Document:

atax-ex102_150.htm

 

Exhibit 10.2

  

International Swaps and Derivatives Association, Inc. 

 

REGULATORY MARGIN SELF-DISCLOSURE LETTER 

published on June 30, 2016 

by the International Swaps and Derivatives Association, Inc. 

 

 

	
 

Various jurisdictions are implementing regulatory margin requirements for uncleared derivatives transactions based on the framework published by the Basel Committee on Banking Supervision and the International Organization of Securities Commissions.1 Regulatory margin requirements based on the BCBS-IOSCO Framework have been proposed or adopted in (i) Canada, (ii) the European Union, (iii) Japan, (iv) Switzerland, and (v) the United States, and it is expected that other jurisdictions will propose and adopt similar requirements.  This Self Disclosure Letter is intended to provide market participants with a standard form for providing counterparties with information necessary to determine if and when compliance with one or more of these new regulatory margin regimes will be required.  The information provided in this Letter is being provided solely for making such determinations. 

Capitalized terms used in this Letter are defined in Appendices I-VI. 

 

	
 

 

__________________

	
1
	
See Margin requirements for non-centrally cleared derivatives (Mar. 2015) (“BCBS-IOSCO Framework”), available at https://www.bis.org/bcbs/publ/d317.htm. 

Copyright © 2016 by the International Swaps and Derivatives Association, Inc.

 

 

TABLE OF CONTENTS

 

	
1.
	
GENERAL BIOGRAPHICAL INFORMATION
	
3

	
2.
	
CANADA INFORMATION
	
4

	
3.
	
EU INFORMATION
	
8

	
4.
	
JAPAN INFORMATION
	
13

	
5.
	
SWITZERLAND INFORMATION
	
17

	
6.
	
UNITED STATES INFORMATION
	
21

 

 

Instructions: 

Section 1 of this Self-Disclosure Letter (the “Letter”) requests general information about the market participant on whose behalf this Letter will be delivered (referred to herein as “Principal”).  Section 1 is intended to be completed by all users of this Letter. 

The remaining sections of this Letter request jurisdiction or regulator-specific information.  The sections that should be completed on behalf of Principal when delivering this Letter to another market participant (referred to herein as “Recipient”) will depend on the jurisdiction and regulatory status of both Recipient and Principal. 

For example, if this Letter is being delivered to a Recipient that is an “FC” (as defined in Article 2(8) of Regulation (EU) No 648/2012), such Recipient will likely need the information requested in the EU section of this Letter to determine whether and how the Draft EU Margin Requirements apply to the particular relationship between Principal and Recipient.  At the same time, if Principal is itself an FC, Recipient will likely need this information for its own purposes, including (if it is regulated in a different jurisdiction) potential application of substituted compliance and other rules. 

Thus, when preparing to fill out this Letter for particular Recipients, market participants should consider obtaining instructions from the Recipient ahead of time if it is not clear which jurisdictional sections the Recipient needs completed.  Market participants should complete at least those sections of this Letter that are for jurisdictions that they have been informed or otherwise have reason to conclude are jurisdictions in which the Recipient is generally regulated for purposes of uncleared derivatives margin.  In addition, market participants that are subject to direct regulation under the uncleared derivatives margin rules of one or more jurisdictions should complete the sections of the Letter that relate to those jurisdictions.  Please note that the regulatory margin requirements of more than one jurisdiction may be applicable to a market participant. 

If you are unsure of whether any particular section will apply to Principal’s relationship with a Recipient, you should contact the applicable Recipient.  Market participants may exchange contact information for this purpose by using Section 1(c). 

-2-

 

	
1.
	
General Biographical Information 

Please complete this Section 1 with the biographical information of Principal.  Definitions of certain terms used in this Section 1 are set forth in Appendix I to this Letter. 

	
(a)
	
Principal Information 

	
Legal Name:
	
 
	
ATAX TEBS II, LLC

	
Entity Identifier:
	
 
	
 

	
Address:
	
 
	
1004 Farnam Street, Suite 400

	
 
	
 
	
Omaha

	
Country:
	
 
	
United States

	
State/Province:
	
 
	
Nebraska

	
Zip/Postal Code:
	
 
	
68102

 

	
(b)
	
Multibranch Entity Information 2 

Is Principal a Multibranch Entity? 

	
☐
	
Yes

	
☒
	
No

	
(c)
	
Contact Information 

This space may be used to provide contact information to a Recipient who may have questions about information provided by Principal in its Letter or about what information to provide in its corresponding Letter to Principal.  This contact information is not required and is solely for purposes of providing an address for Recipient to direct questions regarding this Letter or Principal. 

	
Name:  
	
 
	
Andy Grier

	
E-Mail:  
	
 
	
agrier@burlingtoncapital.com

	
Phone:  
	
 
	
402-930-3076

__________________

	
2
	
It may be necessary to track branches for purposes of establishing when a pair of counterparties is within the scope of margin rules.  See, e.g., Regulation (EU) No. 285/2014 at Article 2(2).

-3-

 

	
2.
	
Canada Information 

If the Canada OSFI Margin Requirements may apply to the relationship between Principal and Recipient (i.e., if either Principal or Recipient is an entity subject to Canada OSFI Margin Requirements), please complete each relevant subsection of this Section 2.  Definitions of certain terms used in this Section 2 are set forth in Appendix II to this Letter. 

	
(a)
	
Canada OSFI Margin Requirements Entity Status 

Please check one box for each of the questions below.  By checking a box, Principal is indicating that its entity status for purposes of Canada OSFI Margin Requirements is the status specified next to the box checked. 

	
 
	
(i)
	
Domestic FRFI 

Is Principal a Domestic FRFI? 

	
☐
	
Yes

	
☒
	
No

	
 
	
(ii)
	
Canada Branch FRFI 

Does Principal have a Canada Branch FRFI? 

	
☐
	
Yes

	
☒
	
No

 

	
 
	
(iii)
	
Covered Entity 

Is Principal a Covered Entity? 

	
☐
	
Yes

	
☒
	
No

 

  

-4-

 

	
(b)
	
Canada Cross-Border Status 

	
 
	
(i)
	
Canadian Branch3 

If Principal is a non-Canadian institution and indicated that it is a Multibranch Entity in Section 1(b), please indicate whether Principal will transact in E-22 NCC Derivatives with Recipient through a Canadian branch.  If Principal checks the box next to “No Canadian Branch Transactions,” it is indicating that it will not enter into E-22 NCC Derivatives with Recipient through one or more branches in Canada.  If Principal checks the box next to “Canadian Branch Transactions,” it is indicating that it may enter into E-22 NCC Derivatives with Recipient through one or more branches in Canada. 

	
☒
	
No Canadian Branch Transactions

	
☐
	
Canadian Branch Transactions

 

	
(c)
	
Canada AANA Information 

If Principal has been identified as a Domestic FRFI in Section 2(a)(i), as having a Canada Branch FRFI in Section 2(a)(ii) or has been identified as a Covered Entity in Section 2(a)(iii), please complete each of the questions below, as applicable. 

	
 
	
(i)
	
Canada AANA Group Information 

	
 
	
(1)
	
Is Principal a member of a Canada AANA Group? 

	
☐
	
Yes

	
☐
	
No

	
 
	
(2)
	
If Principal is a member of a Canada AANA Group, please provide the following information for the ultimate parent entity of such Canada AANA Group: 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

__________________

	
3
	
This section should only be completed by non-Canadian institutions that have a branch in Canada.

-5-

 

 

	
 
	
(ii)
	
2016 Canada AANA Threshold 4

Please check one of the boxes below. 

	
 
	
•
	
Checking the first box below indicates that Principal’s Canada AANA for 2016 is above CAD $5 trillion. 

	
 
	
•
	
Checking the second box below indicates that Principal’s Canada AANA for 2016 is not above CAD $5 trillion. 

	
 
	
•
	
Checking the third box below indicates that Principal’s Canada AANA information will be separately reported by its Canada Ultimate Parent. • By checking the fourth box below, Principal is indicating that its Canada AANA information will be separately reported by a third party other than its Canada Ultimate Parent; if the fourth box is checked, Principal should also provide appropriate contact information regarding who that third party is. 

	
☐
	
Above CAD $5 trillion Canada AANA

	
☐
	
Not above CAD $5 trillion Canada AANA

	
☐
	
Canada AANA information will be separately reported by Principal’s Canada Ultimate Parent

	
☐
	
Canada AANA information will be separately reported by the following person:

 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

__________________

	
4
	
Please note that counterparties may have to exchange AANA information on an annual basis, for which ISDA may publish a separate form, and ISDA Amend will be built to facilitate, subsequent exchanges of AANA information.

-6-

 

	
 
	
(iii) 
	
Canada AANA Threshold Estimate 

If Principal’s Canada AANA is not above CAD $5 trillion in 2016, please indicate the estimated year (if any) in which Principal expects to cross the relevant Canada AANA threshold by checking the appropriate box below.  A person completing this form may also select “Decline to answer” in this section.    

This information is not mandatory, is not a representation that Principal will, in fact, cross the relevant threshold in the indicated year, and is provided solely to enable Recipient to plan for future documentation or other changes that may be necessary to comply with regulatory initial margin requirements. 

	
☐
	
2017
	
(CAD $3.75 trillion Canada AANA)

	
☐
	
2018
	
(CAD $2.5 trillion Canada AANA)

	
☐
	
2019
	
(CAD $1.25 trillion Canada AANA)

	
☐
	
2020
	
(CAD $12 billion Canada AANA)

	
☐
	
None of the above

	
☐
	
Decline to answer

-7-

 

	
3.
	
EU Information 

If EU margin requirements for OTC derivatives may apply to the relationship between Principal and Recipient (i.e., if either Principal or Recipient is an entity that would be regulated under such margin requirements based on the Draft EU Margin Requirements), please complete each relevant subsection of this Section 3.  Definitions of certain terms used in this Section 3 are set forth in Appendix III to this Letter. 

	
(a)
	
EU Entity Status 

Please complete each of the questions below, as applicable, to indicate Principal’s entity status for purposes of Draft EU Margin Requirements.  Checking a box indicates that Principal’s status for purposes of Draft EU Margin Requirements is the status specified next to the box checked. 

	
 
	
(i)
	
If Principal is an Exempt Entity, please check one or more of the boxes below to indicate what type of Exempt Entity it is. 

	
☐
	
Article 1(4)(a) Entity

	
☐
	
Article 1(4)(b) Entity

	
☐
	
Article 1(4)(c) Entity

	
☐
	
Article 1(5)(a) Entity

	
☐
	
Article 1(5)(b) Entity

	
☐
	
Article 1(5)(c) Entity

	
☐
	
Non-Undertaking

	
 
	
(ii)
	
If Principal is not an Exempt Entity, please indicate Principal’s entity type by checking one of the boxes below.  For a Principal that is a Third Country Entity, this section should be completed by checking the box that would apply to it if it were established in the European Union.  Status as a Third Country Entity can be indicated in Section 3(b). 

	
☒
	
FC

	
☐
	
NFC+

	
☐
	
NFC-

 

-8-

 

 

	
(b)
	
EU Cross-Border Status 

If FC or NFC+ has been checked in the EU Entity Status section above, please complete the items in this Section 3(b), as applicable. 

	
 
	
(i)
	
Third Country Entity Status 

Please indicate whether Principal is a Third Country Entity by checking the appropriate box below. 

Is Principal a Third Country Entity? 

	
☒
	
Yes

	
☐
	
No

 

	
 
	
(ii)
	
DSF Guarantees 

If Principal has been identified as a Third Country Entity, please indicate whether Principal’s obligations under OTC derivative contracts are covered by a DSF Guarantee by checking the appropriate box below. 

Checking the box next to “No DSF Guarantees” indicates that, to Principal’s knowledge, Principal’s obligations under OTC derivative contracts with Recipient (other than OTC derivative contracts notified to Recipient in writing prior to execution) are not covered by any DSF Guarantees. 

Checking the box next to “DSF Guarantees” indicates that Principal’s obligations under one or more OTC derivative contracts with Recipient are covered by one or more DSF Guarantees.5 

	
☒
	
No DSF Guarantees

	
☐
	
DSF Guarantees  

__________________

	
5 
	
See Article 2 of Regulation (EU) No 285/2014 (indicating that the impact of a guarantee applies on a contract by-contract basis). 

-9-

 

 

	
 
	
(iii)
	
EU Branches 

If Principal has been identified as a Third Country Entity in Section 3(b)(i) and as a Multibranch Entity in Section 1(b), please indicate whether Principal may transact in OTC derivatives contracts with Recipient through one or more of its branches established in the European Union by checking the appropriate box below. 

Checking the box next to “No EU Branch Transactions” indicates that Principal will not enter into OTC derivatives contracts with Recipient through one or more branches established in the European Union. 

Checking the box next to “EU Branch Transactions” indicates that Principal may enter into OTC derivatives contracts with Recipient through one or more branches established in the European Union.6 

	
☐
	
No EU Branch Transactions

	
☐
	
EU Branch Transactions

 

(c) EU AANA Information 

If Principal has been identified as a FC or NFC+ in Section 3(a)(ii) (including as a Third Country Entity that would be an FC or NFC+ if established in the European Union), please complete each of the questions below, as applicable. 

	
 
	
(i) 
	
EU AANA Group Information 

	
 
	
(1)
	
Is Principal a member of an EU AANA Group? 

	
☐
	
Yes

	
☒
	
No  

	
 
	
(2)
	
If Principal is a member of an EU AANA Group, please provide the following information for the EU Ultimate Parent of such EU AANA Group: 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

__________________

	
6
	
See Regulation (EU) No 285/2014 at Article 2(2). 

-10-

 

	
 
	
(ii)
	
2016 EU AANA Threshold7

Please check one of the boxes below. 

	
 
	
•
	
Checking the first box below indicates that Principal’s EU AANA for 2016 is above €3 trillion. 

	
 
	
•
	
Checking the second box below indicates that Principal’s EU AANA for 2016 is not above €3 trillion. 

	
 
	
•
	
Checking the third box below indicates that Principal’s EU AANA information will be separately reported by its EU Ultimate Parent. 

	
 
	
•
	
Checking the fourth box below indicates that Principal’s EU AANA information will be separately reported by a third party other than its EU Ultimate Parent; if the fourth box is checked, please also provide appropriate contact information for that third party. 

	
☐
	
Above €3 trillion EU AANA

	
☒
	
Not above €3 trillion EU AANA 

	
☐
	
EU AANA information will be separately reported by Principal’s EU Ultimate Parent

	
☐
	
EU AANA information will be separately reported by the following person:

 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

 

 

 

 

 

 

 

 

__________________

	
7
	
 Please note that counterparties may have to exchange AANA information on an annual basis., for which ISDA will publish a separate form, and ISDA Amend will be built to facilitate, subsequent exchanges of AANA information.

-11-

 

	
 
	
(iii)
	
EU AANA Threshold Estimate 8

If Principal’s EU AANA is not above €3 trillion in 2016, please indicate the estimated year (if any) in which Principal expects to cross the relevant EU AANA threshold by checking the appropriate box below.  A person completing this form may also select “Decline to answer” in this section. 

This information is not mandatory, is not a representation that Principal will, in fact, cross the relevant threshold in the indicated year, and is provided solely to enable Recipient to plan for future documentation or other changes that may be necessary to comply with regulatory initial margin requirements. 

	
☐
	
2017
	
(€2.25 trillion EU AANA)

	
☐
	
2018
	
(€1.5 trillion EU AANA)

	
☐
	
2019
	
(€0.75 trillion EU AANA)

	
☐
	
2020
	
(€8 billion EU AANA)

	
☒
	
None of the above 

	
☐
	
Decline to answer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

___________________

	
8 
	
Please note that counterparties may have to exchange AANA information on an annual basis.  ISDA will publish a separate form for, and ISDA Amend will be built to facilitate, subsequent exchanges of AANA information
	
 

-12-

 

	
4.
	
Japan Information 
	
 

If the Japan Margin Requirements may apply to the relationship between Principal and Recipient (i.e., if either Principal or Recipient is an entity regulated under the Japan Margin Requirements), please complete each relevant subsection of this Section 4.  Definitions of certain terms used in this Section 4 are set forth in Appendix IV to this Letter. 

	
(a)
	
Japan Margin Requirements Entity Status – Entities organized in Japan 

Please check one of the boxes below.  Checking a box indicates that Principal’s status for purposes of Japan Margin Requirements is the status specified next to the box checked. 

	
☐
	
Regulated FIBO etc.  

	
☐
	
Regulated Trustee9

	
☒
	
None of the above10

	
(b)
	
Japan Margin Requirements Entity Status – Entities that are not organized in Japan 

	
 
	
(i) 
	
Principal that is a Multibranch Entity 

If Principal has been identified as a Multibranch Entity in Section 1(b), please indicate whether Principal may transact in OTC Derivative Transactions with Recipient through its Japan branch by checking the appropriate box below. 

Checking the box next to “No Japan  Branch Transactions” indicates that Principal will not enter into any OTC Derivative Transactions with Recipient through any of its Japan branches. 

Checking the box next to “Some or All Japan Branch Transactions” indicates that Principal may enter into some or all of its OTC Derivative Transactions with Recipient through one or more Japan branches. 

☐ No Japan Branch Transactions:  If this box is checked for a Principal, then one of the following boxes regarding the status of Principal’s head office and/or branches outside Japan through which it conducts OTC Derivative Transactions should also be checked. 

	
☐
	
Regulated FIBO etc. Equivalent at Offshore

	
☐
	
Not a Regulated FIBO etc. Equivalent at Offshore

_________________

	
9
	
If Principal falls within the FIBO etc. and acts as trustee for a trust, please confirm whether Principal falls within the Regulated Trustee (not the Regulated FIBO etc.).  This item is for a trust bank acting in its capacity as trustee for a trust.  When Principal is a trust bank acting in its proprietary capacity, please confirm whether it falls within the Regulated FIBO etc. (not the Regulated Trustee). 
	
 

	
10
	
This status includes (a) the case where Principal does not fall within the FIBO etc. and (b) the case where Principal falls within the FIBO etc. but does not fall within either the Regulated FIBO etc. or Regulated Trustee.  The same will apply hereinafter.
	
 

-13-

 

☐ Some or All Japan Branch Transactions:  If this box is checked for a Principal, then one of the following boxes regarding (x) the status of Principal’s Japan branch through which it conducts OTC Derivative Transactions and (y) the status of Principal’s head office and/or branches outside Japan through which it conducts OTC Derivative Transactions, should also be checked. 

	
 
	
(A)
	
Japan Branch 

	
☐
	
Regulated FIBO etc.

	
☐
	
Regulated Trustee

	
☐
	
None of the above  

	
 
	
(B)
	
Head office and/or branches outside Japan 

	
☐
	
Regulated FIBO etc. Equivalent at Offshore

	
☐
	
Not a Regulated FIBO etc. Equivalent at Offshore

	
 
	
(ii) 
	
Principal that is not a Multibranch Entity 

If Principal is not a Multibranch Entity as identified under Section 1(b), please check one of the following boxes regarding the status of the Principal. 

	
☒
	
Regulated FIBO etc. Equivalent at Offshore

	
☐
	
Not a Regulated FIBO etc. Equivalent at Offshore

	
(c) 
	
Japan AANA Information 

If Principal has been identified as (i) a Regulated FIBO etc. or Regulated Trustee in Section 4(a), (ii) a Regulated FIBO etc. Equivalent at Offshore, Regulated FIBO etc. or Regulated Trustee in Section 4(b)(i), or (iii) a Regulated FIBO etc. Equivalent at Offshore in Section 4(b)(ii), please complete each of the questions below, as applicable. 

	
 
	
(i) 
	
Japan AANA Group Information 

	
 
	
(1)
	
Is Principal a member of a Japan AANA Group? 

	
☐
	
Yes

	
☒
	
No

 

-14-

 

	
 
	
(2)
	
If Principal is a member of a Japan AANA Group, please provide the following information for the ultimate parent entity or parent entities of such Japan AANA Group: 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

 

	
 
	
(ii)
	
2016 Japan AANA Threshold 

Please check one of the boxes below. 

	
 
	
•
	
Checking the first box below indicates that Principal’s Japan AANA for 2016 is above ¥420 trillion. 
	
 

	
 
	
•
	
Checking the second box below indicates that Principal’s Japan AANA for 2016 is not above ¥420 trillion. 
	
 

	
 
	
•
	
Checking the third box below indicates that Principal’s Japan AANA information will be separately reported by its Japan Ultimate Parent(s). 
	
 

	
 
	
•
	
Checking the fourth box below indicates that Principal’s Japan AANA information will be separately reported by a third party other than its Japan Ultimate Parent; if the fourth box is checked, please also provide appropriate contact information for that third party. 
	
 

	
☐
	
Above ¥420 trillion Japan AANA

	
☒
	
Not above ¥420 trillion Japan AANA 

	
☐
	
Japan AANA information will be separately reported by Principal’s Japan Ultimate Parent(s)

	
☐
	
Japan AANA information will be separately reported by the following person:

 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

 

	
 
	

	

-15-

 

	
 
	
(iii)
	
Japan AANA Threshold Estimate11

If Principal’s Japan AANA is not above ¥420 trillion in 2016, please indicate the estimated year (if any) in which Principal expects to cross the relevant Japan AANA threshold by checking the appropriate box.12  A person completing this form may also select “Decline to answer” in this section.    

This information is not mandatory, is not a representation that Principal will, in fact, cross the relevant threshold in the indicated year, and is provided solely to enable Recipient to plan for future documentation or other changes that may be necessary to comply with regulatory initial margin requirements. 

	
☐
	
2017
	
(¥315 trillion Japan AANA)

	
☐
	
2018
	
(¥210 trillion Japan AANA)

	
☐
	
2019
	
(¥105 trillion Japan AANA)

	
☐
	
2020
	
(¥1.1 trillion Japan AANA)

	
☒
	
Not applicable

	
☐
	
Decline to answer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

__________________

 

	
11  
	
Please note that counterparties may have to exchange AANA information on an annual basis, for which ISDA may publish a separate form, and ISDA Amend will be built to facilitate, subsequent exchanges of AANA information. 
	
 

	
12
	
Under Article 123, Paragraph 11, Items 1(ha), 2(ro) and 4(ha) of the Cabinet Office Ordinance on Financial Instrument Businesses etc., Principal’s Japan AANA must be calculated based on an aggregate month-end average notional amount during the previous period (see the definition of Japan AANA).  Accordingly, the timing of the confirmation in terms of whether Principal’s Japan AANA reaches such threshold is when such period for calculating the aggregate month-end average notional changes in accordance with a change of the Reference Year.
	
 

-16-

 

	
5.
	
Switzerland Information 
	
 

If the FMIA Margin Requirements may apply to the relationship between Principal and Recipient (i.e., if either Principal or Recipient is an entity regulated under the FMIA Margin Requirements), please complete each relevant subsection of this Section 5.  Definitions of certain terms used in this Section 5 are set forth in Appendix V to this Letter. 

(a) FMIA Entity Status 

Please complete each of the questions below, as applicable, to indicate Principal’s entity status for purposes of FMIA Margin Requirements. 

	
 
	
(i)
	
If Principal is a FMIA Exempt Entity, please check one or more of the boxes below to indicate what type of FMIA Exempt Entity it is. 

Principal is fully or partially out of scope of Chapter 1 (Derivatives Trading) of Title 3 (Market Conduct) of FMIA as it is: 

	
☐
	
a FMIA Article 93(4)(a) Entity  

	
☐
	
a FMIA Article 93(4)(b) Entity  

	
☐
	
a FMIA Article 94(1)(a) Entity  

	
☐
	
a FMIA Article 94(1)(b) Entity  

	
☐
	
a FMIA Article 94(1)(c) Entity   

	
☐
	
a FMIA Article 94(2) Entity  a

	
☐
	
FMIA Non-Undertaking Entity

 

	
 
	
(ii)
	
If Principal is not a FMIA Exempt Entity, please indicate Principal’s entity type by checking one of the boxes below.  For a Principal that is a FMIA Third-Country Entity, this section should be completed and the box that would apply to it if it had its registered seat in Switzerland should be checked.  Status as a FMIA Third-Country Entity can be indicated in Section 5(b). 

	
☐
	
FC+

	
☒
	
FC-  

	
☐
	
NFC+  

	
☐
	
NFC-

 

-17-

 

	
(b) 
	
FMIA Cross-Border Status 

If FC+, FC- or NFC+ has been checked in Section 5(a) above, please complete this Section 5(b).  Please indicate whether Principal is a FMIA Third-Country Entity by checking the appropriate box below. 

Is Principal a FMIA Third-Country Entity?13 

	
☒
	
Yes

	
☐
	
No

 

	
(c) 
	
FMIA AANA Information 

If Principal has been identified as a FC+, FC- or NFC+ in Section 5(a)(ii) above (including as a FMIA Third-Country Entity that would be an FC+, FC- or NFC+ if it had its registered seat in Switzerland), please complete each of the questions below, as applicable. 

	
 
	
(i)
	
FMIA AANA Group Information 

	
 
	
(1)
	
Is Principal a member of a FMIA AANA Group? 

	
☐
	
Yes

	
☒
	
No

 

	
 
	
(2)
	
If Principal is a member of a FMIA AANA Group, please provide the following information for the FMIA Ultimate Parent of such FMIA AANA Group: 

 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

 

____________

13  Note that a Swiss branch of a non-Swiss Entity may be subjected to the FMIA if it is not adequately regulated and supervised in its home country, in such case it would need to check No.

-18-

 

 

	
(ii) 
	
2016 FMIA AANA Threshold 14
	
 

Please check one of the boxes below. 

	
 
	
•
	
Checking the first box below indicates that Principal’s FMIA AANA for 2016 is above CHF 3 trillion. 
	
 

	
 
	
•
	
Checking the second box below indicates that Principal’s FMIA AANA for 2016 is not above CHF 3 trillion. 
	
 

	
 
	
•
	
Checking the third box below indicates that Principal’s FMIA AANA information will be separately reported by its FMIA Ultimate Parent. • 
	
 

	
 
	
•
	
Checking the fourth box below indicates that Principal’s FMIA AANA information will be separately reported by a third party other than its FMIA Ultimate Parent; if the fourth box is checked, please also provide appropriate contact information for that third party. 
	
 

	
☐
	
Above CHF 3 trillion FMIA AANA

	
☒
	
Not above CHF 3 trillion FMIA AANA

	
☐
	
FMIA AANA information will be separately reported by Principal’s FMIA Ultimate Parent

	
☐
	
FMIA AANA information will be separately reported by the following person:

 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

__________________

	
14
	
With respect to the FMIA AANA, this section is based on Article 131 (5) FMIO that may pursuant to para. 6 thereof be amended to reflect amendments in the implementation dates in line with international standards.  Please note that counterparties may have to exchange AANA information on an annual basis, for which ISDA may publish a separate form, and ISDA Amend will be built to facilitate, subsequent exchanges of AANA information. 

-19-

 

	
 
	
(iii) 
	
FMIA AANA Threshold Estimate 15

If Principal’s FMIA AANA is not above CHF 3 trillion in 2016, please indicate the estimated year (if any) in which Principal expects to cross the relevant FMIA AANA threshold by checking the appropriate box below.  A person completing this form may also select “Decline to answer” in this section. 

This information is not mandatory, is not a representation that Principal will, in fact, cross the relevant threshold in the indicated year, and is provided solely to enable Recipient to plan for future documentation or other changes that may be necessary to comply with regulatory initial margin requirements. 

	
☐
	
2017
	
(CHF 2.25 trillion FMIA AANA)

	
☐
	
2018
	
(CHF 1.5 trillion FMIA AANA)

	
☐
	
2019
	
(CHF 0.75 trillion FMIA AANA)

	
☐
	
2020
	
(CHF 8 billion FMIA AANA)

	
☒
	
None of the above

	
☐
	
Decline to answer

__________________

	
15 
	
With respect to the FMIA AANA, this section is based on Article 131 (5) FMIO that may pursuant to para. 6 thereof be amended to reflect amendments in the implementation dates in line with international standards. 

-20-

 

	
6.
	
United States Information 

Please note that depending on their other activities, Swap Dealers, Security-Based Swap Dealers, Major Swap Participants and Major Security-Based Swap Participants in the United States may be subject to the margin rules of the CFTC, the SEC, or a Prudential Regulator.  Definitions of certain terms used in this Section 6 are set forth in Appendix VI to this Letter. 

	
(a) 
	
CFTC 

If the CFTC Margin Requirements may apply to the relationship between Principal and Recipient (i.e., if either Principal or Recipient is an Swap Dealer or Major Swap Participant regulated under the CFTC Margin Requirements), please complete each relevant subsection of this Section 6(a). 

	
 
	
(i)
	
CFTC Entity Status 16

Please check one of the boxes below.  Checking a box indicates that Principal’s status for purposes of CFTC Margin Requirements is the status specified next to the box checked. 

	
☐
	
Swap Dealer for which there is not a Prudential Regulator

	
☐
	
Major Swap Participant for which there is not a Prudential Regulator

	
☐
	
Swap Dealer or Major Swap Participant for which there is a Prudential Regulator 17

	
☒
	
CFTC Financial End User 

	
☐
	
None of the above

__________________

	
16
	
 See CFTC Reg. 23.151. 

	
17
	
The term “Swap Entity” is not used here because, unlike the Prudential Regulators, the CFTC rules do not inquire as to whether a counterparty of an SD/MSP is an SBSD or MSBSP.  However, note that SBSDs and MSBSPs are included in the definition of CFTC Financial End User. 

-21-

 

	
 
	
(ii)
	
CFTC Cross-Border Status 

	
 
	
(A)
	
CFTC Cross-Border Status – General 18 

If any box other than “None of the above” has been checked in Section 6(a)(i), please indicate Principal’s status for purposes of jurisdictional rules under CFTC Margin Requirements by checking the appropriate box below.  Checking a box indicates that Principal’s status is the status specified next to the box checked.  A person completing this question should check at least one box.  If Principal fits under more than one category, please check each applicable box. 

 

	
☒
	
CFTC US Person

	
☐
	
CFTC Foreign Consolidated Subsidiary

	
☐
	
None of the above

 

	
 
	
(B)
	
CFTC Cross-Border Status – US Branches 19 

If “None of the above” has been checked in Section 6(a)(ii)(A) and Principal has been identified as a Multibranch Entity in Section 1(b), please indicate whether Principal may conduct Uncleared Swap transactions with Recipient by or through a US branch by checking the appropriate box below. 

Checking the box next to “No US Branch Transactions” indicates that Principal will not conduct Uncleared Swap transactions with Recipient by or through one or more branches in the United States. 

Checking the box next to “Some or All US Branch Transactions” indicates that Principal may conduct Uncleared Swap transactions with Recipient by or through one or more branches in the United States. 

	
☐
	
No US Branch Transactions

	
☐
	
Some or All US Branch Transactions

__________________

	
18
	
See CFTC Reg. 23.160(a). 

	
19 
	
See CFTC Reg. 23.160(b)(2)(ii) and 81 Fed. Reg. at 34832 (“[T]he Commission believes that a non-U.S. CSE should be subject to the Commission’s margin requirements when conducting swap activities from within the United States by or through a U.S. branch.”).  

-22-

 

	
 
	
(C) 
	
CFTC Cross-Border Status – US Guarantees 20 

If “None of the above” was checked under Section 6(a)(ii)(A), please indicate whether Principal’s obligations in respect of Uncleared Swaps with Recipient are guaranteed by a CFTC US Person by checking the appropriate box below. 

Checking the box next to “No CFTC US Guarantees” indicates that, to Principal’s knowledge, none of Principal’s obligations in Uncleared Swaps with Recipient (other than Uncleared Swaps notified to Recipient in writing prior to execution) receive a CFTC Guarantee from a CFTC US Person. 

Checking the box next to “CFTC US Guarantees” indicates that one or more of Principal’s obligations in Uncleared Swaps with Recipient receive a CFTC Guarantee from a CFTC US Person. 

	
☐
	
No CFTC US Guarantees

	
☐
	
CFTC US Guarantees

 

	
(b) 
	
Prudential Regulators 

If the PR Margin Requirements may apply to the relationship between Principal and Recipient (i.e., if either Principal or Recipient is an Swap Entity regulated under the PR Margin Requirements), please complete each relevant subsection of this Section 6(b). 

	
 
	
(i)
	
PR Entity Status 21 

Please indicate Principal’s entity status for purposes of PR Margin Requirements by checking the appropriate box below.  Checking a box indicates that Principal’s status is the status specified next to the box checked. 

	
☐
	
Swap Dealer or Security-Based Swap Dealer for which there is a Prudential Regulator

	
☐
	
Major Swap Participant or Major Security-Based Swap Participant for which there is a Prudential Regulator

	
☐
	
Swap Entity for which there is not a Prudential Regulator 

	
☒
	
PR Financial End User

	
☐
	
None of the above

__________________

	
20
	
See CFTC Reg. 23.160(b). 

	
21
	
See PR Reg. _.2. 

-23-

 

	
 
	
(ii)
	
PR Cross-Border Status 22 

	
 
	
(1)
	
PR Cross-Border Status – General 

If any box other than “None of the above” has been checked in Section 6(a)(i), please indicate Principal’s status for purposes of jurisdictional rules under PR Margin Requirements by checking the appropriate box below.  Checking a box indicates that Principal’s status is the status specified next to the box checked. 

	
☒
	
PR US Person 23

	
☐
	
PR Foreign Consolidated Subsidiary

	
☐
	
None of the above

	
 
	
(2)
	
PR Cross-Border Status – PR US Branches & Agencies 

If “None of the above” has been checked in Section 6(b)(ii)(1) and Principal has been identified as a Multibranch Entity in Section 1(b), please indicate whether Principal may book Uncleared Swaps or Uncleared Security-Based Swaps with Recipient to a PR US Branch or otherwise establish a PR US Branch as counterparty to such transactions 24 by checking the appropriate box below. 

Checking the box next to “No PR US Branch Transactions” indicates that Principal will not book its Uncleared Swaps or Uncleared Security-Based Swaps contracts with Recipient to one or more PR US Branches or otherwise establish a PR US Branch as counterparty to such transactions. 

Checking the box next to “Some or All PR US Branch Transactions” indicates that Principal may book some or all of its Uncleared Swaps or Uncleared Security-Based Swaps contracts with Recipient to one or more PR US Branches or otherwise establish a PR US Branch as counterparty to such transactions. 

	
☐
	
No PR US Branch Transactions

	
☐
	
Some or All PR US Branch Transactions

__________________

	
22 
	
See PR Reg. _.9(b). 

	
23 
	
Important note for Multibranch Entities:  For the purposes of this form, the defined term “PR US Person” does not include branches and agencies organized or licensed under US law, even though PR Reg. _.9(b)(1) treats a US branch or agency of non-US banks as “an entity organized under the laws of the United States or any State.”  A bank that is not organized in the United States or a PR Foreign Consolidated Subsidiary should check the “None of the above” box in response to this question, and use Section 6(b)(ii)(2) to advise Recipient as to whether it will book transactions to a US branch or agency. 

	
24 
	
 The US prudential regulators indicated that they would “generally consider the entity to which the swap is booked as the counterparty” for purposes of section _.9 of the PR Margin Requirements.  See 80 Fed. Reg. at 74883 & n. 183. 

-24-

 

	
 
	
(3) 
	
PR Cross-Border Status – US Guarantees 

If “None of the above” has been checked in Section 6(b)(ii)(1) please indicate whether Principal’s obligations in respect of Uncleared Swaps or Uncleared Security-Based Swaps with Recipient may be guaranteed by a PR US Person, PR US Branch or PR Foreign Consolidated Subsidiary by checking the appropriate box below. 

Checking the box next to “No PR US Guarantees” indicates that, to Principal’s knowledge, none of Principal’s Uncleared Swaps and Uncleared Security-Based Swaps with Recipient (other than Uncleared Swaps and Uncleared Security-Based Swaps notified to Recipient in writing prior to execution) are guaranteed by a PR US Person, PR US Branch or PR Foreign Consolidated Subsidiary. 

Checking the box next to “PR US Guarantees” indicates that one or more of Principal’s Uncleared Swaps and Uncleared Security-Based Swaps with Recipient may be guaranteed by a PR US Person, PR US Branch or PR Foreign Consolidated Subsidiary. 

	
☐
	
No PR US Guarantees

	
☐
	
PR US Guarantees

 

 

-25-

 

	
(c) 
	
Swaps Hedging Exemption 25 

If Principal is eligible for, and may want to take advantage of, a Swaps Hedging Exemption from margin requirements, please complete each relevant subsection of this Section 6(c).26  If Principal is not eligible for, or does not intend to use, a Swaps Hedging Exemption you may skip this section. 

	
 
	
(i)
	
Hedging Exemption Status 

Please check one or more of the boxes below, if applicable.  Checking a box indicates that Principal is eligible, subject to satisfying any applicable transaction-specific requirements, to rely on the specified Swaps Hedging Exemption from the applicable US Margin Requirements.  Persons checking these boxes should note that: (i) checking a box does not constitute an election by Principal to use such exemption in connection with any particular Uncleared Swap and (ii) Recipient may require additional information in order to rely upon the exemption for any particular Uncleared Swap.  Skipping this section does not preclude a Principal that is eligible for a Swaps Hedging Exemption from electing such Swaps Hedging Exemption at a later date in respect of any Swap. 

	
☐
	
CFTC Non-Financial Entity Exemption

	
☐
	
CFTC Small Bank Exemption

	
☐
	
CFTC Captive Finance Company Exemption

	
☐
	
CFTC Exempt Cooperative Exemption

	
☐
	
CFTC Treasury Affiliate Exemption 27

	
 
	
(ii) 
	
Swaps Hedging Exemption Elections 

If any box has been checked in Section 6(c)(i), please indicate below whether Principal will rely on a Swaps Hedging Exemption from margin requirements by checking the appropriate box below. 

Checking the box next to “All Transactions” indicates that, unless it otherwise notifies Recipient in writing prior to the execution of the relevant Swaps that will not be entered into in reliance on a Swaps Hedging Exemption indicated in Section 6(c)(i) above, Principal will enter into all of its Uncleared Swaps with Recipient in reliance on a Swaps Hedging Exemption indicated in Section 6(c)(i) above and that it will comply with the terms of the relevant exemption, including but not limited to, 

__________________

	
25
	
25See PR Reg. _.1(d) and CFTC Reg. 23.150(b).  

	
26 
	
This section is substantially similar to provisions in the March 2013 ISDA DF Protocol.  However, unlike certain of the provisions therein, this section is not specific to swaps that are subject to a mandatory clearing determination under CEA § 2(h).  See Part IV of Schedule 2 to the March 2013 DF Supplement.  

	
27  
	
Note that Section 705 of the Consolidated Appropriations Act, 2016, Pub. L. 114-113, made amendments to CEA § 2(h)(7)(D) and Exchange Act § 3C(g)(4). 

-26-

 

any applicable requirement that such transaction is entered into in order to “hedge or mitigate commercial risk.”28 

Checking the box next to “Not All Transactions” indicates that Principal may not enter into all Uncleared Swaps with Recipient in reliance on a Swaps Hedging Exemption and that if it does rely on a Swaps Hedging Exemption for a particular transaction, it will comply with the terms of the relevant exemption, including but not limited to any requirement that such transaction is entered into in order to “hedge or mitigate commercial risk.” 

	
☐
	
All Transactions

	
☐
	
Not All Transactions

	
 
	
(iii) 
	
Swaps Hedging Exemption Reporting 29 

If any box has been checked in Section 6(c)(i), please indicate if Principal will satisfy the Swaps Hedging Exemption Reporting Requirement by making an annual filing or require Recipient to satisfy such reporting requirement by checking the appropriate box below. 

Checking the box next to “Annual Filing by Principal” indicates that: (i) unless Principal otherwise notifies Recipient in writing prior to the execution of the relevant Uncleared Swap, as applicable, Principal will satisfy the Swaps Hedging Exemption Reporting Requirement by making an annual filing and (ii) all information reported in connection with Principal’s satisfaction of the Swaps Hedging Exemption Reporting Requirement is true, accurate and complete in every material respect. 

Checking the box next to “Trade Filing by Recipient” indicates that Principal intends to cause Recipient to satisfy the Swaps Hedging Exemption Reporting Requirement. 

	
☐
	
Annual Filing by Principal

	
☐
	
Trade Filing by Recipient

 

__________________

	
28
	
See CEA § 2(h)(7)(A)(ii) and CFTC Reg. 50.50(c). 

	
29 
	
See PR Reg. _.1(d) and CFTC Reg. 23.150(b). 

-27-

 

	
 
	
(iv) 
	
Swaps Hedging Exemption Information 

If the box next to “Trade Filing by Recipient” in Section 6(c)(iii) has been checked, the following subsections may be completed to supply information required for such filings. 

	
 
	
(1)
	
Financial Obligations 30 

Please indicate how Principal generally meets its financial obligations associated with entering into Uncleared Swaps by checking one or more boxes below, as appropriate. 

	
☐
	
A written credit support agreement

	
☐
	
Pledged or secured assets (including posting or receiving margin pursuant to a credit support arrangement or otherwise)

	
☐
	
A written third party guarantee

	
☐
	
Its available financial resources

	
☐
	
Means other than those described in any of the foregoing options

	
 
	
(2)
	
SEC Issuer/Filer 

Please check one of the boxes below.  Checking the box next to “SEC Issuer/Filer” indicates that Principal is an issuer of securities registered under Section 12 of the Exchange Act or is required to file reports under Section 15(d) of the Exchange Act.31  Checking the box next to “Not an SEC Issuer/Filer” indicates that Principal is not an issuer of securities registered under Section 12 of the Exchange Act and is not required to file reports under Section 15(d) of the Exchange Act. 

	
☐
	
SEC Issuer/Filer

	
☐
	
Not an SEC Issuer/Filer  

 

__________________

	
30
	
See CFTC Reg. 50.50(b)(iii)(C). 

	
31
	
See CFTC Reg. 50.50(b)(iii)(D).  The CFTC has interpreted the meaning of “issuer of securities” in this context in the same manner as the SEC did in its proposal for implementing the end-user exception to mandatory clearing of security-based swaps, and so the phrase has been interpreted to cover entities that are “controlled” by issuers of securities. See 77 Fed. Reg. 42560, 42570 (July 19, 2012) (citing 75 Fed. Reg. 79992, 79996 & n. 34 (Dec. 21, 2010)) (“[A] counterparty invoking the end-user clearing exception is considered by the [SEC] to be an issuer of securities registered under Exchange Act Section 12 or required to file reports pursuant to Exchange Act Section 15(d) if it is controlled by a person that is an issuer of securities registered under Exchange Act Section 12 or required to file reports pursuant to Exchange Act Section 15(d).”). 

-28-

 

 

	
 
	
(3)
	
SEC Central Index Key Number 32 

If “SEC Issuer/Filer” has been checked in Section 6(c)(iv)(2), please provide Principal’s SEC Central Index Key number here:  

	
 

 

	
 
	
(4)
	
Board Approval 33 

If “SEC Issuer/Filer” has been checked in Section 6(c)(iv)(2), please indicate whether an appropriate committee of Principal’s board of directors (or equivalent body) reviewed and approved the decision to enter into Uncleared Swaps that are exempt from the Clearing Requirements by checking the appropriate box below. 

Checking the box next to “Board Approved” confirms that an appropriate committee of Principal’s board of directors (or equivalent body) has reviewed and approved the decision to enter into Uncleared Swaps that are exempt from the Clearing Requirements. 

Checking the box next to “No Board Approval Confirmation” indicates that Principal does not confirm at this time that an appropriate committee of Principal’s board of directors (or equivalent body) has reviewed and approved the decision to enter into Uncleared Swaps that are exempt from the Clearing Requirements. 

	
☐
	
Board Approved

	
☐
	
No Board Approval

 

__________________

	
32 
	
See CFTC Reg. 50.50(b)(iii)(D)(1). 

	
33
	
 See CFTC Reg. 50.50(b)(iii)(D)(2). 

-29-

 

 

	
(d) 
	
United States AANA Information 

If any box other than “None of the above” has been checked in either Section 6(a)(i) or Section 6(b)(i) of this Letter,34 please complete each relevant subsection of this Section 6(d), as applicable. 

	
 
	
(i) 
	
US AANA Group Information 

Please complete each of the questions below, as applicable. 

	
 
	
(1)
	
Is Principal a member of a US AANA Group? 

	
☒
	
Yes

	
☐
	
No

	
 
	
(2)
	
If Principal is a member of a US AANA Group, provide the following information for the ultimate parent entity of such US AANA Group: 

								
	
Legal Name:
	
America First Multifamily Investors, L.P.

	
Entity Identifier:  
	
54930029TGND09JQHI13

	
Address:  
	
1004 Farnam Street

	
 
	
 
	
 

	
Country:  
	
USA
	
City:
	
Omaha
	
State:
	
NE

	
Zip Code:
	
68102

 

__________________

	
34
	
 I.e., if it has been indicated that Principal is a regulated swap entity in the United States, a CFTC Financial End User or PR Financial End User. 

	
 
	

	

-30-

 

	
 
	
(ii)
	
2016 US AANA Threshold35  

Please check one of the boxes below. 

	
 
	
•
	
Checking the first box below indicates that Principal’s US AANA for 2016 is above $3 trillion and that it has Material Swaps Exposure.36 

	
 
	
•
	
Checking the second box below indicates that Principal’s US AANA for 2016 is not above $3 trillion or that Principal does not have Material Swaps Exposure. 

	
 
	
•
	
Checking the third box below indicates that Principal’s US AANA information will be separately reported by its US Ultimate Parent(s). 

	
 
	
•
	
Checking the fourth box below indicates that Principal’s US AANA information will be separately reported by a third party other than its US Ultimate Parent; if the fourth box is checked, please also provide appropriate contact information for that third party. 

	
☐
	
Above $3 trillion US AANA and Material Swaps Exposure

	
☒
	
Not above $3 trillion US AANA or no Material Swaps Exposure

	
☐
	
US AANA information will be separately reported by Principal’s US Ultimate      Parent

	
☐
	
US AANA information will be separately reported by the following person:

 

	
Legal Name:
	
 
	
 
	
 

	
Entity Identifier:  
	
 
	
 
	
 

	
Address:  
	
 
	
 
	
 

	
 
	
 
	
 

	
Country:  
	
 
	
 
	
 
	
City:
	
 

	
Province/State:
	
 
	
 
	
 

	
Postal Code/Zip Code:
	
 
	
 

 

__________________

	
35 
	
See PR Reg. _.1(e)(1); CFTC Reg. 23.161(a)(1).  Please note that counterparties may have to exchange AANA information on an annual basis, for which ISDA may publish a separate form, and ISDA Amend will be built to facilitate, subsequent exchanges of AANA information. 

	
36  
	
Under the compliance schedule in CFTC Reg. 23.161(a), compliance with minimum margin requirements will be required in the first compliance phase where a covered swap entity and its counterparty exceed the specified US AANA for 2016.  Under the rules, compliance with IM requirements is required with respect to a “covered counterparty,” which is defined as a “financial end user with material swaps exposure or a swap entity ....”  See CFTC Reg. 23.151.  Thus, for transactions with entities other than “swap entities,” a covered swap entity would theoretically want to know whether such entity is over the US AANA threshold and whether it has “material swaps exposure” (which has a different measuring period than US AANA).  A similar issue arises under PR Reg. _.1(e)(1). 

-31-

 

	
 
	
(iii) 
	
US AANA Threshold Estimate 

If Principal’s US AANA is not above $3 trillion in 2016, please indicate the estimated year (if any) in which Principal expects to cross the relevant US AANA threshold by checking the appropriate box below.  A person completing this form may also select “Decline to answer” in this section. 

This information is not mandatory, is not a representation that Principal will, in fact, cross the relevant threshold in the indicated year, and is provided solely to enable Recipient to plan for future documentation or other changes that may be necessary to comply with regulatory initial margin requirements. 

	
☐
	
2017
	
($2.25 trillion US AANA)37

	
☐
	
2018
	
($1.5 trillion US AANA)38

	
☐
	
2019
	
($.75 trillion US AANA)39

	
☐
	
2020
	
(Material Swaps Exposure)40

	
☒
	
2021
	
None of the above

	
☐
	
Decline to answer

 

__________________

	
37 
	
See PR Reg. _.1(e)(3); CFTC Reg. 23.161(a)(3). 

	
38
	
See PR Reg. _.1(e)(4); CFTC Reg. 23.161(a)(4). 

	
39
	
See PR Reg. _.1(e)(5); CFTC Reg. 23.161(a)(5). 

	
40
	
This would be $8 billion, but note that the measuring period for “material swaps exposure” is different from US AANA. See PR Reg. _.1(e)(6); CFTC Reg. 23.161(a)(6). 

-32-

 

The information provided in this Letter is, to the best of Principal’s knowledge and belief accurate as of the date of completion of this Regulatory Margin Self-Disclosure Letter.  As to information other than answers provided in Sections 3(c)(iii), 6(d)(iii), 4(c)(iii) and 5(c)(iii), Principal agrees to promptly provide updates if any such information changes in any material respect. 

	
[Name of Principal]1 ATAX TEBS II, LLC

	
By:  
	
s/ Craig S. Allen

	
Name:
	
Craig S. Allen

	
Title:  
	
CFO

	
Date of Completion:
	
June 9, 2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

_____________________

	
1
	
If this Letter is being delivered by an agent on behalf of one or more Principals, the agent should insert “as agent for [name of Principal][the Principals named on the attached sheet].”  If the agent is acting on behalf of more than one Principal, (i) it may list the names of such Principals on a separate sheet and (ii) this Letter should be treated as if it were a separate Letter with respect to each Principal listed on such sheet.  Similarly, if this Letter is being delivered by a trustee on behalf of one or more trusts or trust funds, the trustee should insert “as trustee for [name of trust or trust fund][the [trusts][trust funds] named on the attached sheet].”
	
 

 

 

-33-

 

Appendix I:  Definitions – General Biographical Information 

“Covered Margin Requirements” means the Canada OSFI Margin Requirements, the Draft EU 

Margin Requirements, the CFTC Margin Requirements, the PR Margin Requirements, the SEC Margin Requirements, the Japan Margin Requirements and the FMIA Margin Requirements. 

“Entity Identifier” means an [LEI/GEI/other acceptable identifier]. 

“Letter” or “Self-Disclosure Letter”  means this Regulatory Margin Self-Disclosure Letter, as published by the International Swaps and Derivatives Association, Inc. on June 30, 2016. 

“Multibranch Entity” means a bank or other entity that has local branches, offices or agencies in multiple jurisdictions for purposes of any of the Covered Margin Requirements. 

“Principal” means the market participant whose information is disclosed in this Letter, as identified in Section 1(a). 

“Recipient” means the derivatives counterparty of Principal to whom this Letter is or will be delivered. 

A-1

 

Appendix II:  Definitions – Canada Information

 

Canada AANA” means an amount in CAD equal to the aggregate month-end average notional amount of E-22 NCC Derivatives for March, April and May of a given year for a Canada AANA Group, excluding inter-affiliate transactions but, for the avoidance of doubt, including physically settled foreign exchange forward transactions and physically settled foreign exchange swaps. 

 

“Canada AANA Group” means a group of entities for which consolidated financial statements are prepared.42

 

“Canada Branch FRFI” means any of the following: (i) a Canadian branch of an authorized foreign bank established under the Bank Act (Canada); and (ii) a branch of a foreign company conducting insurance business in Canada under the Insurance Companies Act (Canada).43

 

“Canada OSFI Margin Requirements” means Guideline E-22. 

 

“Canada Ultimate Parent” means the person identified in Section 2(c)(i)(2) of this Letter. 

 

“Covered Entity” means an E-22 Financial Entity that belongs to a Canada AANA Group44 for which the Canada AANA for 2016 or any year thereafter exceeds CAD $12 billion.  Notwithstanding the foregoing, Covered Entity does not include any entity that is an Excluded Covered Entity. 

 

“Domestic FRFI” means any of the following:  (i) a bank organized under the Bank Act 

(Canada); (ii) a bank holding company organized under the Bank Act (Canada); (iii) a company organized under the Trust and Loan Companies Act (Canada); (iv) an association organized under the Cooperative Credit Associations Act (Canada); (v) a company organized under the 

Insurance Companies Act (Canada); and (vi) an insurance holding company organized under the Insurance Companies Act (Canada). 

 

“E-22 Derivative” means a financial contract whose value depends on, or is derived from, the value of one or more underlying reference assets.  The value can be determined by fluctuations of the underlying asset, which may include stocks, bonds, commodities, currencies, interest rates and market indices.  Physically settled commodity transactions are not included in the definition of “E-22 Derivative”. 

 

_______________

	
42
	
For purposes of Guideline E-22, a Canada AANA Group can consist of a single entity. 

	
43
	
 While the Insurance Companies Act (Canada) does not use the concept of a branch, OSFI refers to a foreign company in respect of its insurance business in Canada as operating on a branch basis.  See footnote 6 of Guideline E-22.   

	
44
	
For the purposes of applying the Covered Entity definition to investment funds, OSFI provides in Guideline E22 as follows:  

[i]nvestment funds that are managed by an investment advisor are considered distinct entities that are treated separately when applying the threshold [i.e., the CAD $12 billion threshold] as long as the funds are distinct legal entities that are not collateralised by or are otherwise guaranteed or supported by other investment funds or the investment advisor in the event of fund insolvency or bankruptcy.

A-2

 

“E-22 Financial Entity” means a legal entity whose main business includes the management of financial assets, lending, factoring, leasing, provision of credit enhancements, securitisation, investments, financial custody, proprietary trading and other financial services activities.  This includes (but is not limited to) deposit-taking institutions, insurance companies, pension funds, hedge funds, and asset managers. 

“E-22 NCC Derivative” means an E-22 Derivative that is not cleared through a central counterparty. 

“Excluded Covered Entity” means the Bank for International Settlements, central counterparties, Excluded Entities, Exempt Multilateral Development Institutions, public sector entities, multilateral development banks eligible for a zero risk weight under OSFI’s Capital Adequacy Requirements (CAR) Guideline and sovereigns. 

“Excluded Entities” means (i) treasury affiliates that undertake risk management activities on behalf of affiliates within a corporate group; (ii) any special purpose entity (“SPE”) established for the purpose of financing a specific pool or pools of assets or underwriting a specific set of risk exposures, in each case, by incurring indebtedness; provided that the indebtedness of the SPE, including obligations owing to the SPE’s swap counterparties, is secured by the specific pool or pools of financed assets; (iii) any SPE established by an investment fund for the purpose of acquiring and holding real estate or other physical assets on behalf of or at the direction of the investment fund; (iv) any SPE established for the purpose of acquiring or investing in real estate; and (v) any collective investment vehicle established for the purpose of investing in real estate or other physical assets. 

“Exempt Multilateral Development Institutions” means the International Bank for 

Reconstruction and Development, the International Finance Corporation, the Asian Development Bank, the African Development Bank, the European Bank for Reconstruction and Development, the Inter-American Development Bank, the European Investment Bank, the European Investment Fund, the Nordic Investment Bank, the Caribbean Development Bank, the Islamic Development Bank, the Council for Europe Development Bank and the International Finance Facility for Immunisation. 

“Guideline E-22” means OSFI Guideline E-22 Margin Requirements for Non-Centrally Cleared Derivatives published by the OSFI in February 2016. 

“OSFI” means the Office of the Superintendent of Financial Institutions Canada. 

“public sector entities” means (i) entities directly or wholly owned by a government; (ii) schools boards, hospitals, universities and social service programs that receive regular government financial support and (iii) municipalities. 

A-3

 

Appendix III:  Definitions – EU Information 

Article 1(4)(a) Entity” means a member of the European System of Central Banks and other Member States’ bodies performing similar functions and other European Union public bodies charged with or intervening in the management of public debt. 

“Article 1(4)(b) Entity” means the Bank for International Settlements. 

“Article 1(4)(c) Entity” means any central bank or public bodies charged with or intervening in the management of public debt in Japan or the United States of America. 

“Article 1(5)(a) Entity” means any multilateral development banks, as listed under Section 4.2 of Part 1 of Annex VI to Directive 2006/48/EC. 

“Article 1(5)(b) Entity” means any public sector entities within the meaning of point (18) of Article 4 of Directive 2006/48/EC where they are owned by central governments and have explicit guarantee arrangements provided by central governments. 

“Article 1(5)(c) Entity” means the European Financial Stability Facility and the European Stability Mechanism. 

“CCP” means a legal person that interposes itself between the counterparties to the contracts traded on one or more financial markets, becoming the buyer to every seller and the seller to every buyer. 

“Draft EU Margin Requirements” means the final draft regulatory technical standards on riskmitigation techniques for OTC derivative contracts not cleared by a CCP under Article 11(15) of EMIR dated March 8, 2016. 

“DSF Guarantee” means an EU Guarantee provided by an FC to a Third Country Entity that, under Article 2(1) of Regulation (EU) No 285/2014 of the European Parliament and of the Council with regard to regulatory technical standards on direct, substantial and foreseeable effect of contracts within the Union and to prevent the evasion of rules and obligations dated 13 February 2014, causes one or more OTC derivative contracts between the Third Country Entity and a counterparty to have a “direct, substantial and foreseeable effect” within the European Union. 

“EMIR” means Regulation (EU) No 648/2012 of the European Parliament and of the Council on OTC derivatives, central counterparties and trade repositories dated 4 July 2012. 

“EU AANA” means an aggregate month-end average notional amount of non-centrally cleared derivatives, as calculated in accordance with the Draft EU Margin Requirements. 

“EU AANA Group” means a “group,” as defined in Article 2, paragraph 16 of EMIR. 

“EU Guarantee” means a “guarantee,” as defined in Article 1 of Regulation (EU) No 285/2014 of the European Parliament and of the Council with regard to regulatory technical standards on direct, substantial and foreseeable effect of contracts within the Union and to prevent the evasion of rules and obligations dated 13 February 2014. 

“EU Ultimate Parent” means the “parent undertaking,” as such term is defined in Article 2(21) of EMIR. 

A-4

 

“European Union” or “Union” means the economic and political union established in 1993 by the Maastricht Treaty, with the aim of achieving closer economic and political union between member states that are primarily located in Europe. 

“Exempt Entity” means an Article 1(4)(a) Entity, an Article 1(4)(b) Entity, an Article 1(4)(c) Entity, an Article 1(5)(a) Entity, an Article 1(5)(b) Entity, an Article 1(5)(c) Entity, or a Non-Undertaking. 

“FC” means “financial counterparty,” within the meaning of Article 2(8) of Regulation (EU) No 648/2012. 

“Member States” has the meaning given to it in EMIR. 

“NFC” means an undertaking established in the European Union other than a CCP or an FC. 

“NFC-” means an NFC that is not an NFC+. 

“NFC+” means an NFC that meets the conditions referred to in Article 10(1)(b) of EMIR. 

“Non-Undertaking” means a natural or legal person who/which is not an undertaking for purposes of EMIR.45

“Third Country Entity” means an entity that is a “third country entity” as that term is used in EMIR.46

 

 

 

___________________________

	
45
	
The concept of an “undertaking” is not defined in EMIR.  The European Commission, in its EMIR FAQs (available at http://ec.europa.eu/internal_market/financial-markets/docs/derivatives/emir-faqs_en.pdf) has given its interpretation of what constitutes an “undertaking” for EMIR purposes. 

	
46
	
 The term “third country entity” is not defined in EMIR. However, in the context of application of certain obligations, EMIR distinguishes between entities that are established in the EU and entities that are not established in the EU. For the purposes of this question therefore, a “third country entity” means an entity that is not established in the EU (subject to the points below). 

	
 
	
The meaning of “established” has also not been defined in this context – existing commentary from European authorities suggests that it refers to the jurisdiction in which an entity is incorporated or otherwise constituted (rather than any physical presence from which it does business, to the extent that this differs from its jurisdiction of incorporation or constitution); for example, an entity which is incorporated outside the EU but has a physical presence in the EU by way of a branch would still be a third country entity. Each entity must determine for itself where it is “established” for these purposes. 

A-5

 

Appendix IV:  Definitions – Japan Information

Cabinet Office Ordinance on Financial Instrument Businesses etc.” means the Cabinet Office Ordinance on Financial Instrument Businesses etc. (kin’yuu shouhin torihiki gyou tou ni kansuru naikakufu rei) (Cabinet Office Ordinance No. 52 of August 6, 2007), as amended. 

“Commodity Clearing Organization” means a commodity clearing organization (shouhin torihiki seisan kikan) as defined in Article 2, Paragraph 18 of the Commodity Derivatives Act. “Commodity Derivatives Act” means the Commodity Derivatives Act of Japan (shouhin sakimono torihiki hou) (Act No. 239 of August 5, 1950), as amended. 

“Commodity Transaction Obligation Assumption Business” means the commodity transaction obligation assumption business (shouhin torihiki saimu hikiuke gyou) as defined in Article 2, Paragraph 17 of the Commodity Derivatives Act. 

“Enforcement Ordinance of the FIEA” means the Enforcement Ordinance of the FIEA (kin’yuu shouhin torihiki hou sekou rei) (Ordinance No. 321 of September 30, 1965), as amended. 

“FIBO etc.” means a Financial Instruments Business Operator etc. (kin’yuu shouhin torihiki gyousha tou) as defined in Article 34 of the FIEA. “FIEA” means the Financial Instruments and Exchange Act of Japan (kin’yuu shouhin torihiki hou) (Act No. 25 of April 13, 1948), as amended. 

“Financial Instruments Clearing Organization” means a financial instruments clearing organization (kin’yuu shouhin torihiki seisan kikan) as defined in Article 2, Paragraph 29 of the FIEA. 

“Financial Instruments Obligation Assumption Business” means the financial instruments obligation assumption business (kin’yuu shouhin saimu hikiuke gyou) as defined in Article 2, Paragraph 28 of the FIEA. 

“Financial Instruments Obligation Assumption Business Operator” means a business operator subject to an assumption of obligations of financial instruments (kin’yuu shouhin saimu hikiuke gyou taishou gyou sha) as defined in Article 2, Paragraph 28 of the FIEA. 

“Foreign Financial Instruments Clearing Organization” means a foreign financial instruments clearing organization (gaikoku kin’yuu shouhin torihiki seisan kikan) as defined in Article 2, Paragraph 29 of the FIEA. 

“Interoperable Clearing Organization, etc.” means an interoperable clearing organization, etc. (renkei seisan kikan tou) as defined in Article 156-20-16, Paragraph 1 of the FIEA. 

“Interoperable Financial Instruments Obligation Assumption Business” means the interoperable financial instruments obligation assumption business (renkei kin’yuu shouhin saimu hikiuke gyoumu) as defined in Article 156-20-16, Paragraph 1 of the FIEA. 

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“Japan AANA” means (i) in respect of the Regulated FIBO etc., an aggregate month-end average notional amount of Principal and its Japan AANA Group (excluding Principal) from March to May of the year immediately preceding the Reference Year (from March to May of the Reference Year if the Reference Time falls between September and December) of the following transactions (limited to transactions whereby both parties fall within (x) an entity provided in Article 123, Paragraph 11, Item 1(i) or (y) an entity other than the entity provided in Article 123, Paragraph 11, Item 4(i) of the Cabinet Office Ordinance on Financial Instrument Businesses etc. and excluding any transactions entered into by and among its Japan AANA Group): 

	
 
	
(a)
	
Non-cleared OTC Derivative Transactions (except for those cleared by a corporation or other legal entity that is established under a law other than Japanese law and that conducts the same type of business as the Financial Instruments Obligation Assumption Business outside of Japan with respect to the Non-cleared OTC Derivative Transactions entered into by an entity other than the Financial Instruments Obligation Assumption Business Operator); 

	
 
	
(b)
	
OTC Commodity Derivative Transactions (except for those cleared by the Commodity Clearing Organization or a corporation or other legal entity that is established under a law other than Japanese law and that conducts the same type of business as the Commodity Transaction Obligation Assumption Business or the business provided for in Article 170, Paragraph 1 of the Commodity Derivatives Act outside of Japan); and 

	
 
	
(c)
	
foreign exchange forward transactions (sakimono gaikoku kawase torihiki), 

	
(ii)
	
in respect of the Regulated FIBO etc. Equivalent at Offshore, an estimated aggregate month-end average notional amount of Principal and its Japan AANA Group (excluding Principal) from March to May of the year immediately preceding the Reference Year (from March to May of the Reference Year if the Reference Time falls between September and December) that are determined in a reasonable manner based on various factors including, but not limited to, certain features of the transactions with respect to the following transactions (limited to transactions whereby both parties fall within (x) an entity provided in Article 123, Paragraph 11, Item 1(i) or (y) an entity other than the entity provided in Article 123, Paragraph 11, Item 4(i) of the Cabinet Office Ordinance on Financial Instrument Businesses etc. and excluding any transactions entered into by and among its Japan AANA Group): 

	
 
	
(a)
	
OTC Derivative Transactions (except for those cleared by (x) a Financial Instruments Clearing Organization (including an Interoperable Clearing Organization, etc. if such Financial Instruments Clearing Organization conducts the Interoperable Financial Instruments Obligation Assumption Business), (y) a Foreign Financial Instruments Clearing Organization or (z) a corporation or other legal entity that is established under a law other than Japanese law and that conducts the same type of business as the Financial Instruments Obligation Assumption Business outside of Japan); 

A-7

 

 

	
 
	
(b)
	
OTC Commodity Derivative Transactions (except for those cleared by the Commodity Clearing Organization or a corporation or other legal entity that is established under a law other than Japanese law and that conducts the same type of business as the Commodity Transaction Obligation Assumption Business or the business provided for in Article 170, Paragraph 1 of the Commodity Derivatives Act outside of Japan); and 

 

	
 
	
(c)
	
foreign exchange forward transactions, and 

	
(iii)
	
in respect of the Regulated Trustee, an aggregate month-end average notional amount of Principal as trustee for a trust from March to May of the year immediately preceding the Reference Year (from March to May of the Reference Year if the Reference Time falls between September and December) with respect to the following transactions (limited to transactions whereby both parties fall within (x) an entity provided in Article 123, Paragraph 11, Item 1(i) or (y) an entity other than the entity provided in Article 123, Paragraph 11, Item 4(i) of the Cabinet Office Ordinance on Financial Instrument Businesses etc.): 

	
 
	
(a)
	
Non-cleared OTC Derivative Transactions; 

	
 
	
(b)
	
OTC Commodity Derivative Transactions (except for those cleared by the Commodity Clearing Organization or a corporation or other legal entity that is established under a law other than Japanese law and that conducts the same type of business as the Commodity Transaction Obligation Assumption Business or the business provided for in Article 170, Paragraph 1 of the Commodity Derivatives Act outside of Japan); and 

	
 
	
(c)
	
foreign exchange forward transactions. 

“Japan AANA Group” means a group of the Subsidiaries etc. (if any), the Parent Companies etc. (if any) and the Subsidiaries etc. of such Parent Companies etc. (if any). 

“Japan Margin Requirements” means the margin requirements as provided in Article 40, Item 2 of the FIEA and Article 123, Paragraph 1, Items 21-5 and 21-6 and Paragraphs 7 to 11 of the Cabinet Office Ordinance on Financial Instrument Businesses etc. 

“Japan Ultimate Parent” means each person identified in Section 4(c)(ii) of this Letter. 

“Non-cleared OTC Derivative Transaction” means a non-cleared OTC derivative transaction (hi seisan tentou deribathibu torihiki) as defined in Article 123, Paragraph 1, Item 21-5 of the Cabinet Office Ordinance on Financial Instrument Businesses etc. 

“OTC Commodity Derivative Transaction” means an OTC commodity derivative transaction (tentou shouhin deribathibu torihiki) as defined in Article 2, Paragraph 14 of the Commodity Derivatives Act. 

“OTC Derivative Transaction” means an OTC derivative transaction (tentou deribathibu torihiki) as defined in Article 2, Paragraph 22 of the FIEA. 

A-8

 

“Parent Companies etc.” means parent companies etc. (oya gaisha tou) as defined in Article 1516, Paragraph 3 of the Enforcement Ordinance of the FIEA. 

“Reference Time” means the time when a Non-cleared OTC Derivative Transaction is entered into. 

“Reference Year” means the year into which the Reference Time falls. 

“Regulated FIBO etc.” means a FIBO etc. which does not fall into any of the categories provided in Article 123, Paragraph 10, Item 4(i) and (ro) of the Cabinet Office Ordinance on Financial Instrument Businesses etc. (excluding a FIBO etc. which falls into the category of the Regulated Trustee). 

“Regulated FIBO etc. Equivalent at Offshore” means a person (i) who is not a FIBO etc. and 

(ii) which satisfies the conditions provided in Article 123, Paragraph 10, Item 1(i) and (ro) of the Cabinet Office Ordinance on Financial Instrument Businesses etc. 

“Regulated Trustee” means a FIBO etc. which acts as trustee for a trust whose trust assets do not satisfy the condition provided in Article 123, Paragraph 10, Item 2 of the Cabinet Office Ordinance on Financial Instrument Businesses etc.  For the avoidance of doubt, Non-cleared OTC Derivative Transactions which belong to such trust will not be exempt from the Japan Margin Requirements. 

“Subsidiaries etc.” means subsidiaries etc. (ko gaisha tou) as defined in Article 15-16, Paragraph 3 of the Enforcement Ordinance of the FIEA. 

A-9

 

Appendix V:  Definitions – Switzerland Information 

“FC-” means a “financial counterparty” which is small within the meaning of Article 99 FMIA in conjunction with Article 88 (2) FMIO. 

“FC+” means a “financial counterparty” within the meaning of Article 93 (2) FMIA which is not an FC-. 

“FMIA” means the Swiss Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading of 19 June 2015. 

“FMIA AANA” means an aggregate month-end average notional amount of non-centrally cleared derivatives, as calculated in accordance with Article 131(4)(a) and (5)(a–d) FMIO respectively. 

“FMIA AANA Group” means a financial group, an insurance group or any group within the meaning of Article 131(4)(a) and (5)(a–d) FMIO, respectively. 

“FMIA Article 93(4)(a) Entity” means multilateral development banks. 

“FMIA Article 93(4)(b) Entity” means organisations, including social security institutions, belonging to the Swiss Confederation, cantons or communes or for which the Swiss Confederation, canton or commune in question is liable and provided that they are not Swiss financial counterparties. 

“FMIA Article 94(1)(a) Entity” means the Swiss Confederation, cantons and communes. 

“FMIA Article 94(1)(b) Entity” means the Swiss National Bank. 

“FMIA Article 94(1)(c) Entity” means the Bank for International Settlements. 

“FMIA Article 94(2) Entity” means an entity excluded from Chapter 1 (Derivatives Trading) of Title 3 (Market Conduct) of FMIA, by the Federal Council under Article 94(2) of FMIA and accordingly includes an entity falling within the list of public state bodies set out in Article 79 of FMIO, namely: (a) foreign central banks; (b) the European Central Bank; (c) the European Financial Stability Facility; (d) the European Stability Mechanism; (e) official bodies or state departments that are responsible for or involved in administering the national debt; and (f) financial institutions set up by a central government or by the government of a subordinate regional body in order to grant promotional loans on the state’s behalf on a non-competitive, non-profit-oriented basis. 

“FMIA Exempt Entity” means a FMIA Article 93(4)(a) Entity, a FMIA Article 93(4)(b) Entity, a FMIA Article 94(1)(a) Entity, a FMIA Article 94(1)(b) Entity, a FMIA Article 94(1)(c) Entity, a FMIA Article 94(2) Entity, or a FMIA Non-Undertaking Entity. 

“FMIA Margin Requirements” means the FMIA margin requirements pursuant to Article 110 through 111 FMIA and Art. 94 and Art. 100 through 107 FMIO. 

A-10

 

“FMIA Ultimate Parent” means the “parent undertaking” (as such term is defined in Art. 3(1)(a) FMIA). 

“FMIA Non-Undertaking Entity” means a counterparty that is not an undertaking (Unternehmen/Entreprise) within the meaning of Article 77 FMIO. 

“FMIA Third-Country Entity” means an entity that is a “third country entity” (ausländische Gegenpartei/contrepartie étrangère) as that term is used in FMIA and FMIO.47

“FMIO” means the Swiss Federal Council Ordinance on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading of 25 November 2015. 

“NFC-” means a “non-financial counterparty” which is small within the meaning of Article 98 FMIA in conjunction with Article 88 (1) FMIO. 

“NFC+” means a “non-financial counterparty” within the meaning of Article 93 (3) FMIA which is not an NFC-. 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

_________________

 

	
47 
	
The term “third country entity” (ausländische Gegenpartei/contrepartie étrangère) is not defined in the FMIA/FMIO. However, in the context of application of certain obligations, the FMIA distinguishes between entities that have their registered seat in Switzerland and entities that do not have their registered seat in Switzerland. As a result, if the counterparty has its registered seat in Switzerland it is subject to FMIA and therefore should not be considered as a third country entity from a FMIA perspective. A “FMIA Third Country Entity” means an entity that has no registered seat in Switzerland and is not a Swiss branch of a FMIA third country entity that is exceptionally subjected to the FMIA by the Federal Council due to not being adequately regulated and supervised in the third country entity’s home country. 

 

A-11

 

Appendix VI:  Definitions – United States Information 

“Affiliate” means (i) in the case of the PR Margin Requirements, an “affiliate,” as defined in PR Reg. _.2 and (ii) in the case of the CFTC Margin Requirements, a “margin affiliate,” as defined in CFTC Reg. 23.151. 

“CEA” means the US Commodity Exchange Act, as amended. 

“CFTC” means the US Commodity Futures Trading Commission. 

“CFTC Captive Finance Company Exemption” means the exemption from margin requirements for an entity that qualifies for an exclusion from the definition of “financial entity” in Section CEA § 2(h)(7)(C)(iii). 

“CFTC Exempt Cooperative Exemption” means the exemption from margin requirements for an entity that qualifies for an exception from clearing under a rule, regulation, or order that the CFTC issued pursuant to its authority under Section 4(c)(1) of the CEA concerning cooperative entities that would otherwise be subject to the requirements of CEA § 2(h)(1)(A).48 

“CFTC Financial End User” means a “financial end user” as defined in CFTC Reg. 23.151.49

“CFTC Foreign Consolidated Subsidiary” means a “foreign consolidated subsidiary,” as defined in CFTC Reg. 23.160(a)(1). 

“CFTC Guarantee” means a “guarantee” as defined in CFTC Reg. 23.160(a)(2).50

“CFTC Margin Requirements” means the margin requirements adopted by the CFTC pursuant to CEA § 4s(e). 

“CFTC Non-Financial Entity Exemption” means the exemption from margin requirements for an entity that does not meet the general definition of “financial entity” in CEA § 2(h)(7)(C)(i). 

“CFTC Small Bank Exemption” means the exemption from margin requirements for an entity that qualifies for an exclusion from the definition of “financial entity” in CEA § 2(h)(7)(C)(ii) and CFTC Regulation 50.50(d). 

 

 

_______________

	
48 
	
See CFTC Regulation 50.51. 

	
49
	
This definition, as it existed at the time of publication, is provided at the end of this Letter for ease of reference. 

	
50
	
Solely for ease of reference, as of the date of publication of this Letter, CFTC Reg. 23.160(a)(2) states:  Guarantee means an arrangement pursuant to which one party to an uncleared swap has rights of recourse against a guarantor, with respect to its counterparty’s obligations under the uncleared swap. For these purposes, a party to an uncleared swap has rights of recourse against a guarantor if the party has a conditional or unconditional legally enforceable right to receive or otherwise collect, in whole or in part, payments from the guarantor with respect to its counterparty’s obligations under the uncleared swap. In addition, in the case of any arrangement pursuant to which the guarantor has a conditional or unconditional legally enforceable right to receive or otherwise collect, in whole or in part, payments from any other guarantor with respect to the counterparty’s obligations under the uncleared swap, such arrangement will be deemed a guarantee of the counterparty’s obligations under the uncleared swap by the other guarantor.

A-12

 

 “CFTC Treasury Affiliate Exemption” means the exemption from margin requirements for an entity that satisfies the criteria in CEA § 2(h)(7)(D) and implementing regulations. 

“CFTC US Person” means a “U.S. person,” as defined in CFTC Reg. 23.160(a)(10).5151

“Clearing Requirement” means (i) in the case of a Swap, CEA § 2(h)(1) and (ii) in the case of a Security-Based Swap, Exchange Act § 3C(a)(1). 

“Exchange Act” means the US Securities Exchange Act of 1934, as amended. 

“Hedging Exempt Swap” means a Swap or Security-based Swap that is exempt pursuant to PR Reg. _.1(d), CFTC Reg. 23.150(b) or Section 15F(e)(4) of the Exchange Act. 

“Major Security-Based Swap Participant” means a “major security-based swap participant,” as defined in Exchange Act § 3(a)(67) and the rules adopted thereunder. 

“Major Swap Participant” means a “major swap participant,” as defined in CEA § 1a(33). 

“Material Swaps Exposure” means “material swaps exposure,” as defined in PR Reg. _.2 and CFTC Reg. 23.151. 

“PR Financial End User” means a “financial end user,” as defined in PR Reg. _.2.52

“PR Foreign Consolidated Subsidiary” means a Swap Entity that is a Subsidiary of an entity that is organized under the laws of the United States or any US State. 

“PR Margin Requirements” means the margin requirements adopted by a Prudential Regulator pursuant to CEA § 4s(e) and Exchange Act § 15F(e). 

“PR US Branch” means a branch or agency organized or licensed under the laws of the United States or any US State.

 

 

______________

 

	
51
	
Solely for ease of reference, as of the date of publication of this Letter, CFTC Reg. 23.160(a)(10) states: 

U.S. person means: (i) A natural person who is a resident of the United States; (ii) An estate of a decedent who was a resident of the United States at the time of death; (iii) A corporation, partnership, limited liability company, business or other trust, association, joint-stock company, fund or any form of entity similar to any of the foregoing (other than an entity described in paragraph (a)(10)(iv) or (v) of this section) (a “legal entity”), in each case that is organized or incorporated under the laws of the United States or that has its principal place of business in the United States, including any branch of such legal entity; (iv) A pension plan for the employees, officers or principals of a legal entity described in paragraph (a)(10)(iii) of this section, unless the pension plan is primarily for foreign employees of such entity; (v) A trust governed by the laws of a state or other jurisdiction in the United States, if a court within the United States is able to exercise primary supervision over the administration of the trust; (vi) A legal entity (other than a limited liability company, limited liability partnership or similar entity where all of the owners of the entity have limited liability) that is owned by one or more persons described in paragraphs (a)(10)(i) through (v) of this section and for which such person(s) bears unlimited responsibility for the obligations and liabilities of the legal entity, including any branch of the legal entity; or (vii) An individual account or joint account (discretionary or not) where the beneficial owner (or one of the beneficial owners in the case of a joint account) is a person described in paragraphs (a)(10)(i) through (vi) of this section. 

	
52
	
This definition, as it existed at the time of publication, is provided at the end of this Letter for ease of reference.

 

 

A-13

 

“PR US Person” means (i) an entity organized under the laws of the United States or any State other than a US branch, office or agency of a non-US bank or (ii) a natural person who is a resident of the United States.53

 

“Prudential Regulator” means a “prudential regulator,” as defined in CEA § 1a(39). 

 

“SEC” means the US Securities and Exchange Commission. 

 

“Security-Based Swap” means a “security-based swap,” as defined in Exchange Act § 3(a)(68) and the rules adopted thereunder. 

 

“Security-Based Swap Dealer” means a “security-based swap dealer,” as defined in Exchange Act § 3(a)(71) and the rules adopted thereunder. 

 

“Subsidiary” means a “subsidiary,” as defined in PR Reg. _.2.54

 

“Swap” means a “swap,” as defined in CEA § 1a(47) and the rules adopted thereunder. 

 

“Swap Dealer” means a “swap dealer,” as defined in CEA § 1a(49) and the rules adopted thereunder. 

 

“Swap Entity” means a Swap Dealer, a Security-Based Swap Dealer, a Major Swap Participant or a Major Security-Based Swap Participant. 

 

“Swaps Hedging Exemption” means the exemptions from the PR Margin Requirements pursuant to PR Reg. _.1(d)(1) or from the CFTC Margin Requirements pursuant to CFTC Reg. 23.150(b). 

 

“Swaps Hedging Exemption Reporting Requirement” means the reporting requirements of CFTC Reg. 50.50(b). 

 

“Swaps Hedging Requirement” means the requirements of CFTC Reg. 50.50(c). 

 

“Uncleared Swap” means, (i) in the case of the PR Margin Requirements, a “non-cleared swap,” as defined in PR Reg. _.2 and (ii) in the case of the CFTC Margin Requirements, an “uncleared swap,” as defined in CFTC Reg. 23.151. 

 

 

___________________

53PR Reg. _.9(b)(1). 

54Solely for ease of reference, as of the date of publication of this Letter, PR Reg. _.2 states, in relevant part: 

Subsidiary. A company is a subsidiary of another company if: (1) The company is consolidated by company on financial statements the other prepared in accordance with U.S. Generally Accepted Accounting Principles, the International Financial Reporting Standards, or other similar standards; (2) For a company that is not subject to such principles or standards, if consolidation as described in paragraph (1) of this definition would have occurred if such principles or standards had applied; or (3) [The Agency] has determined that the company is a subsidiary of another company, based on [Agency’s] conclusion that either company provides significant support to, or is materially subject to the risks of loss of, the other company. 

A-14

 

“Uncleared Security-Based Swap” means, (i) in the case of the PR Margin Requirements, a “non-cleared security-based swap,” as defined in PR Reg. _.2 and (ii) in the case of the CFTC Margin Requirements, an “uncleared security-based swap,” as defined in CFTC Reg. 23.151. 

“US AANA” means the average daily aggregate notional amount of Uncleared Swaps, Uncleared Security-Based Swaps, Foreign Exchange Swaps and Foreign Exchange Forwards (other than Hedging Exempt Swaps) for March, April and May of [relevant year], where such amounts are calculated only for business days and transactions between Affiliates are only counted once. 

“US AANA Group” means a group of Affiliates. 

“US Foreign Exchange Forward” means a “foreign exchange forward,” as defined in CEA § 1a(24). 

“US Foreign Exchange Swap” means a “foreign exchange swap,” defined in CEA § 1a(25). 

“US Margin Requirements” means the PR Margin Requirements and the CFTC Margin Requirements. 

“US Ultimate Parent” means the person identified in Section 6(e)(i)(2) of this Letter. 

A-15

 

“CFTC Financial End User” 

The definition of “financial end user” in CFTC Regulation 23.150 (as of June 30, 2016) is provided below solely for ease of reference. 

Financial end user means—  

	
(1)
	
A counterparty that is not a swap entity and that is:  

	
 
	
(i)
	
A bank holding company or a margin affiliate thereof; a savings and loan holding company; a U.S. intermediate holding company established or designated for purposes of compliance with 12 C.F.R. 252.153; or a nonbank financial institution supervised by the Board of Governors of the Federal Reserve System under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act (12 U.S.C. 5323);  

	
 
	
(ii)
	
A depository institution; a foreign bank; a Federal credit union or State credit union as defined in section 2 of the Federal Credit Union Act (12 U.S.C. 1752(1) and (6)); an institution that functions solely in a trust or fiduciary capacity as described in section 2(c)(2)(D) of the Bank Holding Company Act (12 U.S.C. 1841(c)(2)(D)); an industrial loan company, an industrial bank, or other similar institution described in section 2(c)(2)(H) of the Bank Holding Company Act (12 U.S.C. 1841(c)(2)(H)); 

	
 
	
(iii)
	
An entity that is state-licensed or registered as: 

	
 
	
(A)
	
A credit or lending entity, including a finance company; money lender; installment lender; consumer lender or lending company; mortgage lender, broker, or bank; motor vehicle title pledge lender; payday or deferred deposit lender; premium finance company; commercial finance or lending company; or commercial mortgage company; except entities registered or licensed solely on account of financing the entity’s direct sales of goods or services to customers; 

	
 
	
(B)
	
A money services business, including a check casher; money transmitter; currency dealer or exchange; or money order or traveler’s check issuer; 

	
 
	
(iv)
	
A regulated entity as defined in section 1303(20) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 (12 U.S.C. 4502(20)) or any entity for which the Federal Housing Finance Agency or its successor is the primary federal regulator; 

	
 
	
(v)
	
Any institution chartered in accordance with the Farm Credit Act of 1971, as amended, 12 U.S.C. 2001 et seq. that is regulated by the Farm Credit Administration; 

 

A-16

 

	
 
	
(vi)
	
A securities holding company; a broker or dealer; an investment adviser as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)); an investment company registered with the Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.), a company that has elected to be regulated as a business development company pursuant to section 54(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–53(a)), or a person that is registered with the U.S. Securities and Exchange Commission as a security-based swap dealer or a major security-based swap participant pursuant to the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). 

	
 
	
(vii)
	
A private fund as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80–b–2(a)); an entity that would be an investment company under section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a–3) but for section 3(c)(5)(C); or an entity that is deemed not to be an investment company under section 3 of the Investment Company Act of 1940 pursuant to Investment Company Act Rule 3a–7 (§ 270.3a–7 of this title) of the Securities and Exchange Commission; 

	
 
	
(viii)
	
A commodity pool, a commodity pool operator, a commodity trading advisor, a floor broker, a floor trader, an introducing broker or a futures commission merchant; 

	
 
	
(ix)
	
An employee benefit plan as defined in paragraphs (3) and (32) of section 3 of the Employee Retirement Income and Security Act of 1974 (29 U.S.C. 1002); 

	
 
	
(x)
	
An entity that is organized as an insurance company, primarily engaged in writing insurance or reinsuring risks underwritten by insurance companies, or is subject to supervision as such by a State insurance regulator or foreign insurance regulator;  

	
 
	
(xi)
	
An entity, person, or arrangement that is, or holds itself out as being, an entity, person, or arrangement that raises money from investors, accepts money from clients, or uses its own money primarily for investing or trading or facilitating the investing or trading in loans, securities, swaps, funds, or other assets; or  

	
 
	
(xii)
	
An entity that would be a financial end user described in paragraph (1) of this definition or a swap entity if it were organized under the laws of the United States or any State thereof. 

	
(2)
	
The term “financial end user” does not include any counterparty that is:  

	
 
	
(i)
	
A sovereign entity;  

	
 
	
(ii)
	
A multilateral development bank;  

	
 
	
(iii)
	
The Bank for International Settlements;  

	
 
	
(iv)
	
An entity that is exempt from the definition of financial entity pursuant to section 2(h)(7)(C)(iii) of the Act and implementing regulations;  

A-17

 

	
 
	
(v)
	
An affiliate that qualifies for the exemption from clearing pursuant to section 2(h)(7)(D) of the Act; or  

	
 
	
(vi)
	
An eligible treasury affiliate that the Commission exempts from the requirements of §§ 23.150 through 23.161 by rule. 

A-18

 

“PR Financial End User” 

The definition of “financial end user” in PR Regulation _.2 (as of June 30, 2016) is provided below solely for ease of reference. 

Financial end user means –   

	
(1)
	
Any counterparty that is not a swap entity and that is: 

	
 
	
(i) 
	
A bank holding company or an affiliate thereof; a savings and loan holding company; a U.S. intermediate holding company established or designated for purposes of compliance with 12 C.F.R. 252.153; or a nonbank financial institution supervised by the Board of Governors of the Federal Reserve System under Title I of the Dodd-Frank Wall Street Reform and Consumer Protection Act 

(12 U.S.C. 5323); 

	
 
	
(ii)
	
A depository institution; a foreign bank; a Federal credit union or State credit union as defined in section 2 of the Federal Credit Union Act (12 U.S.C. 1752(1) & (6)); an institution that functions solely in a trust or fiduciary capacity as described in section 2(c)(2)(D) of the Bank Holding Company Act (12 U.S.C. 1841(c)(2)(D)); an industrial loan company, an industrial bank, or other similar institution described in section 2(c)(2)(H) of the Bank Holding Company Act (12 U.S.C. 1841(c)(2)(H)); 

	
 
	
(iii)
	
An entity that is state-licensed or registered as: 

	
 
	
(A)
	
A credit or lending entity, including a finance company; money lender; installment lender; consumer lender or lending company; mortgage lender, broker, or bank; motor vehicle title pledge lender; payday or deferred deposit lender; premium finance company; commercial finance or lending company; or commercial mortgage company; except entities registered or licensed solely on account of financing the entity’s direct sales of goods or services to customers; 

	
 
	
(B)
	
A money services business, including a check casher; money transmitter; currency dealer or exchange; or money order or traveler’s check issuer; 

	
 
	
(iv)
	
A regulated entity as defined in section 1303(20) of the Federal Housing Enterprises Financial Safety and Soundness Act of 1992, as amended (12 U.S.C. 4502(20)) or any entity for which the Federal Housing Finance Agency or its successor is the primary federal regulator; 

	
 
	
(v)
	
Any institution chartered in accordance with the Farm Credit Act of 1971, as amended, 12 U.S.C. 2001 et seq., that is regulated by the Farm Credit Administration; 

A-19

 

	
 
	
(vi)
	
A securities holding company; a broker or dealer; an investment adviser as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80b-2(a)); an investment company registered with the U.S. Securities and Exchange Commission under the Investment Company Act of 1940 (15 U.S.C. 80a–1 et seq.); or a company that has elected to be regulated as a business development company pursuant to section 54(a) of the Investment Company Act of 1940 (15 U.S.C. 80a–53(a)); 

	
 
	
(vii)
	
A private fund as defined in section 202(a) of the Investment Advisers Act of 1940 (15 U.S.C. 80–b– 2(a)); an entity that would be an investment company under section 3 of the Investment Company Act of 1940 (15 U.S.C. 80a–3) but for section 3(c)(5)(C); or an entity that is deemed not to be an investment company under section 3 of the Investment Company Act of 1940 pursuant to Investment Company Act Rule 3a–7 (17 C.F.R. 270.3a–7) of the U.S. Securities and Exchange Commission; 

	
 
	
(viii)
	
A commodity pool, a commodity pool operator, or a commodity trading advisor as defined, respectively, in section 1a(10), 1a(11), and 1a(12) of the Commodity Exchange Act of 1936 (7 U.S.C. 1a(10), 1a(11), and 1a(12)); a floor broker, a floor trader, or introducing broker as defined, respectively, in 1a(22), 1a(23) and 1a(31) of the Commodity Exchange Act of 1936 (7 U.S.C. 1a(22), 1a(23), and 1a(31)); or a futures commission merchant as defined in 1a(28) of the Commodity Exchange Act of 1936 (7 U.S.C. 1a(28)); 

	
 
	
(ix)
	
An employee benefit plan as defined in paragraphs (3) and (32) of section 3 of the Employee Retirement Income and Security Act of 1974 (29 U.S.C. 1002); 

	
 
	
(x)
	
An entity that is organized as an insurance company, primarily engaged in writing insurance or reinsuring risks underwritten by insurance companies, or is subject to supervision as such by a State insurance regulator or foreign insurance regulator; 

	
 
	
(xi)
	
An entity, person or arrangement that is, or holds itself out as being, an entity, person, or arrangement that raises money from investors, accepts money from clients, or uses its own money primarily for the purpose of investing or trading or facilitating the investing or trading in loans, securities, swaps, funds or other assets for resale or other disposition or otherwise trading in loans, securities, swaps, funds or other assets; or  

	
 
	
(xii)
	
An entity that would be a financial end user described in paragraph (1) of this definition or a swap entity, if it were organized under the laws of the United States or any State thereof. 

	
(2)
	
The term “financial end user” does not include any counterparty that is:  

	
 
	
(i)
	
A sovereign entity;  

	
 
	
(ii)
	
A multilateral development bank;  

A-20

 

	
 
	
(iii)
	
The Bank for International Settlements;  

	
 
	
(iv)
	
An entity that is exempt from the definition of financial entity pursuant to section 2(h)(7)(C)(iii) of the Commodity Exchange Act of 1936 (7 U.S.C. 2(h)(7)(C)(iii)) and implementing regulations; or  

	
 
	
(v) 
	
An affiliate that qualifies for the exemption from clearing pursuant to section 2(h)(7)(D) of the Commodity Exchange Act of 1936 (7 U.S.C. 2(h)(7)(D)) or section 3C(g)(4) of the Securities Exchange Act of 1934 (15 U.S.C. 78c-3(g)(4)) and implementing regulations. 

A-21atax-ex103_159.htm

 

Exhibit 10.3

5 The North Colonnade

Canary Wharf

London

E14 4BB

United Kingdom

Tel: +44 (0) 207623 2323

 

 

Reference No. nyk10f51633 / 35948998B | nyk10f51830 / 35948848B

USI No.: 1030209452101135948998BZZZZZZZZZZZZZZZZZZZ

Buyer LEI:   54930060N608ZCQZDB93

Seller LEI: G5GSEF7VJP5I7OUK5573

 

RATE CAP AGREEMENT (SIFMA)

THIS RATE CAP AGREEMENT (this “Agreement”) is dated as of June 28, 2017 between BARCLAYS BANK PLC (LONDON HEAD OFFICE) (the “Seller”) and ATAX TEBS II, LLC (the “Buyer”), whereby the parties agree as follows:

Section 1.  Definitions and Incorporated Terms.  For purposes of this Agreement, the terms set forth below in the Cap Transaction Profile or in Exhibit A shall have the meanings there indicated and capitalized terms that are used and not otherwise defined herein shall have the meanings given to them (as completed herein, where applicable) in the 2006 ISDA Definitions  as published by the International Swaps and Derivatives Association, Inc.

Cap Transaction Profile

	
Notional Amount:
	
USD 92,550,751.02 which shall reduce in such amounts and on such dates as set forth in Annex I hereto

	
 
	
 

	
Trade Date:
	
June 28, 2017

	
 
	
 

	
Effective Date:
	
June 15, 2017

	
 
	
 

	
Termination Date:
	
August 15, 2019

 

Fixed Amount:

 

	
 
	
Fixed Amount Payer:
	
Buyer

	
 
	
 
	
 

	
 
	
Fixed Amount Payer

Payment Date:
	
 

June 30, 2017

	
 
	
 
	
 

	
 
	
Fixed Amount:
	
USD 138,900.00

 

Barclays Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register No. 122702). Registered in England. Registered No. 1026167. Registered office: 1 Churchill Place, London E14 5HP.

 

4814-8780-0582.10 

Barclays Reference Number: 35948998B / 35948848B 

 

	
Floating Amounts:
	
For the avoidance of doubt, on each Floating Rate Payer Payment Date, the Seller will pay to Buyer the difference between the Floating Rate Option and the Cap Rate. If the Floating Rate Option does not exceed the Cap Rate with respect to any Calculation Period, no payment will be made by Seller to Buyer on the related Floating Rate Payer Payment Date.

 

	
 
	
Floating Rate Payer:
	
Seller

	
 
	
 
	
 

	
 
	
Cap Rate:
	
1.50% per annum

	
 
	
 
	
 

	
 
	
Floating Rate Payer

Payment Dates:
	
 

Fifteenth calendar day of each month from (and including) July 15, 2017, to (and including) the Termination Date, subject to adjustment in accordance with the Following Business Day Convention.

	
 
	
 
	
 

	
 
	
Floating Rate Payer

Period End Dates:
	
 

Fifteenth calendar day of each month from (and including) July 15, 2017, to (and including) the Termination Date, subject to No Adjustment.

	
 
	
 
	
 

	
 
	
Floating Rate Option:
	
USD-SIFMA Municipal Swap Index (“SIFMA”); provided, however, if SIFMA exceeds 3.00% per annum as determined on any Reset Date, then SIFMA for such Reset Date shall be 3.00% per annum

	
 
	
 
	
 

	
 
	
Floating Rate Day

Count Fraction:
	
 

Actual/Actual

	
 
	
 
	
 

	
 
	
Reset Dates:
	
Effective Date and thereafter Weekly on Thursday.

	
 
	
 
	
 

	
 
	
Weighted Average Method:
	
Applicable

 

	
Business Days:
	
A day other than (a) a Saturday or a Sunday, (b) any day on which banking institutions located in the city of New York, New York are authorized or required by law to close, (c) a day on which the New York Stock Exchange is closed

	
 
	
 

	
Rounding Convention:
	
The simple arithmetic mean of rates expressed as a percentage rounded to five decimal places.

	
 
	
 

	
Calculation Agent:
	
The Seller

2

4814-8780-0582.10 

Barclays Reference Number: 35948998B / 35948848B

 

 

Additional Defined Terms

“Credit Support Document” means the Guaranty of the Credit Support Provider, if any, and the Credit Support Annex, each as identified in Exhibit A hereto.

“Credit Support Provider” means the Person (if any) identified as such in Part 3 of Exhibit A.

“Damages” means an amount determined as provided in Section 11(b).

“Early Termination Date” has the meaning given to that term in Section 10(b).

“Local Business Day” in relation to a party means a day on which commercial banks in the city indicated in that party’s address for notices hereunder are open for business.

“Market Quotation” means an amount determined as provided in Section 12.

“Person” means an individual, an estate, a trust, a corporation, a partnership, a limited liability company, or any other organization or entity, whether governmental or private.

Reference Market‐maker” has the meaning given to that term in Section 12(a).

“Standard and Poor’s” means S&P Global Ratings Inc., and its successors and assigns, if such successors and assigns shall continue to perform the functions of a securities rating agency.

“Taxes,” with respect to payments hereunder by the Seller, means any present or future taxes, levies, imposts, duties or charges of any nature whatsoever that are collectible by withholding except for any such tax, levy, impost, duty or charge that would not have been imposed but for the existence of a connection between the Buyer and the jurisdiction where the Tax is imposed.

“Termination Event” has the meaning given to that term in Section 9.

Section 2.  Payments.  On the Payment Date for the Buyer, it shall pay the Fixed Amount and, on each Payment Date for the Seller, it shall pay the Floating Amount for the Calculation Period ending on that Payment Date.  The Seller’s obligation to make any payment hereunder shall be subject to the condition precedent that the Buyer has paid the Fixed Amount.  If the Buyer fails to pay the Fixed Amount to the Seller as and when due hereunder and does not remedy the failure on or before the third Local Business Day after notice from the Seller, the Seller may, by notice to the Buyer given not later than the fifth Local Business Day after the end of the Buyer’s cure period, declare this Agreement to be terminated, whereupon neither party shall have any further obligation hereunder, except for the Buyer’s obligation to pay interest pursuant to Section 4.  Notwithstanding the foregoing, the Buyer shall, upon failure to pay the Fixed Amount, remain liable to the Seller to pay the value of this Agreement, calculated, on the date Seller declares this Agreement terminated, on the basis of Market Quotation, which, for purposes of this Section 2 only, shall be determined pursuant to Section 12, substituting the word “Seller” in each instance when the word “Buyer” is utilized in such section and the quotation 

3

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referred to in Section 12(b) shall be the amount in Dollars that a Reference Market‐Maker would charge as a Fixed Amount on such date of declaration of termination; provided, however, that if a Market Quotation cannot be determined, the Seller shall reasonably determine in good faith an amount equal to its total losses and costs in connection with this Agreement, including any loss of bargain, cost of funding or, at the election of the Seller but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position.  The value of this Agreement, if any, shall be the original Fixed Amount less the amount of the Market Quotation determined in the manner described in the previous sentence.  If the difference is a negative number, the value of this Agreement shall be zero.

Section 3.  Making of Payments.  All payments hereunder shall be made to the account of the intended payee specified in Exhibit A, or to such other account in New York City as that party may have last specified by notice to the party required to make the payment.  All such payments shall be made in funds settled through the New York Clearing House Interbank Payments System or such other same‐day funds as are customary at the time for the settlement in New York City of banking transactions denominated in Dollars.

Section 4.  Interest on Overdue Amounts.  If any amount due hereunder is not paid when due, interest shall accrue on that amount to the extent permitted by applicable law at a rate per annum equal for each day that amount remains unpaid to the sum of 1% and the rate per annum equal to the cost (without proof or evidence of any actual cost) to the intended payee (as certified by it) if it were to fund or of funding the relevant amount for that day.

Section 5.  Supervening Illegality.  If it becomes unlawful for either party to make any payment to be made by it hereunder, as a result of the adoption of, or any change in, or change in the interpretation of, any law, regulation or treaty, that party shall give notice to that effect to the other party and shall use reasonable efforts (a) to assign or transfer its rights and obligations under this Agreement, subject to Section 14, to another of its branches, offices or affiliates, or to any leading participant in the interest rate cap market, that may make those payments lawfully and without withholding for or on account of Taxes or (b) to agree with that other party to modify this Agreement or change the method of payment hereunder so that the payment will not be unlawful.  If an assignment or agreement is not made as provided herein on or before the tenth Business Day after that notice becomes effective, either party may give notice of termination as provided in Section 10.

Section 6.  Taxes.

(a)Except as otherwise required by law, each payment hereunder shall be made without withholding for or on account of Taxes.  If a party is required to make any withholding from any payment under this Agreement for or on account of Taxes, it shall:

(i)make that withholding;

(ii)make timely payment of the amount withheld to the appropriate governmental authority;

(iii)forthwith pay the other party such additional amount as may be necessary to ensure that the net amount actually received by it free and clear of 

4

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Taxes (including any Taxes on the additional amount) is equal to the amount that it would have received had no Taxes been withheld; and

(iv)on or before the thirtieth day after payment, send the payee the original or a certified copy of an official tax receipt evidencing that payment; provided, however, that if the representation and warranty made by a party in Section 7(c) proves not to have been true when made or, if repeated on each Payment Date, would not then be true, or if a party fails to perform or observe any of its covenants set forth in Section 7 or Section 8, the other party shall be under no obligation to pay any additional amount hereunder to the extent that the withholding would not have been required if the representation and warranty had been true when made, or would have been true if so repeated, or if the failure had not occurred.

(b)If a party would be required to make any withholding for or on account of Taxes and pay any additional amount as provided in Section 6(a) with respect to any payment to be made by it in accordance with Section 2, it shall give notice to that effect to the other party and shall use reasonable efforts

(i)to assign or transfer its rights and obligations under this Agreement, subject to Section 14, to another of its branches, offices or affiliates, or to any leading participant in the interest rate cap market, that may make the payments to be made by it hereunder lawfully and without withholding for or on account of Taxes; or

(ii)to agree with that other party to modify this Agreement or change the method of payment hereunder so that those payments will not be subject to the withholding.  If an assignment or agreement is not made as provided herein on or before the tenth day after that notice becomes effective, the party that would be required to make the withholding may give notice of termination as provided in Section 10.

Section 7.  Representations and Warranties.

(a)Each of the parties makes the representations and warranties set forth below to the other as of the date hereof:

(i)It is duly organized and validly existing and has the corporate, partnership or other power as a company and the authority to execute and deliver this Agreement and to perform its obligations hereunder;

(ii)It has taken all necessary action to authorize its execution and delivery of this Agreement and the performance of its obligations hereunder;

(iii)All governmental authorizations and actions necessary in connection with its execution and delivery of this Agreement and the performance of its obligations hereunder have been obtained or performed and remain valid and in full force and effect; 

5

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(iv)This Agreement has been duly executed and delivered by it and constitutes its legal, valid and binding obligation, enforceable against it in accordance with the terms of this Agreement, subject to all applicable bankruptcy, insolvency, moratorium and similar laws affecting creditors’ rights generally;

(v)There are no actions, proceedings or claims pending or, to its knowledge, threatened, the adverse determination of which might have a materially adverse effect on its ability to perform its obligations under, or affect the validity or enforceability against it of, this Agreement;

(vi)Each of the documents delivered by it hereunder is, as of the date stated in such document, true, accurate and complete in every material respect or, in the case of financial statements, fairly presents the condition of the Person indicated therein; and

(vii)Its execution, delivery and performance of this Agreement 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.

(b)The Seller makes the following additional representations and warranties to the Buyer:

(i)No event or condition that constitutes (or that with the giving of notice or the lapse of time or both would constitute) a Termination Event with respect to it has occurred and is continuing or will occur by reason of its entering into or performing its obligations under this Agreement.

(ii)Seller is and shall be the reporting party for the Transaction pursuant to Section 4r(a)(3) of the Commodity Exchange Act, as amended (“CEA”), and shall report the Transaction to a Swap Data Repository (as defined in Section 1a(48) of the CEA, pursuant to any requirements of 17 CFR Part 44, 45 and 46 applicable to the Transaction.

(c)In addition, if an Exhibit B on Tax Representations and Covenants is made a part of this Agreement, each of the Buyer and the Seller makes the representations and warranties set forth therein to the other and covenants as set forth therein with the other with respect to certain matters relating to Taxes.

(d)Buyer represents that it is not a governmental, quasi-governmental, municipal or similar public entity and is not otherwise owned or controlled by any such entity.

Section 8.  Documents.  At or before the time of execution of this Agreement, each party shall deliver to the other evidence of the truth and accuracy of its representations in subsections (ii) and (iii) of Section 7(a) as well as evidence of the authority, incumbency and specimen signature of each Person authorized to execute and deliver this Agreement or any other 

6

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document to be delivered under this Agreement on its behalf.  In addition, the Seller shall deliver to the Buyer at the times specified in Part 2 of Exhibit A, each of the documents there specified.

Section 9.  Termination Events.  For purposes of this Agreement, “Termination Event” means each of the events and circumstances listed below:

(a)The Seller fails to pay any amount payable by it hereunder as and when that amount becomes payable and does not remedy that failure on or before the third Local Business Day after notice from the Buyer of the failure;

(b)Any representation or warranty made by the Seller in this Agreement, other than in Section 7(c), or made by any Credit Support Provider in any Credit Support Document (or document related thereto) delivered hereunder proves to have been incorrect, incomplete or misleading in any material respect at the time it was made, or the Seller fails to deliver any document it is required to deliver as provided in Part 2 of Exhibit A and does not remedy that failure on or before the thirtieth day after notice from the Buyer of the failure or, in the case of failure to deliver a Credit Support Document, does not remedy that failure immediately;

(c)The Seller or any Credit Support Provider becomes the subject of any action or proceeding for relief under any bankruptcy or insolvency law or any law affecting creditors’ rights that is similar to a bankruptcy or insolvency law or law relating to the composition of debts or seeks or becomes subject to the appointment of a receiver, custodian or similar official for it or any of its property or fails or is unable to pay its debts generally as they fall due;

(d)The Seller or any Credit Support Provider fails to pay any amount payable by it to the Buyer under any other agreement or under any instrument of the Seller or any Credit Support Provider held by the Buyer and does not remedy that failure during any applicable cure period;

(e)(i) There occurs a default, an event of default or another similar condition or event (however described) in respect of the Seller or any Credit Support Provider for the Seller under one or more agreements or instruments relating to Specified Indebtedness in an aggregate amount of not less than the Threshold Amount and as a result such Specified Indebtedness has been or may be declared due and payable before it would otherwise have been due and payable or (ii) there occurs a default by the Seller or any such Credit Support Provider in making one or more payments on the due date thereof in an aggregate amount of not less than the Threshold Amount under any such agreements or instruments or under any Specified Transaction (after giving effect to any applicable notice requirement or grace period) or (iii) the combined amounts of Specified Indebtedness covered by clauses (i) and (ii) at least equal the Threshold Amount.

For this purpose, “Specified Indebtedness,” with respect to any Person, means all obligations of that Person (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money, excluding deposits received in the ordinary course of its banking business; “Specified Transaction” means any rate swap, 

7

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currency swap, cross‐currency swap, commodity‐price swap, equity, equity‐index, debt‐linked or debt‐index‐linked swap, rate cap, floor or collar, forward rate agreement, forward or spot foreign exchange transaction, interest rate, currency or commodity‐price option, any cash‐settled option on a security or index or group of securities, any combination of any of the foregoing and any similar transaction; and “Threshold Amount” means an amount equal to the value of two percent (2%) of shareholder’s equity of the Seller (or the equivalent in any other currency or currencies), determined in accordance with generally accepted accounting principles in the Seller’s jurisdiction of incorporation or organization, as at the end of the Seller’s most recently completed fiscal year;

(f)Any Credit Support Provider fails to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document to which it is a party if the failure is not remedied during any applicable cure period; or any Credit Support Document expires or terminates or fails or ceases to be in full force and effect (in either case, other than in accordance with its terms) prior to the satisfaction of all obligations of the Seller under this Agreement; or any Credit Support Provider or any Person purporting to act on its behalf disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, any Credit Support Document to which it is a party;

(g)The Seller or any Credit Support Provider consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity, and the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of the Seller or such Credit Support Provider (as the case may be) as determined by the Buyer immediately prior to such action; or

Section 10.  Early Termination.

(a)At any time while a Termination Event is continuing, the Buyer may, in its absolute discretion, give notice of termination in accordance with this Section.  If a party gives notice of supervening illegality, either party may give notice of termination in accordance with this Section in the circumstances described in Section 5.  If a party is required to pay any additional amount pursuant to Section 6, it may give notice of termination in accordance with this Section in the circumstances described in Section 6.

(b)At any time while an event under Paragraph 7 of the Credit Support Annex is continuing where the Buyer (or its Custodian) is the party failing to take an action or comply with the provisions specified therein, the Seller may, in its absolute discretion give notice of termination in accordance with this Section.  For purposes of calculating the amount due under Sections 11 and 12 hereof in connection with a notice of termination under this Section 10(b), the Market Quotation shall be determined pursuant to Section 12, substituting the word “Seller” in each instance when the word “Buyer” is utilized in such section and the quotation referred to in Section 12(b) shall be the amount in Dollars that a Reference Market Maker would charge as a Fixed Amount on such date of declaration of termination; provided, however, that if a Market Quotation cannot be determined, the Seller shall reasonably determine in good faith an amount 

8

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equal to its total losses and costs in connection with this Agreement including any loss of bargain, costs of funding or, at the election of the Seller but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position.

(c)Any notice of termination hereunder

(i)shall state the grounds for termination;

(ii)shall specify a date that is not before, nor more than 10 days after, the date the notice of early termination is given on which the payments required by Section 11 shall be made as provided therein (the “Early Termination Date”); and

(iii)shall declare the obligations of the Seller to make the payments required by Section 2 that are scheduled to be made after the Early Termination Date to be terminated as of that date, and those obligations shall so terminate and be replaced by the parties’ obligations to make the payments specified in Section 11.

Section 11.  Payments Upon Early Termination.

(a)If notice of termination is given pursuant to Section 10, the Seller shall pay the Buyer its Damages.

(b)The Buyer’s Damages in the event of early termination shall be the Market Quotation, if it can be determined.  If it cannot be determined, the Buyer’s Damages shall be an amount in Dollars equal to the sum of the losses (including loss of bargain) that it may incur as a result of the early termination or as a result of the event that served as the ground for early termination.

(c)Payments to be made in accordance with this Section shall be made on the Early Termination Date.  If the Buyer is entitled to be paid any amount in respect of its Damages in accordance with this Section, it shall submit to the Seller a statement in reasonable detail of those Damages.

Section 12.  Market Quotation.

(a)For the purpose of determining the Market Quotation, the Buyer shall select, four leading participants in the interest rate cap market (each a “Reference Market‐maker”), in its sole discretion and in good faith, with a view to minimizing the Market Quotation (to the extent required by law); provided, however, that in doing so the Buyer shall be entitled to select market participants that are of the highest credit standing and that otherwise satisfy all the criteria that the Buyer applies generally at the time in deciding whether to enter into an interest rate protection transaction.

(b)The Buyer shall request from each of the Reference Market‐makers it has selected a quotation of the amount in Dollars which that Reference Market‐maker would 

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charge on the Early Termination Date as a flat amount for entering into an agreement, effective on the Early Termination Date, pursuant to which it would be obligated to make all the payments scheduled to be made by the Seller under Section 2 of this Agreement after the Early Termination Date.

(c)The Market Quotation shall be the arithmetic mean (rounded up, if necessary, to the nearest cent) of the amounts described in Section 12(b) that are quoted to the Buyer by the Reference Market‐makers it has selected or, if only one Reference Market‐maker will quote such a fee, the Market Quotation Value shall be the amount quoted by that Reference Market‐maker.

Section 13.  Costs and Expenses.

(a)Each of the parties shall pay, or reimburse the other on demand for, all stamp, registration, documentation or similar taxes or duties, and any penalties or interest that may be due with respect thereto, that may be imposed by any jurisdiction in respect of its execution or delivery of this Agreement.  If any such tax or duty is imposed by any jurisdiction as the result of the conduct or status of both parties, each party shall pay one half of the amount of the tax or duty.

(b)The Seller shall pay, or reimburse the Buyer on demand for, all reasonable costs and expenses incurred by the Buyer in connection with enforcement of its rights under this Agreement or as a consequence of a Termination Event, including, without limitation, fees and expenses of legal counsel.

(c)Upon the Buyer’s failure to pay the Fixed Amount pursuant to Section 2, if the value of this Agreement is greater than zero as determined in the manner described in Section 2, the Buyer shall pay, or reimburse the Seller on demand for, all reasonable costs and expenses incurred by the Seller in connection with enforcement and protection of its rights under this Agreement including, without limitation, fees and expenses of legal counsel. 

Section 14.  Nonassignment.  Neither party shall assign or otherwise transfer its rights or obligations hereunder or any interest herein to any other Person or any of its other branches or offices without the prior written consent of the other party to this Agreement, unless the assignment or transfer by the Seller is pursuant to Section 5 or Section 6 and provided that:

(a)the Seller gives the Buyer 10 Business Days’ prior written notice of the assignment or transfer;

(b)the assignee or transferee meets the criteria set forth in Section 5(a) or Section 6(b), as the case may be;

(c)the credit policies of the Buyer at the time would permit the Buyer to purchase an interest rate cap from the assignee or transferee without credit support;

(d)a Termination Event does not occur as a result of such transfer;

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(e)on or prior to the effective date of the transfer, this Agreement (including, without limitation, any Tax covenants (if any) in Exhibit B to this Agreement) and all other related documents shall have been amended to reflect the transfer in a manner reasonably satisfactory to Buyer; and

(f)on or prior to the effective date of the transfer, Seller shall have agreed in writing to indemnify and hold harmless Buyer in a manner reasonably satisfactory to Buyer from and against any adverse tax consequences and any related fees, expenses and other losses resulting from the transfer, subject to the following conditions:  (i) notwithstanding Seller’s duty to indemnify Buyer, Buyer shall at all times retain sole control and decision‐making authority with regard to any tax issues affecting Buyer or related litigation arising from or in connection with said transfer; and (ii) such indemnification shall be made as such expenses are incurred by Buyer and at such time as Buyer is required to pay any such tax liability, provided that Seller shall not be required to make such indemnification until five Business Days after it has received written notice from Buyer of expenses or liabilities for which Buyer seeks reimbursement.

Any purported transfer in violation of this Section shall be void.  The parties are acting for purposes of this Agreement through their respective branches or offices specified in Exhibit A.

The Seller shall not withhold its consent to an assignment or transfer proposed by the Buyer, or by any subsequent assignee or transferee of the Buyer, if the Seller would be entitled to make the payments it is required to make pursuant to Section 2 to the proposed assignee or transferee lawfully and without withholding for or on account of Taxes and the proposed assignee or transferee assumes the obligations of the Buyer under the Tax covenants (if any) of the Buyer in Exhibit B to this Agreement to the satisfaction of the Seller.

Section 15.  Waivers: Rights Not Exclusive.  No failure or delay by a party in exercising any right hereunder shall operate as a waiver of, or impair, any such right.  No single or partial exercise of any such right shall preclude any other or further exercise thereof or the exercise of any other right.  No waiver of any such right shall be effective unless given in writing.  No waiver of any such right shall be deemed a waiver of any other right hereunder.  The right to terminate provided for herein is in addition to, and not exclusive of, any other rights, powers, privileges or remedies provided by law.

Section 16.  Interpretation.  The section headings in this Agreement are for convenience of reference only and shall not affect the meaning or construction of any provision hereof.

Section 17.  Notices.  All notices in connection with this Agreement shall be given by telex or cable or by notice in writing hand‐delivered or sent by facsimile transmission or by airmail, postage prepaid.  All such notices shall be sent to the telex or telecopier number or address (as the case may be) specified for the intended recipient in Exhibit A (or to such other number or address as that recipient may have last specified by notice to the other party).  All such notices shall be effective upon receipt, and confirmation by answerback of any notice sent by telex as provided herein shall be sufficient evidence of receipt thereof, and telephone 

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confirmation of receipt of any facsimile transmission in accordance with Exhibit A shall be sufficient evidence of receipt thereof.

Section 18.  Amendments.  This Agreement may be amended only by an instrument in writing executed by the parties hereto.

Section 19.  Survival.  The obligations of the parties under Section 6, Section 11 and Section 13 shall survive payment of the obligations of the parties under Section 2 and Section 4 and the termination of their other obligations hereunder.

Section 20.  Jurisdiction; Governing Law.

(a)Any action or proceeding relating in any way to this Agreement may be brought and enforced in the courts of the State of New York or of the United States for the Southern District of New York, and each of the parties irrevocably submits to the nonexclusive jurisdiction of each such court in connection with any such action or proceeding.

(b)This Agreement shall be governed by, and construed in accordance with, the law of the State of New York without reference to its choice of law doctrine.

Section 21.  Independence of this Agreement.  It is the parties’ intention that no other agreements or arrangements between them or any of their affiliates affect the transaction provided for herein except as expressly provided herein.  Therefore, except as expressly provided herein, the Seller’s obligation to make payments to the Buyer hereunder shall not be subject to early termination or to any condition precedent, no such payment obligation shall be netted against any payment due from the Buyer or any third party under any other agreement or instrument, and neither the Seller nor any third party shall have any right to set off any such payment due from the Seller to the Buyer or withhold any such payment, in whole or in part, pending payment of any amount payable by the Buyer or any third party to the Seller or any third party.  In addition, the terms set forth in this provision may not be modified except in a written amendment to this Agreement executed by both parties hereto that (i) is expressly identified in capital letters as modifying this provision (identified by its title) and (ii) deals only with such modification.

Section 22.  Waiver of Jury Trial.  Each of the Buyer and the Seller, respectively, hereby waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this Agreement or any Credit Support Document.  Each of the Buyer and the Seller (i) certifies that no representative, agent or attorney of the other party or any Credit Support Provider has represented, expressly or otherwise, that such other party would not, in the event of such suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and the other party have been induced to enter into this Agreement and provide for any Credit Support Document, as applicable, by, among other things, the mutual waivers and certifications in this Section.

Section 23.  Setoff.  The obligation to pay amounts due hereunder shall be absolute and unconditional and shall not be subject to diminution by set‐off, recoupment, counterclaim, abatement or otherwise.

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Section 24.  Counterparts: Integration of Terms.  This Agreement may be executed in counterparts, and the counterparts taken together shall be deemed to constitute one and the same agreement.  This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto. Delivery of an executed counterpart of a signature page of this Agreement by any electronic means that reproduces an image of the actual executed signature page (including by the email of a scanned Portable Document Format file) shall be of the same legal effect, validity and enforceability as the physical delivery of a manually executed signature thereof.  This Agreement contains the entire agreement between the parties relating to the subject matter hereof and supersedes all oral statements and prior writings with respect thereto.

Section 25.  Contractual Currency.  The provision on Contractual Currency set forth in Part 4 of Exhibit A will apply if the Seller or any Credit Support Provider for the Seller is not organized in the U.S. or is acting through any office outside the U.S.

Section 26.  Consent to Recording.  Each party (i) 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, (ii) waives any further notice of such monitoring or recording, and (iii) agrees to notify (and, if required by law, obtain the consent of) its officers and employees with respect to such monitoring or recording.  Any such recording may be submitted in evidence to any court or in any proceeding for the purpose of establishing any matters pertinent to this Agreement.

Section 27.  Contractual Recognition of Bail-in 

(1)Each party acknowledges and accepts that liabilities arising under this Agreement (other than Excluded Liabilities) may be subject to the exercise of the UK Bail-in Power by the relevant resolution authority and acknowledges and accepts to be bound by any Bail-in Action and the effects thereof (including any variation, modification and/or amendment to the terms of this Agreement as may be necessary to give effect to any such Bail-in Action), which if the Bail-in Termination Amount is payable by Seller to the Buyer may include, without limitation: 

(i)a reduction, in full or in part, of the Bail-in Termination Amount; and/or 

(ii)a conversion of all, or a portion of, the Bail-in Termination Amount into shares or other instruments of ownership, in which case the Buyer acknowledges and accepts that any such shares or other instruments of ownership may be issued to or conferred upon it as a result of the Bail-in Action. 

(2)Each party acknowledges and accepts that this provision is exhaustive on the matters described herein to the exclusion of any other agreements, arrangements or understanding between the parties relating to the subject matter of this Agreement and that no further notice shall be required between the parties pursuant to this Agreement in to order to give effect to the matters described herein. 

(3)The acknowledgements and acceptances contained in paragraphs (1) and (2) above will not apply if: 

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(i)the relevant resolution authority determines that the liabilities arising under this Agreement may be subject to the exercise of the UK Bail-in Power pursuant to the law of the third country governing such liabilities or a binding agreement concluded with such third country and in either case the UK Regulations have been amended to reflect such determination; and/or 

(ii)the UK Regulations have been repealed or amended in such a way as to remove the requirement for the acknowledgements and acceptances contained in paragraphs (1) and (2). 

For purposes of this Section 27:

 

“Bail-in Action” means the exercise of the UK Bail-in Power by the relevant resolution authority in respect of all transactions (or all transactions relating to one or more netting sets, as applicable) under this Agreement. 

 

“Bail-in Termination Amount” means the early termination amount or early termination amounts (howsoever described), together with any accrued but unpaid interest thereon, in respect of all transactions (or all transactions relating to one or more netting sets, as applicable) under this Agreement (before, for the avoidance of doubt, any such amount is written down or converted by the relevant resolution authority). 

 

“BRRD” means Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms. 

 

“Excluded Liabilities” means liabilities excluded from the scope of the contractual recognition of bail-in requirement pursuant to the UK Regulations. 

 

“UK Bail-in Power” means any write-down or conversion power existing from time to time (including, without limitation, any power to amend or alter the maturity of eligible liabilities of an institution under resolution or amend the amount of interest payable under such eligible liabilities or the date on which interest becomes payable, including by suspending payment for a temporary period) under, and exercised in compliance with, any laws, regulations, rules or requirements (together, the “UK Regulations”) in effect in the United Kingdom relating to the transposition of the BRRD as amended from time to time, including but not limited to, the Banking Act 2009 as amended from time to time, and the instruments, rules and standards created thereunder, pursuant to which the obligations of a regulated entity (or other affiliate of a regulated entity) can be reduced (including to zero), cancelled or converted into shares, other securities, or other obligations of such regulated entity or any other person. 

A reference to a “regulated entity” is to any BRRD Undertaking as such term is defined under the PRA Rulebook promulgated by the United Kingdom Prudential Regulation Authority or to any person falling within IFPRU 11.6, of the FCA Handbook promulgated by the United Kingdom Financial Conduct Authority, both as amended from time to time, which includes, certain credit institutions, investment firms, and certain of their parent or holding companies.

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Section 28.  Contractual Recognition of UK Stay in Resolution.  The terms of the ISDA UK (PRA Rule) Jurisdictional Module and the ISDA Resolution Stay Jurisdictional Modular Protocol (together, the “UK Module”) are incorporated into and form part of this Agreement, and, for purposes thereof: (a) this Agreement shall be deemed a Covered Agreement, (b) Buyer shall be deemed a Module Adhering Party and (c) Seller shall be deemed a Regulated Entity Counterparty with respect to Buyer.  In the event of any inconsistencies between this Agreement and the UK Module, the UK Module will prevail.

Section 29.  Bankruptcy.  Without limiting any other protections under the Bankruptcy Code (Title 11 of the United States Code) (the "Bankruptcy Code"), the Parties hereto intend for:

(a)This Transaction and the Agreement to be a "swap agreement" as defined in the Bankruptcy Code, and the parties hereto to be entitled to the protections afforded by, among other Sections, Section 560 of the Bankruptcy Code.

(b)A party's right to liquidate this Transaction and to exercise any other remedies upon the occurrence of any Event of Default or Termination Event under the Agreement or this Transaction to constitute a "contractual right" as described in Section 560 of the Bankruptcy Code.

(c)Any cash, securities or other property provided as performance assurance, credit support or collateral with respect to this Transaction or the Agreement to constitute "transfers" under a "swap agreement" as defined in the Bankruptcy Code.

(d)All payments for, under or in connection with this Transaction or the Agreement, all payments for any securities or other assets and the transfer of such securities or other assets to constitute "transfers" under a "swap agreement" as defined in the Bankruptcy Code.

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IN WITNESS WHEREOF the parties have caused this Agreement to be duly executed and delivered as of the day and year first written above.

	
 
	
BARCLAYS BANK PLC

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
DRAFT

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By
	
/s/Dawn Beach

	
 
	
Name
	
Dawn Beach

	
 
	
Title
	
Authorized Signatory

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
ATAX TEBS II, LLC

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
DRAFT

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
By
	
/s/Craig S. Allen

	
 
	
Name
	
Craig S. Allen

	
 
	
Title
	
Chief Financial Officer

 

 

[Signature Page to nyk10f51633 / nyk10f51830 Rate Cap Agreement]

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ANNEX I

 

to Confirmation, Dated June 28, 2017

between Buyer and Seller

 

	
From and Including*
	
To But Excluding*
	
Notional Amount (USD)

	
6/15/2017
	
7/15/2017
	
92,550,751.02

	
7/15/2017
	
8/15/2017
	
92,460,329.01

	
8/15/2017
	
9/15/2017
	
92,369,488.02

	
9/15/2017
	
10/15/2017
	
92,278,226.01

	
10/15/2017
	
11/15/2017
	
92,186,539.02

	
11/15/2017
	
12/15/2017
	
92,094,425.01

	
12/15/2017
	
1/15/2018
	
91,956,883.02

	
1/15/2018
	
2/15/2018
	
91,863,913.02

	
2/15/2018
	
3/15/2018
	
91,770,510.00

	
3/15/2018
	
4/15/2018
	
91,675,673.01

	
4/15/2018
	
5/15/2018
	
91,580,400.00

	
5/15/2018
	
6/15/2018
	
91,484,688.00

	
6/15/2018
	
7/15/2018
	
91,388,535.00

	
7/15/2018
	
8/15/2018
	
91,291,938.00

	
8/15/2018
	
9/15/2018
	
91,194,895.02

	
9/15/2018
	
10/15/2018
	
91,097,404.02

	
10/15/2018
	
11/15/2018
	
90,999,465.00

	
11/15/2018
	
12/15/2018
	
90,901,073.01

	
12/15/2018
	
1/15/2019
	
90,757,226.01

	
1/15/2019
	
2/15/2019
	
90,657,922.02

	
2/15/2019
	
3/15/2019
	
90,558,158.01

	
3/15/2019
	
4/15/2019
	
90,457,933.02

	
4/15/2019
	
5/15/2019
	
90,357,245.01

	
5/15/2019
	
6/15/2019
	
90,256,091.01

	
6/15/2019
	
7/15/2019
	
90,154,469.01

	
7/15/2019
	
8/15/2019
	
90,052,375.02

 

* Subject to No Adjustment.

 

 

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EXHIBIT A

notice addresses and other matters

Part 1:Addresses for Notices and Accounts for Payments:

The Seller:

 

	
Address:

 
	
BARCLAYS BANK PLC
745 Seventh Avenue

New York, New York 10019

United States of America

Attention:  Head of Derivatives PTS, Americas

By electronic email:  IRDConfirmations@barclays.com

With copy to:  muni_deriv_middleoffice@barclays.com

 

	
Payments to Seller:

 
	
Bank:

ABA No.:

A/C:

Favour:

 
	
Barclays Bank Plc, New York

026‐0025‐74

Barclays Bank Plc London

Barclays Swaps & Options Group, New York

A/C No.:  050‐01922‐8

The Buyer:

 

	
Address:

 
	
ATAX TEBS II, LLC

c/o Burlington Capital Group

1004 Farnam Street, Suite 400

Omaha, NE 68102

Attn: Craig Allen

By Electronic email: callen@burlingtoncapital.com

 

Payments to Buyer (pursuant to Section 3, payments are to be made as will be specified):

	
Bank Name:
	
Bank of America, N.A.

	
 
	
100 West 33rd Street

	
 
	
NY, NY 10001

	
ABA#:
	
026009593

	
Account Name:
	
America First Multifamily Investors, L.P.

	
Account Number:
	
223001503325

 

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Part 2:Documents to be delivered by the Seller to the Buyer contemporaneously with this Rate Cap Agreement:

	
(a)
	
Credit Support Document to be delivered by the Seller:  Credit Support Annex on standard ISDA form with paragraph 13 in the form attached as Exhibit C hereto.

Document to be delivered by the Buyer to the Seller contemporaneously with this Rate Cap Agreement:

	
(a)
	
Evidence of the authority, incumbency and specimen signature of the party executing this Agreement.

Part 3:Credit Support Provider for the Seller:  NONE

Part 4:Each reference in this Agreement to Dollars (the “Contractual Currency”) is of the essence.  The obligation of each party in respect of any amount due under this Agreement in the Contractual Currency is, notwithstanding any payment in any other currency (whether pursuant to a judgment or otherwise), be discharged only to the extent of the amount in the Contractual Currency that the intended payee may, in accordance with normal banking procedures, purchase with the sum paid in that other currency (after any premium and costs of exchange) on the Business Day in New York City immediately following the day on which that payee receives the payment.  If the amount in the Contractual Currency that may be so purchased for any reason falls short of the amount originally due, the party owing that amount shall pay such additional amount, in the Contractual Currency, as is necessary to compensate for the shortfall.  Any obligation of that party not discharged by that payment shall, to the fullest extent permitted by applicable law, be due as a separate and independent obligation and, until discharged as provided herein, shall continue in full force and effect.

 

 

A-2

 

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EXHIBIT B

TAX REPRESENTATIONS AND COVENANTS

	
A.
	
Tax Representations and Covenants

Representations of each of the Seller and the Buyer

It is not required by any applicable law, as modified by the practice of any relevant governmental authority, to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 4 to be made by it to the other party) under this Agreement.  In making this representation, it may rely on (i) the accuracy of any representation made by the other party below in this Exhibit and (ii) the satisfaction of the covenant of that other party contained below in this Exhibit and the accuracy and effectiveness of any document provided by that other party pursuant to any such covenant.

	
B.
	
Payee Tax Representations

Of the Seller:

	
 
	
(i)
	
With respect to payments made to Seller which are not effectively connected to the United States, Seller is a non-U.S. branch of a foreign person for United States federal income tax purposes.

	
 
	
(ii)
	
With respect to payments made to Seller which are effectively connected to the United States, each payment received or to be received by Seller in connection with this Agreement will be effectively connected with its conduct of a trade or business in the United States.

Of the Buyer:

Buyer is a United States person for purposes of the United States Internal Revenue Code of 1986, as amended, and is not acting as an agent or intermediary for a foreign Person.

C.          Covenants

Of Each Party:

It will give notice of any failure of a representation set forth in this Exhibit B and made by it under Section 7(c) of this Agreement to be accurate and true promptly upon learning of such failure.

If a party is required at any time to execute any form or document in order for payments to it hereunder to qualify for exemption from withholding for or on account of Taxes or to qualify for such withholding at a reduced rate, that party shall, as soon as practicable after request from the other party, execute the required form or document and deliver it to that other party.

 

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Of the Seller:

None

Of the Buyer:

None

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

B-2

 

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EXHIBIT C

FORM OF PARAGRAPH 13 of CREDIT SUPPORT ANNEX

Party A (or Seller): Barclays Bank PLC

Party B (or Buyer): ATAX TEBS II, LLC

Paragraph 13.  Elections and Variables

	
(a)
	
Security Interest for “Obligations.”  The term “Obligations” as used in the Annex includes the following additional obligations:  Not Applicable.

	
(b)
	
Credit Support Obligations.

	
 
	
(i)
	
Delivery Amount, Return Amount and Credit Support Amount.

	
 
	
(A)
	
“Delivery Amount” has the meaning specified in Paragraph 3(a), unless otherwise specified here:  None Specified

	
 
	
(B)
	
“Return Amount” has the meaning specified in Paragraph 3(b), unless otherwise specified here:  None Specified

	
 
	
(C)
	
“Credit Support Amount” means, for any Valuation Date (i) the Secured Party’s Exposure for that Valuation Date plus (ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any, minus (iii) the Pledgor’s Threshold; provided, however, that (x) in the case where the sum of the Independent Amounts applicable to the Pledgor exceeds zero, the Credit Support Amount will not be less than the sum of all Independent Amounts applicable to the Pledgor and (y) in all other cases, the Credit Support Amount will be deemed to be zero whenever the calculation of Credit Support Amount yields an amount less than zero.

	
 
	
(ii)
	
Eligible Collateral.  Debt obligations of the Federal Home Loan Mortgage Corporation shall not qualify as “Eligible Collateral.”  The following items will qualify as “Eligible Collateral” with respect to Party A and Party B:

	
 
	
Remaining Maturity

	
ICAD Code
	
One (1) year or

under
	
More than one

(1) year up to

and including

five (5) years
	
More than five (5)

years up to and

including ten (10)

years
	
More than ten

(10) years

	
 

US-CASH
	
 

100%
	
 

N/A
	
 

N/A
	
 

N/A

	
US-TBILL
	
99%
	
N/A
	
N/A
	
N/A

	
US-TNOTE
	
99%
	
98%
	
95%
	
N/A

	
US-TBOND
	
99%
	
98%
	
95%
	
95%

 

 

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(iii)
	
Other Eligible Support.  There shall be no “Other Eligible Support” for either Party A or Party B.

	
 
	
(iv)
	
Thresholds.

	
 
	
(A)
	
“Independent Amount” for Party A and Party B means zero.

	
 
	
(B)
	
“Threshold” for the Party A and Party B means USD$0.

	
 
	
(C)
	
“Minimum Transfer Amount” means, with respect to Party A and Party B, USD$500,000; provided, that if an Event of Default has occurred and is continuing with respect to Pledgor, the Minimum Transfer Amount with respect to Pledgor shall be zero.

	
 
	
(D)
	
Rounding.  The Delivery Amount and the Return Amount will be rounded up or down respectively to the nearest integral multiple of USD$10,000.

	
(c)
	
Valuation and Timing.

	
 
	
(i)
	
“Valuation Agent” means, for purposes of Paragraphs 3 and 5, the party making the demand under Paragraph 3, and, for purposes of Paragraph 6(d), the Secured Party receiving or deemed to receive the Distributions or the Interest Amount, as applicable.  In addition, the Valuation Agent will be the Secured Party for purposes of calculating Value in connection with substitutions pursuant to Paragraph 4(d).

	
 
	
(ii)
	
“Valuation Date” means each Local Business Day.

	
 
	
(iii)
	
“Valuation Time” means the closing of business in the city of the Valuation Agent on the Local Business Day preceding the Valuation Date or the date of calculation, as applicable, provided that the calculations of Value and Exposure will be made as of approximately the same time on the same date.

	
 
	
(iv)
	
“Notification Time” means by 10:00 a.m., New York time, on a Local Business Day.

	
(d)
	
Conditions Precedent and Secured Party’s Rights and Remedies.  Each of the following will be a “Specified Condition”:  None.

	
(e)
	
Substitution.

	
 
	
(i)
	
“Substitution Date” has the meaning specified in Paragraph 4(d)(ii) unless otherwise specified here:  None

	
 
	
(ii)
	
Consent.  The Pledgor does not need to obtain the Secured Party’s consent for any substitution pursuant to Paragraph 4(d).

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(f)
	
Dispute Resolution.

	
 
	
(i)
	
“Resolution Time” means 12:00 p.m., New York Time, on the fifth Local Business Day following the date on which notice of a dispute is given under Paragraph 5.

	
 
	
(ii)
	
Value.  For the purpose of Paragraph 5(i)(C) and 5(ii), the Value of Eligible Collateral other than Cash will be calculated as follows:

the sum of (i) (x) the arithmetic mean of the closing bid prices quoted on the relevant date of three nationally recognized principal market makers (which may include an affiliate of Party A) for such security chosen by the Valuation Agent or (y) if no quotations are available from such principal market makers on the relevant date, the arithmetic mean of the closing bid prices on the next preceding date, multiplied by the appropriate Valuation Percentage set forth in subsection (b) of this Paragraph 13, plus (ii) the accrued interest on such security (except to the extent Transferred to a party pursuant to any applicable provision of this Agreement or included in the applicable price referred to in (i) of this clause) as of such date.

	
 
	
(iii)
	
Alternative.  Not Applicable.

	
(g)
	
Holding and Using Posted Collateral.

	
 
	
(i)
	
Eligibility to Hold Posted Collateral; Custodians.  Secured Party will be entitled to     hold Posted Collateral  through itself or its Custodian pursuant to Paragraph 6(b), provided that the following conditions applicable to it are satisfied:

	
 
	
(1)
	
The Custodian:  The Custodian is a bank or trust company designated by the Secured Party and having total assets of at least USD$10,000,000,000.

	
 
	
(ii)
	
Use of Posted Collateral.  The provision of Paragraph 6(c) will apply.

	
(h)
	
Distributions and Interest Amount.

	
 
	
(i)
	
Interest Rate.  The Interest Rate will be the rate per annum equal to the overnight Federal Funds Rate for each day cash is held by the Secured Party as reported in Federal Reserve Publication H.15‐519.

	
 
	
(ii)
	
Transfer of Interest Amount.  The Transfer of the Interest Amount will be made on the last Local Business Day of each calendar month and on any Local Business Day that Posted Collateral in the form of Cash is Transferred to the Pledgor pursuant to Paragraph 3(b).

	
 
	
(iii)
	
Alternative to Interest Amount.  Not Applicable.

	
(i)
	
Additional Representation(s).  Not Applicable.

C-3

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(j)
	
“Other Eligible Support and Other Posted Support.”

	
 
	
(i)
	
“Value” with respect to Other Eligible Support and Other Posted Support means:  Not Applicable.

	
 
	
(ii)
	
“Transfer” with respect to Other Eligible Support and Other Posted Support means:  Not Applicable.

	
(k)
	
Demands and Notices.  All demands, specifications and notices made by one party to this Annex will be made pursuant to the Notices Section of this Agreement, unless otherwise specified here:

Party A:None Specified

Party B:None Specified

	
(l)
	
Address for Transfers.  None Specified

	
(m)
	
Other Provisions.

	
 
	
(i)
	
 (ii)FIRREA.  Party A, if an FDIC‐insured depository institution, represents that (i) this Annex has been executed and delivered by a duly appointed or elected and authorized officer of Party A of the level of vice president or higher and (ii) Party A has taken all necessary action to authorize the execution, delivery and performance of this Annex.

	
 
	
(iii)
	
Posted Collateral.  The definition of Posted Collateral shall also include any and all accounts in which Cash Collateral is held.

	
 
	
(iv)
	
Additions to Paragraph 3.  The following subparagraph (c) is hereby added to Paragraph 3 of this Annex:

	
 
	
(c)
	
No Offset.  On any Valuation Date, if (i) each party is required to make a Transfer under Paragraph 3(a) and (ii) each party is required to make a Transfer under Paragraph 3(b), then the amounts of those obligations will not offset each other.

	
 
	
(v)
	
Fees of Custodian.  Notwithstanding any other provision contained in this Annex, Pledgor shall pay all fees and charges of the Custodian related to the holding and maintenance of the Posted Collateral. 

	
 
	
(vi)
	
Exposure.  The definition of the term “Exposure” contained in Paragraph 12 of this Annex is deleted in its entirety and the following language is substituted therefor:  “Exposure” means for any Valuation Date or other date for which Exposure is calculated and, subject to Paragraph 5 in the case of a dispute, the amount, if any that would be payable to Party B pursuant to Section 11 of this Agreement as if this Agreement were being terminated as of the relevant Valuation Time; provided, however, that Market Quotation will be determined by 

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the Valuation Agent using its estimates at mid-market of the amounts that would be paid pursuant to Section 11. 

	
 
	
(vii)
	
Master Agreement.  For purposes of this Annex, the term "Agreement" shall not refer to a Master Agreement and Schedule as indicated above in the introductory paragraph, but shall mean the Rate Cap Agreement between Party A and Party B dated as of the date hereof.  

	
 
	
(viii)
	
Notice Regarding Client Money Rules. Party A hereby notifies Party B that Barclays Bank PLC, as a CRD credit institution (as such term is defined in the rules of the UK Financial Conduct Authority or any successor thereto (“the FCA”)), holds Party B’s money as banker and not as trustee. Accordingly, Party B’s money will not be held in accordance with the rules within the Client Asset Sourcebook of the FCA (the “Client Money Rules”) and will not be subject to the statutory trust provided for under the Client Money Rules. In particular, Seller shall not segregate Party B’s money from Party A’s money and Party A shall not be liable to account of Party B for any profits made by Party A’s use as banker of such funds. Upon failure of Party A, the client money distribution rules within the rules of the FCA (the “Client Money Distribution Rules”) will not apply to these sums and so Party B will not be entitled to share in any distribution under the Client Money Distribution Rules.

	
 
	
(ix)
	
ISDA 2014 Collateral Agreement Negative Interest Protocol (the Protocol). The parties agree that, solely for the purposes of this Agreement (which shall be deemed to be a Protocol Covered Collateral Agreement for the purposes of the Protocol), they shall be deemed to be Adhering Parties to the Protocol, the Implementation Date shall be the date of this Agreement and the representations and undertakings set out at Clause 3(a)(vi) (with respect to any Third Party Credit Support Document only), Clause 3(c) and Clause 3(d) of the Protocol shall be disregarded.

	
 
	
(x)
	
Form of Annex.  The parties hereto agree that the text of the body of this Annex (paragraphs 1 through 12) shall be deemed to be the printed form of the 1994 ISDA Credit Support Annex (Bilateral Form — ISDA Agreements subject to New York Law only version) as published and copyrighted by the International Swaps and Derivatives Association, Inc., incorporated herein by reference, subject to the following revisions:

(a)Modification to Introductory Paragraph:  The following paragraph is substituted for the introductory paragraph of the Annex:

“This Annex supplements, forms part of, and is subject to, the above-referenced Rate Cap Agreement (the “Agreement”), and is a Credit Support Document under the Agreement with respect to each party.

(b)Modifications to Paragraph 1:  

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(1)The word “Schedule” shall be replaced with “Agreement” in subparagraph (a) of the Annex.

(c)Modification to Paragraph 2:  The following Paragraph 2 is substituted for Paragraph 2 of this Annex:

“Paragraph 2.  Security Interest.  The Pledgor hereby pledges to the Secured Party, as security for its Obligations, and grants to the Secured Party a first priority continuing security interest in, lien on and right of Set-off against all Posted Collateral Transferred to or received by the Secured Party hereunder.  Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the security interest and lien granted hereunder on that Posted Collateral will be released immediately and, to the extent possible, without any further action by either party.”

(e)Modification to Paragraph 5:  The following subparagraph (i) is substituted for subparagraph (i) of Paragraph 5 of this Annex:

(i)In the case of a dispute involving a Delivery Amount or Return Amount, unless otherwise specified in Paragraph 13, the Valuation Agent will recalculate the Exposure and the Value as of the Recalculation Date by:

(A)calculating the Exposure for the Rate Cap Agreement by seeking four actual quotations at mid‐market from Reference Market‐makers for purposes of calculating Market Quotation, and taking the arithmetic average of those obtained; provided that if four quotations are not available for the Rate Cap Agreement, then fewer than four quotations may be used for the Rate Cap Agreement; and if no quotations are available for the Rate Cap Agreement, then the Valuation Agent's original calculations will be used for the Rate Cap Transaction; and 

(B)utilizing the procedures specified in Paragraph 13 for calculating the Value, if disputed, of Posted Credit Support.”

(f)Modification to Paragraph 7:  The following Paragraph 7 is substituted for Paragraph 7 of this Annex:

“Paragraph 7. Notice of termination.  For purposes of Section 10 of this Agreement, a party (X) may give a notice of termination with respect to the other party (Y) in accordance with Section 10 in the following circumstances: 

(i)Y fails (or fails to cause its Custodian) to make, when due, any Transfer of Eligible Collateral, Posted Collateral or the Interest Amount, as applicable, required to be made by it and that failure continues for two Local Business Days after notice of that failure is given to Y;

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(ii)Y fails to comply with any restriction or prohibition specified in this Annex with respect to any of the rights specified in Paragraph 6(c) and that failure continues for five Local Business Days after notice of that failure is given to Y; or 

(iii)Y fails to comply with or perform any agreement or obligation other than those specified in Paragraphs 7(i) and 7(ii) and that failure continues for 30 days after notice of that failure is given to Y.

For purposes of Section 10, (a) if Y is the Seller, the occurrence of an event described above shall constitute a “Termination Event” and (b) if Y is the Buyer, the occurrence of an event described above shall give rise to the Seller’s right to terminate pursuant to Section 10(b).”

(g)Modifications to Paragraph 8:  

(1)The following subparagraph (b) is substituted for the introductory clause of subparagraph (b) of Paragraph 8 of the Annex:

“(b)Pledgor’s Rights and Remedies.  If at any time an Early Termination Date has occurred or been designated as the result of an event described in Paragraph 7 with respect to the Secured Party, then:”

(2)The words “Section 2(d)” shall be replaced with “Section 8” in subparagraph (d) of Paragraph 8 of this Annex. 

(h)Modifications to Paragraph 9:  The following first clause of Paragraph 9 is substituted for the first clause of this Annex:

“Paragraph 9.  Representations.  The Pledgor represents to the Secured Party (which representations will be deemed to be repeated as of each date on which it Transfers Eligible Collateral) that:”

(i)Modification to Paragraph 11:  The words “one or more Confirmations or” are deleted in Paragraph 11(f) of this Annex.

(j)Certain Defined Terms.  The following terms have the meanings indicated below:

“Defaulting Party”  means (a) the Seller if a Termination Event has occurred and is continuing with respect to the Seller and (b) the Buyer if an event has occurred and is continuing under Paragraph 7 hereof with respect to which the Buyer is Y.

“Default Rate” means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum.

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“Event of Default”  means a Termination Event as specified in Section 9 of the Agreement.

“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.

(xi)Additional Amendments for compliance with Variation Margin Rules.

	
 
	
(i)
	
Transfer Timing.  The word “next” on the third line of Paragraph 4(b) is deleted and replaced with the word “same”.  The word “second” on the fifth line of Paragraph 4(b) is deleted and replaced with the word “next”.

	
 
	
(ii)
	
Dispute Resolution. Clause (1) and (2) of the opening paragraph of Paragraph 5 of the Annex to the Agreement are amended as follows:  “(1) the Disputing Party will notify the other party and the Valuation Agent (if the Valuation Agent is not the other party) not later than the close of business on (X) the date that the demand is received under Paragraph 3 in the case of (I) above, or (Y) the Local Business Day following the date of Transfer in the case of (II) above, (2)  subject to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the other party not later than the close of business on the Local Business Day (X) that the Transfer otherwise would have been due if no dispute had existed in the case of (I) above, or (Y) following the date of Transfer in the case of (II) above.”

	
 
	
(iii)
	
Legally Ineligible Credit Support.

Unless otherwise specified in Paragraph 13, upon delivery of a Legal Ineligibility Notice by a party, each item of Eligible Credit Support (or a specified amount of such item) identified in such notice (i) will cease to be Eligible Credit Support (VM) for purposes of Transfers to such party as the Secured Party hereunder as of the applicable Transfer Ineligibility Date, (ii) will cease to be Eligible Credit Support for the other party as the Pledgor for all purposes hereunder as of the Total Ineligibility Date and (iii) will have a Value of zero on and from the Total Ineligibility Date. 

The parties agree that: (a) a Legal Ineligibility Notice may be delivered because the relevant item(s) of Eligible Credit Support never did satisfy the relevant Legal Eligibility Requirements (in which case the applicable Transfer Ineligibility Date and Total Ineligibility Date will be the fifth Local Business Day following the date of delivery of the Legal Ineligibility Notice); (b) Legal Eligibility Requirements may be applied on a portfolio basis (including, without limitation, for the purposes of applying any concentration limits) such that an entire portfolio or group of items may be the subject of a Legal Ineligibility Notice; (c) Legal Eligibility Requirements will include, if relevant, whether or not the 

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relevant item comprises financial collateral (or equivalent) for the purposes of the Directive 2002/47/EC of the European Parliament and Council of 6th June, 2002 on financial collateral arrangements as implemented in the relevant jurisdiction; and (d) a Legal Ineligibility Notice may be given in respect of a new sub-category, as identified in such notice in respect of an item, to the extent such a distinction is made by the relevant law, regulatory guideline, policy, manual, standard or statement. 

As used herein:

“Legal Ineligibility Notice” means a written notice from the Secured Party to the Pledgor in which the Secured Party (i) represents that the Secured Party has determined that one or more items of Eligible Credit Support (or a specified amount of any such item) either has ceased to satisfy, or as of a specified date will cease to satisfy, collateral eligibility requirements under law applicable to the Secured Party requiring the collection of variation margin (the “Legal Eligibility Requirements”), (ii) lists the item(s) of Eligible Credit Support (and, if applicable, the specified amount) that have ceased to satisfy, or as of a specified date will cease to satisfy, the Legal Eligibility Requirements, (iii) describes the reason(s) why such item(s) of Eligible Credit Support (or the specified amount thereof) have ceased to satisfy, or will cease to satisfy, the Legal Eligibility Requirements and (iv) specifies the Total Ineligibility Date and, if different, the Transfer Ineligibility Date. 

“Total Ineligibility Date” means the date on which the relevant item of Eligible Credit Support (or a specified amount of such item) has ceased to satisfy, or will cease to satisfy, the Legal Eligibility Requirements applicable to the Secured Party for all purposes hereunder; provided that, unless otherwise specified in Paragraph 13, if such date is earlier than the fifth Local Business Day following the date on which the Legal Ineligibility Notice is delivered, the Total Ineligibility Date will be the fifth Local Business Day following the date of such delivery. 

“Transfer Ineligibility Date” means the date on which the relevant item of Eligible Credit Support (or a specified amount of such item) has ceased to satisfy, or will cease to satisfy, the Legal Eligibility Requirements for purposes of Transfers to the Secured Party hereunder; provided that, unless otherwise specified in Paragraph 13, if such date is earlier than the fifth Local Business Day following the date on which the Legal Ineligibility Notice is delivered, the Transfer Ineligibility Date will be the fifth Local Business Day following the date of such delivery.

(iv) Valuation Percentage. If at any time the Valuation Percentage assigned to an item of Eligible Credit Support with respect to a party (as the Pledgor) under this Annex is greater than the maximum permitted valuation percentage (prescribed or implied) for such item of collateral under any law requiring the collection of variation margin applicable to 

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the other party (as the Secured Party), then the Valuation Percentage with respect to such item of Eligible Credit Support and such party will be such maximum permitted valuation percentage, as notified by the Secured Party to the Pledgor.

 

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