Document:

Wells CORE REIT Q3 2012 EX.10.3

EXHIBIT 10.3

ISDA
International Swaps and Derivatives Association, Inc.
2002 MASTER AGREEMENT
dated as of September 26, 2012
      
	
			
	JPMORGAN CHASE BANK, N.A.
	and
	WELLS CORE OFFICE INCOME OPERATING PARTNERSHIP, L.P.

have entered and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will be
governed by this 2002 Master Agreement, which includes the schedule (the “Schedule”), and the documents and
other confirming evidence (each a “Confirmation”) exchanged between the parties or otherwise effective for the
purpose of confirming or evidencing those Transactions. This 2002 Master Agreement and the Schedule are together
referred to as this “Master Agreement”.

Accordingly, the parties agree as follows:-

1.    Interpretation

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

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

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

2.    Obligations

(a)    General Conditions.

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

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

	
	
	Copyright © 2002  by International Swaps and Derivatives Association, Inc.

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

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

(c)    Netting of Payments. If on any date amounts would otherwise be payable:-

(i)    in the same currency; and

(ii)    in respect of the same Transaction,

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

The parties may elect in respect of two or more Transactions that a net amount and payment obligation will be
determined in respect of all amounts payable on the same date in the same currency in respect of those Transactions,
regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the
Schedule or any Confirmation by specifying that “Multiple Transaction Payment Netting” applies to the Transactions
identified as being subject to the election (in which case clause (ii) above will not apply to such Transactions). If
Multiple Transaction Payment Netting is applicable to Transactions, it will apply to those Transactions with effect
from the starting date specified in the Schedule or such Confirmation, or, if a starting date is not specified in the
Schedule or such Confirmation, the starting date otherwise agreed by the parties in writing.  This election may be
made separately for different groups of Transactions and will apply separately to each pairing of Offices through
which the parties make and receive payments or deliveries.

(d)    Deduction or Withholding for Tax.

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

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

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

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

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

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 (A)    the failure by Y to comply with or perform any agreement contained in
Section 4(a)(i), 4(a)(iii) or 4(d); or

(B)    the failure of a representation made by Y pursuant to Section 3(f) to be accurate
and true unless such failure would not have occurred but for (I) any action taken by a
taxing authority, or brought in a court of competent jurisdiction, after a Transaction is
entered into (regardless of whether such action is taken or brought with respect to a party
to this Agreement) or (II) a Change in Tax Law.

(ii)    Liability. If:-

(1)    X is required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, to make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under Section 2(d)(i)(4);

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

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

then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will
promptly pay to X the amount of such liability (including any related liability for interest, but including any
related liability for penalties only if Y has failed to comply with or perform any agreement contained in
Section 4(a)(i), 4(a)(iii) or 4(d)).

3.    Representations

Each party makes the representations contained in Sections 3(a), 3(b), 3(c), 3(d), 3(e) and 3(f) and, if specified in the
Schedule as applying, 3(g) to the other party (which representations will be deemed to be repeated by each party on
each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times
until the termination of this Agreement).  If any “Additional Representation” is specified in the Schedule or any
Confirmation as applying, the party or parties specified for such Additional Representation will make and, if
applicable, be deemed to repeat such Additional Representation at the time or times specified for such Additional Representation.

(a)    Basic Representations.

(i)    Status. It is duly organised and validly existing under the laws of the jurisdiction of its organisation
or incorporation and, if relevant under such laws, in good standing;

(ii)    Powers. It has the power to execute this Agreement and any other documentation relating to this
Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to perform its obligations under this
Agreement and any obligations it has under any Credit Support Document to which it is a party and has
taken all necessary action to authorise such execution, delivery and performance;

(iii)    No Violation or Conflict. Such execution, delivery and performance do not violate or conflict with
any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any contractual restriction binding on or
affecting it or any of its assets;

(iv)    Consents. All governmental and other consents that are required to have been obtained by it with
respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are
in full force and effect and all conditions of any such consents have been complied with; and

(v)    Obligations Binding. Its obligations under this Agreement and any Credit Support Document to
which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganisation, insolvency, moratorium or similar laws
affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in equity or at law)).

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(b)    Absence of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge,
Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur
as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to
which it is a party.

(c)    Absence of Litigation. There is not pending or, to its knowledge, threatened against it, any of its Credit
Support Providers or any of its applicable Specified Entities any action, suit or proceeding at law or in equity or
before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality,
validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its
ability to perform its obligations under this Agreement or such Credit Support Document.

(d)    Accuracy of Specified Information. All applicable information that is furnished in writing by or on behalf
of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.

(e)    Payer Tax Representation. Each representation specified in the Schedule as being made by it for the
purpose of this Section 3(e) is accurate and true.

(f)    Payee Tax Representations. Each representation specified in the Schedule as being made by it for the
purpose of this Section 3(f) is accurate and true.

(g)    No Agency. It is entering into this Agreement, including each Transaction, as principal and not as agent of
any person or entity.

4.    Agreements

Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or
under any Credit Support Document to which it is a party:-

(a)    Furnish Specified Information. It will deliver to the other party or, in certain cases under clause (iii)
below, to such government or taxing authority as the other party reasonably directs:-

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

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

(iii)    upon reasonable demand by such other party, any form or document that may be required or
reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a
payment under this Agreement or any applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would not materially prejudice the legal
or commercial position of the party in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be
delivered with any reasonably required certification,

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

(b)    Maintain Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of
any governmental or other authority that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become
necessary in the future.

(c)    Comply With Laws. It will comply in all material respects with all applicable laws and orders to which it
 may be subject if failure so to comply would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.

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(d)    Tax Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be
accurate and true promptly upon learning of such failure.

(e)    Payment of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in
respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised,
managed and controlled or considered to have its seat, or where an Office through which it is acting for the purpose
of this Agreement is located (“Stamp Tax Jurisdiction”), and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's execution or performance of this Agreement
by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party.

5.    Events of Default and Termination Events

(a)    Events of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support
Provider of such party or any Specified Entity of such party of any of the following events constitutes (subject to
Sections 5(c) and 6(e)(iv)) an event of default (an “Event of Default”) with respect to such party:-

(i)    Failure to Pay or Deliver. Failure by the party to make, when due, any payment under this
Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) required to be made by it if such failure is
not remedied on or before the first Local Business Day in the case of any such payment or the first Local
Delivery Day in the case of any such delivery after, in each case, notice of such failure is given to the party;

(ii)    Breach of Agreement; Repudiation of Agreement.

(1)    Failure by the party to comply with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 9(h)(i)(2)
or (4) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i),
4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement
if such failure is not remedied within 30 days after notice of such failure is given to the party; or 

(2)    the party disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the
validity of, this Master Agreement, any Confirmation executed and delivered by that party or any
Transaction evidenced by such a Confirmation (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);

(iii)    Credit Support Default.

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

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

(3)    the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in
whole or in part, or challenges the validity of, such Credit Support Document (or such action is
taken by any person or entity appointed or empowered to operate it or act on its behalf);

(iv)    Misrepresentation. A representation (other than a representation under Section 3(e) or 3(f)) made
or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such
party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any
material respect when made or repeated or deemed to have been made or repeated;

(v)    Default Under Specified Transaction.  The party, any Credit Support Provider of such party or any
applicable Specified Entity of such party:- 

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(1)    defaults (other than by failing to make a delivery) under a Specified Transaction or any
credit support arrangement relating to a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, such default results in a liquidation of, an
acceleration of obligations under, or an early termination of, that Specified Transaction;

(2)    defaults, after giving effect to any applicable notice requirement or grace period, in making
any payment due on the last payment or exchange date of, or any payment on early termination of, a
Specified Transaction (or, if there is no applicable notice requirement or grace period, such default
continues for at least one Local Business Day);

(3)    defaults in making any delivery due under (including any delivery due on the last delivery
or exchange date of) a Specified Transaction or any credit support arrangement relating to a
Specified Transaction and, after giving effect to any applicable notice requirement or grace period,
such default results in a liquidation of, an acceleration of obligations under, or an early termination
of, all transactions outstanding under the documentation applicable to that Specified Transaction; or

(4)    disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity
of, a Specified Transaction or any credit support arrangement relating to a Specified Transaction
that is, in either case, confirmed or evidenced by a document or other confirming evidence executed
and delivered by that party, Credit Support Provider or Specified Entity (or such action is taken by
any person or entity appointed or empowered to operate it or act on its behalf);

(vi)    Cross Default.  If “Cross Default” is specified in the Schedule as applying to the party, the
occurrence or existence of:-

(1)    a default, event of default or other similar condition or event (however described) in
respect of such party, any Credit Support Provider of such party or any applicable Specified Entity
of such party under one or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) where the aggregate principal amount of such agreements
or instruments, either alone or together with the amount, if any, referred to in clause (2) below, is
not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in
such Specified Indebtedness becoming, or becoming capable at such time of being declared, due
and payable under such agreements or instruments before it would otherwise have been due and
payable; or

		
	 
	(2)    a default by such party, such Credit Support Provider or such Specified Entity

(individually or collectively) in making one or more payments under such agreements or 
instruments on the due date for payment (after giving effect to any applicable notice requirement or 
grace period) in an aggregate amount, either alone or together with the amount, if any, referred to in
clause (1) above, of not less than the applicable Threshold Amount;

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

(1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its
debts as they become due; (3) makes a general assignment, arrangement or composition with or for
the benefit of its creditors; (4)(A) institutes or has instituted against it, by a regulator, supervisor or
any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the
jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is
presented for its winding-up or liquidation by it or such regulator, supervisor or similar official, or
(B) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any
other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights,
or a petition is presented for its winding-up or liquidation, and such proceeding or petition is
instituted or presented by a person or entity not described in clause (A) above and either (I) results
in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an
order for its winding-up or liquidation or (II) is not dismissed, discharged, stayed or restrained in

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each case within 15 days of the institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant to a consolidation
amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for
all or substantially all its assets; (7) has a secured party take possession of all or substantially all its
assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced
or sued on or against all or substantially all its assets and such secured party maintains possession,
or any such process is not dismissed, discharged, stayed or restrained, in each case within 15 days
thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of
any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) above
(inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the foregoing acts; or

(viii)    Merger Without Assumption. The party or any Credit Support Provider of such party consolidates
or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, or reorganises,
reincorporates or reconstitutes into or as, another entity and, at the time of such consolidation, 
amalgamation, merger, transfer, reorganisation, reincorporation or reconstitution:-

(1)    the resulting, surviving or transferee entity fails to assume all the obligations of such party
or such Credit Support Provider under this Agreement or any Credit Support Document to which it
or its predecessor was a party; or

(2)    the benefits of any Credit Support Document fail to extend (without the consent of the
other party) to the performance by such resulting, surviving or transferee entity of its obligations
under this Agreement.

(b)    Termination Events. The occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider of such party or any Specified Entity of such party of any event specified below constitutes (subject
to Section 5(c)) an Illegality if the event is specified in clause (i) below, a Force Majeure Event if the event is
specified in clause (ii) below, a Tax Event if the event is specified in clause (iii) below, a Tax Event Upon Merger if
the event is specified in clause (iv) below, and, if specified to be applicable, a Credit Event Upon Merger if the event
is specified pursuant to clause (v) below or an Additional Termination Event if the event is specified pursuant to
clause (vi) below:-

(i)    Illegality. After giving effect to any applicable provision, disruption fallback or remedy specified
in, or pursuant to, the relevant Confirmation or elsewhere in this Agreement, due to an event or circumstance
(other than any action taken by a party or, if applicable, any Credit Support Provider of such party)
occurring after a Transaction is entered into, it becomes unlawful under any applicable law (including
without limitation the laws of any country in which payment, delivery or compliance is required by either
party or any Credit Support Provider, as the case may be), on any day, or it would be unlawful if the relevant
payment, delivery or compliance were required on that day (in each case, other than as a result of a breach
by the party of Section 4(b)):-

(1)    for the Office through which such party (which will be the Affected Party) makes and
receives payments or deliveries with respect to such Transaction to perform any absolute or
contingent obligation to make a payment or delivery in respect of such Transaction, to receive a
payment or delivery in respect of such Transaction or to comply with any other material provision
of this Agreement relating to such Transaction; or

(2)    for such party or any Credit Support Provider of such party (which will be the Affected
Party) to perform any absolute or contingent obligation to make a payment or delivery which such
party or Credit Support Provider has under any Credit Support Document relating to such
Transaction, to receive a payment or delivery under such Credit Support Document or to comply
with any other material provision of such Credit Support Document; 

(ii)    Force Majeure Event. After giving effect to any applicable provision, disruption fallback or
remedy specified in, or pursuant to, the relevant Confirmation or elsewhere in this Agreement, by reason of
force majeure or act of state occurring after a Transaction is entered into, on any day:-

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(1)    the Office through which such party (which will be the Affected Party) makes and receives
payments or deliveries with respect to such Transaction is prevented from performing any absolute
or contingent obligation to make a payment or delivery in respect of such Transaction, from
receiving a payment or delivery in respect of such Transaction or from complying with any other
material provision of this Agreement relating to such Transaction (or would be so prevented if such
payment, delivery or compliance were required on that day), or it becomes impossible or
impracticable for such Office so to perform, receive or comply (or it would be impossible or
impracticable for such Office so to perform, receive or comply if such payment, delivery or
compliance were required on that day); or

(2)    such party or any Credit Support Provider of such party (which will be the Affected Party)
is prevented from performing any absolute or contingent obligation to make a payment or delivery
which such party or Credit Support Provider has under any Credit Support Document relating to
such Transaction, from receiving a payment or delivery under such Credit Support Document or
from complying with any other material provision of such Credit Support Document (or would be
so prevented if such payment, delivery or compliance were required on that day), or it becomes
impossible or impracticable for such party or Credit Support Provider so to perform, receive or
comply (or it would be impossible or impracticable for such party or Credit Support Provider so to
perform, receive or comply if such payment, delivery or compliance were required on that day),

so long as the force majeure or act of state is beyond the control of such Office, such party or such Credit
Support Provider, as appropriate, and such Office, party or Credit Support Provider could not, after using all
reasonable efforts (which will not require such party or Credit Support Provider to incur a loss, other than
immaterial, incidental expenses), overcome such prevention, impossibility or impracticability;

(iii)    Tax Event.  Due to (1) any action taken by a taxing authority, or brought in a court of competent
jurisdiction, after a Transaction is entered into (regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (2) a Change in Tax Law, the party (which will be the Affected
Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Settlement Date
(A) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 9(h)) or (B) receive a payment from which an
amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under
Section 9(h)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) 
(other than by reason of Section 2(d)(i)(4)(A) or (B));

(iv)    Tax Event Upon Merger. The party (the “Burdened Party”) on the next succeeding Scheduled
Settlement Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section 9(h)) or (2) receive a payment from
which an amount has been deducted or withheld for or on account of any Tax in respect of which the other
party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring
all or substantially all its assets (or any substantial part of the assets comprising the business conducted by it
as of the date of this Master Agreement) to, or reorganising, reincorporating or reconstituting into or as, 
another entity (which will be the Affected Party) where such action does not constitute a Merger Without
Assumption;

(v)    Credit Event Upon Merger. If “Credit Event Upon Merger” is specified in the Schedule as
applying to the party, a Designated Event (as defined below) occurs with respect to such party, any Credit
Support Provider of such party or any applicable Specified Entity of such party (in each case, “X”) and such
Designated Event does not constitute a Merger Without Assumption, and the creditworthiness of X or, if
applicable, the successor, surviving or transferee entity of X, after taking into account any applicable Credit
Support Document, is materially weaker immediately after the occurrence of such Designated Event than
that of X immediately prior to the occurrence of such Designated Event (and, in any such event, such party
or its successor, surviving or transferee entity, as appropriate, will be the Affected Party). A “Designated
Event” with respect to X means that:-

(1)    X consolidates or amalgamates with, or merges with or into, or transfers all or substantially
all its assets (or any substantial part of the assets comprising the business conducted by X as of the

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date of this Master Agreement) to, or reorganises, reincorporates or reconstitutes into or as, another
entity;

(2)    any person, related group of persons or entity acquires directly or indirectly the beneficial
ownership of (A) equity securities having the power to elect a majority of the board of directors (or
its equivalent) of X or (B) any other ownership interest enabling it to exercise control of X; or

(3)    X effects any substantial change in its capital structure by means of the issuance,
incurrence or guarantee of debt or the issuance of (A) preferred stock or other securities convertible
into or exchangeable for debt or preferred stock or (B) in the case of entities other than
corporations, any other form of ownership interest; or 

(vi)    Additional Termination Event. If any “Additional Termination Event” is specified in the Schedule
or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or
Affected Parties will be as specified for such Additional Termination Event in the Schedule or such
Confirmation).

(c)    Hierarchy of Events. 

(i)    An event or circumstance that constitutes or gives rise to an Illegality or a Force Majeure Event will
not, for so long as that is the case, also constitute or give rise to an Event of Default under Section 5(a)(i),
5(a)(ii)(1) or 5(a)(iii)(1) insofar as such event or circumstance relates to the failure to make any payment or
delivery or a failure to comply with any other material provision of this Agreement or a Credit Support
Document, as the case may be.

(ii)        Except in circumstances contemplated by clause (i) above, if an event or circumstance which would
otherwise constitute or give rise to an Illegality or a Force Majeure Event also constitutes an Event of
Default or any other Termination Event, it will be treated as an Event of Default or such other Termination
Event, as the case may be, and will not constitute or give rise to an Illegality or a Force Majeure Event.

(iii)        If an event or circumstance which would otherwise constitute or give rise to a Force Majeure Event
also constitutes an Illegality, it will be treated as an Illegality, except as described in clause (ii) above, and
not a Force Majeure Event.

(d)    Deferral of Payments and Deliveries During Waiting Period.  If an Illegality or a Force Majeure Event has
occurred and is continuing with respect to a Transaction, each payment or delivery which would otherwise be
required to be made under that Transaction will be deferred to, and will not be due until:-

(i)    the first Local Business Day or, in the case of a delivery, the first Local Delivery Day (or the first
day that would have been a Local Business Day or Local Delivery Day, as appropriate, but for the
occurrence of the event or circumstance constituting or giving rise to that Illegality or Force Majeure Event)
following the end of any applicable Waiting Period in respect of that Illegality or Force Majeure Event, as
the case may be; or

(ii)        if earlier, the date on which the event or circumstance constituting or giving rise to that Illegality or
Force Majeure Event ceases to exist or, if such date is not a Local Business Day or, in the case of a delivery,
a Local Delivery Day, the first following day that is a Local Business Day or Local Delivery Day, as
appropriate.

(e)    Inability of Head or Home Office to Perform Obligations of Branch. If (i) an Illegality or a Force
Majeure Event occurs under Section 5(b)(i)(1) or 5(b)(ii)(1) and the relevant Office is not the Affected Party's head
or home office, (ii) Section 10(a) applies, (iii) the other party seeks performance of the relevant obligation or
compliance with the relevant provision by the Affected Party's head or home office and (iv) the Affected Party's head
or home office fails so to perform or comply due to the occurrence of an event or circumstance which would, if that
head or home office were the Office through which the Affected Party makes and receives payments and deliveries
with respect to the relevant Transaction, constitute or give rise to an Illegality or a Force Majeure Event, and such
failure would otherwise constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) with respect to such party,
then, for so long as the relevant event or circumstance continues to exist with respect to both the Office referred to in
Section 5(b)(i)(1) or 5(b)(ii)(1), as the case may be, and the Affected Party's head or home office, such failure will

9

not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1).

6.    Early Termination; Close-Out Netting

(a)    Right to Terminate Following Event of Default. If at any time an Event of Default with respect to a party
(the “Defaulting Party”) has occurred and is then continuing, the other party (the “Non-defaulting Party”) may, by not
more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier
than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If,
however, “Automatic Early Termination” is specified in the Schedule as applying to a party, then an Early
Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect
to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto,
(8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the
relevant petition upon the occurrence with respect to such party of an Event of Default specified in
Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).

(b)    Right to Terminate Following Termination Event.

(i)    Notice. If a Termination Event other than a Force Majeure Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event
and each Affected Transaction, and will also give the other party such other information about that
Termination Event as the other party may reasonably require. If a Force Majeure Event occurs, each party
will, promptly upon becoming aware of it, use all reasonable efforts to notify the other party, specifying the
nature of that Force Majeure Event, and will also give the other party such other information about that
Force Majeure Event as the other party may reasonably require.

(ii)    Transfer to Avoid Termination Event.  If a Tax Event occurs and there is only one Affected Party,
or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will,
as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable
efforts (which will not require such party to incur a loss, other than immaterial, incidental expenses) to
transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this
Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.

If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect
within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the
notice is given under Section 6(b)(i).

Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior
written consent of the other party, which consent will not be withheld if such other party's policies in effect
at such time would permit it to enter into transactions with the transferee on the terms proposed.

(iii)    Two Affected Parties. If a Tax Event occurs and there are two Affected Parties, each party will use
all reasonable efforts to reach agreement within 30 days after notice of such occurrence is given under
Section 6(b)(i) to avoid that Termination Event.

(iv)    Right to Terminate. 

(1)    If:-

(A)    a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the
 case may be, has not been effected with respect to all Affected Transactions within 30 days
 after an Affected Party gives notice under Section 6(b)(i); or

(B)    a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax
Event Upon Merger occurs and the Burdened Party is not the Affected Party,

the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there are two Affected Parties, or the Non-
affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if

10

there is only one Affected Party may, if the relevant Termination Event is then continuing, by not
more than 20 days notice to the other party, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected Transactions.

(2)    If at any time an Illegality or a Force Majeure Event has occurred and is then continuing
and any applicable Waiting Period has expired:-

(A)    Subject to clause (B) below, either party may, by not more than 20 days notice to
the other party, designate (I) a day not earlier than the day on which such notice becomes
effective as an Early Termination Date in respect of all Affected Transactions or (II) by
specifying in that notice the Affected Transactions in respect of which it is designating the
relevant day as an Early Termination Date, a day not earlier than two Local Business Days
following the day on which such notice becomes effective as an Early Termination Date in
respect of less than all Affected Transactions.  Upon receipt of a notice designating an
Early Termination Date in respect of less than all Affected Transactions, the other party
may, by notice to the designating party, if such notice is effective on or before the day so
designated, designate that same day as an Early Termination Date in respect of any or all
other Affected Transactions.

(B)    An Affected Party (if the Illegality or Force Majeure Event relates to performance
by such party or any Credit Support Provider of such party of an obligation to make any
payment or delivery under, or to compliance with any other material provision of, the 
relevant Credit Support Document) will only have the right to designate an Early
Termination Date under Section 6(b)(iv)(2)(A) as a result of an Illegality under
Section 5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2) following the prior
designation by the other party of an Early Termination Date, pursuant to
Section 6(b)(iv)(2)(A), in respect of less than all Affected Transactions.

(c)    Effect of Designation.

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

(ii)    Upon the occurrence or effective designation of an Early Termination Date, no further payments or
deliveries under Section 2(a)(i) or 9(h)(i) in respect of the Terminated Transactions will be required to be
made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in
respect of an Early Termination Date will be determined pursuant to Sections 6(e) and 9(h)(ii).

(d)    Calculations; Payment Date.

(i)    Statement. On or as soon as reasonably practicable following the occurrence of an Early
Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and
will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including any
quotations, market data or information from internal sources used in making such calculations),

(2) specifying (except where there are two Affected Parties) any Early Termination Amount payable and

(3) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation or market data obtained in determining a Close-out
Amount, the records of the party obtaining such quotation or market data will be conclusive evidence of the
existence and accuracy of such quotation or market data.

(ii)    Payment Date. An Early Termination Amount due in respect of any Early Termination Date will,
together with any amount of interest payable pursuant to Section 9(h)(ii)(2), be payable (1) on the day on
which notice of the amount payable is effective in the case of an Early Termination Date which is designated
or occurs as a result of an Event of Default and (2) on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (or, if there are two Affected Parties, after the day on
which the statement provided pursuant to clause (i) above by the second party to provide such a statement is

11

effective) in the case of an Early Termination Date which is designated as a result of a Termination Event.

(e)    Payments on Early Termination. If an Early Termination Date occurs, the amount, if any, payable in
respect of that Early Termination Date (the “Early Termination Amount”) will be determined pursuant to this
Section 6(e) and will be subject to Section 6(f).

(i)    Events of Default. If the Early Termination Date results from an Event of Default, the Early
Termination Amount will be an amount equal to (1) the sum of (A) the Termination Currency Equivalent of
the Close-out Amount or Close-out Amounts (whether positive or negative) determined by the Non-
defaulting Party for each Terminated Transaction or group of Terminated Transactions, as the case may be,
and (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less
(2) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If the Early
Termination Amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it
is a negative number, the Non-defaulting Party will pay the absolute value of the Early Termination Amount
to the Defaulting Party.

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

(1)    One Affected Party. Subject to clause (3) below, if there is one Affected Party, the Early
Termination Amount will be determined in accordance with Section 6(e)(i), except that references
to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the
Affected Party and to the Non-affected Party, respectively.

(2)    Two Affected Parties. Subject to clause (3) below, if there are two Affected Parties, each
party will determine an amount equal to the Termination Currency Equivalent of the sum of the
Close-out Amount or Close-out Amounts (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions, as the case may be, and the Early Termination
Amount will be an amount equal to (A) the sum of (I) one-half of the difference between the higher
amount so determined (by party “X”) and the lower amount so determined (by party “Y”) and
(II) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to Y.  If the Early Termination
Amount is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute
value of the Early Termination Amount to Y.

(3)    Mid-Market Events. If that Termination Event is an Illegality or a Force Majeure Event, 
then the Early Termination Amount will be determined in accordance with clause (1) or (2) above, 
as appropriate, except that, for the purpose of determining a Close-out Amount or Close-out 
Amounts, the Determining Party will:-

(A) if obtaining quotations from one or more third parties (or from any of the 
Determining Party's Affiliates), ask each third party or Affiliate (I) not to take account of
the current creditworthiness of the Determining Party or any existing Credit Support
Document and (II) to provide mid-market quotations; and

(B)    in any other case, use mid-market values without regard to the creditworthiness of
the Determining Party.

(iii)    Adjustment for Bankruptcy. In circumstances where an Early Termination Date occurs because
“Automatic Early Termination” applies in respect of a party, the Early Termination Amount will be subject to
such adjustments as are appropriate and permitted by applicable law to reflect any payments or deliveries
made by one party to the other under this Agreement (and retained by such other party) during the period
from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).

(iv)    Adjustment for Illegality or Force Majeure Event. The failure by a party or any Credit Support
Provider of such party to pay, when due, any Early Termination Amount will not constitute an Event of
Default under Section 5(a)(i) or 5(a)(iii)(1) if such failure is due to the occurrence of an event or
circumstance which would, if it occurred with respect to payment, delivery or compliance related to a
Transaction, constitute or give rise to an Illegality or a Force Majeure Event.  Such amount will (1) accrue
interest and otherwise be treated as an Unpaid Amount owing to the other party if subsequently an Early

12

Termination Date results from an Event of Default, a Credit Event Upon Merger or an Additional
Termination Event in respect of which all outstanding Transactions are Affected Transactions and
(2) otherwise accrue interest in accordance with Section 9(h)(ii)(2).

(v)    Pre-Estimate. The parties agree that an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of
protection against future risks, and, except as otherwise provided in this Agreement, neither party will be
entitled to recover any additional damages as a consequence of the termination of the Terminated
Transactions.

(f)    Set-Off.  Any Early Termination Amount payable to one party (the “Payee”) by the other party (the
“Payer”), in circumstances where there is a Defaulting Party or where there is one Affected Party in the case where
either a Credit Event Upon Merger has occurred or any other Termination Event in respect of which all outstanding
Transactions are Affected Transactions has occurred, will, at the option of the Non-defaulting Party or the Non-
affected Party, as the case may be (“X”) (and without prior notice to the Defaulting Party or the Affected Party, as the
case may be), be reduced by its set-off against any other amounts (“Other Amounts”) payable by the Payee to the
Payer (whether or not arising under this Agreement, matured or contingent and irrespective of the currency, place of
payment or place of booking of the obligation).  To the extent that any Other Amounts are so set off, those Other
Amounts will be discharged promptly and in all respects.  X will give notice to the other party of any set-off effected
under this Section 6(f).

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

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

Nothing in this Section 6(f) will be effective to create a charge or other security interest.  This Section 6(f) will be
without prejudice and in addition to any right of set-off, offset, combination of accounts, lien, right of retention or
withholding or similar right or requirement to which any party is at any time otherwise entitled or subject (whether by
operation of law, contract or otherwise).

7.    Transfer

Subject to Section 6(b)(ii) and to the extent permitted by applicable law, neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party
without the prior written consent of the other party, except that:-

(a)    a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or
merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and

(b)    a party may make such a transfer of all or any part of its interest in any Early Termination Amount payable
to it by a Defaulting Party, together with any amounts payable on or with respect to that interest and any other rights
associated with that interest pursuant to Sections 8, 9(h) and 11.

Any purported transfer that is not in compliance with this Section 7 will be void.

8.    Contractual Currency

(a)    Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant
currency specified in this Agreement for that payment (the “Contractual Currency”). To the extent permitted by
applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be
discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such
tender results in the actual receipt by the party to which payment is owed, acting in good faith and using
commercially reasonable procedures in converting the currency so tendered into the Contractual Currency, of the full
amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the

13

amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in
respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law,
immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual
Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of
such excess.

(b)    Judgments. To the extent permitted by applicable law, if any judgment or order expressed in a currency
other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in
respect of a judgment or order of another court for the payment of any amount described in clause (i) or (ii) above,
the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to
the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund
promptly to the other party any excess of the Contractual  Currency received by such party as a consequence of sums
paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of
exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purpose
of such judgment or order and the rate of exchange at which such party is able, acting in good faith and using
commercially reasonable procedures in converting the currency received into the Contractual Currency, to purchase
the Contractual Currency with the amount of the currency of the judgment or order actually received by such party.

 (c)    Separate Indemnities. To the extent permitted by applicable law, the indemnities in this Section 8
constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as
separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which
any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other
sums payable in respect of this Agreement.

(d)    Evidence of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it
would have suffered a loss had an actual exchange or purchase been made.

9.    Miscellaneous

(a)    Entire Agreement. This Agreement constitutes the entire agreement and understanding of the parties with
respect to its subject matter. Each of the parties acknowledges that in entering into this Agreement it has not relied
on any oral or written representation, warranty or other assurance (except as provided for or referred to in this
Agreement) and waives all rights and remedies which might otherwise be available to it in respect thereof, except that
nothing in this Agreement will limit or exclude any liability of a party for fraud.

(b)    Amendments. An amendment, modification or waiver in respect of this Agreement will only be effective if
in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or
confirmed by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system.

(c)    Survival of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties
under this Agreement will survive the termination of any Transaction.

(d)    Remedies Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided
by law.

(e)    Counterparts and Confirmations.

(i)    This Agreement (and each amendment, modification and waiver in respect of it) may be executed
and delivered in counterparts (including by facsimile transmission and by electronic messaging system), each
of which will be deemed an original.

(ii)    The parties intend that they are legally bound by the terms of each Transaction from the moment
they agree to those terms (whether orally or otherwise). A Confirmation will be entered into as soon as
practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be
created by an exchange of telexes, by an exchange of electronic messages on an electronic messaging system

14

or by an exchange of e-mails, which in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or through another effective means that any
such counterpart, telex, electronic message or e-mail constitutes a Confirmation.

(f)    No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of this
Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or
privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the
exercise of any other right, power or privilege.

(g)    Headings. The headings used in this Agreement are for convenience of reference only and are not to affect
the construction of or to be taken into consideration in interpreting this Agreement.

(h)    Interest and Compensation. 

(i)    Prior to Early Termination. Prior to the occurrence or effective designation of an Early
Termination Date in respect of the relevant Transaction:-

(1)    Interest on Defaulted Payments. If a party defaults in the performance of any payment
obligation, it will, to the extent permitted by applicable law and subject to Section 6(c), pay interest
(before as well as after judgment) on the overdue amount to the other party on demand in the same
currency as the overdue amount, for the period from (and including) the original due date for
payment to (but excluding) the date of actual payment (and excluding any period in respect of
which interest or compensation in respect of the overdue amount is due pursuant to clause (3)(B) or
(C) below), at the Default Rate.

(2)    Compensation for Defaulted Deliveries. If a party defaults in the performance of any
obligation required to be settled by delivery, it will on demand (A) compensate the other party to
the extent provided for in the relevant Confirmation or elsewhere in this Agreement and (B) unless
otherwise provided in the relevant Confirmation or elsewhere in this Agreement, to the extent
permitted by applicable law and subject to Section 6(c), pay to the other party interest (before as
well as after judgment) on an amount equal to the fair market value of that which was required to be
delivered in the same currency as that amount, for the period from (and including) the originally
scheduled date for delivery to (but excluding) the date of actual delivery (and excluding any period
in respect of which interest or compensation in respect of that amount is due pursuant to clause (4)
below), at the Default Rate. The fair market value of any obligation referred to above will be
determined as of the originally scheduled date for delivery, in good faith and using commercially
reasonable procedures, by the party that was entitled to take delivery.

(3)    Interest on Deferred Payments. If:-

(A)    a party does not pay any amount that, but for Section 2(a)(iii), would have been
payable, it will, to the extent permitted by applicable law and subject to Section 6(c) and
clauses (B) and (C) below, pay interest (before as well as after judgment) on that amount
to the other party on demand (after such amount becomes payable) in the same currency as
that amount, for the period from (and including) the date the amount would, but for
Section 2(a)(iii), have been payable to (but excluding) the date the amount actually
becomes payable, at the Applicable Deferral Rate;

(B)    a payment is deferred pursuant to Section 5(d), the party which would otherwise
have been required to make that payment will, to the extent permitted by applicable law,
subject to Section 6(c) and for so long as no Event of Default or Potential Event of Default
with respect to that party has occurred and is continuing, pay interest (before  as well as
after judgment) on the amount of the deferred payment to the other party on demand (after
such amount becomes payable) in the same currency as the deferred payment, for the
period from (and including) the date the amount would, but for Section 5(d), have been
payable to (but excluding) the earlier of the date the payment is no longer deferred
pursuant to Section 5(d) and the date during the deferral period upon which an Event of
Default or Potential Event of Default with respect to that party occurs, at the Applicable
Deferral Rate; or

15

(C)    a party fails to make any payment due to the occurrence of an Illegality or a Force
Majeure Event (after giving effect to any deferral period contemplated by clause (B)
above), it will, to the extent permitted by applicable law, subject to Section 6(c) and for so
long as the event or circumstance giving rise to that Illegality or Force Majeure Event
continues and no Event of Default or Potential Event of Default with respect to that party
has occurred and is continuing, pay interest (before as well as after judgment) on the
overdue amount to the other party on demand in the same currency as the overdue amount,
for the period from (and including) the date the party fails to make the payment due to the
occurrence of the relevant Illegality or Force Majeure Event (or, if later, the date the
payment is no longer deferred pursuant to Section 5(d)) to (but excluding) the earlier of the
date the event or circumstance giving rise to that Illegality or Force Majeure Event ceases
to exist and the date during the period upon which an Event of Default or Potential Event
of Default with respect to that party occurs (and excluding any period in respect of which
interest or compensation in respect of the overdue amount is due pursuant to clause (B)
above), at the Applicable Deferral Rate.

(4)    Compensation for Deferred Deliveries. If:-

(A)    a party does not perform any obligation that, but for Section 2(a)(iii), would have
been required to be settled by delivery;

(B)    a delivery is deferred pursuant to Section 5(d); or

(C)    a party fails to make a delivery due to the occurrence of an Illegality or a Force
Majeure Event at a time when any applicable Waiting Period has expired,

the party required (or that would otherwise have been required) to make the delivery will, to the
extent permitted by applicable law and subject to Section 6(c), compensate and pay interest to the
other party on demand (after, in the case of clauses (A) and (B) above, such delivery is required) if
and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement.

(ii)    Early Termination. Upon the occurrence or effective designation of an Early Termination Date in
respect of a Transaction:-

(1)    Unpaid Amounts. For the purpose of determining an Unpaid Amount in respect of the
relevant Transaction, and to the extent permitted by applicable law, interest will accrue on the
amount of any payment obligation or the amount equal to the fair market value of any obligation
required to be settled by delivery included in such determination in the same currency as that
amount, for the period from (and including) the date the relevant obligation was (or would have
been but for Section 2(a)(iii) or 5(d)) required to have been performed to (but excluding) the
relevant Early Termination Date, at the Applicable Close-out Rate.

(2)    Interest on Early Termination Amounts. If an Early Termination Amount is due in respect
of such Early Termination Date, that amount will, to the extent permitted by applicable law, be paid
together with interest (before as well as after judgment) on that amount in the Termination
Currency, for the period from (and including) such Early Termination Date to (but excluding) the
date the amount is paid, at the Applicable Close-out Rate.

		
	 
	(iii)    Interest Calculation. Any interest pursuant to this Section 9(h) will be calculated on the basis of

daily compounding and the actual number of days elapsed.

 10.    Offices; Multibranch Parties

(a)    If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an
Office other than its head or home office represents to and agrees with the other party that, notwithstanding the place
of booking or its jurisdiction of incorporation or organisation, its obligations are the same in terms of recourse against
it as if it had entered into the Transaction through its head or home office, except that a party will not have recourse
to the head or home office of the other party in respect of any payment or delivery deferred pursuant to Section 5(d)
for so long as the payment or delivery is so deferred. This representation and agreement will be deemed to be

16

repeated by each party on each date on which the parties enter into a Transaction.

 (b)    If a party is specified as a Multibranch Party in the Schedule, such party may, subject to clause (c) below, 
enter into a Transaction through, book a Transaction in and make and receive payments and deliveries with respect to
a Transaction through any Office listed in respect of that party in the Schedule (but not any other Office unless
otherwise agreed by the parties in writing).

(c)    The Office through which a party enters into a Transaction will be the Office specified for that party in the
relevant Confirmation or as otherwise agreed by the parties in writing, and, if an Office for that party is not specified
in the Confirmation or otherwise agreed by the parties in writing, its head or home office. Unless the parties
otherwise agree in writing, the Office through which a party enters into a Transaction will also be the Office in which
it books the Transaction and the Office through which it makes and receives payments and deliveries with respect to
the Transaction. Subject to Section 6(b)(ii), neither party may change the Office in which it books the Transaction or
the Office through which it makes and receives payments or deliveries with respect to a Transaction without the prior
written consent of the other party.

11.    Expenses

A Defaulting Party will on demand indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees, execution fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any Credit Support Document to which the
Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, 
costs of collection.

12.    Notices

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

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

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

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

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

(v)    if sent by electronic messaging system, on the date it is received; or

(vi)    if sent by e-mail, on the date it is delivered,

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

(b)    Change of Details. Either party may by notice to the other change the address, telex or facsimile number or
electronic messaging system or e-mail details at which notices or other communications are to be given to it.

13.    Governing Law and Jurisdiction

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

17

(b)    Jurisdiction. With respect to any suit, action or proceedings relating to any dispute arising out of or in
connection with this Agreement (“Proceedings”), each party irrevocably:-

(i)    submits:-

(1)    if this Agreement is expressed to be governed by English law, to (A) the non-exclusive
jurisdiction of the English courts if the Proceedings do not involve a Convention Court and (B) the
exclusive jurisdiction of the English courts if the Proceedings do involve a Convention Court; or

(2)    if this Agreement is expressed to be governed by the laws of the State of New York, to the
non-exclusive jurisdiction of the courts of the State of New York and the United States District
Court located in the Borough of Manhattan in New York City;

(ii)    waives any objection which it may have at any time to the laying of venue of any Proceedings
brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such Proceedings, that such court does not have
any jurisdiction over such party; and

(iii)    agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or
more jurisdictions will not preclude the bringing of Proceedings in any other jurisdiction.

(c)    Service of Process. Each party irrevocably appoints the Process Agent, if any, specified opposite its name
in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any
party's Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days
appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process
given in the manner provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv). Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted by applicable law.

(d)    Waiver of Immunities. Each party irrevocably waives, to the extent permitted by applicable law, with
respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction or
order for specific performance or recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be
entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.

14.    Definitions

As used in this Agreement:-

“Additional Representation” has the meaning specified in Section 3.

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

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

“Affected Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Force Majeure
Event, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event
(which, in the case of an Illegality under Section 5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2), means
all Transactions unless the relevant Credit Support Document references only certain Transactions, in which case
those Transactions and, if the relevant Credit Support Document constitutes a Confirmation for a Transaction, that
Transaction) and (b) with respect to any other Termination Event, all Transactions.

“Affiliate” means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by
the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common
control with the person. For this purpose, “control” of any entity or person means ownership of a majority of the
voting power of the entity or person.

“Agreement” has the meaning specified in Section 1(c).

18

“Applicable Close-out Rate” means:-

(a)    in respect of the determination of an Unpaid Amount:-

(i)    in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii))
by a Defaulting Party, the Default Rate;

(ii)    in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) 
by a Non-defaulting Party, the Non-default Rate;

(iii)    in respect of obligations deferred pursuant to Section 5(d), if there is no Defaulting Party and for so
long as the deferral period continues, the Applicable Deferral Rate; and

(iv)    in all other cases following the occurrence of a Termination Event (except where interest accrues
pursuant to clause (iii) above), the Applicable Deferral Rate; and

(b)    in respect of an Early Termination Amount:-

(i)    for the period from (and including) the relevant Early Termination Date to (but excluding) the date
(determined in accordance with Section 6(d)(ii)) on which that amount is payable:-

(1)    if the Early Termination Amount is payable by a Defaulting Party, the Default Rate;

(2)    if the Early Termination Amount is payable by a Non-defaulting Party, the Non-default
Rate; and

(3)    in all other cases, the Applicable Deferral Rate; and

(ii)    for the period from (and including) the date (determined in accordance with Section 6(d)(ii) on
which that amount is payable to (but excluding) the date of actual payment:-

(1)    if a party fails to pay the Early Termination Amount due to the occurrence of an event or
circumstance which would, if it occurred with respect to a payment or delivery under a Transaction,
constitute or give rise to an Illegality or a Force Majeure Event, and for so long as the Early
Termination Amount remains unpaid due to the continuing existence of such event or circumstance,
the Applicable Deferral Rate;

(2)    if the Early Termination Amount is payable by a Defaulting Party (but excluding any
period in respect of which clause (1) above applies), the Default Rate;

(3)    if the Early Termination Amount is payable by a Non-defaulting Party (but excluding any
period in respect of which clause (1) above applies), the Non-default Rate; and

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

“Applicable Deferral Rate” means:-

(a)    for the purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant payer to be a rate offered to the
payer by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to
be selected in good faith by the payer for the purpose of obtaining a representative rate that will reasonably reflect 
conditions prevailing at the time in that relevant market;

(b)    for purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition of Applicable Close-out Rate, the
rate certified by the relevant payer to be a rate offered to prime banks by a major bank in a relevant interbank market
for overnight deposits in the applicable currency, such bank to be selected in good faith by the payer after
consultation with the other party, if practicable, for the purpose of obtaining a representative rate that will reasonably
reflect conditions prevailing at the time in that relevant market; and

19

(c)    for purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and (b)(ii)(1) of the definition of
Applicable Close-out Rate, a rate equal to the arithmetic mean of the rate determined pursuant to clause (a) above and
a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by
it) if it were to fund or of funding the relevant amount.

“Automatic Early Termination” has the meaning specified in Section 6(a).

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

“Change in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or
amendment to, any law (or in the application or official interpretation of any law) that occurs after the parties enter
into the relevant Transaction.

“Close-out Amount” means, with respect to each Terminated Transaction or each group of Terminated Transactions
and a Determining Party, the amount of the losses or costs of the Determining Party that are or would be incurred
under then prevailing circumstances (expressed as a positive number) or gains of the Determining Party that are or
would be realised under then prevailing circumstances (expressed as a negative number) in replacing, or in providing
for the Determining Party the economic equivalent of, (a) the material terms of that Terminated Transaction or group
of Terminated Transactions, including the payments and deliveries by the parties under Section 2(a)(i) in respect of
that Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant
Early Termination Date, have been required after that date (assuming satisfaction of the conditions precedent in
Section 2(a)(iii)) and (b) the option rights of the parties in respect of that Terminated Transaction or group of
Terminated Transactions.

Any Close-out Amount will be determined by the Determining Party (or its agent), which will act in good faith and
use commercially reasonable procedures in order to produce a commercially reasonable result. The Determining
Party may determine a Close-out Amount for any group of Terminated Transactions or any individual Terminated
Transaction but, in the aggregate, for not less than all Terminated Transactions. Each Close-out Amount will be
determined as of the Early Termination Date or, if that would not be commercially reasonable, as of the date or dates
following the Early Termination Date as would be commercially reasonable.

Unpaid Amounts in respect of a Terminated Transaction or group of Terminated Transactions and legal fees and out-
of-pocket expenses referred to in Section 11 are to be excluded in all determinations of Close-out Amounts.
In determining a Close-out Amount, the Determining Party may consider any relevant information, including, without
limitation, one or more of the following types of information:-

(i)    quotations (either firm or indicative) for replacement transactions supplied by one or more third parties that
may take into account the creditworthiness of the Determining Party at the time the quotation is provided and the
terms of any relevant documentation, including credit support documentation, between the Determining Party and the
third party providing the quotation;

(ii)    information consisting of relevant market data in the relevant market supplied by one or more third parties
including, without limitation, relevant rates, prices, yields, yield curves, volatilities, spreads, correlations or other
relevant market data in the relevant market; or

(iii)    information of the types described in clause (i) or (ii) above from internal sources (including any of the
Determining Party's Affiliates) if that information is of the same type used by the Determining Party in the regular
course of its business for the valuation of similar transactions.

The Determining Party will consider, taking into account the standards and procedures described in this definition,
quotations pursuant to clause (i) above or relevant market data pursuant to clause (ii) above unless the Determining
Party reasonably believes in good faith that such quotations or relevant market data are not readily available or would
produce a result that would not satisfy those standards. When considering information described in clause (i), (ii) or
(iii) above, the Determining Party may include costs of funding, to the extent costs of funding are not and would not
be a component of the other information being utilised. Third parties supplying quotations pursuant to clause (i)
above or market data pursuant to clause (ii) above may include, without limitation, dealers in the relevant markets,
end-users of the relevant product, information vendors, brokers and other sources of market information.

20

Without duplication of amounts calculated based on information described in clause (i), (ii) or (iii) above, or other
relevant information, and when it is commercially reasonable to do so, the Determining Party may in addition
consider in calculating a Close-out Amount any loss or cost incurred in connection with its terminating, liquidating or
re-establishing any hedge related to a Terminated Transaction or group of Terminated Transactions (or any gain
resulting from any of them).

Commercially reasonable procedures used in determining a Close-out Amount may include the following:-

(1)    application to relevant market data from third parties pursuant to clause (ii) above or information from
internal sources pursuant to clause (iii) above of pricing or other valuation models that are, at the time of the
determination of the Close-out Amount, used by the Determining Party in the regular course of its business in pricing
or valuing transactions between the Determining Party and unrelated third parties that are similar to the Terminated
Transaction or group of Terminated Transactions; and

(2)    application of different valuation methods to Terminated Transactions or groups of Terminated Transactions
depending on the type, complexity, size or number of the Terminated Transactions or group of Terminated
Transactions.

“Confirmation” has the meaning specified in the preamble.

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

“Contractual Currency” has the meaning specified in Section 8(a).

“Convention Court” means any court which is bound to apply to the Proceedings either Article 17 of the 1968
Brussels Convention on Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters or
Article 17 of the 1988 Lugano Convention on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters.

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

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

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

“Cross-Default” means the event specified in Section 5(a)(vi).

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

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

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

“Determining Party” means the party determining a Close-out Amount.

“Early Termination Amount” has the meaning specified in Section 6(e).

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

“electronic messages” does not include e-mails but does include documents expressed in markup languages, and

“electronic messaging system” will be construed accordingly.

“English law” means the law of England and Wales, and “English” will be construed accordingly.

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

21

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

“General Business Day” means a day on which commercial banks are open for general business (including dealings
in foreign exchange and foreign currency deposits).

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

“Indemnifiable Tax” means any Tax other than a Tax that would not be imposed in respect of a payment under this
Agreement but for a present or former connection between the jurisdiction of the government or taxation authority
imposing such Tax and the recipient of such payment or a person related to such recipient (including, without
limitation, a connection arising from such recipient or related person being or having been a citizen or resident of
such jurisdiction, or being or having been organised, present or engaged in a trade or business in such jurisdiction, or
having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a
connection arising solely from such recipient or related person having executed, delivered, performed its obligations
or received a payment under, or enforced, this Agreement or a Credit Support Document).

“law” includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any
relevant governmental revenue authority), and “unlawful” will be construed accordingly.

“Local Business Day” means (a) in relation to any obligation under Section 2(a)(i), a General Business Day in the
place or places specified in the relevant Confirmation and a day on which a relevant settlement system is open or
operating as specified in the relevant Confirmation or, if a place or a settlement system is not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by
reference, in this Agreement, (b) for the purpose of determining when a Waiting Period expires, a General Business
Day in the place where the event or circumstance that constitutes or gives rise to the Illegality or Force Majeure
Event, as the case may be, occurs, (c) in relation to any other payment, a General Business Day in the place where the
relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment 
and, if that currency does not have a single recognised principal financial centre, a day on which the settlement
system necessary to accomplish such payment is open, (d) in relation to any notice or other communication, including
notice contemplated under Section 5(a)(i), a General Business Day (or a day that would have been a General
Business Day but for the occurrence of an event or circumstance which would, if it occurred with respect to payment,
delivery or compliance related to a Transaction, constitute or give rise to an Illegality or a Force Majeure Event) in
the place specified in the address for notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and (e) in relation to Section 5(a)(v)(2), a
General Business Day in the relevant locations for performance with respect to such Specified Transaction.

“Local Delivery Day” means, for purposes of Sections 5(a)(i) and 5(d), a day on which settlement systems necessary
to accomplish the relevant delivery are generally open for business so that the delivery is capable of being
accomplished in accordance with customary market practice, in the place specified in the relevant Confirmation or, if
not so specified, in a location as determined in accordance with customary market practice for the relevant delivery.

“Master Agreement” has the meaning specified in the preamble.

“Merger Without Assumption” means the event specified in Section 5(a)(viii).

“Multiple Transaction Payment Netting” has the meaning specified in Section 2(c).

“Non-affected Party” means, so long as there is only one Affected Party, the other party.

“Non-default Rate” means the rate certified by the Non-defaulting Party to be a rate offered to the Non-defaulting
Party by a major bank in a relevant interbank market for overnight deposits in the applicable currency, such bank to
be selected in good faith by the Non-defaulting Party for the purpose of obtaining a representative rate that will
reasonably reflect conditions prevailing at the time in that relevant market.

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

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

“Other Amounts” has the meaning specified in Section 6(f).

22

“Payee” has the meaning specified in Section 6(f).

“Payer” has the meaning specified in Section 6(f).

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

“Proceedings” has the meaning specified in Section 13(b).

“Process Agent” has the meaning specified in the Schedule.

“rate of exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the
purchase of or conversion into the Contractual Currency.

“Relevant Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is incorporated,
organised, managed and controlled or considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to
any payment, from or through which such payment is made.

“Schedule” has the meaning specified in the preamble.

“Scheduled Settlement Date” means a date on which a payment or delivery is to be made under Section 2(a)(i) with
respect to a Transaction.

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

“Specified Indebtedness” means, subject to the Schedule, any obligation (whether present or future, contingent or
otherwise, as principal or surety or otherwise) in respect of borrowed money.

“Specified Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect to
any such transaction) now existing or hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement
(or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is
not a Transaction under this Agreement but (i) which is a rate swap transaction, swap option, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond
option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option, credit protection transaction, credit
swap, credit default swap, credit default option, total return swap, credit spread transaction, repurchase transaction, 
reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, weather index transaction or
forward purchase or sale of a security, commodity or other financial instrument or interest (including any option with
respect to any of these transactions) or (ii) which is a type of transaction that is similar to any transaction referred to
in clause (i) above that is currently, or in the future becomes, recurrently entered into in the financial markets
(including terms and conditions incorporated by reference in such agreement) and which is a forward, swap, future,
option or other derivative on one or more rates, currencies, commodities, equity securities or other equity
instruments, debt securities or other debt instruments, economic indices or measures of economic risk or value, or
other benchmarks against which payments or deliveries are to be made, (b) any combination of these transactions and
(c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation.

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

“Stamp Tax Jurisdiction” has the meaning specified in Section 4(e).

“Tax” means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest,
penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any
payment under this Agreement other than a stamp, registration, documentation or similar tax.

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

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

23

“Terminated Transactions” means, with respect to any Early Termination Date (a) if resulting from an Illegality or
a Force Majeure Event, all Affected Transactions specified in the notice given pursuant to Section 6(b)(iv), (b) if
resulting from any other Termination Event, all Affected Transactions and (c) if resulting from an Event of Default,
all Transactions in effect either immediately before the effectiveness of the notice designating that Early Termination
Date or, if Automatic Early Termination applies, immediately before that Early Termination Date.

“Termination Currency” means (a) if a Termination Currency is specified in the Schedule and that currency is freely
available, that currency, and (b) otherwise, euro if this Agreement is expressed to be governed by English law or
United States Dollars if this Agreement is expressed to be governed by the laws of the State of New York.

“Termination Currency Equivalent” means, in respect of any amount denominated in the Termination Currency,
such Termination Currency amount and, in respect of any amount denominated in a currency other than the
Termination Currency (the “Other Currency”), the amount in the Termination Currency determined by the party
making the relevant determination as being required to purchase such amount of such Other Currency as at the
relevant Early Termination Date, or, if the relevant Close-out Amount is determined as of a later date, that later date,
with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as
provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in
the city in which such foreign exchange agent is located) on such date as would be customary for the determination of
such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later
date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be
selected in good faith by that party and otherwise will be agreed by the parties.

“Termination Event” means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon Merger or, if
specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event.

“Termination Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of
any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts.

“Threshold Amount” means the amount, if any, specified as such in the Schedule.

“Transaction” has the meaning specified in the preamble.

“Unpaid Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in
respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for
Section 2(a)(iii) or due but for Section 5(d)) to such party under Section 2(a)(i) or 2(d)(i)(4) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date, (b) in respect of each Terminated
Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii) or
5(d)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not
been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or
would have been) required to be delivered and (c) if the Early Termination Date results from an Event of Default, a
Credit Event Upon Merger or an Additional Termination Event in respect of which all outstanding Transactions are
Affected Transactions, any Early Termination Amount due prior to such Early Termination Date and which remains
unpaid as of such Early Termination Date, in each case together with any amount of interest accrued or other
compensation in respect of that obligation or deferred obligation, as the case may be, pursuant to Section 9(h)(ii)(1)
or (2), as appropriate.  The fair market value of any obligation referred to in clause (b) above will be determined as of
the originally scheduled date for delivery, in good faith and using commercially reasonable procedures, by the party
obliged to make the determination under Section 6(e) or, if each party is so obliged, it will be the average of the
Termination Currency Equivalents of the fair market values so determined by both parties.

“Waiting Period” means:-

(a)    in respect of an event or circumstance under Section 5(b)(i), other than in the case of Section 5(b)(i)(2) 
where the relevant payment, delivery or compliance is actually required on the relevant day (in which case no
Waiting Period will apply), a period of three Local Business Days (or days that would have been Local Business
Days but for the occurrence of that event or circumstance) following the occurrence of that event or circumstance;
and

(b)    in respect of an event or circumstance under Section 5(b)(ii), other than in the case of Section 5(b)(ii)(2) 
where the relevant payment, delivery or compliance is actually required on the relevant day (in which case no

24

Waiting Period will apply), a period of eight Local Business Days (or days that would have been Local Business
Days but for the occurrence of that event or circumstance) following the occurrence of that event or circumstance.
IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with
effect from the date specified on the first page of this document.

	
			
	

JPMORGAN CHASE BANK, N.A.

By:  /s/ Christine A. Smith                        
      Name: Christine A. Smith
      Title: Vice President
      Date:
	 
	WELLS CORE OFFICE INCOME OPERATING PARTNERSHIP, L.P.,
 a Delaware limited partnership

By:  Wells Core Office Income REIT, Inc., 
         its General Partner

	 
	 
	By:  /s/ Douglas P. Williams                        
Name: Douglas P. Williams
Title: Executive Vice President
Date: 9/26/12

25

SCHEDULE
 to the 
2002 MASTER AGREEMENT

dated as of September 26, 2012

between

	
			
	JPMORGAN CHASE BANK, N.A.
(“Party A”)
	and
	WELLS CORE OFFICE INCOME OPERATING PARTNERSHIP, L.P.
 (“Party B”)

Part 1: Termination Provisions 

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

Section 5(a)(v), any Affiliate of Party A;
Section 5(a)(vi), none;
Section 5(a)(vii), none; and
Section 5(b)(v), none;

and, in relation to Party B, for the purpose of:

Section 5(a)(v), none;
Section 5(a)(vi), none;
Section 5(a)(vii), none; and
Section 5(b)(v), none.

		
	(2)
	“Specified Transaction” will have the meaning specified in Section 14 of this Agreement.

		
	(3)
	The “Cross-Default” provisions of Section 5(a)(vi) will apply to Party A and Party B, and for such purpose:

		
	(a) 
	“Specified Indebtedness” will have the meaning specified in Section 14 of this Agreement, except that such term shall not include (i) obligations in respect of deposits received in the ordinary course of a party's banking business, (ii) obligations under the Credit Agreements, (iii) in respect of Party B, non-recourse indebtedness, and (iv) in respect of Party B, intra-company indebtedness.

		
	(b) 
	“Threshold Amount” means, with respect to Party A, an amount equal to three percent of the shareholders' equity of Party A, determined in accordance with generally accepted accounting principles in the United States of America (“GAAP”), consistently applied, as at the end of such party's most recently completed fiscal year; and with respect to Party B, USD 20,000,000, or the equivalent thereof in any other currency or currencies. For purposes of this definition, any Specified Indebtedness denominated in a currency other than the currency in which the Threshold is expressed shall be converted into the currency in which the Threshold is expressed at the rate of exchange at which the other party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.

		
	(4)
	The “Credit Event Upon Merger” provisions of Section 5(b)(v) will apply to Party A and Party B; provided, however, that if the applicable party has long term, unsecured and unsubordinated indebtedness or deposits which is or are publicly rated (such rating, a “Credit Rating”) by Moody's Investor Services, Inc. ("Moody's"), Standard and Poor's Ratings Group ("S&P") or any other internationally recognized rating agency (a "Rating Agency"), then the words "materially weaker" in line 6 of Section 5(b)(v) shall mean that the Credit Rating of such party (or, if applicable, the Credit Support Provider of such party) shall be rated lower than Baa3 by Moody's, or lower than BBB- by S&P or, in the event that there is no Credit Rating by either Moody's or S&P applicable to such party (or, if applicable, the Credit Support Provider of such party) but such party's long-term indebtedness or deposits is or are rated by a Rating Agency, lower than a rating equi-valent to the foregoing by such Rating Agency.

For purposes of Section 5(b)(v), it is understood and agreed between the parties that in respect of Party B, any merger, consolidation, or other transaction permitted under Section 9.6 of the Revolving Credit Agreement shall not constitute a “Designated Event” under such Section.

		
	(5)
	The “Automatic Early Termination” provision of Section 6(a) will not apply to Party A or Party B.

(6)    “Termination Currency” will have the meaning set forth in Section 14 of this Agreement.

		
	(7)
	Additional Termination Event will apply. It shall constitute an Additional Termination Event in respect of  which Party B will be the sole Affected Party and all Transactions will be Affected Transactions (a) if at any time the obligations of Party B under the Revolving Credit Agreement shall become secured and/or shall become guaranteed by any subsidiary of Party B owning any material assets, and the obligations of Party B under this Agreement are not equally and ratably secured and/or guaranteed to the same extent, or (b) if there shall occur any Event of Default, default, termination event, or similar condition or event (however described) under any of the Credit Agreements and, as a result and other than pursuant to its terms, the unpaid principal balance of any loans made pursuant to such Credit Agreement are declared or become due and payable.

As used herein, “Credit Agreements” means (i) the Credit Agreement, dated as of September 26, 2012, among Party B, as Borrower, Regions Bank, as Administrative Agent, JPMorgan Chase Bank, N.A. and U.S. Bank, National Association, as Co-Syndication Agents, and the Lenders from time to time party thereto (as amended and as the same may be further amended, amended and restated, replaced, refinanced, supplemented or otherwise modified from time to time) (the “Revolving Credit Agreement”), and (ii) any other credit agreement or loan agreement under which Party B is a borrower (or under which a subsidiary of Party B is the borrower and Party B is a guarantor and which credit agreement or loan agreement is either unsecured or, if secured, is only secured to the same extent as the Revolving Credit Agreement) which contains any financial covenants applicable to Party B that are substantially similar to the financial covenants set forth in the Revolving Credit Agreement.

		
	(8)
	Additional Condition Precedent.  For the purposes of Section 2(a)(iii) it shall be a condition precedent that no Additional Termination Event as described in clause (7) of this Part 1 with respect to the other party shall have occurred and be continuing. If a party (“X”) (A) exercises its rights in connection with Section 2(a)(iii) and elects not to make any payment or delivery specified in a Confirmation to be made by it for thirty (30) Local Business Days, and (B) if the underlying condition is an Event of Default, Potential Event of Default or Additional Termination Event where the other party to this Agreement (“Y”) is the Defaulting Party or the Affected Party, as the case may be, and X does not designate an Early Termination Date in connection with such Event of Default, Potential Event of Default or Additional Termination Event by the end of such thirty Local Business Day period, then the right to declare such Early Termination Date shall be deemed waived and X shall resume all payment and delivery obligations.

2

Part 2: Tax Representations

		
	(1)
	Payer Tax Representations.  For the purpose of Section 3(e) of this Agreement, Party A and Party B each hereby make the following representation:

It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement or amounts payable hereunder that may be considered to be interest for United States federal income tax purposes) to be made by it to the other party under this Agreement.  In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement of the other party contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, except that it will not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.

		
	(2)
	Payee Tax Representations.  For the purpose of Section 3(f) of this Agreement, Party A and Party B each hereby make the following representations:

		
	(i)
	Party A represents that it is a U.S. person for U.S. federal income tax purposes and is not acting as an agent for a person this is not a U.S. person for U.S. federal income tax purposes.

		
	(ii)
	Party B represents that it is a U.S. person for U.S. federal income tax purposes and is not acting as an agent for a person this is not a U.S. person for U.S. federal income tax purposes.

3

Part 3: Agreement to Deliver Documents

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

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

A complete and accurate United States Internal Revenue Service Form W-9 (or any applicable successor form), in a manner reasonably satisfactory to the other Party, (I) upon execution of this Agreement; (II) promptly upon reasonable demand of the other Party, and (III) promptly upon learning that any such form previously provided by such Party has become obsolete or incorrect (and each such form is hereby identified for purposes of Section 3(d) of this Agreement).

(b)    Other documents to be delivered are:

	
				
	Party required
to deliver
document
	

Form/Document/
Certificate
	

Date by which
to be delivered
	Covered by
Section 3(d)
Representation

	 
	 
	 
	 

	Party A and Party B
	Annual Report containing consolidated financial statements certified by independent certified public accountants and prepared in accordance with GAAP
	Upon request but in no event earlier than the date required to be provided under the Revolving Credit Agreement, except to the extent otherwise publicly available
	Yes

	 
	 
	 
	 

	Party B
	Unaudited consolidated financial statements of Party B for a fiscal quarter prepared in accordance with GAAP
	Upon request but in no event earlier than the date required to be provided under the Revolving Credit Agreement, except to the extent otherwise publicly available
	Yes

	 
	 
	 
	 

	Party B
	Certified copies of all corporate authorizations and any other documents with respect to the execution, delivery and performance of this Agreement
	Upon execution and delivery of this Agreement
	Yes

	 
	 
	 
	 

	Party A and Party B
	Certificate of authority and specimen signatures of individuals executing this Agreement, Confirmations and each Credit Support Document (as applicable)
	Upon execution and delivery of this Agreement and thereafter upon request of the other party
	Yes

	 
	 
	 
	 

	Party B
	Guaranty (as specified in Part 4(5) of this Schedule)
	Upon execution and delivery of this Agreement
	No

	 
	 
	 
	 

	Party B
	Certified copies of all corporate (or other) authorizations and any other documents with respect to the execution, delivery and performance of the Guaranty by each Guarantor
	Upon execution and delivery of this Agreement and thereafter as applicable
	Yes

4

Part 4: Miscellaneous

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

Address for notice or communications to Party A:

Any notice relating to a particular Transaction shall be delivered to the address or facsimile number specified in the Confirmation of such Transaction.  Any notice delivered for purposes of Sections 5 and 6 of this Agreement shall be delivered to the following address:

JPMorgan Chase Bank, N.A.
Attention:  Legal Department - Derivatives Practice Group
277 Park Avenue, 13th Floor
New York, New York 10167
Facsimile No.:  (646) 534-6393

Address for notice or communications to Party B:

Wells Core Office Income Operating Partnership, L.P.    
Attention:  Douglas P. Williams
6200 The Corners Parkway
Norcross, Georgia 30092-2265
Facsimile No.:  (770) 243-8124

with a copy to:        McKenna Long & Aldridge LLP
Attention: William F. Timmons, Esq.
303 Peachtree Street, NE
Suite 5300
Atlanta, GA  30308
Facsimile No.:  (404) 527-4198

		
	(2)
	Process Agent.  For the purpose of Section 13(c) of this Agreement:

Party A appoints as its Process Agent:  Not applicable.
Party B appoints as its Process Agent:  Not applicable.

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

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

Party A is a Multibranch Party and may act through any Office specified in a Confirmation.
Party B is not a Multibranch Party.

		
	(5)
	Credit Support Document.  The Guaranty (the “Guaranty”) of the Credit Support Providers dated as of the date hereof in favor of Party A and in the form appended hereto shall constitute a “Credit Support Document” in relation to all of the obligations of Party B and for all purposes of this Agreement.

5

(6)    Credit Support Provider. 

Credit Support Provider means, in relation to Party A, not applicable.
Credit Support Provider means, in relation to Party B, each Guarantor (as defined in the Guaranty).  

Party B agrees that if at any time any additional entity becomes a Guarantor under the Guaranty (as each such term is defined in the Revolving Credit Agreement), Party B shall promptly cause such entity to deliver a guaranty substantially in the form of the Guaranty, or cause such entity to become a party to the Guaranty.

		
	(7)
	Governing Law.  This Agreement will be governed by and construed in accordance with the laws of the State of New York (without reference to choice of law doctrine).

		
	(8)
	Netting of Payments. “Multiple Transaction Payment Netting” will apply for the purpose of Section 2(c) of this Agreement to all Transactions starting from the date of this Agreement.

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

(10)    Absence of Litigation.  For the purpose of Section 3(c) of this Agreement:

“Specified Entity” means, in relation to Party A, none.
“Specified Entity” means, in relation to Party B, none.

		
	(11)
	No Agency.  The provisions of Section 3(g) of this Agreement will apply to this Agreement.

		
	(12)
	Additional Representation will apply.  For the purpose of Section 3 of this Agreement, the following will each constitute an Additional Representation:

(h)    Relationship Between Parties.  Each party will be deemed to represent to the other party on the date on which it enters into a Transaction that (absent a written agreement between the parties that expressly imposes affirmative obligations to the contrary for that Transaction):

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

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

(iii)    Status of Parties.  The other party is not acting as a fiduciary for or an adviser to it in respect of that Transaction.

(iv)    Other Transactions.  It understands and acknowledges that the other party may, either in connection with entering into a Transaction or from time to time thereafter, engage in open market transactions that are designed to hedge or reduce the risks incurred by it in connection with such Transaction and that the effect of such open market transactions may be to affect or reduce the value of such Transaction.

6

		
	(13)
	Eligible Contract Participant. Each party represents to the other party (which representation will be deemed to be repeated by each party on each date on which a Transaction is entered into) that it is an “eligible contract participant”, as defined in the Commodity Futures Modernization Act of 2000.

		
	(14)
	Recording of Conversations. Each party (i) consents to the recording of telephone conversations between the trading, marketing and other relevant personnel of the parties and their Affiliates in connection with this Agreement or any potential Transaction, (ii) agrees to obtain any necessary consent of, and give any necessary notice of such recording to, its relevant personnel and (iii) agrees, to the extent permitted by applicable law, that recordings may be submitted in evidence in any Proceedings.

Part 5: Other Provisions

		
	(1)
	Change of Accounts.  Section 2(b) of this Agreement is hereby amended by the addition of the following after the word "delivery" in the first line thereof:  "to another account in the same legal and tax jurisdiction as the original account."

		
	(2)
	Waiver of Jury Trial.  Each party waives, to the fullest extent permitted by applicable law, any right it may have to a trial by jury in respect of any suit, action or proceeding relating to this Agreement or any Credit Support Document.  Each party (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 a 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.

		
	(3)
	ISDA Definitions.  Reference is hereby made to the 2006 ISDA Definitions (the "2006 Definitions") and the 1998 FX and Currency Option Definitions (the "FX Definitions") (collectively the “ISDA Definitions”) each as published by the International Swaps and Derivatives Association, Inc., which are hereby incorporated by reference herein.  Any terms used and not otherwise defined herein which are contained in the ISDA Definitions shall have the meaning set forth therein. 

		
	(4)
	Scope of Agreement.  Notwithstanding anything contained in this Agreement to the contrary, any transaction (other than a repurchase transaction, reverse repurchase transaction, buy/sell-back transaction or securities lending transaction) which may otherwise constitute a "Specified Transaction" (without regard to the phrase “which is not a Transaction under this Agreement but” in the definition of “Specified Transaction”) for purposes of this Agreement which has been or will be entered into between the parties shall constitute a "Transaction" which is subject to, governed by, and construed in accordance with the terms of this Agreement, unless any Confirmation with respect to a Transaction entered into after the execution of this Agreement expressly provides otherwise.

		
	(5)
	Inconsistency.  In the event of any inconsistency between any of the following documents, the relevant document first listed below shall govern: (i) a Confirmation; (ii) the Schedule and Paragraph 11 or Paragraph 13 of an ISDA Credit Support Annex (as applicable); (iii) the ISDA Definitions; and (iv) the printed form of ISDA Master Agreement and ISDA Credit Support Annex (as applicable).  In the event of any inconsistency between provisions contained in the 2006 Definitions and the FX Definitions, the FX Definitions shall prevail.

[Remainder of this Page Intentionally Left Blank]

7

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

	
		
	JPMORGAN CHASE BANK, N.A.

By:   /s/ Christine A. Smith                    
       Name: Chrstine A. Smith
       Title: Vice President
	WELLS CORE OFFICE INCOME OPERATING PARTNERSHIP, L.P.,
 a Delaware limited partnership

By:  Wells Core Office Income REIT, Inc., 
         its General Partner

By:   /s/ Douglas P. Williams                        
        Name: Douglas P. Williams
        Title: Executive Vice President

8gblacemploymentagreement.htm

  

  

  

Execution Version

EXECUTIVE EMPLOYMENT AGREEMENT

 

THIS EXECUTIVE EMPLOYMENT AGREEMENT (the “Agreement”) is entered into as of August 31, 2012 (the “Effective Date”), by and between Calamos Advisors, LLC, a Delaware limited liability company (“Advisors”) (together with its successors and assigns permitted under this Agreement, shall be referred herein as the “Company”), and Gary D. Black (“Executive”).

 

RECITALS

 

WHEREAS, in connection with Calamos Investments LLC (“Holdings”) acquiring all of the issued and outstanding membership interests in Black Capital LLC (f/k/a Black Capital Management, LLC), a Delaware limited liability company (“BCG”) and becoming the successor to Black Capital Group LLC, a Delaware limited liability company, as the general partner of the feeder funds (the “Feeder Funds”) of the Black Strategic Master Fund (together with the Feeder Funds, the “Acquired Funds”), pursuant to the terms of the Membership Interest Purchase Agreement dated August 22, 2012 (the “Purchase Agreement”), Advisors desires to employ Executive, and Executive desires to serve as, Global Co-Chief Investment Officer and Chief Investment Officer of Alternative Strategies, in each case, on the terms and conditions set forth herein effective as of the Effective Date; and

 

WHEREAS, the effectiveness of this Agreement is contingent on the consummation of the transactions contemplated in the Purchase Agreement.

 

NOW THEREFORE, the parties agree as follows:

 

 

1. Term.  The term of this Agreement (the “Term”) shall begin as of the Effective Date and shall continue for one (1) year until the first anniversary of the Effective Date, provided that the Term shall automatically renew for successive periods of one (1) year unless the Board of Directors (the “Board”) of Calamos Asset Management, Inc., a Delaware corporation (“CAM”), and the Chief Executive Officer of the Company (the “CEO”) gives written notice to Executive or Executive gives written notice to the Company, in accordance with Section 17(c), below at least sixty (60) days prior to the commencement of any such one (1) year renewal period that the Term shall not be further extended.  The portion of the Term during which Executive is actually employed by the Company shall be hereinafter referred to as the “Employment Period.”

 

 

2. Duties.

 

 

(a) Executive’s Positions and Titles. During the Employment Period, Executive’s positions and titles shall be Global Co-Chief Investment Officer and Chief Investment Officer of Alternative Strategies of the Company, CAM and Holdings.

 

 

(b) Executive’s Duties.  The duties and responsibilities of Executive are of an executive nature as shall be required by the Company in the conduct of its business and shall include the performance of such lawful and reasonable duties and responsibilities as the CEO or the Board may from time to time assign to Executive.  Recognizing and acknowledging that it is essential for the protection and enhancement of the name and business of the Company and the goodwill pertaining thereto, Executive shall perform his duties under this Agreement professionally, in accordance with the applicable laws, rules and regulations and such standards, policies and procedures established by Employer and the industry from time to time.  During the Term, and excluding any periods of disability and vacation and sick leave to which Executive is entitled, Executive agrees to devote substantially all of his attention and time during normal business hours to the business and affairs of the Company and, to the extent necessary to discharge Executive’s responsibilities hereunder, to use Executive’s reasonable best efforts to perform such responsibilities.  During the Term, it shall not be a violation of this Agreement for Executive, upon prior written notice to the Company, to: (i) serve on corporate, civic or charitable boards or committees; (ii) deliver lectures, fulfill speaking engagements or teach at educational institutions; and (iii) manage personal investments; all so long as such activities do not interfere with the performance of Executive’s responsibilities as an employee of the Company in accordance with this Agreement, do not create a conflict of interest with respect to Executive’s position, or cause reputational harm to the Company; and, in the case of Executive’s management of his personal investments, so long as all such personal investment management activities comply with the Company’s personal trading policies and, otherwise, with applicable law.  Executive shall be subject to the Company’s code of ethics as well as all applicable Company policies and procedures.

 

 

Under the supervision of the CEO, Executive shall be responsible for CAM's global investment management activities, including alternative strategies, and shall have the authority required to carry out such responsibilities. Executive and the CEO may, from time to time, mutually agree to changes in such duties and responsibilities. 

 

 

Subject to the oversight and approval of the CEO and the Compensation Committee of the Board (the “Compensation Committee”),   Executive shall have the authority: (i) to determine and allocate investment management personnel compensation opportunities, including, without limitation, salary and bonuses, and (ii) to hire and fire investment management personnel.

 

 

(c)  Board Service.  As soon as practicable after the Effective Date, Executive will be appointed to the Executive Committee of CAM and appointed as a member of the Board.  The Company agrees to propose to the Nominating and Corporate Governance Committee of the Board at each annual meeting of stockholders during the Employment Period at which the class of directors to which he belongs is up for election that Executive be nominated for reelection by the Board as a member of the Board.  If so elected, Executive agrees that he will serve as a member of the Board and/or the board of directors or managers, as applicable, of any of its subsidiaries and affiliates, as well as to serve as a member of any committee of any of said boards, to which Executive may be elected or appointed.

 

 

(d) Work Locations.  Executive is expected to work three (3) to four (4) days each week in the Chicago, Illinois area, and one (1) to two (2) days per week in New York, New York.

 

 

 

 

3. Compensation and Benefits.

 

 

(a) Base Salary.  During the Employment Period, Executive shall receive a base salary (“Base Salary”), paid in accordance with the normal payroll practices of the Company, at an annual rate of $500,000, less applicable deductions.  The Base Salary shall be reviewed from time to time in accordance with the Company’s policies and practices, but no less frequently than once annually and may be increased (but not decreased), at any time and from time to time by action of the Board or the Compensation Committee.  The term “Base Salary” shall include any such increases to the Base Salary from time to time.

 

 

(b) Annual Bonus Programs.  In respect of each fiscal year of the Company that ends during the Employment Period, beginning January 1, 2013, in supplement to the Base Salary, Executive shall be eligible to participate in such annual discretionary bonus plans and programs (“Annual Bonus Programs”), as may be in effect from time to time in accordance with the Company’s compensation practices and the terms and provisions of any such plans or programs.  The Compensation Committee shall, in consultation with the Executive, set, in the first quarter of each year, the Company’s and Executive’s target performance goals for each such calendar year during the Employment Period.  Executive shall be eligible to receive a discretionary target annual bonus of 300% of Base Salary, and the actual bonus awarded shall be based upon the extent to which the Company and Executive meet their target performance goals, as determined by the Compensation Committee, in its sole discretion.  For calendar year 2012, Executive will be paid a bonus equal to $ 1 million, a portion of which may (in the discretion of the Company), be paid subject to the terms and conditions of the Long Term Incentive Programs (defined below).

 

 

(c) Long-Term Incentive Programs.  Beginning January 1, 2013, in supplement to the Base Salary and participation in the Annual Bonus Programs, Executive shall be eligible to participate during the Employment Period in such long term bonus plans and programs including stock option, restricted stock unit, restricted shares, performance stock unit and other similar programs (“Long Term Incentive Programs”), as may be in effect from time to time in accordance with the Company’s compensation practices and the terms and provisions of any such plans or programs.  The Compensation Committee shall, in consultation with the Executive, set, in the first quarter of each year, the Company’s and Executive’s target performance goals for each such calendar year during the Employment Period. Executive shall be eligible to receive annual Long Term Incentive Program awards with an aggregate target value of 300% of Base Salary, and the actual aggregate value of the Long Term Incentive Program awards shall be based upon the extent to which the Company and Executive meet their target performance goals, as determined by the Compensation Committee, in its sole discretion.  The Long Term Incentive Program awards will be awarded in a combination of common shares and options, vesting in equal thirds on the 4th, 5th and 6th year anniversaries of the grant date, or such other vesting schedule as may become generally applicable for peer executives under the Long Term Incentive Program.

 

 

(d) Other Incentive Plans.  During the Employment Period, Executive shall be eligible to participate, subject to the terms and conditions thereof, in all other incentive plans and programs, including such cash and deferred bonus programs as may be in effect from time to time.

 

 

(e) Pension and Welfare Benefit Plans.  During the Employment Period, Executive and Executive’s dependents, as the case may be, shall be eligible to participate in all pension and similar benefit plans (qualified, non-qualified and supplemental), profit sharing, 401(k), as well as all medical and dental, disability, group and executive life, accidental death and travel accident insurance, and other similar welfare benefit plans and programs of the Company, subject to the terms and conditions thereof, as in effect from time to time.

 

 

(f) Expenses.  During the Employment Period, Executive shall be entitled to receive prompt reimbursement for all reasonable expenses incurred by him in accordance with the policies and practices of the Company as in effect from time to time.

 

 

(g) Vacation.  During the Employment Period, Executive shall be entitled to paid vacation in accordance with the policies and practices of the Company as in effect from time to time with respect to senior executives employed by the Company, but in no event shall such vacation time be less than four (4) weeks per calendar year.

 

 

(h) Certain Amendments.  Except for Section 5(c)(i)(1), nothing herein shall be construed to prevent the Company from amending, altering, eliminating or reducing any plans, benefits or programs referenced in this Section 3.

 

 

4. Admission to New GP

 

 

(a) Executive will become a non-managing member (if the entity is an LLC) or a limited partner (if the entity is a limited partnership) in a limited liability company/limited partnership to be formed and controlled solely by the Company (the “New GP”).  As a result, Executive shall be entitled to receive an allocation up to 12.5% of any incentive fees or incentive allocations (in either case, "Incentive Payments") received by the New GP from the Acquired Funds and from any future products  (as mutually agreed by Executive and the Company). 

 

 

(b) The Company and Executive agree that if his share of the Incentive Payments awarded to him equals or exceeds his annual bonus under the Annual Bonus Programs and long term incentive awards under the Long Term Incentive Programs, he and the Company will in good faith discuss the overall compensation structure.  Executive shall reinvest 50% of his Incentive Payments (as determined on an after tax basis)  in the Acquired Funds and any such future investment products for a three (3) year period measured from the date such Incentive Payments are paid to Executive.  Executive and the Company also acknowledge and agree that each party has a shared interest in ensuring that the compensation arrangements applicable to Executive do not raise material conflicts of interest (or the appearance of such conflicts) in relation to fiduciary and other obligations the Company and its affiliates owe to investment advisory clients.  Accordingly, Executive and the Company agree to discuss in good faith any modifications of these arrangements that may be necessary or appropriate so as to limit or manage any such conflicts, it being understood that any such modifications are not intended to interfere with the substantial realization by Executive of the principal benefits purported to be provided pursuant to such arrangements over time.

 

 

 

 

 

 

5. Termination.

 

 

(a) Permanent Disability.  Either Executive or the Company may terminate Executive’s employment, by giving notice of his or its intention to terminate Executive’s employment, after having established Executive is unable to substantially perform his duties even with a reasonable accommodation as a result of becoming permanently disabled within the definition of the Company’s then current long term disability plan or program (whether employer or employee-paid) (“Permanent Disability”).

 

 

(b) Cause.

 

 

(i) The Company may terminate Executive’s employment for “Cause” following the occurrence of any of the following events:

 

 

(A) Executive is convicted of, or has pled guilty or nolo contendere  to any felony, other than a traffic related felony;

 

 

(B) Executive is found to have willfully and wrongfully misappropriated money, assets, or other property of the Company or its affiliates or a client of the Company or its affiliates,

 

 

(C) As a result of finding that Executive’s willful action(s) or failure(s) to act was (were) material to the occurrence of a violation of the Investment  Advisers Act of 1940, as amended, or of the Investment Company Act of 1940, as amended, Executive or the Company or any of its affiliates are censured by the Securities and Exchange Commission pursuant to Section 203(e) or 203(f) of the Investment Advisers Act of 1940, as amended, or Section 9(b) of the Investment Company Act of 1940, as amended;

 

 

(D) Executive is found to have acted with gross negligence, or engaged in acts of gross moral turpitude;

 

 

(E) Executive’s material breach of any of the material terms of this Agreement and which results in material harm to the Company or its affiliates;

 

 

(F) Executive’s continued willful failure to substantially perform his duties as reasonably directed by the CEO or the Board;

 

 

(G) Executive's failure to maintain such licenses as are required for the performance of his duties.

 

 

(ii) Provided that the applicable conditions in Section 5(b)(iii) are met, if the Company desires to terminate Executive’s employment for Cause, the cessation of employment of Executive shall not be deemed to be for Cause unless and until there shall have been delivered to Executive a copy of a resolution duly adopted by the Board (not including Executive) at a meeting of the Board called and held for such purpose, finding that, in the good faith opinion of the Board, Executive’s conduct gives rise to “Cause” as described in Section 5(b)(i) above.

 

 

(iii) Cause may not be found under Section 5(b)(i)(C), where Executive has acted or failed to act based on the direction of the Board or legal counsel of the Company or its affiliates, or Executive has acted or failed to act  based upon the failure of the Board or the legal counsel of the Company or its affiliates to provide direction in response to Executive’s request for direction.  Cause may not be found under Section 5(b)(i)(E) or (F), unless Executive has first been provided with written notice of the Cause condition specifying, in reasonable detail such that Executive can cure such Cause condition, if capable of being cured, and Executive has not substantially cured such Cause condition after being given a reasonable opportunity to cure.  Cause may not be found under Section 5(b)(i)(G), unless Executive has first been provided with written notice of the Company’s intention to terminate his employment for Cause due to the licensure issue, and a reasonable opportunity to cure the licensure issue and such assistance as is reasonable to provide.

 

 

(iv) For purposes of this Section 5(b), no act or failure to act, on the part of Executive, shall be considered willful if it is determined by the Board that it was done, or omitted to be done, by him in good faith and with a reasonable belief that his action or omission was in the best interests of the Company.

 

 

(c) Good Reason.

 

 

(i) Executive shall have the right to terminate his employment upon thirty (30) days' written notice to the Board for "Good Reason" in the event of any of the following Good Reason conditions occurring without his consent and continuing for thirty (30) days after Executive's written notice to the Board specifying, in reasonable detail that the Board can cure such Good Reason condition, provided that Executive provides such written notice of the condition constituting Good Reason within thirty(30) days after Executive has actual knowledge of the occurrence of the condition constituting Good Reason and Executive terminates his employment within thirty (30) days following end of the thirty (30) day cure period:

 

 

(1) Any material diminution in contractual compensation opportunities as described in this Agreement;

 

 

(2) A material diminution in Executive’s title, duties, responsibilities and authority; or

 

 

(3) A change in Executive’s reporting line requiring he report to anyone or any entity other than the CEO and the Board.

 

 

(d) Termination by Executive Without Good Reason.  Executive may, at any time without Good Reason, by at least sixty (60) days’ prior notice, voluntarily terminate his employment without liability.

 

 

(e) Termination by the Company Without Cause.  The Company may terminate this Agreement and Executive’s employment hereunder at any time without Cause.

 

 

(f) Expiration of Agreement.  Upon expiration of the Term, Executive’s employment shall automatically terminate.  For purposes of Section 6 and Section 11(d), such termination shall be treated as a termination by the Company without Cause if such expiration is by reason of the Company having provided Executive with a notice of non-renewal pursuant to Section 1, and shall be treated as a termination by Executive without Good Reason if such expiration is by reason of Executive having provided the Company with a notice of non-renewal pursuant to Section 1.

 

 

(g) Notice of Termination.  Any termination of Executive’s employment by the Company for Permanent Disability or for or without Cause, or by Executive for Permanent Disability or for or without Good Reason, shall be communicated by a Notice of Termination to the other party hereto given in accordance with Section 17(c).  For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon; (ii) sets forth in reasonable detail the circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated; and (iii) specifies the Date of Termination (defined below); provided, such Notice of Termination may be conditional if coupled with a notice of the Board’s consideration of “Cause” or Executive’s intention to resign for “Good Reason,” as the case may be, as provided above.  The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not constitute a waiver of any right of Executive or the Company, respectively, hereunder or preclude Executive or the Company, respectively, from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

 

 

(h) Date of Termination.  “Date of Termination” means the date Notice of Termination is given pursuant to Section 17(c) or any later date specified therein; provided, (i) any Notice of Termination pursuant to Section 5(b) shall be effective not less than thirty (30) days after the date given, (ii) any Notice of Termination pursuant to Section 5(c) shall be effective not less than sixty (60) days after the date given, (iii) any Notice of Termination pursuant to Section 5(d) shall be effective not less than sixty (60) days after the date given, and (iv) in every other case any Notice of Termination shall be effective not more than fifteen (15) days after the date given.  In the event of Executive’s death during the Term, the Date of Termination shall be the date of his death.  In the event of expiration of the Term, the Date of Termination shall be the day following the last day of the Term.

 

 

6. Obligations of the Company and Executive upon Termination.  Executive’s entitlements upon termination of employment are set forth below.  Except to the extent otherwise provided in this Agreement, all benefits, including stock option grants, restricted shares, restricted stock units and awards under the Long Term Incentive Programs, shall be subject to the terms and conditions of the plan or arrangement under which such benefits accrue, are granted or are awarded.  For purposes of this Section 6, the term “Accrued Obligations” shall mean, as of the Date of Termination, (i) Executive’s full Base Salary through the Date of Termination, at the rate in effect at the time Notice of Termination is given (disregarding any reduction constituting Good Reason), to the extent not theretofore paid, (ii) the amount of any bonus, incentive compensation, deferred compensation and other cash compensation awarded and accrued (and not forfeited hereunder) to Executive as of the Date of Termination to the extent not theretofore paid, and (iii) any accrued vacation pay, expense reimbursements and other cash entitlements accrued by Executive as of the Date of Termination to the extent not theretofore paid.  For purposes of determining an Accrued Obligation under this Section 6, amounts shall be deemed to accrue ratably over the period during which they are awarded or earned (and not forfeited hereunder), but no discretionary compensation shall be deemed awarded, earned or accrued until it is specifically approved by the Board or the Compensation Committee in accordance with the applicable plan, program or policy.  Unless otherwise specified by the Board, upon any termination of employment, Executive shall resign in writing, from the Board and the Executive Committee of CAM, and all offices, directorships and fiduciary positions of the Company or its affiliates in which Executive is serving.

 

 

(a) Death.  If Executive’s employment is terminated by reason of Executive’s death, then this Agreement shall terminate without further obligations by the Company to Executive’s legal representatives under this Agreement, except as set forth in this Section 6(a) or as contained in an applicable Company plan or program which takes effect at the date of his death, but in no event shall the Company’s obligations be less than those provided by this Agreement:

 

 

(i) Executive’s Accrued Obligations not theretofore paid, paid within thirty (30) days following the Date of Termination;

 

 

(ii) From and after the Date of Termination, Executive’s surviving spouse, other named beneficiaries or other legal representatives, as the case maybe, shall be entitled to receive those, benefits payable to them under the provisions of any plan or program described in Section 3 above;

 

 

(iii) Return of Incentive Payments reinvested in the funds as described in Section 4(a) above, subject to the terms of the fund in which the Incentive Payments were reinvested, paid in accordance with the terms of the applicable funds, and

 

 

(iv) An amount equal to six (6) months of Executive’s annual Base Salary at the rate in effect at the Date of Termination, which amount shall be payable within sixty (60) days following the Date of Termination, and

 

 

(v) A lump sum payment equal to the actual annual cash bonus under the Annual Bonus Programs that Executive would have been awarded for the year in which the Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of days in the calendar year in which the Date of Termination occurs prior to the Date of Termination, and the denominator of which is 365.  Such pro-rated annual cash bonus amount shall be paid when such annual bonuses are paid to non-terminated employee participants in the applicable Annual Bonus Programs (or, if later, upon the satisfaction of all conditions for the payment of benefits hereunder, but in no event shall such payment occur later than March 15 of the calendar year following the year in which the Date of Termination occurs).

 

 

(b) Permanent Disability.  If Executive’s employment is terminated by reason of Executive’s Permanent Disability, then Executive shall be entitled to receive as of the Date of Termination:

 

 

(i) Executive’s Accrued Obligations not theretofore paid, paid within thirty (30) days following the Date of Termination;

 

 

(ii) Disability benefits, if any, at least equal to those then provided by the Company to disabled executives and their families;

 

 

(iii) Executive and Executive’s eligible dependents shall be entitled to receive those benefits payable to them under the provisions of any applicable plan or program described in Section 3 and above;

 

 

(iv) Return of Incentive Payments reinvested in the funds, as described in Section 4(a) above, subject to the terms of the fund in which the Incentive Payments were reinvested, paid in accordance with the terms of the applicable funds;

 

 

(v) An amount equal to six (6) months of Executive’s annual Base Salary at the rate in effect at the time the Notice of Termination is given, which amount shall be payable in six (6) monthly installments, commencing within sixty (60) days following the Date of Termination and the first installment will include any monthly installments not yet paid during such sixty (60)-day period; and

 

 

(vi) A lump sum payment equal to the actual annual cash bonus under the Annual Bonus Programs that Executive would have been awarded for the year in which the Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of days in the calendar year in which the Date of Termination occurs prior to the Date of Termination, and the denominator of which is 365.  Such pro-rated annual cash bonus amount shall be paid when such annual bonuses are paid to non-terminated employee participants in the applicable Annual Bonus Programs (or, if later, upon the satisfaction of all conditions for the payment of benefits hereunder, but in no event shall such payment occur later than March 15 of the calendar year following the year in which the Date of Termination occurs).

 

 

(c) Cause/Other Than for Good Reason.  If Executive’s employment is terminated for Cause by the Company or if Executive terminates Executive’s employment without Good Reason, then (i) within thirty (30) days following the Date of Termination, the Company shall pay Executive his full Base Salary accrued through the Date of Termination, at the rate in effect at the time Notice of Termination is given, to the extent not theretofore paid, and (ii) the Incentive Payments that Executive reinvested in the funds as described in Section 4(a) above, subject to the terms of the fund in which the Incentive Payments were reinvested, shall be returned and paid in accordance with the terms of the applicable funds.

 

 

(d)           Other Than for Cause; Death; Permanent Disability; or For Good Reason.  If the Company terminates Executive’s employment during the Term (x) other than for Cause, (y) as a result of the Executive's death or (z) as a result of Executive's Permanent Disability, or, if Executive terminates Executive’s employment for Good Reason, then:

 

 

(i)   The Company shall pay to Executive the following amounts:

 

 

(A)           In the event of the Executive's Death, the amounts set forth in Section 6(a) above.

 

 

(B)           In the event of the Executive's Permanent Disability, the amounts set forth in Section (6)(b) above.

 

 

(C)           In the event the Company terminates the employment of the Executive without Cause, or the Executive terminates Executive's employment for Good Reason:

 

 

(1) Executive’s Accrued Obligations not theretofore paid, paid within thirty (30) days following the Date of Termination;

 

 

(2) An amount equal to six (6) months of Executive’s annual Base Salary at the rate in effect at the time the Notice of Termination is given (disregarding any reduction constituting Good Reason), which amount shall be payable in six (6) monthly installments (such six (6) month period, the “Salary Continuation Period”), commencing within sixty (60) days following the Date of Termination and the first installment will include any monthly installments not yet paid during such sixty (60)-day period;

 

 

(3) During the Salary Continuation Period, if Executive timely elects continued coverage under COBRA, the Company will reimburse Executive for the monthly COBRA cost of continued health and dental coverage paid by  Executive under health and dental plans of the Company pursuant to Section 4980B of the Internal Revenue Code of 1986, as amended (the “Code”), less the amount that Executive would be required to contribute for health and dental coverage if Executive were an active employee of the Company.  These reimbursements will commence within sixty (60) days following the Date of Termination and will be paid on the first payroll date of each month, provided that Executive demonstrates proof of payment of the applicable premiums prior to the applicable reimbursement payment date, and shall cease prior to the end of the Salary Continuation Period if Executive becomes eligible for comparable from a subsequent employer;

 

 

(4) Return of Incentive Payments reinvested in the funds, as described in Section 4(a) above, subject to the terms of the fund in which the Incentive Payments were reinvested, paid within in accordance with the terms of the applicable funds; and

 

 

(5) A lump sum payment equal to the actual annual cash bonus under the Annual Bonus Programs that Executive would have been awarded for the year in which the Date of Termination occurs, multiplied by a fraction, the numerator of which is the number of days in the calendar year in which the Date of Termination occurs prior to the Date of Termination, and the denominator of which is 365.  Such pro-rated annual cash bonus amount shall be paid when such annual bonuses are paid to non-terminated employee participants in the applicable Annual Bonus Programs (or, if later, upon the satisfaction of all conditions for the payment of benefits hereunder, but in no event shall such payment occur later than March 15 of the calendar year following the year in which the Date of Termination occurs).

 

 

(ii)           The compensation and benefits described in this Section 6(d) shall be in lieu of compensation and benefits provided under any severance plan or agreement of the Company and Executive shall not be entitled to any severance benefits upon a termination of employment except as provided for herein.

 

 

(e)           General Release.  Executive acknowledges and agrees that Executive’s (or Executive’s legal representatives’ in the event of his death) right to receive severance pay and other benefits pursuant to this Section 6 (other than his Accrued Obligations) is contingent upon Executive’s compliance with the Restrictive Covenants (defined below) set forth in Section 11 of this Agreement and Executive’s (or Executive’s legal representatives’ in the event of his death) execution and acceptance of the terms and conditions of, and the effectiveness of, a separation agreement and general release in a form acceptable to the Company, which does not contain any additional or lengthened post-employment restrictions, and does not release Executive's rights to indemnification and D&O and E&O insurance, or any vested rights (the “Release”).  If Executive fails to comply with the covenants set forth in Section 11 or if Executive (or Executive’s legal representatives in the event of his death) fails to execute the Release within the time period provided therein following the Date of Termination or revokes the Release during the seven (7)-day period following his execution of the Release, then Executive (or Executive’s legal representatives in the event of his death) shall not be entitled to any severance payments or other benefits to which Executive (or Executive’s legal representatives in the event of his death) would otherwise be entitled under this Section 6.  Notwithstanding any provision of this Agreement to the contrary, in no event shall the timing of Executive’s execution of the Release, directly or indirectly, result in Executive designating the calendar year of payment, and if a payment that is subject to execution of the Release could be made in more than one taxable year, payment shall be made in the later taxable year.

 

 

7. Non-exclusivity of Rights.  Nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in any benefit, bonus, incentive or other plan or program provided by the Company and for which Executive may qualify, nor shall anything herein limit or otherwise affect such rights as Executive may have under any stock option, restricted shares or other agreement with the Company or any of its affiliated companies.  Except as otherwise provided herein, amounts and benefits which are vested benefits or which Executive is otherwise entitled to receive under any plan, program, agreement or arrangement of the Company at or subsequent to the Date of Termination shall be payable in accordance with such plan or program.

 

 

8. No Set-Off; No Mitigation.  Except as provided herein, the Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including any set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others.  In no event shall Executive be obligated to seek other employment or take any other action by way of mitigation of the amounts payable to Executive under any of the provisions of this Agreement, and such amounts shall not be reduced whether or not Executive obtains other employment.

 

 

9. Governing Law, Jurisdiction, Waiver of Jury Trial.                                                                                     This Agreement shall be governed by and construed in accordance with the laws of the State of New York (except Section 14 which shall be governed by the laws of the State of Delaware) in accordance with choice of law provisions thereof, without reference to principles of conflict of laws.  Any suit, action or proceeding arising out of or relating to this Agreement against any of the parties hereto or any of the assets of any of such parties shall be brought in any courts located in DuPage County or in the U.S. District Court for the Northern District, Eastern Division of Illinois, and each of the parties hereto hereby irrevocably and unconditionally submits to the exclusive jurisdiction of such courts over the subject matter of any such suit, action or proceeding.  Each of the parties hereto each irrevocably waives and agrees not to raise any objection it might now or hereafter have to any such suit, action or proceeding in any such court including, without limitation, any objection that the place where such court is located is an inconvenient forum or that there is any other suit, action or proceeding in any other place relating in whole or in part to the same subject matter.

 

 

EACH PARTY HERETO HEREBY ABSOLUTELY, IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREIN, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. EACH OF THE PARTIES HERETO AGREES THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF THIS PARAGRAPH AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT OR ANY PROVISION HEREOF. THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.

 

 

10. Entire Agreement.  Executive acknowledges and agrees that this Agreement includes the entire agreement and understanding between the parties and supersedes any prior agreements, written or oral, with respect to the subject matter hereof, including the termination of Executive’s employment during the Term and all amounts to which Executive shall be entitled whether during the Term or thereafter and all restrictive covenants to which Executive may be subject.  Executive also acknowledges and agrees that Executive’s right to receive severance pay and other benefits pursuant to Section 6 of this Agreement is contingent upon Executive’s compliance with the Restrictive Covenants set forth in Section 11 of this Agreement.

 

 

11. Executive’s Covenants.

 

 

(a) Executive’s Acknowledgment.  Executive agrees and acknowledges that in order to assure the Company that it will retain its value and that of the Business (defined below) as a going concern, it is necessary that Executive not utilize special knowledge of the Business and its relationships with customers to compete with the Company or its affiliates.  For purposes of this Agreement, “Business” means the provision of investment management, investment advisory, portfolio management, financial analysis, research or similar services relating to the investment of international or domestic equity or debt securities or other activities or services of the type provided by the Company or its affiliates to its clients on a worldwide basis including, without limitation, open-end and closed-end, registered and unregistered, investment companies (“Funds”), and the direct and indirect sale and/or distribution of equity interests in the Funds; and “Competing Activity” or “Competing Activities” means engaging in the Business. Executive further acknowledges that:

 

 

(i) The Company and its affiliates are and will be engaged in the Business during the Term and thereafter;

 

 

(ii) Executive will occupy a position of trust and confidence with the Company, and during the Term, Executive will become familiar with the Company’s and its affiliates’ trade secrets and with other proprietary and Confidential Information concerning the Company, its affiliates and the Business;

 

 

(iii) The agreements and covenants contained in this Section 11 are essential to protect the Company and its affiliates, the near permanent client relationships and the goodwill of the Business and compliance with such agreements and covenants will not impair Executive’s ability to procure subsequent and comparable employment; and

 

 

(iv) Executive’s employment with the Company has special, unique and extraordinary value to the Company and its affiliates and the Company and its affiliates would be irreparably damaged if Executive were to provide services to any person or entity in violation of the provisions of this Agreement.

 

 

(b) Confidential Information.  For purposes of this Agreement, “Confidential Information” shall mean trade secrets and other proprietary information concerning the products, processes or services of the Company or any of its affiliates, which information (i) has not been made generally available to the public, and is useful or of value to Company’s current or anticipated business activities or of those of any affiliate or client of the Company or its affiliates; or (ii) has been identified to Executive as confidential, either orally or in writing, including, but not limited to: computer programs; research and other statistical data and analyses; marketing, organizational or other research and development, or business plans; personnel information, including the identity of other executives of the Company, their responsibilities, competence, abilities, and compensation; financial, accounting and similar records of Company, its affiliates and/or any Fund or account managed by the Company or its affiliates (such Funds or accounts referred to herein as “Company Funds”); current and prospective client lists and information on clients and their Executives; client investment objectives, the nature of their investment portfolios and contractual agreements with the Company or its affiliates; information concerning planned or pending investment products, acquisitions or divestitures; information concerning the marketing and/or sale or distribution of equity interests in the Funds; and analysis and reports relating to investment performance of Company Accounts (defined below). Confidential Information shall not include information which: (a) is in or hereafter enters the public domain through no fault of Executive; (b) is obtained by Executive from a third party having the legal right to use and disclose the same; or (c) is in the possession of Executive prior to receipt from the Company (as evidenced by Executive’s written records pre-dating the date of employment).  All notes, reports, plans, published memoranda or other documents created, developed, generated or held by Executive during employment, concerning or related to the Company’s or its affiliates business, and whether containing or relating to Confidential Information or not, and all tangible personal property of the Company or its affiliates entrusted to Executive or in Executive’s direct or indirect possession or control, in whatever form maintained or stored by Executive, including on computer or electronic storage device, are the property of the Company, and will be promptly delivered to the Company and not thereafter used by Executive upon request by the Company during Executive’s employment or upon termination of Executive’s employment for any reason whatsoever.

 

 

(c) Non-Disclosure.  Executive agrees that during employment with the Company (including any employment following the Term) and at all times thereafter, Executive shall not reveal to any competitor or other person or entity (other than current employees of the Company) any Confidential Information regarding clients that Executive obtains while performing services for the Company, except as may be required in Executive’s reasonable judgment to fulfill his duties hereunder.

 

 

(d) Non-Compete.  During the term of Executive’s employment with the Company and, after such termination of employment, for a period after such termination ending upon the first anniversary of the Date of Termination, which shall be reduced to a period of six (6) months after termination of employment if the termination of employment is by the Company without Cause or by Executive for Good Reason (such period the “Post-Termination Non-Compete Period”), Executive shall not, directly or indirectly, on his behalf or another’s behalf, engage in, or own or control any interest in, or act as an officer, director or employee of, or consultant, advisor or lender to any firm, corporation, institution, business or entity (each an “Entity”) directly or indirectly engaged in the Business.

 

 

(e) Non-Solicitation.  Executive understands that accounts managed by the Company or its affiliates (such proprietary Funds, accounts and any other client account managed by the Company or its affiliates, the “Company Accounts”) and the investment performance of any Company Account and Company’s relationships with its clients and employees are extremely valuable and are the result of the expenditure of substantial time, effort and resources by the Company.  Therefore, during the period of Executive’s employment and for the two (2)-year period following the Date of Termination (except as set forth in Section 11(e)(iv)), Executive agrees that he will not, directly or indirectly, on his behalf or another’s behalf:

 

 

(i) Solicit the Company’s or its affiliates’ clients to provide, offer to provide, or provide to any such clients, services or products of the kind generally offered or provided by Company or its affiliates or to induce such clients to terminate or diminish their relations with the Company or its affiliates; or

 

 

(ii) Solicit, induce or encourage any person who is then in an employee, consultant or contractor of the Company or its affiliates to leave his or her employment, agency or office with Company or its affiliates, or employ or be employed with any such person or persons, for the purpose of providing or offering to provide, services or products of the kind generally offered by Company or its affiliates; or

 

 

(iii) Maintain a relationship of the type described in Section 11(d) above with any Entity which refers to the Company, any Company Account or the investment performance thereof, or Executive’s prior association with Company or any Company Account in any public filing or in any advertisement or marketing of any service or product which is a Competing Activity.

 

 

(iv) For the six (6)-month period following the Date of Termination, solicit the Company’s or its affiliates’ prospective clients to provide, offer to provide, or provide to any such prospective clients, services or products of the kind generally offered or provided by Company or its affiliates or to induce such prospective clients to terminate or diminish their relations with the Company or its affiliates.  For purposes of this Agreement, “prospective client” shall refer to any entity or person to which the Company or its affiliates made a presentation or written proposal to such entity during the twelve (12) month period preceding Executive’s Date of Termination or was preparing to make such a presentation or proposal at the time of Executive’s Date of Termination.

 

 

(f) Notwithstanding the foregoing, nothing in Sections 11(d) or (e) shall prohibit Executive or any other person or Entity from referring to information described in said Sections, provided such reference is not made in advertising or marketing in newspapers, magazines, trade journals or other public media, or direct advertising or marketing materials, and such information is limited to the extent that (i) such information is contained in any SEC filings previously made by the Company, or (ii) reference to such information is otherwise required by law.  The Company and Executive agree that, based on applicable rules, regulations and court decisions in effect as of the date this Agreement is entered into, information relating to the investment performance of any Company Account is not information reference to which “is otherwise required by law” within the meaning of said clause (ii).  In addition, this Section 11 shall not prohibit Executive from being a passive owner of not more than two percent (2%) of the outstanding shares of any class of securities of an Entity whose securities are publicly traded, so long as Executive does not have any active participation in the business of such Entity.

 

 

(g) Non-Disparagement.   Subject to applicable legal requirements, Executive agrees that he will not disparage the Company or any of its affiliates, and their respective officers, directors, investors, employees, and agents, or their respective successors and assigns, or make any public statement reflecting negatively on the Company,  its affiliates, or their respective officers, directors, investors, employees, or agents, or their respective successors and assigns, to third parties, including, but not limited to, any matters relating to the operation or management of the Company or any of its affiliates, irrespective of the truthfulness or falsity of such statement.  Subject to applicable legal requirements, the Company will direct the members of the Company's Executive Committee and Board, its officers, and employees working in its corporate communications, public relations, human resources and legal operations, and their parallel units in the Company's affiliates and subsidiaries, not to disparage you, including, but not limited to, any matters relating to the operation or management of the Company or any of its affiliates, irrespective of the truthfulness or falsity of such statement.

 

 

(h) Non-Exclusive Remedy for Restrictive Covenants.  Executive acknowledges and agrees that the covenants set forth in this Section 11 (collectively, the “Restrictive Covenants”) are reasonable and necessary for the protection of the Company’s business interests, that irreparable injury will result to the Company if Executive breaches any of the terms of the Restrictive Covenants, and that in the event of Executive’s actual or threatened breach of any such Restrictive Covenants, the Company will have no adequate remedy at law.  Executive accordingly agrees that in the event of any actual or threatened breach by him of any of the Restrictive Covenants, the Company shall be entitled to immediate temporary injunctive and other equitable relief, without the necessity of showing actual monetary damages or the posting of bond.  Nothing contained herein shall be construed as prohibiting the Company from pursuing any other remedies available to it for such breach or threatened breach, including the recovery of damages.  The duration of a Restrictive Covenant shall be extended by such time during which such breach or threatened breach continues without cure by Executive.

 

 

12.    Section 409A.

 

 

(a) This Agreement is intended to comply with Section 409A of the Code and its corresponding regulations, or an exemption, and payments may only be made under this Agreement upon an event and in a manner permitted by Section 409A of the Code, to the extent applicable.  Severance benefits under the Agreement are intended to be exempt from Section 409A of the Code under the “short-term deferral” exception, to the maximum extent applicable, and then under the “separation pay” exception, to the maximum extent applicable.  Notwithstanding anything in this Agreement to the contrary, if required by Section 409A of the Code, if Executive is considered a “specified employee” for purposes of Section 409A of the Code and if payment of any amounts under this Agreement is required to be delayed for a period of six (6) months after separation from service pursuant to Section 409A of the Code, payment of such amounts shall be delayed as required by Section 409A of the Code, and the accumulated amounts shall be paid in a lump sum payment within ten days after the end of the six (6) month period.  If Executive dies during the postponement period prior to the payment of benefits, the amounts withheld on account of Section 409A of the Code shall be paid to the personal representative of Executive’s estate within sixty (60) days after the date of Executive’s death.

 

 

(b) All payments to be made upon a termination of employment under this Agreement may only be made upon a “separation from service” under Section 409A of the Code.  For purposes of Section 409A of the Code, each payment shall be treated as a separate payment and the right to a series of installment payments under this Agreement shall be treated as a right to a series of separate payments.  In no event may Executive, directly or indirectly, designate the calendar year of a payment.   All reimbursements and in-kind benefits provided under the Agreement shall be made or provided in accordance with the requirements of Section 409A of the Code, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during the period of time specified in this Agreement, (ii) the amount of expenses eligible for reimbursement, or in kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in kind benefits to be provided, in any other calendar year, (iii) the reimbursement of an eligible expense will be made no later than the last day of the calendar year following the year in which the expense is incurred, and (iv) the right to reimbursement or in kind benefits is not subject to liquidation or exchange for another benefit.

 

 

13.           Cooperation.   During the Term and thereafter, Executive shall cooperate with the Company and its affiliates, upon the Company’s reasonable request, with respect to any internal investigation or administrative, regulatory or judicial proceeding involving matters within the scope of Executive’s duties and responsibilities to the Company and any of its affiliates during the Term (including, without limitation, Executive being available to the Company upon reasonable notice for interviews and factual investigations, appearing at the Company’s reasonable request to give testimony without requiring service of a subpoena or other legal process, and turning over to the Company all relevant documents of the Company or any of its affiliates, which are or may come into Executive’s possession during the Term).

 

 

14.           Indemnification.  The Company agrees that if Executive is made a party to or involved in, or is threatened to be made a party to or otherwise to be involved in, any action, suit or proceeding, whether civil, criminal, administrative or investigative (a “Proceeding”), by reason of the fact that he is or was a director, officer or employee of the Company, Executive shall be indemnified and held harmless by the Company against any and all liabilities, losses, expenses, judgments, penalties, fines and amounts reasonably paid in settlement in connection therewith, and shall be advanced reasonable expenses (including attorneys’ fees) as and when incurred in connection therewith, to the fullest extent legally permitted or authorized by the Company’s By-laws or, if greater, by the laws of the State of Delaware, as may be in effect from time to time. The rights conferred on Executive by this Section 14 shall not be exclusive of any other rights which Executive may have or hereafter acquire under any statute, the By-laws, agreement, vote of stockholders or disinterested directors, or otherwise.  The indemnification and advancement of expenses provided for by this Section 14 shall continue as to Executive after he ceases to be a director, officer or employee and shall inure to the benefit of his heirs, executors and administrators.

 

 

15.           Successors.

 

 

(a) This Agreement is personal to Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

 

 

(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors. It shall not be assignable by the Company or its successors except in connection with the sale or other disposition of all or substantially all the assets or business of the Company.  The Company shall require any successor to all or substantially all of the business or assets of the Company, whether direct or indirect, by purchase, merger, consolidation, acquisition of stock, or otherwise, by an agreement in form and substance reasonably satisfactory to Executive, expressly to assume and agree to perform this Agreement in the same manner and to the same extent as the Company would be required to perform if no such succession had taken place.

 

 

16.           Amendment; Waiver.  This Agreement contains the entire agreement between the parties with respect to the subject matter hereof and may be amended, modified or changed only by a written instrument executed by Executive and the Company.  No provision of this Agreement may be waived except by a writing executed and delivered by the party sought to be charged.  Any such written waiver will be effective only with respect to the event or circumstance described therein and not with respect to any other event or circumstance, unless such waiver expressly provides to the contrary.

 

 

17.           Miscellaneous.

 

 

(a) The provisions of Section 6 (Obligations of the Company upon Termination), Section 8 (No Set-Off; No Mitigation), Section 9 (Arbitration of Disputes), Section 11 (Executive’s Covenants), Section 14 (Indemnification), Section 15 (Successors), Section 16(Amendment; Waiver) and this Section 17(a) shall survive the termination of Executive’s employment with the Company for any reason, or the expiration of the Term of the Agreement pursuant to Section 1, and shall thereafter remain in full force and effect.

 

 

(b) In the event of any inconsistency between this Agreement and any other agreement, plan, program, policy or practice (collectively, “Other Provision”) of the Company, the terms of this Agreement shall control unless such Other Provision provides otherwise by a specific reference to this Section 17(b).

 

 

(c) All notices, demands or other communications to be given or delivered under or by reason of the provisions of this Agreement shall be in writing and shall be deemed to have been duly given (i) the following business day after deposit from within the United States with a reputable express courier service (charges prepaid), (ii) three (3) days after mailing by certified or registered mail, return receipt requested and postage prepaid, or (iii) upon receipt in all other cases.  Such notices, demands and other communications shall be sent to the addresses indicated below:

 

If to the Company:

Calamos Advisors LLC

1111 E. Warrenville Road

Naperville, IL 60563

Attn: General Counsel

If to Executive:

Address per the Company records

With a copy (which shall not constitute notice, to:)

Katten Muchin Rosenman LLP

575 Madison Avenue

New York, NY 10022

Attn: Steven Eckhaus Esq.

Steven.eckhaus@kattenlaw.com

or to such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party.

 

 

(d) Any provision of this Agreement which is prohibited or unenforceable in any jurisdiction will, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof, and any such prohibition or unenforceability in any jurisdiction will not invalidate or render unenforceable such provision in any other jurisdiction.

 

 

(e) All compensation payable to Executive from the Company shall be subject to all applicable withholding taxes, normal payroll withholding and any other amounts required by law to be withheld.

 

 

(f) Executive agrees that Executive will be subject to any compensation clawback, recoupment and anti-hedging policies that may be applicable to all peer executives to Executive as an executive of the Company, as in effect from time to time and as approved by the boards of directors or managers of the Company or its affiliates or a duly authorized committee thereof

 

 

(g) Holdings, CAM and all other Company affiliates are intended third party beneficiaries of this Agreement with the authority to enforce the provisions of this Agreement for the benefit of the Company and its affiliates as if they were parties hereto.

 

 

(h) This Agreement may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same Agreement.

 

 

(i) The descriptive headings in this Agreement are inserted for convenience of reference only and are not intended to be part of or to affect the meaning or interpretation of this Agreement. The use of the word “including” in this Agreement shall be by way of example rather than by limitation.

 

 

(j) The language used in this Agreement will be deemed to be the language chosen by the parties hereto to express their mutual intent, and no rule of strict construction will be applied against any party hereto.  Neither Executive nor the Company shall be entitled to any presumption in connection with any determination made hereunder in connection with any arbitration, judicial or administrative proceeding relating to or arising under this Agreement.

 

[Signature Page Follows]

 

	
DB1/ 70682591.11

 

  

  

  

IN WITNESS WHEREOF, each of the parties hereto has duly executed this Executive Employment Agreement as of the date and year first set forth above.

 

CALAMOS ADVISORS LLC

By:           Calamos Investments LLC,

its Manager

By:           Calamos Asset Management, Inc.,

its Manager

By:       /s/ James J. Boyne                                                                

           James J. Boyne,

Executive Vice President and

Chief Operating Officer

EXECUTIVE

/s/ Gary D. Black                                                                           

Gary D. Black

 

Signature Page to Executive Employment Agreement

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