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UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): August 5, 2024
UNITED
STATES NATURAL GAS FUND, LP
(Exact name of registrant as specified in its charter)
Delaware |
001-33096 |
20-5576760 |
(State or other jurisdiction |
(Commission File Number)
|
(I.R.S.
Employer
|
of incorporation) |
|
Identification No.)
|
1850 Mt. Diablo Boulevard, Suite 640
Walnut Creek, California 94596
(Address of principal executive offices) (Zip Code)
(510) 522-9600
Registrant’s telephone number, including area code
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| ☐ | Written communication pursuant
to Rule 425 under the Securities Act (17 CFR 230.425) |
| ☐ | Soliciting material pursuant
to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ☐ | Pre-commencement communications
pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ☐ | Pre-commencement communications
pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging
growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Securities
registered pursuant to Section 12(b) of the Act:
|
|
|
|
|
Title
of each class |
|
Trading
Symbol(s) |
|
Name
of each exchange on which registered: |
Shares of United States
Natural Gas Fund, LP |
|
UNG |
|
NYSE Arca, Inc. |
Item 1.01 Entry into a Material Definitive Agreement.
On August 5,
2024, United States Natural Gas Fund, LP (the “Registrant”), entered into an International
Swaps and Derivatives Association, Inc. (“ISDA”) 2002 Master Agreement (the “Agreement”) with The Bank of Nova
Scotia (“ScotiaBank”), pursuant to which ScotiaBank has agreed to serve as an over-the-counter (“OTC”) swaps
counterparty for the Registrant. The Agreement provides the Registrant with the ability to invest in OTC swaps in furtherance of its
investment objective. The Registrant has not yet entered into any OTC swap transactions with ScotiaBank under the Agreement, but it may
do so in the future.
The Registrant’s OTC swap transactions outstanding under the Agreement,
if any, along with the Registrant’s other holdings, will be posted on the Registrant’s webpage, www.uscfinvestments.com.
The foregoing description of the Agreement is not complete and is qualified
in its entirety by reference to the full text of the Agreement, which is attached hereto as Exhibit 10.13 and is incorporated herein by
reference.
Item
9.01 Financial Statements and Exhibits
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
|
|
UNITED STATES NATURAL GAS FUND,
LP |
|
|
By: |
United States Commodity Funds LLC, its
general partner |
|
|
|
|
Date: |
August 6, 2024 |
By: |
/s/
John P. Love |
|
|
Name: |
John P. Love |
|
|
Title: |
President and Chief Executive Officer |
Exhibit 10.13
ISDA®
International
Swaps and Derivatives Association, Inc.
2002
MASTER AGREEMENT
dated
as of August 5, 2024
THE
BANK OF NOVA SCOTIA |
and |
EACH PARTY B SPECIFIED ON
APPENDIX A TO THIS AGREEMENT, severally and not jointly |
have entered
and/or anticipate entering into one or more transactions (each a “Transaction”) that are or will be governed by this
2002 Master Agreement, which includes the schedule (the “Schedule”), and the documents and other confirming evidence
(each a “Confirmation”) exchanged between the parties or otherwise effective for the purpose of confirming or evidencing
those Transactions. This 2002 Master Agreement and the Schedule are together referred to as this “Master Agreement”.
Accordingly,
the parties agree as follows:—
1. Interpretation
(a) Definitions.
The terms defined in Section 14 and elsewhere in this Master Agreement will have the meanings therein specified for the
purpose of this Master Agreement.
(b) Inconsistency.
In the event of any inconsistency between
the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any
inconsistency between the provisions of any Confirmation and this Master Agreement, such Confirmation will prevail for the purpose
of the relevant Transaction.
(c) Single
Agreement. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations
form a single agreement between the parties (collectively referred to as this “Agreement”), and the parties would
not otherwise enter into any Transactions.
2. Obligations
(a) General
Conditions.
(i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions
of this Agreement.
(ii) Payments
under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt
on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or
elsewhere in this Agreement.
Copyright
© 2002 by International Swaps and Derivatives Association, Inc.
(iii) Each
obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential
Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination
Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other condition specified
in this Agreement to be a condition precedent for the purpose of this Section 2(a)(iii).
(b) Change
of Account. Either party may change its account for receiving a payment or delivery by giving notice to the other party
at least five Local Business Days prior to the Scheduled Settlement Date for the payment or delivery to which such change applies
unless such other party gives timely notice of a reasonable objection to such change.
(c) Netting
of Payments. If on any date amounts would otherwise be payable:—
(i) in
the same currency; and
(ii) in
respect of the same Transaction,
by each
party to the other, then, on such date, each party’s obligation to make payment of any such amount will be automatically
satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate
amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by which the larger
aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller
aggregate amount.
The parties
may elect in respect of two or more Transactions that a net amount and payment obligation will be determined in respect of all
amounts payable on the same date in the same currency in respect of those Transactions, regardless of whether such amounts are
payable in respect of the same Transaction. The election may be made in the Schedule or any Confirmation by specifying that “Multiple
Transaction Payment Netting” applies to the Transactions identified as being subject to the election (in which case clause
(ii) above will not apply to such Transactions). If Multiple Transaction Payment Netting is applicable to Transactions, it will
apply to those Transactions with effect from the starting date specified in the Schedule or such Confirmation, or, if a starting
date is not specified in the Schedule or such Confirmation, the starting date otherwise agreed by the parties in writing. This
election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through
which the parties make and receive payments or deliveries.
(d) Deduction
or Withholding for Tax.
(i) Gross-Up. All payments under this Agreement will be made without any deduction or withholding for or on account
of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant
governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party (“X”)
will:—
(1) promptly notify the other party (“Y”) of such requirement;
(2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving notice that such amount has been assessed against Y;
(3) promptly
forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment
to such authorities; and
(4) if
such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement,
such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required.
However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:—
(A) the
failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the
failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred
but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, after a Transaction is entered
into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax
Law.
(ii) Liability.
If:—
(1) X
is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction
or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4);
(2) X
does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against X,
then,
except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but including any related liability for penalties only if Y has
failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
3. Representations
Each
party makes the representations contained in Sections 3(a), 3(b), 3(c), 3(d), 3(e) and 3(f) and, if specified in the Schedule
as applying, 3(g) to the other party (which representations will be deemed to be repeated by each party on each date on which
a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this
Agreement). If any “Additional Representation” is specified in the Schedule or any Confirmation as applying, the party
or parties specified for such Additional Representation will make and, if applicable, be deemed to repeat such Additional Representation
at the time or times specified for such Additional Representation.
(a) Basic
Representations.
(i) Status.
It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;
(ii) Powers.
It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party,
to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver
and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is
a party and has taken all necessary action to authorise such execution, delivery and performance;
(iii) No
Violation or Conflict. Such execution, delivery and performance do not violate or conflict with any law applicable to
it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable
to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets;
(iv) Consents.
All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such
consents have been complied with; and
(v) Obligations
Binding. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute
its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy,
reorganisation, insolvency, moratorium or similar laws affecting creditors’ rights generally and subject, as to enforceability,
to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)).
(b) Absence
of Certain Events. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect
to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing
its obligations under this Agreement or any Credit Support Document to which it is a party.
(c) Absence
of Litigation. There is not pending or, to its knowledge, threatened against it, any of its Credit Support Providers or
any of its applicable Specified Entities any action, suit or proceeding at law or in equity or before any court, tribunal, governmental
body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement
or such Credit Support Document.
(d) Accuracy
of Specified Information. All applicable information that is furnished in writing by or on behalf of it to the other party
and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and
complete in every material respect.
(e) Payer Tax Representation. Each representation specified in the Schedule as being made by it for the purpose
of this Section 3(e) is accurate and true.
(f) Payee
Tax Representations. Each representation specified in the Schedule as being made by it for the purpose of this Section
3(f) is accurate and true.
(g) No
Agency. It is entering into this Agreement, including each Transaction, as principal and not as agent of any person or
entity.
4. Agreements
Each
party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit
Support Document to which it is a party:—
(a) Furnish
Specified Information. It will deliver to the other party or, in certain cases under clause (iii) below, to such government
or taxing authority as the other party reasonably directs:—
(i) any
forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation;
(ii) any
other documents specified in the Schedule or any Confirmation; and
(iii) upon
reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order
to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit
Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a
reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the
legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if none is
specified, as soon as reasonably practicable.
(b) Maintain
Authorisations. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental
or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which
it is a party and will use all reasonable efforts to obtain any that may become necessary in the future.
(c) Comply
With Laws. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure
so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document
to which it is a party.
(d) Tax
Agreement. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true
promptly upon learning of such failure.
(e) Payment
of Stamp Tax. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution
or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled or considered
to have its seat, or where an Office through which it is acting for the purpose of this Agreement is located (“Stamp Tax
Jurisdiction”), and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect
of the other party’s execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp
Tax Jurisdiction with respect to the other party.
5. Events
of Default and Termination Events
(a) Events
of Default. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such
party or any Specified Entity of such party of any of the following events constitutes (subject to Sections 5(c) and 6(e)(iv))
an event of default (an “Event of Default”) with respect to such party:
(i) Failure
to Pay or Deliver. Failure by the party to make, when due, any payment under this Agreement or delivery under Section
2(a)(i) or 9(h)(i)(2) or (4) required to be made by it if such failure is not remedied on or before the first Local Business Day
in the case of any such payment or the first Local Delivery Day in the case of any such delivery after, in each case, notice of
such failure is given to the party;
(ii) Breach
of Agreement; Repudiation of Agreement.
(1) Failure
by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement
or delivery under Section 2(a)(i) or 9(h)(i)(2) or (4) or to give notice of a Termination Event or any agreement or obligation
under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such
failure is not remedied within 30 days after notice of such failure is given to the party; or
(2) the
party disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, this Master Agreement,
any Confirmation executed and delivered by that party or any Transaction evidenced by such a Confirmation (or such action is taken
by any person or entity appointed or empowered to operate it or act on its behalf);
(iii) Credit
Support Default.
(1) Failure
by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied
with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace
period has elapsed;
(2) the
expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document, or any security
interest granted by such party or such Credit Support Provider to the other party pursuant to any such Credit Support Document,
to be in full force and effect for the purpose of this Agreement (in each case other than in accordance with its terms) prior
to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges
the validity of, such Credit Support Document (or such action is taken by any person or entity appointed or empowered to operate
it or act on its behalf);
(iv) Misrepresentation. A representation (other than a representation under Section 3(e) or 3(f)) made
or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement
or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed
to have been made or repeated;
(v) Default
Under Specified Transaction. The party, any Credit Support Provider of such party or any applicable Specified Entity of
such party:—
(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).
(c) Hierarchy of Events.
(i) An
event or circumstance that constitutes or gives rise to an Illegality or a Force Majeure Event will not, for so long as that is
the case, also constitute or give rise to an Event of Default under Section 5(a)(i), 5(a)(ii)(1) or 5(a)(iii)(1) insofar as such
event or circumstance relates to the failure to make any payment or delivery or a failure to comply with any other material provision
of this Agreement or a Credit Support Document, as the case may be.
(ii) Except
in circumstances contemplated by clause (i) above, if an event or circumstance which would otherwise constitute or give rise to
an Illegality or a Force Majeure Event also constitutes an Event of Default or any other Termination Event, it will be treated
as an Event of Default or such other Termination Event, as the case may be, and will not constitute or give rise to an Illegality
or a Force Majeure Event.
(iii) If an event or circumstance which would otherwise constitute or give rise to a Force Majeure Event also constitutes an
Illegality, it will be treated as an Illegality, except as described in clause (ii) above, and not a Force Majeure Event.
(d) Deferral
of Payments and Deliveries During Waiting Period. If an Illegality or a Force Majeure Event has occurred and is continuing
with respect to a Transaction, each payment or delivery which would otherwise be required to be made under that Transaction will
be deferred to, and will not be due until:—
(i) the
first Local Business Day or, in the case of a delivery, the first Local Delivery Day (or the first day that would have been a
Local Business Day or Local Delivery Day, as appropriate, but for the occurrence of the event or circumstance constituting or
giving rise to that Illegality or Force Majeure Event) following the end of any applicable Waiting Period in respect of that Illegality
or Force Majeure Event, as the case may be; or
(ii) if
earlier, the date on which the event or circumstance constituting or giving rise to that Illegality or Force Majeure Event ceases
to exist or, if such date is not a Local Business Day or, in the case of a delivery, a Local Delivery Day, the first following
day that is a Local Business Day or Local Delivery Day, as appropriate.
(e) Inability
of Head or Home Office to Perform Obligations of Branch. If (i) an Illegality or a Force Majeure Event occurs under Section
5(b)(i)(1) or 5(b)(ii)(1) and the relevant Office is not the Affected Party’s head or home office, (ii) Section 10(a) applies,
(iii) the other party seeks performance of the relevant obligation or compliance with the relevant provision by the Affected Party’s
head or home office and (iv) the Affected Party’s head or home office fails so to perform or comply due to the occurrence
of an event or circumstance which would, if that head or home office were the Office through which the Affected Party makes and
receives payments and deliveries with respect to the relevant Transaction, constitute or give rise to an Illegality or a Force
Majeure Event, and such failure would otherwise constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) with respect
to such party, then, for so long as the relevant event or circumstance continues to exist with respect to both the Office referred
to in Section 5(b)(i)(1) or 5(b)(ii)(1), as the case may be, and the Affected Party’s head or home office, such failure
will not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1).
6. Early
Termination; Close-Out Netting
(a) Right
to Terminate Following Event of Default. If at any time an Event of Default with respect to a party (the “Defaulting
Party”) has occurred and is then continuing, the other party (the “Non-defaulting Party”) may, by not more than
20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, “Automatic Early
Termination” is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding
Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section
5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution
of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event
of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right
to Terminate Following Termination Event.
(i) Notice.
If a Termination Event other than a Force Majeure Event occurs, an Affected Party will, promptly upon becoming aware of it,
notify the other party, specifying the nature of that Termination Event and each Affected Transaction, and will also give the
other party such other information about that Termination Event as the other party may reasonably require. If a Force Majeure
Event occurs, each party will, promptly upon becoming aware of it, use all reasonable efforts to notify the other party, specifying
the nature of that Force Majeure Event, and will also give the other party such other information about that Force Majeure Event
as the other party may reasonably require.
(ii) Transfer
to Avoid Termination Event. If a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early
Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, other
than immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If
the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day
period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i).
Any
such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the
other party, which consent will not be withheld if such other party’s policies in effect at such time would permit it to
enter into transactions with the transferee on the terms proposed.
(iii) Two
Affected Parties. If a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts
to reach agreement within 30 days after notice of such occurrence is given under Section 6(b)(i) to avoid that Termination Event.
(iv) Right
to Terminate.
(1) If:—
(A) a
transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect
to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or
(B) a
Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is
not the Affected Party,
the
Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination
Event if there are two Affected Parties, or the Non-affected Party in the case of a Credit Event Upon Merger or an Additional
Termination Event if 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), specifying (except where there are two Affected Parties) any Early Termination Amount
payable and 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 Party’s Affiliates), ask each third
party or Affiliate (I) not to take account of the current creditworthiness of the Determining Party or any existing Credit
Support Document and (II) to provide mid-market quotations; and
(B) in any other case, use mid-market values without regard to the creditworthiness of the Determining Party.
(iii) Adjustment
for Bankruptcy. In circumstances where an Early Termination Date occurs because Automatic Early Termination applies
in respect of a party, the Early Termination Amount will be subject to such adjustments as are appropriate and permitted by applicable
law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party)
during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii).
(iv) Adjustment
for Illegality or Force Majeure Event. The failure by a party or any Credit Support Provider of such party to pay, when
due, any Early Termination Amount will not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) if such
failure is due to the occurrence of an event or circumstance which would, if it occurred with respect to payment, delivery
or compliance related to a Transaction, constitute or give rise to an Illegality or a Force Majeure Event. Such amount will (1)
accrue interest and otherwise be treated as an Unpaid Amount owing to the other party if subsequently an Early Termination
Date results from an Event of Default, a Credit Event Upon Merger or an Additional Termination Event in respect of which all outstanding
Transactions are Affected Transactions and (2) otherwise accrue interest in accordance with Section 9(h)(ii)(2).
(v) Pre-Estimate.
The parties agree that an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty.
Such amount is payable for the loss of bargain and the loss of protection against future risks, and, except as otherwise provided
in this Agreement, neither party will be entitled to recover any additional damages as a consequence of the termination of the
Terminated Transactions.
(f) Set-Off.
Any Early Termination Amount payable to one party (the “Payee”) by the other party (the “Payer”),
in circumstances where there is a Defaulting Party or where there is one Affected Party in the case where either a Credit Event
Upon Merger has occurred or any other Termination Event in respect of which all outstanding Transactions are Affected Transactions
has occurred, will, at the option of the Non-defaulting Party or the Non-affected Party, as the case may be (“X”)
(and without prior notice to the Defaulting Party or the Affected Party, as the case may be), be reduced by its set-off against
any other amounts (“Other Amounts”) payable by the Payee to the Payer (whether or not arising under this Agreement,
matured or contingent and irrespective of the currency, place of payment or place of booking of the obligation). To the extent
that any Other Amounts are so set off, those Other Amounts will be discharged promptly and in all respects. X will give notice
to the other party of any set-off effected under this Section 6(f).
For this
purpose, either the Early Termination Amount or the Other Amounts (or the relevant portion of such amounts) may be converted by
X into the currency in which the other is denominated at the rate of exchange at which such party would be able, in good faith
and using commercially reasonable procedures, to purchase the relevant amount of such currency.
If an
obligation is unascertained, X may in good faith estimate that obligation and set off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is ascertained.
Nothing
in this Section 6(f) will be effective to create a charge or other security interest. This Section 6(f) will be without prejudice
and in addition to any right of set-off, offset, combination of accounts, lien, right of retention or withholding or similar right
or requirement to which any party is at any time otherwise entitled or subject (whether by operation of law, contract or otherwise).
7. Transfer
Subject
to Section 6(b)(ii) and to the extent permitted by applicable law, neither this Agreement nor any interest or obligation in or
under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent
of the other party, except that:—
(a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or
into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy
under this Agreement); and
(b) a
party may make such a transfer of all or any part of its interest in any Early Termination Amount payable to it by a Defaulting
Party, together with any amounts payable on or with respect to that interest and any other rights associated with that interest
pursuant to Sections 8, 9(h) and 11.
Any purported
transfer that is not in compliance with this Section 7 will be void.
8. Contractual Currency
(a) Payment in the Contractual Currency. Each payment under this Agreement will be made in the relevant currency
specified in this Agreement for that payment (the “Contractual Currency”). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender
in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party
to which payment is owed, acting in good faith and using commercially reasonable procedures in converting the currency so tendered
into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement.
If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable
in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason
the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement,
the party receiving the payment will refund promptly the amount of such excess.
(b) Judgments.
To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual
Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount
relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for
the payment of any amount described in clause (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate
amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other
party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence
of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of
exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purpose of such judgment
or order and the rate of exchange at which such party is able, acting in good faith and using commercially reasonable procedures
in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the
currency of the judgment or order actually received by such party.
(c) Separate
Indemnities. To the extent permitted by applicable law, the indemnities in this Section 8 constitute separate and
independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of
action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by
judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement.
(d) Evidence
of Loss. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered
a loss had an actual exchange or purchase been made.
9. Miscellaneous
(a) Entire
Agreement. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject
matter. Each of the parties acknowledges that in entering into this Agreement it has not relied on any oral or written representation,
warranty or other assurance (except as provided for or referred to in this Agreement) and waives all rights and remedies which
might otherwise be available to it in respect thereof, except that nothing in this Agreement will limit or exclude any liability
of a party for fraud.
(b) Amendments.
An amendment, modification or waiver in respect of this Agreement will only be effective if in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or by an exchange
of electronic messages on an electronic messaging system.
(c) Survival
of Obligations. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this
Agreement will survive the termination of any Transaction.
(d) Remedies
Cumulative. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement
are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law.
(e) Counterparts
and Confirmations.
(i) This
Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including
by facsimile transmission and by electronic messaging system), each of which will be deemed an original.
(ii) The
parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation will be entered into as soon as practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of telexes, by an exchange of electronic messages on an electronic
messaging system or by an exchange of e-mails, which in each case will be sufficient for all purposes to evidence a binding supplement
to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex, electronic
message or e-mail constitutes a Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any right, power or privilege in respect of
this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege
will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any
other right, power or privilege.
(g) Headings.
The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or
to be taken into consideration in interpreting this Agreement.
(h) Interest
and Compensation.
(i) Prior
to Early Termination. Prior to the occurrence or effective designation of an Early Termination Date in respect of the
relevant Transaction:—
(1) Interest
on Defaulted Payments. If a party defaults in the performance of any payment obligation, it will, to the extent permitted
by applicable law and subject to Section 6(c), pay interest (before as well as after judgment) on the overdue amount to the other
party on demand in the same currency as the overdue amount, for the period from (and including) the original due date for payment
to (but excluding) the date of actual payment (and excluding any period in respect of which interest or compensation in respect
of the overdue amount is due pursuant to clause (3)(B) or (C) below), at the Default Rate.
(2) Compensation for Defaulted Deliveries. If a party defaults in the performance of any obligation required to be settled
by delivery, it will on demand (A) compensate the other party to the extent provided for in the relevant Confirmation or elsewhere
in this Agreement and (B) unless otherwise provided in the relevant Confirmation or elsewhere in this Agreement, to the extent
permitted by applicable law and subject to Section 6(c), pay to the other party interest (before as well as after judgment) on
an amount equal to the fair market value of that which was required to be delivered in the same currency as that amount, for the
period from (and including) the originally scheduled date for delivery to (but excluding) the date of actual delivery (and excluding
any period in respect of which interest or compensation in respect of that amount is due pursuant to clause (4) below), at the
Default Rate. The fair market value of any obligation referred to above will be determined as of the originally scheduled date
for delivery, in good faith and using commercially reasonable procedures, by the party that was entitled to take delivery.
(3) Interest
on Deferred Payments. If:—
(A) a
party does not pay any amount that, but for Section 2(a)(iii), would have been payable, it will, to the extent permitted by applicable
law and subject to Section 6(c) and clauses (B) and (C) below, pay interest (before as well as after judgment) on that amount
to the other party on demand (after such amount becomes payable) in the same currency as that amount, for the period from (and
including) the date the amount would, but for Section 2(a)(iii), have been payable to (but excluding) the date the amount actually
becomes payable, at the Applicable Deferral Rate;
(B) a
payment is deferred pursuant to Section 5(d), the party which would otherwise have been required to make that payment will, to
the extent permitted by applicable law, subject to Section 6(c) and for so long as no Event of Default or Potential Event of Default
with respect to that party has occurred and is continuing, pay interest (before as well as after judgment) on the amount of the
deferred payment to the other party on demand (after such amount becomes payable) in the same currency as the deferred payment,
for the period from (and including) the date the amount would, but for Section 5(d), have been payable to (but excluding) the
earlier of the date the payment is no longer deferred pursuant to Section 5(d) and the date during the deferral period upon which
an Event of Default or Potential Event of Default with respect to that party occurs, at the Applicable Deferral Rate; or
(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 party may, subject to clause (c) below, enter into a Transaction
through, book a Transaction in and make and receive payments and deliveries with respect to a Transaction through any Office listed
in respect of that party in the Schedule (but not any other Office unless otherwise agreed by the parties in writing).
(c) The
Office through which a party enters into a Transaction will be the Office specified for that party in the relevant Confirmation
or as otherwise agreed by the parties in writing, and, if an Office for that party is not specified in the Confirmation or otherwise
agreed by the parties in writing, its head or home office. Unless the parties otherwise agree in writing, the Office through which
a party enters into a Transaction will also be the Office in which it books the Transaction and the Office through which it makes
and receives payments and deliveries with respect to the Transaction. Subject to Section 6(b)(ii), neither party may change the
Office in which it books the Transaction or the Office through which it makes and receives payments or deliveries with respect
to a Transaction without the prior written consent of the other party.
11. Expenses
A Defaulting
Party will on demand indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including
legal fees, execution fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights
under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination
of any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) Effectiveness.
Any notice or other communication in respect of this Agreement may be given in any manner described below (except that
a notice or other communication under Section 5 or 6 may not be given by electronic messaging system or e-mail) to the address
or number or in accordance with the electronic messaging system or e-mail details provided (see the Schedule) and will be deemed
effective as indicated:—
(i) if
in writing and delivered in person or by courier, on the date it is delivered;
(ii) if sent by telex, on the date the recipient’s answerback is received;
(iii) if sent by facsimile transmission, on the date it is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated
by the sender’s facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date
it is delivered or its delivery is attempted;
(v) if sent by electronic messaging system, on the date it is received; or
(vi) if sent by e-mail, on the date it is delivered,
unless
the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication
is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that
communication will be deemed given and effective on the first following day that is a Local Business Day.
(b) Change
of Details. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging
system or e-mail details at which notices or other communications are to be given to it.
13. Governing Law and Jurisdiction
(a) Governing
Law. This Agreement will be governed by and construed in accordance with the law specified in the Schedule.
(b) Jurisdiction.
With respect to any suit, action or proceedings relating to any dispute arising out of or in connection with this Agreement
(“Proceedings”), each party irrevocably:—
(i) submits:—
(1) if
this Agreement is expressed to be governed by English law, to (A) the non-exclusive jurisdiction of the English courts if the
Proceedings do not involve a Convention Court and (B) the exclusive jurisdiction of the English courts if the Proceedings do involve
a Convention Court; or
(2) if
this Agreement is expressed to be governed by the laws of the State of New York, to the non-exclusive jurisdiction of the courts
of the State of New York and the United States District Court located in the Borough of Manhattan in New York City;
(ii) waives
any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such party; and
(iii) agrees, to the extent permitted by applicable law, that the bringing of Proceedings in any one or more jurisdictions will
not preclude the bringing of Proceedings in any other jurisdiction.
(c) Service
of Process. Each party irrevocably appoints the Process Agent, if any, specified opposite its name in the Schedule
to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party’s Process Agent
is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent
acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices
in Section 12(a)(i), 12(a)(iii) or 12(a)(iv). Nothing in this Agreement will affect the right of either party to serve process
in any other manner permitted by applicable law.
(d) Waiver
of Immunities. Each party irrevocably waives, to the extent permitted by applicable law, with respect to itself
and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar
grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction or order for specific performance or
recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any
judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction
and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings.
14. Definitions
As used
in this Agreement:—
“Additional
Representation” has the meaning specified in Section 3.
“Additional
Termination Event” has the meaning specified in Section 5(b).
“Affected
Party” has the meaning specified in Section 5(b).
“Affected
Transactions” means (a) with respect to any Termination Event consisting of an Illegality, Force Majeure
Event, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event (which, in the
case of an Illegality under Section 5(b)(i)(2) or a Force Majeure Event under Section 5(b)(ii)(2), means all Transactions unless
the relevant Credit Support Document references only certain Transactions, in which case those Transactions and, if the relevant
Credit Support Document constitutes a Confirmation for a Transaction, that Transaction) and (b) with respect to any other Termination
Event, all Transactions.
“Affiliate”
means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person,
any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the
person. For this purpose, “control” of any entity or person means ownership of a majority of the voting power of the
entity or person.
“Agreement”
has the meaning specified in Section 1(c).
“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)(1) of the definition of Applicable Close-out Rate,
a rate equal to the arithmetic mean of the rate determined pursuant to clause (a) above and a rate per annum equal to the cost
(without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the
relevant amount.
“Automatic
Early Termination” has the meaning specified in Section 6(a).
“Burdened
Party” has the meaning specified in Section 5(b)(iv).
“Change
in Tax Law” means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any
law (or in the application or official interpretation of any law) that occurs after the parties enter into the relevant Transaction.
“Close-out
Amount” means, with respect to each Terminated Transaction or each group of Terminated Transactions and a Determining
Party, the amount of the losses or costs of the Determining Party that are or would be incurred under then prevailing circumstances
(expressed as a positive number) or gains of the Determining Party that are or would be realised under then prevailing circumstances
(expressed as a negative number) in replacing, or in providing for the Determining Party the economic equivalent of, (a) the material
terms of that Terminated Transaction or group of Terminated Transactions, including the payments and deliveries by the parties
under Section 2(a)(i) in respect of that Terminated Transaction or group of Terminated Transactions that would, but for the occurrence
of the relevant Early Termination Date, have been required after that date (assuming satisfaction of the conditions precedent
in Section 2(a)(iii)) and (b) the option rights of the parties in respect of that Terminated Transaction or group of Terminated
Transactions.
Any Close-out
Amount will be determined by the Determining Party (or its agent), which will act in good faith and use commercially reasonable
procedures in order to produce a commercially reasonable result. The Determining Party may determine a Close-out Amount for any
group of Terminated Transactions or any individual Terminated Transaction but, in the aggregate, for not less than all Terminated
Transactions. Each Close-out Amount will be determined as of the Early Termination Date or, if that would not be commercially
reasonable, as of the date or dates following the Early Termination Date as would be commercially reasonable.
Unpaid
Amounts in respect of a Terminated Transaction or group of Terminated Transactions and legal fees and out-of-pocket expenses referred
to in Section 11 are to be excluded in all determinations of Close-out Amounts.
In determining
a Close-out Amount, the Determining Party may consider any relevant information, including, without limitation, one or more of
the following types of information:—
(i) quotations (either
firm or indicative) for replacement transactions supplied by one or more third parties that may take into account the creditworthiness
of the Determining Party at the time the quotation is provided and the terms of any relevant documentation, including credit support
documentation, between the Determining Party and the third party providing the quotation;
(ii) information consisting
of relevant market data in the relevant market supplied by one or more third parties including, without limitation, relevant rates,
prices, yields, yield curves, volatilities, spreads, correlations or other relevant market data in the relevant market; or
(iii) information of the
types described in clause (i) or (ii) above from internal sources (including any of the Determining Party’s Affiliates)
if that information is of the same type used by the Determining Party in the regular course of its business for the valuation
of similar transactions.
The Determining
Party will consider, taking into account the standards and procedures described in this definition, quotations pursuant to clause
(i) above or relevant market data pursuant to clause (ii) above unless the Determining Party reasonably believes in good faith
that such quotations or relevant market data are not readily available or would produce a result that would not satisfy those
standards. When considering information described in clause (i), (ii) or (iii) above, the Determining Party may include costs
of funding, to the extent costs of funding are not and would not be a component of the other information being utilised. Third
parties supplying quotations pursuant to clause (i) above or market data pursuant to clause (ii) above may include, without limitation,
dealers in the relevant markets, end-users of the relevant product, information vendors, brokers and other sources of market information.
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”
has the meaning specified in Section 6(f).
“Potential
Event of Default” means any event which, with the giving of notice or the lapse of time or both, would constitute
an Event of Default.
“Proceedings”
has the meaning specified in Section 13(b).
“Process
Agent” has the meaning specified in the Schedule.
“rate
of exchange” includes, without limitation, any premiums and costs of exchange payable in connection with the purchase
of or conversion into the Contractual Currency.
“Relevant
Jurisdiction” means, with respect to a party, the jurisdictions (a) in which the party is incorporated, organised,
managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this
Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which
such payment is made.
“Schedule”
has the meaning specified in the preamble.
“Scheduled
Settlement Date” means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to
a Transaction.
“Specified
Entity” has the meaning specified in the Schedule.
“Specified
Indebtedness” means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise,
as principal or surety or otherwise) in respect of borrowed money.
“Specified
Transaction” means, subject to the Schedule, (a) any transaction (including an agreement with respect to any such
transaction) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider
of such other party or any applicable Specified Entity of such other party) which is not a Transaction under this Agreement but
(i) which is a rate swap transaction, swap option, basis swap, forward rate transaction, commodity swap, commodity option, equity
or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction,
floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option, credit
protection transaction, credit swap, credit default swap, credit default option, total return swap, credit spread transaction,
repurchase transaction, reverse repurchase transaction, buy/sell-back transaction, securities lending transaction, weather index
transaction or forward purchase or sale of a security, commodity or other financial instrument or interest (including any option
with respect to any of these transactions) or (ii) which is a type of transaction that is similar to any transaction referred
to in clause (i) above that is currently, or in the future becomes, recurrently entered into in the financial markets (including
terms and conditions incorporated by reference in such agreement) and which is a forward, swap, future, option or other derivative
on one or more rates, currencies, commodities, equity securities or other equity instruments, debt securities or other debt instruments,
economic indices or measures of economic risk or value, or other benchmarks against which payments or deliveries are to be made,
(b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement
or the relevant confirmation.
“Stamp
Tax” means any stamp, registration, documentation or similar tax.
“Stamp
Tax Jurisdiction” has the meaning specified in Section 4(e).
“Tax”
means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties
and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement
other than a stamp, registration, documentation or similar tax.
“Tax
Event” has the meaning specified in Section 5(b).
“Tax
Event Upon Merger” has the meaning specified in Section 5(b).
“Terminated
Transactions” means, with respect to any Early Termination Date, (a) if resulting from an Illegality or a Force
Majeure Event, all Affected Transactions specified in the notice given pursuant to Section 6(b)(iv), (b) if resulting from any
other Termination Event, all Affected Transactions and (c) if resulting from an Event of Default, all Transactions in effect either
immediately before the effectiveness of the notice designating that Early Termination Date or, if Automatic Early Termination
applies, immediately before that Early Termination Date.
“Termination
Currency” means (a) if a Termination Currency is specified in the Schedule and that currency is freely available,
that currency, and (b) otherwise, euro if this Agreement is expressed to be governed by English law or United States Dollars if
this Agreement is expressed to be governed by the laws of the State of New York.
“Termination
Currency Equivalent” means, in respect of any amount denominated in the Termination Currency, such Termination Currency
amount and, in respect of any amount denominated in a currency other than the Termination Currency (the “Other Currency”),
the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase
such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Close-out Amount is determined
as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign
exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about
11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination
of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The
foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith
by that party and otherwise will be agreed by the parties.
“Termination
Event” means an Illegality, a Force Majeure Event, a Tax Event, a Tax Event Upon Merger or, if specified to be applicable,
a Credit Event Upon Merger or an Additional Termination Event.
“Termination
Rate” means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost)
to each party (as certified by such party) if it were to fund or of funding such amounts.
“Threshold
Amount” means the amount, if any, specified as such in the Schedule.
“Transaction”
has the meaning specified in the preamble.
“Unpaid
Amounts” owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect
of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii) or
due but for Section 5(d)) to such party under Section 2(a)(i) or 2(d)(i)(4) on or prior to such Early Termination Date and which
remain unpaid as at such Early Termination Date, (b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii) or 5(d)) required to be settled by delivery to such party on or
prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the
fair market value of that which was (or would have been) required to be delivered and (c) if the Early Termination Date results
from an Event of Default, a Credit Event Upon Merger or an Additional Termination Event in respect of which all outstanding Transactions
are Affected Transactions, any Early Termination Amount due prior to such Early Termination Date and which remains unpaid as of
such Early Termination Date, in each case together with any amount of interest accrued or other compensation in respect of that
obligation or deferred obligation, as the case may be, pursuant to Section 9(h)(ii)(1) or (2), as appropriate. The fair market
value of any obligation referred to in clause (b) above will be determined as of the originally scheduled date for delivery, in
good faith and using commercially reasonable procedures, by the party obliged to make the determination under Section 6(e) or,
if each party is so obliged, it will be the average of the Termination Currency Equivalents of the fair market values so determined
by both parties.
“Waiting
Period” means:—
(a) in
respect of an event or circumstance under Section 5(b)(i), other than in the case of Section 5(b)(i)(2) where the relevant payment,
delivery or compliance is actually required on the relevant day (in which case no Waiting Period will apply), a period of three
Local Business Days (or days that would have been Local Business Days but for the occurrence of that event or circumstance) following
the occurrence of that event or circumstance; and
(b) in
respect of an event or circumstance under Section 5(b)(ii), other than in the case of Section 5(b)(ii)(2) where the relevant payment,
delivery or compliance is actually required on the relevant day (in which case no 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.
THE BANK OF NOVA SCOTIA |
|
EACH PARTY B SPECIFIED ON
APPENDIX A TO THIS AGREEMENT, severally and not jointly |
|
|
|
By: |
|
|
By: |
|
Name: |
|
Name: |
Title: |
|
Title: |
Date: |
|
Date: |
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|
ISDA®
International
Swaps and Derivatives Association, Inc.
SCHEDULE
to the
2002 Master
Agreement
dated as of August
5, 2024
between
The
Bank of Nova Scotia |
and |
Each
entity specified on Appendix A attached hereto, severally and not jointly |
(“Party
A”) |
|
(each,
a “Party B”) |
|
|
|
established
as a chartered bank under the laws of Canada |
|
established
as a limited partnership organized under the laws of the State of Delaware |
Each party listed
on Appendix A hereto, as may be amended or supplemented from time to time, shall be referred to individually as Party B. Notwithstanding
any other provision of this Agreement, this Agreement shall constitute and shall be construed as a separate agreement between
Party A and each Party B as though each Party B had separately contracted with Party A with respect to such Party B. Each obligation
of each Party B shall constitute the obligation solely of such Party B, and shall not constitute the obligation of, or a joint
obligation with, any other Party B or any other person. Each obligation of Party A under this Agreement with respect to any Party
B shall constitute an obligation solely in respect of such Party B and not an obligation to any other Party B or any other person.
Part 1. Termination
Provisions.
(a) “Specified
Entity” means in relation to Party A for the purpose of:―
Section
5(a)(v), |
None |
Section 5(a)(vi), |
None |
Section 5(a)(vii), |
None |
Section 5(b)(v), |
None |
and in relation
to Party B for the purpose of:―
Section
5(a)(v), |
None |
Section 5(a)(vi), |
None |
Section 5(a)(vii), |
None |
Section 5(b)(v), |
None |
| (b) | “Specified
Transaction” will have the meaning specified in Section 14 of this Agreement. |
| (c) | The
“Cross-Default” provisions of Section 5(a)(vi) will apply to
Party A and will apply to Party B. Section 5(a)(vi) of this Agreement is hereby amended
by the addition of the following at the end thereof: |
“provided,
however, that notwithstanding the foregoing, an Event of Default shall not occur under (2) above if, as demonstrated to the reasonable
satisfaction of the other party, (a) the failure to pay referred to in (2) is a failure to pay caused by an error or omission
of an administrative or operational nature; and (b) funds were available to such party to enable it to make the relevant payment
when due; and (c) such relevant payment is made within three Local Business Days following receipt of written notice from an interested
party of such failure to pay.”
Additionally,
Section 5(a)(vi) of this Agreement is hereby amended by deleting in the seventh line thereof the words, “or becoming capable
at such time of being declared,”.
“Specified
Indebtedness” shall mean any obligation (whether present or future, contingent or otherwise, as principal or surety
or otherwise) in respect of borrowed money or any Specified Transaction (except that, for this purpose only, the words “and
any other entity” shall be substituted for the words “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)” where they appear in the definition of Specified
Transaction).
For
the purposes of Section 5(a)(vi)(1), any reference to the principal amount of Specified Indebtedness becoming due and payable
shall, in the case of a Specified Transaction, refer to the amount that becomes, or would become, due and payable as a result
of the early termination of such Specified Transaction and provided that where one or more such terminated Specified Transactions
is governed by a master agreement, the amount that would result from the netting of such amounts as determined pursuant to such
master agreement.
Specified
Indebtedness shall not include obligations in respect of deposits received in the ordinary course of a party’s banking business.
“Threshold
Amount” means
(i) with
respect to Party A, an amount in CAD equivalent to 3% of the total shareholders’ equity of Party A (or its equivalent in
another currency, being the amount of that other currency required to purchase such amount at the rate equal to the spot exchange
rate of any foreign exchange agent selected in good faith by the party asserting that a Cross Default has occurred); and
(ii) with
respect to Party B, an amount in USD equivalent to 3% of the Net Asset Value of Party B (or its equivalent in another currency,
being the amount of that other currency required to purchase such amount at the rate equal to the spot exchange rate of any foreign
exchange agent selected in good faith by the party asserting that a Cross Default has occurred).
For
purposes of the above, shareholders’ equity shall be determined by reference to the relevant party’s most recent consolidated
balance sheet prepared in accordance with accounting principles that are generally accepted in such party’s country of organisation.
(d) The
“Credit Event Upon Merger” provisions of Section 5(b)(v) will apply to Party A and to Party B.
| (e) | The
“Automatic Early Termination” provision of Section 6(a) will
not apply to Party A and will not apply to Party B. |
| (f) | “Termination
Currency” means the currency selected by the party which is not the Defaulting
Party or the Affected Party, as the case may be, or where there is more than one Affected
Party, the currency agreed by Party A and Party B. However, the Termination Currency
shall be one of the currencies in which payments are required to be made in respect of
Transactions. If the currency selected is not freely available, or where there are two
Affected Parties and they cannot agree on a Termination Currency, the Termination Currency
shall be United States Dollars. |
| (g) | Additional
Termination Event will apply. |
Each
of the following will constitute an Additional Termination Event with respect to Party A, who shall be the sole Affected Party:
―
On
any day during the term hereof, the rating of the long-term, unsecured and unsubordinated indebtedness of Party A or its Credit
Support Provider, if any, is reduced below BBB-, if rated by Standard & Poor’s Ratings Group and Baa2, if rated by Moody’s
Investors Service, Inc., or if Party A’s aforementioned obligations do not have a rating by at least one of these agencies
(which, for the avoidance of doubt, includes a scenario where Party A’s rating has been withdrawn or suspended).
Each
of the following will constitute an Additional Termination Event with respect to Party B, who shall be the sole Affected Party:
―
| (i) | Minimum
Net Asset Value. |
| a. | The
Net Asset Value of Party B shall be at any time equal to or less than $1.5 billion (as
reflected in Party B’s annual audited financial statements for such fiscal year); |
| b. | During
any calendar month, the Net Asset Value of Party B (inclusive of shareholder redemptions
and withdrawals) declines 35% or more from the immediately preceding calendar month-end. |
| (ii) | Failure
to Deliver Monthly NAV Reports. Party B fails to deliver the Monthly NAV Reports
as defined and in accordance with Part 3(b) below if such failure is not remedied on
or before the second Local Business Day after notice of such failure is given to Party
B. |
| (iii) | Material
Amendment. The Core Documents of Party B are amended or modified in a manner
which, in the reasonable judgment of Party A, has a material adverse effect on Party
B’s ability to perform its obligations hereunder or under any Transaction or on
Party A’s rights hereunder or under any Transaction. |
| (iv) | Change
of General Partner. The General Partner ceases to be the general partner
of Party B; an Additional Termination Event shall not occur however, under this Part
1(g)(iv) where, no fewer than ten Local Business Days prior to General Partner ceasing
to be the general partner of Party B, Party B sends written notice to Party A informing
it of the identity of a replacement general partner (a “General Partner Notice”),
and Party A gives written confirmation of its approval of such replacement general partner,
which approval is not to be unreasonably withheld and shall be notified to Party B within
10 Local Business Days of receipt by Party A of such General Partner Notice. |
For
the purposes of each of the foregoing Additional Termination Events, the Affected Party will be Party B and all Transactions shall
be Affected Transactions.
| (h) | Definitions.
For the purposes of this Agreement, the following additional definitions will apply: |
“Constitutional
Documents” has the meaning set out in Appendix A.
“Core
Documents” means the Constitutional Documents and Offering Memorandum.
“General
Partner” means United States Commodity Funds, LLC.
“Net
Asset Value” means, at any time in relation to Party B, Total Assets minus Total Liabilities.
“Offering
Memorandum” means the prospectus, offering memorandum, private placement memorandum, or other offering document of Party
B.
“Total
Assets” means, at any time, the aggregate current book value of all of the assets of Party B as at that date
(determined in accordance with generally accepted international accounting standards).
“Total
Liabilities” means, at any time, the sum of all liabilities of Party B, as at that date (determined in accordance
with generally accepted international accounting standards).
| Part 2. | Tax Representations. |
| (a) | Payer
Representations. For the purpose of Section 3(e) of this Agreement,
Party A and Party B each make the following representation:― |
| | It
is not required by any applicable law, as modified by the practice of any relevant governmental
revenue authority, of any Relevant Jurisdiction to make any deduction or withholding
for or on account of any Tax from any payment (other than interest under Section 9(h)
of this Agreement) 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. |
| (b) | Payee
Representations. For the purpose of Section 3(f) of this Agreement,
each of Party A and Party B make the representations specified below, as applicable:― |
(1) Jurisdiction
of residence for tax purposes.
The
following representations will apply to all Transactions:
(a) The following representation
will apply to Party A when acting through its Toronto Office:—
It is a foreign person within
the meaning of United States Treasury Regulation section 1.6041-4(a)(4) and a non-U.S. branch of a foreign person within the meaning
of United States Treasury Regulation section 1.1441-4(a)(3)(ii); it is a resident of Canada within the meaning of the Specified
Treaty; it is fully eligible for the benefits of the “Business Profits” or “Industrial and Commercial Profits”
provision, as the case may be, the “Interest” provision or the “Other Income” provision (if any) of the
Specified Treaty with respect to any payment described in such provisions and received or to be received by it in connection with
this Agreement; no such payment is attributable to a trade or business carried on by it through a permanent establishment in the
United States of America; and such payment will not be effectively connected with its conduct of a trade or business in the United
States of America.
“Specified Treaty”
means the income tax convention between Canada and the United States.
(b) The following representation
will apply to Party A when acting through its New York Office: -
Each payment received or
to be received by it in connection with this Agreement will be effectively connected with its conduct of a trade or business in
the United States of America.
| (i) | Party
B makes the representations as set out in Appendix A. |
(2) Other
payments under the Agreement
Solely
for the purposes of the representations made under Section 3(f) of the Agreement, any payments made under the Agreement but not
as part of a Transaction, including any payments made in accordance with Section 6(e), shall be deemed to be payments in relation
to a Transaction.
Part 3. Agreement
to Deliver Documents.
For the purpose
of Sections 4(a)(i) and 4(a)(ii) of this Agreement, each party agrees to deliver the following documents, as applicable:―
(a) Tax forms,
documents or certificates to be delivered are :―
Party
required to
deliver document |
Form/Document/
Certificate |
Date
by which
to
be delivered |
|
|
|
Party
A |
A
properly executed United States Internal Revenue Service Form W-8BEN-E, or appropriate successor form, to the extent the form
previously furnished has ceased to be effective, the information therein has become inaccurate or such form has been superseded |
Upon
execution of this Agreement, and after such date it will provide additional Internal Revenue Service Forms W-8BEN-E, or
appropriate successor forms, (i) promptly upon reasonable demand by Party B, and (ii) promptly upon learning that any
such form previously provided by Party A has become obsolete or incorrect |
|
|
|
Party
B |
A
properly executed United States Internal Revenue Service Form W-9, and after such date it will provide additional Internal
Revenue Service Forms W-9, or appropriate successor forms, to the extent the form previously furnished has ceased to be
effective, the information therein has become inaccurate or such form has been superseded. |
Upon
execution of this Agreement, and after such date it will provide additional Internal Revenue Service Forms W-9, or appropriate
successor forms, (i) promptly upon reasonable demand by Party A, and (ii) promptly upon learning that any such
form previously provided by Party B has become obsolete or incorrect |
|
|
|
(b) Other
documents to be delivered are :―
Party
required to deliver document |
Form/Document/
Certificate |
Date
by which
to
be delivered |
Covered
by
Section 3(d)
Representation |
|
|
|
|
Party
A and
Party
B |
A
list of authorised signatories for the party (and, as applicable, any Credit Support Provider of such party) and evidence
of the authority of the authorised signatories of such party to execute this Agreement (and, as applicable, any Credit
Support Document). |
At
the execution of this Agreement |
Yes |
|
|
|
|
Party
A and
Party
B |
Any
Credit Support Document(s) specified in Part 4 of this Schedule. |
Upon
execution of this Agreement |
Yes |
|
|
|
|
Party
B |
A
copy of Party B’s annual audited consolidated financial statements prepared in accordance with accounting principles
that are generally accepted in such party’s country of organisation and certified by independent certified public
accountants for each financial year (“Party B Annual Report”). |
Upon
request, if such financial statements are not available from public sources at www.sec.gov |
Yes |
|
|
|
|
Party
A |
A
copy of Party A’s audited consolidated financial statements prepared in accordance with accounting principles that
are generally accepted in Party A’s country of organisation and certified by independent certified public accountants
for each financial year. |
Upon
request, if such financial statements are not available from public sources or at www.scotiabank.com |
Yes |
|
|
|
|
Party
A and
Party
B |
Copies
of the party’s standard settlement instructions. |
At
the execution of this Agreement and at any time there is a change to those standard settlement instructions. |
No |
|
|
|
|
Party
A and
Party
B |
A
list of authorised signatories for the party and evidence of the authority of the authorised signatories of the party
to execute Confirmations on behalf of the party. |
Upon
execution of this Agreement and at any time there is a change to the list of those authorised to sign Confirmations. |
Yes |
|
|
|
|
Party
B |
Contact
details for settlement purposes, including telephone, facsimile (and email details if relevant), addresses and names of the
relevant contacts. |
At
the execution of this Agreement and at any time there is a change to those contacts details. |
No |
|
|
|
|
Party
B |
Monthly
investment reports of Party B which outline Party B’s Net Asset Value (“Monthly NAV Reports”) as of the
most recent calendar month end. |
Within
30 calendar of each calendar month end; provided, however, if such information is available on Party B’s website within
such time period, then such information shall be deemed to have been delivered. |
Yes |
|
|
|
|
Party
B |
Core
Documents |
At
the execution of this Agreement and upon amendment; provided, however, if such information is available on Party B’s
website, then such information shall be deemed to have been delivered |
Yes |
Part 4. Miscellaneous.
(a) Addresses
for Notices. For the purpose of Section 12(a) of this Agreement:―
Address
for notices or communications to Party A:―
Notices or communications
to Party A in respect of a particular Transaction shall be directed to the address, facsimile or contact reflected in the Confirmation
for that Transaction, and any notices in respect of Sections 5, 6, 9(b) or 13(c) of this Agreement shall be directed to: BNS_ISDAnotices@scotiabank.com
with a copy of any notices in respect of Sections 5 and 6 to Party A’s Toronto Office as follows
Address: |
40 Temperance St. 7th
Floor |
|
Toronto, Ontario, Canada M5H 1H1 |
|
|
Attention: |
Global Markets Documentation |
|
Facsimile No.: (416) 350-1187 |
|
Telephone No.:(416) 866-6613 |
|
|
Address for notices or communications
to Party B:― |
|
|
Address: |
United States Commodity Funds |
|
1850 Mt. Diablo Boulevard, Suite 640 |
|
Walnut Creek, CA 94596 |
|
|
Attention: |
John Love |
Telephone No.: |
(510) 522-9600 |
E-mail: |
trading@uscfinvestments.com |
|
|
With a copy to: |
|
|
|
Address: |
United States Commodity Funds |
|
1850 Mt. Diablo Boulevard, Suite 640 |
|
Walnut Creek, CA 94596 |
|
|
Attention: |
Daphne Frydman |
Telephone No.: |
(510) 522-9600 |
E-mail: |
dfrydman@uscfinvestments.com |
|
|
(b) Process
Agent. For the purpose of Section 13(c) of this Agreement:―
Party
A appoints as its Process Agent: US Regional Head of Operations, The Bank of Nova Scotia, 250 Vesey Street, 23rd Floor, New York,
New York 10281 U.S.A.
Party
B appoints as its Process Agent: Not Applicable.
(c) Offices. The
provisions of Section 10(a) will apply to this Agreement.
(d) Multibranch
Party. For the purpose of Section 10(b) of this Agreement:―
Party
A is a Multibranch Party and may enter into a Transaction through any of the following Offices:― Toronto, New York.
Party
B is not a Multibranch Party.
| (e) | Calculation
Agent. The Calculation Agent is Party A, unless otherwise specified
in a Confirmation in relation to the relevant Transaction. If at any time an Event of
Default is continuing with respect to Party A or Party A fails to perform its duties
as Calculation Agent as required by the terms of this Agreement, then an independent
third party selected by Party B (and acceptable to Party A, acting reasonably) will
act as Calculation Agent. |
Party
B may challenge any determination or calculation by the Calculation Agent following receipt by Party B of such determination or
calculation, after which the parties will attempt in good faith to bilaterally resolve their dispute within one Local Business
Day. If the parties are unable to agree on a particular determination or calculation within one Local Business Day, a mutually
acceptable third party will be appointed within two Local Business Days thereafter to make a determination or calculation as to
the disputed matter. If the parties cannot agree on a substitute Calculation Agent, then each party shall, within one Local Business
Day of failing to agree on a mutually acceptable third party, appoint their own third party independent leading dealer (an “Independent
Dealer”), which Independent Dealers shall jointly appoint a third Independent Dealer who shall be the substitute
Calculation Agent. All calculations and determinations of the substitute Calculation Agent shall be binding and conclusive, in
the absence of manifest error. If either (i) the substitute Calculation Agent fails to deliver a final calculation or determination;
or (ii) the Independent Dealers appointed by Party A and Party B fail to appoint a substitute Calculation, in each case, within
three (3) Local Business Days after being appointed, the Calculation Agent’s original calculation or determination shall
be binding.
| | For
the avoidance of doubt, if a party hereto is designated as the Calculation Agent, Section
5(a)(ii) shall not include any failure by that party to comply with its obligations as
Calculation Agent. |
| (f) | Credit
Support Document. Details of any Credit Support Document:― |
In
relation to Party A and Party B: the 2016 Credit Support Annex for Variation
Margin
(VM) entered into by the parties hereto.
(g) Credit
Support Provider.
Credit
Support Provider means in relation to Party A: None.
Credit
Support Provider means in relation to Party B: None.
| (h) | Governing
Law. This Agreement will be governed by and construed in accordance
with the laws of the State of New York (without reference to choice of law doctrine). |
| (i) | Waiver
of Jury Trial. Each party waives, to the fullest extent permitted by applicable
law, any right it may have to a trial by jury in respect of any suit, action or proceeding
relating to this Agreement or any Transaction. Each party: |
| (i) | certifies
that no representative, agent or attorney of the other party has represented, expressly
or otherwise, that such other party would not seek to enforce the foregoing waiver in
the event of any such suit, action or proceeding; and |
| (ii) | acknowledges
that it and the other party have entered into this Agreement, in reliance on, among other
things, the mutual waivers and certifications of this provision. |
| (j) | Netting
of Payments. “Multiple Transaction Payment Netting”
will apply for the purpose of Section 2(c) of this Agreement to any Transactions of the
same product type (in each case starting from the date of this Agreement). |
| (k) | “Affiliate”
will have the meaning specified in Section 14 of this Agreement. |
(l) Absence
of Litigation. For the purpose of Section 3(c):―
“Specified
Entity” means in relation to Party A, not applicable.
“Specified
Entity” means in relation to Party B, not applicable.
| (m) | No
Agency. The provisions of Section 3(g) will apply to this Agreement. |
| (n) | Additional
Representation will apply. For the purpose of Section 3 of this Agreement, the
following will constitute Additional Representations:― |
| (i) | Relationship
Between Parties. Each party will be deemed to represent to the other
party on the date on which it enters into a Transaction that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the contrary for
that Transaction):― |
| (A) | Non-Reliance. It
is acting for its own account, and it has made its own independent decisions to enter
into that Transaction and as to whether that Transaction is appropriate or proper for
it based upon its own judgment and upon advice from such advisers as it has deemed necessary.
It is not relying on any communication (written or oral) of the other party as investment
advice or as a recommendation to enter into that Transaction, it being understood that
information and explanations related to the terms and conditions of a Transaction will
not be considered investment advice or a recommendation to enter into that Transaction.
No communication (written or oral) received from the other party will be deemed to be
an assurance or guarantee as to the expected results of that Transaction. |
| (B) | 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 adviser
to it in respect of that Transaction. |
(ii) ERISA. Party B represents and warrants (which representation and warranty will be deemed to
be repeated at all times until the termination of this Agreement) that the assets that are used in connection with the execution,
delivery and performance of this Agreement and the Transactions entered into pursuant hereto are not the assets of an employee
benefit or other plan subject to Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”),
a plan described in Section 4975 of the Internal Revenue Code of 1986, as amended (the “Code”), an entity whose underlying
assets include “plan assets” by reason of ERISA section 3(42) and Department of Labor (DOL) regulation section 2510.3-101,
or a governmental plan that is subject to any federal, state, or local law that is substantially similar to the provisions of
Section 406 of ERISA or Section 4975 of the Code.
| (o) | 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; |
| (ii) | agrees
to obtain any necessary consent of, and give any necessary notice of such recording to,
its relevant personnel; and |
| (iii) | agrees,
to the extent permitted by applicable law, that recordings may be submitted in evidence
in any Proceedings. |
| (p) | Accuracy
of Specified Information. Section 3(d) is hereby amended by adding in the third
line thereof after the word “respect” and before the period, the phrase “or,
in the case of audited or unaudited financial statements, a fair presentation of the
financial condition of the relevant person”. |
| (q) | Contractual
Recognition of Stay in Resolution. With respect to this Agreement, each party
agrees to the application of subsections 39.15(7.1) to (7.104) and (7.11) of the
Canada Deposit Insurance Corporation Act, RSC, 1985, c. C-3 in relation to the
actions that the parties may take. |
Part 5. Other
Provisions.
| (a) | Definitions.
(i) The provisions of the 1998 FX and Currency Option Definitions (as published by the
International Swaps and Derivatives Association, Inc., the Emerging Markets Traders Association
and the Foreign Exchange Committee); (ii) the provisions of the 2005 ISDA Commodity Definitions
(as published by the International Swaps and Derivatives Association, Inc.) are hereby
incorporated in their entirety; and (iii) the 2006 ISDA Definitions (as published by
the International Swaps and Derivatives Association, Inc.) are hereby incorporated in
their entirety. |
| (b) | Inconsistency.
At the end of Section 1(b), the following sentence is inserted: |
“In
the event of any inconsistency between the Definitions and this Master Agreement (including the Schedule), the Master Agreement
will prevail.”
(c) Amendment
of Section 2. A new Section 2(a)(iv) is inserted as follows:
“(iv) The
condition precedent in Section 2(a)(iii)(1) does not apply to a payment or delivery due to be made to a party if it has satisfied
in full all its payment and delivery obligations under Section 2(a)(i) and Section 9(h) of this Agreement and has no future payment
or delivery obligations, whether absolute or contingent, under Section 2(a)(i) or Section 9(h).”
| (d) | Change
of Accounts. For the purposes of Section 2(b) of this Agreement both parties
agree that such new account so designated shall be in the same tax jurisdiction as the
original account. |
| (e) | Tax
Events. Section 5(b)(iii) is amended by deleting the words “, or
there is a substantial likelihood that it will,” where they appear in that
clause. |
| (f) | Procedures
for Confirming Transactions. Section 9(e) of this Agreement is amended by the
addition of the following terms: |
“(iii) With
respect to each Transaction entered into pursuant to this Agreement and for the purposes of Section 9(e)(ii), Party A
shall, on or promptly after the relevant Trade Date, send Party B a Confirmation confirming that Transaction and Party B
shall promptly then confirm the accuracy of or request the correction of such Confirmation. In the absence of manifest error,
where Party B fails to confirm the accuracy of or request the correction of a Confirmation within three Local Business Days
after it was sent, the terms of a Confirmation will be binding on and conclusive against Party B.
| | Delivery
of a Confirmation is effected whether a party uses facsimile, email or an electronic
messaging system, and irrespective of the form of delivery used by the other party to
confirm the terms of the relevant Transaction. The requirement of this Agreement that
the parties exchange Confirmations shall for all purposes be satisfied by following the
procedure set out in this paragraph. |
| | Where
a Transaction is confirmed by means of a facsimile, email or an electronic messaging
system, such message will constitute a Confirmation even where not so specified in that
Confirmation.” |
| (g) | Notices.
Section 12 of the Agreement is amended by deleting the following words where they appear
on lines 2 and 3 of Section 12(a): |
| | “(except
that a notice or other communication under Section 5 or 6 may not be given by electronic
messaging system or email).” |
and
replacing it with:
“(except
that a notice or other communication under Section 5 or 6 may not be given by electronic messaging system).”
| (h) | 2002
Master Agreement Protocol. The parties agree that, with effect from the date
of this Agreement, the terms of each Annex to the 2002 Master Agreement Protocol published
by the International Swaps and Derivatives Association Inc., on July 15th
2003(the “Protocol”) shall apply to this Agreement as if the parties had
adhered to the Protocol without amendment. |
| (i) | Miscellaneous.
With effect from and including the date of this Agreement the parties agree that every
transaction between them is a Transaction governed by this Agreement (whether or not
the parties refer to this Agreement when entering into or confirming the transaction)
unless the terms of this Agreement have been expressly excluded or any confirmation of
such transaction is expressed to be governed by another agreement. |
For
the purpose of this clause ‘transaction’ means a transaction between the parties, whether entered into before, on
or after the commencement of this Agreement, of the nature of a Specified Transaction (excluding any repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction or securities lending transaction).
(j) Party
B and General Partner Representations. Each of the General Partner and Party B represents and warrants on
and as of the date hereof, on the date on which it enters into a Transaction, and on and as of each date this Agreement or any
Transaction remains outstanding:
| (i) | General
Partner’s Authority. The General Partner and each person acting on its
behalf is duly authorized to receive any and all notices sent to Party B in respect of
this Agreement and to act for and on behalf of Party B for all purposes under this Agreement
including without limitation to execute and deliver this
Agreement and Confirmations, to enter into Transactions, and to give instructions (including,
without limitation, payment instructions). This representation shall be deemed to be
repeated at all relevant times. |
| (ii) | Compliance
with Applicable Internal Policies. Each Transaction entered into under this Agreement
will be entered into in accordance with, and will at all times comply with, applicable
investment policies, guidelines or other requirements of Party B (if any, as may be adopted
or amended from time to time by Party B) that may affect the due authorization or validity
of any Transaction or the Agreement. |
(k) Payment
of Premium Unless otherwise agreed in writing by the parties, with respect to any premium related to a Transaction
that is an option, if any such premium is not paid on the date such premium is due to be paid under the terms of the Transaction,
the seller of such Transaction may elect:
| (i) | to
accept a late payment of such premium; |
| (ii) | to
give written notice of such non-payment and, if such payment shall not be received within
one Local Business Day of such notice, treat the related Transaction as void; or |
| (iii) | to
give written notice of such non-payment and, if such payment shall not be received within
one Local Business Day of such notice, treat such non-payment as an Event of Default
under Section 5(a)(i) of this Agreement. |
If
the seller of such option Transaction elects to act under either (i) or (ii) above, the buyer of such Transaction shall pay all
reasonable out-of-pocket costs and actual damages incurred in connection with such unpaid or late premium or void Transaction,
including, without limitation, interest on such premium in the same currency as such premium at the then prevailing market rate
and any other reasonable costs or expenses incurred by the seller of the Transaction in covering its obligations (including, without
limitation, a delta hedge) with respect to such Transaction.
| (l) | Withholding
Tax imposed on payments to non-US counterparties under the United States Foreign Account
Tax Compliance Act. “Tax” as used in Part 2(a) of this Schedule (Payer
Tax Representation) and “Indemnifiable Tax” as defined in Section 14 of this
Agreement shall not include any U.S. federal withholding tax imposed or collected pursuant
to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the
“Code”), any current or future regulations or official interpretations thereof,
any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or
regulatory legislation, rules or practices adopted pursuant to any intergovernmental
agreement entered into in connection with the implementation of such Sections of the
Code (a “FATCA Withholding Tax”). For the avoidance of doubt, a FATCA Withholding
Tax is a Tax the deduction or withholding of which is required by applicable law for
the purposes of Section 2(d) of this Agreement. |
(m) ISDA
2013 Reporting Protocol Notwithstanding anything to the contrary in this Agreement or in any non-disclosure, confidentiality
or other agreement between the parties, each party hereby consents to the disclosure of information:
(a)
to the extent required or permitted by any applicable law, rule or regulation which mandates reporting and/or retention of transaction
and similar information or to the extent required by any order or directive regarding reporting and/or retention of transaction
and similar information issued by any authority or body or agency in accordance with which the other party is required or accustomed
to act (“Reporting Requirements”); or
(b)
to and between the other party’s head office, branches or affiliates, or any persons or entities who provide services to
such other party or its head office, branches or affiliates, in each case, in connection with such Reporting Requirements.
Each
party acknowledges that pursuant to global regulatory reform initiatives, regulators require reporting of trade data to increase
market transparency and enable regulators to monitor systemic risk to ensure safeguards are implemented globally.
Each
party further acknowledges that disclosures made pursuant hereto may include, without limitation, the disclosure of trade information
including a party’s identity (by name, address, corporate affiliation, identifier or otherwise) to any swap or trade data
repository or one or more systems or services operated by any trade repository (“TR”) and any relevant regulators
(including without limitation, the U.S. Commodity Futures Trading Commission or other U.S. regulators in the case of trade reporting
under applicable U.S. laws, and the European Securities and Markets Authority and national regulators in the E.U. under the E.U.
Regulation No. 648/2012 on OTC derivatives, central counterparties and trade repositories in the case of trade reporting under
applicable E.U. laws) and that such disclosures could result in certain anonymous swap transaction and pricing data becoming available
to the public. Each party further acknowledges that, for purposes of complying with regulatory reporting obligations, a party
may use a third party service provider to transfer trade information into a TR and that a TR may engage the services of a global
trade repository regulated by one or more governmental regulators. Each party also acknowledges that disclosures made pursuant
hereto may be made to recipients in a jurisdiction other than that of the disclosing party or a jurisdiction that may not necessarily
provide an equivalent or adequate level of protection for personal data as the counterparty’s home jurisdiction. For the
avoidance of doubt, (i) to the extent that applicable non-disclosure, confidentiality, bank secrecy, data privacy or other law
imposes non-disclosure requirements on transaction and similar information required or permitted to be disclosed as contemplated
herein but permits a party to waive such requirements by consent, the consent and acknowledgements provided herein shall be a
consent by each party for purposes of such law; (ii) any agreement between the parties to maintain confidentiality of information
contained in this Agreement or in any non-disclosure, confidentiality or other agreement shall continue to apply to the extent
that such agreement is not inconsistent with the disclosure of information in connection with the Reporting Requirements as set
out herein; and (iii) nothing herein is intended to limit the scope of any other consent to disclosure separately given by each
party to the other party.
| (n) | Incorporation
of the terms of the IBOR Fallbacks Protocol. |
| (a) | From
and including 25 January 2021, the terms of the Attachment to the ISDA 2020 IBOR Fallbacks
Protocol published by ISDA on 23 October 2020 (IBOR Fallbacks Protocol) are incorporated
into and apply to this Agreement. For the purposes of this Agreement the parties will
each be deemed to be an ‘Adhering Party’ with respect to the IBOR Fallbacks
Protocol as between themselves and references in the IBOR Fallbacks Protocol to a ‘Protocol
Covered Document’ will be deemed to include references to this Agreement. If each
of the parties subsequently becomes or is an Adhering Party to the IBOR Fallbacks Protocol
by delivering an Adherence Letter to ISDA in accordance with the IBOR Fallbacks Protocol,
to the extent that there is any inconsistency between this Part 5(n) and the IBOR Fallbacks
Protocol, the this Part 5(n) shall prevail. |
| (b) | Each
party represents to the other party that the application of the terms of the IBOR Fallbacks
Protocol and any amendment contemplated by the IBOR Fallbacks Protocol (including the
Attachment thereto) will not, in and of itself, adversely affect the enforceability,
effectiveness or validity of any obligations owed, whether by it or by any third party,
under any Credit Support Document in respect of its obligations under this Transaction. |
| (c) | Terms
used in this Part 5(n) have the meaning given to those term in the IBOR Fallbacks Protocol
unless another meaning is provided. |
| (o) | Limited
Recourse. Except as otherwise stated in the Agreement or this Schedule, any amounts
owed or liabilities incurred by Party B in respect of any Transaction entered into under
this Agreement may be satisfied solely from the assets of Party B. Without limiting the
generality of the foregoing, and except as otherwise stated above, in no event shall
Party A have recourse under this Agreement, whether by set-off or otherwise, with respect
to any such amounts owed or liabilities incurred to or against (i) any assets of any
person or entity (including, without limitation, any person or entity whose account is
under the management of the General Partner) other than Party B, (ii) any assets of any
affiliate of Party B, or (iii) any assets of the General Partner or any affiliate of
such General Partner. |
| (p) | Condition
End Date. Section 2 of the Agreement is amended to add at the end a new
Section 2(e), reading in its entirety as follows: |
“(e) Condition
End Date.
(i) If
an Event of Default occurs, the Defaulting Party may, by notice to the Non-defaulting Party identifying the Event of Default and
confirming its occurrence, specify that clause (iii) will apply to that Event of Default.
(ii) If
a Potential Event of Default occurs with respect to a party, that party may, by notice to the other party identifying the Potential
Event of Default and confirming its occurrence:
(A) waive
any requirement that notice be given or that any period of time elapse, by virtue of which waiver the Potential Event of Default
will become an Event of Default; and
(B) specify
that clause (iii) will apply to that Event of Default.
(iii) If
this clause (iii) applies to an Event of Default, then the condition precedent specified in Section 2(a)(iii)(1) with respect
to that Event of Default will cease to be a condition precedent to each obligation of the Non-defaulting Party on the relevant
Condition End Date. Any obligation that would have been payable or deliverable by the Non-defaulting Party but for Section 2(a)(iii)(1)
will become payable or deliverable on the first Local Business Day falling after the Condition End Date (together with interest
payable on demand in accordance with Section 9(h)(i)(3)(A) or compensation and interest payable on demand in accordance with
Section 9(h)(i)(4)(A), as the case may be).
(iv) Subject
to clause (v) below, if, after a party has given a notice under clause (i) or (ii) above with respect to an Event of Default or
Potential Event of Default, another Event of Default or Potential Event of Default occurs with respect to that party, then, with
respect to the earlier Event of Default, no Condition End Date will occur and therefore clause (iii) will not apply. This
will not affect the right of that party to give a notice under clause (i) in respect of the subsequent Event of Default or under
clause (ii) in respect of the subsequent Potential Event of Default. This clause (iv) is without prejudice to the right of the
Defaulting Party to give a new notice to the Non-defaulting Party under clause (i) with respect to the earlier Event of Default.
(v) If
the Defaulting Party has given a notice under clause (i) above in respect of an Event of Default under Section 5(a)(vii),
then clause (iv) will not apply.”
Section 14
of the Agreement is amended to add in the appropriate alphabetical position a new definition of “Condition End Date”,
reading in its entirety as follows:
““Condition
End Date” means, with respect to an Event of Default, the day falling 90 days after a notice given by the Defaulting
Party under Section 2(e)(i) or Section 2(e)(ii) is effective if the Event of Default is still continuing on that day.”
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 Agreement.
The Bank of Nova Scotia |
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Each entity specified on
Appendix A attached hereto, severally and not jointly |
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By: United States Commodity Funds LLC,
its General Partner |
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APPENDIX
A
Party
B |
Jurisdiction
|
Payee Tax Representation
Elections |
Constitutional
Document |
United
States Oil Fund, LP |
United
States |
(i),
(ii), (iii) |
Means
the Limited Partnership Agreement of Party B, dated as of December 15, 2017, as amended restated or otherwise modified. |
UnITED
STATES NATURAL GAS FUND, LP |
United
States |
(i),
(ii), (iii) |
Means
the Limited Partnership Agreement of Party B, dated as of as of December 15, 2017 as amended restated or otherwise modified. |
Party B Payee tax representations:
| (i) | Party
B represents that it is a “U.S. person” (as that term is used in Section
1.1441-4(a)(3)(ii) of United States Treasury Regulations) for United States federal income
tax purposes. |
| (ii) | Party
B represents that it is resident for tax purposes in the United States. |
(Bilateral Form) |
(ISDA Agreements Subject
to New York Law Only) |
International
Swaps and Derivatives Association, Inc.
2016
CREDIT SUPPORT ANNEX FOR
VARIATION MARGIN (VM)
dated
as of
to the
Schedule to the
ISDA
Master Agreement
dated
as of August 5, 2024
|
between |
|
|
|
|
THE
BANK OF NOVA SCOTIA |
And |
Each
Party B specified on Appendix A to this Agreement, severally and not jointly
(each a “Party B”) |
This
Annex supplements, forms part of, and is subject to, the above-referenced Agreement, is part of its Schedule and is a Credit Support
Document under this Agreement with respect to each party.
Accordingly,
the parties agree as follows:—
| Paragraph | 1.
Interpretation |
(a) Definitions
and Inconsistency. Capitalized terms not otherwise defined herein or elsewhere in this Agreement have the meanings specified
pursuant to Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs of this Annex. In the event of any
inconsistency between this Annex and the other provisions of this Schedule, this Annex will prevail, and in the event of any inconsistency
between Paragraph 13 and the other provisions of this Annex, Paragraph 13 will prevail.
(b) Secured
Party and Pledgor. All references in this Annex to the “Secured Party” will be to either party when acting in
that capacity and all corresponding references to the “Pledgor” will be to the other party when acting in that capacity;
provided, however, that if Other Posted Support (VM) is held by a party to this Annex, all references herein to
that party as the Secured Party with respect to that Other Posted Support (VM) will be to that party as the beneficiary thereof
and will not subject that support or that party as the beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
(c) Scope of this Annex and the Other CSA. The only Transactions which will be relevant for the purposes of determining
“Exposure” under this Annex will be the Covered Transactions specified in Paragraph 13. Each Other CSA, if any, is hereby
amended such that the Transactions that will be relevant for purposes of determining “Exposure” thereunder, if any,
will exclude the Covered Transactions. Except as provided in Paragraphs 8(a), 8(b) and 11(j), nothing in this Annex will affect
the rights and obligations, if any, of either party with respect to “independent amounts” or initial margin under each
Other CSA, if any, with respect to Transactions that are Covered Transactions.
Copyright
© 2016 by International Swaps and Derivatives Association, Inc.
| Paragraph | 2.
Security Interest |
Each
party, as the Pledgor, hereby pledges to the other party, as the Secured Party, as security for its Obligations, and grants to
the Secured Party a first priority continuing security interest in, lien on and right of Set-off against all Posted Collateral
(VM) Transferred to or received by the Secured Party hereunder. Upon the Transfer by the Secured Party to the Pledgor of Posted
Collateral (VM), the security interest and lien granted hereunder on that Posted Collateral (VM) will be released immediately
and, to the extent possible, without any further action by either party.
| Paragraph | 3.
Credit Support Obligations |
(a)
Delivery Amount (VM). Subject to Paragraphs 4 and 5, upon a demand made by the Secured Party on or promptly
following a Valuation Date, if the Delivery Amount (VM) for that Valuation Date equals or exceeds the Pledgor’s Minimum Transfer
Amount, then the Pledgor will Transfer to the Secured Party Eligible Credit Support (VM) having a Value as of the date of Transfer
at least equal to the applicable Delivery Amount (VM) (rounded pursuant to Paragraph 13). Unless otherwise specified in Paragraph
13, the “Delivery Amount (VM)” applicable to the Pledgor for any Valuation Date will equal the amount
by which:
(i) the
Secured Party’s Exposure
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit Support (VM) held by the Secured Party.
(b) Return
Amount (VM). Subject to Paragraphs 4 and 5, upon a demand made by the Pledgor on or promptly following a Valuation Date,
if the Return Amount (VM) for that Valuation Date equals or exceeds the Secured Party’s Minimum Transfer Amount, then the Secured
Party will Transfer to the Pledgor Posted Credit Support (VM) specified by the Pledgor in that demand having a Value as of the
date of Transfer as close as practicable to the applicable Return Amount (VM) (rounded pursuant to Paragraph 13). Unless otherwise
specified in Paragraph 13, the “Return Amount” applicable to the Secured Party for any Valuation Date
will equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit Support (VM) held by the Secured Party
exceeds
(ii) the Secured Party’s Exposure.
| Paragraph | 4.
Conditions Precedent, Transfer Timing, Calculations and Substitutions |
(a) Conditions
Precedent. Unless otherwise specified in Paragraph 13, each Transfer obligation of the Pledgor under Paragraphs 3, 5 and
6(d) and of the Secured Party under Paragraphs 3, 4(d)(ii), 5, 6(d) and 11(h) is subject to the conditions precedent that:
(i) no
Event of Default, Potential Event of Default or Specified Condition has occurred and is continuing with respect to the other party;
and
(ii) no
Early Termination Date for which any unsatisfied payment obligations exist has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the other party.
(b) Transfer
Timing. Subject to Paragraphs 4(a) and 5 and unless otherwise specified in Paragraph 13, if a demand for the Transfer
of Eligible Credit Support (VM) or Posted Credit Support (VM) is made by the Notification Time, then the relevant Transfer will
be made not later than the close of business on the Regular Settlement Day; if a demand is made after the Notification Time, then
the relevant Transfer will be made not later than the close of business on the next Local Business Day following the Regular Settlement
Day.
(c) Calculations.
All calculations of Value and Exposure for purposes of Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time; provided that the Valuation Agent may use, in the case of any calculation of (i) Value, Values most recently reasonably
available for close of business in the relevant market for the relevant Eligible Credit Support (VM) as of the Valuation Time
and (ii) Exposure, relevant information or data most recently reasonably available for close of business in the relevant market(s)
as of the Valuation Time. The Valuation Agent will notify each party (or the other party, if the Valuation Agent is a party) of
its calculations not later than the Notification Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
(d) Substitutions.
(i) Unless otherwise specified in Paragraph 13, upon notice to the Secured Party specifying the items of Posted Credit Support
(VM) to be exchanged, the Pledgor may, on any Local Business Day, Transfer to the Secured Party substitute Eligible Credit Support
(VM) (the “Substitute Credit Support (VM)”); and
(ii) subject
to Paragraph 4(a), the Secured Party will Transfer to the Pledgor the items of Posted Credit Support (VM) specified by the Pledgor
in its notice not later than the Local Business Day following the date on which the Secured Party receives the Substitute Credit
Support (VM), unless otherwise specified in Paragraph 13 (the “Substitution Date”); provided that
the Secured Party will only be obligated to Transfer Posted Credit Support (VM) with a Value as of the date of Transfer of that
Posted Credit Support (VM) equal to the Value as of that date of the Substitute Credit Support (VM).
| Paragraph | 5.
Dispute Resolution |
If a
party (a “Disputing Party”) disputes (I) the Valuation Agent’s calculation of a Delivery Amount (VM) or
a Return Amount (VM) or (II) the Value of any Transfer of Eligible Credit Support (VM) or Posted Credit Support (VM), then:
(i) the Disputing Party will notify the other party and the Valuation Agent (if the Valuation Agent is not the other party)
not later than the close of business on (X) the date that the Transfer is due in respect of such Delivery Amount (VM) or Return
Amount (VM) in the case of (I) above, or (Y) the Local Business Day following the date of Transfer in the case of (II) above,
(ii) subject
to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to the other party not later than the close of business
on (X) the date that the Transfer is due in respect of such Delivery Amount (VM) or Return Amount (VM) in the case of (I) above,
or (Y) the Local Business Day following the date of Transfer in the case of (II) above,
(iii) the parties will consult with each other in an attempt to resolve the dispute, and
(iv) if they fail to resolve the dispute by the Resolution Time, then:
(A) In the case of a dispute involving a Delivery Amount (VM) or Return Amount (VM), unless otherwise specified in Paragraph
13, the Valuation Agent will recalculate the Exposure and the Value as of the Recalculation Date by:
(1) utilizing
any calculations of Exposure for the Covered Transactions that the parties have agreed are not in dispute;
(2) (I) if this Agreement is a 1992 ISDA Master Agreement, calculating the Exposure for the Covered Transactions in dispute
by seeking four actual quotations at mid-market from Reference Market-makers for purposes of calculating Market Quotation, and
taking the arithmetic average of those obtained, or (II) if this Agreement is an ISDA 2002 Master Agreement or a 1992 ISDA Master
Agreement in which the definition of Loss and/or Market Quotation has been amended (including where such amendment has occurred
pursuant to the terms of a separate agreement or protocol) to reflect the definition of Close-out Amount from the pre-printed
form of the ISDA 2002 Master Agreement as published by ISDA, calculating the Exposure for the Covered Transactions in dispute
by seeking four actual quotations at mid-market from third parties for purposes of calculating the relevant Close-out Amount,
and taking the arithmetic average of those obtained; provided that, in either case, if four quotations are not available
for a particular Covered Transaction, then fewer than four quotations may be used for that Covered Transaction, and if no quotations
are available for a particular Covered Transaction, then the Valuation Agent’s original calculations will be used for that Covered
Transaction; and
(3) utilizing
the procedures specified in Paragraph 13 for calculating the Value, if disputed, of Posted Credit Support (VM).
(B) In
the case of a dispute involving the Value of any Transfer of Eligible Credit Support (VM) or Posted Credit Support (VM), the Valuation
Agent will recalculate the Value as of the date of Transfer pursuant to Paragraph 13.
Following
a recalculation pursuant to this Paragraph, the Valuation Agent will notify each party (or the other party, if the Valuation Agent
is a party) not later than the Notification Time on the Local Business Day following the Resolution Time. The appropriate party
will, upon demand following that notice by the Valuation Agent or a resolution pursuant to (iii) above and subject to Paragraphs
4(a) and 4(b), make the appropriate Transfer.
| Paragraph | 6.
Holding and Using Posted Collateral (VM) |
(a) Care
of Posted Collateral (VM). Without limiting the Secured Party’s rights under Paragraph 6(c), the Secured Party will exercise
reasonable care to assure the safe custody of all Posted Collateral (VM) to the extent required by applicable law, and in any
event the Secured Party will be deemed to have exercised reasonable care if it exercises at least the same degree of care as it
would exercise with respect to its own property. Except as specified in the preceding sentence, the Secured Party will have no
duty with respect to Posted Collateral (VM), including, without limitation, any duty to collect any Distributions, or enforce
or preserve any rights pertaining thereto.
(b) Eligibility to Hold Posted Collateral (VM); Custodians (VM).
(i) General.
Subject to the satisfaction of any conditions specified in Paragraph 13 for holding Posted Collateral (VM), the Secured Party
will be entitled to hold Posted Collateral (VM) or to appoint an agent (a “Custodian (VM)”) to hold Posted
Collateral (VM) for the Secured Party. Upon notice by the Secured Party to the Pledgor of the appointment of a Custodian (VM),
the Pledgor’s obligations to make any Transfer will be discharged by making the Transfer to that Custodian (VM). The holding of
Posted Collateral (VM) by a Custodian (VM) will be deemed to be the holding of that Posted Collateral (VM) by the Secured Party
for which the Custodian (VM) is acting.
(ii) Failure
to Satisfy Conditions. If the Secured Party or its Custodian (VM) fails to satisfy any conditions for holding Posted Collateral
(VM), then upon a demand made by the Pledgor, the Secured Party will, not later than five Local Business Days after the demand,
Transfer or cause its Custodian (VM) to Transfer all Posted Collateral (VM) held by it to a Custodian (VM) that satisfies those
conditions or to the Secured Party if it satisfies those conditions.
(iii) Liability. The Secured Party will be liable for the acts or omissions of its Custodian (VM) to the same extent
that the Secured Party would be liable hereunder for its own acts or omissions.
(c) Use of Posted Collateral (VM). Unless otherwise specified in Paragraph 13 and without limiting the rights
and obligations of the parties under Paragraphs 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a Defaulting Party or
an Affected Party with respect to a Specified Condition and no Early Termination Date has occurred or been designated as the result
of an Event of Default or Specified Condition with respect to the Secured Party, then the Secured Party will, notwithstanding
Section 9-207 of the New York Uniform Commercial Code, have the right to:
(i) sell,
pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose of, or otherwise use in its business any Posted Collateral
(VM) it holds, free from any claim or right of any nature whatsoever of the Pledgor, including any equity or right of redemption
by the Pledgor; and
(ii) register any Posted Collateral (VM) in the name of the Secured Party, its Custodian (VM) or a nominee for either.
For purposes
of the obligation to Transfer Eligible Credit Support (VM) or Posted Credit Support (VM) pursuant to Paragraphs 3 and 5 and any
rights or remedies authorized under this Agreement, the Secured Party will be deemed to continue to hold all Posted Collateral
(VM) and to receive Distributions made thereon, regardless of whether the Secured Party has exercised any rights with respect
to any Posted Collateral (VM) pursuant to (i) or (ii) above.
(d) Distributions,
Interest Amount (VM) and Interest Payment (VM).
(i) Distributions.
Subject to Paragraph 4(a), if the Secured Party receives or is deemed to receive Distributions on a Local Business Day, it will
Transfer to the Pledgor not later than the following Local Business Day any Distributions it receives or is deemed to receive
to the extent that a Delivery Amount (VM) would not be created or increased by that Transfer, as calculated by the Valuation Agent
(and the date of calculation will be deemed to be a Valuation Date for this purpose).
(ii) Interest Amount (VM) and Interest Payment (VM). Unless otherwise specified in Paragraph 13 and subject to
Paragraph 4(a), in lieu of any interest, dividends or other amounts paid or deemed to have been paid with respect to Posted Collateral
(VM) in the form of Cash (all of which may be retained by the Secured Party),
(A) if
“Interest Transfer” is specified as applicable in Paragraph 13, the Interest Payer (VM) will Transfer to the Interest
Payee (VM), at the times specified in Paragraph 13, the relevant Interest Payment (VM); provided that if “Interest
Payment Netting” is specified as applicable in Paragraph 13:
(1) if
the Interest Payer (VM) is entitled to demand a Delivery Amount (VM) or Return Amount (VM), in respect of the date such Interest
Payment (VM) is required to be Transferred:
(a) such
Delivery Amount (VM) or Return Amount (VM) will be reduced (but not below zero) by such Interest Payment (VM); provided that,
in case of such Return Amount (VM), if the amount of Posted Collateral (VM) which is comprised of Cash in the Base Currency is
less than such Interest Payment (VM), such reduction will only be to the extent of the amount of such Cash which is Posted Collateral
(VM) (the “Eligible Return Amount (VM)”); and
(b) the
Interest Payer (VM) will Transfer to the Interest Payee (VM) the amount of the excess, if any, of such Interest Payment (VM) over
such Delivery Amount (VM) or Eligible Return Amount (VM), as applicable; and
(2) if
under Paragraph 6(d)(ii)(A)(I)(a) a Delivery Amount (VM) is reduced (the amount of such reduction, the “Delivery Amount
Reduction (VM)”) or a Return Amount (VM) is reduced (the amount of such reduction, the “Return Amount
Reduction (VM)”), then for purposes of determining Posted Collateral (VM), the Secured Party (a) will be deemed to
have received an amount in Cash in the Base Currency equal to any Delivery Amount Reduction (VM), and such amount will constitute
Posted Collateral (VM) in such Cash and will be subject to the security interest granted under Paragraph 2 or (b) will be deemed
to have Transferred an amount in Cash in the Base Currency equal to any Return Amount Reduction (VM), as applicable, in each case
on the day on which the relevant Interest Payment (VM) was due to be Transferred, as applicable; and
(B) if “Interest Adjustment” is specified as applicable in Paragraph 13, the Posted Collateral (VM) will be adjusted
by the Secured Party, at the times specified in Paragraph 13, as follows:
(1) if the Interest Amount (VM) for an Interest Period is a positive number, the Interest Amount (VM) will constitute Posted
Collateral (VM) in the form of Cash in the Base Currency and will be subject to the security interest granted under Paragraph
2; and
(2) if
the Interest Amount (VM) for an Interest Period is a negative number and any Posted Collateral (VM) is in the form of Cash in
the Base Currency, the Interest Amount (VM) will constitute a reduction of Posted Collateral (VM) in the form of such Cash in
an amount (such amount, the “Interest Adjustment Reduction Amount (VM)”) equal to the absolute value of
the Interest Amount (VM); provided that if the amount of Posted Collateral (VM) which is comprised of such Cash is less
than the Interest Adjustment Reduction Amount (VM), such reduction will only be to the extent of the amount of such Cash which
is Posted Collateral (VM) and the Pledgor will be obligated to Transfer the remainder of the Interest Adjustment Reduction Amount
(VM) to the Secured Party on the day that such reduction occurred.
| Paragraph | 7.
Events of Default |
For purposes
of Section 5(a)(iii)(1) of this Agreement, an Event of Default will exist with respect to a party if:
(i) that
party fails (or fails to cause its Custodian (VM)) to make, when due, any Transfer of Eligible Collateral (VM), Posted Collateral
(VM) or the Interest Payment (VM), as applicable, required to be made by it and that failure continues for two Local Business
Days after notice of that failure is given to that party;
(ii) that party fails to comply with any restriction or prohibition specified in this Annex with respect to any of the rights
specified in Paragraph 6(c) and that failure continues for five Local Business Days after notice of that failure is given to that
party; or
(iii) that
party fails to comply with or perform any agreement or obligation other than those specified in Paragraphs 7(i) and 7(ii) and
that failure continues for 30 days after notice of that failure is given to that party.
| Paragraph | 8.
Certain Rights and Remedies |
(a) Secured
Party’s Rights and Remedies. If at any time (1) an Event of Default or Specified Condition with respect to the Pledgor
has occurred and is continuing or (2) an Early Termination Date has occurred or been designated as the result of an Event of Default
or Specified Condition with respect to the Pledgor, then, unless the Pledgor has paid in full all of its Obligations that are
then due, the Secured Party may exercise one or more of the following rights and remedies:
(i) all
rights and remedies available to a secured party under applicable law with respect to Posted Collateral (VM) held by the Secured
Party;
(ii) any
other rights and remedies available to the Secured Party under the terms of Other Posted Support (VM), if any;
(iii) the
right to Set-off (A) any amounts payable by the Pledgor with respect to any Obligations and (B) any Cash amounts and the Cash
equivalent of any non-Cash items posted to the Pledgor by the Secured Party as margin under any Other CSA (other than any Other
CSA Excluded Credit Support) the return of which is due to the Secured Party against any Posted Collateral (VM) or the Cash equivalent
of any Posted Collateral (VM) held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral
(VM)); and
(iv) the
right to liquidate any Posted Collateral (VM) held by the Secured Party through one or more public or private sales or other dispositions
with such notice, if any, as may be required under applicable law, free from any claim or right of any nature whatsoever of the
Pledgor, including any equity or right of redemption by the Pledgor (with the Secured Party having the right to purchase any or
all of the Posted Collateral (VM) to be sold) and to apply the proceeds (or the Cash equivalent thereof) from the liquidation
of the Posted Collateral (VM) to (A) any amounts payable by the Pledgor with respect to any Obligations and (B) any Cash amounts
and the Cash equivalent of any non-Cash items posted to the Pledgor by the Secured Party as margin under any Other CSA (other
than any Other CSA Excluded Credit Support) the return of which is due to the Secured Party in that order as the Secured Party
may elect.
Each
party acknowledges and agrees that Posted Collateral (VM) in the form of securities may decline speedily in value and is of a
type customarily sold on a recognized market, and, accordingly, the Pledgor is not entitled to prior notice of any sale of that
Posted Collateral (VM) by the Secured Party, except any notice that is required under applicable law and cannot be waived.
(b) Pledgor’s Rights and Remedies. If at any time an Early Termination Date has occurred or been designated as
the result of an Event of Default or Specified Condition with respect to the Secured Party, then (except in the case of an Early
Termination Date relating to fewer than all Transactions where the Secured Party has paid in full all of its obligations that
are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available to a pledgor under applicable law with respect to Posted Collateral
(VM) held by the Secured Party;
(ii) the Pledgor may exercise any other rights and remedies available to the Pledgor under the terms of Other Posted Support
(VM), if any;
(iii) the Secured Party will be obligated immediately to Transfer all Posted Collateral (VM) and, if the Secured Party is an
Interest Payer (VM), the Interest Payment (VM) to the Pledgor; and
(iv) to
the extent that Posted Collateral (VM) or the Interest Payment (VM) is not so Transferred pursuant to (iii) above, the Pledgor
may:
(A) Set-off
any amounts payable by the Pledgor with respect to any Obligations against any Posted Collateral (VM) or the Cash equivalent of
any Posted Collateral (VM) held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted Collateral
(VM));
(B) Set-off,
net, or apply credit support received under any Other CSA or the proceeds thereof against any Posted Collateral (VM) or the Cash
equivalent of any Posted Collateral (VM) held by the Secured Party (or any obligation of the Secured Party to Transfer that Posted
Collateral (VM)); and
(C) to the extent that the Pledgor does not Set-off under (iv)(A) or (iv)(B) above, withhold payment of any remaining amounts
payable by the Pledgor with respect to any Obligations, up to the Value of any remaining Posted Collateral (VM) held by the Secured
Party, until that Posted Collateral (VM) is Transferred to the Pledgor.
(c) Deficiencies
and Excess Proceeds. The Secured Party will Transfer to the Pledgor any proceeds and Posted Credit Support (VM) remaining
after liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in full of all amounts payable
by the Pledgor with respect to any Obligations; and the Pledgor in all events will remain liable for any amounts remaining unpaid
after any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) Final
Returns. When no amounts are or thereafter may become payable by the Pledgor with respect to any Obligations (except for
any potential liability under Section 2(d) of this Agreement, any obligation to Transfer any Interest Payment (VM) under this
Paragraph 8(d) or any obligation to transfer any interest payment under any Other CSA), (i) the Secured Party will Transfer to
the Pledgor all Posted Credit Support (VM), and (ii) the Interest Payer (VM) will Transfer to the Interest Payee (VM) any Interest
Payment (VM).
| Paragraph | 9.
Representations |
Each
party represents to the other party (which representations will be deemed to be repeated as of each date on which it, as the Pledgor,
Transfers Eligible Collateral (VM)) that:
(i) it
has the power to grant a security interest in and lien on any Eligible Collateral (VM) it Transfers as the Pledgor and has taken
all necessary actions to authorize the granting of that security interest and lien;
(ii) it
is the sole owner of or otherwise has the right to Transfer all Eligible Collateral (VM) it Transfers to the Secured Party hereunder,
free and clear of any security interest, lien, encumbrance or other restrictions other than the security interest and lien granted
under Paragraph 2;
(iii) upon
the Transfer of any Eligible Collateral (VM) to the Secured Party under the terms of this Annex, the Secured Party will have a
valid and perfected first priority security interest therein (assuming that any central clearing corporation or any third-party
financial intermediary or other entity not within the control of the Pledgor involved in the Transfer of that Eligible Collateral
(VM) gives the notices and takes the action required of it under applicable law for perfection of that interest); and
(iv) the performance by it of its obligations under this Annex will not result in the creation of any security interest, lien
or other encumbrance on any Posted Collateral (VM) other than the security interest and lien granted under Paragraph 2.
(a) General.
Except as otherwise provided in Paragraphs 10(b) and 10(c), each party will pay its own costs and expenses in connection with
performing its obligations under this Annex and neither party will be liable for any costs and expenses incurred by the other
party in connection herewith.
(b) Posted
Credit Support (VM). The Pledgor will promptly pay when due all taxes, assessments or charges of any nature that are imposed
with respect to Posted Credit Support (VM) held by the Secured Party upon becoming aware of the same, regardless of whether any
portion of that Posted Credit Support (VM) is subsequently disposed of under Paragraph 6(c), except for those taxes, assessments
and charges that result from the exercise of the Secured Party’s rights under Paragraph 6(c).
(c) Liquidation/Application
of Posted Credit Support (VM). All reasonable costs and expenses incurred by or on behalf of the Secured Party or the
Pledgor in connection with the liquidation and/or application of any Posted Credit Support (VM) under Paragraph 8 will be payable,
on demand and pursuant to the Expenses Section of this Agreement, by the Defaulting Party or, if there is no Defaulting Party,
equally by the parties.
| Paragraph | 11.
Miscellaneous |
(a) Default
Interest. A Secured Party that fails to make, when due, any Transfer of Posted Collateral (VM) will be obligated to pay
the Pledgor (to the extent permitted under applicable law) an amount equal to interest at the Default Rate multiplied by the Value
of the items of property that were required to be Transferred, from (and including) the date that Posted Collateral (VM) was required
to be Transferred to (but excluding) the date of Transfer of that Posted Collateral (VM). This interest will be calculated on
the basis of daily compounding and the actual number of days elapsed. An Interest Payer (VM) that fails to make, when due, any
Transfer of an Interest Payment (VM) will be obligated to pay the Interest Payee (VM) (to the extent permitted under applicable
law) an amount equal to interest at the Default Rate (and for such purposes, if the Default Rate is less than zero, it will be
deemed to be zero) multiplied by that Interest Payment (VM), from (and including) the date that Interest Payment (VM) was required
to be Transferred to (but excluding) the date of Transfer of that Interest Payment (VM). This interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(b) Further
Assurances. Promptly following a demand made by a party, the other party will execute, deliver, file and record any financing
statement, specific assignment or other document and take any other action that may be necessary or desirable and reasonably requested
by that party to create, preserve, perfect or validate any security interest or lien granted under Paragraph 2, to enable that
party to exercise or enforce its rights under this Annex with respect to Posted Credit Support (VM) or an Interest Payment (VM)
or to effect or document a release of a security interest on Posted Collateral (VM) or an Interest Payment (VM).
(c) Further Protection. The Pledgor will promptly give notice to the Secured Party of, and defend against, any
suit, action, proceeding or lien that involves Posted Credit Support (VM) Transferred by the Pledgor or that could adversely affect
the security interest and lien granted by it under Paragraph 2, unless that suit, action, proceeding or lien results from the
exercise of the Secured Party’s rights under Paragraph 6(c).
(d) Good
Faith and Commercially Reasonable Manner. Performance of all obligations under this Annex, including, but not limited
to, all calculations, valuations and determinations made by either party, will be made in good faith and in a commercially reasonable
manner.
(e) Demands
and Notices. All demands and notices made by a party under this Annex will be made as specified in the Notices Section
of this Agreement, except as otherwise provided in Paragraph 13.
(f) Specifications of Certain Matters. Anything referred to in this Annex as being specified in Paragraph 13
also may be specified in one or more Confirmations or other documents and this Annex will be construed accordingly.
(g) Legally Ineligible Credit Support (VM). Unless otherwise specified in Paragraph 13, upon delivery of a Legal
Ineligibility Notice by a party, each item of Eligible Credit Support (VM) (or a specified amount of such item) identified in
such notice (i) will cease to be Eligible Credit Support (VM) for purposes of Transfers to such party as the Secured Party hereunder
as of the applicable Transfer Ineligibility Date, (ii) will cease to be Eligible Credit Support (VM) for the other party as the
Pledgor for all purposes hereunder as of the Total Ineligibility Date and (iii) will have a Value of zero on and from the Total
Ineligibility Date.
“Legal
Ineligibility Notice” means a written notice from the Secured Party to the Pledgor in which the Secured Party (i)
represents that the Secured Party has determined that one or more items of Eligible Credit Support (VM) (or a specified amount
of any such item) either has ceased to satisfy, or as of a specified date will cease to satisfy, collateral eligibility requirements
under law applicable to the Secured Party requiring the collection of variation margin (the “Legal Eligibility Requirements”),
(ii) lists the item(s) of Eligible Credit Support (VM) (and, if applicable, the specified amount) that have ceased to satisfy,
or as of a specified date will cease to satisfy, the Legal Eligibility Requirements, (iii) describes the reason(s) why such item(s)
of Eligible Credit Support (VM) (or the specified amount thereof) have ceased to satisfy, or will cease to satisfy, the Legal
Eligibility Requirements and (iv) specifies the Total Ineligibility Date and, if different, the Transfer Ineligibility Date.
“Total
Ineligibility Date” means the date on which the relevant item of Eligible Credit Support (VM) (or a specified amount
of such item) has ceased to satisfy, or will cease to satisfy, the Legal Eligibility Requirements applicable to the Secured Party
for all purposes hereunder; provided that, unless otherwise specified in Paragraph 13, if such date is earlier than the fifth
Local Business Day following the date on which the Legal Ineligibility Notice is delivered, the Total Ineligibility Date will
be the fifth Local Business Day following the date of such delivery.
“Transfer
Ineligibility Date” means the date on which the relevant item of Eligible Credit Support (VM) (or a specified amount
of such item) has ceased to satisfy, or will cease to satisfy, the Legal Eligibility Requirements for purposes of Transfers to
the Secured Party hereunder; provided that, unless otherwise specified in Paragraph 13, if such date is earlier than the fifth
Local Business Day following the date on which the Legal Ineligibility Notice is delivered, the Transfer Ineligibility Date will
be the fifth Local Business Day following the date of such delivery.
(h) Return of Posted Credit Support (VM) with a Value of Zero. Subject to Paragraph 4(a), the Secured Party will,
promptly upon demand (but in no event later than the time at which a Transfer would be due under Paragraph 4(b) with respect to
a demand for the Transfer of Eligible Credit Support (VM) or Posted Credit Support (VM)), Transfer to the Pledgor any item of
Posted Credit Support (VM) (or the specified amount of such item) that as of the date of such demand has a Value of zero; provided
that the Secured Party will only be obligated to Transfer any Posted Credit Support (VM) in accordance with this Paragraph
11(h), if, as of the date of Transfer of such item, the Pledgor has satisfied all of its Transfer obligations under this Annex,
if any.
(i) Reinstatement
of Credit Support Eligibility. Upon a reasonable request by the Pledgor, the Secured Party will determine whether an item
(or a specified amount of such item) of Eligible Credit Support (VM) that was the subject of a prior Legal Ineligibility Notice
would currently satisfy the Legal Eligibility Requirements applicable to the Secured Party. If the Secured Party determines that
as of such date of determination such item (or specified amount of such item) satisfies the Legal Eligibility Requirements applicable
to the Secured Party, the Secured Party will promptly following such determination rescind the relevant Legal Ineligibility Notice
with respect to such item (or specified amount of such item) by written notice to the Pledgor. Upon the delivery of such notice,
the relevant item (or specified amount of such item) will constitute Eligible Credit Support (VM) hereunder.
(j) Credit
Support Offsets. If the parties specify that “Credit Support Offsets” is applicable in Paragraph 13, and on
any date:
(i) a
Transfer of Eligible Credit Support (VM) is due under this Annex to satisfy a Delivery Amount (VM) or a Return Amount (VM) obligation,
and a transfer of credit support (other than any Other CSA Excluded Credit Support) is also due under any Other CSA;
(ii) the
parties have notified each other of the credit support that they intend to Transfer under this Annex and transfer under such Other
CSA (other than any Other CSA Excluded Credit Support) to satisfy their respective obligations; and
(iii) in
respect of Paragraph 11(j)(ii), each party intends to transfer one or more types of credit support that is fully fungible with
one or more types of credit support the other party intends to transfer (each such credit support, a “Fungible Credit
Support Type”),
then,
on such date and in respect of each such Fungible Credit Support Type, each party’s obligation to make a transfer of any such
Fungible Credit Support Type hereunder or under such Other CSA will be automatically satisfied and discharged and, if the aggregate
amount that would have otherwise been transferred by one party exceeds the aggregate amount that would have otherwise been transferred
by the other party, replaced by an obligation hereunder or under such Other CSA, as applicable, upon the party by which the larger
aggregate amount would have been transferred to transfer to the other party the excess of the larger aggregate amount over the
smaller aggregate amount. If a party’s obligation to make a transfer of credit support under this Annex or an Other CSA is automatically
satisfied and discharged pursuant to this Paragraph 11(j), then, for purposes of this Annex or the Other CSA, as applicable, the
other party will be deemed to have received credit support of the applicable Fungible Credit Support Type in the amount that would
otherwise have been required to be transferred, in each case on the day on which the relevant transfer was due.
| Paragraph | 12.
Definitions |
As used
in this Annex:—
“Base
Currency” means the currency specified as such in Paragraph 13.
“Base
Currency Equivalent” means, with respect to an amount on a Valuation Date, in the case of an amount denominated in
the Base Currency, such Base Currency amount and, in the case of an amount denominated in a currency other than the Base Currency
(the “Other Currency”), the amount of Base Currency required to purchase such amount of the Other Currency
at the spot exchange rate on such Valuation Date as determined by the Valuation Agent.
“Cash”
means, respectively, the Base Currency and each other Eligible Currency.
“Covered
Transaction” has the meaning specified in Paragraph 13.
“Credit
Support Eligibility Condition (VM)” means, with respect to any item specified for a party as Eligible Collateral
(VM) in Paragraph 13, any condition specified for that item in Paragraph 13.
“Custodian
(VM)” has the meaning specified in Paragraphs 6(b)(i) and Paragraph 13.
“Delivery
Amount (VM)” has the meaning specified in Paragraph 13.
“Delivery
Amount Reduction (VM)” has the meaning specified in Paragraph 6(d)(ii)(A)(II).
“Disputing
Party” has the meaning specified in Paragraph 5.
“Distributions”
means with respect to Posted Collateral (VM) other than Cash, all principal, interest and other payments and distributions of
cash or other property with respect thereto, regardless of whether the Secured Party has disposed of that Posted Collateral (VM)
under Paragraph 6(c). Distributions will not include any item of property acquired by the Secured Party upon any disposition or
liquidation of Posted Collateral (VM) or, with respect to any Posted Collateral (VM) in the form of Cash, any distributions on
that collateral, unless otherwise specified herein.
“Eligible
Collateral (VM)” has the meaning specified in Paragraph 13.
“Eligible
Credit Support (VM)” means Eligible Collateral (VM) and Other Eligible Support (VM).
“Eligible
Currency” means each currency specified as such in Paragraph 13, if such currency is freely available.
“Eligible
Return Amount (VM)” has the meaning specified in Paragraph 6(d)(ii)(A)(I)(a).
“Exposure”
means, unless otherwise specified in Paragraph 13, for any Valuation Date or other date for which Exposure is calculated and subject
to Paragraph 5 in the case of a dispute:
(i) if this Agreement is a 1992 ISDA Master Agreement, the amount, if any, that would be payable to a party that is the Secured
Party by the other party (expressed as a positive number) or by a party that is the Secured Party to the other party (expressed
as a negative number) pursuant to Section 6(e)(ii)(2)(A) of this Agreement as if all Covered Transactions were being terminated
as of the relevant Valuation Time on the basis that the Base Currency is the Termination Currency; provided that Market
Quotation will be determined by the Valuation Agent on behalf of that party using its estimates at mid-market of the amounts that
would be paid for Replacement Transactions (as that term is defined in the definition of “Market Quotation”); and
(ii) if this Agreement is an ISDA 2002 Master Agreement or a 1992 ISDA Master Agreement in which the definition of Loss and/or
Market Quotation has been amended (including where such amendment has occurred pursuant to the terms of a separate agreement or
protocol) to reflect the definition of Close-out Amount from the pre-printed form of the ISDA 2002 Master Agreement as published
by ISDA, the amount, if any, that would be payable to a party that is the Secured Party by the other party (expressed as a positive
number) or by a party that is the Secured Party to the other party (expressed as a negative number) pursuant to Section 6(e)(ii)(1)
(but without reference to clause (3) of Section 6(e)(ii)) of this Agreement as if all Covered Transactions were being terminated
as of the relevant Valuation Time on the basis that the Base Currency is the Termination Currency; provided that the Close-out
Amount will be determined by the Valuation Agent on behalf of that party using its estimates at mid-market of the amounts that
would be paid for transactions providing the economic equivalent of (X) the material terms of the Covered Transactions, including
the payments and deliveries by the parties under Section 2(a)(i) in respect of the Covered 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 (Y) the option rights of the parties in respect of the Covered Transactions.
“Fungible
Credit Support Type” has the meaning specified in Paragraph 11(j)(iii).
“FX
Haircut Percentage” means, for any item of Eligible Collateral (VM), the percentage specified as such in Paragraph
13.
“Interest
Adjustment Reduction Amount (VM)” has the meaning specified in Paragraph 6(d)(ii)(B)(II).
“Interest
Amount (VM)” means, with respect to an Interest Period, the aggregate sum of the Base Currency Equivalents of the
amounts of interest determined for each relevant currency and calculated for each day in that Interest Period on any Posted Collateral
(VM) in the form of Cash in such currency held by the Secured Party on that day, determined by the Secured Party for each such
day as follows:
(i) the
amount of Cash in such currency on that day plus, only if “Daily Interest Compounding” is specified as applicable in
Paragraph 13, the aggregate of each Interest Amount (VM) in respect of such currency determined for each preceding day, if any,
in that Interest Period; multiplied by
(ii) the
Interest Rate (VM) in effect for that day; divided by
(iii) 360
(or, in the case of pounds sterling or any other currency specified as an “A/365 Currency” in Paragraph 13, 365);
provided
that, unless “Negative Interest” is specified as applicable in Paragraph 13, if the Interest Amount (VM) for an
Interest Period would be a negative amount, it will be deemed to be zero.
“Interest
Payee (VM)” means, in relation to an Interest Payer (VM), the other party.
“Interest
Payer (VM)” means the Secured Party; provided that if “Negative Interest” is specified as applicable
in Paragraph 13 and an Interest Payment (VM) is determined in respect of a negative Interest Amount (VM), the Interest Payer (VM)
in respect of such Interest Payment (VM) will be the Pledgor.
“Interest
Payment (VM)” means, with respect to an Interest Period, the Interest Amount (VM) determined in respect of such Interest
Period; provided that in respect of any negative Interest Amount (VM), the Interest Payment (VM) will be the absolute value
of such negative Interest Amount (VM).
“Interest
Period” means the period from (and including) the last day on which (i) a party became obligated to Transfer an Interest
Payment (VM) or (ii) an Interest Amount (VM) was included or otherwise became constituted as part of Posted Collateral (VM) (or,
if no Interest Payment (VM) or Interest Amount (VM) has yet fallen due or been included or otherwise became constituted as a part
of Posted Collateral (VM), respectively, the day on which Eligible Credit Support (VM) in the form of Cash was Transferred to
or received by the Secured Party) to (but excluding) the day on which (i) a party is obligated to Transfer the current Interest
Payment (VM) or (ii) the current Interest Amount (VM) is included or otherwise becomes constituted as a part of Posted Collateral
(VM).
“Interest
Rate (VM)” means, with respect to an Eligible Currency, the rate specified in Paragraph 13 for that currency.
“Legal
Eligibility Requirements” has the meaning specified in Paragraph 11(g).
“Legal
Ineligibility Notice” has the meaning specified in Paragraph 11(g).
“Local
Business Day”, unless otherwise specified in Paragraph 13, means:
(i) in
relation to a Transfer of cash or other property (other than securities) under this Annex, a day on which commercial banks are
open for business (including dealings in foreign exchange and foreign currency deposits) in the place where the relevant account
is located and, if different, in the principal financial center, if any, of the currency of such payment;
(ii) in
relation to a Transfer of securities under this Annex, a day on which the clearance system agreed between the parties for delivery
of the securities is open for the acceptance and execution of settlement instructions or, if delivery of the securities is contemplated
by other means, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency
deposits) in the place(s) agreed between the parties for this purpose;
(iii) in
relation to the Resolution Time, a day on which commercial banks are open for business (including dealings in foreign exchange
and foreign currency deposits) in at least one Valuation Date Location for Party A and at least one Valuation Date Location for
Party B; and
(iv) in
relation to any notice or other communication under this Annex, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) in the place specified in the address for notice most recently provided
by the recipient.
“Minimum
Transfer Amount” means, with respect to a party, the amount specified as such for that party in Paragraph 13; if
no amount is specified, zero.
“Notification
Time” has the meaning specified in Paragraph 13.
“Obligations”
means, with respect to a party, all present and future obligations of that party under this Agreement and any additional obligations
specified for that party in Paragraph 13.
“Other
CSA” means, unless otherwise specified in Paragraph 13, any other credit support annex or credit support deed that
is in relation to, or that is a Credit Support Document in relation to, this Agreement.
“Other
CSA Excluded Credit Support” means, with respect to an Other CSA, any amounts and items posted as margin under such
Other CSA, which, pursuant to the terms of such Other CSA, Party A and Party B have agreed must be segregated in an account maintained
by a third-party custodian or for which offsets are prohibited.
“Other
Eligible Support (VM)” means, with respect to a party, the items, if any, specified as such for that party in Paragraph
13.
“Other
Posted Support (VM)” means all Other Eligible Support (VM) Transferred to the Secured Party that remains in effect
for the benefit of that Secured Party.
“Pledgor”
means either party, when that party (i) receives a demand for or is required to Transfer Eligible Credit Support (VM) under Paragraph
3(a) or (ii) has Transferred Eligible Credit Support (VM) under Paragraph 3(a).
“Posted
Collateral (VM)” means all Eligible Collateral (VM), other property, Distributions, and all proceeds thereof that
have been Transferred to or received by the Secured Party under this Annex and not Transferred to the Pledgor pursuant to Paragraph
3(b), 4(d)(ii), 6(d)(i) or 11(h) or released by the Secured Party under Paragraph 8. With respect to any Interest Amount (VM)
in respect of any Interest Payment (VM) or relevant part thereof not Transferred pursuant to Paragraph 6(d)(ii)(A) or Paragraph
6(d)(ii)(B), as applicable, if such Interest Amount (VM) is a positive number, such Interest Amount (VM) will constitute Posted
Collateral (VM) in the form of Cash in the Base Currency.
“Posted
Credit Support (VM)” means Posted Collateral (VM) and Other Posted Support (VM).
“Recalculation
Date” means the Valuation Date that gives rise to the dispute under Paragraph 5; provided, however,
that if a subsequent Valuation Date occurs under Paragraph 3 prior to the resolution of the dispute, then the “Recalculation
Date” means the most recent Valuation Date under Paragraph 3.
“Regular
Settlement Day,” means, unless otherwise specified in Paragraph 13, the same Local Business Day on which a demand
for the Transfer of Eligible Credit Support (VM) or Posted Credit Support (VM) is made.
“Resolution
Time” has the meaning specified in Paragraph 13.
“Return
Amount (VM)” has the meaning specified in Paragraph 3(b).
“Return
Amount Reduction (VM)” has the meaning specified in Paragraph 6(d)(ii)(A)(II).
“Secured
Party” means either party, when that party (i) makes a demand for or is entitled to receive Eligible Credit Support
(VM) under Paragraph 3(a) or (ii) holds or is deemed to hold Posted Credit Support (VM).
“Set-off”
means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement (whether
arising under this Agreement, another contract, applicable law or otherwise) and, when used as a verb, the exercise of any such
right or the imposition of any such requirement.
“Specified
Condition” means, with respect to a party, any event specified as such for that party in Paragraph 13.
“Substitute
Credit Support (VM)” has the meaning specified in Paragraph 4(d)(i).
“Substitution
Date” has the meaning specified in Paragraph 4(d)(ii).
“Total
Ineligibility Date” has the meaning specified in Paragraph 11(g) unless otherwise specified in Paragraph 13.
“Transfer”
means, with respect to any Eligible Credit Support (VM), Posted Credit Support (VM) or Interest Payment (VM), and in accordance
with the instructions of the Secured Party, Pledgor or Custodian (VM), as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into one or more bank accounts specified by the recipient;
(ii) in
the case of certificated securities that cannot be paid or delivered by book-entry, payment or delivery in appropriate physical
form to the recipient or its account accompanied by any duly executed instruments of transfer, assignments in blank, transfer
tax stamps and any other documents necessary to constitute a legally valid transfer to the recipient;
(iii) in
the case of securities that can be paid or delivered by book-entry, causing the relevant depository institution(s) or other securities
intermediaries to make changes to their books and records sufficient to result in a legally effective transfer of the relevant
interest to the recipient or its agent; and
(iv) in the case of Other Eligible Support (VM) or Other Posted Support (VM), as specified in Paragraph 13.
“Transfer
Ineligibility Date” has the meaning specified in Paragraph 11(g) unless otherwise specified in Paragraph 13.
“Valuation
Agent” has the meaning specified in Paragraph 13.
“Valuation
Date” means, unless otherwise specified in Paragraph 13, each day from, and including, the date of this Annex, that
is a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits)
in at least one Valuation Date Location for Party A and at least one Valuation Date Location for Party B.
“Valuation
Date Location” has the meaning specified in Paragraph 13.
“Valuation
Percentage” means, for any item of Eligible Collateral (VM), the percentage specified as such in Paragraph 13.
“Valuation
Time” means, unless otherwise specified in Paragraph 13, the time as of which the Valuation Agent computes its end
of day valuations of derivatives transactions in the ordinary course of its business (or such other commercially reasonable convenient
time on the relevant day as the Valuation Agent may determine).
“Value”
means for any Valuation Date or other date for which Value is calculated and subject to Paragraph 5 in the case of a dispute,
with respect to:
(i) Eligible Collateral (VM) or Posted Collateral (VM) that is:
(A) an
amount of Cash, the Base Currency Equivalent of such amount multiplied by (VP – HFX); and
(B) a
security, the Base Currency Equivalent of the bid price obtained by the Valuation Agent multiplied by (VP – HFX), where:
VP
equals the applicable Valuation Percentage; and
HFX
equals the applicable FX Haircut Percentage;
(ii) Posted
Collateral (VM) that consists of items that are not Eligible Collateral (VM) (including any item or any portion of any item that
fails to satisfy any (A) Credit Support Eligibility Condition (VM) applicable to it or (B) applicable Legal Eligibility Requirements),
zero; and
(iii) Other Eligible Support (VM) and Other Posted Support (VM), as specified in Paragraph 13.
Paragraph
13. Elections and Variables
(a) Base
Currency and Eligible Currency.
(i) “Base
Currency” means United States Dollars.
(ii) “Eligible
Currency” means the Base Currency.
(b) Covered
Transactions; Security Interest for Obligations; Exposure.
(i) The
term “Covered Transactions” as used in this Annex include any Transaction entered into on or after 1 March
2017, except as otherwise provided in the Confirmation of such Transaction.
(A)
For the purposes of the foregoing, the term “Covered Transaction” includes: Any Transaction that is not an
Excluded FX Spot Transaction.
As
used above:
“Excluded
FX Spot Transactions“ means “FX Transactions” as defined in the ISDA 1998 FX and Currency
Option Definitions (the “FX Definitions”) with a Settlement Date (as defined in the FX Definitions) which
is on or before the second Local Business Day following the day on which the parties entered into such FX Transaction or within
the customary settlement timeline of the relevant spot market for such currencies and which is not subject to a requirement to
collect or post variation margin under any law applicable to either of the parties as of the date for which the determination
is made.
(ii) The
term “Obligations” as used in this Annex includes the following additional obligations:
With
respect to Party A: None specified
With
respect to Party B: None specified
(iii) “Exposure”
has the meaning specified in Paragraph 12.
(c) Credit
Support Obligations.
| (i) | Optional
Addition of Independent Amounts. The following amendments and additional terms
for inclusion of Independent Amounts will apply: |
(A) Notwithstanding
Paragraph 3(a), the “Delivery Amount (VM)” applicable to the Pledgor for any Valuation Date will equal the amount by
which:
(1) the
Credit Support Amount (VM/IA)
exceeds
(2) the
Value as of that Valuation Date of all Posted Credit Support (VM) held by the Secured Party.
(B) Notwithstanding
Paragraph 3(b), the “Return Amount (VM)” applicable to the Secured Party for any Valuation Date will equal the amount
by which:
(1) the
Value as of that Valuation Date of all Posted Credit Support (VM) held by the Secured Party
exceeds
(2) the
Credit Support Amount (VM/IA).
(C) “Credit
Support Amount (VM/IA)” means for any Valuation Date (i) the Secured Party’s Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any, minus (ii) all Independent Amounts applicable
to the Secured Party, if any; provided, however, that the Credit Support Amount (VM/IA) will be deemed to be zero whenever the
calculation of the Credit Support Amount (VM/IA) yields a number less than zero.
(D) “Independent
Amount” means:
with
respect to Party A: zero
with
respect to Party B: the amount specified in any Confirmation with respect to any Transaction under this Agreement.
(ii) Eligible
Collateral (VM). Subject to Paragraph 11(g), if applicable, and each Credit Support Eligibility Condition (VM) applicable
to it specified in Paragraph 13, if any, the following items will qualify as “Eligible Collateral (VM)” for the
party specified (as the Pledgor):
|
Party
A |
Party
B |
Valuation
Percentage |
(A) cash
in an Eligible Currency |
x |
x |
100% |
(B) US-TBILLs,
US-TNOTES, and US-TBONDs with a remaining maturity of one year or less |
x |
x |
99.5% |
(C) US-TBILLs,
US-TNOTES, and US-TBONDs with a remaining maturity of more than one year but less than or equal to five years |
x |
x |
98% |
(D) US-TBILLs,
US-TNOTES, and US-TBONDs with a remaining maturity of more than five years but less than or equal to thirty-two years |
x |
x |
96% |
| (iii) | Legally
Ineligible Credit Support (VM). The provisions of Paragraph 11(g) will apply. |
(A) “Total
Ineligibility Date” has the meaning specified in Paragraph 11(g).
(B) “Transfer
Ineligibility Date” has the meaning specified in Paragraph 11(g).
(C) Credit
Support Eligibility Conditions (VM). The following conditions will each be a “Credit Support Eligibility Condition
(VM)” for the party specified. Any item will not qualify as Eligible Collateral (VM) for a party (as the Pledgor) if such
item does not satisfy each Credit Support Eligibility Condition (VM) applicable to it.
None
specified
(iv) “Valuation
Percentage”; “FX Haircut Percentage”
(A) “Valuation Percentage” means, with respect to each party (as the Pledgor) and item of Eligible Collateral (VM), the percentage specified in Paragraph 13(c)(ii), provided that if at any time the Valuation Percentage assigned to an item of Eligible Credit Support (VM) under this Annex is greater than the maximum permitted valuation percentage (prescribed or implied) for such item of collateral under all laws requiring the collection or posting of variation margin applicable to any Covered Transaction and either party on the date for which the determination is made, then the Valuation Percentage with respect to such item of Eligible Credit Support (VM) and such party will be such maximum permitted valuation percentage.
(B) “FX
Haircut Percentage” means, with respect to each party (as the Pledgor) and item of Eligible Collateral (VM), 8%,
unless the Eligible Collateral (VM) or Posted Collateral (VM) is in the form of cash in a Major Currency or is denominated in
a currency that matches an Eligible Currency, in which case the FX Haircut Percentage will be 0%.
“Major
Currency” means any of: (1) United States Dollar; (2) Canadian Dollar; (3) Euro; (4) United Kingdom Pound; (5) Japanese
Yen; (6) Swiss Franc; (7) New Zealand Dollar; (8) Australian Dollar; (9) Swedish Kronor; (10) Danish Kroner; or (11) Norwegian
Krone.
| (v) | Other
Eligible Support (VM). The following items will qualify as “Other
Eligible Support (VM)” for the party specified (as the Pledgor): |
Not
applicable.
(vi) Minimum
Transfer Amount.
(A) “Minimum
Transfer Amount” means with respect to Party A: USD250,000 provided that if an Event of Default or Potential
Event of Default has occurred and is continuing with respect to Party A, Party A’s Minimum Transfer Amount shall be zero.
“Minimum
Transfer Amount” means with respect to Party B: USD250,000 provided that if an Event of Default or Potential
Event of Default has occurred and is continuing with respect to Party B, Party B’s Minimum Transfer Amount shall be zero.
(B) Rounding.
The Delivery Amount (VM) and the Return Amount (VM) will be rounded up and down respectively to the nearest integral multiple
of 10,000 units of the Base Currency.
(vii) Transfer
Timing. “Regular Settlement Day” has the meaning specified in Paragraph 12.
(d) Valuation
and Timing.
(i) “Valuation
Agent” means, for purposes of Paragraphs 3 and 5, the party making the demand under Paragraph 3, and, for purposes
of Paragraph 6(d), the Secured Party, as applicable, unless there has occurred and is continuing any Event of Default, Potential
Event of Default or an Early Termination Date with respect to a party as the Defaulting Party or Affected Party, in which case
the other party shall be the Valuation Agent.
(ii) “Valuation
Date” has the meaning specified in Paragraph 12.
For
purposes of determining the Valuation Date and clause (iii) of the definition of “Local Business Day” in Paragraph 12,
“Valuation Date Location” means, with respect to each party, each city, region, or country specified below:
Party A:
Toronto, Ontario
Party B:
Walnut Creek, CA
(iii) “Valuation
Time” has the meaning specified in Paragraph 12.
(iv) “Notification
Time” means 10:00 a.m. New York time on a Local Business Day.
(e) Conditions
Precedent and Secured Party’s Rights and Remedies.
(i) The
provisions of Paragraph 4(a) will apply.
(ii) If
the provisions of Paragraph 4(a) are applicable, the following Termination Event(s) will be a “Specified Condition”
for the party specified (that party being the Affected Party if the Termination Event occurs with respect to that party):
|
Party
A |
Party
B |
Illegality |
x |
x |
Force
Majeure Event |
o |
o |
Tax
Event |
o |
o |
Tax
Event Upon Merger |
o |
o |
Credit
Event Upon Merger |
x |
x |
Additional
Termination Event(s): |
x |
x |
(f) Substitution.
(i) “Substitution
Date” has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent.
The Pledgor must obtain the Secured Party’s consent for any substitution pursuant to Paragraph 4(d).
(g) Dispute
Resolution.
(i) “Resolution
Time” means 1:00pm New York time, on the Local Business Day following the date on which the notice is given that
gives rise to a dispute under Paragraph 5.
(ii) Value.
For the purpose of Paragraphs 5(iv)(A)(3) and 5(iv)(B), the Value of Posted Credit Support (VM) will be calculated as
follows:
(A) With
respect to cash in any Eligible Currency, the Value will be calculated by the Valuation Agent as provided in the definition of “Value”
in Paragraph 12.
(B) with
respect to USTs, the arithmetic mean of the bid prices for the relevant UST obtained by the Valuation Agent from Reference Dealers
selected by it in accordance with the second sentence of Section 4.14 of the 2006 ISDA Definitions as published by the International
Swaps and Derivatives Association, Inc. multiplied by (VP – HFX). For these purposes, “Reference Dealers” means
three leading dealers in the principal market for the relevant kind of security.
(iii) Alternative.
The provisions of Paragraph 5 will apply.
(h) Holding
and Using Posted Collateral (VM).
(i) Eligibility
to Hold Posted Collateral (VM); Custodians (VM).
Party
A, when acting as Secured Party, shall hold Posted Collateral (VM) only through a third-party unaffiliated custodian (the “Third
Party Custodian”) selected by Party B who shall be a (i) “bank” (as defined in the Federal Deposit Insurance
Act) domiciled in the United States of America with a long-term debt rating of at least “A” by S&P, “A2”
by Moody’s or A+ by Fitch, and with assets of at least $1,000,000,000 (“Custodian Ratings Test”),
or (ii) Federal Reserve Bank. The Third Party Custodian shall hold Posted Collateral (VM) in a manner and pursuant to an agreement
reasonably satisfactory to Party A and Party B (an “Account Control Agreement”). Delivery by Party B
of Eligible Credit Support (VM) to such Third Party Custodian and crediting to the Account pursuant to the terms of the Account
Control Agreement and this Annex will be deemed to be delivery of Eligible Credit Support (VM) to Party A for purposes of this
Annex. For the avoidance of doubt, the Third Party Custodian is not Party A’s Custodian (VM) for any purposes under the
Annex and Paragraph 6(b)(iii) shall not apply with respect to the Third Party Custodian.
Party
B, when acting as Secured Party, and its Custodian (VM) will be entitled to hold Posted Collateral (VM) pursuant to Paragraph
6(b); provided that the following conditions applicable to it are satisfied:
(1) Party
B: Party B is not a Defaulting Party.
(2) Its
Custodian (VM): The long term unsubordinated unsecured debt of the Custodian (VM) is rated at least ‘A’ by Standard & Poor’s
Rating Group or at least ‘A2’ by Moody’s Investor Service, Inc (“Custodian Ratings Test”).
Posted
Collateral (VM) may be held only in the following jurisdictions: New York, Massachusetts and any State that has adopted a revised
Article 8 Investment Securities of the Uniform Commercial Code, adopted by the American Law Institute and the National Conference
of Commissioners on Uniform State Laws.
Initially,
the Third Party Custodian through which Party A shall hold Posted Collateral (VM) is: The Bank of New York Mellon.
Initially,
the Custodian (VM) through which Party B shall hold Posted Collateral (VM) is: Not applicable.
If
at any time a Third Party Custodian or a Custodian (VM), as applicable, fails to satisfy the Custodian Ratings Test or fails to
perform its duties or carry out its obligations under the relevant Account Control Agreement, then each Party agrees that not
later than ten (10) Local Business Days after demand, each shall agree to cause such Third Party Custodian or Custodian (VM),
as applicable, to Transfer all Posted Collateral (VM) held by it to an account at a substitute custodian which shall be one of
the three largest custodians in the United States as determined by assets under management (which shall not include Affiliates
of either party), unless otherwise agreed by the parties. The parties will enter into, and will cause such substitute custodian
to enter into, an agreement substantially similar to the Account Control Agreement in respect of such account. Each Party will
execute such documentation as it reasonably determines to be necessary to facilitate such Transfer. If such Transfer is not made
within such time period set forth above, then each Party agrees that all Posted Collateral (VM) will be held by the Secured Party
until such time as a substitute custodial arrangement is established.
(ii) Use
of Posted Collateral (VM). The provisions of Paragraph 6(c) will not apply to either party.
(iii) Care
of Posted Collateral (VM). The provisions of Paragraph 6(a) will not apply to Party A.
(i) Distributions
and Interest Payment (VM).
(i) Interest
Rate (VM). The “Interest Rate (VM)” in relation to each Eligible Currency specified below will
be:
Eligible
Currency |
|
Interest
Rate (VM) |
|
A/365
Currency |
USD |
|
With
respect to Posted Collateral (VM) posted by Party A: Fed Funds
With
respect to Posted Collateral (VM) posted by Party B: None |
|
No |
For
purposes of the foregoing:
“Fed
Funds” means the Federal Funds (Effective) rate published in N.Y. Federal Reserve Statistical Release H.15(519) for
that day, or such other recognized source used for the purpose of displaying such rate.
(ii) Transfer
of Interest Payment (VM) or application of Interest Amount (VM).
Interest
Transfer: Applicable. The Transfer of an Interest Payment (VM) by the Interest Payer (VM) will be made on or before the fifth
Local Business Day following the end of each calendar month.
Interest
Payment Netting: Not Applicable
Interest
Adjustment: Not Applicable
(iii) Other
Interest Elections.
Negative
Interest: Applicable
Daily
Interest Compounding: Not Applicable
| (iv) | Alternative
to Interest Amount (VM) and Interest Payment (VM). The provisions of Paragraph 6(d)(ii)
will apply. |
| (v) | Distributions
and Interest Amount. Notwithstanding anything to the contrary in the Annex (including
without limitation, Paragraph 13(i) of the Annex) and subject to the terms of the Account
Control Agreement, (a) Party A as Secured Party shall have no obligation to Transfer
or pay any Distributions to Party B, and (b) where Party A is the Secured Party, neither
party shall have any obligation to Transfer or pay an Interest Amount (VM) with respect
to Posted Collateral (VM) in the form of Cash held in the Account by the Third Party
Custodian. |
(j) Credit
Support Offsets.
Not
Applicable
(k) Additional
Representation(s).
Not
Applicable.
(l) Other
Eligible Support (VM) and Other Posted Support (VM).
(i) “Value”
with respect to Other Eligible Support (VM) and Other Posted Support (VM) shall have the definition given to “Value”
in Paragraph 12.
(ii) “Transfer”
with respect to Other Eligible Support (VM) and Other Posted Support (VM) shall have the definition given to “Transfer”
in Paragraph 12.
(m) Demands
and Notices.
All
demands, specifications and notices under this Annex will be made pursuant to the Notices Section of this Agreement, unless otherwise
specified here:
Shall
be given to or made at the following addresses:
If
to Party A:
Address: |
The Bank of Nova Scotia |
|
GWO – Collateral Management |
|
150 King St. West, 4th Floor, Toronto,
Ontario M5H 4B6 |
|
|
Attention: |
Manager – Global Wholesale Operations |
|
Tel.: 416-866-4587 |
|
Fax: 416-933-2291 |
|
Email: collateral@scotiabank.com |
If
to Party B: as specified in Part 4 of the Schedule to the Master Agreement, or at such other address as the relevant party may
from time to time designate by giving notice (in accordance with the terms of this paragraph) to the other party.
(n) Addresses
for Transfers.
Party A:
To be notified from time to time.
Party B:
To be notified from time to time.
(o) “Other
CSA” has the meaning specified in Paragraph 12.
| (p) | Collateral
Agreement Interest Rate Definitions: This Agreement is subject to and incorporates,
the ISDA Collateral Agreement Interest Rate Definitions as amended from time to time
and Interest Rate Override: All Rates is applicable. |
(q) Other
Provisions.
| (1) | Paragraph
1(c). Paragraph 1(c) is amended by deleting the words “and 11(j)”
and replacing such words with “, 11(j) and 13”. |
| (2) | Security Interest. In
addition to the pledge set out in Paragraph 2 of the Annex, Party B, hereby pledges to Party A, as security for its Obligations,
and grants to Party A, a first priority security interest in, lien on and right of Set-off against all of its interests in the
Account, including but not limited to any securities, monies, securities entitlements, financial assets, investment property or
any other property held in or credited to the Account, together with the proceeds, income, distributions, investments and reinvestments
thereof. |
| (3) | Return
Amount (VM) – Party A. For the purposes of Paragraph 3(b) of the Annex,
Party A shall be deemed to have complied with its obligation to Transfer Posted Credit
Support (VM) to Party B provided that it has instructed the Third Party Custodian to
Transfer such Posted Credit Support (VM). For the avoidance of doubt, Party A shall bear
no liability for the failure of the Third Party Custodian to comply with such instructions
and no such failure shall constitute an Event of Default with respect to Party A. |
| (4) | Secured
Party’s Rights and Remedies. The following shall be added to Paragraph
8(a) as subparagraph (v) thereto: |
“(v)
Party A as Secured Party shall be entitled to provide a Notice of Exclusive Control as defined in and pursuant to the Control
Agreement, require the Third Party Custodian to Transfer to it the Posted Credit Support (VM) in its custody at such time and
exercise any other right provided for under the Control Agreement.”
| (5) | Amendment to Paragraph
6. With respect to Party A as the Secured Party, Paragraph 6(a) shall not apply to any Posted Collateral (VM) held
at the Third Party Custodian and the last sentence in Paragraph 6(c) shall be deleted in its entirety. |
| (6) | The
term “Account” shall have the meaning given to it in the Account
Control Agreement. |
EXECUTED
BY the parties on the respective dates specified below.
The
Bank of Nova Scotia
|
|
Each entity specified on
Appendix A attached to the Schedule to this Agreement, severally and not jointly |
|
|
|
|
|
By: United States Commodity
Funds LLC, its General Partner |
|
|
|
By: |
|
|
By: |
|
Name: |
|
Name: |
Title: |
|
Title: |
Date: |
|
Date: |
v3.24.2.u1
Cover
|
Aug. 05, 2024 |
Cover [Abstract] |
|
Document Type |
8-K
|
Amendment Flag |
false
|
Document Period End Date |
Aug. 05, 2024
|
Entity File Number |
001-33096
|
Entity Registrant Name |
UNITED
STATES NATURAL GAS FUND, LP
|
Entity Central Index Key |
0001376227
|
Entity Tax Identification Number |
20-5576760
|
Entity Incorporation, State or Country Code |
DE
|
Entity Address, Address Line One |
1850 Mt. Diablo Boulevard
|
Entity Address, Address Line Two |
Suite 640
|
Entity Address, City or Town |
Walnut Creek
|
Entity Address, State or Province |
CA
|
Entity Address, Postal Zip Code |
94596
|
City Area Code |
(510)
|
Local Phone Number |
522-9600
|
Written Communications |
false
|
Soliciting Material |
false
|
Pre-commencement Tender Offer |
false
|
Pre-commencement Issuer Tender Offer |
false
|
Title of 12(b) Security |
Shares of United States
Natural Gas Fund, LP
|
Trading Symbol |
UNG
|
Security Exchange Name |
NYSEArca
|
Entity Emerging Growth Company |
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