as applicable, after the close of business

on a Local Business Day, in which case that communication shall be deemed given and effective on the first

following day that is a Local Business Day.

(b)        Change of Addresses. Either party may by notice to the other change the address, telex or facsimile

number or electronic messaging system details at which notices or other communications are to be given to

it.

13.        Governing Law and Jurisdiction

(a)        Governing Law. This Agreement will be governed by and construed in accordance with the law

specified in the Schedule.

(b)        Jurisdiction. With respect to any suit, action or proceedings relating to this Agreement

(“Proceedings”), each party irrevocably:—

(i)    submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed

by English law, or to the non‐exclusive jurisdiction of the courts of the State of New York and the

United States District Court located in the Borough of Manhattan in New York City, if this

Agreement is expressed to be governed by the laws of the State of New York; and

(ii)   waives any objection which it may have at any time to the laying of venue of any Proceedings

brought in any such court, waives any claim that such Proceedings have been brought in an

inconvenient forum and further waives the right to object, with respect to such Proceedings, that

such court does not have any jurisdiction over such party.

Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction

(outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined

in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or

re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more

jurisdictions preclude the bringing of Proceedings in any other jurisdiction.

(c)        Service of Process. Each party irrevocably appoints the Process Agent (if any) specified opposite

its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any







	
 

	
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reason any party’s Process Agent is unable to act as such, such party will promptly notify the other party

and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably

consent to service of process given in the manner provided for notices in Section 12. Nothing in this

Agreement will affect the right of either party to serve process in any other manner permitted by law.

(d)        Waiver of Immunities. Each party irrevocably waives, to the fullest extent permitted by applicable

law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity

on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief

by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets

(whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its

revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and

irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any

Proceedings.

14.        Definitions

As used in this Agreement:—

“Additional Termination Event” has the meaning specified in Section 5(b).

“Affected Party” has the meaning specified in Section 5(b).

“Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Tax

Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event

and (b) with respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled, directly or

indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or

indirectly under common control with the person. For this purpose, “control” of any entity or person means

ownership of a majority of the voting power of the entity or person.

“Applicable Rate” means:—

(a)    in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii))

by a Defaulting Party, the Default Rate;

(b)   in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date

(determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate;

(c)    in respect of all other obligations payable or deliverable (or which would have been but for

Section 2(a)(iii)) by a Non‐defaulting Party, the Non‐default Rate; and

(d)   in all other cases, the Termination Rate.

“Burdened Party” has the meaning specified in Section 5(b).

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or

amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the

date on which the relevant Transaction is entered into.

“consent” includes a consent, approval, action, authorisation, exemption, notice, filing, registration or

exchange control consent.

“Credit Event Upon Merger” has the meaning specified in Section 5(b).

“Credit Support Document” means any agreement or instrument that is specified as such in this Agreement.

“Credit Support Provider” has the meaning specified in the Schedule.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to

the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1 % per annum.



	
 

	
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“Defaulting Party” has the meaning specified in Section 6(a).

“Early Termination Date” means the date determined in accordance with Section 6(a) or 6(b)(iv).

“Event of Default” has the meaning specified in Section 5(a) and, if applicable, in the Schedule.

“Illegality” has the meaning specified in Section 5(b).

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment

under this Agreement but for a present or former connection between the jurisdiction of the government or

taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient

(including, without limitation, a connection arising from such recipient or related person being or having

been a citizen or resident of such jurisdiction, or being or having been organised, present or engaged in a

trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of

business in such jurisdiction, but excluding a connection arising solely from such recipient or related person

having executed, delivered, performed its obligations or received a payment under, or enforced, this

Agreement or a Credit Support Document).

“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of

any relevant governmental revenue authority) and “lawful” and “unlawful” will be construed accordingly.

“Local Business Day” means, subject to the Schedule, a day on which commercial banks are open for

business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any

obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified,

as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated

by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account

is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in

relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the

city specified in the address for notice provided by the recipient and, in the case of a notice contemplated

by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to

Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction.

“Loss” means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and

a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be

its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement

or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of

bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result

of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain

resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery

required to have been made (assuming satisfaction of each applicable condition precedent) on or before the

relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or

6(c)(ii)(2)(A) applies. Loss does not include a party’s legal fees and out‐of‐pocket expenses referred to under

Section 11. A party will determine its Loss as of the relevant Early Termination Date, or, if that is not reasonably

practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine

its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant

markets.

“Market Quotation” means, with respect to one or more Terminated Transactions and a party making the

determination, an amount determined on the basis of quotations from Reference Market-makers. Each

quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number)

or by such party (expressed as a positive number) in consideration of an agreement between such party (taking

into account any existing Credit Support Document with respect to the obligations of such party) and the

quoting Reference Market‐maker to enter into a transaction (the “Replacement Transaction”) that would

have the effect of preserving for such party the economic equivalent of any payment or delivery (whether

the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable

condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group

of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have







	
 

	
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been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or

group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that

would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each

applicable condition precedent) after that Early Termination Date is to be included. The Replacement

Transaction would be subject to such documentation as such party and the Reference Market‐maker may, in

good faith, agree. The party making the determination (or its agent) will request each Reference

Market‐maker to provide its quotation to the extent reasonably practicable as of the same day and time

(without regard to different time zones) on or as soon as reasonably practicable after the relevant Early

Termination Date. The day and time as of which those quotations are to be obtained will be selected in good

faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after

consultation with the other. If more than three quotations are provided, the Market Quotation will be the

arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If

exactly three such quotations are provided, the Market Quotation will be the quotation remaining after

disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same

highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations

are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group

of Terminated Transactions cannot be determined.

“Non‐default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost)

to the Non‐defaulting Party (as certified by it) if it were to fund the relevant amount.

“Non‐defaulting Party” has the meaning specified in Section 6(a).

“Office” means a branch or office of a party, which may be such party’s head or home office.

“Potential Event of Default” means any event which, with the giving of notice or the lapse of time or both, 

would constitute an Event of Default.

“Reference Market‐makers” means four leading dealers in the relevant market selected by the party

determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which

satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make

an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same

city.

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is

incorporated, organised, managed and controlled or considered to have its seat, (b) where an Office through

which the party is acting for purposes of this Agreement is located, (c) in which the party executes this

Agreement and (d) in relation to any payment, from or through which such payment is made.

“Scheduled Payment Date” means a date on which a payment or delivery is to be made under Section 2(a)(i)

with respect to a Transaction.

“Set‐off” means set‐off, offset, combination of accounts, right of retention or withholding or similar right

or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under

this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such

payer.

“Settlement Amount” means, with respect to a party and any Early Termination Date, the sum of:—

(a)    the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each

Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined;

and

(b)   such party’s Loss (whether positive or negative and without reference to any Unpaid Amounts) for

each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be

determined or would not (in the reasonable belief of the party making the determination) produce a

commercially reasonable result.

“Specified Entity” has the meaning specified in the Schedule.



	
 

	
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“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future,

contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money.

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect

thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support

Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or

any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is

a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or

equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction,

cap transaction, floor transaction, collar transaction, currency swap transaction, cross‐currency rate swap

transaction, currency option or any other similar transaction (including any option with respect to any of these

transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified

Transaction in this Agreement or the relevant confirmation.

“Stamp Tax” means any stamp, registration, documentation or similar tax.

“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including

interest, penalties and additions thereto) that is imposed by any government or other taxing authority in

respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax.

“Tax Event” has the meaning specified in Section 5(b).

“Tax Event Upon Merger” has the meaning specified in Section 5(b).

“Terminated Transactions” means with respect to any Early Termination Date (a) if resulting from a

Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions

(in either case) in effect immediately before the effectiveness of the notice designating that Early Termination

Date (or, if “Automatic Early Termination” applies, immediately before that Early Termination Date).

“Termination Currency” has the meaning specified in the Schedule.

“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination

Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other

than the Termination Currency (the “Other Currency”), the amount in the Termination Currency determined

by the party making the relevant determination as being required to purchase such amount of such Other

Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case

may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to

the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such

Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign

exchange agent is located) on such date as would be customary for the determination of such a rate for the

purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The

foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be

selected in good faith by that party and otherwise will be agreed by the parties.

“Termination Event” means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be

applicable, a Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or

 evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such

amounts.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of

(a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become

payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination

Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated

Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for

Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date

and which has not been so settled as at such Early Termination Date, an amount equal to the fair market







	
 

	
17

	
ISDAÒ 1992





 


 








 



value of that which was (or would have been) required to be delivered as of the originally scheduled date

for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency,

of such amounts, from (and including) the date such amounts or obligations were or would have been required

to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such

amounts of interest will be calculated on the basis of daily compounding and the actual number of days

elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably

determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged,

it shall be the average of the Termination Currency Equivalents of the fair market values reasonably

determined by both parties.

IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below

with effect from the date specified on the first page of this document.


	
 

....................

(Name of Party)

	
 

	
 

..................

(Name of Party)


	
 

	
 

	
 


	
By: .......................................................................

Name:

Title:

Date:

	
 

	
By: .......................................................................

Name:

Title:

Date:


	
By: .......................................................................

Name:

Title:

Date:

	
 

	
By: .......................................................................

Name:

Title:

Date:







	
 

	
18

	
ISDAÒ 1992





 


 








 



SCHEDULE

TO THE 

MASTER AGREEMENT

dated as of _________, 20__

between

[MORGAN STANLEY] 

(“Party A”)

and

SATURNS TRUST NO. ______

(“Party B” or the “Trust”)

Part 1.  Termination Provisions.

(a)         “Breach of Agreement”, “Credit Support Default” “Misrepresentation”, “Default Under Specified Transaction”, “Cross-Default”, “Bankruptcy”:  Section 5(a)(ii), Section 5(a)(iv), Section 5(a)(v) and Section 5(a)(vi) will not apply to Party A or Party B.  Section 5(a)(iii) will not apply where Party B would be the Defaulting Party.

(b)        “Bankruptcy”:  Section 5(a)(vii), where Party B would be the Defaulting Party, is amended as follows:

 

by deleting clause (2);

 

by deleting in clause (6) the words “seeks or” and the words “, trustee, custodian”;

 

by deleting clause (7); and

 

by deleting clause (9).

(b)         “Tax Event Upon Merger”; “Credit Event Upon Merger”: Section 5(b)(ii), Section 5(b)(iii) and Section 5(b)(iv) will not apply to Party A or Party B.

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

(d)         Payments on Early Termination. “Market Quotation” and “Second Method” will apply for purposes of Section 6(e) of this Agreement[; provided, however, that in the case of (1) an Additional Termination Event resulting solely from an Excess Expense Event under the Trust Agreement or (2) an Early Termination Date occurring solely as a result of an Event of Default with respect to Party A, any amount payable by Party B to Party A pursuant to Section 6(e) of the Agreement in respect of such Early Termination Date shall be limited to the amount available for such payment in accordance with the terms of the Trust Agreement].

(e)         “Termination Currency” means United States Dollars.

(f)          Additional Termination Event will apply. 

(i)         Any “Trust Wind-Up Event” under the Trust Agreement, of even date herewith (the “Trust Agreement”), other than (viii) of Section 9.02(a) of the Standard Terms for Trust 
Agreements, dated March 25, 2010 (the “Standard Terms”), between Party B and the trustee named therein (the “Trustee”) shall constitute an Additional Termination Event.  Party B shall be the Affected Party and all Transactions shall be Affected Transactions.



19

 


 








 





If a Trust Wind-Up Event has occurred and Party A has not designated an Early Termination Date in accordance with Section 6(b) of the Master Agreement, as applicable, within three Business Days after receiving written notice from Party B, then Party B shall be entitled to designate an Early Termination Date.  

(ii)        It shall be an Additional Termination Event, with Party B as the sole Affected Party and all Transactions as Affected Transactions, if the Underlying Security Issuer or Underlying Security Guarantor (as defined in the Trust Agreement) effects an early redemption of the Underlying Securities (as defined in the Trust Agreement).  In the event that the relevant redemption of the Underlying Securities in only in part, such Additional Termination Event shall occur with respect to a portion of the Notional Amount of each Transaction corresponding to the portion of the Underlying Securities which have been redeemed.

Part 2.  Tax Representations.

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

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 2(a)(iii), 2(e), 6(d)(ii) or 6(e)) to be made by it to the other party under this Agreement.  In making this representation, it may rely on:-

(i)             the accuracy of any representation made by the other party pursuant to Section 3(f);

(ii)            the satisfaction of the agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii); and

(iii)           the satisfaction of the agreement of the other party contained in Section 4(d);

provided that it shall not be a breach of this representation where reliance is placed on clause (ii), and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

(b)                        Payee Tax Representations.  For the purposes of Section 3(f), Party A represents that it is a limited company duly organized under the laws of [                     ].

 


20

 


 








 



Part 3.  Agreement to Deliver Documents.

 


	
Party required to deliver document

	
Form/Document/

Certificate

	
Date by which to be delivered

	
Covered by Section 3(d) Representation


	
Party A and Party B

	
Either (1) a signature booklet containing secretary’s certificate and resolutions (“authorizing resolutions”) authorizing the party to enter into derivatives transactions of the type contemplated by the parties or (2) a secretary’s certificate, authorizing resolutions and incumbency certificate for such party and any Credit Support Provider of such party reasonably satisfactory in form and substance to the other party.

	
The earlier of the fifth Business Day after the Trade Date of the first Transaction or upon execution of this Agreement and as deemed necessary for any further documentation.

	
Yes


	
Party B

	
Certified copies of documents evidencing Party B’s capacity to execute this Agreement, each Confirmation and any Credit Support Document (if applicable) and to perform its obligations hereunder and thereunder.

	
As soon as practicable after the execution of this Agreement.

	
Yes


	
Party B

	
A written opinion of legal counsel to Party B, reasonably satisfactory in form and substance to Party A.

	
Upon execution of this Agreement and as deemed necessary for any further documentation.

	
No


	
Party A and Party B

	
Such other documents as the other party may reasonably request

	
Upon request.

	
No





 


21

 


 








 



Part 4.  Miscellaneous.

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

(i)       Address for notice or communications to Party A:-

[Morgan Stanley

Attn:  [                         ]

1585 Broadway

New York, New York 10036-8293

Facsimile No.: 212-507-4622   Telephone No.: 212-761-4000]

 

(ii)      Address for notice or communications to Party B:-

SATURNS Trust No. _____

c/o [Trustee]

[Address to be inserted] 

Attn: 

Facsimile No.: ___________  Telephone No.: ___________]

(b)         Notices.  Section 12(a) is amended by adding in the third line thereof after the phrase “messaging system” and before the “)” the words, “; provided, however, any such notice or other communication may be given by facsimile transmission if telex is unavailable, no telex number is supplied to the party providing notice, or if answer back confirmation is not received from the party to whom the telex is sent.”

(c)         Process Agent.  For the purpose of Section 13(c) of this Agreement, Party B irrevocably appoints as its Process Agent:

Same as above address for notices

(d)         Offices.  The provisions of Section 10(a) will apply to Party A and to Party B.

(e)         Multibranch Party.  For the purpose of Section 10(c):-

Party A is not a Multibranch Party.

Party B is not a Multibranch Party.

(f)          “Calculation Agent” means Party A.

(g)         “Credit Support Document” means any credit support annex, any Confirmation and any other document any of which by its terms secures, guarantees or otherwise supports either or both parties’ obligations under this Agreement.

(h)         Governing Law; Jurisdiction.  This Agreement, any Credit Support Document and each Confirmation will be governed by and constructed in accordance with the laws of the State of New York, without reference to its choice of law doctrine.  Section 13(b) is amended by: (1) deleting “non-” from the second line of clause (i); and (2) deleting the final paragraph.

(i)          Waiver of Jury Trial.  Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any Proceedings relating to this Agreement or any Credit Support Document.

(j)          Netting of Payment.  Clause (ii) of Section 2(c) will not apply.


22

 


 








 



(k)         “Affiliate” has the meaning specified in Section 14, but excludes [Morgan Stanley Derivative Products Inc.]

Part 5.  Other Provisions.

(a)        Trustee Capacity. It is expressly understood and agreed by the parties hereto that insofar as this Agreement is executed on behalf of the Trust (i) this Agreement is executed and delivered by Trustee, not in its individual capacity but solely as Trustee under the Trust Agreement in the exercise of the powers and authority conferred and vested in it, (ii) each of the representations, undertakings and agreements herein made on the part of the Trust is made and intended not as representations, warranties, covenants, undertakings and agreements by the Trustee in its individual capacity but is made and intended for the purpose of binding only the Trust and (iii) under no circumstances shall the Trustee in its individual capacity be personally liable for the payment of any indebtedness or expenses of the Trust or be liable for the breach or failure of any obligation, representation, warranty or covenant made or undertaken by the Trust under this Agreement.

(b)         Additional Representations.  Section 3 is hereby amended by adding at the end thereof the following Subparagraphs:

              

“(g)  It is an “Eligible Contract Participant” as defined in Section 1a(12) of the Commodity Exchange Act, as amended.

(h)  It has entered into this Agreement (including each Transaction evidenced hereby) in conjunction with its line of business (including financial intermediation services) or the financing of its business.

(i)  Non-Reliance.  It is acting for its own account, and it has made its own independent decisions to enter into that Transaction and as to whether that Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisers as it has deemed necessary.  It is not relying on any communication (written or oral) of the other party as investment advice or as a recommendation to enter into that Transaction; it being understood that information and explanations related to the terms and conditions of a Transaction shall not be considered investment advice or a recommendation to enter into that Transaction.  No communication (written or oral) received from the other party shall be deemed to be an assurance or guarantee as to the expected results of that Transaction.

(j)  Assessment and Understanding.  It is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of that Transaction.  It is also capable of assuming, and assumes, the risks of that Transaction.

(k)  Status of Parties.  The other party is not acting as a fiduciary for or adviser to it in respect of that Transaction.  It is entering into this Agreement, any Credit Support Document to which it is a party, each Transaction and any other documentation relating to this Agreement or any Transaction as principal (and not as agent or in any other capacity, fiduciary or otherwise).”


23

 


 








 



(c)         Confirmations.  Party A will deliver to Party B a Confirmation relating to each Transaction.

(d)         Security.  As collateral security for the prompt and complete payment and performance when due of the obligations of Party B hereunder, Party B hereby grants to Party A a continuing security interest in all of Party B’s right, title and interest in the Trust Property as such term is defined in the Trust Agreement pursuant to which Party B was formed.  Such security interest shall remain in full force and effect until Party A has received amounts due to it hereunder.

(e)         Further Acknowledgments.  Each party agrees and acknowledges that:

(i)          Each transfer of funds, securities or other property under this Agreement or any Transaction hereunder constitutes a transfer that may not be avoided under Sections 544, 545, 547, 548(a)(2) or 548(b) of Title 11 of the United States Code (the “Bankruptcy Code”).

(ii)         The rights given to each party hereunder upon an Event of Default by the other to cause the liquidation and termination of this Agreement and each Transaction hereunder, and to set off mutual debts and claims in connection therewith, may not be stayed, limited or avoided under the Bankruptcy Code, including, without limitation, Section 362, 365(c) or 105(a) thereof.

(f)          Setoff and Related Matters.  Without prejudice to any netting provisions of Section 2 or Section 6 of the Agreement, the obligations of the Parties under this Agreement will not be subject to rights of setoff.

(g)         Non-Petition.  Prior to the date that is one year and one day after all distributions in respect of the Units issued by the Trust have been made, Party A shall not take any action, institute any proceeding, join in any action or proceeding or otherwise cause any action or proceeding against the Trust under the United States Bankruptcy Code or any other liquidation, insolvency, bankruptcy, moratorium, reorganization or similar law (“Insolvency Law”) applicable to the Trust, now or hereafter in effect, or which would be reasonably likely to cause the Trust to be subject to, or seek the protection of, any such Insolvency Law.

(h)         Depositor Optional Exchange.  If the Depositor has exercised its right of Depositor Optional Exchange (as defined in the Trust Agreement) in part, Party A consents to assign to the Depositor a portion of the Swap Agreement proportionate to the portion of the Units being exchanged or, in lieu of such assignment, at the option of the Depositor, to agree to a partial termination of the related Transaction.  The parties agree that any such assignment or termination shall not constitute an “amendment, modification, waiver, or other change of the Swap Agreement” for purposes of Section 7.02(a) of the Trust Agreement.


24

 











 



IN WITNESS WHEREOF, the parties have executed this Schedule by their duly authorized officers as of the date hereof.

[MORGAN STANLEY]

By: ____________________________

Name: 

Title:    

Date:   

SATURNS TRUST NO. _______

By: [                       ]

as Trustee

By: ____________________________

Name:  

Title:    

Date: