Document:

EXHIBIT 10.1

 

(Multicurrency—Cross Border)

ISDA®

 

International Swap Dealers Association, Inc.

 

MASTER
AGREEMENT

dated as of April 12,
2002

 

Fleet National Bank and
Price
Legacy Corporation

 

have entered and/or anticipate entering into one or
more transactions (each a “Transaction”) that are or will be governed by this Master Agreement, which includes the
schedule (the “Schedule”), and
the documents and other confirming evidence (each a “Confirmation”) exchanged between the parties confirming those
Transactions.

 

Accordingly, the parties agree as follows:—

 

1.            Interpretation

 

(a)           Definitions. The
terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master
Agreement.

 

(b)           Inconsistency. In the
event of any inconsistency between
the provisions of the Schedule and
the other provisions of this Master Agreement, the Schedule will prevail. In
the event of any inconsistency between the provisions of any Confirmation and
this Master Agreement (including the Schedule), such Confirmation will prevail
for the purpose of the relevant Transaction.

 

(c)           Single Agreement. All Transactions
are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this “Agreement”), and the
parties would not otherwise enter into any Transactions.

 

2.            Obligations

 

(a)           General Conditions.

 

(i) Each party will make
each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of
this Agreement.

 

(ii) Payments under this Agreement will be made on the due
date for value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner
customary for payments in the required currency. Where settlement is by
delivery (that is, other than by payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation
or elsewhere in this Agreement.

 

(iii) Each obligation of each party under Section
2(a)(i) is subject to (1) the condition precedent that no Event of Default or
Potential Event of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction
has occurred or been effectively designated and (3) each other applicable
condition precedent specified in this Agreement.

 

 

(b)           Change of Account.
Either party may change its account for receiving a payment or delivery by
giving notice to the other party at least five Local Business Days prior to the
scheduled date for the payment or delivery to which such change applies unless such other party gives timely
notice of a reasonable objection to such change.

 

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

 

(i)   in the same currency; and

 

(ii)  in respect of the same Transaction,

 

by each party to the other, then, on such date, each
party’s obligation to make payment of any such amount will be automatically
satisfied and discharged and, if the aggregate amount that would otherwise have
been payable by one party exceeds the aggregate amount that would otherwise
have been payable by the other party, replaced by an obligation upon the party
by whom the larger aggregate amount
would  have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.

 

The parties may elect in respect of two or more
Transactions that a net amount will be determined in respect of all amounts
payable on the same date in the same currency in respect of such Transactions,
regardless of whether such amounts are payable in respect of the same
Transaction. The election may be made in the Schedule or a Confirmation by
specifying that subparagraph (ii) above will not apply to the Transactions
identified as being subject to the election, together with the starting date
(in which case subparagraph (ii) above will not, or will cease to, apply to
such Transactions from such date). This election may be made separately for
different groups of Transactions and will apply separately to each pairing of
Offices through which the parties make and receive payments or deliveries.

 

(d)           Deduction or Withholding for Tax,

 

(i)            Gross-Up. All payments under this Agreement
will be made without any deduction or withholding for or on account of any Tax
unless such deduction or withholding is required by any applicable law, as
modified by the practice of any relevant governmental revenue authority, then
in effect.  If a party is so required to
deduct or withhold, then that party (“X”) will:—

 

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

 

(2)  pay to the relevant authorities the full
amount required to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by X to Y under this
Section 2(d)) promptly upon the earlier of determining that such deduction or
withholding is required or receiving notice that such amount has been assessed
against Y;

 

(3)  promptly forward to Y an official receipt
(or a certified copy), or other documentation reasonably acceptable to Y, evidencing
such payment to such authorities; and

 

(4)  if such Tax is an Indemnifiable Tax, pay to
Y, in addition to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether assessed
against X or Y) will equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be required to pay
any additional amount to Y to the extent that it would not be required to be
paid but for: —

 

(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 parry 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,

 

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organised, managed and controlled, or considered to
have its seat, or in which a branch or office through which it is acting for
the purpose of this Agreement is located (“Stamp Tax Jurisdiction”) and will
indemnify the other party against any Stamp Tax levied or imposed upon the
other party or in respect of the other party’s execution or performance of this
Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction
with respect to the other party.

 

5.            Events of Default and Termination Events

 

(a)           Events of Default.  The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or  any Specified Entity of such party of any
of the following events constitutes an event of default (an “Event of Default”)
with respect to such party:—

 

(i)            Failure to Pay or Deliver.  Failure by the party
to make, when due, any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is given to
the party;

 

(ii)           Breach of Agreement. Failure by the
party to comply with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed
by the party in accordance with this Agreement if such failure is not remedied
on or before the thirtieth day after notice of such failure is given to the
party;

 

(iii)          Credit Support Default.

 

(1)  Failure
by the party or any Credit Support Provider of such party to comply with or
perform any agreement or obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is continuing after
any applicable grace period has elapsed;

 

(2)  the expiration or termination of such Credit
Support Document or the failing or ceasing of such Credit Support Document to
be in full force and effect for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to the satisfaction of all
obligations of such party under each Transaction to which such Credit Support
Document relates without the written consent of the other party; or

 

(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

 

5

 

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 au 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

 

6

 

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.

 

7

 

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 of 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 it’s 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

 

8

 

continuing, designate a
day not earlier than the day such notice is effective as an Early Termination
Date in respect of all Affected Transactions.

 

(c)           Effect of Designation.

 

(i)            If notice designating an Early
Termination Date is given under Section 6(a) or (b), the Early Termination Date
will occur on the date so designated, whether or not the relevant Event of
Default or Termination Event is then continuing.

 

(ii)           Upon the occurrence or effective
designation of an Early Termination Date, no further payments or deliveries
under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of this
Agreement. The amount, if any, payable in respect of an Early Termination Date
shall be determined pursuant to Section 6(e).

 

(d)           Calculations.

 

(i)            Statement. On or as soon as reasonably
practicable following the occurrence of an Early Termination Date, each party
will make the calculations on its part, if any, contemplated by Section 6(e)
and will provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining a
Market Quotation, the records of the party obtaining such quotation will be
conclusive evidence of the existence and accuracy of such quotation.

 

(ii)           Payment Date. An amount calculated as being
due in respect of any Early Termination Date under Section 6(e) will be payable
on the day that notice of the amount payable is effective (in the case of an
Early Termination Date which is designated or occurs as a result of an Event of
Default) and on the day which is two Local Business Days after the day on which
notice of the amount payable is effective (in the case of an Early Termination
Date which is designated as a result of a Termination Event). Such amount will
be paid together with (to the extent permitted under applicable law) interest
thereon (before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding) the date
such amount is paid, at the Applicable Rate. Such interest will be calculated
on the basis of daily compounding and the actual number of days elapsed.

 

(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

 

9

 

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.

 

10

 

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.

 

11

 

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 l0(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

 

12

 

to which the Defaulting Party is a party or by reason
of the early termination of any Transaction, including, but not limited to,
costs of collection.

 

12.          Notices

 

(a)           Effectiveness.  Any notice or other communication in respect
of this Agreement may be given in any manner set forth below (except that a
notice or other communication under Section 5 or 6 may not be given by
facsimile transmission or electronic messaging system) to the address or number
or in accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:—

 

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

 

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

 

(iii)          if sent by facsimile transmission, on
the date that transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden of proving receipt
will be on the sender and will not be met by a transmission report generated by
the sender’s facsimile machine);

 

(iv)          if sent by certified or registered
mail (airmail, if overseas) or the equivalent (return receipt requested), on
the date that mail is delivered or its delivery is attempted; or

 

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

 

unless the date of that delivery (or attempted
delivery) or that receipt, as applicable, is not a Local Business Day or that
communication is delivered (or attempted) or received, as applicable, after the
close of business on a Local Business Day, in which case that communication
shall be deemed given and effective on the first following day that is a Local
Business Day.

 

(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

 

13

 

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.

 

14

“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(e)(ii)(2)(A) applies.  Loss does not include a party’s legal fees
and out-of-pocket expenses referred to under Section 11.  A party will determine its Loss as of the
relevant Early Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable.  A party may (but need not) determine its
Loss by reference to quotations of relevant rates or prices from one or more
leading dealers in the relevant markets.

 

“Market Quotation”
means, with respect to one or more Terminated Transactions and a party making
the determination, an amount determined on the basis of quotations from Reference
Market-makers.  Each quotation will be
for an amount, if any, that would be paid to such party (expressed as a
negative number) or by such party (expressed as a positive number) in
consideration of an agreement between such party (taking into account any
existing Credit Support Document with respect to the obligations of such party)
and the quoting Reference Market-maker to enter into a transaction (the
“Replacement Transaction”) that would have the effect of preserving for such
party the economic equivalent of any payment or delivery (whether the
underlying obligation was absolute or contingent and assuming the satisfaction
of each applicable condition precedent) by the parties under Section 2(a)(i) in
respect of such Terminated Transaction or group of Terminated Transactions that
would, but for the occurrence of the relevant Early Termination Date, have

 

15

 

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 meanings specified in the Schedule.

 

16

 

“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
transactions (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

 

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 laws) 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.

 

	
  Fleet
  National Bank

  	
   

  	
  Price
  Legacy Corporation

  	
   

  
	
  (Name of Party)

  	
   

  	
  (Name or Party)

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Donald M. Caiazza

  	
   

  	
  By:

  	
  /s/ James Y. Nakagawa

  	
   

  
	
  Name:

  	
  Donald M. Caiazza

  	
   

  	
  Name:

  	
  James Y. Nakagawa

  
	
  Title:

  	
  Vice President

  	
   

  	
  Title:

  	
  C.F.O.

  
								

 

18

 

(Multicurrency—Cross Border)

 

	
   

  	
  ISDA®

  	
   

  
	
   

  	
   

  	
   

  
	
  International Swap and
  Derivatives Association, Inc.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  SCHEDULE

  to the 

  Master Agreement

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  dated as of April 12,
  2002

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  between

  	
   

  
	
   

  	
   

  	
   

  
	
  Fleet National Bank

  	
  and

  	
  Price Legacy Corporation

  
	
  (“Party A”)

  	
   

  	
  (“Party B”)

  

 

Part
1. Termination Provisions.

 

In the Agreement:

 

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

 

	
  Section 5(a)(v)

  	
   

  	
  None;

  
	
  Section 5(a)(vi)

  	
   

  	
  None;

  
	
  Section
  5(a)(vii)

  	
   

  	
  None; and

  
	
  Section 5(b)(iv)

  	
   

  	
  None.

  

 

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

 

(c)                                  The
“Cross Default” provisions of
Section 5(a)(vi) will apply to Party A and will apply to Party B, subject to
the following provision being inserted at the end thereof:

 

“; provided that an Event of Default shall not occur
under either (1) or (2) above, if (a) the event or condition referred to in (1)
or the failure to pay referred to in (2) is a failure to pay caused by an error
or omission of an administrative or operational nature, (b) funds were
available to such party to enable it to make the relevant payment when due, and
(c) such relevant payment is made within three Local Business Days following
receipt of written notice from an interested party of such failure to pay”.

 

The following provisions apply:

 

(i)                                     “Specified Indebtedness”: with respect to
any person, means all obligations of that person identified as Specified
Indebtedness in Section 14, except as excluded in the proviso to this
definition, as well as all reimbursement obligations in respect of letters of
credit, financial guaranty insurance or surety bonds issued for the account of
that person and trade debt incurred other than through borrowings; provided, however, that indebtedness
or obligations in respect of deposits received in the ordinary course of the
banking business of such person shall not constitute Specified Indebtedness.

 

19

 

(ii)                                  “Threshold Amount” means: (i) with respect
to Party A, 3% of stockholders’ equity of Party A, and (ii) with respect to
Party B, $5,000,000.00.

 

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

 

Notwithstanding Section 5(b)(iv) of this Agreement,
“Credit Event Upon Merger” means (1)(a) with respect to Party A or Party B,
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, or receives all or
substantially all the assets or obligations of, another entity and such action
does not constitute an event described in Section 5(a)(viii) or (b) with
respect to Party B, (A) any person or entity acquires directly or indirectly
the beneficial ownership of equity securities having the power to elect a
majority of the board of directors of such party (“X”), any Credit Support
Provider of X, or any applicable Specified Entity of Party X or (B) such party
(“X”), any Credit Support Provider of X, or any applicable Specified Entity of
X effects any substantial change in its capital structure by means of the
issuance, incurrence or guarantee of debt or the issuance of preferred stock or
other securities convertible into or exchangeable for, debt or preferred stock
and (2)(a) 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 or
(b) with respect to Party B, Party A’s policies in effect at such time would
not permit Party A to enter into every Transaction then outstanding with the
resulting, surviving or transferee entity of Party B, such Credit Support Provider
or such Specified Entity, as the case may be (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party).

 

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

 

(f)                                    Payments on Early Termination.  For the purpose of Section
6(e) of this Agreement:

 

(i)                                     Market
Quotation will apply.

(ii)                                  The
Second Method will apply.

 

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

 

(h)           Additional
Termination Event will not apply to Party A or to Party B.

 

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

 

“(ix)  Unsatisfied Judgments.   With respect
to Party B, the party, any Credit Supporter Provider of such party or any Specified
Entity of such party for the purpose of Section 5(a)(vii) has a final
judgment issue against it by a court of competent jurisdiction for an amount
greater than $5,000,000.00 and such judgment is not discharged or its execution
stayed pending appeal within 90 days of such judgment or such judgment is not
discharged within 90 days of the expiration of any such stay.”

 

(j)                                     Credit Support Default.  Section 5(a)(iii)(2) of this Agreement is
hereby amended by deleting from the third line thereof the phrase “(in either
case other than in accordance with its terms)”.

 

Part 2.  Tax Representations.

 

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

 

20

 

It is not required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of any Tax
from any payment (other than interest under Section 2(e), 6(d)(ii)
or 6(e) of this Agreement) to be made by it to the other party under
this Agreement.  In making this
representation, it may rely on (i) the accuracy of any representations made by
the other party pursuant to Section 3(f) of this Agreement, (ii) the
satisfaction of the agreement of the other party contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, provided that it shall not be a breach of
this representation where reliance is placed on clause (ii) 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)                                 Party A Payee Tax Representations.  For the purpose of Section
3(f) of this Agreement, Party A makes the following representation:

 

Party A is a national banking association duly
organized under the laws of the United States and is not a foreign corporation
for United States tax purposes.

 

(c)                                  Party B Payee Tax Representations.  For the purpose of Section
3(f) of this Agreement, Party B makes the following representation:

 

Party B is not a foreign entity for United States tax
purposes.

 

Part 3.  Agreement to Deliver Documents.

 

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

 

(a)                                  Tax
forms, documents or certificates to be delivered are:

 

	
  Party required to deliver document

  	
   

  	
  Form/Document
  Certificate

  	
   

  	
  Date by
  which to be delivered

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  An executed
  United States Internal Revenue Service form W-9 (or any successor thereto).

  	
   

  	
  Upon execution
  of this Agreement if requested and as deemed necessary.

  

 

21

 

(b)           Other documents to
be delivered are:

 

	
  Party required to

  deliver document

  	
   

  	
  Form/Document
  Certificate

  	
   

  	
  Date by
  which to

  be delivered

  	
   

  	
  Covered by

  Section 3(d) 

  Representation

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  A certificate of
  an authorized officer for such party, and any Credit Support Provider of such
  party, certifying the authority, names and true signatures of the officers
  signing this Agreement, each Confirmation any Credit Support Document,
  reasonably satisfactory in form and substance to Party A.

  	
   

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

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Certified copies of documents evidencing each action
  taken by Party B, and any Credit Support Provider of such party, to authorize
  its execution of this Agreement, each Confirmation, and any Credit Support Document
  referred to in Part 4 of this Schedule, and the performance of its
  obligations hereunder as well as its bylaws and articles of incorporation.

  	
   

  	
  Upon execution of this Agreement.

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  A duly executed copy of the Credit Support Documents
  specified in Part 4 of this Schedule.

  	
   

  	
  Upon execution of this Agreement.

  	
   

  	
  No

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Annual audited financial statements prepared in
  accordance with generally accepted accounting principles in the country in
  which the entity to which they relate is organized.

  	
   

  	
  Promptly upon request.

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Quarterly unaudited financial statements prepared in
  accordance with generally accepted accounting principles in the country in
  which the outstanding entity to which they relate is organized.

  	
   

  	
  Promptly upon request.

  	
   

  	
  Yes

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party B

  	
   

  	
  Such other documents as Party A may reasonably
  request in connection with each transaction.

  	
   

  	
  Promptly upon request.

  	
   

  	
  Yes

  

 

Part 4.  Miscellaneous.

 

 

	
  (a)

  	
  Addresses for Notices.

  	
  For the purpose of Section 12(a) of this
  Agreement:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Address for notices or

  	
  (i) When acting through its Boston Head Office:

  	
   

  	
   

  
	
   

  	
  communications to

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Party A:

  	
  Fleet National Bank

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  100 Federal Street – MA DE 10013H

  	
   

  	
   

  
	
   

  	
   

  	
  Boston, Massachusetts 02110

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:  Manager
  Global Markets Documentation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Telex:

  	
  144203

  	
  Answerback:

  	
  FLEETBI

  
	
   

  	
   

  	
  Telephone No:

  	
  (617) 434-8072

  	
  Facsimile No:

  	
  (617) 434-3085

  
										

 

22

 

	
   

  	
  (ii) When acting through any other office or branch,
  as provided in the relevant Confirmation or as otherwise advised by Party A,
  with a copy to the address in (i) above.

  
	
   

  	
   

  
	
  Address for notices or

  	
  Price Legacy Corporation

  
	
  communications to

  	
  17140 Bernardo Center Drive, Suite 300

  
	
  Party B:

  	
  San Diego, California 92128

  
	
   

  	
   

  
	
   

  	
  Attention: 
  Mr. James Nakagawa

  
	
   

  	
   

  
	
   

  	
  Telephone No.: 
  (858) 675-9400 x310

  	
  Facsimile No.: 
  (858) 675-9405

  

 

(b)           Process Agent.    For the purpose of Section 13(c) of this Agreement, Not
Applicable.

 

(c)           Offices.  The
provisions of Section 10(a) will apply to this Agreement.

 

(d)           Multibranch Party.  For the purpose of Section 10(c) of
this Agreement:

 

(i)            Party
A is a Multibranch Party and will act for purposes of this Agreement through
the following Offices (and any other branch, office or agency as agreed by the
parties and specified in a Confirmation): 
Boston, London, Singapore, Buenos Aires, Seoul.

(ii)           Party
B is not a Multibranch Party.

 

(e)                                  Calculation Agent.  The Calculation Agent is Party A, unless
otherwise specified in a Confirmation in relation to a relevant Transaction.

 

(f)            Credit Support Document.  Details of any Credit Support Document:

 

(i)                                     With
respect to Party A, none.

(ii)                                  With
respect to Party B:

(1)           The
Revolving Credit Agreement dated as of September 19, 2001 by and among Price
Legacy Corporation, Fleet National Bank, as Bank and Agent, the other parties a
party thereto or which may become a party thereto as Banks, Fleet Securities,
Inc., as Co-Lead Arranger, Wells Fargo Bank, N.A., as Co-Lead Arranger and
Syndication Agent, and U.S. Bank National Association, as Documentation Agent,
as the same may be modified, amended, or restated (the “Credit Agreement”); and

 

(2)           Unconditional
Guaranty of Payment and Performance dated as of September 19, 2001 made by
Excel Legacy Corporation and Excel Legacy Holdings, Inc. in favor of the Agent
and the Lenders under the Credit Agreement, as the same may be modified,
amended, or restated (the “Guaranty”).

 

(g)           Credit Support Provider means:

 

(i)                                     In
relation to Party A, none.

(ii)                                  In
relation to Party B:  Excel Legacy
Corporation, Excel Legacy Holdings, Inc.

 

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

 

23

 

(i)            Netting
of Payments.  Subparagraph
(ii) of Section 2(c) of this Agreement will not apply to all
Transactions, with the result that a net payment amount will be determined in
respect of all amounts payable on the same date in the same currency in respect
of two or more Transactions.

 

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

 

Part 5.  Other Provisions.

 

(a)           2000
ISDA Definitions.  The
definitions and provisions contained in the 2000 ISDA Definitions (as published
by the International Swaps and Derivatives Association, Inc.) (the “2000 ISDA Definitions”) are incorporated
into this Agreement.  For these
purposes, all references in the 2000 ISDA
Definitions to a “Swap Transaction” shall be deemed to apply to each
Transaction under this Agreement.  In
the event of any inconsistency between the 2000
ISDA Definitions and any other definitions incorporated into a
Confirmation, the definitions incorporated into such Confirmation will govern.

 

(b)           Accuracy
of Specified Information.  Section
3(d) is hereby amended by adding in the third line thereof after the word
“respect” and before the period:

 

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

 

(c)                                  Forms. 
For purposes of Section 4(a)(iii) of this Agreement, the
following shall be added immediately prior to the existing text:

 

“upon learning that such form or document is required
or”

 

 

(d)                                 Right of Set-off.  Any amount (the “Early Termination Amount”) payable to one party
(the Payee) by the other party (the Payer) under Section 6(e), in
circumstances where there is a Defaulting Party or one Affected Party, will, at
the option of the party (“X”) other than the Defaulting Party or the Affected
Party be reduced by its set-off against any amount(s) (the “Other Agreement
Amount”) payable (whether at such time or in the future or upon the occurrence
of a contingency) by the Payee to the Payer (irrespective of the currency, place
of payment or booking office of the obligation) under any other agreement(s)
between the Payee and the Payer or instrument(s) or undertaking(s) issued or
executed by one party to, or in favor of, the other party (and the Other
Agreement Amount will be discharged promptly and in all respects to the extent
it is so set-off).  X will give notice
to the other party of any set-off effected under this provision, titled Right
of Set-off.

 

For this purpose, either the Early Termination Amount
or the Other Agreement Amount (or the relevant portion of such amounts) may be
converted by X into the currency in which the other is denominated at the rate
of exchange at which such party would be able, acting in a reasonable manner
and in good faith, to purchase the relevant amount of such currency.

 

If an obligation is unascertained, X may in good faith
estimate that obligation and set-off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is ascertained.

 

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

 

24

 

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

 

(e)           Tax Event. 
The following is hereby inserted in Section 5(b)(ii) before the
words “there is substantial likelihood that”:

 

“in the written opinion of legal counsel of recognized
standing (which may include in-house legal counsel)”

 

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

 

(g)           Consent
to Recording.  Each party
consents to the monitoring or recording, at any time and from time to time, by
the other party of any and all communications between officers or employees of
the parties, waives any further notice of such monitoring or recording, and
agrees to notify its officers and employees of such monitoring or recording.

 

(h)           Severability.  If any term, provision, covenant, or
condition of this Agreement, or the application thereof to either party or any
circumstance, is held to be unenforceable, invalid or illegal (in whole or in
part) for any reason (in any jurisdiction), the remaining terms, provisions,
covenants, and conditions of this Agreement, modified by the deletion of the
unenforceable, invalid or illegal portion (in any relevant jurisdiction), will
continue in full force and effect, and such unenforceability, invalidity, or
illegality will not otherwise affect the enforceability, validity or legality
of the remaining terms, provisions, covenants and conditions of this Agreement
so long as this Agreement as so modified continues to express, without material
change, the original intentions of the parties as to the subject matter hereof
and the deletion of such portion of this Agreement will not substantially
impair the respective expectations of the parties or the practical realization
of the benefits that would otherwise be enforced upon the parties.  The parties will endeavor in good faith
negotiations to replace the prohibited or unenforceable provision with a valid
provision, the economic effect of which comes as close as possible to that of
the prohibited or unenforceable provision.

 

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

 

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

 

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

 

25

 

(k)                                  Credit Support Default.  Subparagraph (3) of Section 5(a)(iii)
of this Agreement is hereby amended by adding the phrase “(or such action is
taken by any person or entity appointed or empowered to operate or act on its
behalf)” after the word “Document” in the second line thereof.

 

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

 

“(c)         Party
A may transfer, with the prior written consent of Party B, whose consent will
not be unreasonably withheld, this Agreement and all or any portion of the
Transactions under this Agreement in the event that any of Party B’s
obligation(s) to Party A or its Affiliates, as identified in Part 4 of this
Agreement, are sold, transferred, or otherwise assigned by Party A to one or
more banks or financial institutions, in which case Party B (and each Credit
Support Provider of Party B) shall execute, or cause to be executed, such
documents, instruments and agreements, including without limitation, amendments
to this Agreement, as Party A shall deem necessary to effect the foregoing.”

 

(m)                               Waiver of Jury Trial. 
EACH PARTY HEREBY IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY
IN ANY PROCEEDINGS.  AS TO ANY MATTER
FOR WHICH A JURY TRIAL CANNOT BE WAIVED, EACH PARTY AGREES NOT TO ASSERT ANY
SUCH MATTER AS A CROSS CLAIM OR COUNTERCLAIM IN, NOR MOVE TO CONSOLIDATE THE
SAME WITH, ANY LEGAL PROCEEDING IN WHICH A JURY TRIAL IS WAIVED.

 

(n)                                 Additional Representations.  For purposes of Section 3 of this
Agreement, the following shall be added, immediately following paragraph (f)
thereof:

 

“(g)         It
is an “eligible contract participant” as defined in Section 1a(12) of the
Commodity Exchange Act.

 

(h)           This
Agreement and each Transaction hereunder are subject to individual negotiation
by the parties.

 

(i)            Neither
this Agreement nor any Transaction hereunder has been executed or traded on a
“trading facility” as defined in Section 1a(33) of the Commodity Exchange Act.

 

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

 

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

 

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

 

26

 

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

 

(iii)          it
has a full understanding of all the terms, conditions, and risks (economic and
otherwise) of the Agreement, such Credit Support Document, each Transaction,
and such other documentation and is capable of assuming and willing to assume
(financially and otherwise) those risks;

 

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

 

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

 

(vi)          the
other party to this Agreement, such Credit Support Document, each Transaction,
and such other documentation (a) is not acting as a fiduciary or financial,
investment or commodity trading advisor for it; (b) has not given to it
(directly or indirectly through any other person) any assurance, guaranty or representation
whatsoever as to the merits (either legal, regulatory, tax, financial,
accounting or otherwise) of this Agreement, such Credit Support Document, each
Transaction, and such other documentation; and (c) has not committed to unwind
the Transactions.”

 

(o)                                 Credit Agreement Financial Covenants.  Party B shall at all times observe, perform
and comply with each and every covenant, term and provision set forth in
Sections 7.4, 7.14, 7.16, 8.1, 8.2, 8.3, 8.4, 8.7, 8.9, 9.2, 9.3, 9.4, 9.5, and
9.6 of the Credit Agreement and shall not permit the occurrence of an Event of
Default (as such term is defined in the Credit Agreement) under Section 12.1
(r) of the Credit Agreement, as such covenants, terms, provisions, and defaults
are set forth in the Credit Agreement as of the date hereof (or as the same may
be amended with the approval of Party A), as if such covenants, terms,
provisions, and defaults and any defined terms referred to therein were fully
set forth in this Agreement and made a part hereof, subject, however, to any
applicable period of grace or notice and cure with respect to a failure to
comply with such covenants or provisions as set forth in the Credit
Agreement.  Party B shall observe,
perform and comply with such covenants, terms, provisions, and defaults and
such covenants, terms, provisions, defaults, and definitions shall survive
until the obligations of Party B under this Agreement shall be satisfied in
full, notwithstanding the payment in full of the loans contemplated by the
Credit Agreement, the termination of Credit Agreement or that the Credit
Agreement is, for any reason, no longer in force and effect.

 

(p)                                 Borrowing Base Covenants.  If  the Credit
Agreement is terminated or for any reason is no longer in force and effect, or
the restriction in Section 8.1(h) of the Credit Agreement (which prohibits the
use of any Unencumbered Borrowing Base Properties (as defined in the Credit
Agreement) as a borrowing base, unencumbered asset pool, or any similar form of
credit support for the

 

27

 

Indebtedness (as defined
in the Credit Agreement) described in such Section 8.1(h)) is no longer
effective, Party B shall comply with each and every covenant, term, and
provision set forth in Sections 7.13 and 9.1 of the Credit Agreement, as if
such covenants, terms, and provisions and any defined terms referred to therein
were fully set forth in this Agreement and made a part hereof, subject,
however, to any applicable period of grace or notice and cure with respect to a
failure to comply with such covenants or provisions as set forth in the Credit
Agreement.  Notwithstanding the
foregoing, Section 9.1 will be modified so that the phrase “Loans and the
Letters of Credit Outstanding” shall be deleted in its entirety and the phrase
“unsecured Indebtedness of Borrower and its Subsidiaries” substituted in lieu
thereof and the definition of the term Debt Service Coverage Amount shall be
modified by deleting the references to the term “Loans” and substituting in
lieu thereof the term “unsecured Indebtedness of Borrower and its
Subsidiaries.”

 

(q)                                 Definition of Banks. 
For the purposes of this Agreement, any reference to the
“Majority Banks” or “all Banks” in the provisions of the Credit Agreement
incorporated herein shall be deemed a reference solely to Party A.

 

(r)                                    Acknowledgement. 
Upon the request of Party A, Party B will execute a document
acknowledging the Credit Agreement that is referenced herein and/or modifying
and amending this Agreement to include the covenants, terms, provisions,
defaults and definitions from the Credit Agreement which have been or may in
the future be incorporated herein by reference.

 

	
  Fleet
  National Bank

  	
   

  	
  Price
  Legacy Corporation

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Donald M. Caiazza

  	
   

  	
  By:

  	
  /s/ James Y. Nakagawa

  
	
  Name:

  	
  Donald M. Caiazza

  	
   

  	
  Name:

  	
  James Y. Nakagawa

  
	
  Title:

  	
  Authorized Officer

  	
   

  	
  Title:

  	
  C.F.O.

  
	
  Date:

  	
   

  	
   

  	
  Date:

  	
   

  

 

28<PAGE>

                                                                   EXHIBIT 10.26

                                 PROMISSORY NOTE

$409,340                                                         January 1, 2002

         FOR VALUE RECEIVED, the undersigned, BART C. SHULDMAN (the "Maker"),
promises to pay to the order OF TRANSACT TECHNOLOGIES INCORPORATED (the
"Lender"), at its office at 7 Laser Lane, Wallingford, Connecticut (the
"Holder"), or at such other place as the Holder hereof may designate from time
to time, in lawful money of the United States, the principal sum of Four Hundred
Nine Thousand Three Hundred Forty Dollars ($409,340), together with interest
thereon computed. Such new principal amount represents the original loan of
$330,000 made on February 23, 1999, plus interest accrued to December 31, 2001.

         1. (a) The Maker shall repay the principal amount of this Note,
together with accrued interest, on February 23, 2004 (the "Maturity Date"),
unless the Maturity Date has been advanced pursuant to the terms hereof;
provided, however, the Holder, in its sole and absolute discretion, may elect to
accelerate the indebtedness of this Note upon the occurrence of an Event of
Default (as defined below).

         (b) The Maker may prepay all or any part of the amounts outstanding
under this Note at any time and from time to time without premium or penalty.

         (c) Only such amounts advanced to the undersigned (less repayments, if
any), together with (a) interest thereon, (b) all taxes levied or assessed
against the Holder on this Note or the debt evidenced hereby, except for income
or other similar taxes, however designated, on income derived by the Holder
herefrom, and (c) all costs, expenses, attorneys' fees and professionals' fees
incurred by the Holder in (i) any action to collect this Note or to foreclose
any security for this Note, or (ii) in protecting or sustaining the lien of any
security, or (iii) in any litigation or controversy arising from or connected
with any security agreement or this Note, shall be deemed due hereunder.

         2. (a) Commencing on the date hereof through December 31, 2002,
interest under this Note shall accrue monthly on the principal amount at the
beginning of such month at a variable rate that is the greater of (i) the
average interest rate paid by the Company during such month, as calculated under
the Lender's credit facility with its primary lender (currently LaSalle Business
Credit), and which rate shall be subject to adjustment as and when adjusted
under the terms of such credit facility or any replacement credit facility or
(ii) the Applicable Federal Rate published by the Internal Revenue Service each
month in the Internal Revenue Bulletin during the term of this Note (the
"Monthly Note Rate") and such accrued interest shall be added to the principal
amount monthly at the end of each month and be due and payable on the Maturity
Date.
<PAGE>
         (b) Commencing on January 1, 2003, interest under this Note shall
accrue monthly on the principal amount on December 31, 2002 at a variable rate
that is the greater of (i) the average interest rate paid by the Company during
such month, as calculated under the Lender's credit facility with its primary
lender (currently LaSalle Business Credit), and which rate shall be subject to
adjustment as and when adjusted under the terms of such credit facility or any
replacement credit facility or (ii) the Applicable Federal Rate published by the
Internal Revenue Service each month in the Internal Revenue Bulletin during the
term of this Note (the "Annual Note Rate" and together with the Monthly Note
Rate, the "Note Rate") and such accrued interest shall be due and payable
annually in arrears on the earlier of the fifteenth (15th) day of March or the
Maturity Date.

         (c) The Company shall timely notify the Maker of the Note Rate to
permit the Maker to remit payment in compliance with this Section 2.

         (d) The Maker agrees that the interest rate shall increase by 2% per
annum above the Note Rate from and after the date of an Event of Default or
after maturity, by acceleration or otherwise, or judgment, and such additional
rate shall remain in effect until all unpaid principal and interest are
satisfied in full.

         (e) Notwithstanding any provisions of this Note, the maximum rate of
interest to be paid hereunder shall not exceed the maximum rate of interest
permissible to be charged by the Holder under applicable laws. Any amount paid
in excess of such rate shall be considered to have been payments in reduction of
principal.

         3. Term of the Note. The term of the Note shall be the indicated
Maturity Date; provided that the Maturity Date shall be affected by the
termination of employment, disability or death of the Maker as follows:

         (a) In the event that (i) the Maker's employment with the Company is
terminated for Cause as that term is defined in any employment agreement between
the Maker and the Company in effect on the date of such termination or (ii) the
Maker voluntarily terminates his employment with the Company, the Maturity Date
of the Note shall be advanced to the date that is six months after the date of
such termination, but in no event later than the Maturity Date.

         (b) In the event that the Maker's employment with the Company is
terminated by the Company without Cause or in the event of the Maker's
disability, in each case as defined in any employment agreement between the
Maker and the Company in effect on the date of such termination or disability,
or in the event of the Maker's death, the Maturity Date of the Note shall remain
unaffected.

         4. The Maker agrees that (i) if Maker shall fail to make any of the
payments required herein and fails to remedy such failure within thirty (30)
days, (ii) if Maker shall suffer or permit the filing by or against him of any
petition for relief, arrangement, reorganization or the like under any
bankruptcy or insolvency law, make an assignment for the benefit of creditors or
suffer or permit the appointment of a

                                       2
<PAGE>
receiver for any party of his property; (iii) if any Event of Default shall
occur under any agreement securing this Note or executed in connection with this
Note; or (iv) if any Event of Default shall occur under any other liability,
indebtedness or obligation of the Maker to the Holder (each of the events and
circumstances in (i), (ii), (iii) and (iv) being an Event of Default), then,
upon the happening of any such Event of Default, the entire indebtedness with
accrued interest due under this Note and all other expenses, including, but not
limited to, attorneys' fees incurred by the Holder in collecting or enforcing
payment hereof, shall accelerate and become immediately due and payable at the
option of the Holder without notice and without regard to the Maturity Date and
the Holder may proceed to exercise any rights or remedies that it may have by
law or at equity under this Note or any other agreement relating to the loan
evidenced by this Note.

         5. Failure of the Holder to exercise its option to accelerate the
indebtedness of this Note shall not constitute a waiver of the Holder's right to
exercise the same in the event of any subsequent Event of Default.

         6. Unless applicable law provides otherwise, all payments received by
the Holder under this Note shall, at the option of the Holder, be applied (a) to
the then outstanding charges and expenses, including but not limited to
attorneys' fees incurred by the Holder in sustaining and/or enforcing this Note
or any security granted for this Note; then (b) to any unpaid and accrued
interest; and finally, (c) to the outstanding principal indebtedness.

         7. The Holder's failure to insist upon the strict performance of any
term herein shall not be deemed to be a waiver, and the Holder shall retain the
right thereafter to insist upon strict performance by the Maker of all terms of
this Note or any agreement securing this Note or executed in connection
herewith.

         8. All amounts due under this Note are secured by the Maker's pledge to
the Lender of shares of the Lender's common stock described in and pursuant to a
Stock Pledge Agreement between the Maker and the Lender and dated the date
hereof.

         9. THE MAKER ACKNOWLEDGES THAT THE LOAN EVIDENCED BY THIS NOTE IS A
COMMERCIAL TRANSACTION AND WAIVES HIS RIGHTS TO NOTICE AND HEARING AS ALLOWED BY
ANY STATE OR FEDERAL LAW WITH RESPECT TO ANY PREJUDGMENT REMEDY WHICH THE HOLDER
MAY DESIRE TO USE. THE MAKER WAIVES DILIGENCE, DEMAND, PRESENTMENT FOR PAYMENT,
NOTICE OF NONPAYMENT, PROTEST AND NOTICE OF PROTEST, AND NOTICE OF ANY RENEWALS
OR EXTENSIONS OF THIS NOTE, AND ALL RIGHTS UNDER ANY STATUTES OF LIMITATIONS.
THE MAKER ACKNOWLEDGES THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY
AFTER CONSIDERATION OF THE RAMIFICATIONS OF THIS WAIVER WITH HIS ATTORNEYS.

         10. THE MAKER WAIVES TRIAL BY JURY IN ANY COURT IN ANY SUIT, ACTION OR
PROCEEDING ON ANY MATTER ARISING IN

                                       3
<PAGE>
CONNECTION WITH OR IN ANY WAY RELATED TO THE TRANSACTION OF WHICH THIS NOTE IS A
PART AND/OR TO THE DEFENSE OR ENFORCEMENT OF ANY OF THE HOLDER'S RIGHTS AND
REMEDIES, INCLUDING, WITHOUT LIMITATION, TORT CLAIMS. THE MAKER ACKNOWLEDGES
THAT HE MAKES THIS WAIVER KNOWINGLY, VOLUNTARILY AND ONLY AFTER CONSIDERATION OF
THE RAMIFICATIONS OF THIS WAIVER WITH HIS ATTORNEYS.

         11. This Note and the provisions hereof shall inure to the benefit of
the Holder, its successors and assigns and shall be binding upon the
undersigned, his heirs, executors, administrators and assigns.

         12. This Note shall be governed by and construed in accordance with the
laws of the State of Connecticut. The Maker submits to personal jurisdiction in
the State of Connecticut for the enforcement of the Maker's obligations
hereunder and under any agreement securing this Note, and the Maker waives all
rights under the laws of any other state to object to jurisdiction within the
State of Connecticut. If litigation is commenced, the Maker agrees that service
of process may be made and personal jurisdiction over the Maker obtained, by
service of a copy of the summons, complaint and other pleadings required to
commence such litigation upon the Maker by registered or certified mail to or by
personal service at the last known address of the Maker.

                                               /s/ Bart C. Shuldman
                                              ---------------------------------
                                              BART C. SHULDMAN

                                       4

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