ISDA Master Agreement, Schedules, and Transaction Confirmation
ISDA
International
Swaps and Derivatives Association, Inc.
2002
MASTER AGREEMENT
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dated
as of
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August
11, 2005
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Bank
of America,
N.A.
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and
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Katy
Industries, Inc.
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have
entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed
by this 2002 Master Agreement, which includes the schedule (the "Schedule"),
and
the documents and other confirming evidence (each a "Confirmation") exchanged
between the parties or otherwise effective for the purpose
of confirming or evidencing those Transactions. This 2002 Master Agreement
and
the Schedule are together referred
to as this "Master Agreement".
Accordingly,
the parties agree as follows:—
1. Interpretation
(a) Definitions. The
terms
defined in Section 14 and elsewhere in this Master Agreement will have the
meanings
therein specified for the purpose of this Master Agreement.
(b) Inconsistency. In
the
event of any inconsistency between the provisions of the Schedule and the other
provisions of this Master Agreement, the Schedule will prevail. In the event
of
any inconsistency between the provisions
of any Confirmation and this Master Agreement, such Confirmation will prevail
for the purpose of the relevant
Transaction.
(c) Single
Agreement. All
Transactions are entered into in reliance on the fact that this Master Agreement
and all
Confirmations form a single agreement between the parties (collectively referred
to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General
Conditions.
(i) Each
party will make each payment or delivery specified in each Confirmation to
be
made by it, subject
to the other provisions of this Agreement.
(ii) Payments
under this Agreement will be made on the due date for value on that date in
the
place of the
account specified in the relevant Confirmation or otherwise pursuant to this
Agreement, in freely transferable
funds and in the manner customary for payments in the required currency. Where
settlement is by
delivery (that is, other than by payment), such delivery will be made for
receipt on the due date in the manner customary for the relevant obligation
unless otherwise specified in the relevant Confirmation or elsewhere
in this Agreement.
Copyright
© 2002 by International Swaps and Derivatives Association, Inc.
(iii) Each
obligation of each party under Section 2(a)(i) is subject to (1) the condition
precedent that no Event
of
Default or Potential Event of Default with respect to the other party has
occurred and is continuing, (2)
the
condition precedent that no Early Termination Date in respect of the relevant
Transaction has occurred
or been effectively designated and (3) each other condition specified in this
Agreement to be a condition
precedent for the purpose of this Section 2(a)(iii).
(b) Change
of Account. Either
party may change its account for receiving a payment or delivery by giving
notice
to
the other party at least five Local Business Days prior to the Scheduled
Settlement Date for the payment or delivery to which such change applies unless
such other party gives timely notice of a reasonable objection to such
change.
(c) Netting
of Payments. If
on any
date amounts would otherwise be payable:—
(i) in
the
same currency; and
(ii) in
respect of the same Transaction,
by
each
party to the other, then, on such date, each party's obligation to make payment
of any such amount will be automatically
satisfied and discharged and, if the aggregate amount that would otherwise
have
been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the
other
party, replaced
by
an
obligation
upon the party by which the larger aggregate amount would have been payable
to
pay to the other party the excess
of
the larger aggregate amount over the smaller aggregate amount.
The
parties may elect in respect of two or more Transactions that a net amount
and
payment obligation will be determined
in respect of all amounts payable on the same date in the same currency in
respect of those Transactions, regardless of whether such amounts are payable
in
respect of the same Transaction. The election may be made in the Schedule or
any
Confirmation by specifying that "Multiple Transaction Payment Netting" applies
to the Transactions identified
as being subject to the election (in which case clause (ii) above will not
apply
to such Transactions). If Multiple
Transaction Payment Netting is applicable to Transactions, it will apply to
those Transactions with effect from
the
starting date specified in the Schedule or such Confirmation, or, if a starting
date is not specified in the Schedule or such Confirmation, the starting date
otherwise agreed by the parties in writing. This election may be made separately
for different groups of Transactions and will apply separately to each pairing
of Offices through which
the
parties make and receive payments or deliveries.
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(d)
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Deduction
or Withholding for
Tax.
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(i) Gross-Up.
All
payments under this Agreement will be made without any deduction or withholding
for
or on
account of any Tax unless such deduction or withholding is required by any
applicable law, as modified by the practice of any relevant governmental revenue
authority, then in effect. If a party is so required
to deduct or withhold, then that party ("X") will:—
(1) promptly
notify the other party ("Y") of such requirement;
(2) pay
to
the relevant authorities the full amount required to be deducted or withheld
(including
the full amount required to be deducted or withheld from any additional amount
paid by X
to Y
under this Section 2(d)) promptly upon the earlier of determining that such
deduction or withholding
is required or receiving notice that such amount has been assessed against
Y;
(3) promptly
forward to Y an official receipt (or a certified copy), or other documentation
reasonably
acceptable to Y, evidencing such payment to such authorities; and
(4) if
such
Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which
Y is
otherwise
entitled under this Agreement, such additional amount as is necessary to ensure
that the net
amount actually received by Y (free and clear of Indemnifiable Taxes, whether
assessed against X
or Y)
will equal the full amount Y would have received had no such deduction or
withholding been
required. However, X will not be required to pay any additional amount to Y
to
the extent that it
would
not be required to be paid but for:—
(A) the
failure by Y to comply with or perform any agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d); or
(B) the
failure of a representation made by Y pursuant to Section 3(f) to be accurate
and
true
unless such failure would not have occurred but for (I) any action taken by
a
taxing
authority, or brought in a court of competent jurisdiction, after a Transaction
is entered
into (regardless of whether such action is taken or brought with respect to
a
party to this Agreement) or (II) a Change in Tax Law.
(ii) Liability.
If:—
(1) X
is
required by any applicable law, as modified by the practice of any relevant
governmental
revenue authority, to make any deduction or withholding in respect of which
X
would not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X
does
not so deduct or withhold; and
(3) a
liability resulting from such Tax is assessed directly against X,
then,
except to the extent Y has satisfied or then satisfies the liability resulting
from such Tax, Y will promptly
pay to X the amount of such liability (including any related liability for
interest, but including any related
liability for penalties only if Y has failed to comply with or perform any
agreement contained in Section
4(a)(i), 4(a)(iii) or 4(d)).
Each
party makes the representations contained in Sections 3(a), 3(b), 3(c), 3(d),
3(e) and 3(f) and, if specified in the Schedule
as applying, 3(g) to the other party (which representations will be deemed
to be
repeated by each party on each
date
on which a Transaction is entered into and, in the case of the representations
in Section 3(f), at all times until the termination of this Agreement). If
any
"Additional Representation" is specified in the Schedule or any Confirmation
as applying, the party or parties specified for such Additional Representation
will make and, if applicable,
be deemed to repeat such Additional Representation at the time or times
specified for such Additional Representation.
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(a)
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Basic
Representations.
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(i) Status. It
is
duly organised and validly existing under the laws of the jurisdiction of its
organisation or
incorporation and, if relevant under such laws, in good standing;
(ii) Powers.
It
has
the power to execute this Agreement and any other documentation relating to
this
Agreement to which it is a party, to deliver this Agreement and any other
documentation relating to this Agreement
that it is required by this Agreement to deliver and to perform its obligations
under this Agreement
and any obligations it has under any Credit Support Document to which it is
a
party and has taken
all
necessary action to authorise such execution, delivery and
performance;
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(iii)
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No
Violation or Conflict. Such
execution, delivery and performance do not violate or conflict with
any
law applicable to it, any provision of its constitutional documents,
any
order or judgment of any court or other
agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting
it or any of its assets;
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(iv)
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Consents. All
governmental and other consents that are required to have been obtained
by
it with respect
to this Agreement or any Credit Support Document to which it is a
party
have been obtained and are in
full force and effect and all conditions of any such consents have
been
complied with; and
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(v)
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Obligations
Binding. Its
obligations under this Agreement and any Credit Support Document
to
which
it is a party constitute its legal, valid and binding obligations,
enforceable in accordance with their respective
terms (subject to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to
equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in equity
or
at law)).
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(b) Absence
of Certain Events. No
Event
of Default or Potential Event of Default or, to its knowledge, Termination
Event with respect to it has occurred and is continuing and no such event or
circumstance would occur as
a
result of its entering into or performing its obligations under this Agreement
or any Credit Support Document to which it is a party.
(c) Absence
of Litigation. There
is
not pending or, to its knowledge, threatened against it, any of its Credit
Support
Providers or any of its applicable Specified Entities any action, suit or
proceeding at law or in equity or before
any court, tribunal, governmental body, agency or official or any arbitrator
that is likely to affect the legality, validity
or enforceability against it of this Agreement or any Credit Support Document
to
which it is a party or its ability
to perform its obligations under this Agreement or such Credit Support
Document.
(d) Accuracy
of Specified Information. All
applicable information that is furnished in writing by or on behalf of it to
the
other party and is identified for the purpose of this Section 3(d) in the
Schedule is, as of the date of the information,
true, accurate and complete in every material respect.
(e) Payer
Tax Representation. Each
representation specified in the Schedule as being made by it for the
purpose
of this Section 3(e) is accurate and true.
(f) Payee
Tax Representations. Each
representation specified in the Schedule as being made by it for the
purpose
of this Section 3(f) is accurate and true.
(g) No
Agency. It
is
entering into this Agreement, including each Transaction, as principal and
not
as agent of any
person or entity.
Each
party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under
any
Credit Support Document to which it is a party:—
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(a)
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Furnish
Specified Information. It
will deliver to the other party or, in certain cases under clause
(iii)
below,
to such government or taxing authority as the other party reasonably
directs:—
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(i) any
forms, documents or certificates relating to taxation specified in the Schedule
or any Confirmation;
(ii) any
other
documents specified in the Schedule or any Confirmation; and
(iii) upon
reasonable demand by such other party, any form or document that may be required
or reasonably
requested in writing in order to allow such other party or its Credit Support
Provider to make a payment
under this Agreement or any applicable Credit Support Document without any
deduction or withholding
for or on account of any Tax or with such deduction or withholding at a reduced
rate (so long as the
completion, execution or submission of such form or document would not
materially prejudice the legal or
commercial position of the party in receipt of such demand), with any such
form
or document to be accurate
and completed in a manner reasonably satisfactory to such other party and to
be
executed and to be
delivered with any reasonably required certification,
in
each
case by the date specified in the Schedule or such Confirmation or, if none
is
specified, as soon as reasonably practicable.
(b) Maintain
Authorisations. It
will
use all reasonable efforts to maintain in full force and effect all consents
of
any
governmental or other authority that are required to be obtained by it with
respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts
to
obtain any that may become necessary
in the future.
(c) Comply
With Laws. It
will
comply in all material respects with all applicable laws and orders to which
it
may
be
subject if failure so to comply would materially impair its ability to perform
its obligations under this Agreement
or any Credit Support Document to which it is a party.
(d) Tax
Agreement. It
will
give notice of any failure of a representation made by it under Section 3(f)
to
be accurate
and true promptly upon learning of such failure.
(e) Payment
of Stamp Tax. Subject
to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect
of its execution or performance of this Agreement by a jurisdiction in which
it
is incorporated, organised, managed
and controlled or considered to have its seat, or where an Office through which
it is acting for the purpose of
this
Agreement is located ("Stamp Tax Jurisdiction"), and will indemnify the other
party against any Stamp Tax levied
or
imposed upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which is not
also a Stamp Tax Jurisdiction with respect to the other party.
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5.
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Events
of Default and Termination
Events
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(a) Events
of Default. The
occurrence at any time with respect to a party or, if applicable, any Credit
Support Provider
of such party or any Specified Entity of such party of any of the following
events constitutes (subject to Sections
5(c) and 6(e)(iv)) an event of default (an "Event of Default") with respect
to
such party:—
(i) Failure
to Pay or Deliver. Failure
by the party to make, when due, any payment under this Agreement
or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) required to be made
by it
if such failure is not remedied on or before the first Local Business Day in
the
case of any such payment or the first Local Delivery
Day in the case of any such delivery after, in each case, notice of such failure
is given to the party;
(ii) Breach
of Agreement; Repudiation of Agreement.
(1) Failure
by the party to comply with or perform any agreement or obligation (other than
an
obligation to make any payment under this Agreement or delivery under Section
2(a)(i) or 9(h)(i)(2)
or (4) or to give notice of a Termination Event or any agreement or obligation
under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in
accordance with this
Agreement if such failure is not remedied within 30 days after notice of such
failure is given to the party; or
(2) the
party
disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges
the validity of, this Master Agreement, any Confirmation executed and delivered
by that party or any
Transaction
evidenced by such a Confirmation (or such action is taken by any person or
entity appointed
or empowered to operate it or act on its behalf);
(iii) Credit
Support Default.
(1) Failure
by the party or any Credit Support Provider of such party to comply with or
perform
any agreement or obligation to be complied with or performed by it in accordance
with any Credit Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the
expiration or termination of such Credit Support Document or the failing or
ceasing of such
Credit Support Document, or any security interest granted by such party or
such
Credit Support
Provider to the other party pursuant to any such Credit Support Document, to
be
in full force
and
effect for the purpose of this Agreement (in each case other than in accordance
with its terms)
prior to the satisfaction of all obligations of such party under each
Transaction to which such Credit
Support Document relates without the written consent of the other party;
or
(3) the
party
or such Credit Support Provider disaffirms, disclaims, repudiates or rejects,
in-whole
or
in part, or challenges the validity of, such Credit Support Document (or such
action is taken
by
any person or entity appointed or empowered to operate it or act on its
behalf);
(iv) Misrepresentation. A
representation (other than a representation under Section 3(e) or 3(f)) made
or
repeated or deemed to have been made or repeated by the party or any Credit
Support Provider of such party
in
this Agreement or any Credit Support Document proves to have been incorrect
or
misleading in any material
respect when made or repeated or deemed to have been made or
repeated;
(v) Default
Under Specified Transaction. The
party, any Credit Support Provider of such party or any applicable
Specified Entity of such party:—
(1) defaults
(other than by failing to make a delivery) under a Specified Transaction or
any
credit
support arrangement relating to a Specified Transaction and, after giving effect
to any applicable
notice requirement or grace period, such default results in a liquidation of,
an
acceleration
of obligations under, or an early termination of, that Specified
Transaction;
(2) defaults,
after giving effect to any applicable notice requirement or grace period, in
making any payment due on the last payment or exchange date of, or any payment
on early termination of, a Specified
Transaction (or, if there is no applicable notice requirement or grace period,
such default continues
for at least one Local Business Day);
(3) defaults
in making any delivery due under (including any delivery due on the last
delivery or
exchange date of) a Specified Transaction or any credit support arrangement
relating to a Specified
Transaction and, after giving effect to any applicable notice requirement or
grace period, such default results in a liquidation of, an acceleration of
obligations under, or an early termination of,
all
transactions outstanding under the documentation applicable to that Specified
Transaction; or
(4) disaffirms,
disclaims, repudiates or rejects, in whole or in part, or challenges the
validity of,
a
Specified Transaction or any credit support arrangement relating to a Specified
Transaction that
is,
in either case, confirmed or evidenced by a document or other confirming
evidence executed and
delivered by that party, Credit Support Provider or Specified Entity (or such
action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi)
Cross-Default.
If
"Cross-Default" is specified in the Schedule as applying to the party, the
occurrence
or existence of:—
(1) a
default, event of default or other similar condition or event (however
described) in respect
of such party, any Credit Support Provider of such party or any applicable
Specified Entity of
such
party under one or more agreements or instruments relating to Specified
Indebtedness of any
of
them (individually or collectively) where the aggregate principal amount of
such
agreements or
instruments, either alone or together with the amount, if any, referred to
in
clause (2) below, is not
less
than the applicable Threshold Amount (as specified in the Schedule) which has
resulted in such
Specified Indebtedness becoming, or becoming capable at such time of being
declared, due and
payable under such agreements or instruments before it would otherwise have
been
due and payable;
or
(2) a
default
by such party, such Credit Support Provider or such Specified Entity
(individually
or collectively) in making one or more payments under such agreements or
instruments
on the due date for payment (after giving effect to any applicable notice
requirement or grace
period) in an aggregate amount, either alone or together with the amount, if
any, referred to in clause
(1) above, of not less than the applicable Threshold Amount;
(vii)
Bankruptcy.
The
party, any Credit Support Provider of such party or any applicable Specified
Entity
of
such party:—
(1) is
dissolved (other than pursuant to a consolidation, amalgamation or merger);
(2)
becomes insolvent or is unable to pay its debts or fails or admits in writing
its inability generally to pay its debts
as
they become due; (3) makes a general assignment, arrangement or composition
with
or for the benefit of its creditors; (4)(A) institutes or has instituted against
it, by a regulator, supervisor or any
similar official with primary insolvency, rehabilitative or regulatory
jurisdiction over it in the jurisdiction
of its incorporation or organisation or the jurisdiction of its head or home
office, a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy
or insolvency law or other similar law affecting creditors' rights, or a
petition is presented
for its winding-up or liquidation by it or such regulator, supervisor or similar
official, or (B)
has
instituted against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other
relief under any bankruptcy or insolvency law or other similar law affecting
creditors' rights, or
a
petition is presented for its winding-up or liquidation, and such proceeding
or
petition is instituted
or presented by a person or entity not described in clause (A) above and either
(I) results in
a
judgment of insolvency or bankruptcy or the entry of an order for relief or
the
making of an order
for
its winding-up or liquidation or (II) is not dismissed, discharged, stayed
or
restrained in each
case
within 15 days of the institution or presentation thereof; (5) has a resolution
passed for its winding-up,
official management or liquidation (other than pursuant to a consolidation,
amalgamation
or merger); (6) seeks or becomes subject to the appointment of an administrator,
provisional
liquidator, conservator, receiver, trustee, custodian or other similar official
for it or for all or substantially all its assets; (7) has a secured party
take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced or sued on
or
against all or substantially all its assets and such secured party maintains
possession, or
any
such process is not dismissed, discharged, stayed or restrained, in each case
within 15 days thereafter;
(8) causes or is subject to any event with respect to it which, under the
applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
(1) to (7) above (inclusive);
or (9) takes any action in furtherance of, or indicating its consent to,
approval of, or acquiescence
in, any of the foregoing acts; or
(viii)
Merger
Without Assumption. The
party
or any Credit Support Provider of such party consolidates or
amalgamates with, or merges with or into, or transfers all or substantially
all
its assets to, or reorganises, reincorporates
or reconstitutes into or as, another entity and, at the time of such
consolidation, amalgamation,
merger, transfer, reorganisation, reincorporation or
reconstitution:—
(1) the
resulting, surviving or transferee entity fails to assume all the obligations
of
such party or such Credit Support Provider under this Agreement or any Credit
Support Document to which it or
its
predecessor was a party; or
(2) the
benefits of any Credit Support Document fail to extend (without the consent
of
the other
party) to the performance by such resulting, surviving or transferee entity
of
its obligations under
this Agreement.
(b) Termination
Events. The
occurrence at any time with respect to a party or, if applicable, any Credit
Support
Provider of such party or any Specified Entity of such party of any event
specified below constitutes (subject to
Section 5(c)) an Illegality if the event is specified in clause (i) below,
a
Force Majeure Event if the event is specified
in clause (ii) below, a Tax Event if the event is specified in clause (iii)
below, a Tax Event Upon Merger if the event is specified in clause (iv) below,
and, if specified to be applicable, a Credit Event Upon Merger if the event
is
specified pursuant to clause (v) below or an Additional Termination Event if
the
event is specified pursuant to clause
(vi) below:—
(i) Illegality. After
giving effect to any applicable provision, disruption fallback or remedy
specified in,
or
pursuant to, the relevant Confirmation or elsewhere in this Agreement, due
to an
event or circumstance (other
than any action taken by a party or, if applicable, any Credit Support Provider
of such party) occurring
after a Transaction is entered into, it becomes unlawful under any applicable
law (including without
limitation the laws of any country in which payment, delivery or compliance
is
required by either party
or
any Credit Support Provider, as the case may be), on any day, or it would be
unlawful if the relevant payment,
delivery or compliance were required on that day (in each case, other than
as a
result of a breach by the party of Section 4(b)):—
(1) for
the
Office through which such party (which will be the Affected Party) makes and
receives
payments or deliveries with respect to such Transaction to perform any absolute
or contingent
obligation to make a payment or delivery in respect of such Transaction, to
receive a payment
or delivery in respect of such Transaction or to comply with any other material
provision of
this
Agreement relating to such Transaction; or
(2) for
such
party or any Credit Support Provider of such party (which will be the Affected
Party)
to
perform any absolute or contingent obligation to make a payment or delivery
which such party
or
Credit Support Provider has under any Credit Support Document relating to such
Transaction,
to receive a payment or delivery under such Credit Support Document or to comply
with
any
other material provision of such Credit Support Document;
(ii) Force
Majeure Event. After
giving effect to any applicable provision, disruption fallback or remedy
specified in, or pursuant to, the relevant Confirmation or elsewhere in this
Agreement, by reason of force
majeure or act of state occurring after a Transaction is entered into, on any
day:—
(1) the
Office through which such party (which will be the Affected Party) makes and
receives payments or deliveries with respect to such Transaction is prevented
from performing any absolute or
contingent obligation to make a payment or delivery in respect of such
Transaction, from receiving
a payment or delivery in respect of such Transaction or from complying with
any
other material
provision of this Agreement relating to such Transaction (or would be so
prevented if such payment,
delivery or compliance were required on that day), or it becomes impossible
or
impracticable
for such Office so to perform, receive or comply (or it would be impossible
or
impracticable
for such Office so to perform, receive or comply if such payment, delivery
or
compliance
were required on that day); or
(2) such
party or any Credit Support Provider of such party (which will be the Affected
Party) is
prevented from performing any absolute or contingent obligation to make a
payment or delivery which
such party or Credit Support Provider has under any Credit Support Document
relating to such Transaction, from receiving a payment or delivery under such
Credit Support Document or from complying with any other material provision
of
such Credit Support Document (or would be so prevented if such payment, delivery
or compliance were required on that day), or it becomes impossible
or impracticable for such party or Credit Support Provider so to perform,
receive or comply
(or it would be impossible or impracticable for such party or Credit Support
Provider so to perform,
receive or comply if such payment, delivery or compliance were required on
that
day),
so
long
as the force majeure or act of state is beyond the control of such Office,
such
party or such Credit. Support
Provider, as appropriate, and such Office, party or Credit Support Provider
could not, after using all reasonable
efforts (which will not require such party or Credit Support Provider to incur
a
loss, other than immaterial, incidental expenses), overcome such prevention,
impossibility or impracticability;
(iii) Tax
Event. Due
to
(1) any action taken by a taxing authority, or brought in a court of competent
jurisdiction,
after a Transaction is entered into (regardless of whether such action is taken
or brought with respect
to a party to this Agreement) or (2) a Change in Tax Law, the party (which
will
be the Affected Party)
will, or there is a substantial likelihood that it will, on the next succeeding
Scheduled Settlement Date (A)
be
required to pay to the other party an additional amount in respect of an
Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 9(h)) or (B) receive
a
payment from which an amount
is
required to be deducted or withheld for or on account of a Tax (except in
respect of interest under Section 9(h)) and no additional amount is required
to
be paid in respect of such Tax under Section 2(d)(i)(4) (other
than by reason of Section 2(d)(i)(4)(A) or (B));
(iv) Tax
Event Upon Merger. The
party
(the "Burdened Party") on the next succeeding Scheduled Settlement
Date will either (1) be required to pay an additional amount in respect of
an
Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 9(h)) or (2)
receive a payment from which
an
amount has been deducted or withheld for or on account of any Tax in respect
of
which the other party is not required to pay an additional amount (other than
by
reason of Section 2(d)(i)(4)(A) or (B)), in either
case as a result of a party consolidating or amalgamating with, or merging
with
or into, or transferring all or substantially all its assets (or any substantial
part of the assets comprising the business conducted by it as
of the
date of this Master Agreement) to, or reorganising, reincorporating or
reconstituting into or as, another
entity (which will be the Affected Party) where such action does not constitute
a Merger Without Assumption;
(v) Credit
Event Upon Merger.
If
"Credit Event Upon Merger" is specified in the Schedule as applying
to the party, a Designated Event (as defined below) occurs with respect to
such
party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (in
each
case, "X") and such Designated
Event does not constitute a Merger Without Assumption, and the creditworthiness
of X or, if applicable,
the successor, surviving or transferee entity of X, after taking into account
any applicable Credit Support
Document, is materially weaker immediately after the occurrence of such
Designated Event than that
of X
immediately prior to the occurrence of such Designated Event (and, in any such
event, such party or
its
successor, surviving or transferee entity, as appropriate, will be the Affected
Party). A "Designated Event" with respect to X means that:—
(1) X
consolidates or amalgamates with, or merges with or into, or transfers all
or
substantially all
its
assets (or any substantial part of the assets comprising the business conducted
by X as of the
date
of
this Master Agreement) to, or reorganises, reincorporates or reconstitutes
into
or as, another entity;
(2) any
person, related group of persons or entity acquires directly or indirectly
the
beneficial ownership of (A) equity securities having the power to elect a
majority of the board of directors (or its
equivalent) of X or (B) any other ownership interest enabling it to exercise
control of X; or
(3) X
effects
any substantial change in its capital structure by means of the issuance,
incurrence
or guarantee of debt or the issuance of (A) preferred stock or other securities
convertible into
or
exchangeable for debt or preferred stock or (B) in the case of entities other
than corporations,
any other form of ownership interest; or
(vi) Additional
Termination Event. If
any
"Additional Termination Event" is specified in the Schedule
or any Confirmation as applying, the occurrence of such event (and, in such
event, the Affected Party
or
Affected Parties will be as specified for such Additional Termination Event
in
the Schedule or such
Confirmation).
(i) An
event
or circumstance that constitutes or gives rise to an Illegality or a Force
Majeure Event will not,
for
so long as that is the case, also constitute or give rise to an Event of Default
under Section 5(a)(i), 5(a)(ii)(l) or 5(a)(iii)(l) insofar as such event or
circumstance relates to the failure to make any payment or delivery
or a failure to comply with any other material provision of this Agreement
or a
Credit Support Document,
as the case may be.
(ii) Except
in
circumstances contemplated by clause (i) above, if an event or circumstance
which would otherwise
constitute or give rise to an Illegality or a Force Majeure Event also
constitutes an Event of Default
or any other Termination Event, it will be treated as an Event of Default or
such other Termination Event, as the case may be, and will not constitute or
give rise to an Illegality or a Force Majeure Event.
(iii) If
an
event or circumstance which would otherwise constitute or give rise to a Force
Majeure Event also
constitutes an Illegality, it will be treated as an Illegality, except as
described in clause (ii) above, and not a Force Majeure Event.
(d) Deferral
of Payments and Deliveries During Waiting Period. If
an
Illegality or a Force Majeure Event has occurred
and is continuing with respect to a Transaction, each payment or delivery which
would otherwise be required
to be made under that Transaction will be deferred to, and will not be due
until:—
(i) the
first
Local Business Day or, in the case of a delivery, the first Local Delivery
Day
(or the first day
that
would have been a Local Business Day or Local Delivery Day, as appropriate,
but
for the occurrence
of the event or circumstance constituting or giving rise to that Illegality
or
Force Majeure Event) following
the end of any applicable Waiting Period in respect of that Illegality or Force
Majeure Event, as the case may be; or
(ii) if
earlier, the date on which the event or circumstance constituting or giving
rise
to that Illegality or Force
Majeure Event ceases to exist or, if such date is not a Local Business Day
or,
in the case of a delivery, a
Local
Delivery Day, the first following day that is a Local Business Day or Local
Delivery Day, as appropriate.
(e) Inability
of Head or Home Office to Perform Obligations of Branch.
If
(i) an
Illegality or a Force Majeure
Event occurs under Section 5(b)(i)(l) or 5(b)(ii)(l) and the relevant Office
is
not the Affected Party's head or
home
office, (ii) Section 10(a) applies, (iii) the other party seeks performance
of
the relevant obligation or
compliance
with the relevant provision by the Affected Party's head or home office and
(iv)
the Affected Party's head or
home
office fails so to perform or comply due to the occurrence of an event or
circumstance which would, if that head or home office were the Office through
which the Affected Party makes and receives payments and deliveries with
respect to the relevant Transaction, constitute or give rise to an Illegality
or
a Force Majeure Event, and such failure
would otherwise constitute an Event of Default under Section 5(a)(i)or
5(a)(iii)(l) with respect to such party, then,
for
so long as the relevant event or circumstance continues to exist with respect
to
both the Office referred to in Section
5(b)(i)(l) or 5(b)(ii)(l), as the case may be, and the Affected Party's head
or
home office, such failure will not
constitute an Event of Default under Section 5(a)(i) or
5(a)(iii)(l).
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6.
|
Early
Termination; Close-Out
Netting
|
(a) Right
to Terminate Following Event of Default. If
at any
time an Event of Default with respect to a party (the
"Defaulting Party") has occurred and is then continuing, the other party (the
"Non-defaulting Party") may, by not more than 20 days notice to the Defaulting
Party specifying the relevant Event of Default, designate a day not earlier
than
the
day such notice is effective as an Early Termination Date in respect of all
outstanding Transactions. If, however,
"Automatic Early Termination" is specified in die Schedule as applying to a
party, then an Early Termination
Date in respect of all outstanding Transactions will occur immediately upon
the
occurrence with respect to
such
party of an Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6)
or, to the extent analogous thereto, (8),
and
as of the time immediately preceding the institution of the relevant proceeding
or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section
5(a)(vii)(4) or, to the extent analogous thereto, (8).
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(b)
|
Right
to Terminate Following Termination
Event.
|
(i) Notice. If
a
Termination Event other than a Force Majeure Event occurs, an Affected Party
will, promptly
upon becoming aware of it, notify the other party, specifying the nature of
that
Termination Event and
each
Affected Transaction, and will also give the other party such other information
about that Termination
Event as the other party may reasonably require. If a Force Majeure Event
occurs, each party will,
promptly upon becoming aware of it, use all reasonable efforts to notify the
other party, specifying the nature
of
that Force Majeure Event, and will also give the other party such other
information about that Force
Majeure Event as the other party may reasonably require.
(ii) Transfer
to Avoid Termination Event. If
a Tax
Event occurs and there is only one Affected Party, or
if a
Tax Event Upon Merger occurs and the Burdened Party is the Affected Party,
the
Affected Party will, as
a
condition to its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts
(which will not require such party to incur a loss, other than immaterial,
incidental expenses) to transfer within 20 days after it gives notice under
Section 6(b)(i) all its rights and obligations under this Agreement in respect
of the Affected Transactions to another of its Offices or Affiliates so that
such Termination
Event ceases to exist.
If
the
Affected Party is not able to make such a transfer it will give notice to the
other party to that effect within such 20 day period, whereupon the other party
may effect such a transfer within 30 days after the notice
is
given under Section 6(b)(i).
Any
such
transfer by a party under this Section 6(b)(ii) will be subject to and
conditional upon the prior written
consent of the other party, which consent will not be withheld if such other
party's policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) Two
Affected Parties. If
a Tax
Event occurs and there are two Affected Parties, each party will use
all
reasonable efforts to reach agreement within 30 days after notice of such
occurrence is given under Section
6(b)(i) to avoid that Termination Event.
(iv) Right
to Terminate.
(1) If:—
(A) a
transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as
the
case
may
be, has not been effected with respect to all Affected Transactions within
30
days after
an
Affected Party gives notice under Section 6(b)(i); or
(B) a
Credit
Event Upon Merger or an Additional Termination Event occurs, or a Tax
Event
Upon Merger occurs and the Burdened Parry is not the Affected Party,
the
Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in
the
case of a Tax
Event
or an Additional Termination Event if there are two Affected Parties, or the
Non-affected
Party in the case of a Credit Event Upon Merger or an Additional Termination
Event if there
is
only one Affected Party may, if the relevant Termination Event is then
continuing, by not more than 20 days notice to the other party, designate a
day
not earlier than the day such notice is effective as an Early Termination Date
in respect of all Affected Transactions.
(2) If
at any
time an Illegality or a Force Majeure Event has occurred and is then continuing
and any applicable Waiting Period has expired:—
(A) Subject
to clause (B) below, either party may, by not more than 20 days notice to
the
other
party, designate (I) a day not earlier than the day on which such notice becomes
effective
as an Early Termination Date in respect of all Affected Transactions or (II)
by
specifying
in that notice the Affected Transactions in respect of which it is designating
the relevant day as an Early Termination Date, a day not earlier than two Local
Business Days following the day on which such notice becomes effective as an
Early Termination Date in respect
of less than all Affected Transactions. Upon receipt of a notice designating
an
Early
Termination Date in respect of less than all Affected Transactions, the other
party may,
by
notice to the designating party, if such notice is effective on or before the
day so designated, designate that same day as an Early Termination Date in
respect of any or all other Affected Transactions.
(B) An
Affected Party (if the Illegality or Force Majeure Event relates to performance
by
such
party or any Credit Support Provider of such party of an obligation to make
any
payment
or delivery under, or to compliance with any other material provision of, the
relevant
Credit Support Document) will only have the right to designate an Early
Termination
Date under Section 6(b)(iv)(2)(A) as a result of an Illegality under
Section
5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2) following the
prior designation
by the other party of an Early Termination Date, pursuant to Section
6(b)(iv)(2)(A), in respect of less than all Affected Transactions.
(c) Effect
of Designation.
(i) If
notice
designating an Early Termination Date is given under Section 6(a) or 6(b),
the
Early Termination
Date will occur on the date so designated, whether or not the relevant Event
of
Default or Termination
Event is then continuing.
(ii) Upon
the
occurrence or effective designation of an Early Termination Date, no further
payments or deliveries under Section 2(a)(i) or 9(h)(i) in respect of the
Terminated Transactions will be required to be made,
but
without prejudice to the other provisions of this Agreement. The amount, if
any,
payable in respect
of an Early Termination Date will be determined pursuant to Sections 6(e) and
9(h)(ii).
(d) Calculations;
Payment Date.
(i) Statement. On
or as
soon as reasonably practicable following the occurrence of an Early Termination
Date, each party will make the calculations on its part, if any, contemplated
by
Section 6(e) and will provide to the other party a statement (1) showing, in
reasonable detail, such calculations (including any quotations,
market data or information from internal sources used in making such
calculations), (2)
specifying
(except where there are two Affected Parties) any Early Termination Amount
payable and (3)
giving
details of the relevant account to which any amount payable to it is to be
paid.
In the absence of written
confirmation from the source of a quotation or market data obtained in
determining a Close-out Amount,
the records of the party obtaining such quotation or market data will be
conclusive evidence of the existence
and accuracy of such quotation or market data.
(ii) Payment
Date. An
Early
Termination Amount due in respect of any Early Termination Date will,
together
with any amount of interest payable pursuant to Section 9(h)(ii)(2), be payable
(1) on the day on which
notice of the amount payable is effective in the case of an Early Termination
Date which is designated or
occurs
as a result of an Event of Default and (2) on the day which is two Local
Business Days after the day
on
which notice of the amount payable is effective (or, if there are two Affected
Parties, after the day on which the statement provided pursuant to clause (i)
above by the second party to provide such a statement is effective)
in the case of an Early Termination Date which is designated as a result of
a
Termination Event.
(e)
Payments
on Early Termination. If
an
Early Termination Date occurs, the amount, if any, payable in respect
of that Early Termination Date (the "Early Termination Amount") will be
determined pursuant to this Section
6(e) and will be subject to Section 6(f).
(i) Events
of Default. If
the
Early Termination Date results from an Event of Default, the Early Termination
Amount will be an amount equal to (1) the sum of (A) the Termination Currency
Equivalent of the
Close-out Amount or Close-out Amounts (whether positive or negative) determined
by the. Non- defaulting
Party for each Terminated Transaction or group of Terminated Transactions,
as
the case may be, and
(B)
the Termination Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (2)
the
Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If the Early Termination
Amount is a positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is
a
negative number, the Non-defaulting Party will pay the absolute value of the
Early Termination Amount to the Defaulting Party.
(ii) Termination
Events.
If
the
Early Termination Date results from a Termination Event:—
(1) One
Affected Party. Subject
to clause (3) below, if there is one Affected Party, the Early Termination
Amount will be determined in accordance with Section 6(e)(i), except that
references to
the
Defaulting Party and to the Non-defaulting Party will be deemed to be references
to the Affected
Party and to the Non-affected Party, respectively.
(2) Two
Affected Parties. Subject
to clause (3) below, if there are two Affected Parties, each party
will determine an amount equal to the Termination Currency Equivalent of the
sum
of the Close-out
Amount or Close-out Amounts (whether positive or negative) for each Terminated
Transaction
or group of Terminated Transactions, as the case may be, and the Early
Termination Amount
will be an amount equal to (A) the sum of (I) one-half of the difference between
the higher amount
so
determined (by party "X") and the lower amount so determined (by party "Y")
and
(II)
the
Termination Currency Equivalent of the Unpaid Amounts owing to X less (B) the
Termination
Currency Equivalent of the Unpaid Amounts owing to Y. If the Early Termination
Amount
is
a positive number, Y will pay it to X; if it is a negative number, X will pay
the absolute value of the Early Termination Amount to Y.
(3) Mid-Market
Events. If
that
Termination Event is an Illegality or a Force Majeure Event, then
the
Early Termination Amount will be determined in accordance with clause (1) or
(2)
above, as
appropriate, except that, for the purpose of determining a Close-out Amount
or
Close-out Amounts,
the Determining Party will:—
(A) if
obtaining quotations from one or more third parties (or from any of the
Determining
Parry's Affiliates), ask each third party or Affiliate (I) not to take account
of the
current creditworthiness of the Determining Party or any existing Credit Support
Document
and (II) to provide mid-market quotations; and
(B) in
any
other case, use mid-market values without regard to the creditworthiness of
the
Determining Party.
(iii) Adjustment
for Bankruptcy. In
circumstances where an Early Termination Date occurs because Automatic
Early Termination applies in respect of a party, the Early Termination Amount
will be subject to such
adjustments as are appropriate and permitted by applicable law to reflect any
payments or deliveries made by one party to the other under this Agreement
(and
retained by such other party) during the period from
the
relevant Early Termination Date to the date for payment determined under Section
6(d)(ii).
(iv) Adjustment
for Illegality or Force Majeure Event. The
failure by a parry or any Credit Support Provider
of such party to pay, when due, any Early Termination Amount will not constitute
an Event of Default
under Section 5(a)(i) or 5(a)(iii)(l) if such failure is due to the occurrence
of an event or circumstance
which would, if it occurred with respect to payment, delivery or compliance
related to a Transaction,
constitute or give rise to an Illegality or a Force Majeure Event. Such amount
will (1) accrue interest
and otherwise be treated as an Unpaid Amount owing to the other party if
subsequently an Early Termination
Date results from an Event of Default, a Credit Event Upon Merger or an
Additional Termination
Event in respect of which all outstanding Transactions are Affected Transactions
and (2)
otherwise accrue interest in accordance with Section 9(h)(ii)(2).
(v) Pre-Estimate. The
parties agree that an amount recoverable under this Section 6(e) is a reasonable
pre-estimate
of loss and not a penalty. Such amount is payable for the loss of bargain and
the loss of protection
against future risks, and, except as otherwise provided in this Agreement,
neither parry will be entitled
to recover any additional damages as a consequence of the termination of the
Terminated Transactions.
(f) Set-Off. Any
Early
Termination Amount payable to one party (the "Payee") by the other party (the
"Payer"),
in circumstances where there is a Defaulting Party or where there is one
Affected Party in the case where either a Credit Event Upon Merger has occurred
or any other Termination Event in respect of which all outstanding Transactions
are Affected Transactions has occurred, will, at the option of the
Non-defaulting Party or the Non-affected
Party, as the case may be ("X") (and without prior notice to the Defaulting
Party or the Affected Party, as the case
may
be), be reduced by its set-off against any other amounts ("Other Amounts")
payable by the Payee to the Payer
(whether or not arising under this Agreement, matured or contingent and
irrespective of the currency, place of payment
or place of booking of the obligation). To the extent that any Other Amounts
are
so set off, those Other Amounts
will be discharged promptly and in all respects. X will give notice to the
other
party of any set-off effected under this Section 6(f).
For
this
purpose, either the Early Termination Amount or the Other Amounts (or the
relevant portion of such amounts)
may be converted by X into the currency in which the other is denominated at
the
rate of exchange at which such
party would be able, in good faith and using commercially reasonable procedures,
to purchase the relevant amount
of
such currency.
If
an
obligation is unascertained, X may in good faith estimate that obligation and
set off in respect of the estimate, subject to the relevant party accounting
to
the other when the obligation is ascertained.
Nothing
in this Section 6(f) will be effective to create a charge or other security
interest. This Section 6(f) will be without prejudice and in addition to any
right of set-off, offset, combination of accounts, lien, right of retention
or
withholding
or similar right or requirement to which any party is at any time otherwise
entitled or subject (whether by operation
of law, contract or otherwise).
Subject
to Section 6(b)(ii) and to the extent permitted by applicable law, neither
this
Agreement nor any interest or obligation in or under this Agreement may be
transferred (whether by way of security or otherwise) by either party without
the prior written consent of the other party, except that:—
(a) a
party
may make such a transfer of this Agreement pursuant to a consolidation or
amalgamation with, or merger with or into, or transfer of all or substantially
all its assets to, another entity (but -without prejudice to any other
right or remedy under this Agreement); and
(b) a
party
may make such a transfer of all or any part of its interest in any Early
Termination Amount payable to
it by
a Defaulting Party, together with any amounts payable on or with respect to
that
interest and any other rights associated
with that interest pursuant to Sections 8,9(h) and 11.
Any
purported transfer that is not in compliance with this Section 7 will be
void.
(a) Payment
in the Contractual Currency. Each
payment under this Agreement will be made in the relevant currency
specified in this Agreement for that payment (the "Contractual Currency").
To
the extent permitted by applicable law, any obligation to make payments under
this Agreement in the Contractual Currency will not be discharged
or satisfied by any tender in any currency other than the Contractual Currency,
except to the extent such tender
results in the actual receipt by the party to which payment is owed, acting
in
good faith and using commercially
reasonable procedures in converting the currency so tendered into the
Contractual Currency, of the full amount
in
the Contractual Currency of all amounts payable in respect of this Agreement.
If
for any reason the amount
in
the Contractual Currency so received falls short of the amount in the
Contractual Currency payable in respect
of this Agreement, the party required to make the payment will, to the extent
permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary
to
compensate for the shortfall.
If for any reason the amount in the Contractual Currency so received exceeds
the
amount in the Contractual Currency
payable in respect of this Agreement, the party receiving the payment will
refund promptly the amount of such
excess.
(b) Judgments. To
the
extent permitted by applicable law, if .any judgment or order expressed in
a
currency other
than the Contractual Currency is rendered (i) for the payment of any amount
owing in respect of this Agreement,
(ii) for the payment of any amount relating to any early termination in respect
of this Agreement or (iii) in respect
of a judgment or order of another court for the payment of any amount described
in clause (i) or (ii) above, the party seeking recovery, after recovery in
full
of the aggregate amount to which such party is entitled pursuant to the
judgment or order, will be entitled to receive immediately from the other party
the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly
to the other party any excess of the Contractual Currency received by such
party
as a consequence of sums paid
in
such other currency if such shortfall or such excess arises or results from
any
variation between the rate of exchange
at which the Contractual Currency is converted into the currency of the judgment
or order for the purpose of
such
judgment or order and the rate of exchange at which such party is able, acting
in good faith and using
commercially
reasonable procedures in converting the currency received into the Contractual
Currency, to purchase the Contractual Currency with the amount of the currency
of the judgment or order actually received by such party.
(c) Separate
Indemnities. To
the
extent permitted by applicable law, the indemnities in this Section 8
constitute
separate and independent obligations from the other obligations in this
Agreement, will be enforceable as separate and independent causes of action,
will apply notwithstanding any indulgence granted by the party to which
any
payment is owed and will not be affected by judgment being obtained or claim
or
proof being made for any other
sums payable in respect of this Agreement.
(d) Evidence
of Loss. For
the
purpose of this Section 8, it will be sufficient for a party to demonstrate
that
it would
have suffered a loss had an actual exchange or purchase been made.
(a) Entire
Agreement. This
Agreement constitutes the entire agreement and understanding of the parties
with
respect to its subject matter. Each of the parties acknowledges that in entering
into this Agreement it has not relied on
any
oral or written representation, warranty or other assurance (except as provided
for or referred to in this Agreement)
and waives all rights and remedies which might otherwise be available to it
in
respect thereof, except that nothing
in this Agreement will limit or exclude any liability of a party for
fraud.
(b) Amendments.
An
amendment, modification or waiver in respect of this Agreement will only be
effective if in
writing (including a writing evidenced by a facsimile transmission) and executed
by each of the parties or confirmed
by an exchange of telexes or by an exchange of electronic messages on an
electronic messaging system.
(c) Survival
of Obligations. Without
prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties
under
this Agreement will survive the termination of any Transaction.
(d) Remedies
Cumulative. Except
as
provided in this Agreement, the rights, powers, remedies and privileges
provided
in this Agreement are cumulative and not exclusive of any rights, powers,
remedies and privileges provided by law.
(e) Counterparts
and Confirmations.
(i) This
Agreement (and each amendment, modification and waiver in respect of it) may
be
executed and
delivered in counterparts (including by facsimile transmission and by electronic
messaging system), each of
which
will be deemed an original.
(ii) The
parties intend that they are legally bound by the terms of each Transaction
from
the moment they
agree to those terms (whether orally or otherwise). A Confirmation will be
entered into as soon as practicable
and may be executed and delivered in counterparts (including by facsimile
transmission) or be created
by an exchange of telexes, by an exchange of electronic messages on an
electronic messaging system or
by an
exchange of e-mails, which in each case will be sufficient for all purposes
to
evidence a binding supplement
to this Agreement. The parties will specify therein or through another effective
means that any such
counterpart, telex, electronic message or e-mail constitutes a
Confirmation.
(f) No
Waiver of Rights. A
failure
or delay in exercising any right, power or privilege in respect of this
Agreement
will not be presumed to operate as a waiver, and a single or partial exercise
of
any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that
right, power or privilege or the exercise of any other right, power or
privilege.
(g) Headings.
The
headings used in this Agreement are for convenience of reference only and are
not to affect the
construction of or to be taken into consideration in interpreting this
Agreement.
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(h)
|
Interest
and Compensation.
|
(i) Prior
to
Early Termination. Prior to the occurrence or effective designation of an Early
Termination
Date in respect of the relevant Transaction:—
(1) Interest
on Defaulted Payments. If
a
party defaults in the performance of any payment obligation,
it will, to the extent permitted by applicable law and subject to Section 6(c),
pay interest (before as well as after judgment) on the overdue amount to the
other party on demand in the same currency
as the overdue amount, for the period from (and including) the original due
date
for payment to (but excluding) the date of actual payment (and excluding any
period in respect of which
interest or compensation in respect of the overdue amount is due pursuant to
clause (3)(B) or (C)
below), at the Default Rate.
(2) Compensation
for Defaulted Deliveries. If
a
party defaults in the performance of any obligation
required to be settled by delivery, it will on demand (A) compensate the other
party to the
extent provided for in the relevant Confirmation or elsewhere in this Agreement
and (B) unless otherwise
provided in the relevant Confirmation or elsewhere in this Agreement, to the
extent permitted
by applicable law and subject to Section 6(c), pay to the other party interest
(before as well
as
after judgment) on an amount equal to the fair market value of that which was
required to be delivered
in the same currency as that amount, for the period from (and including) the
originally scheduled
date for delivery to (but excluding) the date of actual delivery (and excluding
any period in respect of which interest or compensation in respect of that
amount is due pursuant to clause (4) below),
at the Default Rate. The fair market value of any obligation referred to above
will be determined
as of the originally scheduled date for delivery, in good faith and using
commercially reasonable procedures, by the party that was entitled to take
delivery.
(3) Interest
on Deferred Payments. If:—
(A) a
party
does not pay any amount that, but for Section 2(a)(iii), would have been
payable, it will, to the extent permitted by applicable law and subject to
Section 6(c) and clauses (B) and (C) below, pay interest (before as well as
after judgment) on that amount to
the
other party on demand (after such amount becomes payable) in the same currency
as that
amount, for the period from (and including) the date the amount would, but
for
Section 2(a)(iii), have been payable to (but excluding) the date the amount
actually becomes
payable, at the Applicable Deferral Rate;
(B) a
payment
is deferred pursuant to Section 5(d), the party which would otherwise have
been
required to make that payment will, to the extent permitted by applicable law,
subject
to Section 6(c) and for so long as no Event of Default or Potential Event of
Default with
respect to that party has occurred and is continuing, pay interest (before
as
well as after
judgment) on the amount of the deferred payment to the other party on demand
(after such
amount becomes payable) in the same currency as the deferred payment, for the
period
from (and including) the date the amount would, but for Section 5(d), have
been
payable
to (but excluding) the earlier of the date the payment is no longer deferred
pursuant
to Section 5(d) and the date during the deferral period upon which an Event
of
Default or Potential Event of Default with respect to that party occurs, at
the
Applicable Deferral
Rate; or
(C) a
party
fails to make any payment due to the occurrence of an Illegality or a
Force
Majeure Event (after giving effect to any deferral period contemplated by clause
(B)
above), it will, to the extent permitted by applicable law, subject to Section
6(c) and for
so
long as the event or circumstance giving rise to that Illegality or Force
Majeure Event
continues
and no Event of Default or Potential Event of Default with respect to that
party
has
occurred and is continuing, pay interest (before as well as after judgment)
on
the overdue
amount to the other party on demand in the same currency as the overdue amount,
for
the
period from (and including) the date the party fails to make the payment due
to
the occurrence
of the relevant Illegality or Force Majeure Event (or, if later, the date the
payment
is no longer deferred pursuant to Section 5(d)) to (but excluding) the earlier
of the date
the
event or circumstance giving rise to that Illegality or Force Majeure Event
ceases to exist and the date during the period upon which an Event of Default
or
Potential Event of Default with respect to that party occurs (and excluding
any
period in respect of which interest
or compensation in respect of the overdue amount is due pursuant to clause
(B)
above),
at the Applicable Deferral Rate.
(4) Compensation
for Deferred Deliveries. If:—
(A) a
party
does not perform any obligation that, but for Section 2(a)(iii), would have
been
required to be settled by delivery;
(B)
a
delivery is deferred pursuant to Section 5(d); or
(C)
a
party
fails to make a delivery due to the occurrence of an Illegality or a Force
Majeure
Event at a time when any applicable Waiting Period has expired,
the
party
required (or that would otherwise have been required) to make the delivery
will,
to the extent
permitted by applicable law and subject to Section 6(c), compensate and pay
interest to the other
party on demand (after, in the case of clauses (A) and (B) above, such delivery
is required) if and
to
the extent provided for in the relevant Confirmation or elsewhere in this
Agreement.
(ii) Early
Termination. Upon
the
occurrence or effective designation of an Early Termination Date in respect
of a Transaction:—
(1) Unpaid
Amounts. For
the
purpose of determining an Unpaid Amount in respect of the relevant Transaction,
and to the extent permitted by applicable law, interest will accrue on the
amount
of
any payment obligation or the amount equal to the fair market value of any
obligation required
to be settled by delivery included in such determination in the same currency
as
that amount,
for the period from (and including) the date the relevant obligation was (or
.would have been
but
for Section 2(a)(iii) or 5(d)) required to have been performed to (but
excluding) the relevant
Early Termination Date, at the Applicable Close-out Rate.
(2) Interest
on Early Termination Amounts. If
an
Early Termination Amount is due in respect of
such
Early Termination Date, that amount will, to the extent permitted by applicable
law, be paid together
with interest (before as well as after judgment) on that amount in the
Termination Currency,
for the period from (and including) such Early Termination Date to (but
excluding) the date the amount is paid, at the Applicable Close-out
Rate.
(iii) Interest
Calculation. Any
interest pursuant to this Section 9(h) will be calculated on the basis of
daily
compounding and the actual number of days elapsed.
|
10.
|
Offices;
Multibranch Parties
|
(a) If
Section 10(a) is specified in the Schedule as applying, each party that enters
into a Transaction through an Office other than its head or home office
represents to and agrees with the other party that, notwithstanding the place
of
booking or its jurisdiction of incorporation or organisation, its obligations
are the same in terms of recourse against it
as if
it had entered into the Transaction through its head or home office, except
that
a party will not have recourse to the head or home office of the other party
in
respect of any payment or delivery deferred pursuant to Section 5(d)
for
so
long as the payment or delivery is so deferred. This representation and
agreement will be deemed to be repeated
by each party on each date on which the parties enter into a
Transaction.
(b) If
a
party is specified as a Multibranch Party in the Schedule, such parry may,
subject to clause (c) below, enter
into a Transaction through, book a Transaction in and make and receive payments
and deliveries with respect to a
Transaction through any Office listed in respect of that party in the Schedule
(but not any other Office unless otherwise
agreed by the parties in writing).
(c) The
Office through which a party enters into a Transaction will be the Office
specified for that party in the relevant
Confirmation or as otherwise agreed by the parties in writing, and, if an Office
for that parry is not specified in
the
Confirmation or otherwise agreed by the parties in writing, its head or home
office. Unless the parties otherwise
agree in writing, the Office through which a party enters into a Transaction
will also be the Office in which it books the Transaction and the Office through
which it makes and receives payments and deliveries with respect to the
Transaction. Subject to Section 6(b)(ii), neither party may change the Office
in
which it books the Transaction or the Office through which it makes and receives
payments or deliveries with respect to a Transaction without the prior
written
consent of the other party.
A
Defaulting Party will on demand indemnify and hold harmless the other party
for
and against all reasonable out-of-pocket
expenses, including legal fees, execution fees and Stamp Tax, incurred by such
other party by reason of the enforcement
and protection of its rights under this Agreement or any Credit Support Document
to which the Defaulting
Party is a party or by reason of the early termination of any Transaction,
including, but not limited to, costs
of
collection.
(a) Effectiveness. Any
notice or other communication in respect of this Agreement may be given in
any
manner described below (except that a notice or other communication under
Section 5 or 6 may not be given by electronic messaging
system or e-mail) to the address or number or in accordance with the electronic
messaging system or e-mail
details provided (see the Schedule) and will be deemed effective as
indicated:—
(i)
if
in
writing and delivered in person or by courier, on the date it is
delivered;
(ii)
if
sent
by telex, on the date the recipient's answerback is received;
(iii) if
sent
by facsimile transmission, on the date it is received by a responsible employee
of the recipient
in legible form (it being agreed that the burden of proving receipt will be
on
the sender and will not be
met by
a transmission report generated by the sender's facsimile machine);
(iv) if
sent
by certified or registered mail (airmail, if overseas) or the equivalent (return
receipt requested),
on the date it is delivered or its delivery is attempted;
(v) if
sent
by electronic messaging system, on the date it is received; or
(vi) if
sent
by e-mail, on the date it is delivered,
unless
the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that
communication is delivered (or attempted) or received, as applicable, after
the
close of business on a Local Business
Day, in which case that communication will be deemed given and effective on
the
first following day that is a Local Business Day.
(b) Change
of Details. Either
party may by notice to the other change the address, telex or facsimile number
or electronic
messaging system or e-mail details at which notices or other communications
are
to be given to it.
|
13.
|
Governing
Law and Jurisdiction
|
(a) Governing
Law. This
Agreement will be governed by and construed in accordance with the law specified
in the
Schedule.
(b) Jurisdiction.
With
respect to any suit, action or proceedings relating to any dispute arising
out
of or in connection
with this Agreement ("Proceedings"), each party irrevocably:—
(i) submits:—
(1) if
this
Agreement is expressed to be governed by English law, to (A) the non-exclusive
jurisdiction
of the English courts if the Proceedings do not involve a Convention Court
and
(B) the exclusive
jurisdiction of the English courts if the Proceedings do involve a Convention
Court; or
(2) if
this
Agreement is expressed to be governed by the laws of the State of New York,
to
the
non-exclusive jurisdiction of the courts of the State of New York and the United
States District Court
located in the Borough of Manhattan in New York City;
(ii) waives
any objection which it may have at any time to the laying of venue of any
Proceedings brought
in any such court, waives any claim that such Proceedings have been brought
in
an inconvenient forum
and
further waives the right to object, with respect to such Proceedings, that
such
court does not have any
jurisdiction over such party; and
(iii) agrees,
to the extent permitted by applicable law, that the bringing of Proceedings
in
any one or more
jurisdictions will not preclude the bringing of Proceedings in any other
jurisdiction.
(c) Service
of Process. Each
party irrevocably appoints the Process Agent, if any, specified opposite its
name in
the
Schedule to receive, for it and on its behalf, service of process in any
Proceedings. If for any reason any party's.
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint
a
substitute process agent acceptable to the other parry. The parties irrevocably
consent to service of process given
in
the manner provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv).
Nothing in this Agreement will affect
the right of either party to serve process in any other manner permitted by
applicable law.
(d) Waiver
of Immunities. Each
party irrevocably waives, to the extent permitted by applicable law, with
respect
to itself and its revenues and assets (irrespective of their use or intended
use), all immunity on the grounds of sovereignty
or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii)
relief by way of injunction or order
for
specific performance or recovery of property, (iv) attachment of its assets
(whether before or after judgment)
and (v) execution or enforcement of any judgment to which it or its revenues
or
assets might otherwise be entitled
in any Proceedings in the courts of any jurisdiction and irrevocably agrees,
to
the extent permitted by applicable
law, that it will not claim any such immunity in any Proceedings.
14.
Definitions
As
used
in this Agreement:—
"Additional
Representation" has
the
meaning specified in Section 3.
"Additional
Termination Event"
has
the
meaning specified in Section 5(b).
"Affected
Party" has
the
meaning specified in Section 5(b).
"Affected
Transactions" means
(a)
with respect to any Termination Event consisting of an Illegality, Force Majeure
Event,
Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence
of such Termination Event (which, in the case of an Illegality under Section
5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2), means
all
Transactions unless the relevant Credit Support Document references only certain
Transactions, in which case those
Transactions and, if the relevant Credit Support Document constitutes a
Confirmation for a Transaction, that Transaction) and (b) with respect to any
other Termination Event, all Transactions.
"Affiliate" means,
subject to the Schedule, in relation to any person, any entity controlled,
directly or indirectly, by the
person, any entity that controls, directly or indirectly, the person or any
entity directly or indirectly under common control
with die person. For this purpose, "control" of any entity or person means
ownership of a majority of the voting
power of the entity or person.
"Agreement" has
the
meaning specified in Section l(c).
"Applicable
Close-out Rate" means:—
(a) in
respect of the determination of an Unpaid Amount:—
(i) in
respect of obligations payable or deliverable (or which would have been but
for
Section 2(a)(iii)) by
a
Defaulting Party, the Default Rate;
(ii) in
respect of obligations payable or deliverable (or which would have been but
for
Section 2(a)(iii)) by
a
Non-defaulting Party, the Non-default Rate;
(iii) in
respect of obligations deferred pursuant to Section 5(d), if there is no
Defaulting Party and for so long
as
the deferral period continues, the Applicable Deferral Rate; and
(iv)
in
all
other cases following the occurrence of a Termination Event (except where
interest accrues pursuant to clause (iii) above), the Applicable Deferral Rate;
and
(b) in
respect of an Early Termination Amount:—
(i) for
the
period from (and including) the relevant Early Termination Date to (but
excluding) the date (determined
in accordance with Section 6(d)(ii)) on which that amount is
payable:—
(1) if
the
Early Termination Amount is payable by a Defaulting Party, the Default
Rate;
(2) if
the
Early Termination Amount is payable by a Non-defaulting Party, the Non-default
Rate;
and
(3) in
all
other cases, the Applicable Deferral Rate; and
(ii) for
the.
period from (and including) the date (determined in accordance with Section
6(d)(ii)) on which
that amount is payable to (but excluding) the date of actual
payment:—
(1) if
a
party fails to pay the Early Termination Amount due to the occurrence of an
event or circumstance
which would, if it occurred with respect to a payment or delivery under a
Transaction, constitute
or give rise to an Illegality or a Force Majeure Event, and for so long as
the
Early Termination
Amount remains unpaid due to the continuing existence of such event or
circumstance, the
Applicable Deferral Rate;
(2) if
the
Early Termination Amount is payable by a Defaulting Party (but excluding any
period
in
respect of which clause (1) above applies), the Default Rate;
(3) if
the
Early Termination Amount is payable by a Non-defaulting Party (but excluding
any
period
in
respect of which clause (1) above applies), the Non-default Rate;
and
(4) in
all
other cases, the Termination Rate.
"Applicable
Deferral Rate"
means:—
(a) for
the
purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant payer
to be
a rate offered to the payer
by
a major bank in a relevant interbank market for overnight deposits in the
applicable currency, such bank to be
selected in good faith by the payer for the purpose of obtaining a
representative rate that will reasonably reflect conditions
prevailing at the time in that relevant market;
(b) for
purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition of
Applicable Close-out Rate, the rate
certified by the relevant payer to be a rate offered to prime banks by a major
bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be selected in
good
faith by the payer after consultation
with the other party, if practicable, for the purpose of obtaining a
representative rate that will reasonably reflect
conditions prevailing at the time in that relevant market; and
(c) for
purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and (b)(ii)(l)
of the definition of Applicable
Close-out Rate, a rate equal to the arithmetic mean of the rate determined
pursuant to clause (a) above and a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the relevant payee (as certified by
it)
if it
were to fund or of funding the relevant amount.
"Automatic
Early Termination"
has
the
meaning specified in Section 6(a).
"Burdened
Party" has
the
meaning specified in Section 5(b)(iv).
"Change
in Tax Law" means
the
enactment, promulgation, execution or ratification of, or any change in or
amendment
to, any law (or in the application or official interpretation of any law) that
occurs after the parties enter into
the
relevant Transaction.
"Close-out
Amount" means,
with respect to each Terminated Transaction or each group of Terminated
Transactions and
a
Determining Party, the amount of the losses or costs of the Determining Party
that are or would be incurred under
then prevailing circumstances (expressed as a positive number) or gains of
the
Determining Party that are or would
be
realised under then prevailing circumstances (expressed as a negative number)
in
replacing, or in providing for the Determining Party the economic equivalent
of,
(a) the material terms of that Terminated Transaction or group of
Terminated Transactions, including the payments and deliveries by the parties
under Section 2(a)(i) in respect of that Terminated Transaction or group of
Terminated Transactions that would, but for the occurrence of the relevant
Early
Termination Date, have been required after that date (assuming satisfaction
of
the conditions precedent in
Section
2(a)(iii)) and (b) the option rights of the parties in respect of that
Terminated Transaction or group of Terminated
Transactions.
Any
Close-out Amount will be determined by the Determining Party (or its agent),
which will act in good faith and use
commercially reasonable procedures in order to produce a commercially reasonable
result. The Determining Party
may
determine a Close-out Amount for any group of Terminated Transactions or any
individual Terminated Transaction but, in the aggregate, for not less than
all
Terminated Transactions. Each Close-out Amount will be determined
as of the Early Termination Date or, if that would not be commercially
reasonable, as of the date or dates following
the Early Termination Date as would be commercially reasonable.
Unpaid
Amounts in respect of a Terminated Transaction or group of Terminated
Transactions and legal fees and out-of-pocket
expenses referred to in Section 11 are to be excluded in all determinations
of
Close-out Amounts.
In
determining a Close-out Amount, the Determining Party may consider any relevant
information, including, without limitation,
one or more of the following types of information: —
(i) quotations
(either firm or indicative) for replacement transactions supplied by one or
more
third parties that may
take
into account the creditworthiness of the Determining Party at the time the
quotation is provided and the terms
of
any relevant documentation, including credit support documentation, between
the
Determining Party and the third
party providing the quotation;
(ii) information
consisting of relevant market data in the relevant market supplied by one or
more third parties including,
without limitation, relevant rates, prices, yields, yield curves, volatilities,
spreads, correlations or other relevant market data in the relevant market;
or
(iii)
information
of the types described in clause (i) or (ii) above from internal sources
(including any of the Determining
Party's Affiliates) if that information is of the same type used by the
Determining Party in the regular course of its business for the valuation of
similar transactions.
The
Determining Party will consider, taking into account the standards and
procedures described in this definition, quotations pursuant to clause (i)
above
or relevant market data pursuant to clause (ii) above unless the Determining
Party
reasonably believes in good faith that such quotations or relevant market data
are not readily available or would produce
a
result that would not satisfy those standards. When considering information
described in clause (i), (ii) or (iii) above, the Determining Party may include
costs of funding, to the extent costs of funding are not and would not
be
a
component of the other information being utilised. Third parties supplying
quotations pursuant to clause (i) above
or
market data pursuant to clause (ii) above may include, without limitation,
dealers in the relevant markets, end-users of the relevant product, information
vendors, brokers and other sources of market information.
Without
duplication of amounts calculated based on information described in clause
(i),
(ii) or (iii) above, or other relevant
information, and when it is commercially reasonable to do so, the Determining
Party may in addition consider
in calculating a Close-out Amount any loss or cost incurred in connection with
its terminating, liquidating or re-establishing
any hedge related to a Terminated Transaction or group of Terminated
Transactions (or any gain resulting
from any of them).
Commercially
reasonable procedures used in determining a Close-out Amount may include the
following:—
(1)
application
to relevant market data from third parties pursuant to clause (ii) above or
information from internal
sources pursuant to clause (iii) above of pricing or other valuation models
that
are, at the time of the determination
of the Close-out Amount, used by the Determining Party in the regular course
of
its business in pricing or
valuing transactions between the Determining Party and unrelated third parties
that are similar to the Terminated Transaction or group of Terminated
Transactions; and
(2) application
of different valuation methods to Terminated Transactions or groups of
Terminated Transactions depending
on the type, complexity, size or number of the Terminated Transactions or group
of Terminated Transactions.
"Confirmation"
has
the
meaning specified in the preamble.
"consent" includes
a consent, approval, action, authorisation, exemption, notice, filing,
registration or exchange control
consent.
"Contractual
Currency" has
the
meaning specified in Section 8(a).
"Convention
Court" means
any
court which is bound to apply to the Proceedings either Article 17 of the 1968
Brussels
Convention on Jurisdiction and the Enforcement of Judgments in Civil and
Commercial Matters or Article 17 of the 1988 Lugano Convention on Jurisdiction
and the Enforcement of Judgments in Civil and Commercial
Matters.
"Credit
Event Upon Merger"has
the
meaning specified in Section 5(b).
"Credit
Support Document" means
any
agreement or instrument that is specified as such in this
Agreement.
"Credit
Support Provider"has
the
meaning specified in the Schedule.
"Cross-Default"
means
the
event specified in Section 5(a)(vi).
"Default
Rate" means
a
rate per annum equal to the cost (without proof or evidence of any actual cost)
to the relevant
payee (as certified by it) if it were to fund or of funding the relevant amount
plus 1 % per annum.
"Defaulting
Party" has
the
meaning specified in Section 6(a).
"Designated
Event"
has
the
meaning specified in Section 5(b)(v).
"Determining
Party" means
the
party determining a Close-out Amount.
"Early
Termination Amount" has
the
meaning specified in Section 6(e).
"Early
Termination Date" means
the
date determined in accordance with Section 6(a) or 6(b)(iv).
"electronic
messages"
does
not
include e-mails but does include documents expressed in markup languages, and
"electronic
messaging system" will
be
construed accordingly.
"English
law" means
the
law of England and Wales, and "English"
will
be
construed accordingly.
"Event
of Default" has
the
meaning specified in Section 5(a) and, if applicable, in the
Schedule.
"Force
Majeure Event" has
the
meaning specified in Section 5(b).
"General
Business Day"'
means a
day on which commercial banks are open for general business (including dealings
in foreign
exchange and foreign currency deposits).
"Illegality" has
the
meaning specified in Section 5(b).
"Indemnifiable
Tax" means
any
Tax other than a Tax that would not be imposed in respect of a payment under
this Agreement
but for a present or former connection between the jurisdiction of the
government or taxation authority imposing
such Tax and the recipient of such payment or a person related to such recipient
(including, without limitation,
a connection arising from such recipient or related person being or having
been
a citizen or resident of such
jurisdiction, or being or having been organised, present or engaged in a trade
or business in such jurisdiction, or having
or
having had a permanent establishment or fixed place of business in such
jurisdiction, but excluding a connection
arising solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"law" includes
any treaty, law, rule or regulation (as modified, in the case of tax matters,
by
the practice of any relevant governmental revenue authority), and "unlawful" will
be
construed accordingly.
"Local
Business Day" means
(a)
in relation to any obligation under Section 2(a)(i), a General Business Day
in
the place or places specified in the relevant Confirmation and a day on which
a
relevant settlement system is open or operating
as specified in the relevant Confirmation or, if a place or a settlement system
is not so specified, as otherwise agreed by the parties in writing or determined
pursuant to provisions contained, or incorporated by reference,
in this Agreement, (b) for the purpose of determining when a Waiting Period
expires, a General Business Day
in
the place where the event or circumstance that constitutes or gives rise to
the
Illegality or Force Majeure Event,
as
the case may be, occurs, (c) in relation to any other payment, a General
Business Day in the place where the relevant
account is located and, if different, in the principal financial centre, if
any,
of the currency of such payment and,
if
that currency does not have a single recognised principal financial centre,
a
day on which the settlement system
necessary to accomplish such payment is open, (d) in relation to any notice
or
other communication, including notice
contemplated under Section 5(a)(i), a General Business Day (or a day that would
have been a General Business
Day but for the occurrence of an event or circumstance which would, if it
occurred with respect to payment, delivery
or compliance related to a Transaction, constitute or give rise to an Illegality
or a Force Majeure Event) in the
place
specified in the address for notice provided by the recipient and, in the case
of a notice contemplated by Section
2(b), in the place where the relevant new account is to be located and (e)
in
relation to Section 5(a)(v)(2), a General Business Day in the relevant locations
for performance with respect to such Specified Transaction.
"Local
Delivery Day" means,
for purposes of Sections 5(a)(i) and 5(d), a day on which settlement systems
necessary to
accomplish the relevant delivery are generally open for business so that the
delivery is capable of being accomplished
in accordance with customary market practice, in the place specified in the
relevant Confirmation or, if not
so
specified, in a location as determined in accordance with customary market
practice for the relevant delivery.
"Master
Agreement" has
the
meaning specified in the preamble.
"Merger
Without Assumption"
means
the event specified in Section 5(a)(viii).
"Multiple
Transaction Payment
Netting" has the
meaning specified in Section 2(c).
"Non-affected
Party" means,
so
long as there is only one Affected Party, the other party.
"Non-default
Rate" means
the
rate certified by the Non-defaulting Party to be a rate offered to the
Non-defaulting Party by a major bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be
selected in good faith by the Non-defaulting Party for the purpose of obtaining
a representative rate that will reasonably
reflect conditions prevailing at the time in that relevant market.
"Non-defaulting
Party" has the
meaning specified in Section 6(a).
"Office"
means
a
branch or office of a party, which may be such party's head or home
office.
"Other
Amounts" has
the
meaning specified in Section 6(f).
"Payee" has
the
meaning specified in Section 6(f).
"Payer"
loss
the
meaning specified in Section 6(f).
"Potential
Event of Default" means
any
event which, with the giving of notice or the lapse of time or both, would
constitute
an Event of Default.
"Proceedings" has
the
meaning specified in Section 13(b).
"Process
Agent" has
the
meaning specified in the Schedule.
"rate
of exchange" includes,
without limitation, any premiums and costs of exchange payable in connection
with the purchase
of or conversion into the Contractual Currency.
"Relevant
Jurisdiction" means,
with respect to a party, the jurisdictions (a) in which the party is
incorporated, organised, managed and controlled or considered to have its seat,
(b) where an Office through which the party is acting
for purposes of this Agreement is located, (c) in which the party executes
this
Agreement and (d) in relation to any
payment, from or through which such payment is made.
"Schedule" has
the
meaning specified in the preamble.
"Scheduled
Settlement Date" means
a
date on which a payment or delivery is to be made under Section 2(a)(i) with
respect
to a Transaction.
"Specified
Entity" has
the
meaning specified in the Schedule.
"Specified
Indebtedness" means,
subject to the Schedule, any obligation (whether present or future, contingent
or otherwise,
as principal or surety or otherwise) in respect of borrowed money.
"Specified
Transaction" means,
subject to the Schedule, (a) any transaction (including an agreement with
respect to any
such
transaction) now existing or hereafter entered into between one party to this
Agreement (or any Credit Support
Provider of such party or any applicable Specified Entity of such party) and
the
other party to this Agreement (or
any
Credit Support Provider of such other party or any applicable Specified Entity
of such other party) which is not
a
Transaction under this Agreement but (i) which is a rate swap transaction,
swap
option, basis swap, forward rate transaction,
commodity swap, commodity option, equity or equity index swap,
equity
or
equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency
swap transaction, cross-currency rate swap transaction, currency option, credit
protection transaction, credit swap,
credit default swap, credit default option, total return swap, credit spread
transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending
transaction, weather index transaction or forward
purchase or sale of a security, commodity or other financial instrument or
interest (including any option with respect
to any of these transactions) or (ii) which is a type of transaction that is
similar to any transaction referred to in
clause
(i) above that is currently, or in the future becomes, recurrently entered
into
in the financial markets (including
terms and conditions incorporated by reference in such agreement) and which
is a
forward, swap, future, option
or
other derivative on one or more rates, currencies, commodities, equity
securities or other equity instruments,
debt securities or other debt instruments, economic indices or measures of
economic risk or value, or other
benchmarks against which payments or deliveries are to be made, (b) any
combination of these transactions and (c)
any
other transaction identified as a Specified Transaction in this Agreement or
the
relevant confirmation.
"Stamp
Tax" means
any
stamp, registration, documentation or similar tax.
"Stamp
Tax Jurisdiction" has
the
meaning specified in Section 4(e).
"Tax" means
any
present or future tax, levy, impost, duty, charge, assessment or fee of any
nature (including interest, penalties
and additions thereto) that is imposed by any government or other taxing
authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"Tax
Event" has
the
meaning specified in Section 5(b).
"Tax
Event Upon Merger" has
the
meaning specified in Section 5(b).
"Terminated
Transactions" means,
with respect to any Early Termination Date, (a) if resulting from an Illegality
or a
Force
Majeure Event, all Affected Transactions specified in the notice given pursuant
to Section 6(b)(iv), (b) if resulting from any other Termination Event, all
Affected Transactions and (c) if resulting from an Event of Default,
all
Transactions in effect either immediately before the effectiveness of the notice
designating that Early Termination Date
or,
if Automatic Early Termination applies, immediately before that Early
Termination Date.
"Termination
Currency" means
(a)
if a Termination Currency is specified in the Schedule and that currency is
freely available,
that currency, and (b) otherwise, euro if this Agreement is expressed to be
governed by English law or United
States Dollars if this Agreement is expressed to be governed by the laws of
the
State of New York.
"Termination
Currency Equivalent" means,
in
respect of any amount denominated in the Termination Currency, such Termination
Currency amount and, in respect of any amount denominated in a currency other
than the Termination
Currency (the "Other Currency"), the amount in the Termination Currency
determined by the party making
the relevant determination as being required to purchase such amount of such
Other Currency as at the relevant
Early Termination Date, or, if the relevant Close-out Amount is determined
as of
a later date, that later date, with
the
Termination Currency at the rate equal to the spot exchange rate of the foreign
exchange agent (selected as provided below) for the purchase of such Other
Currency with the Termination Currency at or about 11:00 a.m. (in the
city
in which such foreign exchange agent is located) on such date as would be
customary for the determination of such
a
rate for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected
in good faith by that party and otherwise will be agreed by the
parties.
"Termination
Event" means
an
Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon Merger or,
if
specified
to be applicable, a Credit Event Upon Merger or an Additional Termination
Event.
"Termination
Rate" means
a
rate per annum equal to the arithmetic mean of the cost (without proof or
evidence of any
actual cost) to each party (as certified by such party) if it were to fund
or of
funding such amounts.
"Threshold
Amount" means
the
amount, if any, specified as such in the Schedule.
"Transaction" has
the
meaning specified in the preamble.
"Unpaid
Amounts" owing
to
any party means, with respect to an Early Termination Date, the aggregate of
(a)
in respect
of all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii) or due but for Section 5(d))
to
such parry under Section 2(a)(i) or 2(d)(i)(4) on or prior to such Early
Termination
Date and which remain unpaid as at such Early Termination Date, (b) in respect
of each Terminated Transaction,
for each obligation under Section 2(a)(i) which was (or would have been but
for
Section 2(a)(iii) or 5(d))
required to be settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such Early Termination
Date, an amount equal to the fair market value of that which was (or
would
have been) required to be delivered and (c) if the Early Termination Date
results from an Event of Default, a Credit Event Upon Merger or an Additional
Termination Event in respect of which all outstanding Transactions are Affected
Transactions, any Early Termination Amount due prior to such Early Termination
Date and which remains unpaid
as
of such Early Termination Date, in each case together with any amount of
interest accrued or other
compensation
in respect of that obligation or deferred obligation, as the case may be,
pursuant to Section 9(h)(ii)(l) or
(2),
as appropriate. The fair market value of any obligation referred to in clause
(b) above will be determined as of the originally scheduled date for delivery,
in good faith and using commercially reasonable procedures, by the party
obliged
to make the determination under Section 6(e) or, if each party is so obliged,
it
will be the average of the Termination
Currency Equivalents of the fair market values so determined by both
parties.
"Waiting
Period" means:—
(a) in
respect of an event or circumstance under Section 5(b)(i), other than in the
case of Section 5(b)(i)(2) where
the
relevant payment, delivery or compliance is actually required on the relevant
day (in which case no Waiting
Period will apply), a period of three Local Business Days (or days that would
have been Local Business Days
but
for the occurrence of that event or circumstance) following the occurrence
of
that event or circumstance; and
(b) in
respect of an event or circumstance under Section 5(b)(ii), other than in the
case of Section 5(b)(ii)(2) where
the
relevant payment, delivery or compliance is actually required on the relevant
day (in which case no Waiting
Period will apply), a period of eight Local Business Days (or days that would
have been Local Business Days
but
for the occurrence of that event or circumstance) following the occurrence
of
that event or circumstance.
IN
WITNESS WHEREOF the parties have executed this document on the respective dates
specified below with effect
from the date specified on the first page of this document.
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Bank
of America, N.A.
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Katy
Industries, Inc.
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By:
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/s/
Donald M. Caiazza
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By:
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/s/
Michael C. Paul
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Name:
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Donald
M. Caiazza
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Name:
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Michael
C. Paul
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Title:
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Senior
Vice President
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Title:
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Treasurer
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Date:
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August
11, 2005 |
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Date:
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August
15, 2005
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ISDA®
International
Swaps and Derivatives Association, Inc.
SCHEDULE
to
the
2002
Master Agreement
dated
as
of August 11, 2005 between
BANK
OF AMERICA, N.A.,
a
national banking association
organized
and existing under the laws of the United States of America,
("Party
A")
and
KATY
INDUSTRIES, INC.,
a
corporation
organized
and existing under the laws of the State of Delaware,
("Party
B")
PART
1: Termination
Provisions
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(a)
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"Specified
Entity" means
in relation to Party A for the purpose of Sections 5(a)(v), 5(a)(vi),
5(a)(vii) and 5(b)(v):
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None;
"Specified
Entity" means
in
relation to Party B for the purpose of Sections 5(a)(v), 5(a)(vi),
5(a)(vii) and 5(b)(v):
None.
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(b)
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"Specified
Transaction "
will
have the meaning specified in Section
14.
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(c)
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The
"Cross-Default"
provisions
of Section 5(a)(vi) (as amended in Part
5(d))
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will
apply to Party A and
will
apply to Party B.
In
connection therewith, "Specified
Indebtedness" will
not
have the meaning specified in
Section 14, and such definition shall be replaced by the following: "any
obligation in respect
of the payment of moneys (whether present or future, contingent or otherwise,
as
principal
or surety or otherwise), except that such term shall not include obligations
in
respect
of deposits received in the ordinary course of a party's banking
business."
"Threshold
Amount" means
with respect to Party A an amount equal to three percent (3%)
of
the Shareholders' Equity of Bank of America Corporation and with respect to
Party
B,
$1,000,000.00.
With
respect to Party B, any "Event of Default" (as such term is defined in the
Credit Agreement) shall be an Event of Default under this
Agreement.
"Credit
Agreement" means
the
Amended and Restated Loan Agreement dated as of April 13, 2004, by and among
Party A, other lenders party thereto and Party B (as amended,
extended, supplemented or otherwise modified in writing from time to
time).
"Shareholders'
Equity" means
with respect to an entity, at any time, the sum (as shown in
the
most recent annual audited financial statements of such entity) of (i) its
capital stock
(including preferred stock) outstanding, taken at par value, (ii) its capital
surplus and
(iii)
its retained earnings, minus (iv) treasury stock, each to be determined in
accordance
with generally accepted accounting principles.
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(d)
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The
"Credit
Event Upon Merger"
provisions
of Section 5(b)(v)
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will
apply to Party A
will
apply to Party B.
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(e)
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The
"Automatic
Early Termination" provision
of Section 6(a)
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will
not
apply to Party A
will
not
apply to Party B.
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(f)
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"Termination
Currency" means
United States Dollars.
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(g)
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Additional
Termination Event will
apply.
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The
following Additional Termination Events shall apply:
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(i)
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In
the event that at any time prior to the termination of any Transaction
hedging obligations
under the Credit Agreement, Party A's obligation to lend under the
Credit
Agreement is terminated (a "Collateral Event"), Party B shall within
three
General Business Days of a Collateral Event (a) execute an ISDA Credit
Support Annex, or provide other credit support, to secure the exposure
of
Party A, in form and substance satisfactory to Party A in its sole
discretion or (b) transfer its rights and
obligations under this Agreement to another party that is acceptable
to
Party A.
Failure to take either action mentioned in the preceding sentence
to the
satisfaction
of Party A shall constitute an Additional Termination Event under
this
Agreement with Party B being the sole Affected
Party;
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(ii)
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In
the event that at any time prior to the termination of any Transaction
hedging obligations
under the Credit Agreement, Party A (in accordance with the terms
of
the
Credit Agreement) voluntarily sells, assigns or otherwise disposes
of its
obligation
to lend and be a party to the Credit Agreement (a "Credit Event"),
Party
A shall within three General Business Days of a Collateral Event
transfer
its
rights and obligations under this Agreement to another party that
is
acceptable to Party B. Failure to take such action mentioned in the
preceding sentence to the satisfaction
of Party B shall constitute an Additional Termination Event under
this
Agreement with Party A being the sole Affected Party;
and
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(iii)
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It
shall be an Additional Termination Event hereunder, with respect
to which
Party
B shall be the sole Affected Party, if the payment obligations of
Party B
hereunder
are specifically subordinated to Party B's obligations to the lenders
under
the Credit Agreement or any new or other credit agreement to which
Party
B
is a party.
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PART
2: Tax
Representations
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(a)
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Payer
Tax Representations. For
the purpose of Section 3(e) of this Agreement, Party A and
Party B will make the following
representation:
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It
is not
required by any applicable law, as modified by the practice of any relevant
governmental
revenue authority, of any Relevant Jurisdiction to make any deduction or
withholding for or on account of any Tax from any payment (other than interest
under Section
9(h) of this Agreement) to be made by it to the other party under this
Agreement. In making this representation, it may rely on (i) the accuracy of
any
representations made by
the
other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction
of
the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy
and
effectiveness
of any document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the
other party contained
in Section 4(d) of this Agreement, except that it will not be a breach of this
representation where reliance is placed on clause (ii) above and the other
party
does not deliver a form or document under Section 4(a)(iii) by reason of
material prejudice to its legal
or
commercial position.
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(b)
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Payee
Tax Representations. For
the purpose of Section 3(f) of this Agreement, Party A and
Party B will make the following representations specified below,
if
any:
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(i)
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The
following representations will apply to Party
A:
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Party
A
is a national banking association created or organized under the laws of the
United States of America and the federal taxpayer identification number is
94-1687665.
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(ii)
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The
following representations will apply to Party
B:
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Party
B
is a corporation created or organized under the laws of the State of
Delaware
and the federal taxpayer identification number is75-l277589.
PART
3: Agreement
to Deliver Documents
For
the
purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees to
deliver the following
documents:
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(a)
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Tax
forms, documents or certificates to be delivered
are:
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Party
required to deliver
document
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Form/Document/Certificate
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Date
by which to be delivered
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Party
A and Party B
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Internal
Revenue Service Form
W-9
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Upon
execution and delivery of this
Agreement
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(b)
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Other
documents to be delivered are:
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Party
required
to deliver
document
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Form/Document/Certificate
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Date
by which
to be delivered
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Covered
by Section
3(d) Representation
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Party
A
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Annual
Report of Bank of America Corporation
containing audited, consolidated financial statements certified
by independent certified public
accountants and prepared in accordance with generally accepted
accounting principles in the
country in which such party is organized
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To
be made available
on www.bankofameric
a.com/investor/
as
soon
as available and in any event within
90 days after
the end of each
fiscal year of
Party A
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Yes
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Party
B
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Annual
Report of Party B and of any
Credit Support Provider thereof containing audited, consolidated
financial
statements certified
by independent certified public
accountants and prepared in accordance with generally accepted accounting
principles in the
country in which such party and such Credit Support Provider is
organized
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Upon
request
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Yes
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Party
A
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Quarterly
Financial Statements of Bank
of America Corporation containing
unaudited, consolidated financial statements of such party's fiscal
quarter prepared in accordance
with generally accepted accounting principles in the country in which
such
party is organized
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To
be made available
on www.bankofameric
a.com/investor/
as
soon
as available and in any event within 30 days after
the end of each
fiscal quarter
of Party
A
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Yes
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Party
required
to deliver document
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Form/Document/Certificate
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Date
by which
to be delivered
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Covered
by Section
3(d) Representation
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Party
B
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Quarterly
Financial Statements of Party
B and any Credit Support Provider
thereof containing unaudited,
consolidated financial statements
of such party's fiscal quarter prepared in accordance with generally
accepted accounting principles
in the country in which such
party and such Credit Support Provider
is organized
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Upon
request
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Yes
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Party
A and Party
B
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Certified
copies of all corporate, partnership or membership authorizations,
as the case may be, and
any other documents with respect to the execution, delivery and
performance of this Agreement and any Credit Support Document
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Upon
execution and
delivery of this
Agreement
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Yes
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Party
A and Party
B
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Certificate
of authority and specimen
signatures of individuals executing this Agreement and any Credit
Support Document
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Upon
execution and
delivery of this
Agreement and
thereafter upon
request of the
other party
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Yes
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PART
4: Miscellaneous
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(a)
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Address
for Notices. For
the purpose of Section 12(a) of this
Agreement:
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Address
for notice or communications to Party A:
Bank
of
America, N. A.
Sears
Tower
233
South
Wacker Drive, Suite 2800
Chicago,
IL 60606
Attention:
Swap Operations
Telephone
No.:
Facsimile
No.:
With
a
copy to:
Bank
of
America, N.A.
100
Federal St., MA5-100-12-04
Boston,
Massachusetts 02110
Attention:
Capital Markets Documentation
Address
for notice or communications to Party B:
Katy
Industries, Inc.
765
Straits Turnpike - suite 2000
Middlebury,
CT 06762
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(b)
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Process
Agent. For
the purpose of Section 13(c):
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Party
A
appoints as its Process Agent: Not applicable.
Party
B
appoints as its Process Agent: Not applicable.
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(c)
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Offices.
The
provisions of Section 10(a) will apply to this
Agreement.
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(d)
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Multibranch
Party. For
the purpose of Section 10(b) of this
Agreement:
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Party
A
is a Multibranch Party and may enter into a Transaction through its Charlotte,
North Carolina, Chicago, Illinois, San Francisco, California, New York, New,
York, Boston,
Massachusetts or such other Office as may be agreed to by the parties in
connection
with a Transaction.
Party
B
is not a Multibranch Party.
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(e)
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Calculation
Agent. The
Calculation Agent is Party A; provided, that if an Event
of
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Default
with respect to Party A as the Defaulting Party has occurred and is continuing,
the
Calculation Agent shall be a Reference Market-maker selected by Party B and
acceptable
to Party A.
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(f)
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Credit
Support Document. Details
of any Credit Support Document:
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Each
of
the following, as amended, extended, supplemented or otherwise modified in
writing
from time to time, is a "Credit Support Document":
Not
applicable.
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(g)
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Credit
Support Provider.
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Credit
Support Provider means in relation to Party A: Not
applicable.
Credit
Support Provider means in relation to Party B: Not
applicable.
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(h)
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Governing
Law. This
Agreement will be governed by and construed in accordance with
the
laws of the State of New York (without reference to its conflict
of laws
provisions, except
for Sections 5-1401 and 5-1402 of the New York General Obligations
Law).
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(i)
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Netting
of Payments. Unless
the parties otherwise so agree, "Multiple Transaction Payment
Netting" will apply for the purpose of Section 2(c) of this Agreement,
starting as of
the date of this Agreement, within the following group of Transactions,
and not otherwise:
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FX
Transactions (as defined in the FX Definitions) and Currency Option Transactions
(as defined in the FX Definitions) (but excluding payments with respect to
option premiums and cash settled options); and
Transactions
(as defined in the 1993 Commodity Derivatives Definitions, published by
the
International Swaps and Derivatives Association, Inc.) (but excluding payments
with respect to option premiums).
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(j)
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"Affiliate"
will
have the meaning specified in
Section
14 of this Agreement.
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(k)
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Absence
of Litigation. For
the purpose of Section 3(c): "Specified Entity" means in relation
to Party A, none;
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"Specified
Entity" means in relation to Party B, any Affiliate of Party B.
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(l)
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No
Agency. The
provisions of Section 3(g) will apply to this
Agreement.
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(m)
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Additional
Representation will
apply. For the purpose of Section 3 of this Agreement, each
of the following will constitute an Additional
Representation:
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Relationship
Between Parties. Each
party will be deemed to represent to the other party on
the
date on which it eaters into a Transaction that (absent a written agreement
between the
parties that expressly imposes affirmative obligations to the contrary for
that
Transaction):
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(A)
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Non-Reliance.
It
is acting for its own account, and it has made its own independent
decisions to enter into that Transaction and as to whether that
Transaction
is appropriate or proper for it based upon its own judgment and upon
advice
from such 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 that Transaction, it being understood that information
and explanations related to the terms and conditions of a Transaction
shall
not be considered investment advice or a recommendation to enter
into that
Transaction.
No communication (written or oral) received from the other party
will
be deemed to be an assurance or guarantee as to the expected results
of
that Transaction.
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(B)
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Assessment
and Understanding. It
is capable of assessing the merits of and understanding
(on its own behalf or through independent professional advice),
and
understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming, and assumes, the risks
of
that Transaction.
|
| |
(C)
|
Status
of Parties. The
other party is not acting as a fiduciary for or an advisor to it
in respect of that Transaction.
|
| |
(D)
|
Eligible
Contract Participant. It
is an "eligible contract participant" as defined in Section la(12)
of the
U.S. Commodity Exchange Act, 7 U.S.C. Section
la(12).
|
|
(n)
|
Recording
of Conversations. Each
party (i) consents to the recording of telephone conversations
between the trading, marketing and other relevant personnel of the
parties
in
connection with this Agreement or any potential Transaction and (ii)
agrees, to the extent
permitted by applicable law, that recordings may be submitted
in evidence in any Proceedings.
|
PART
5: Other
Provisions
|
(a)
|
Delivery
of Confirmations. For
each Transaction entered into hereunder, Party A shall promptly
send to Party B a Confirmation (which may be via facsimile transmission).
Party
B agrees to respond to such Confirmation within two Local Business
Days,
either confirming
agreement thereto or requesting a correction of any error(s) contained
therein. Failure
by Party A to send a Confirmation or of Party B to respond within
such
period shall
not affect the validity or enforceability of such Transaction. Absent
manifest error, there shall be a presumption that the terms contained
in
such Confirmation are the terms of
the Transaction.
|
|
(b)
|
Furnishing
Specified Information. Section
4(a)(iii) is hereby amended by inserting "promptly
upon the earlier of (1)" in lieu of the word "upon" at the beginning
thereof and inserting
"or (2) such party learning that the form or document is required"
before
the word
"any" on the first line thereof.
|
|
(c)
|
Waiver
of Right to Trial by Jury. EACH
PARTY HEREBY IRREVOCABLY WAIVES ANY
AND ALL RIGHTS TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY CREDIT
SUPPORT DOCUMENT OR ANY TRANSACTION CONTEMPLATED HEREBY.
|
|
(d)
|
Cross
Default. Section
5(a)(vi) of this Agreement is hereby amended adding the following
after the semicolon at the end
thereof:
|
"provided,
however, that notwithstanding the foregoing (but subject to any provision to
the
contrary contained in any such agreement or instrument), an Event
of
Default shall not occur under either (1) or (2) above if the default, event
of
default or other similar condition or event referred to in (1) or the failure
to
pay referred to in (2) is caused not (even in part) by the unavailability of
funds but
is
caused solely due to a technical or administrative error which has been
remedied
within three Local Business Days after notice of such failure is given to the
party."
|
(e)
|
2002
Master Agreement Protocol. Annexes
1 to 18 and Section 6 of the ISDA 2002 Master Agreement Protocol
as
published by the International Swaps and Derivatives Association,
Inc. on July 15, 2003 are incorporated into and apply to this Agreement.
References
in those definitions and provisions to any ISDA Master Agreement
will be
deemed
to be references to this Master
Agreement.
|
|
(f)
|
Consent
to Disclosure. Party
B consents to Party A effecting such disclosure as Party A may deem
appropriate to enable Party A to transfer Party B's records and
information to process
and execute Party B's instructions, or in pursuance of Party A's
or Party
B's commercial
interest, to any of its Affiliates. For the avoidance of doubt, Party
B's
consent to
disclosure includes the right on the part of Party A to allow access
to
any intended recipient
of Party B's information, to the records of Party A by any
means.
|
|
(g)
|
USA
PATRIOT Act Notice. Party
A hereby notifies Party B .that pursuant to the requirements
of the USA Patriot Act (Title III of Pub. L. 107-56 (signed into
law
October 26,
2001)) (the "Act"),
it is required to obtain, verify and record information that identifies
Party B, which information includes the name and address of Party
B and
other information that will allow Party A to identify Party B in
accordance with the Act.
|
PART
6: Additional
Terms for Foreign Exchange and Foreign Exchange Option
Transactions
|
(a)
|
Incorporation
of Definitions. The
1998 FX and Currency Option Definitions (the "FX Definitions"),
published by the International Swaps and Derivatives Association,
Inc.,
the Emerging
Markets Traders Association and The Foreign Exchange Committee, are
hereby
incorporated
by reference with respect to FX Transactions (as defined in the FX
Definitions)
and Currency Option Transactions (as defined in the FX Definitions).
Terms
defined
in the FX Definitions shall have the same meanings in this Part
6.
|
|
(b)
|
Scope. Unless
otherwise agreed in writing by the parties, each FX Transaction and
Currency
Option Transaction entered into between the parties before, on or
after
the date of this Agreement shall be a Transaction under this Agreement
and
shall be part of, subject to and governed by this Agreement. FX
Transactions and Currency Option Transactions shall be
part of, subject to and governed by this Agreement even if the
Confirmation in respect
|
thereof
does not state that such FX Transaction or Currency Option Transaction is
subject to
or
governed by this Agreement or does not otherwise reference this
Agreement.
|
(c)
|
Premium
Netting. If,
on any date, and unless otherwise mutually agreed by the parties,
Premiums
would otherwise be payable hereunder in the same Currency between
the same
respective
offices of the parties, then, on such date, each party's obligation
to
make payment
of such Premiums will be automatically satisfied and discharged and,
if
the aggregate
Premiums that would otherwise have been payable by such office of
one
party exceeds
the aggregate Premiums that would otherwise have been payable by
such
office of
the other party, replaced by an obligation upon the party by whom
the
larger aggregate Premiums
would have been payable to pay the other party the excess of the
larger
aggregate
Premiums over the smaller aggregate Premiums, and if the aggregate
Premiums
are equal, no payment shall be
made.
|
IN
WITNESS WHEREOF, the
parties have executed this Schedule by their duly authorized officers
as of the date hereof.
|
BANK
OF AMERICA, N.A.
|
|
KATY
INDUSTRIES, INC.
|
| |
|
|
|
/s/
Donald M. Caiazza
|
|
/s/
Michael C. Paul
|
|
Name:
Donald M. Caiazza
|
|
Name:
Michael C. Paul
|
|
Title:
Senior Vice President
|
|
Title:
Treasurer
|
|
To:
|
Katy
Industries, Inc.
|
|
| |
765
Straits Turnpike
|
|
| |
Middlebury
|
|
| |
CT
06762 USA
|
|
| |
|
|
| |
|
|
| |
|
|
|
From:
|
Bank
of America, N. A.
|
|
| |
233
South Wacker Drive - Suite 2800
|
|
| |
Chicago
|
|
| |
Illinois
60606
|
|
| |
U.S.A.
|
|
|
Department:
|
Swaps
Operations
|
|
| |
|
|
|
Fax:
|
|
|
| |
|
|
|
Date:
|
16th
August 2005
|
|
Dear
Sir/Madam,
The
purpose of this letter agreement is to confirm the terms and conditions of
the
Transaction entered into
between Katy Industries, Inc. and Bank of America, N.A. (each a "party" and
together "the parties") on the Trade Date specified below (the "Transaction").
This letter agreement constitutes a "Confirmation" as referred to in the ISDA
Master Agreement specified below (the "Agreement").
The
definitions and provisions contained in the 2000 ISDA Definitions, as published
by the International Swaps
and
Derivatives Association, Inc., (the "Definitions") are incorporated into this
Confirmation. In the event of any inconsistency between the Definitions and
this
Confirmation, this Confirmation will govern.
This
Confirmation supplements, forms part of, and is subject to, the ISDA Master
Agreement dated as of 11th August 2005, as amended and supplemented from time
to
time, between the parties. All provisions contained
in the Agreement govern this Confirmation except as expressly modified
below.
In
this
Confirmation "Party A" means Bank of America, N.A. and "Party B" means Katy
Industries, Inc..
General
Terms:
The
terms
of the particular Transaction to which this Confirmation relates are as
follows:
|
Notional
Amount:
|
As
per Schedule A attached hereto.
|
| |
|
|
Trade
Date:
|
15th
August 2005
|
| |
|
|
Effective
Date:
|
17th
August 2005
|
| |
|
|
Termination
Date:
|
17th
August 2007, subject to adjustment in accordance with the
Modified Following Business Day Convention
|
| |
|
| |
|
|
Fixed
Amounts:
|
|
|
|
|
|
Fixed
Rate Payer:
|
Party
B
|
| |
|
|
Delayed
Payment:
|
Applicable,
9 Business Days after each Fixed Rate Payer Period
End Date
|
| |
|
|
Fixed
Rate Payer
|
|
|
Period
End Dates:
|
The
23rd of each Month, commencing on 23rd August 2005 and ending
on the
Termination Date, subject to adjustment in accordance
with the Modified Following Business Day Convention
|
| |
|
|
Fixed
Rate:
|
4.49000
per cent
|
| |
|
|
Fixed
Rate Day
|
|
|
Count
Fraction:
|
Actual/360
|
| |
|
| |
|
|
Floating
Amounts:
|
|
| |
|
|
Floating
Rate Payer:
|
Party
A
|
|
|
|
|
Floating
Rate Payer
|
|
|
Payment
Dates:
|
The
23rd of each Month, commencing on 23rd August 2005 and ending
on the
Termination Date, subject to adjustment in accordance
with the Modified Following Business Day Convention
|
| |
|
|
Floating
Rate for initial
|
|
|
Calculation
Period:
|
to
be determined
|
| |
|
|
Floating
Rate Option:
|
USD-LIBOR-BBA
|
| |
|
|
Designated
Maturity:
|
1
Month provided that Linear Interpolation will apply to the initial
Calculation Period and to the final Calculation Period
|
| |
|
|
Spread:
|
None
|
| |
|
|
Floating
Rate Day
|
|
|
Count
Fraction:
|
Actual/360
|
| |
|
|
Reset
Dates:
|
First
day of each Calculation Period
|
| |
|
|
Business
Days:
|
New
York and London
|
|
|
|
|
Calculation
Agent:
|
Party
A
|
Recording
of Conversations:
Each
party to this Transaction acknowledges and agrees to the tape recording of
conversations between
the parties to this Transaction whether by one or other or both of the parties
or their agents, and
that
any such tape recordings may be submitted in evidence in any Proceedings
relating to the Agreement and/or this Transaction.
|
Account
Details:
|
|
|
| |
|
|
|
Account
for payments to
|
|
|
|
Party
A:
|
|
USD
|
| |
Pay
to:
|
|
| |
ABA#:
|
|
| |
For
Account of :
|
|
| |
Account
Number :
|
|
| |
Swift
Code:
|
|
| |
|
|
|
Account
for payments to
|
|
|
|
Party
B:
|
|
USD
|
| |
|
As
advised under separate cover
|
|
Offices:
|
|
|
| |
|
|
|
The
Office of Party A for this
|
|
|
|
Transaction
is:
|
Charlotte
- NC, United States
|
| |
Please
send reset notices to fax no.
|
| |
|
|
|
The
Office of Party B for this
|
|
|
|
Transaction
is:
|
Middlebury
- CT, United States
|
Please
confirm that the foregoing correctly sets forth the terms and conditions of
our
agreement by returning
via telecopier an executed copy of this Confirmation to the attention of Global
FX and Derivative
Operations
| |
|
Accepted
and confirmed as of the date first written:
|
|
|
Bank
of America, N.A.
|
|
Katy
Industries, Inc.
|
|
| |
|
|
|
| /s/
Dave Walker |
|
|
|
|
Dave
Walker
|
|
|
|
|
Senior
Vice President
|
|
|
|
|
Authorised
Signatory
|
|
By:
/s/ Michael C. Paul
|
|
| |
|
Name:
Michael C. Paul
|
|
| |
|
Title:
Treasurer
|
|
SCHEDULE
A
|
Calculation
Period scheduled to commence on:
|
Currency
Amount:
|
| |
|
|
17th
August 2005
|
USD
25,000,000.00
|
| |
|
|
23rd
August 2005
|
USD
25,000,000.00
|
| |
|
|
23rd
September 2005
|
USD
25,000,000.00
|
| |
|
|
23rd
October 2005
|
USD
25,000,000.00
|
| |
|
|
23rd
November 2005
|
USD
25,000,000.00
|
| |
|
|
23rd
December 2005
|
USD
25,000,000.00
|
| |
|
|
23rd
January 2006
|
USD
25,000,000.00
|
| |
|
|
23rd
February 2006
|
USD
25,000,000.00
|
| |
|
|
23rd
March 2006
|
USD
25,000,000.00
|
| |
|
|
23rd
April 2006
|
USD
25,000,000.00
|
| |
|
|
23rd
May 2006
|
USD
25,000,000.00
|
| |
|
|
23rd
June 2006
|
USD
25,000,000.00
|
| |
|
|
23rd
July 2006
|
USD
25,000,000.00
|
|
23rd
August 2006
|
USD
15,000,000.00
|
| |
|
|
23rd
September 2006
|
USD
15,000,000.00
|
| |
|
|
23rd
October 2006
|
USD
15,000,000.00
|
| |
|
|
23rd
November 2006
|
USD
15,000,000.00
|
| |
|
|
23rd
December 2006
|
USD
15,000,000.00
|
| |
|
|
23rd
January 2007
|
USD
15,000,000.00
|
| |
|
|
23rd
February 2007
|
USD
15,000,000.00
|
| |
|
|
23rd
March 2007
|
USD
15,000,000.00
|
| |
|
|
23rd
April 2007
|
USD
15,000,000.00
|
| |
|
|
23rd
May 2007
|
USD
15,000,000.00
|
| |
|
|
23rd
June 2007
|
USD
15,000.000.00
|
| |
|
|
23rd
July 2007
|
USD
15,000,000.00
|
| |
|