Document:

EX-10.19

 
  
  

	
	

 

 Exhibit 10.19 

MEMORANDUM OF AGREEMENT 
  

			
		  	 Norwegian Shipbrokers’ Association’s

Memorandum of Agreement for sale and

purchase of ships. Adopted by BIMCO in 1956.

Code-name
 SALEFORM 2012

Revised 1966, 1983 and 1986/87, 1993 and 2012

 Dated: 7 July 2014 

Maersk Tankers Singapore Pte. Ltd. (Name of sellers), hereinafter called the “Sellers”, have agreed to sell, 

and  
 Euronav NV or its fully guaranteed nominee
pursuant to the Framework Agreement (Name of buyers), hereinafter called the “Buyers”, have agreed to buy: 
 Name of vessel: 

IMO Number: 
 Classification Society: American Bureau of
Shipping 
 Class Notation: 
  

					
	Year of Build: 	  	Builder/Yard: 
			
	Flag: Singapore	  	Place of Registration: Singapore	  	GT/NT: 

 hereinafter called the “Vessel”, on the following terms and conditions: 

Definitions 
 “Banking Days” are days on which
banks are open both in New York, Singapore, London, Antwerp and Copenhagenthe country of the currency stipulated for the Purchase Price in Clause 1 (Purchase Price) and in the place of closing stipulated
in Clause 8 (Documentation) and          (add additional jurisdictions as appropriate). 

“Buyers’ Nominated Flag State” means TBN (state flag state). 

“Class” means the class notation referred to above. 

“Classification Society” means the Society referred to above. 

“Deposit” shall have the meaning given in Clause 2 (Deposit) 

“Deposit Holder” means          (state name and location of Deposit Holder) or, if left
blank, the Sellers’ Bank, which shall hold and release the Deposit in accordance with this Agreement. 
 “Framework Agreement” means the
agreement governing the terms for the sale of 4 VLCC vessels, entered into on the same date as this Agreement between the Sellers and Buyers. 

“In writing” or “written” means a letter handed over from the Sellers to the Buyers or vice versa, a registered letter, e-mail or
telefaxin accordance with Clause 21 of the Framework Agreement. 
 “Parties” means the Sellers and the Buyers. 

“Purchase Price” means the price for the Vessel as stated in Clause 1 Clause 4 and Appendix 2 of the
Framework Agreement (Purchase Price). 
 “Sellers’ Account” means          (state details of
bank account) at the Sellers’ Bank. 
 “Sellers’ Bank” means          (state name
of bank, branch and details) or, if left blank, the bank notified by the Sellers to the Buyers for receipt of the balance of the Purchase Price. 

Save as specifically defined in this Agreement the definitions used in the Framework Agreement shall have the same meaning in this Agreement. 

 

	1.	Purchase Price 

  

	  	The Purchase Price is          (state currency and amount both in words and figures)See Clause 4 and Appendix 2 of the Framework
Agreement. 

  

	2.	Deposit 

  

	  	See Clause 4 of the Framework Agreement.As security for the correct fulfilment of this Agreement the Buyers shall ledge a deposit of     %
(     per cent) or, if left blank, 10% (ten per cent), of the Purchase Price (the “Deposit”) in an interest bearing account for the Parties with the Deposit Holder within three (3) Banking Days
after the date that: 

  

	 	(i)	this Agreement has been signed by the Parties and exchanged in original or by e-mail or telefax; and 

  

	 	(ii)	the Deposit Holder has confirmed in writing to the Parties that the account has been opened

 

  

	
	

  

	
	This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.

 

	
	

 

  

	  	The Deposit shall be released in accordance with joint written instructions of the Parties interest, if any, shall be credited to the Buyers. Any fee charged for holding and releasing the Deposit shall be borne
equally by the Parties. The Parties shall provide to the Deposit Holder all necessary documentation to open and maintain the account without delay. 

  

	3.	Payment 

  

	  	See Clause 4 of the Framework Agreement. 

  

	  	On delivery of the Vessel, but not later than three (3) Banking Days after the date that Notice of Readiness has been given in accordance with Clause 5 (Time and place of delivery
and notices): 

  

	 	(i)	the Deposit shall be released to the Sellers; and 

  

	 	(ii)	the balance of the Purchase Price and all other sums payable on delivery by the Buyers to the Sellers under this Agreement shall be paid in full free of bank charges to the Sellers’ Account.

  

	4.	Inspection 

  

	  	(a)* The Buyers have inspected and accepted the Vessel’s classification records. The Buyer’s have also inspected the Vessel at/in
         (state place) on          (state date) and have accepted the Vessel following this inspection and the sale is
outright at definite, subject only to the terms and conditions of this Agreement. 

  

	  	The Buyers have inspected and accepted the Vessel’s classification records. The Buyers have waived their right to physically inspect the Vessel, and as a consequence the Buyers accept that the sale is outright
and definite, subject only to the terms and conditions of this Agreement and the Framework Agreement. 

  

	  	(b)* The Buyers shall have the right to inspect the Vessel’s classification records and declare whether same are accepted or not within         
(state date/period). 

  

	  	The Sellers shall make the Vessel available for inspection at/in          (state place/range) within
         (state date/period). 

  

	  	The Buyers shall undertake the inspection without undue delay to the Vessel. Should the Buyers cause undue delay they shall compensate the Sellers for the losses thereby incurred. 

 

	  	The Buyers shall inspect the Vessel without opening up and without cost to the Sellers. 

  

	  	During the inspection, the Vessel’s deck and engine log books shall be made available for examination by the Buyers. 

 

	  	The sale shall become outright and definite, subject only to the terms and conditions of this Agreement, provided that the Sellers receive written notice of acceptance of the Vessel from the Buyers within
seventy two (72) hours after completion of such inspection or after the date/last day of the period stated in Line 59, whichever is earlier. 

 

	  	Should the Buyers fail to undertake the inspection as scheduled and/or notice of acceptance of the Vessel’s classification records and/or of the Vessel not be received by the Sellers as aforesaid, the
Deposit together with interest earned, if any, shall be released immediately to the Buyers, whereafter this Agreement shall be null and void. 

  

	*	4(a) and 4(b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 4(a) shall apply. 

 

	5.	Time and place of delivery and notices 

  

	  	See Clause 5 of the Framework Agreement. 

  

	  	(a) The Vessel shall be delivered and taken over safely afloat at a safe and accessible berth or anchorage at/in any area or port worldwide (state
place/range) in the Seller’s option, but excluding any area or port within (i) the jurisdiction of the West Coast of the United States of America; and (iii) any nation prohibited under the laws
of the United States of America, the United Nations or the European Union. 

 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
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	    	Notice of Readiness shall not be tendered before:                      (date)

  

	    	Cancelling Date (see Clauses 5(c), 6 (a)(i), 6 (a) (iii) and 14): See Clause 9.2 of the Framework Agreement 

 

	    	(b) The Sellers shall keep the Buyers well informed of the Vessel’s itinerary and shall provide the Buyers with twenty (20), fifteen (15), ten (10), five (5) and three (3) days’ notice
of the date the Sellers intend to tender Notice of Readiness and of the intended range/place of delivery. 

  

	    	When the Vessel is at the place of delivery and physically ready for delivery in accordance with this Agreement, the Sellers shall give the Buyers a written Notice of Readiness for delivery. 

 

	    	(c) If the Sellers anticipate that, notwithstanding the exercise of due diligence by them, the Vessel will not be ready for delivery by the Cancelling Date they may notify the Buyers in writing stating the date
when they anticipate that the Vessel will be ready for delivery and proposing a new Cancelling Date. Upon receipt of such notification the Buyers shall have the option of either cancelling this Agreement in accordance with Clause 14
(Sellers’ Default) within three (3) Banking Days of receipt of the notice or of accepting the new date as the new Cancelling Date. If the Buyers have not declared their option within three (3) Banking Days of receipt of the
Sellers’ notification or if the Buyers accept the new date, the date proposed in the Sellers’ notification shall be deemed to be the new Cancelling Date and shall be substituted for the Cancelling Date stipulated in line 79.

  

	    	If this Agreement is maintained with the new Cancelling Date all other terms and conditions hereof including those contained in Clauses 5(b) and 5(d) shall remain unaltered and in full force and effect.

  

	    	(d) Cancellation, failure to cancel or acceptance of the new Cancelling Date shall be entirely without prejudice to any claim for damages the Buyers may have under Clause 14
(Sellers’ Default) for the Vessel not being ready by the original Cancelling Date. 

  

	    	(e) Should the Vessel become an actual, constructive or compromised total loss before delivery the Deposit together with interest earned, if any, shall be released immediately to the Buyers whereafter
this Agreement shall be null and void. 

  

	6.	Divers Inspection / Drydocking 

  

	 	(a)*	     

  

	 	(i)	The Buyers shall have the option at their cost and expense to arrange for an underwater inspection by a diver approved by the Classification Society prior to the delivery of the Vessel at the Delivery Port as
defined in the Framework Agreement. If Clause 5.2 of the Framework Agreement is applicable and the Vessel is to be delivered in international waters, the Buyers shall instead have the right to arrange for an underwater inspection of the Vessel at
the last discharge port prior to delivery. Such option shall be declared latest nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this
Agreement. The Sellers shall at their cost and expense make the Vessel available for such inspection. This inspection shall be carried out without undue delay and in the presence of a Classification Society surveyor arranged for by the Sellers and
paid for by the Buyers. The Buyers’ representative(s) shall have the right to be present at the diver’s inspection as observer(s) only without interfering with the work or decisions of the Classification Society surveyor. The extent of the
inspection and the conditions under which it is performed shall be to the satisfaction of the Classification Society. If the conditions at the place of delivery are unsuitable for such inspection, the Sellers shall at their cost and expense make the
Vessel available at a suitable alternative place near to the delivery port, in which event the Cancelling Date shall be extended by the additional time required for such positioning and the subsequent re-positioning. The Sellers may not tender
Notice of Readiness prior to completion of the underwater inspection. 

  

	 	(ii)	If the rudder, propeller, bottom or other underwater parts below the deepest load line are found broken, damaged or defective so as to affect the Vessel’s class, then (1) unless repairs can be carried
out afloat to the satisfaction of the Classification Society, the Sellers shall arrange for the Vessel to be drydocked at their expense for inspection by the Classification Society of the Vessel’s underwater parts below the deepest load line,
the extent of the inspection being in accordance with the Classification Society’s rules (2) such defects shall be made good by the Sellers at their cost and expense to the satisfaction of the Classification Society without
condition/recommendation** and (3) the Sellers shall pay for the underwater inspection and the Classification Society’s attendance.

 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
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	 	    	Notwithstanding anything to the contrary in this Agreement, if the Classification Society do not require the aforementioned defects to be rectified beforeuntil the next class drydocking survey,
the Sellers shall be entitled to deliver the Vessel with these defects against a deduction from the Purchase Price of the estimated direct cost (of labour and materials) of carrying out the repairs to the satisfaction of the Classification Society,
whereafter the Buyers shall have no further rights whatsoever in respect of the defects and/or repairs, the scope of repairs shall be ascertained and endorsed by the Classification Society. The estimated direct cost of the repairs
shall be the average of quotes for the repair work obtained from two reputable independent shipyards at or in the UAE-Japan Range, excl. Chinese shipyards vicinity of the port of delivery, one to be obtained
by each of the Parties within twofour (24) Banking Days from the date of theon which the Classification Society ascertained and endorsed the scope of repairs
imposition of the condition/recommendation, unless the Parties agree otherwise. Should either of the Parties fail to obtain such a quote within the stipulated time then the quote duly obtained by the other Party shall be the sole basis for
the estimate of the direct repair costs. The Sellers may not tender Notice of Readiness prior to such estimate having been established. 

  

	 	(iii)	If the Vessel is to be drydocked pursuant to Clause 6(a)(ii) and no suitable dry-docking facilities are available at the port of delivery, the Sellers shall take the Vessel to a port where suitable
drydocking facilities are available, whether within or outside the delivery range as per Clause 5(a). Once drydocking has taken place the Sellers shall deliver the Vessel at a port within the delivery range as per Clause 5(a) which
shall, for the purpose of this Clause, become the new port of delivery. In such event the Cancelling Date shall be extended by the additional time required for the drydocking and extra steaming, but limited to a maximum of fourteen (14) days.

 (b)* The Sellers shall place the Vessel in drydock at the port of delivery for inspection by the
Classification Society of the Vessel’s underwater parts below the deepest load line, the extent of the inspection being in accordance with the Classification Society’s rules. If the rudder, propeller, bottom or other underwater parts below
the deepest load line are found broken, Sellers’ cost and expense to the satisfaction of the Classification Society without condition/recommendation**. In such event the Sellers are also to pay for the costs and expenses in connection with
putting the Vessel in and taking her out of drydock, including the drydock dues and the Classification Society’s fees. The Sellers shall also pay for these costs and expenses if parts of the tailshaft system are condemned or found defective or
broken so as to affect the Vessel’s class. In all other cases, the Buyers shall pay the aforesaid costs and expenses, dues and fees. 

(c) If the Vessel is drydocked pursuant to Clause 6 (a)(ii) or 6 (b) above: 

 

	 	(i)	The Classification Society may require survey of the tailshaft system, the extent of the survey being to the satisfaction of the Classification surveyor. If such survey is not required by the Classification Society, the
Buyers shall have the option to require the tailshaft to be drawn and surveyed by the Classification Society, the extent of the survey being in accordance with the Classification Society’s rules for tailshaft survey and consistent with the
current stage of the Vessel’s survey cycle. The Buyers shall declare whether they require the tailshaft to be drawn and surveyed not later than by the completion of the inspection by the Classification Society. The drawing and refitting of the
tailshaft shall be arranged by the Sellers. Should any parts of the tailshaft system be condemned or found defective so as to affect the Vessel’s class, those parts shall be renewed or made good at the Sellers’ cost and expense to the
satisfaction of Classification Society without condition/recommendation**. 

  

	 	(ii)	The costs and expenses relating to the survey of the tailshaft system shall be borne by the Buyers unless the Classification Society requires such survey to be carried out or if parts of the system are condemned
or found defective or broken so as to affect the Vessel’s class, in which case the Sellers shall pay these costs and expenses. 

  

	 	(iii)	The Buyers’ representative(s) shall have the right to be present in the drydock, as observer(s) only without interfering with the work or decisions of the Classification Society surveyor. 

 

	 	(iv)	 The Buyers shall have the right to have the underwater parts of the Vessel cleaned and painted at their risk, cost and expense without
interfering with the Sellers’ or the Classification Society surveyor’s work, if any, and without affecting the Vessel’s timely delivery. If, however, the Buyers’ work in drydock is still in progress when the

 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
 4 

 

 

	 	
Sellers have completed the work which the Sellers are required to do, the additional docking time needed to complete the Buyers’ work shall be for the Buyers’ risk, cost and expense. In
the event that the Buyers’ work requires such additional time, the Sellers may upon completion of the Sellers’ work tender Notice of Readiness for delivery whilst the Vessel is still in drydock and, notwithstanding Clause 5(a), the
Buyers shall be obliged to take delivery in accordance with Clause 3 (Payment), whether the Vessel is in drydock or not. 

  

	*	6 (a) and 6 (b) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 6 (a) shall apply. 

	**	Notes or memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. 

 

	7.	Spares, bunkers and other items 

  

	  	The Sellers shall deliver the Vessel to the Buyers with everything belonging to her on board and on shore. All spare parts and spare equipment including spare tail-end shaft(s) and/or spare propeller(s)/propeller
blade(s), if any, belonging to the Vessel at the time of inspection used or unused, whether on board or not and in the warehouse at shore shall become the Buyers’ property, but spares on order are excluded. Forwarding charges, if any,
shall be for the Buyers’ account. The Sellers are not required to replace spare parts including spare tail-end shaft(s) and spare propeller(s)/propeller blade(s) which are taken out of spare and used as replacement prior to delivery, but the
replaced items shall be the property of the Buyers. Unused stores and provisions shall be included in the sale and be taken over by the Buyers without extra payment. 

 

	  	Library and forms exclusively for use in the Sellers’ vessel(s) and captain’s, officers’ and crew’s personal belongings including the slop chest are excluded from the sale without compensation, as
well as the following additional items: 

  

	 	•	 	log books for deck/engine/Cargo ops 

  

	 	•	 	pictures and paintings in the Sellers’ option 

  

	 	•	 	welfare equipment 

  

	 	•	 	documents directly related to present ownership 

  

	 	•	 	documents which have to be returned to the authorities 

  

	 	•	 	all forms etc. which are related to the present ownership 

  

	 	•	 	the Vessel’s maintenance system for hull and machinery, however, Sellers shall deliver to the Buyers ship specific PMS database in the format that comes out of Shipnet 

 

	 	•	 	computer software for pc’s either developed by or licensed to the Sellers except loadmaster computer which is included in the sale 

 

	 	•	 	software for chart corrections and nautical documents 

  

	 	•	 	ship’s bell (will be replaced by Sellers with a generic ship’s bell of equal or better quality) 

  

	 	•	 	digital cameras and mobile telephones 

  

	 	•	 	all hired and rented equipment such as videotel, Unitor/Drew bottles 

  

	 	•	 	EPIRB, SAT D etc hardware will remain onboard, but subscriptions will be cancelled/reprogrammed 

  

	 	•	 	administrative LAN server 

  

	 	•	 	Scanjets including hoses and fittings (if any) 

  

	  	(include list) 

  

	  	Items on board which are on hire or owned by third parties, listed as follows, are excluded from the sale without compensation: Sellers will latest 30 days prior to the anticipated delivery date
provide a list to Buyers of items onboard which are on hire or owned by third parties. (include list) Items on board at the time of inspection which are on hire or owned by third parties, not listed above, shall be replaced or
procured by the Sellers prior to delivery at their cost and expense. 

  

	  	The Buyers shall take over the remaining bunkers and unused lubricating and hydraulic oils and greases in storage tanks and unopened drums at the port and date of delivery and for bunkers pay the actual supplied net
price on a FIFO basis as evidenced by invoices or vouches. For the unused lubricating and hydraulic oils and greases the Buyers shall pay its own average prices as follows (all prices in USD/HL): 

 

	  	ME Cylinder oil: 173.79 

	  	ME Engine system oil: 144.24 

	  	Generator (A/E) system oil: 170.17 

	  	Hydraulic oil: 459.35 

	  	Turbine oil: 408.90 

	  	Gear oil: 505.92 

 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
 5 

 

 

  

	  	For the unused oils and greases not included In the above mentioned price list Buyers shall pay the list prices of the latest supplier applicable in the port of Singapore (at the time of delivery of the relevant
supply of products) minus 20% for the quantities taken over. 

  

	  	Quantities of the bunkers/luboils/greases/heel onboard are to be verified by a joint survey between the Sellers’ and the Buyers’ representative(s) onboard prior to delivery, and pay
either: 

 (a) *the actual net price (excluding barging expenses) as evidenced by invoices or vouchers;
or 
 (b) *the current net market price (excluding barging expenses) at the port and date of delivery of the Vessel
or, if unavailable, at the nearest bunkering port, 
  

	  	for the quantities taken over. 

  

	  	Payment under this Clause shall be made at the same time and place and in the same currency as the Purchase Price. 

  

	  	“inspection” in this Clause 7, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b) (Inspection), if applicable. If the Vessel is taken over without inspection, the date
of this Agreement shall be the relevant date. 

  

	*	(a) and (b) are alternatives, delete whichever is not applicable. In the absence of deletions alternative (a) shall apply. 

 

	8.	Documentation 

  

	  	The place of dosing: London, unless otherwise agreed between Sellers and Buyers. 

  

	  	(a) In exchange for payment of the Purchase Price the Sellers shall provide the Buyers with the following delivery documents: 

 

	 	(i)	Two (2) Legal Bill(s) of Sale in a form recordable in the Buyers’ Nominated Flag State, transferring title of the Vessel and stating that the Vessel is free from all mortgages,
encumbrances, taxes and maritime liens or any other debts whatsoever, duly notarially attested and legalised or apostilled, as required by the Buyers’ Nominated Flag State; 

 

	 	(ii)	Evidence that all necessary corporate, shareholder and other action has been taken by the Sellers to authorise the execution, delivery and performance of this Agreement; 

 

	 	(iii)	Power of Attorney of the Sellers appointing one or more representatives to act on behalf of the Sellers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate);

  

	 	(iv)	Certificate or Transcript of Registry issued by the competent authorities of the Singapore flag state on the date of delivery evidencing the Sellers’ ownership of the Vessel and that the Vessel is
free from registered encumbrances and mortgages, to be faxed or e-mailed by such authority or the Sellers to the closing meeting with the original to be sent to the Buyers as soon as possible after delivery of the Vessel; 

 

	 	(v)	Declaration of Class or (depending on the Classification Society) a Class Maintenance Certificate issued within three (3) Banking Days prior to delivery confirming that the Vessel is in Class free of
condition/recommendation; 

  

	 	(vi)	Certificate of Deletion of the Vessel from the Vessel’s Singapore registry or other official evidence of deletion appropriate to the Vessel’s registry at the time of delivery, or, in the event
that the registry does not as a matter of practice issue such documentation immediately, a written undertaking by the Sellers to effect deletion from the Vessel’s Singapore registry forthwith and provide a certificate or other official
evidence of deletion to the Buyers promptly and latest within four (4) weeks after the Purchase Price has been paid and the Vessel has been delivered; 

  

	 	(vii)	A copy of the Vessel’s Continuous Synopsis Record certifying the date on which the Vessel ceased to be registered with the Vessel’s registry, or, in the event that the registry does not as a matter of
practice issue such certificate immediately, a written undertaking from the Sellers to provide the copy of this certificate promptly upon it being issued together with evidence of submission by the Sellers of a duly executed Form 2 stating the date
on which the Vessel shall cease to be registered with the Vessel’s registry; 

  

	 	(viii)	Commercial Invoice for the Vessel; 

 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
 6 

 

 

	 	(ix)	Commercial Invoice(s) for bunkers, lubricating and hydraulic oils and greases; 

  

	 	(x)	A copy of the Sellers’ letter to their satellite communication provider cancelling the Vessel’s communications contract which is to be sent immediately after delivery of the Vessel; 

 

	 	(xi)	Any additional documents as may reasonably be required by the competent authorities of the Buyers’ Nominated Flag State for the purpose of registering the Vessel, provided the Buyers notify the Sellers of any such
documents as soon as possible and within reasonable time after the date of this Agreement; and 

  

	 	(xii)	The Sellers’ letter of confirmation that to the best of their knowledge, the Vessel is not at the time of delivery to Buyers black listed by the USA or any European Union nation or under blockade by ITF
or the Arab Boycott League; any nation or international organisation. 

  

	 	(xiii)	The Sellers’: (1) Certificate of Incorporation; (2) ACRA transcript issued within five (5) business days prior to the delivery of the Vessel; (3) copy of Sellers’ Memorandum and Articles of Association; and
(4) a certificate of director of the Sellers. 

  

	  	(b) At the time of delivery the Buyers shall provide the Sellers with: 

  

	 	(i)	Evidence that all necessary corporate, shareholder and other action has been taken by the Buyers to authorise the execution, delivery and performance of this Agreement; and;.

  

	 	(ii)	Power of Attorney of the Buyers appointing one or more representatives to act on behalf of the Buyers in the performance of this Agreement, duly notarially attested and legalised or apostilled (as appropriate)

  

	 	(iii)	The Buyers’: Certificate of Incorporation and Good Standing confirming the good standing of the Buyers and providing Information on the current Directors of the Buyers together with copy of Buyers’ Articles
of Association attached to it, issued within five (5) business days prior to the delivery, duly notarially attested and legalized by apostille (as appropriate) If information on the Directors of the Buyers is not by practice provided in the above
Certificate, Buyers to provide Sellers with a separate Certificate of Incumbency, duly notarially attested and legalized by apostille (as appropriate). 

  

	  	(c) If any of the documents listed in Sub-clauses (a) and (b) above are not in the English language they shall be accompanied by an English translation by an authorised translator or certified by a lawyer
qualified to practice in the country of the translated language. 

  

	  	(d) The Parties shall to the extent possible exchange copies, drafts or samples of the documents listed in Sub-clause (a) and Sub-clause (b) above for review and comment by the other party not later than nine
(9) (state number of days), or if left blank, nine (9) days prior to the Vessel’s intended date of readiness for delivery as notified by the Sellers pursuant to Clause 5(b) of this Agreement.

  

	  	(e) Concurrent with the exchange of documents in Sub-clause (a) and Sub-clause (b) above, the Sellers shall also hand to the Buyers the classification certificate(s) as well as all plans, drawings and manuals,
(excluding ISM/ISPS manuals), which are on board the Vessel. Other certificates which are on board the Vessel shall also be handed over to the Buyers unless the Sellers are required to retain same, in which case the Buyers have the right to take
copies. 

  

	  	(f) Other technical documentation which may be in the Sellers’ possession shall promptly after delivery be forwarded to the Buyers at their expense, if they so request. The Sellers may keep the Vessel’s
log books but the Buyers have the right to take copies of same. 

  

	  	(g) The Parties shall sign and deliver to each other a Protocol of Delivery and Acceptance confirming the date and time of delivery of the Vessel from the Sellers to the Buyers. 

 

	9.	Encumbrances 

  

	  	The Sellers warrant that the Vessel, at the time of delivery, is free from all charters, encumbrances, mortgages and maritime liens or any other debts whatsoever, and is not subject to Port State or
other administrative detentions. The Sellers hereby undertake to indemnify the Buyers against all consequences of claims made against the Vessel which have been incurred prior to the time of delivery. 

 

	10.	Taxes, fees and expenses 

  

	  	Any taxes, fees and expenses in connection with the purchase and registration in the Buyers’ Nominated Flag State shall be for the Buyers’ account, whereas similar charges in connection with the closing of the
Sellers’ register shall be for the Sellers’ account. 

 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
 7 

 

 

  

	11.	Condition on delivery 

  

	  	The Vessel with everything belonging to her shall be at the Sellers’ risk and expense until she is delivered to the Buyers, but subject to the terms and conditions of this Agreement she shall be delivered and taken
over as she was at the time of inspection of the Vessel’s Class records, fair wear and tear excepted. 

  

	  	However, the Vessel shall be delivered free of cargo and free of stowaways with her Class maintained without condition/recommendation*, free of average damage affecting the Vessel’s class, and with her
classification certificates and national certificates, as well as all other certificates the Vessel had at the time of inspection of the Vessel’s Class records, valid for three (3) months and unextended without
condition/recommendation* by the Classification Society or the relevant authorities at the time of delivery. 

  

	  	The Sellers shall notify the Classification Society of any matters coming to their knowledge prior to delivery which upon being reported to the Classification Society would lead to the withdrawal of the Vessel’s
Class or to the imposition of a recommendation relating to her Class. 

  

	  	“inspection” in this Clause 11, shall mean the Buyers’ inspection according to Clause 4(a) or 4(b) (Inspections), if applicable. If the Vessel is taken over without inspection, the
date of this Agreement shall be the relevant date. 

  

	*	Notes and memoranda, if any, in the surveyor’s report which are accepted by the Classification Society without condition/recommendation are not to be taken into account. 

 

	12.	Name/markings 

  

	  	Upon delivery the Buyers undertake to change the name of the Vessel and alter funnel markings. Latest at the Vessel’s next scheduled dry-docking Buyers shall repaint the Vessel’s hull in a colour
which is not associated with the Sellers. 

  

	13.	Buyers’ default 

  

	  	See Clause 8 of the Framework Agreement 

  

	  	Should the Deposit not be lodged in accordance with Clause 2 (Deposit), the Sellers have the right to cancel this Agreement, and they shall be entitled to claim compensation for their
losses and for all expenses incurred together with interest. 

  

	  	Should the Purchase Price not be paid in accordance with Clause 3 (Payment), the Sellers have the right to cancel this Agreement, in which case the Deposit together with interest earned,
if any, shall be released to the Sellers. If the Deposit does not cover their loss, the Sellers shall be entitled to claim further compensation for their losses and for all expenses incurred together with interest. 

 

	14.	Sellers’ default 

  

	  	See Clause 9 of the Framework Agreement. 

  

	  	Should the Sellers fail to give Notice of Readiness in accordance with Clause 5(b) or fail to be ready to validly complete a legal transfer by the Cancelling Date the Buyers shall have
the option of cancelling this Agreement. If after Notice of Readiness has been given but before the Buyers have taken delivery, the Vessel ceases to be physically ready for delivery and is not made physically ready again by the Cancelling Date and
new Notice of Readiness given, the Buyers shall retain their option to cancel. In the event that the Buyers elect to cancel this Agreement, the Deposit together with interest earned, if any, shall be released to them immediately.

  

	  	Should the Sellers fail to give Notice of Readiness by the Cancelling Date or fail to be ready to Validly complete a legal transfer as aforesaid they shall make due compensation to the Buyers for their loss and
for all expenses together with interest if their failure is due to proven negligence and whether or not the Buyers cancel this Agreement. 

  

	15.	Buyers’ representatives/crew 

  

	  	After this Agreement has been signed by the Parties the Effective Date and when the Deposit has been lodged, the Buyers have the right to place twothree
(23) representatives on board the Vessel at their sole risk and expense. 

 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
 8 

 

 

  

	  	These representatives are on board for the purpose of familiarisation and in the capacity of observers only, and they shall not interfere in any respect with the operation of the Vessel. The Buyers and the Buyers’
representatives shall sign the Sellers’ P&I Club’s standard letter of indemnity prior to their embarkation. 

  

	  	Once Notice of Readiness has been given to the Buyers by the Sellers the Sellers shall allow access to the Vessel by the Buyers’ crew for the purpose of familiarisation only subject to signing the Sellers’
P&I Club’s standard letter of indemnity prior to embarkation and always provided that (i) there is enough space onboard, (ii) safety is not endangered, (iii) Buyers’ crew do not interfere with the delivery and
(iv) no regulations are broached. 

  

	16.	Law and Arbitration 

  

	  	Clause 22 of the Framework Agreement shall apply mutatis mutandis to and form an integral part of this Agreement. 

  

	  	(a) *This Agreement shall be governed by and construed in accordance with English law and any dispute arising out of or in connection with this Agreement shall be referred to arbitration in London in
accordance with the Arbitration Act 1996 or any statutory modification or re-enactment thereof save to the extent necessary to give effect to the provisions of this Clause. 

 

	  	The arbitration shall be conducted in accordance with the London Maritime Arbitrators Association (LMAA) Terms current at the time when the arbitration proceedings are commenced. 

 

	  	The reference shall be to three arbitrators. A party wishing to refer a dispute to arbitration shall appoint its arbitrator and send notice of such appointment in writing to the other party requiring the other
party to appoint its own arbitrator within fourteen (14) calendar days of that notice and stating that it will appoint its arbitrator as sole arbitrator unless the other party appoints its own arbitrator and gives notice that it has done so
within the fourteen (14) days specified. If the other party does not appoint its own arbitrator and give notice that it has done so within the fourteen (14) days specified, the party referring a dispute to arbitration may, without the
requirement of any further prior notice to the other party, appoint its arbitrator as sole arbitrator and shall advise the other party accordingly. The award of a sole arbitrator shall be binding on both Parties as if the sole arbitrator had been
appointed by agreement. 

  

	  	In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall be conducted in accordance with the LMAA Small Claims Procedure current at the time when the arbitration
proceedings are commenced. 

  

	  	(b) *This Agreement shall be governed by and the construed in accordance with Title 9 of the United States Code and the substantive law (not including the choice of law rules) of the State of New York and
any dispute arising out of or in connection with this Agreement shall be referred to three (3) persons at New York, one to be appointed by each of the parties hereto, and the third by the two so chosen, their decision or that of any two of them
shall be final, and for the purposes of enforcing any award, judgment may be entered on an award by any court of competent jurisdiction. The proceedings shall be conducted in accordance with the rules of the Society of Maritime Arbitrators,
Inc. 

  

	  	In cases where neither the claim nor any counterclaim exceeds the sum of US$100,000 the arbitration shall be conducted in accordance with the Shortened Arbitration Procedure of the Society of Maritime
Arbitrators, Inc. 

  

	  	(c) This Agreement shall be governed by and construed in accordance with the laws of          (state place) and any dispute-arising out of
or in connection with this Agreement shall be referred to arbitration at          (state place), subject to the procedures applicable there.  

 

	*	16(a), 16(b) and 16(c) are alternatives; delete whichever is not applicable. In the absence of deletions, alternative 16(a) shall apply. 

 

	17.	Notices 

  

	  	All notices to be provided under this Agreement shall be in writing. 

  

	  	Contact details for recipients of notices are as follows: 

  

			
	For the Buyers:  	 	Euronav NV
		 	 20 De Gerlachekaai
 2000
Antwerp
 Belgium
 For the attention of: Chief
Executive Officer
 Email: management@euronav.com

c.c. For the attention of: General Counsel
 Email:
legal@euronav.com

 
 

  

	
	 This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to
the form must be clearly visible. In the event of any modification made to the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’
Association assume no responsibility for any loss, damage or expense as a result of discrepancies between the original approved document and this computer generated document.

  
 9 

 

 

			
	For the Sellers:	 	 c/o Maersk Tankers A/S
 Esplanaden
50
 1098 Copenhagen K
 Denmark

For the attention of:
 Email:
claus.gronborg@maersktankers.com
  
 c.c. For the attention of: Head of
Legal
 Email: anette.ryde@maersktankers.com

  

	18.	Entire AgreementVarious 

  

	  	This Agreement constitutes an integrated part of the Framework Agreement. In case of conflict between this Agreement and the Framework Agreement, the latter shall prevail. 

 

	  	The written terms of this Agreement together with the Framework Agreement comprise the entire agreement and understanding between the Buyers and the Sellers in relation to the sale and purchase of the
Vessel and supersede and extinguish all previous drafts, agreements, discussions, exchanges and understandings between them, whether oral or written between the Parties in relation theretorelating to its
subject matter. 

  

	  	Each of the Parties acknowledges that in entering into this Agreement it has not and does not relyied on and shall have no right or remedyies in respect of any
statement, representation, assurance or warranty (whether or not made innocently or negligently) other than as is expressly set out in this Agreement. 

 

	  	Any terms implied into this Agreement by any applicable statute or law are hereby excluded to the extent that such exclusion can legally be made. Nothing in this Clause shall limit or exclude any liability for fraud.

  

															
		 		 		 		 	
					
	For and on behalf of the Sellers	 		 	For and on behalf of the Buyers	 		 	
	Name:	 	 Claus Granborg
	 		 	Name:	 	 Egied Verbeech
	 		 	Hugo De Stoop
							
	Title:	 	Attorney-in-fact	 		 	Title:	 	 General Counsel
	 		 	CFO

  

	19.	Trading and delivery of the Vessel 

 The Sellers also undertake with the Buyers not to employ the
Vessel in contradiction with any sanctions against any sovereign nation issued by the European Union, United States of America or United Nations. 

The Sellers shall indemnify the Buyers in relation to any fines or penalties which may be applied by any regulatory authorities in relation to the trading
of the Vessel prior to the date of delivery of the Vessel. 
  

	20.	Notices 

 The days on which any notice is given by one party to the other will be excluded from the
total number of days required for such notice. 
 21. All fleet stock spares in Singapore and Rotterdam warehouses are included free of cost in the
sale, list to be provided by Sellers. Such spares will be delivered ex warehouses in Singapore and Rotterdam. 

 

  

	
	This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.

  
 10 

 

 

 22. All open purchase orders to be delivered by Sellers to Buyers warehouse after delivery.

 

  

	
	This document is a computer generated SALEFORM 2012 form printed by authority of the Norwegian Shipbrokers’ Association. Any insertion or deletion to the form must be clearly visible. In the event of any modification made to
the pre-printed text of this document which is not clearly visible, the text of the original approved document shall apply. BIMCO and the Norwegian Shipbrokers’ Association assume no responsibility for any loss, damage or expense as a result of
discrepancies between the original approved document and this computer generated document.

  
 11ex10-1.htm

Exhibit 10.1

 

	
Citibank, N.A.

390 Greenwich Street

New York, New York 10013

	

Execution Copy

 

	
Date:

	
December 17, 2012 (amended and restated as of September 5, 2014)

 

	
To:

	
Flatiron Funding, LLC

c/o CĪON Investment Corporation

100 Fifth Avenue, 4th Floor

3 Park Avenue, 36th Floor

New York, NY 10016

Attention: General Counsel

Facsimile:  (212) 418-4739

 

	
From:

	
Citibank, N.A.

	
  

	
333 West 34th Street

	
  

	
2nd Floor

	
  

	
New York, New York 10001

	
  

	
Attention: Director Derivative Operations

	
  

	
Facsimile: 212-615-8594

 

Transaction Reference Number: [__________]

 

Ladies and Gentlemen:

 

The purpose of this letter agreement (this "Agreement") is to set forth the terms and conditions of the Transactions entered into between Citibank, N.A. ("Citibank") and Flatiron Funding, LLC, a limited liability company formed under the law of the State of Delaware ("Counterparty"), on the Trade Date specified below (each, a "Transaction" and, collectively, the "Transactions"). This letter constitutes a "Confirmation" as referred to in the Master Agreement specified below.

 

The definitions and provisions contained in the 2000 ISDA Definitions (the "Definitions"), as published by the International Swaps and Derivatives Association, Inc., are incorporated into this Confirmation. In the event of any inconsistency between the Definitions and this Confirmation, this Confirmation shall govern. Capitalized terms used but not defined in this Confirmation have the meanings assigned to them in Annex A. Capitalized terms used but not defined in this Confirmation or in Annex A have the meanings assigned to them in the Definitions.

 

With effect from and after the Fifth Amendment Effective Date, this Confirmation amends and restates the prior Confirmation dated December 17, 2012 and amended and restated as of December 9, 2013, February 18, 2014, April 30, 2014 and July 30, 2014 between Citibank and Counterparty (the "Original Confirmation") relating to the Transactions described herein, which Original Confirmation is hereby superseded and shall be of no further force or effect.

 

Page 1

 

 

1.           Agreement

 

This Confirmation supplements, forms a part of and is subject to, the ISDA 2002 Master Agreement, dated as of December 17, 2012 (as amended, supplemented and otherwise modified and in effect from time to time, the "Master Agreement"), between Citibank and Counterparty. All provisions contained in the Master Agreement govern this Confirmation except as expressly modified below.

 

2.           Terms of Transactions

 

The terms of the particular Transactions to which this Confirmation relates are as follows:

 

	
General Terms:

	  
	 	 
	
Trade Date:

	
December 17, 2012

	 	 
	
Effective Date:

	
December 17, 2012

	 	 
	Amendment Effective Date:	December 9, 2013 
	 	 
	
Second Amendment Effective Date:

	
February 18, 2014

	 	 
	Third Amendment Effective Date:	April 30, 2014
	 	 
	
Fourth Amendment Effective Date:             

	
July 30, 2014

	 	 
	Fifth Amendment Effective Date:	September 5, 2014
	 	 
	
Scheduled Termination Date:

	
The latest date for the final scheduled payment (or, if there is only one scheduled payment, for the scheduled payment) of principal of any Reference Obligation at any time included in the Reference Portfolio, as such date may be accelerated pursuant to the first sentence of Clause 3(c).

	 	 
	
Citibank Call Date:

	
December 17, 2014; provided that Citibank and Counterparty may agree in writing to extend the Citibank Call Date.

	 	 
	
Termination Date:

	
The final Scheduled Settlement Date (as defined in the Master Agreement) with respect to all Transactions (other than any Counterparty Fourth Floating Rate Payer Payment Date).  The obligations of the parties to make payments required to be made hereunder shall survive the Termination Date.

	 	 
	
Obligation Termination Date:

	
(a) In relation to any Repaid Obligation, the related Repayment Date; and

 

(b) In relation to any Terminated Obligation, the related Termination Settlement Date.

	 	 
	
Reference Portfolio:

	
As of any date of determination, all Reference Obligations with respect to all Transactions outstanding on such date.

 

Page 2

 

 

	
Reference Obligation:

	
Each obligation listed on Annex I as revised from time to time pursuant to this Confirmation having a Reference Amount equal to the "Reference Amount" indicated on Annex I for such obligation (and, in the case of a Committed Obligation, having an Outstanding Principal Amount equal to the "Outstanding Principal Amount" indicated on Annex I for such Committed Obligation), in each case, subject to adjustment by the Calculation Agent in accordance with the terms of this Confirmation.  Each Reference Obligation shall be the subject of a Transaction hereunder.

	 	 
	  	
Counterparty may, by notice to Citibank on any Business Day on or after the Trade Date (each, an "Obligation Trade Date"), designate that any obligation (each, a "Reference Obligation") shall become the subject of a Transaction hereunder.  Any such notice shall specify the proposed Reference Obligation, Reference Entity, Reference Amount and Initial Price in relation to such Transaction.

 

Notwithstanding the foregoing, no such designation by Counterparty will be effective unless:

 

(a)  Citibank consents on or prior to the Obligation Trade Date to the relevant Reference Obligation becoming the subject of a Transaction hereunder, such consent not to be unreasonably withheld or delayed, with effect as set forth in the second and third succeeding paragraphs;

 

(b)  on the Obligation Trade Date (i) the relevant Reference Obligation satisfies the Obligation Criteria set forth in Annex II and (ii) the Portfolio Criteria set forth in Annex II are satisfied (or, if any Portfolio Criterion is not satisfied immediately prior to such designation, then the extent of compliance with such Portfolio Criterion is maintained or improved); and

 

(c)  if the relevant Reference Obligation would be a Specified Reference Obligation, Counterparty gives notice of such fact to Citibank in such notice of designation (provided that any failure to give such notice shall not affect the effectiveness of such designation).

 

Page 3

 

 

	 	
Without limiting the generality of the foregoing clause (a), Citibank may reasonably withhold its consent to any such designation based on any legal, accounting, tax or other similar issues that are adverse to Citibank in any material respect and that would or could reasonably be expected to arise as a result of the entry into such Transaction or any purchase by the Citibank Holder of such Reference Obligation as a hedge for such Transaction.  In the event that Citibank determines not to hold, or cause to be held, all or any portion of any such Reference Obligation as a hedge for the such Transaction on the Obligation Settlement Date for such Transaction, Citibank shall no later than the Obligation Trade Date give notice thereof to Counterparty.  In addition, Citibank will promptly respond to any notice from Counterparty requesting that Citibank identify whether Citibank is holding, or causing to be held, the relevant Reference Obligation as a hedge for one or more Transactions identified in such notice from Counterparty. 

 

The "Obligation Settlement Date" for a Transaction shall be the date following the Obligation Trade Date for such Transaction that is customary for settlement of the related Reference Obligation substantially in accordance with the then-current market practice in the principal market for the related Reference Obligation (as determined by the Calculation Agent).

 

On the Obligation Trade Date for a Transaction, the Reference Amount of such Transaction shall, for all purposes hereof other than calculating Rate Payments, be increased by the "Reference Amount" specified in such notice from Counterparty.  On the Obligation Settlement Date for a Transaction, the Reference Amount of such Transaction shall, solely for the purposes of calculating Rate Payments, be increased by the "Reference Amount" specified in such notice from Counterparty.

 

Once a Reference Obligation becomes the subject of a Transaction hereunder, Citibank shall promptly prepare and deliver to Counterparty a revised Annex I reflecting the Reference Portfolio as of the related Obligation Trade Date.

 

 

Page 4

 

 

	  	
If any payment of interest on a Reference Obligation that would otherwise be made during the period from and including the Obligation Trade Date to but excluding the Termination Trade Date is not made but is capitalized as additional principal (without default), then the amount of interest so capitalized as principal shall become a new Transaction hereunder (a "PIK Transaction") having the same terms and conditions as the Transaction relating to the Reference Obligation in respect of which such interest is capitalized, except that (1) the Initial Price in relation to such PIK Transaction shall be zero, (2) the Obligation Trade Date and Obligation Settlement Date for such PIK Transaction shall be the date on which such interest is capitalized and (3) the Reference Amount of such PIK Transaction will be the amount of interest so capitalized as principal. Citibank shall give notice to Counterparty after a PIK Transaction becomes outstanding as provided above, which notice shall set forth the information in the foregoing clauses (2) and (3).

	 	 
	
Reference Entity:

	
The borrower of the Reference Obligation identified as such in Annex I. In addition, "Reference Entity", unless the context otherwise requires, shall also refer to any guarantor of or other obligor on the Reference Obligation.

	 	 
	
Ramp-Up Period:

	
The period from and including the Amendment Effective Date and ending on and including the date occurring 90 days after the Amendment Effective Date.

	 	 
	
Ramp-Down Period:

	
The period from and including the date 90 days prior to the Scheduled Termination Date and ending on and including the Scheduled Termination Date.

	 	 
	
Portfolio Notional Amount:

	
As of any date of determination, the sum of the Notional Amounts for all Reference Obligations as of such date.

	 	 
	
Notional Amount:

	
(a) In relation to any Transaction (other than with respect to any Terminated Obligation or Repaid Obligation), as of any date of determination, the Reference Amount of the related Reference Obligation as of such date multiplied by the Initial Price in relation to such Reference Obligation; and

 

(b) In relation to any Transaction with respect to a Terminated Obligation or Repaid Obligation, the amount of the reduction in the Reference Amount of the related Reference Obligation determined, in the case of a Terminated Obligation, pursuant to Clause 3 or, in the case of a Repaid Obligation, pursuant to Clause 5, in each case multiplied by the Initial Price in relation to the related Reference Obligation.

 

Page 5

 

 

	
Outstanding Principal Amount:

	
In relation to any Reference Obligation as of any date of determination, the outstanding principal amount of such obligation as shown in the then current Annex I, as increased pursuant to this Clause 2 (or, in the case of any Committed Obligation, pursuant to any borrowing in respect of such Committed Obligation after the Obligation Settlement Date) and reduced pursuant to Clauses 3 and 5. Except as otherwise expressly provided below with respect to Counterparty First Floating Amounts, the principal amount of any Committed Obligation outstanding on any date shall include the aggregate stated face amount of all letters of credit, bankers' acceptances and other similar instruments issued in respect of such Committed Obligation to the extent that the holder of such Committed Obligation is obligated to extend credit in respect of any drawing or other similar payment thereunder.

	 	 
	
Commitment Amount:

	
In relation to any Reference Obligation that is a Committed Obligation (and the related Transaction) as of any date of determination, the maximum outstanding principal amount of such Reference Obligation that a registered holder thereof would on such date be obligated to fund (including all amounts previously funded and outstanding, whether or not such amounts, if repaid, may be reborrowed).

	 	 
	
Notional Funded Amount:

	
In relation to any Reference Obligation that is a Committed Obligation (and to the related Transaction) as of any date of determination, the greater of (a) zero and (b) the sum of (i) the Outstanding Principal Amount of such Reference Obligation as of the Obligation Trade Date multiplied by the Initial Price in relation to such Reference Obligation minus (ii) the product of (x) the excess, if any, of the Commitment Amount of such Reference Obligation as of the Obligation Trade Date over the Outstanding Principal Amount of such Reference Obligation as of the Obligation Trade Date multiplied by (y) 100% minus the Initial Price in relation to such Reference Obligation plus (iii) any increase in the Outstanding Principal Amount of such Reference Obligation during the period from but excluding the Obligation Trade Date to and including such date of determination minus (iv) any decrease in the Outstanding Principal Amount of such Reference Obligation during the period from but excluding the Obligation Trade Date to and including such date of determination.

 

In relation to any Reference Obligation that is a Term Obligation (and the related Transaction) as of any date of determination, the Notional Amount of such Reference Obligation.

 

Page 6

 

 

	
Portfolio Notional Funded Amount:

	
As of any date of determination, the aggregate of all Notional Funded Amounts with respect to all Reference Obligations in the Reference Portfolio on such date of determination.

	 	 
	
Reference Amount:

	
In relation to (a) any Term Obligation, the Outstanding Principal Amount thereof and (b) any Committed Obligation, the Commitment Amount thereof.

	 	 
	
Utilization Amount:

	
In relation to any Calculation Period, the daily average of the Portfolio Notional Funded Amount during such Calculation Period.

	 	 
	
Maximum Portfolio Notional Amount:

	
USD475,000,000, or such greater amount as the parties may agree to in writing.

	 	 
	
Minimum Portfolio Notional Amount:

	
80% of the Maximum Portfolio Notional Amount.

	 	 
	
Business Day:

	
New York

	 	 
	
Business Day Convention:

	
Following (which shall apply to any date specified herein for the making of any payment or determination or the taking of any action which falls on a day that is not a Business Day).

 

If any anniversary date specified herein would fall on a day on which there is no corresponding day in the relevant calendar month, then such anniversary date shall be the last day of such calendar month.

	 	 
	
Monthly Period:

	
Each period from and including the 12th day of any calendar month to but excluding the same day of the immediately succeeding calendar month.

	 	 
	
Calculation Agent:

	
Citibank; provided that, if an Event of Default described in Section 5(a)(vii) occurs with respect to Citibank as Defaulting Party and no Event of Default has occurred with respect to Counterparty as Defaulting Party, then Counterparty may designate any of Bank of America, NA, The Bank of Montreal, Barclays Bank plc, Canadian Imperial Bank of Commerce, Credit Suisse, Deutsche Bank AG, JPMorgan Chase Bank, N.A., UBS AG and Wells Fargo Bank, National Association as Calculation Agent, which designation shall be effective only (a) if such designated entity accepts such appointment and agrees to perform the duties of the Calculation Agent hereunder and (b) so long as such Event of Default with respect to Citibank as Defaulting Party continues.  Unless otherwise specified, the Calculation Agent shall make all determinations, calculation s and adjustments required pursuant to this Confirmation in good faith and on a commercially reasonable basis.

 

Page 7

 

 

	
Calculation Agent City:

	
New York

	 	 
	
Initial Price:

	
In relation to any Reference Obligation (and the related Transaction), the Initial Price specified in Annex I.  The Initial Price will be determined as of the related Obligation Trade Date exclusive of accrued interest and will be expressed as a percentage of the Reference Amount.  The Initial Price will be determined exclusive of Costs of Assignment that would be incurred by a buyer in connection with any purchase of the Reference Obligation and exclusive of any Delay Compensation.

	  	  
	
Payments by Counterparty

	  
	 	 
	
Counterparty First Floating Amounts:

	  
	 	 
	
First Floating Amount Payer:

	
Counterparty

	 	 
	
First Floating Amount:

	
In relation to any First Floating Rate Payer Payment Date, the sum, for each Transaction for which such date is a First Floating Rate Payer Payment Date, of the products of (a) the First Floating Rate Payer Calculation Amount for such Transaction for the related First Floating Rate Payer Calculation Period multiplied by (b) the Floating Rate Option for such Transaction during the related First Floating Rate Payer Calculation Period plus the Spread multiplied by (c) the Floating Rate Day Count Fraction; provided that, for purposes of the foregoing calculation, the percentage specified in the foregoing clause (b) shall be the Spread (and not the Floating Rate Option plus the Spread) with respect to any portion of a First Floating Rate Payer Calculation Amount constituting the undrawn stated face amount of all letters of credit, bankers' acceptances and other similar instruments issued in respect of a related Committed Obligation.

 

If the Floating Rate Option in relation to any Transaction varies during any First Floating Rate Payer Calculation Period, then the Floating Rate Option for such Calculation Period shall be equal to (a) the sum, for each day during such Calculation Period, of the products of the Notional Funded Amount of such Transaction for such Calculation Period multiplied by the Floating Rate Option in effect on such day divided by (b) the sum of the Notional Funded Amount of such Transaction on each such day.

 

Page 8

 

 

	
First Floating Rate Payer

Calculation Amount:

	
In relation to any First Floating Rate Payer Payment Date and any Transaction, the daily average of the Notional Funded Amount of such Transaction during the related First Floating Rate Payer Calculation Period.

	 	 
	
First Floating Rate Payer

Calculation Period:

	
In relation to any Transaction, each period from and including any date upon which a payment of interest is scheduled or otherwise required to be made on the related Reference Obligation to but excluding the next such date, except that (a) the initial First Floating Rate Payer Calculation Period will commence on, and include, the Obligation Settlement Date for such Transaction and (b) the final First Floating Rate Payer Calculation Period will end on, but exclude, the related Obligation Termination Date.

	 	 
	
First Floating Rate

Payer Payment Dates:

	
(a) In relation to any Transaction (other than with respect to any Terminated Obligation or Repaid Obligation), the fifth Business Day following the last day of any Monthly Period during which any payment of interest is scheduled or otherwise required to be made on the related Reference Obligation, commencing with the first such date after the Obligation Settlement Date for such Transaction and ending with the last such date occurring prior to the related Obligation Termination Date; and

 

(b) In relation to any Transaction with respect to a Terminated Obligation or Repaid Obligation, the related Total Return Payment Date.

 

Page 9

 

 

	
Floating Rate Option:

	
In relation to any Transaction, the floating rate index specified in the term loan agreement, revolving loan agreement or other similar credit agreement governing the related Reference Obligation (the "Reference Obligation Credit Agreement") that is used to determine the rate of interest payable on such Reference Obligation; provided that (a) if more than one interest rate setting is at any time used to determine the rate of interest payable on a Reference Obligation (i.e., an interest rate election for a specific interest period relating to such Reference Obligation), then a separate First Floating Amount shall be calculated for each portion of such Reference Obligation as to which a separate interest rate setting has been effected, (b) any interest that has accrued to a specified date but is permitted under the Reference Obligation Credit Agreement to be capitalized or deferred as of such date (without default) shall be deemed to be scheduled to be paid on such date, (c) any Reference Obligation Credit Agreement that provides for the payment of interest less frequently than quarterly will be deemed to provide for a scheduled quarterly payment of interest on each date specified by Citibank, which date so specified shall be the calendar day of the month corresponding to other payment dates applicable to the related Reference Obligation and (d) notwithstanding the foregoing, (i) if the floating rate index for such Reference Obligation (or any portion thereof) is the prime or base rate or is a fixed rate, then the Floating Rate Option for such Reference Obligation (or such portion) shall equal USD-LIBOR-BBA and (ii) if the floating rate index for such Reference Obligation (or any portion thereof) is subject to the payment of a specified minimum rate regardless of the level of the relevant floating rate index, then the Floating Rate Option will be determined without regard to such specified minimum rate.

	 	 
	
Designated Maturity:

	
In relation to any Transaction, the Floating Rate Option will have a Designated Maturity and Reset Dates that correspond to the maturity and reset dates specified in the related Reference Obligation Credit Agreement, except that, if the floating rate index specified in the related Reference Obligation Credit Agreement that is used to determine the rate of interest payable on the Reference Obligation (or any portion thereof) is the prime or base rate or is a fixed rate, then for purposes of determining USD-LIBOR-BBA the "Designated Maturity" shall be one month and the first day of each First Floating Rate Payer Calculation Period will be a Reset Date.

	 	 
	
Spread:

	
1.35%

 

Page 10

 

 

	
Floating Rate Day

Count Fraction:

	
In relation to any Transaction, the Floating Rate Day Count Fraction will be the day count basis for the computation of interest specified in the related Reference Obligation Credit Agreement, except that, if the floating rate index specified in the related Reference Obligation Credit Agreement that is used to determine the rate of interest payable on the Reference Obligation (or any portion thereof) is the prime or base rate or is a fixed rate, then the Floating Rate Day Count Fraction will be Actual/360.

	 	 
	
Reset Dates:

	
As set forth in "Designated Maturity" above

	 	 
	
Compounding:

	
Inapplicable

	  	  
	
Counterparty Second Floating Amounts:

	  
	 	 
	
Second Floating Amount Payer:

	
Counterparty

	 	 
	
Second Floating Amount:

	
In relation to any Second Floating Rate Payer Payment Date, the product of (a) the Second Floating Rate Payer Calculation Amount for the related Second Floating Rate Payer Calculation Period multiplied by (b) the Spread multiplied by (c) the Floating Rate Day Count Fraction.

 

Notwithstanding the foregoing:

 

(a) no Second Floating Amount shall be payable with respect to any Second Floating Rate Payer Payment Date occurring on or after any date on which an Event of Default has occurred under Section 5(a)(i) or 5(a)(vii) with respect to Citibank as Defaulting Party; and

 

(b) no Second Floating Amount shall be payable on any Second Floating Rate Payer Payment Date, and no amount shall be payable under Clause 4(c) on any date after the last day of the Ramp-Up Period, following any date on which (i) Counterparty has designated at least 20 Designated Reference Obligations to become the subject of Transactions hereunder (as contemplated opposite the caption "Reference Obligation" above) and (ii) the aggregate Notional Amount of all Designated Reference Obligations as to which Citibank has not given its consent to such Reference Obligations becoming the subject of Transactions hereunder (as contemplated opposite the caption "Reference Obligation" above) exceeds 50% of the aggregate Notional Amount of all Reference Obligations that Counterparty has designated are to become the subject of Transactions hereunder (as contemplated opposite the caption "Reference Obligation" above).

 

Page 11

 

 

	
Second Floating Rate Payer

Calculation Amount:

	
In relation to any Second Floating Rate Payer Calculation Period, the excess, if any, of (a) the Minimum Portfolio Notional Amount over (b) the Utilization Amount for such Second Floating Rate Payer Calculation Period.

	 	 
	
Second Floating Rate Payer

Calculation Period:

	
Each Monthly Period; provided that (a) the initial Second Floating Rate Payer Calculation Period shall begin on the last day of the Ramp-Up Period and (b) the final Second Floating Rate Payer Calculation Period shall end on the last Second Floating Rate Payer Payment Date.

	 	 
	
Second Floating Rate

Payer Payment Dates:

	
The fifth Business Day following the last day of each Monthly Period; provided that (a) the initial Second Floating Rate Payer Payment Date will be the first such Business Day after the last day of the Ramp-Up Period and (b) the final Second Floating Rate Payer Payment Date will be the date 180 days prior to the Scheduled Termination Date (whether or not the Termination Date occurs prior to the Scheduled Termination Date).

	 	 
	
Spread:

	
1.35%

	 	 
	
Floating Rate Day

Count Fraction:

	
Actual/365.

	 	 
	
Compounding:

	
Inapplicable

	  	  
	
Counterparty Third Floating Amounts:

	  
	 	 
	
Third Floating Amount Payer:

	
Counterparty

	 	 
	
Third Floating Amount:

	
In relation to any Third Floating Rate Payer Payment Date, the product of (a) the Third Floating Rate Payer Calculation Amount for the related Third Floating Rate Payer Calculation Period multiplied by (b) the Spread multiplied by (c) the Floating Rate Day Count Fraction.

 

Page 12

 

 

	
Third Floating Rate Payer

Calculation Amount:

	
In relation to any Third Floating Rate Payer Calculation Period, the excess, if any, of (a) the Maximum Portfolio Notional Amount over (b) the greater of (i) the Utilization Amount for such Third Floating Rate Payer Calculation Period plus (ii) the Minimum Portfolio Notional Amount.

 

If the Maximum Portfolio Notional Amount varies during any Third Floating Rate Payer Calculation Period, then the Maximum Portfolio Notional Amount for such Calculation Period shall be equal to the daily average of the Maximum Portfolio Notional Amount during such Calculation Period.

	 	 
	
Third Floating Rate Payer

Calculation Period:

	
Each Monthly Period; provided that (a) the initial Third Floating Rate Payer Calculation Period shall begin on the day immediately following the Ramp-Up Period and (b) the final Third Floating Rate Payer Calculation Period shall end on the last Third Floating Rate Payer Payment Date.

	 	 
	
Third Floating Rate

Payer Payment Dates:

	
The fifth Business Day following the last day of each Monthly Period; provided that (a) the initial Third Floating Rate Payer Payment Date will be the first such Business Day after the end of the Ramp-Up Period and (b) the final Third Floating Rate Payer Payment Date will be the Termination Date.

	 	 
	
Spread:

	
0.15%

	 	 
	
Floating Rate Day

Count Fraction:

	
Actual/360.

	 	 
	
Compounding:

	
Inapplicable

	  	  
	
Counterparty Fourth Floating Amounts:

	  
	 	 
	
Fourth Floating Amount Payer:

	
Counterparty

	 	 
	
Fourth Floating Amount:

	
Each Expense or Other Payment.

	 	 
	
Fourth Floating Rate

Payer Payment Dates:

	
In relation to any Transaction, (a) the fifth Business Day following the last day of each Monthly Period, beginning with the first such Business Day after the Obligation Settlement Date for such Transaction, (b) the related Obligation Termination Date and (c) after the related Obligation Termination Date, the fifth Business Day after notice of a Fourth Floating Amount from Citibank to Counterparty; provided that, prior to the fifth Business Day after the related Obligation Termination Date, if Counterparty has received fewer than five Business Days' notice from Citibank that such Fourth Floating Amount is due and payable, such Fourth Floating Rate Payer Payment Date shall be the fifth Business Day following the last day of the next succeeding Monthly Period. The obligation of Counterparty to pay Fourth Floating Amounts in respect of any Transaction shall survive the related Obligation Termination Date.

 

Page 13

 

 

	  	  
	
Counterparty Fifth Floating Amounts:

	  
	 	 
	
Fifth Floating Amount Payer:

	
Counterparty

	 	 
	
Fifth Floating Amount:

	
In relation to any Terminated Obligation or Repaid Obligation, Capital Depreciation, if any.

	 	 
	
Fifth Floating Rate

Payer Payment Dates:

	
Each Total Return Payment Date.

	  	  
	
Payments by Citibank:

	  
	 	 
	
Citibank Fixed Amounts:

	  
	 	 
	
Fixed Amount Payer:

	
Citibank

	 	 
	
Fixed Amount:

	
In relation to any Transaction, the Interest and Fee Amount with respect to such Transaction for the related Fixed Amount Payer Payment Date.

	 	 
	
Fixed Amount Payer Calculation Periods:

	
In relation to each Reference Obligation in the Reference Portfolio, each period from and including any date upon which a payment of interest is made on such Reference Obligation to but excluding the next such date; provided that (a) the initial Fixed Amount Payer Calculation Period shall commence on and include the Obligation Settlement Date for such Reference Obligation and (b) the final Fixed Amount Payer Calculation Period shall end on, but exclude, the related Obligation Termination Date.

	 	 
	
Fixed Amount Payer Payment Dates:

	
(a) In relation to any Transaction (other than with respect to any Terminated Obligation or Repaid Obligation), the fifth Business Day following the last day of any Monthly Period during which any payment of interest is made on the related Reference Obligation, commencing with the first such date after the Obligation Settlement Date for such Transaction and ending with the last such date occurring prior to the related Obligation Termination Date; and

 

(b) In relation to any Transaction with respect to any Terminated Obligation or Repaid Obligation, the related Total Return Payment Date.

 

Page 14

 

 

	  	  
	
Citibank Floating Amounts:

	  
	 	 
	
Floating Amount Payer:

	
Citibank

	 	 
	
Floating Amount:

	
In relation to any Terminated Obligation or Repaid Obligation, Capital Appreciation, if any.

	 	 
	
Floating Rate Payer Payment Dates:

	
Each Total Return Payment Date.

	  	  

 

3.           Reference Obligation Removal; Accelerated Termination.

 

Reference Obligation Removal

 

(a)         A Transaction may be terminated in whole by either party (or in part by Counterparty) in accordance with this Clause 3 by the giving of notice (an "Accelerated Termination Notice") to the other party (each such termination, an "Accelerated Termination").

 

	
(i)

	
Counterparty shall be entitled to terminate any Transaction or any portion thereof by delivering an Accelerated Termination Notice to Citibank that is given (i) on the proposed Termination Trade Date and (ii) no more than 30 days prior to the proposed Termination Settlement Date; provided that, except in the case of the termination of all Transactions, the Net Collateral Value Percentage would be greater than or equal to the Termination Threshold (in each case, after giving effect to such termination). The Accelerated Termination Notice shall specify the Reference Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination Settlement Date.

 

	
(ii)

	
Following the occurrence of a Credit Event (as determined by the Calculation Agent) with respect to the related Reference Entity (including any guarantor or other obligor referred to in the definition thereof), Citibank shall, at any time after the Obligation Trade Date for the Reference Obligation, be entitled to propose, by notice to Counterparty, an increased Independent Amount Percentage with respect to the related Transaction.  If Counterparty does not, by notice to Citibank within five Business Days after such notice from Citibank, agree to such increase, then Citibank may terminate the related Transaction by delivering an Accelerated Termination Notice to Counterparty that is given (i) on the Termination Trade Date and (ii) no fewer than 10 days prior to the proposed Termination Settlement Date. The Accelerated Termination Notice shall specify the Reference Obligation that is the subject of such Accelerated Termination, the amount of the Terminated Obligation, the Termination Trade Date and the Termination Settlement Date.

 

Page 15

 

 

Elective Termination by Citibank due to Certain Events

 

(b)        If:

 

	
  

	
(i)

	
any Reference Obligation (including any Exchange Consideration) fails to satisfy the Obligation Criteria at any time,

 

	
  

	
(ii)

	
the Portfolio Criteria (other than clause (v) thereof) are not satisfied at any time,

 

	
  

	
(iii)

	
Counterparty fails to perform when due any obligation to Transfer Eligible Collateral under Clause 9(a) or

 

	
  

	
(iv)

	
Counterparty does not, by the deadline specified therefor in Clause 9(e), effect the Transfer to Citibank as Secured Party of Eligible Collateral contemplated by Clause 9(e),

 

then Citibank may notify Counterparty in writing of such event. In the case of the foregoing clause (i) or (ii), if such event continues for 30 days following the delivery of such notice, then Citibank will have the right but not the obligation to terminate the related Transaction.  In the case of the foregoing clause (iii) or (iv), if such event continues for two Business Days following delivery of such notice, Citibank will have the right but not the obligation to terminate each Transaction that is the subject of this Confirmation. Citibank may exercise this termination right with respect to each Terminated Obligation by delivering an Accelerated Termination Notice to Counterparty that is given, as to any Terminated Obligation, (1) on the proposed Termination Trade Date and (2) no fewer than 10 days prior to the proposed Termination Settlement Date for the related Terminated Obligation. The Accelerated Termination Notice shall specify each Reference Obligation that is the subject of such Accelerated Termination and, with respect to each such Reference Obligation, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination Settlement Date.

 

Acceleration of Scheduled Termination Date by Citibank

 

(c)        Citibank will have the right, but not the obligation, to accelerate the Scheduled Termination Date to a Business Day occurring no earlier than the Citibank Call Date.  Any such acceleration shall be effected by giving notice to Counterparty on a Business Day occurring no fewer than 180 days prior to the Citibank Call Date, which notice shall specify the accelerated Scheduled Termination Date.

 

Early Termination Date under Master Agreement

 

(d)        If there is effectively designated an Early Termination Date under the Master Agreement, then (i) each Transaction will be terminated in its entirety, (ii) notwithstanding any contrary or otherwise inconsistent provision of the Master Agreement, the provisions set forth in Section 6(e) of the Master Agreement shall not apply to any Transaction (except that amounts that become due and payable on or prior to such Early Termination Date with respect to any Transaction as provided in this Confirmation will constitute Unpaid Amounts) and (iii) the Termination Trade Date for each Transaction will be the date specified by the Calculation Agent occurring on or promptly after such Early Termination Date; provided that, if such Early Termination Date is designated by reason of an Event of Default as to which Citibank is the Defaulting Party, Counterparty may specify the Termination Trade Date with respect to any Transaction as to which the Calculation Agent has not specified the Termination Trade Date within 10 days after such Early Termination Date. The Calculation Agent shall give notice (an "Accelerated Termination Notice") to each party (such termination, an "Accelerated Termination") on or prior to such Early Termination Date, which Accelerated Termination Notice shall specify each Reference Obligation that is the subject of such Accelerated Termination and, with respect to each such Reference Obligation, the amount of the Terminated Obligation, the proposed Termination Trade Date and the proposed Termination Settlement Date. The amount, if any, payable in respect of such Early Termination Date will be determined in accordance with Clause 4(a) or 4(b) of this Confirmation (as applicable) based upon the delivery of such Accelerated Termination Notice.

 

Page 16

 

 

Effect of Termination

 

(e)        With respect to any Transaction terminated in whole pursuant to this Clause 3, (i) as of the relevant Termination Trade Date the Reference Amount shall, for all purposes hereof other than calculating Rate Payments, be reduced to zero (and, in the case of a Committed Obligation, the Outstanding Principal Amount thereof shall be reduced to zero) and (ii) as of the relevant Termination Settlement Date the Reference Amount, for purposes of calculating Rate Payments, shall be reduced to zero (and, in the case of a Committed Obligation, the Outstanding Principal Amount thereof shall be reduced to zero). With respect to any Transaction terminated in part pursuant to this Clause 3, (i) as of the relevant Termination Trade Date the Reference Amount shall, for all purposes hereof other than calculating Rate Payments, be reduced by the amount of the reduction of the Reference Amount specified in the Accelerated Termination Notice (and, in the case of a Committed Obligation, the Outstanding Principal Amount shall be reduced by an amount equal to the product of the Outstanding Principal Amount in effect immediately prior to such reduction multiplied by the amount of the reduction of the Reference Amount divided by the Reference Amount in effect immediately prior to such reduction) and (ii) as of the relevant Termination Settlement Date the Reference Amount shall, for purposes of calculating Rate Payments, be reduced by the amount of the reduction of the Reference Amount specified in the Accelerated Termination Notice (and, in the case of a Committed Obligation, the Outstanding Principal Amount shall be reduced by an amount equal to the product of the Outstanding Principal Amount in effect immediately prior to such reduction multiplied by the amount of the reduction of the Reference Amount divided by the Reference Amount in effect immediately prior to such reduction). Following any Termination Trade Date (other than the Termination Trade Date in respect of the Termination Date), Citibank shall promptly prepare and deliver to Counterparty a revised Annex I.

 

4.           Final Price Determination

 

Following the termination of any Transaction in whole or in part pursuant to Clause 3 or by reason of the occurrence of the Scheduled Termination Date (other than in connection with a Repayment), the Final Price for the relevant Terminated Obligation will be determined in accordance with this Clause 4.

 

Determination by Counterparty

 

(a)        In order to determine the Final Price for any Terminated Obligation then held by or on behalf of Citibank as a hedge for the related Transaction (other than pursuant to Clause 3(a)(ii), 3(b) or, with respect to any Early Termination Date designated by reason of an Event of Default, Credit Event Upon Merger or Additional Termination Event as to which Counterparty is the Defaulting Party or the sole Affected Party, 3(d)), Counterparty may arrange for the sale of such Terminated Obligation by giving notice of such sale to Citibank; provided that Counterparty shall have no right to arrange a sale of a Terminated Obligation pursuant to this Clause 4(a) if, as a result of such termination and the termination of all other Transactions as to which the Total Return Payment Date has not yet occurred, (i) the aggregate Value (as defined in the Credit Support Annex) of all Posted Credit Support (as so defined) held by Citibank as Secured Party (as so defined) plus the aggregate of all Citibank Floating Amounts payable in connection with such terminations would be less than (ii) the aggregate of all Counterparty Fifth Floating Amounts payable in connection with such terminations. Such notice must be given at least three Business Days prior to the related Termination Settlement Date in the case of any Terminated Obligation and at least 10 days prior to the Scheduled Termination Date if all Transactions are to be terminated in connection with the Scheduled Termination Date. Any sale (i) must be to an Approved Buyer or another buyer approved in advance by Citibank, such approval not to be unreasonably withheld or delayed, and (ii) must be scheduled to occur no later than the date customary for settlement, substantially in accordance with the then-current market practice in the principal market for such Terminated Obligation (as determined by the Calculation Agent), following the Termination Trade Date and prior to the Scheduled Termination Date if all Transactions are to be terminated in connection with the Scheduled Termination Date. If Counterparty so arranges any sale, the net cash proceeds received from the sale of any Terminated Obligation (exclusive of accrued interest), net of the related Costs of Assignment and adjusted by any Delay Compensation as provided in Clause 6(b), shall be the "Final Price" for that Terminated Obligation.

 

Page 17

 

 

Determination by Calculation Agent

 

(b)        If the Final Price for any Terminated Obligation is not determined according to Clause 4(a), the Calculation Agent shall attempt to obtain Firm Bids for such Terminated Obligation with respect to the applicable Termination Trade Date from two or more Dealers. The Calculation Agent will give Counterparty notice of its intention to obtain Firm Bids pursuant to this Clause 4(b) (such notice to be given telephonically and via electronic mail) not later than three hours prior to the bid submission deadline specified below. By notice to Citibank not later than the bid submission deadline specified below, Counterparty may, but shall not be obligated to, designate an Approved Buyer to provide a Firm Bid (and the Calculation Agent will seek a Firm Bid from such designee if so designated by Counterparty on a timely basis). A "Firm Bid" shall be a good and irrevocable bid for value, to purchase all or a portion of the applicable Terminated Obligation, expressed as a percentage of the Reference Amount of such Terminated Obligation and exclusive of accrued interest, for scheduled settlement substantially in accordance with the then-current market practice in the principal market for such Terminated Obligation, as determined by the Calculation Agent, submitted as of 11 a.m. New York time or as soon as practicable thereafter. If there is more than one Terminated Obligation at any time, then the Calculation Agent shall obtain Firm Bids solely with respect to each separate Terminated Obligation (but not with respect to any group or groups of such Terminated Obligations). Citibank may, but is not obligated to, sell or cause the sale of any portion of any Terminated Obligation to any Dealer that provides a Firm Bid.

 

If the Calculation Agent is unable to obtain from Dealers at least one Firm Bid or combination of Firm Bids for all of the Reference Amount of any Terminated Obligation with respect to the relevant Termination Trade Date, the Calculation Agent will attempt to obtain a Firm Bid or combination of Firm Bids for all of the Reference Amount of such Terminated Obligation from two or more Dealers until the earlier of (i) the second Business Day (inclusive) following such Termination Trade Date and (ii) the date a Firm Bid or combination of Firm Bids is obtained for all of the Reference Amount of such Terminated Obligation.

 

If the Calculation Agent is able to obtain at least one Firm Bid or combination of Firm Bids for all or any portion of the Reference Amount of any Terminated Obligation, the Final Price for such Terminated Obligation or portion thereof shall be determined by reference to such Firm Bid or Firm Bids pursuant to the last paragraph of this Clause 4(b). If no Firm Bids are obtained on or before such second Business Day for all or a portion of the applicable Terminated Obligation, the Final Price shall be deemed to be zero with respect to each portion of such Terminated Obligation for which no Firm Bid was obtained. The Calculation Agent will conduct the bid process in accordance with the procedures set forth in this Clause 4(b) and otherwise in good faith and in a commercially reasonable manner. Other than in the case of a termination pursuant to Clause 3(d), Citibank and Counterparty will make commercially reasonable efforts to accomplish the assignment to Counterparty (free of payment by Counterparty) of the related Terminated Obligation or portion thereof held by or on behalf of Citibank as a hedge for the related Transaction for which the Final Price is deemed to be zero (including as provided below); provided that Citibank shall not be liable for any losses related to any delay in or failure of such assignment beyond its control.

 

Page 18

 

 

Notwithstanding anything to the contrary herein,

 

	
(i)

	
the Calculation Agent shall be entitled to disregard any Firm Bid submitted by a Dealer if, in the Calculation Agent's commercially reasonable judgment, (x) such Dealer is ineligible to accept assignment or transfer of the related Terminated Obligation or portion thereof, as applicable, substantially in accordance with the then-current market practice in the principal market for the Terminated Obligation, as determined by the Calculation Agent, or (y) as a result of the terms of any agreement or instrument governing the related Terminated Obligation or any order of a court of competent jurisdiction relating to such Terminated Obligation, such Dealer is prohibited or restricted from obtaining any consent required for the assignment or transfer of the related Terminated Obligation or portion thereof, as applicable, to it; and

 

	
(ii)

	
if the Calculation Agent determines that the highest Firm Bid obtained in connection with any Termination Trade Date is not bona fide as a result of (x) the occurrence of an Event of Default described in Section 5(a)(vii) with respect to the bidder, (y) the inability, failure or refusal of the bidder to settle the purchase of the related Terminated Obligation or portion thereof, as applicable, or otherwise settle transactions in the relevant market or perform its obligations generally or (z) the Calculation Agent not having pre-approved trading lines with the bidder that would permit settlement of the purchase of the related Terminated Obligation or portion thereof, as applicable,

 

that Firm Bid shall be disregarded and the next highest Firm Bid that is not disregarded shall be used to determine the Final Price. If there is no such Firm Bid, then the Calculation Agent shall designate a new Termination Trade Date; provided that the Calculation Agent shall designate a new Termination Trade Date pursuant to this paragraph only once. If the highest Firm Bid for any portion of the related Terminated Obligation determined in connection with the second Termination Trade Date is disregarded pursuant to this paragraph, the Calculation Agent shall have no obligation to obtain further bids, and the applicable "Final Price" for the portion which was so disregarded shall be deemed to be zero.

 

If Citibank transfers, or causes the transfer of, all or any portion of the Terminated Obligation to the Dealer or Dealers providing the highest Firm Bid or highest combination of Firm Bids for such Terminated Obligation (or portion thereof) or to such other party as provided above, the net cash proceeds received from the sale of such Terminated Obligation or portion thereof (which sale shall be scheduled to settle substantially in accordance with the then-current market practice in the principal market for the related Reference Obligation as determined by the Calculation Agent), net of the related Costs of Assignment and adjusted by any Delay Compensation as provided in Clause 6(b), shall be the "Final Price" for that Terminated Obligation (or the portion thereof that is sold).

 

If Citibank has determined not to hold, or cause to be held, all or any portion of any Terminated Obligation as a hedge for the related Transaction or otherwise determines, in its sole discretion, not to sell or cause the sale of any portion of any Terminated Obligation to a Dealer providing the highest Firm Bid or combination of Firm Bids, the "Final Price" for such Terminated Obligation or portion thereof shall be equal to the highest Firm Bid (or highest combination of Firm Bids) for such Terminated Obligation (or portion thereof) multiplied by the Reference Amount of such Terminated Obligation (or the respective portions of the Reference Amount to which such Firm Bids relate). The Calculation Agent may perform any of its duties under this Clause 4(b) through any Affiliate designated by it, but no such designation shall relieve the Calculation Agent of its duties under this Clause 4(b).

 

Page 19

 

 

Early Termination of Facility

 

(c)        For the avoidance of doubt, if the Termination Date occurs prior to the Citibank Call Date, each Counterparty Second Floating Amount shall continue to be payable by Counterparty on each subsequent Second Floating Rate Payer Payment Date occurring on or prior to the Citibank Call Date; provided that, if either party shall so specify in writing to the other party prior to any final Termination Trade Date, then on such final Termination Trade Date (i) the obligation of Counterparty to continue to pay each Counterparty Second Floating Amount on each subsequent Second Floating Rate Payer Payment Date occurring on or prior to the Citibank Call Date shall terminate and be replaced by the obligation in the following clause and (ii) Counterparty shall pay to Citibank an amount equal to the present value (as calculated by the Calculation Agent with discounting on a continuous basis) of each Counterparty Second Floating Amount payable (without regard to the termination of such obligation under the foregoing clause) on each subsequent Second Floating Rate Payer Payment Date occurring on or prior to the Citibank Call Date, discounted to such final Termination Trade Date at a discount rate per annum equal to the Discount Rate.  For this purpose, the "Discount Rate" means the zero coupon swap rate (as determined by the Calculation Agent) implied by the fixed rate offered to be paid by Citibank under a fixed for floating interest rate swap transaction with a remaining Term equal to the period from such final Termination Trade Date to the final Second Floating Rate Payer Payment Date in exchange for the receipt of payments indexed to USD-LIBOR-BBA.

 

5.           Repayment.

 

If all or a portion of the Reference Amount of any Reference Obligation is repaid or otherwise reduced (in the case of a Committed Obligation, only if the Reference Amount thereof is permanently reduced) (including, without limitation, through any exercise of any right of set-off, reduction, or counterclaim that results in the satisfaction of the obligations of such Reference Entity to pay any principal owing in respect of such Reference Obligation) on or prior to the Scheduled Termination Date (the amount of such repayment or other reduction, a "Repayment"; the portion of the related Reference Obligation so repaid or otherwise reduced, a "Repaid Obligation"; and the date of such Repayment, the "Repayment Date"):

 

	
(a)

	
the Total Return Payment Date with respect to the Repaid Obligation will be the fifth Business Day next succeeding the last day of the Monthly Period in which the Repayment Date occurred;

 

	
(b)

	
as of the related Repayment Date, the Reference Amount of such Reference Obligation shall be decreased by an amount equal to the principal amount of the Repaid Obligation; and

 

	
(c)

	
the related Final Price in relation to the Repaid Obligation shall be (i) in the case of a Committed Obligation, the portion of the Reference Amount that is permanently reduced on such Repayment Date and (ii) in the case of a Term Obligation, the amount of principal and premium in respect of principal paid by such Reference Entity on the Repaid Obligation to holders thereof (or the amount by which the Reference Obligation was otherwise reduced) on such Repayment Date. Following any Repayment Date, Citibank shall promptly prepare and deliver to Counterparty a revised Annex I showing the revised Reference Amount for the related Reference Obligation.

 

6.           Adjustments.

 

(a)        If any Reference Obligation or portion thereof is irreversibly converted or exchanged into or for any securities, obligations, cash or other assets or property ("Exchange Consideration"), thereafter such Exchange Consideration will constitute such Reference Obligation or portion thereof, and, unless Citibank shall otherwise agree in writing, (i) if such Exchange Consideration fails to satisfy the Obligation Criteria, then Clause 3(b)(i) shall apply and (ii) if the Portfolio Criteria (other than clause (v) thereof) set forth in Annex II would not be satisfied after giving effect to such exchange, then Clause 3(b)(ii) shall apply.

 

Page 20

 

 

(b)        Delay Compensation (as defined below) shall result in an adjustment (i) as contemplated by the definition of "Interest and Fee Amount" in connection with the establishment by the Citibank Holder of a related hedge in respect of a Transaction, if the actual settlement of the purchase of the related hedge occurs after the Obligation Settlement Date and (ii) of a Final Price with respect to a Terminated Obligation in connection with the termination by the Citibank Holder of a related hedge, if the actual settlement of the sale of the related hedge occurs after the Termination Settlement Date. "Delay Compensation" shall accrue (x) in the case of clause (i) above, from and including the Obligation Settlement Date to but excluding the actual settlement of the purchase effected to establish the related hedge (and, during such period, (A) the Counterparty First Floating Amount shall be calculated by reference to the Spread and not the Floating Rate Option and (B) Interest and Fee Amounts will be determined without regard to payments in respect of the interest rate index, but will be determined inclusive of the applicable spread above such interest rate index, used in the Reference Obligation Credit Agreement to calculate interest payments in respect of the related Reference Obligation and in effect during such period) and (y) in the case of clause (ii) above, from and including the Termination Settlement Date to but excluding the actual settlement of the sale effected to terminate the related hedge (and, during such period, (A) the Counterparty First Floating Amount shall be calculated by reference to the Floating Rate Option and not the Spread and (B) Interest and Fee Amounts shall be reduced by interest accrued during such period in excess of the interest rate index used in the Reference Obligation Credit Agreement to calculate interest payments in respect of the related Reference Obligation and in effect during such period). In connection with any adjustment by reason of Delay Compensation, (i) any initial Payment Date in this Confirmation determined by reference to the "Obligation Settlement Date" shall be determined as if the Obligation Settlement Date were the actual settlement of the purchase of the related hedge and (ii) any final Payment Date in this Confirmation determined by reference to the "Termination Settlement Date" shall be determined as if the Termination Settlement Date were the actual settlement of the termination of the related hedge.

 

(c)        If (i) Citibank elects to establish a hedge as a result of the addition or increase in the Reference Amount of any Reference Obligation that is the subject of a Transaction and (ii) the Citibank Holder is unable after using commercially reasonable efforts to effect the settlement of such hedge, then, by notice to Counterparty, Citibank may in its sole discretion, specify that such addition or increase in the Reference Amount of such Reference Obligation will not be effective.

 

7.           Representations, Warranties and Agreements.

 

(a)        Each party hereby agrees as follows, so long as either party has or may have any obligation under any Transaction:

 

	
(i)

	
Non-Reliance. It is acting for its own account, and it has made its own independent decisions to enter into such Transaction and as to whether such Transaction is appropriate or proper for it based upon its own judgment and upon advice from such advisors 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 such Transaction; it being understood that information and explanations related to the terms and conditions of such Transaction shall not be considered investment advice or a recommendation to enter into such Transaction. It has not received from the other party any assurance or guarantee as to the expected results of such Transaction;

 

	
(ii)

	
Evaluation and Understanding. It is capable of evaluating and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of such Transaction. It is also capable of assuming, and assumes, the financial and other risks of such Transaction;

 

Page 21

 

 

	
(iii)

	
Status of Parties. The other party is not acting as a fiduciary or an advisor for it in respect of such Transaction; and

 

	
(iv)

	
Reliance on its Own Advisors. Without limiting the generality of the foregoing, in making its decision to enter into, and thereafter to maintain, administer or terminate, such Transaction, it will not rely on any communication from the other party as, and it has not received any representation or other communication from the other party constituting, legal, accounting, business or tax advice, and it will consult its own legal, accounting, business and tax advisors concerning the consequences of such Transaction.

 

(b)        Each party acknowledges and agrees that, so long as either party has or may have any obligation under any Transaction:

 

	
(i)

	
such Transaction does not create any direct or indirect obligation of any Reference Entity or any direct or indirect participation in any Reference Obligation or any other obligation of any Reference Entity;

 

	
(ii)

	
each party and its Affiliates may deal in any Reference Obligation and may accept deposits from, make loans or otherwise extend credit to, and generally engage in any kind of commercial or investment banking or other business with any Reference Entity, any Affiliate of any Reference Entity, any other person or entity having obligations relating to any Reference Entity and may act with respect to such business in the same manner as if such Transaction did not exist and may originate, purchase, sell, hold or trade, and may exercise consensual or remedial rights in respect of, obligations, securities or other financial instruments of, issued by or linked to any Reference Entity, regardless of whether any such action might have an adverse effect on such Reference Entity, the value of the related Reference Obligation or the position of the other party to such Transaction or otherwise;

 

	
(iii)

	
except as provided in Clause 7(d)(iii), each party and its Affiliates and the Calculation Agent may, whether by virtue of the types of relationships described herein or otherwise, at the date hereof or at any time hereafter, be in possession of information regarding any Reference Entity or any Affiliate of any Reference Entity that is or may be material in the context of such Transaction and that may or may not be publicly available or known to the other party. In addition, except as provided in Clause 7(b)(vii), this Confirmation does not create any obligation on the part of such party and its Affiliates to disclose to the other party any such relationship or information (whether or not confidential);

 

	
(iv)

	
neither Citibank nor any of its Affiliates shall be under any obligation to hedge such Transaction or to own or hold any Reference Obligation as a result of such Transaction, and Citibank and its Affiliates may establish, maintain, modify, terminate or re-establish any hedge position or any methodology for hedging at any time without regard to Counterparty. Counterparty acknowledges and agrees that it is not relying on any representation, warranty or statement by Citibank or any of its Affiliates as to whether, at what times, in what manner or by what method Citibank or any of its Affiliates may engage in any hedging activities;

 

	
(v)

	
notwithstanding any other provision in this Confirmation or any other document, Citibank and Counterparty (and each employee, representative, or other agent of Citibank or Counterparty) may each disclose to any and all persons, without limitation of any kind, the U.S. tax treatment and U.S. tax structure of the transaction and all materials of any kind (including opinions or other tax analyses) that are provided to them relating to such U.S. tax treatment and U.S. tax structure (as those terms are used in Treasury Regulations under Sections 6011, 6111 and 6112 of the U.S. Internal Revenue Code of 1986, as amended (the "Code")), other than any information for which nondisclosure is reasonably necessary in order to comply with applicable securities laws. To the extent not inconsistent with the previous sentence, Citibank and Counterparty will each keep confidential (except as required by law) all information unless the other party has consented in writing to the disclosure of such information;

 

Page 22

 

 

	
(vi)

	
if Citibank chooses to hold a Reference Obligation as a result of any Transaction, Citibank shall hold such Reference Obligation directly or through an Affiliate (the "Citibank Holder"). The Citibank Holder may deal with such Reference Obligation as if the related Transaction did not exist, provided that, so long as the Citibank Holder remains the lender of record with respect to such Reference Obligation, upon any occasion permitting the Citibank Holder to exercise any right in relation to such Reference Obligation to give or withhold consent (an "Election") to an action proposed to be taken (or to be refrained from being taken), the Citibank Holder shall, insofar as permitted under (x) applicable laws, rules and regulations and (y) each provision of any agreement or instrument evidencing or governing such Reference Obligation (and, in the case of any participation interest, governing such participation interest), give its consent to the action proposed to be taken (or to be refrained from being taken), unless (A) Counterparty, by timely notice to Citibank, requests (a "Counterparty Election Request") that the Citibank Holder withhold such consent and (B) the Citibank Holder, in its sole discretion, elects to withhold such consent in accordance with the Counterparty Election Request. Notwithstanding the foregoing: (1) the Citibank Holder shall have no obligation to respond to, or consult with Counterparty in relation to, a Counterparty Election Request (failure to respond to a Counterparty Election Request being deemed a denial); (2) the Citibank Holder shall have no other duties or obligations to Counterparty of any nature with respect to any Election or any Counterparty Election Request; (3) the Citibank Holder shall not be liable to Counterparty or any of its Affiliates for the consequences of any consent given or withheld by the Citibank Holder in connection with such Reference Obligation (whether or not pursuant to a Counterparty Election Request); and (4) if the Citibank Holder elects in its sole discretion to withhold its consent in accordance with a Counterparty Election Request, the Citibank Holder may subsequently determine to give such consent at any time without notice to Counterparty; and

 

	
(vii)

	
in connection with each Reference Obligation that is held by a Citibank Holder as a result of any Transaction, the Citibank Holder will promptly (and in any event within one Business Day after receipt) deliver or cause to be delivered to Counterparty the following information and documentation, in each case, to the extent actually received by the Citibank Holder from the Reference Entity or its agents under the related Reference Obligation Credit Agreement: all notices of any borrowings, prepayments and interest rate settings, all amendments, waivers, tenders, exchanges and other modifications (whether final or proposed) in relation to the terms of the Reference Obligation; and all notices given by the Reference Entity to the lenders or their agent or by the lenders or their agent to the Reference Entity in relation to the exercise of remedies.

 

(c)        Each of the parties hereby represents that, on each date on which a Transaction is entered into hereunder:

 

	
(i)

	
it is entering into such Transaction for investment, financial intermediation, hedging or other commercial purposes; and

 

	
(ii)

	
(x) it is an "eligible contract participant" as defined in Section 1a of the U.S. Commodity Exchange Act, as amended (the "CEA"), (y) the Master Agreement and each Transaction are subject to individual negotiation by each party, and (z) neither the Master Agreement nor any Transaction will be executed or traded on a "trading facility" within the meaning of Section 1a of the CEA.

 

Page 23

 

 

(d)        Counterparty hereby represents to Citibank that:

 

	
(i)

	
its financial condition is such that it has no need for liquidity with respect to its investment in any Transaction and no need to dispose of any portion thereof to satisfy any existing or contemplated undertaking or indebtedness. Its investments in and liabilities in respect of any Transaction, which it understands is not readily marketable, are not disproportionate to its net worth, and it is able to bear any loss in connection with any Transaction, including the loss of its entire investment in such Transaction;

 

	
(ii)

	
it understands that no obligations of Citibank to it hereunder will be entitled to the benefit of deposit insurance and that such obligations will not be guaranteed by any Affiliate of Citibank or any governmental agency;

 

	
(iii)

	
as of (x) the relevant Obligation Trade Date and (y) any date on which a sale is effected pursuant to Clause 4(a) or on which the Calculation Agent solicits Firm Bids pursuant to Clause 4(b), neither Counterparty nor any of its Affiliates, whether by virtue of the types of relationships described herein or otherwise, is on such date in possession of information regarding any related Reference Entity or any Affiliate of such Reference Entity that is or may be material in the context of such Transaction or the purchase or sale of any related Reference Obligation unless such information either (x) is publicly available or (y) has been made available to each registered owner of such Reference Obligation on a basis that permits such registered owner to disclose such information to any assignee of or participant (whether on a funded or unfunded basis) in, or any prospective assignee of or participant (whether on a funded or unfunded basis) in, any rights or obligations under the related Reference Obligation Credit Agreement;

 

	
(iv)

	
it has delivered to Citibank on or prior to the date hereof (and it will, prior to any expiration of any such form previously so delivered, deliver to Citibank) a United States Internal Revenue Service Form W-9 (or applicable successor form), properly completed and signed (which representation shall also be made for purposes of Section 3(f) of the Master Agreement);

 

	
(v)

	
it could have received all payments on the Reference Obligation without any withholding tax if it had been the registered owner of the Reference Obligation (which representation shall also be made for purposes of Section 3(f) of the Master Agreement);

 

	
(vi)

	
it is not, for U.S. Federal income tax purposes, a tax-exempt organization and to the extent it is a pass-through entity for U.S. Federal income tax purposes, it either has disclosed or will disclose to its tax-exempt investors, if any, that direct and indirect investments of Counterparty may cause tax-exempt investors of Counterparty to recognize unrelated business taxable income;

 

	
(vii)

	
it understands that the entry into a Transaction hereunder might cause it to be treated as the beneficial owner of the related Reference Obligation for U.S. Federal income tax purposes and has obtained tax advice from its auditors or external legal counsel, in either case of recognized standing in relation to U.S. Federal income tax matters, that considers the tax consequences of that treatment; and

 

Page 24

 

 

	
(viii)

	
any purchase by it of record ownership of the Reference Amount of the related Reference Obligation would not have resulted in a violation or breach, or otherwise contravened, the related Reference Obligation Credit Agreement.

 

(e)        Except for disclosure authorized pursuant to Clause 7(b)(v), Counterparty agrees to be bound by the confidentiality provisions of the related Reference Obligation Credit Agreement with respect to all information and documentation in relation to a Reference Entity or a Reference Obligation delivered to Counterparty hereunder. Counterparty acknowledges that such information may include material non-public information concerning the Reference Entity or its securities and agrees to use such information in accordance with applicable law, including Federal and State securities laws.

 

(f)        Section 2(c)(ii) of the Master Agreement shall not apply to the Transactions to which this Confirmation relates. Multiple Transaction Payment Netting under Section 2(c) of the Master Agreement will apply to the Transactions to which this Confirmation relates.

 

(g)        Notwithstanding anything in the Master Agreement to the contrary, Citibank will not be required to pay any additional amount under Section 2(d)(i) of the Master Agreement in respect of any deduction or withholding for or on account of any Tax in relation to any payment under any Transaction that is determined by reference to interest or fees payable with respect to any Reference Obligation. If Citibank is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding for or on account of any Tax in relation to any payment under any Transaction that is determined by reference to interest or fees payable with respect to any Reference Obligation and Citibank does not so deduct or withhold, then Section 2(d)(ii) of the Master Agreement shall be applicable.

 

8.           Adjustments Relating to Certain Unpaid or Rescinded Payments.

 

(a)        If (i) Citibank makes any payment to Counterparty as provided under Clause 2 and the corresponding Interest and Fee Amount is not paid (in whole or in part) when due or (ii) any Interest and Fee Amount in respect of a Reference Obligation is required to be returned (in whole or in part) by a holder of such Reference Obligation (including, without limitation, the Citibank Holder) to the applicable Reference Entity or paid to any other person or entity or is otherwise rescinded pursuant to any bankruptcy or insolvency law or any other applicable law, then Counterparty will pay to Citibank, upon request by Citibank, such amount (or portion thereof) so not paid or so required to be returned, paid or otherwise rescinded. If such returned, paid or otherwise rescinded amount is subsequently paid, Citibank shall pay such amount (subject to Clause 8(c)) to Counterparty within five Business Days after the date of such subsequent payment.

 

(b)        If, with respect to any Repaid Obligation, the corresponding payment of principal of the Repaid Obligation is required to be returned (in whole or in part) by a holder thereof (including, without limitation, the Citibank Holder) to the applicable Reference Entity or paid to any other person or entity or is otherwise rescinded pursuant to any bankruptcy or insolvency law or any other applicable law, then (i) the parties hereto shall be restored severally and respectively to their former positions hereunder and thereafter all rights and obligations of the parties hereunder shall continue as though no Repayment had occurred and (ii) without limiting the generality of the foregoing, if either party has made a payment to the other party in respect of Capital Appreciation or Capital Depreciation related to such Repayment as provided under Clause 2, then the party that received the payment in respect of such Capital Appreciation or Capital Depreciation, as applicable, shall repay such amount (subject to Clause 8(c)) to the other party. If such returned, paid or otherwise rescinded amount is subsequently paid by the related Reference Entity or any such other person or entity, then the relevant party shall pay the amount of such Capital Appreciation or Capital Depreciation, as applicable, within five Business Days after the date of such subsequent payment.

 

Page 25

 

 

(c)        Amounts payable pursuant to this Clause 8 shall be subject to adjustment by the Calculation Agent in good faith and on a commercially reasonable basis, as agreed by Citibank and Counterparty, in order to preserve for the parties the intended economic risks and benefits of the relevant Transaction.

 

(d)        The payment obligations of Citibank and Counterparty pursuant to this Clause 8 shall survive the termination of all Transactions.

 

9.           Credit Support.

 

Notwithstanding anything in the Credit Support Annex (the "Credit Support Annex") to the Schedule to the Master Agreement to the contrary, the following collateral terms shall apply to each Transaction to which this Confirmation relates (capitalized terms used in this Clause 9 but not otherwise defined in this Confirmation have the respective meanings given to such terms in the Credit Support Annex):

 

	
(a)

	
With respect to each Transaction to which this Confirmation relates, an "Independent Amount" shall be applicable to Counterparty on each date of determination in an amount equal to the Notional Amount of such Transaction on such date of determination multiplied by the relevant Independent Amount Percentage (determined in accordance with the table set forth below).

 

	 	
Condition

	
Independent Amount Percentage

	 	
(i) Except as provided in clause (iii) below, with respect to any Transaction not relating to a Specified Reference Obligation

	
25%

	 	
(ii) Except as provided in clause (iii) below, with respect to any Transaction relating to a Specified Reference Obligation 

	Such percentage as Citibank shall specify on or prior to the Obligation Trade Date for such Transaction 
	 	
(iii) With respect to any Reference Obligation whose Independent Amount Percentage is agreed in writing as provided in Clause 3(a)(ii)

	
Such Independent Amount Percentage as is agreed in writing as provided in Clause 3(a)(ii)

 

	
  

	
Not later than (i) the Effective Date and (ii) the date of any increase in the Independent Amount Percentage applicable to any Transaction, Counterparty as Pledgor will Transfer to Citibank as Secured Party Eligible Collateral having a Value as of the date of Transfer equal to the related Independent Amount (or increase in the related Independent Amount) determined pursuant this Clause 9(a).

 

	
(b)

	
In no event shall Citibank as Secured Party be obligated to Transfer Posted Credit Support in respect of a Return Amount to Counterparty as Pledgor if the Value as of any Valuation Date of all Posted Credit Support held by Citibank as Secured Party would be less than the Independent Amount determined pursuant to Clause 9(a).

 

Page 26

 

 

	
(c)

	
In no event shall Counterparty as a Secured Party have any positive "Exposure" to Citibank with respect to the Transactions to which this Confirmation relates.

 

	
(d)

	
Without limiting Clause 3(b)(iv), in no event shall Citibank as a Secured Party shall have any positive "Exposure" to Counterparty with respect to the Transactions to which this Confirmation relates.

 

	
(e)

	
If (i) the Net Collateral Value Percentage on any Valuation Date is less than the Termination Threshold on such Valuation Date and (ii) Citibank gives notice thereof to Counterparty on any Business Day, Counterparty will, not later than the close of business on the Business Day following the date of such notice from Citibank, effect the Transfer to Citibank as Secured Party of Eligible Collateral such that the Net Collateral Value Percentage after giving effect to such Transfer is at least equal to the Cure Threshold.  In addition, Counterparty may, on any Business Day, effect the Transfer to Citibank as Secured Party of any additional Eligible Collateral.

 

	
(f)

	
If Counterparty enters into any Transaction under the Master Agreement other than the Transactions contemplated by this Confirmation (each, a "Separate Transaction"), then the Credit Support Amount with respect to Counterparty as Pledgor shall never be less than the "Credit Support Amount" with respect to Counterparty as Pledgor calculated (i) solely with reference to all Separate Transactions and (ii) without regard to the Independent Amount applicable to Counterparty as Pledgor under this Confirmation.

 

	
(g)

	
Each Business Day shall be a Valuation Date.

 

10.         Notice and Account Details.

 

	
Notices to Citibank:

	  	
 

Citibank, N.A., New York Branch

390 Greenwich Street, 4th Floor

New York, New York 10013

Tel: (212) 723-6181

Fax: (646) 291-5779

Attn: Mitali Sohoni

 

with a copy to:

 

Office of the General Counsel

Fixed Income and Derivatives Sales and Trading

Citibank, N.A., New York Branch

388 Greenwich Street, 17th Floor

New York, New York 10013

Tel: (212) 816-2121

Fax: (646) 862-8431

Attn: Craig Seledee

 

Page 27

 

 

	
Notices to Counterparty:

	  	
 

Flatiron Funding, LLC

c/o CĪON Investment Corporation

3 Park Avenue, 36th Floor

New York, NY 10016

Attention: General Counsel

Facsimile:  (212) 418-4739

 

	
Payments to Citibank:

	  	
 

Citibank, N.A., New York

ABA No.: 021-000-089

Account No.: 00167679

Ref: Financial Futures

 

	
Payments to Counterparty:

	  	
 

Account Name: CION Investment Corporation

Bank: U.S. Bank, N.A., Minneapolis, MN

ABA No.: 091-000-022

Account: 1047-9089-5668

FFC: 163276-200

 

11.         Offices.

 

	
(a)

	
The Office of Citibank for each Transaction:

 

New York

 

(b)        The Office of Counterparty for each Transaction:

 

New York

 

Page 28

 

Please confirm that the foregoing correctly sets forth the terms of our agreement by having a duly authorized officer of Counterparty execute this Confirmation and return the same by facsimile to the attention of the individual at Citibank indicated on the first page hereof.

 

Very truly yours,

 

 

CITIBANK, N.A.

 

 

 

By: /s/ David Santos                                                               

Name: David Santos

Title: Vice President

 

 

CONFIRMED AND AGREED

 

AS OF THE DATE FIRST ABOVE WRITTEN:

 

FLATIRON FUNDING, LLC

 

 

 

By: /s/ Michael A. Reisner                                                             

 Name: Michael A. Reisner

 Title: Co-President & Co-CEO

 

Page 29

 

 

ANNEX A

 

ADDITIONAL DEFINITIONS

 

"Affiliate", for purposes of this Confirmation only, has the meaning given to such term in Rule 405 under the Securities Act of 1933, as amended.

 

"Approved Buyer" means (a) any entity listed in Annex III hereto (as such Annex may be amended by mutual written consent of the parties hereto from time to time) so long as its long-term unsecured and unsubordinated debt obligations on the "trade date" for the related purchase or submission of a Firm Bid contemplated hereby are rated at least "A2" by Moody's and at least "A" by S&P and (b) if an entity listed in Annex III hereto is not the principal banking or securities Affiliate within a financial holding company group, the principal banking or securities Affiliate of such listed entity within such financial holding company group so long as such obligations of such Affiliate have the rating indicated in clause (a) above.

 

"Capital Appreciation" and "Capital Depreciation" mean, for any Total Return Payment Date, the amount determined according to the following formula for the applicable Terminated Obligation or Repaid Obligation:

 

Final Price – Applicable Notional Amount

 

where

 

"Final Price" means (a) in the case of any Terminated Obligation, the amount determined pursuant to Clause 4, and (b) in the case of any Repaid Obligation, the amount determined pursuant to Clause 5, and

 

"Applicable Notional Amount" means the Notional Funded Amount (determined immediately prior to the related Repayment Date or Termination Trade Date) for such Terminated Obligation or Repaid Obligation, as applicable.

 

If such amount is positive, such amount is "Capital Appreciation" and if such amount is negative, the absolute value of such amount is "Capital Depreciation".

 

"Committed Obligation" means (a) any Delayed Drawdown Reference Obligation and (b) any Revolving Reference Obligation.

 

"Costs of Assignment" means, in the case of any Terminated Obligation, the sum of (a) any actual costs of transfer or assignment paid by the seller under the terms of any Terminated Obligation or otherwise actually imposed on the seller by any applicable administrative agent, borrower or obligor incurred in connection with the sale of such Terminated Obligation and (b) any reasonable expenses incurred by the seller in connection with such sale and, if transfers of the Terminated Obligation are subject to the Standard Terms and Conditions for Distressed Trade Confirmations, as published by the LSTA and as in effect on the Obligation Trade Date, reasonable legal costs incurred by the seller in connection with such sale, in each case to the extent not already reflected in the Final Price.

 

"Credit Event" means the occurrence of a Bankruptcy or Failure to Pay. For purposes of the determination of whether a Credit Event has occurred, the Obligation Category will be Borrowed Money, the Payment Requirement will be USD1,000,000 and no Obligation Characteristics will be specified. Capitalized terms used in this definition but not defined in this Confirmation shall have the meanings specified in the 2003 ISDA Credit Derivatives Definitions.

 

Page 30

 

 

"Cure Threshold" means, on any date of determination, (a) the sum, determined with respect to all Transactions, of the products of (i) the Independent Amount Percentage with respect to such Transaction multiplied by (ii) the Notional Amount with respect to such Transaction on such date of determination divided by (b) the Portfolio Notional Amount on such date of determination.

 

"Current Price" means, with respect to any Reference Obligation on any date of determination, the Calculation Agent's determination of the net cash proceeds that would be received from the sale on such date of determination of such Reference Obligation, net of the related Costs of Assignment. If Counterparty disputes the Calculation Agent's determination of the Current Price of any Reference Obligation, then Counterparty may, no later than three hours after Counterparty is given notice of such determination, (a) designate two Dealers and (b) provide to Citibank within such three-hour period with respect to each such Dealer either (i) a Firm Bid with respect to not less than the Quotation Amount of the Reference Obligation or (ii) a Bloomberg screen page indicating that such Dealer has made during the Quotation Period both a bid and an offer quotation with respect to not less than the Quotation Amount of the Reference Obligation (with such bid quotation being a "Firm Bid" for purposes of the next sentence).  The highest of such two Firm Bids will be the Current Price. The "Current Price" shall be expressed as a percentage of par and will be determined exclusive of accrued interest.

 

"Dealer" means (a) any nationally recognized independent dealer in the related Reference Obligation chosen by the Calculation Agent or its designated Affiliate, (b) any Approved Buyer and (c) any other entity designated by the Calculation Agent or its designated Affiliate.

 

"Delayed Drawdown Reference Obligation" means a Reference Obligation that (a) requires the holder thereof to make one or more future advances to the borrower under the instrument or agreement pursuant to which such Reference Obligation was issued or created, (b) specifies a maximum amount that can be borrowed on one or more fixed borrowing dates and (c) does not permit the re-borrowing of any amount previously repaid; provided that, on any date on which all commitments by the holder thereof to make advances to the borrower under such Delayed Drawdown Reference Obligation expire or are terminated or reduced to zero, such Reference Obligation shall cease to be a Delayed Drawdown Reference Obligation.

 

"Designated Reference Obligation" means any Reference Obligation that (a) is not a Specified Reference Obligation, (b) has as of the Obligation Trade Date a Moody's Rating of at least B2 and an S&P Rating of at least B, (c) is on the Obligation Trade Date part of a fungible class of debt obligations (as to issuance date and all economic terms) of at least USD500,000,000, (d) has an Initial Price as of the Obligation Trade Date of at least 90% and (e) is on the Obligation Trade Date the subject of at least five bid quotations from nationally recognized independent dealers in the related obligation as reported on a nationally recognized pricing service.

 

"Expense or Other Payment" means the aggregate amount of any payments (other than extensions of credit) due from the lender(s) in respect of any Reference Obligation, including, without limitation, (a) any expense associated with any amendment, modification or waiver of the provisions of a credit agreement, (b) any reimbursement of any agents under the provisions of a credit agreement, and (c) any indemnity or other similar payment, including amounts owed on or after the related Obligation Termination Date in respect of amounts incurred or any event that occurred before the related Obligation Termination Date.

 

Page 31

 

 

"Interest and Fee Amount" means, for any Citibank Fixed Amount Payer Payment Date and any Transaction, the aggregate amount of interest (including interest breakage costs), fees (including, without limitation, amendment, consent, tender, facility, letter of credit and other similar fees) and other amounts (other than in respect of principal and premium paid in respect of principal) paid with respect to the related Reference Obligation (after deduction of any withholding taxes for which the Reference Entities are not obligated to reimburse holders of the related Reference Obligation, if applicable) during the relevant Citibank Fixed Amount Payer Calculation Period; provided that Interest and Fee Amounts:

 

	
(a)

	
in the case of "Interest and Accruing Fees" (as defined in the "Standard Terms and Conditions for Par/Near Par Trade Confirmations" or "Standard Terms and Conditions for Distressed Trade Confirmations", as applicable to the relevant Reference Obligation, most recently published by the LSTA prior to the Trade Date), shall not include any amounts that accrue prior to the Obligation Settlement Date for the related Reference Obligation or that accrue on or after the Obligation Termination Date for the related Reference Obligation or portion thereof,

 

	
(b)

	
in the case of "Non-Recurring Fees" (as so defined), shall not include any amounts that accrue prior to the Obligation Trade Date for the related Reference Obligation or that accrue on or after the Termination Trade Date for the related Reference Obligation or portion thereof,

 

	
(c)

	
shall be determined after deducting any Costs of Assignment that would be incurred by a buyer in connection with any purchase of the Reference Obligation as a hedge for such Transaction and, in connection with the establishment by the Citibank Holder of a related hedge in respect of such Transaction, shall be adjusted by any Delay Compensation as provided in Clause 6(b); and

 

	
(d)

	
in the case of any Transaction as to which the related Reference Obligation is a Committed Obligation, shall include only 75% of fees that are stated to accrue on or in respect of the unfunded portion of any Commitment Amount.

 

"Loan" means any obligation for the payment or repayment of borrowed money that is documented by a term loan agreement, revolving loan agreement or other similar credit agreement.

 

"LSTA" means The Loan Syndications and Trading Association, Inc. and any successor thereto.

 

"Moody's" means Moody's Investors Service, Inc. or any successor thereto.

 

"Moody's Rating" means, with respect to a Reference Obligation, as of any date of determination:

 

	
(i)

	
if the Reference Obligation itself is rated by Moody's (including pursuant to any credit estimate), such rating,

 

	
(ii)

	
if the foregoing paragraph is not applicable, then, if the Reference Obligation is a Loan and the related Reference Entity has a corporate family rating by Moody's, the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Loan:

 

	 	
Loan

	
Relevant Rating

	 	
The Loan is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating by Moody's that is one rating subcategory above such corporate family rating

	 	
The Loan is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

	
The rating by Moody's that is one rating subcategory below such corporate family rating

	 	
The Loan is Subordinate

	
The rating by Moody's that is two rating subcategories below such corporate family rating

 

Page 32

 

 

	
(iii)

	
if the foregoing paragraphs are not applicable, but there is a rating by Moody's on a secured obligation of the Reference Entity that is not a Second Lien Loan and is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

 

	 	
Reference Obligation

	
Relevant Rating

	 	
The Reference Obligation is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating assigned by Moody's to the other obligation

	 	
The Reference Obligation is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

 

	
The rating by Moody's that is one rating subcategory below the rating assigned by Moody's to the other obligation

	 	
The Reference Obligation is Subordinate

	
The rating by Moody's that is two rating subcategories below the rating assigned by Moody's to the other obligation

 

 

	
(iv)

	
if the foregoing paragraphs are not applicable, but there is a rating by Moody's on an unsecured obligation of the Reference Entity (or, failing that, an obligation that is a Second Lien Loan) but is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

 

	 	
Reference Obligation

	
Relevant Rating

	 	
The Reference Obligation is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating by Moody's that is one rating subcategory above the rating assigned by Moody's to the other obligation

	 	
The Reference Obligation is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

	
The rating assigned by Moody's to the other obligation

	 	
The Reference Obligation is Subordinate

	
The rating by Moody's that is one rating subcategory below the rating assigned by Moody's to the other obligation

 

 

	
(v)

	
if the foregoing paragraphs are not applicable, but there is a rating by Moody's on an obligation of the Reference Entity that is Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

 

	 	
Reference Obligation

	
Relevant Rating

	 	
The Reference Obligation is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating by Moody's that is two rating subcategories above the rating assigned by Moody's to the other obligation

	 	
The Reference Obligation is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

	
The rating by Moody's that is one rating subcategory above the rating assigned by Moody's to the other obligation

	 	
The Reference Obligation is Subordinate

	
The rating assigned by Moody's to the other obligation

 

Page 33

 

 

	
(vi)

	
if a rating cannot be assigned pursuant to clauses (i) through (v), the Moody's Rating may be determined using any of the methods below:

 

	
  

	
(A)

	 	
for up to 5% of the Portfolio Target Amount, Counterparty may apply to Moody's for a shadow rating or public rating of such Reference Obligation, which shall then be the Moody's Rating (and Counterparty may deem the Moody's Rating of such Reference Obligation to be "B3" pending receipt of such shadow rating or public rating, as the case may be); provided that (x) a Reference Obligation will not be included in the 5% limit of the Portfolio Target Amount if Counterparty has assigned a rating to such Reference Obligation in accordance with clause (B) below and (y) upon receipt of a shadow rating or public rating, as the case may be, such Reference Obligation will not be included in the 5% limit of the Portfolio Target Amount;

 

	
  

	
(B)

	 	
for up to 5% of the Portfolio Target Amount, if there is a private rating of an obligor that has been provided by Moody's to Citibank and Counterparty, Counterparty may impute a Moody's Rating that corresponds to such private rating; provided that a Reference Obligation will not be included in the 5% limit of the Portfolio Target Amount if Counterparty has applied to Moody's for a shadow rating; or

 

	
  

	
(C)

	 	
for up to 10% of the Portfolio Target Amount, the Moody's Rating may be determined in accordance with the methodologies for establishing the S&P Rating except that the Moody's Rating of such obligation will be (1) one sub-category below the Moody's equivalent of the S&P Rating if such S&P Rating is "BBB-" or higher and (2) two sub-categories below the Moody's equivalent of the S&P Rating if such S&P Rating is "BB+" or lower.

 

For purposes of the foregoing, a "private rating" shall refer to a rating obtained by Citibank, by Counterparty or by or on behalf of an obligor on a Reference Obligation that is not disseminated publicly; whereas a "shadow rating" shall refer to a credit estimate obtained upon application of Counterparty or a holder of a Reference Obligation. Any private rating or shadow rating shall be required to be refreshed annually. If Counterparty applies to Moody's for a shadow rating or public rating of a Reference Obligation, Counterparty shall provide evidence to Citibank of such application and shall notify Citibank of the expected rating. Counterparty shall notify Citibank of the shadow rating or public rating assigned by Moody's to a Reference Obligation.

 

"Net Collateral Value" means, as of any date of determination, an amount equal to (a) the aggregate Value (as defined in the Credit Support Annex) on such date of all Posted Credit Support (as so defined) held by Citibank as Secured Party (as so defined) plus (b) the aggregate of all Unrealized Capital Gains on such date with respect to the Reference Portfolio minus (c) the aggregate of all Unrealized Capital Losses on such date with respect to the Reference Portfolio.

 

Page 34

 

 

"Net Collateral Value Percentage" means, as of any date of determination, an amount (expressed as a percentage) equal to (a) the Net Collateral Value on such date divided by (b) the Portfolio Notional Amount on such date.

 

"Portfolio Target Amount" means (a) during the Ramp-Up Period and the Ramp-Down Period, USD150,000,000 and (b) at any other time, the Portfolio Notional Amount.

 

"Quotation Amount" means, with respect to any Reference Obligation relating to any Transaction, the lesser of (a) the related Reference Amount and (b) USD3,000,000.

 

"Quotation Period" means, with respect to any notice of any dispute by Counterparty of the Calculation Agent's determination of the Current Price, the period from and including 3:00 p.m. New York time on the immediately preceding Business Day to and including the time occurring three hours after Counterparty is given notice of the Calculation Agent's determination of the Current Price.

 

"Rate Payments" means Counterparty First Floating Amounts, Counterparty Second Floating Amounts, Counterparty Third Floating Amounts and Citibank Fixed Amounts.

 

"Revolving Reference Obligation" means a Reference Obligation that (a) requires the holder thereof to make one or more future advances to the borrower under the instrument or agreement pursuant to which such Reference Obligation was issued or created, (b) specifies a maximum aggregate amount that can be borrowed and (c) permits, during any period on or after the date on which the holder thereof acquires such Reference Obligation, the re-borrowing of any amount previously repaid; provided that, on the date that all commitments by the holder thereof to make advances to the borrower under such Revolving Reference Obligation expire or are terminated or reduced to zero, such Reference Obligation shall cease to be a Revolving Reference Obligation.

 

"S&P" means Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies, or any successor thereto.

 

"S&P Rating" means, with respect to a Reference Obligation:

 

	
(i)

	
if the Reference Obligation itself is rated by S&P (including pursuant to any credit estimate), such rating,

 

	
(ii)

	
if the foregoing paragraph is not applicable, then, if the Reference Obligation is a Loan and the related Reference Entity has a corporate issuer rating by S&P, the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Loan:

 

	 	
Loan

	
Relevant Rating

	 	
The Loan is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating by S&P that is one rating subcategory above such corporate issuer rating

	 	
The Loan is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

	
The rating by S&P that is one rating subcategory below such corporate issuer rating

	 	
The Loan is Subordinate

	
The rating by S&P that is two rating subcategories below such corporate issuer rating

 

Page 35

 

 

	
(iii)

	
if the foregoing paragraphs are not applicable, but there is a rating by S&P on a secured obligation of the Reference Entity that is not a Second Lien Loan and is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

 

	 	
Reference Obligation

	
Relevant Rating

	 	
The Reference Obligation is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating assigned by S&P to the other obligation

	 	
The Reference Obligation is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

	
The rating by S&P that is one rating subcategory below the rating assigned by S&P to the other obligation

	 	
The Reference Obligation is Subordinate

	
The rating by S&P that is two rating subcategories below the rating assigned by S&P to the other obligation

 

 

	
(iv)

	
if the foregoing paragraphs are not applicable, but there is a rating by S&P on an unsecured obligation of the Reference Entity (or, failing that, an obligation that is a Second Lien Loan) but is not Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

 

	 	
Reference Obligation

	
Relevant Rating

	 	
The Reference Obligation is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating by S&P that is one rating subcategory above the rating assigned by S&P to the other obligation

	 	
The Reference Obligation is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

	
The rating assigned by S&P to the other obligation

	 	
The Reference Obligation is Subordinate

	
The rating by S&P that is one rating subcategory below the rating assigned by S&P to the other obligation

 

 

	
(v)

	
if the foregoing paragraphs are not applicable, but there is a rating by S&P on an obligation of the Reference Entity that is Subordinate (the "other obligation"), the rating specified in the applicable row of the table below under "Relevant Rating" opposite the row in the table below that describes such Reference Obligation:

 

	 	
Reference Obligation

	
Relevant Rating

	 	
The Reference Obligation is a secured obligation, but is not a Second Lien Loan and is not Subordinate

	
The rating by S&P that is two rating subcategories above the rating assigned by S&P to the other obligation

	 	
The Reference Obligation is an unsecured obligation or is a Second Lien Loan, but is not Subordinate

	
The rating by S&P that is one rating subcategory above the rating assigned by S&P to the other obligation

	 	
The Reference Obligation is Subordinate

	
The rating assigned by S&P to the other obligation

 

Page 36

 

 

	
(vi)

	
if the foregoing paragraphs are not applicable, then the S&P Rating shall be "CC"; provided that:

 

(A) if application has been made to S&P to rate a Reference Obligation and such Reference Obligation has a Moody's Rating, then the S&P Rating with respect to such Reference Obligation shall, pending the receipt of such rating from S&P, be equal to the S&P Rating that is equivalent to such Moody's Rating and (y) Reference Obligations in the Reference Portfolio constituting no more, by aggregate Notional Amount, than 10% of the Portfolio Target Amount may be given a S&P Rating based on a rating given by Moody's as provided in clause (x) (after giving effect to the addition of the relevant Reference Obligation, if applicable); and

 

(B) for up to 10% of the Portfolio Target Amount, the S&P Rating may be determined in accordance with the methodologies for establishing the Moody's Rating except that the S&P Rating of such obligation will be (1) one sub-category below the S&P equivalent of the Moody's Rating if such Moody's Rating is "Baa3" or higher and (2) two sub-categories below the S&P equivalent of the Moody's Rating if such Moody's Rating is "Ba1" or lower

 

"Second Lien Loan" means a Loan that is secured by collateral, but as to which the beneficiary or beneficiaries of such collateral security agree for the benefit of the holder or holders of other indebtedness secured by the same collateral ("First Lien Debt") as to one or more of the following: (1) to defer their right to enforce such collateral security either permanently or for a specified period of time while First Lien Debt is outstanding, (2) to permit a holder or holders of First Lien Debt to sell such collateral free and clear of the security in favor of such beneficiary or beneficiaries, (3) not to object to sales of assets by the obligor on such Loan following the commencement of a bankruptcy or other insolvency proceeding with respect to such obligor or to an application by the holder or holders of First Lien Debt to obtain adequate protection in any such proceeding and (4) not to contest the creation, validity, perfection or priority of First Lien Debt; provided that Citibank and Counterparty may agree in writing on or prior to the related Trade Date that a Reference Obligation that would otherwise fall within this definition shall not be a Second Lien Loan.

 

"Specified Reference Obligation" means any Reference Obligation whose inclusion in the Reference Portfolio (other than as a "Specified Reference Obligation") would not on the related Obligation Trade Date satisfy one or more of clauses (ix) through (xiii) of the Obligation Criteria.

 

"Subordinate" means, with respect to an obligation (the "Subordinated Obligation") and another obligation of the obligor thereon to which such obligation is being compared (the "Senior Obligation"), a contractual, trust or similar arrangement (without regard to the existence of preferred creditors arising by operation of law or to collateral, credit support, lien or other credit enhancement arrangements or provisions regarding the application of proceeds of any of the foregoing) providing that (i) upon the liquidation, dissolution, reorganization or winding up of the obligor, claims of the holders of the Senior Obligation will be satisfied prior to the claims of the holders of the Subordinated Obligation or (ii) the holders of the Subordinated Obligation will not be entitled to receive or retain payments in respect of their claims against the obligor at any time that the obligor is in payment arrears or is otherwise in default under the Senior Obligation.

 

Page 37

 

 

"Term Obligation" means any Reference Obligation that is not a Committed Obligation.

 

"Terminated Obligation" means any Reference Obligation or portion of any Reference Obligation that is terminated pursuant to Clause 3.

 

"Termination Settlement Date" means, for any Terminated Obligation, the date customary for settlement, substantially in accordance with the then-current market practice in the principal market for such Terminated Obligation (as determined by the Calculation Agent), of the sale of such Terminated Obligation with the trade date for such sale occurring on the related Termination Trade Date.

 

"Termination Threshold" means, on any date of determination, (a) the Cure Threshold on such date minus (b) 5%.

 

"Termination Trade Date" means, with respect to any Terminated Obligation, the date so designated in the related Accelerated Termination Notice; provided that:

 

	
(a)

	
except as provided in the following clause (b), if the related Final Price is not determined in accordance with Clause 4(a), the "Termination Trade Date" will be the bid submission deadline for the Firm Bid or combination of Firm Bids for all of the Reference Amount of such Terminated Obligation that are to be the basis for determining the Final Price of such Terminated Obligation as designated by the Calculation Agent in order to cause the related Total Return Payment Date to occur as promptly as practicable (in the discretion of the Calculation Agent) after the date originally designated as the "Termination Trade Date" in the related Accelerated Termination Notice; and

 

	
(b)

	
in respect of the Scheduled Termination Date, if the related Final Price is not determined in accordance with Clause 4(a), the "Termination Trade Date" will be the date so designated by the Calculation Agent in its discretion, occurring during the 60 calendar days preceding the Scheduled Termination Date (or earlier in the case of any Terminated Obligation determined by the Calculation Agent in its sole discretion to be a distressed loan or other obligation) in a manner reasonably likely to cause the final Total Return Payment Date to occur on the Scheduled Termination Date.

 

The Calculation Agent shall notify the parties of any Termination Trade Date designated by it pursuant to the foregoing proviso.

 

"Total Return Payment Date" means, with respect to any Terminated Obligation or Repaid Obligation, the fifth Business Day next succeeding the last day of the Monthly Period during which the related Obligation Termination Date occurs.

 

"Unrealized Capital Gain" means, with respect to any Reference Obligation, if the Current Price of such Reference Obligation is greater than the Initial Price in relation to such Reference Obligation, then (a) such Current Price minus such Initial Price multiplied by (b) the Reference Amount of such Reference Obligation. For purposes of computing any Unrealized Capital Gain, a Repaid Obligation or Terminated Obligation will be deemed to continue to be outstanding in an amount equal to its Reference Amount until (but excluding) the related Total Return Payment Date (and after the determination of the related Final Price will have a Current Price equal to such Final Price).

 

Page 38

 

 

"Unrealized Capital Loss" means, with respect to any Reference Obligation, if the Initial Price in relation to such Reference Obligation is greater than the Current Price of such Reference Obligation, then (a) such Initial Price minus such Current Price multiplied by (b) the Reference Amount of such Reference Obligation. For purposes of computing any Unrealized Capital Loss, a Repaid Obligation or Terminated Obligation will be deemed to continue to be outstanding in an amount equal to its Reference Amount until (but excluding) the related Total Return Payment Date (and after the determination of the related Final Price will have a Current Price equal to such Final Price).

 

Page 39

 

ANNEX I

 

	
Reference Obligation

	
Reference Entity

	
Reference Amount

	
Outstanding Principal Amount

	
Initial Price (%)

	
Obligation Trade Date

	
Obligation Settlement Date

	
Independent Amount Percentage (if a Specified Reference Obligation)

	  	  	  	  	  	  	  	  

 

Page 40

 

ANNEX II

 

OBLIGATION CRITERIA

 

Except as Counterparty and Citibank may from time to time otherwise agree in writing in connection with a specified Reference Obligation, the "Obligation Criteria" are as follows:

 

	
(i)  

	
The obligation is a Loan.

 

	
(ii)  

	
The obligation is denominated in USD.

 

	
(iii)  

	
The obligation constitutes a legal, valid, binding and enforceable obligation of the applicable Reference Entity, enforceable against such person in accordance with its terms.

 

	
(iv)  

	
The obligation does not require any future advances to be made to the related issuer or obligor on or after the relevant Obligation Trade Date, except for any Delayed Drawdown Reference Obligation or Revolving Reference Obligation.

 

	
(v)  

	
Except for any Second Lien Loan, the obligation is not Subordinate.

 

	
(vi)  

	
The obligation is secured.

 

	
(vii)  

	
On the relevant Obligation Trade Date for the Transaction relating to the obligation, the obligation is in the form of, and is treated as, indebtedness for U.S. Federal income tax purposes.

 

	
(viii)  

	
Transfers thereof on the Obligation Trade Date may be effected pursuant to the Standard Terms and Conditions for Par/Near Par Trade Confirmations and not the Standard Terms and Conditions for Distressed Trade Confirmations, in each case as published by the LSTA and as in effect on the Obligation Trade Date.

 

	
(ix)  

	
Except for any Specified Reference Obligation, the obligation is not a Second Lien Loan.

 

	
(x)  

	
Except for any Specified Reference Obligation, on the Obligation Trade Date the obligation is part of a fungible class of debt obligations (as to issuance date and all economic terms) of at least USD125,000,000.

 

	
(xi)  

	
Except for any Specified Reference Obligation, the obligation has an Initial Price of at least 80%.

 

	
(xii)  

	
Except for any Specified Reference Obligation, the obligation has as of the Obligation Trade Date a Moody's Rating of at least B3 and an S&P Rating of at least B-.

 

	
(xiii)  

	
Except for any Specified Reference Obligation, the obligation is on the Obligation Trade Date the subject of at least two bid quotations from nationally recognized independent dealers in the related obligation as reported on a nationally recognized pricing service.

 

Page 41

 

PORTFOLIO CRITERIA

 

Except as Counterparty and Citibank may from time to time otherwise agree in writing, the "Portfolio Criteria" are as follows:

 

	
(i)  

	
The Portfolio Notional Amount does not exceed the Maximum Portfolio Notional Amount.

 

	
(ii)  

	
The sum of the Notional Amounts for Reference Obligations of any single Reference Entity or any of its Affiliates does not exceed 10% of the Portfolio Target Amount.

 

	
(iii)  

	
The sum of the Notional Amounts for Reference Obligations of Reference Entities in any single Moody's Industry Classification Group does not exceed 15% of the Portfolio Target Amount; provided that the sum of the Notional Amounts for Reference Obligations of Reference Entities in one Moody's Industry Classification Group may be up to 20% of the Portfolio Target Amount.

 

	
(iv)  

	
The sum of the Notional Amounts for Specified Reference Obligations does not exceed 20% of the Portfolio Target Amount.

 

	
(v)  

	
After the Ramp-Up Period and prior to the Ramp-Down Period, the Reference Portfolio has a Weighted Average Rating of at most 2,720.

 

For purposes hereof:

 

"Moody's Industry Classification Groups" means each of the categories set forth in Table 1 below.

 

"Weighted Average Rating" means, as of any date of determination, the number obtained by (a) multiplying the Notional Amount of each Reference Obligation by the applicable Rating Factor (as set forth in Table 2 below) for the related Reference Entity; (b) summing the products obtained in clause (a) for all Reference Obligations; and (c) dividing the sum obtained in clause (b) by the aggregate of the Notional Amounts of all Reference Obligations.

 

Page 42

 

 

TABLE 1

 

MOODY'S INDUSTRY CLASSIFICATION GROUPS

 

Aerospace & Defense

Automotive

Banking, Finance, Insurance and Real Estate

Beverage, Food, & Tobacco

Capital Equipment

Chemicals, Plastics, & Rubber

Construction & Building

Consumer goods: durable

Consumer goods: non-durable

Containers, Packaging, & Glass

Energy: Electricity

Energy: Oil & Gas

Environmental Industries

Forest Products & Paper

Healthcare & Pharmaceuticals

High Tech Industries

Hotel, Gaming, & Leisure

Media: Advertising, Printing & Publishing

Media: Broadcasting & Subscription

Media: Diversified & Production

Metals & Mining

Retail

Services: Business

Services: Consumer

Sovereign & Public Finance

Telecommunications

Transportation: Cargo

Transportation: Consumer

Utilities: Electric

Utilities: Oil & Gas

Utilities: Water

Wholesale

 

Page 43

 

 

TABLE 2

 

RATING FACTORS

 

 

	Moody's Rating	Rating Factor
	 Aaa	 1
	 Aa1	 10
	 Aa2	 20
	 Aa3	 40
	 A1	 70
	 A2	 120
	 A3	 180
	 Baa1	 260
	 Baa2	 360
	 Baa3	 610
	 Ba1	 940
	 Ba2	 1,350
	 Ba3	 1,766
	 B1	 2,220
	 B2	 2,720
	 B3	 3,490
	 Caa1	 4,770
	 Caa2	 6,500
	 Caa3 or below	 10,000

 

Page 44

 

 

ANNEX III

 

APPROVED BUYERS

 

Bank of America, NA

The Bank of Montreal

The Bank of New York Mellon, N.A.

Barclays Bank plc

BNP Paribas

Broadpoint Securities

Canadian Imperial Bank of Commerce

Citibank, N.A.

Credit Agricole S.A.

Credit Suisse

Deutsche Bank AG

Goldman Sachs & Co.

HSBC Bank

Imperial Capital LLC

JPMorgan Chase Bank, N.A.

Lloyds TSB Bank

Merrill Lynch, Pierce, Fenner & Smith Incorporated

Morgan Stanley & Co.

Natixis

Northern Trust Company

Royal Bank of Canada

The Royal Bank of Scotland plc

Societe Generale

The Toronto-Dominion Bank

UBS AG

U.S. Bank, National Association

Wells Fargo Bank, National Association

 

Page 45

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