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(Multicurrency--Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of October 26, 2000
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<S> <C> <C>
Morgan Guaranty Trust Company THE BANK OF NEW YORK, acting as trustee for the
of New York and CAPITAL ONE MASTER TRUST
("Party A") ("Party B")
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have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. Interpretation
(a) Definitions. The terms defined in Section 14 and in the Schedule 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 (including the Schedule), 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.
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(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 applicable condition precedent specified in this Agreement.
(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 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. 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 whom 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
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). 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, on or after the
date on which 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)).
(e) Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. Representations
Each party represents 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) that:--
(a) Basic Representations.
(i) Status. It is duly organized and validly existing under the laws of the
jurisdiction of its organization 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
authorize 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
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(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, reorganization, 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 or any of its Affiliates 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 aspect.
(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.
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 subparagraph (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 Authorizations. 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.
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(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, organized, managed and
controlled, or considered to have its seat, or in which a branch or 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 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 2(e)
required to be made by it if such failure is not remedied on or before the
third Local Business Day after notice of such failure is given to the
party;
(ii) Breach of Agreement. 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 2(e) 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 on or
before the thirtieth day after notice of such failure is given to the
party;
(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 to be in full
force and effect for the purpose of this Agreement (in either 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;
(iv) Misrepresentation. A representation (other than a representation under
Section 3(e) or (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;
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(v) Default under Specified Transaction. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party (1)
defaults under a Specified Transaction and, after giving effect to any
applicable notice requirement or grace period, there occurs 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 or delivery due
on the last payment, delivery or exchange date of, or any payment on early
termination of, a Specified Transaction (or such default continues for at
least three Local Business Days if there is no applicable notice
requirement or grace period) or (3) disaffirms, disclaims, repudiates or
rejects, in whole or in part, a Specified Transaction (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) in an aggregate amount of 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 on the due date thereof in an
aggregate amount of not less than the applicable Threshold Amount under
such agreements or instruments (after giving effect to any applicable
notice requirement or grace period);
(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) institutes
or 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, in the
case of any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) 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 (B) is not
dismissed, discharged, stayed or restrained in each case within 30
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 30 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) (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, another entity and, at
the time of such consolidation, amalgamation, merger or transfer:--
(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 by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to this
Agreement; or
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(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 an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) Illegality. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a result
of a breach by the party of Section 4(b)) for such party (which will be the
Affected Party):--
(1) to perform any absolute or contingent obligation to make a payment
or delivery or 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) to perform, or for any Credit Support Provider of such party to
perform, any contingent or other obligation which the party (or such
Credit Support Provider) has under any Credit Support Document
relating to such Transaction;
(ii) Tax Event. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on which
a Transaction is entered into (regardless of whether such action is taken
or brought with respect to a party to this Agreement) or (y) 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
Payment Date (1) 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 2(e), 6(d)(ii) or 6(e)) or (2) 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 2(e),
6(d)(ii) or 6(e)) 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));
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on the next
succeeding Scheduled Payment 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 2(e), 6(d)(ii) or
6(e)) or (2) receive a payment from which an amount has been deducted or
withheld for or on account of any Indemnifiable 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 to, another entity (which
will be the Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) Credit Event Upon Merger. If "Credit Event Upon Merger" is specified
in the Schedule as applying to the party, such party ("X"), any Credit
Support Provider of X or any applicable Specified Entity of X consolidates
or amalgamates with, or merges with or into, or transfers all or
substantially all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate, will
be the Affected Party); or
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(v) 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
shall be as specified for such Additional Termination Event in the Schedule
or such Confirmation).
(c) Event of Default and Illegality. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. Early Termination
(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 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
such other information about that Termination Event as the other party may
reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality under
Section 5(b)(i)(1) or 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,
excluding 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 an Illegality under Section 5(b)(i)(1) or 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
thereof is given under Section 6(b)(i) on action to avoid that Termination
Event.
(iv) Right to Terminate. If:--
(1) 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
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(2) an Illegality under Section 5(b)(i)(2), 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,
either party in the case of an Illegality, 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 is more than one Affected
Party, or the party which is not the Affected Party in the case of a Credit
Event Upon Merger or an Additional Termination Event if there is only one
Affected Party may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then continuing, designate
a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under Section
6(a) or (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 2(e) 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 shall be determined
pursuant to Section 6(e).
(d) Calculations.
(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 all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) 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 obtained in determining
a Market Quotation, the records of the party obtaining such quotation will
be conclusive evidence of the existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day that
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 on the day which is two Local Business Days after the day on
which notice of the amount payable is effective (in the case of an Early
Termination Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted under
applicable law) interest thereon (before as well as after judgment) in the
Termination Currency, from (and including) the relevant Early Termination
Date to (but excluding) the date such amount is paid, at the Applicable
Rate. Such interest will be calculated on the basis of daily compounding
and the actual number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
<PAGE>
(i) Events of Default. If the Early Termination Date results from an Event
of Default:--
(1) First Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting
Party the excess, if a positive number, of (A) the sum of the
Settlement Amount (determined by the Non-defaulting Party) in respect
of the Terminated Transactions and the Termination Currency Equivalent
of the Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply, the
Defaulting Party will pay to the Non-defaulting Party, if a positive
number, the Non-defaulting Party's Loss in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A) the sum
of the Settlement Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party
less (B) the Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party. If that 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 that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss apply, an
amount will be payable equal to the Non-defaulting Party's Loss in
respect of this Agreement. If that 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 that amount to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the amount
payable will be determined in accordance with Section 6(e)(i)(3), if
Market Quotation applies, or Section 6(e)(i)(4), if Loss applies,
except that, in either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be references to the
Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the Transactions
are being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine a
Settlement Amount in respect of the Terminated Transactions, and
an amount will be payable equal to (I) the sum of (a) one-half of
the difference between the Settlement Amount of the party with
the higher Settlement Amount ("X") and the Settlement Amount of
the party with the lower Settlement Amount ("Y") and (b) the
Termination Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the Transactions
are being terminated, in respect of all Terminated Transactions)
and an amount will be payable equal to one-half of the difference
between the Loss of the party with the higher Loss ("X") and the
Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.
<PAGE>
(iii) Adjustment for Bankruptcy. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will be
subject to such adjustments as are appropriate and permitted by 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) Pre-Estimate. The parties agree that if Market Quotation applies 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 such losses.
7. Transfer
Subject to Section 6(b)(ii), 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
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section 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 a reasonable manner and
in good faith 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 (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 purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith 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.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in
<PAGE>
connection with the purchase of or conversion into the Contractual Currency.
(c) Separate Indemnities. To the extent permitted by applicable law, these
indemnities 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 and supersedes
all oral communication and prior writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect of this
Agreement will be effective unless 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 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), 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 shall 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 or by an exchange of
electronic messages on an electronic messaging system, 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 or electronic message
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.
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 the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organization of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
<PAGE>
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
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 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 set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system 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 that transmission 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 that mail is delivered
or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of 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 shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system 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
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement is
expressed to be governed by English law, or 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, if
this Agreement is expressed to be governed by the laws of the State of New
York; and
<PAGE>
(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.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions 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. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) Waiver of Immunities. Each party irrevocably waives, to the fullest 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, order for specific performance or for
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 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, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event 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.
"Applicable Rate" means:--
(a) 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;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
<PAGE>
"Burdened Party" has the meaning specified in Section 5(b).
"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 on or after the date on which the
relevant Transaction is entered into.
"consent" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"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.
"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).
"Early Termination Date" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"Event of Default" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"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
"lawful" and "unlawful" will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if 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) in relation to
any other payment, 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, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city 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
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
<PAGE>
"Loss" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"Market Quotation" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such 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. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obligated to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"Non-default Rate" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting party (as certified by it) if
it were to fund the relevant amount.
"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.
"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.
"Reference Market-makers" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
<PAGE>
"Relevant Jurisdiction" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, 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.
"Scheduled Payment Date" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"Set-off" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"Settlement Amount" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"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 thereto) 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 a rate swap
transaction, 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 or any other similar transaction (including
any option with respect to any of these transactions), (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.
"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 a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
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" has the meaning specified in the Schedule.
<PAGE>
"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 Market Quotation or Loss (as the case may be), 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 Tax Event or 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.
"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)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(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)) 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 as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
<PAGE>
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.
Morgan guaranty Trust Company
Of New York CAPITAL ONE MASTER TRUST
----------------------------- -------------------------------------------
(Name of Party) (Name of Party)
By: The Bank of New York
----------------------------------------
solely in its capacity as trustee and not in
its individual capacity
By: /s/ Andrew D. Brown By: /s/ Scott J. Tepper
-------------------------- -----------------------------------
Name: Andrew D. Brown Name: Scott J. Tepper
Title: Vice President Title: Assistant Treasurer
Date: 10/26/00 Date: 10/26/00
<PAGE>
EXECUTION COPY
SCHEDULE
to the
Master Agreement
dated as of October 26, 2000
between
MORGAN GUARANTY TRUST COMPANY OF NEW YORK ("Party A"),
and
THE BANK OF NEW YORK (the "Trustee")
acting as trustee for
The CAPITAL ONE MASTER TRUST ("Party B"), a trust formed pursuant to a pooling
and servicing agreement dated as of September 30, 1993 (as amended and
supplemented from time to time, the "Pooling and Servicing Agreement"), as
supplemented by the Series 2000-4 Supplement dated as of October 26, 2000 each
between Capital One Bank, as Seller and Servicer, and the Trustee (the Pooling
and Servicing Agreement, as so supplemented, the "Trust Agreement").
Part 1. Termination Provisions.
In this Agreement:
(a) "Specified Entity" shall not apply for purposes of this Agreement.
(b) "Specified Transaction" will have the meaning specified in Section 14 of
this Agreement.
(c) The "Breach of Agreement" provisions of Section 5(a)(ii), the
"Misrepresentation" provisions of Section 5(a)(iv), the "Default under
Specified Transaction" provisions of Section 5(a)(v), the "Cross Default"
provisions of Section 5(a)(vi), the "Merger Without Assumption" provisions
of Section 5(a)(viii), the "Tax Event" provisions of Section 5(b)(ii), "Tax
Event Upon Merger" provisions of Section 5(b)(iii), and the "Credit Event
Upon Merger" provisions of Section 5(b)(iv) will not apply to Party A and
will not apply to Party B. Solely after giving effect to an amendment
pursuant to Section 10.08 of the Trust Agreement and solely with respect to
payments required to be made by Party A, "third" in the final line of
Section 5(a)(i) of this Agreement shall be replaced with "sixth".
(d) The "Automatic Early Termination" provisions of Section 6(a) will not apply
to Party A and will not apply to Party B.
<PAGE>
(e) Payments on Early Termination. For the purpose of Section 6(e) of this
Agreement, Market Quotation and the Second Method will apply; provided,
however, that in the case of an Event of Default with respect to Party A as
the Defaulting Party or a Termination Event with respect to Party A as the
sole Affected Party, the related Settlement Amount, if negative, will be
deemed to be zero if the Market Quotation cannot be determined.
(f) Market Quotation. Notwithstanding anything to the contrary in the
definition of Market Quotation in Section 14, in the case of an Event of
Default with respect to Party A as the Defaulting Party or a Termination
Event with respect to Party A as the sole Affected Party, the Market
Quotation, if negative, will be deemed to be the negative quotation, if
any, with the highest absolute value received from any Reference
Market-maker, even if only one quotation is provided, with which Party B is
able, using its best efforts, to enter into a Replacement Transaction even
if Party B reasonably believes such Market Quotation would not produce a
commercially reasonable result.
(g) "Reference Market-maker" will not have the meaning specified in Section 14,
but will instead mean the following:
"Reference Market-maker" means five leading dealers in the relevant
market selected by the party determining the Market Quotation in good
faith (a) from among dealers which are rated not lower than investment
grade by S&P and Moody's which satisfy the criteria that such party
applies generally at that time in deciding whether to offer or make an
extension of credit and (b) to the extent practicable, from among
dealers having an office in the same city.
(h) "Termination Currency" means United States Dollars ("USD").
Part 2. Tax Representations.
(a) Representations of Party A.
(1) Payer Tax Representation. For the purpose of Section 3(e) of this
Agreement, Party A hereby makes the following representation:
(i) 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
Sections 2(e), 6(d)(ii) and 6(e) of this Agreement) to be made by
it to Party B under this Agreement. In making this
representation, it may rely on:
(a) the accuracy of any representations made by Party B pursuant
to Section 3(f) of this Agreement;
<PAGE>
(b) the satisfaction of the agreement of Party B contained in
Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by Party
B pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement; and
(c) the satisfaction of the agreement of Party B contained in
Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation
where reliance is placed on clause (b) and Party B does not
deliver a form or document under Section 4(a)(iii) of this
Agreement by reason of material prejudice to its legal or
commercial position.
(ii) It (A) is entering into such Swap Transaction in the ordinary
course of its trade as, and is, either (x) a recognized U.K. bank
of (y) a recognized U.K. swaps dealer (in either case (x) or
(y)), for purposes of the United Kingdom Inland Revenue Extra
Statutory Concession on interest and currency swaps dated April
14, 1989), and (B) will bring into account payments made and
received in respect of such Swap Transaction in computing its
income for United Kingdom tax purposes.
(2) Payee Tax Representations. For the purpose of Section 3(f) of this
Agreement, Party A makes the representations specified below:
(i) It (A) is entering into such Swap Transaction in the ordinary
course of its trade as, and is, either (x) a recognized U.K. bank
or (y) a recognized U.K. swaps dealer (in either case (x) or
(y)), for purposes of the United Kingdom Inland Revenue Extra
Statutory Concession on interest and currency swaps dated April
14, 1989), and (B) will bring into account payments made and
received in respect of such Swap Transaction in computing its
income for United Kingdom tax purposes.
(ii) It (A) is a banking corporation or is organized under the laws of
the State of New York and (B) is a domestic corporation within
the meaning of Sections 7701(a)(3) and 7701(a)(4) of the United
States Internal Revenue Code.
(b) Representations of Party B.
(1) Payer Tax Representation. For the purpose of Section 3(e) of this
Agreement, Party B hereby makes 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
<PAGE>
than interest under Sections 2(e), 6(d)(ii) and 6(e) of this
Agreement) to be made by it to Party A under this Agreement. In making
this representation, it may rely on:
(i) the accuracy of any representation made by Party A pursuant to
Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement of Party A contained in Section
4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by Party A pursuant to
Section 4(a)(i) or 4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of Party A contained in
Section 4(d) of this Agreement,
provided that it shall not be a breach of this representation where
reliance is placed on clause (ii) and Party A does not deliver a form
or document under Section 4(a)(iii) of this Agreement by reason of
material prejudice to its legal or commercial position.
(2) Payee Tax Representations. For the purpose of Section 3(f) of this
Agreement, Party B makes the representation specified below:
(i) For United States federal income tax purposes it is a "United
States Person" as defined in ss. 7701(a)(30) of the Internal
Revenue Code.
Part 3. Agreement to Deliver Documents.
For the purpose of Sections 3(d), 4(a)(i) and (ii) of this Agreement,
each party agrees to deliver the following documents, as applicable:
(a) Tax forms, documents or certificates to be delivered are:
<PAGE>
<TABLE>
<CAPTION>
======================= ===================================== ====================== =====================
Party required to Covered by Section
deliver document Date by which 3(d) Representation
Form/Document/Certificate to be delivered
----------------------- ------------------------------------- ---------------------- ---------------------
<S> <C> <C> <C>
Party B Any form or document that may be Promptly upon Yes
reasonably requested, and that reasonable demand by
Party B is eligible to provide, in the other party.
order to allow the requesting party
to make a payment without (or with
reduced) withholding Tax.
----------------------- ------------------------------------- ---------------------- ---------------------
Party A An accurate and complete signed (i) Concurrently Yes
copy of Internal Revenue Service with the execution
Form W-9 (or any successor thereto) and delivery of this
and all other related forms Agreement and the
(including any certificate with Confirmation,
respect thereto) as Party B may (ii) prior to the
reasonably request. expiration of the
immediately
preceding form
that was in full
force and effect,
and (iii) at any
time that a change
in circumstances
renders the
preceding form
inaccurate or
incomplete in any
material respect.
======================= ===================================== ====================== =====================
</TABLE>
<PAGE>
(b) Other documents to be delivered are:
<TABLE>
<CAPTION>
======================== ======================= ====================== ================
Party required to Covered by
deliver document Form/Document/ Date by which to be Section 3(d)
Certificate delivered
------------------------ ----------------------- ---------------------- ----------------
<S> <C> <C> <C>
Party A Opinions of counsel Upon execution of Yes
for Party A this Agreement
substantially in the
form of Exhibit A to
this Schedule
------------------------ ----------------------- ---------------------- ----------------
Party A An incumbency Upon execution of Yes
certificate with this Agreement
respect to the
signatory of this
Agreement
------------------------ ----------------------- ---------------------- ----------------
Party B An opinion of counsel Upon execution of Yes
for Party B this Agreement
substantially in the
form of Exhibit B to
this Schedule
------------------------ ----------------------- ---------------------- ----------------
Party B An incumbency Upon execution of Yes
certificate with this Agreement
respect to the
signatory of this
Agreement
------------------------ ----------------------- ---------------------- ----------------
Party B Documentary evidence Upon execution of Yes
of authority of The this Agreement
Bank of New York, as
Trustee, to act on
behalf of Party B
======================== ======================= ====================== ================
</TABLE>
Part 4. Miscellaneous.
(a) Addresses for Notices. For the purpose of Section 12(a):
Address for all notices or communications to Party A (other than notices
under Sections 5 and 6):
<PAGE>
Address: Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attention: Global Swaps
Facsimile No.: (212) 648-5922
All notices or communications to Party A under Section 5 or 6 shall be
effective only if given in writing and delivered in person or by courier,
on the date it is delivered, which notice or communication shall have been
personally delivered to Party A's Head of Swaps Marketing, Head of Swaps
Trading or Head of U.S. Dollar Swaps Book in New York at the address set
forth below:
Address: Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Address for notices or communications to Party B:
Address: Capital One Master Trust
c/o The Bank of New York, as Trustee
101 Barclay Street - 12E
New York, New York 10286
Attention: Corporate Trust Department
Telephone No.: (212) 815-5738
Facsimile No.: (212) 815-5544
<PAGE>
with a copy to:
Capital One Master Trust
Capital One Bank, as Servicer
8000 Jones Branch Drive
Suite 200
McLean, Virginia 22102
Attention: Director of Securitization
Telephone No.: (703) 875-1305
Facsimile No.: (703) 875-1389
with a copy to:
Capital One Bank
8000 Jones Branch Drive
Suite 200
McLean, Virginia 22102
Attention: General Counsel
Telephone No.: (703) 875-1490
Facsimile No.: (703) 875-1589
For all purposes.
(b) Process Agent. For the purpose of Section 13(c):
Party A appoints as its Process Agent: Not applicable.
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(c) of this Agreement:
Party A is a Multibranch Party and may act through its London, New York and
Tokyo Offices.
Party B is not a Multibranch Party.
(e) Calculation Agent. The Calculation Agent is the Trustee, unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) Credit Support Document. Details of any Credit Support Document:
In the case of Party A: Not applicable.
<PAGE>
In the case of Party B: Not applicable.
(g) Credit Support Provider.
In relation to Party A: Not applicable
In relation to Party B: Not applicable
(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 but without prejudice to the provisions of Section
5-1401 of the General Obligations Law of the State of New York).
(i) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to any of the Transactions.
(j) "Affiliate" will have the meaning specified in Section 14 of this
Agreement, except that with respect to Party B there shall be deemed to be
no Affiliates.
(k) Amendments. Party B shall give S&P and Moody's notice of any amendment to
this Agreement as soon as practicable thereafter.
Part 5. Other Provisions.
(a) Confirmation. Each Confirmation supplements, forms part of, and will be
read and construed as one with, this Agreement. A form of Confirmation is
set forth as Exhibit C hereto.
(b) Waiver of Trial By Jury. 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. 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, in
the event of such a suit, action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have
been induced to enter this Agreement by, among other things, the mutual
waivers and certifications in this Section.
(c) Non-Petition. Party A hereby agrees that it will not bring any action
(whether in bankruptcy or otherwise) against Party B in any court prior to
the date which is one year and one day after all Investor Certificates (as
such term is defined in the Pooling and Servicing Agreement), including all
collateral interests and class C interests, of Party B have been paid in
full.
(d) Assignment. In the event the long-term senior unsecured debt rating of
Party A is lowered to below the category of BBB- by Standard & Poor's
Corporation ("S&P") or Baa3 by Moody's Investor Services ("Moody's") or
such rating agencies' then equivalent ratings, or
<PAGE>
such ratings are withdrawn by either S&P or Moody's, the Trustee shall
direct Party A to assign and delegate (which may require Party A to incur a
loss) its rights and obligations under any Transaction to a replacement
counterparty. Party B shall give S&P and Moody's notice of the replacement
counterparty as soon as practicable thereafter.
(e) Provision for Payments from Party B. Notwithstanding anything contained in
this Agreement to the contrary, any amount required to be paid by Party B
pursuant to this Agreement will be payable only to the extent provided in
subsection 4.05(a)(ii) of the Trust Agreement (as each such term is defined
in the Confirmation). Except as expressly provided in Part 5(j) below, the
Trustee shall not be required to expend or risk its own funds or otherwise
incur any liability in connection with this Agreement, and Party A shall
not bring any claim whatsoever against the Trustee in its individual
capacity or against the assets of the Trustee (other than the assets of the
Trust).
(f) Definition of Trustee. For purposes of this Agreement the term "Trustee"
shall mean The Bank of New York as trustee for Party B.
(g) Relationship Between Parties. Each party will be deemed to represent to the
other party on the date on which it enters into this Agreement that (absent
a written agreement between the parties that expressly imposes affirmative
obligations to the contrary):
(i) Non-Reliance. It is acting for its own account, and it has made its own
independent decisions to enter into this Agreement and as to whether this
Agreement 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 this Agreement; it
being understood that information and explanations related to the terms and
conditions of this Agreement shall not be considered investment advice or a
recommendation to enter into this Agreement. No communication (written or
oral) received from the other party shall be deemed to be an assurance or
guarantee as to the expected results of this Agreement.
(ii) Assessment and Understanding. It is capable of assessing the merits of
and understanding (on its own behalf or through independent professional
advice), and understands and accepts, the terms, conditions and risks of
this Agreement. It is also capable of assuming, and assumes, the risks of
this Agreement.
(iii) Status of Parties. The other party is not acting as a fiduciary for
or as adviser to it in respect of this Agreement.
(h) Additional Representations. Each of Party A and Party B represents that it
is an "eligible swap participant" as defined in Commodities Futures Trading
Commission Rule 35.1(b)(2) (17 C.F.R. 35(b)(2)).
<PAGE>
(i) Negative Interest Rates. Party A and Party B agree that:
if, with respect to a Calculation Period for a Transaction, a party ("X")
is obligated to pay a Floating Amount that is a negative number (either by
reason of a negative Floating Rate or the subtraction of a Spread from the
Floating Rate), the Floating Amount with respect to X for that Calculation
Period will be deemed to be zero, and the other party ("Y") will pay to X
the absolute value of the negative Floating Amount, in addition to any
amounts otherwise owed by Y to X, on the Payment Date such Floating Amount
would have been payable if it had been a positive number. Any amounts paid
by Y to X pursuant to this provision will be paid to such account as X may
designate (unless Y gives timely notice of a reasonable objection to such
designation) in the currency in which that Floating Amount would have been
paid if it had been a positive number (and without regard to the currency
in which Y is otherwise obligated to make payments).
(j) Limited Recourse. It is expressly understood and agreed by the parties
hereto that (i) this Agreement and each Transaction entered into pursuant
to this Agreement is entered into by The Bank of New York, not individually
or personally but solely as Trustee of the Capital One Master Trust (the
"Trust") in the exercise of the powers and authority conferred and vested
in it, (ii) the representations, undertakings and agreements herein made on
the part of the Trust are made and intended not as personal
representations, undertakings and agreements by the Trustee but are made
and intended for the purpose of binding only the Trust, (iii) nothing
herein contained shall be construed as creating any liability on the
Trustee on the part of the Trust, individually or personally, to perform
any covenant either expressed or implied herein, all such liability, if
any, being expressly waived by the parties who are signatories to this
Agreement and by any Persons claiming by, through or under such parties;
provided, however, that the Trustee shall be liable in its individual
capacity for its own willful misconduct or gross negligence and (iv) under
no circumstances shall the Trustee be personally liable for the payment of
any indebtedness or expenses of the Trust or be liable for the breach or
failure of any obligation, representation, warranty or covenant made or
undertaken by the Trust under this Agreement.
<PAGE>
The parties executing this Schedule have executed the Master Agreement and have
agreed as to the contents of this Schedule.
MORGAN GUARANTY
TRUST COMPANY OF NEW YORK
By: /s/ Andrew D. Brown
---------------------------
Name: Andrew D. Brown
Title: Vice President
THE BANK OF NEW YORK, solely in its capacity as
trustee for the CAPITAL ONE MASTER TRUST and not
in its individual capacity
By: /s/ Scott J. Tepper
---------------------------
Name: Scott J. Tepper
Title: Assistant Treasurer
<PAGE>
EXHIBIT A to Schedule
Capital One Master Trust
c/o The Bank of New York
101 Barclay Street
New York, New York 10286
Attention: Kelly Sheahan-Paci
Dear Ladies and Gentlemen:
This opinion is furnished to you in connection with the Master Agreement (the
"Agreement") between Morgan Guaranty Trust Company of New York ("Morgan") and
___________ (the "Counterparty") dated as of ___________. Terms defined in the
Agreement and used but not defined herein have the meanings given to them in the
Agreement.
I am Vice President and Assistant General Counsel of Morgan and have represented
Morgan in connection with the Agreement and the transactions contemplated
thereby. In connection with the delivery of this opinion, I have examined (a)
executed copies of the Agreement and (b) copies, certified or otherwise
identified to my satisfaction, of such documents, corporate records,
certificates of public officials and other instruments, and have conducted such
investigation of fact and law, as I have deemed necessary or appropriate for the
opinions expressed herein. In rendering the opinions expressed below, I have
assumed the due authorization, execution and delivery of the Agreement by each
of the parties thereto other than Morgan and I have assumed and have not
verified that the signatures (other than signatures of officers of Morgan) on
all documents that I have examined are genuine.
Based on the foregoing, I am of the opinion that:
(1) Morgan is a banking corporation, duly organized, validly existing and in
good standing under the laws of the State of New York.
(2) Morgan has full corporate power and authority to execute and deliver the
Agreement and to perform its obligations thereunder and the Agreement has
been duly authorized, executed and delivered by Morgan.
(3) No consents, authorizations or approvals are required for the execution and
delivery by Morgan of the Agreement and the performance of its obligations
thereunder, and no other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for such execution,
delivery or performance.
(4) The execution, delivery and performance by Morgan of the Agreement do not
and will not contravene any law or governmental regulation or order
presently binding on Morgan or its articles of incorporation or bylaws or
contravene any provision of or constitute a default
<PAGE>
under any indenture, contract or other instrument to which Morgan is a
party or by which Morgan is bound.
(5) The Agreement constitutes the legal, valid and binding obligation of Morgan
enforceable in accordance with its terms (except as enforcement thereof may
be limited by bankruptcy, reorganization, insolvency, moratorium or other
laws affecting the enforcement of creditors' rights generally and by
general equitable principles).
With respect to clause (5) above, I express no opinion regarding the legality,
validity, binding effect or enforceability of Section 6(e) of the Agreement
insofar as it purports to obligate a party, on termination of the Agreement, to
pay an amount in excess of that measured by the lowest quotation from a
Reference Market-maker. In addition, in connection with any such Early
Termination on the grounds of default, a court might limit the non-defaulting
party's recovery to its actual damages in the circumstances, imposing its own
settlement procedures in lieu of the provisions of Section 6(e) of the
Agreement.
I am a member of the bar of the State of New York and the opinions expressed
herein are limited to the laws of the State of New York and the Federal laws of
the United States of America.
I am furnishing this letter to you in my capacity as Counsel for Morgan and this
opinion may not be relied upon by or furnished to any other person without my
prior written consent.
Very truly yours,
<PAGE>
EXHIBIT B to Schedule
[Form of Opinion of Counsel for Trustee]
<PAGE>
EXHIBIT C to Schedule
Date: October 26, 2000
To: The Bank of New York acting as
Trustee for the
Capital One Master Trust
Telephone: (212) 815-5738
Telecopier: (212) 815-5544
From: Morgan Guaranty Trust Company of New York
Subject: Swap Transaction
The purpose of this communication is to set forth the terms and conditions
of the swap transaction entered into on the Trade Date referred to below (the
"Swap Transaction"), between THE BANK OF NEW YORK (the "Trustee") acting as
trustee for the CAPITAL ONE MASTER TRUST ("Party B"), but only as relates to the
Series 2000-4 Class A Floating Rate Asset Backed Certificates (the "Trust") and
Morgan Guaranty Trust Company of New York ("Party A"). This communication
constitutes a "Confirmation" as referred to in the Swap Agreement specified
below.
This Confirmation supplements, forms part of, and is subject to, the Master
Agreement dated as of October 26, 2000 between Party A and Party B (the "Master
Agreement"). All provisions contained in, or incorporated by reference to, such
Master Agreement shall govern this Confirmation except as expressly modified
below.
This Confirmation and the Schedule to the Master Agreement (the "Schedule")
each incorporate the definitions and provisions contained in (i) the 1991 ISDA
Definitions (as supplemented by the 1998 Supplement) (as published by the
International Swaps and Derivatives Association, Inc.) (the "Definitions"),
without regard to any amendment to the Definitions subsequent to the date
hereof, and (ii) the Series 2000-4 Supplement dated as of October 26, 2000 (the
"Supplement") to the Pooling and Servicing Agreement dated as of September 30,
1993 by and between Capital One Bank, as Seller and Servicer, and The Bank of
New York, as Trustee (as amended, the "Pooling and Servicing Agreement",
together with the Supplement, the "Trust Agreement"), and relating to the Trust,
Series 2000-4 ("Series 2000-4") and, in particular, for the purposes hereof, the
Class A Floating Rate Asset Backed Certificates, Series 2000-4 (the "Class A
Certificates"). In the event of any inconsistency between the definitions in the
Supplement and any of the Definitions, the Schedule or this Confirmation, the
definitions in the Supplement will govern; in the event of any inconsistency
between this Confirmation and either the Schedule or the Definitions, this
Confirmation will govern; and in the event of any inconsistency between the
Schedule and the Definitions, the Schedule will govern.
<PAGE>
The terms of this particular Swap Transaction to which this Confirmation
relates are as follows:
Trade Date:
October 26, 2000
Effective Date:
October 26, 2000
Termination Date:
The earlier of (i) the date on which the Notional Amount is zero and
(ii) the October 2005 Distribution Date.
Expected Final Payment Date
The October 2005 Distribution Date.
Fixed Amounts:
Fixed Rate Payer:
Party B.
Fixed Rate:
6.763%.
Fixed Amount for Initial Fixed Rate Payer Payment Date:
$3,480,127.08.
Fixed
Amount: For each Fixed Rate Payer Payment Date other than the initial
Fixed Rate Payer Payment Date, an amount calculated on a formula basis
for that Fixed Rate Payer Payment Date as follows:
Fixed Rate
Fixed = Notional x Fixed
Amount Amount Rate
----------------------
12
Fixed Rate Notional Amount:
For the initial Fixed Rate Payer Payment Date, $975,000,000 (the
initial outstanding principal balance of the Class A Certificates),
and for each Fixed Rate Payer Payment Date thereafter the outstanding
principal balance of Class A Certificates as of the Record Date
immediately preceding such Fixed Rate Payer Payment Date.
Fixed Rate Payer Payment Dates:
Each Distribution Date.
Distribution Date:
The fifteenth (15th) day of each calendar month, commencing November
15, 2000, or, if such day is not a Business Day, the next following
Business Day.
Floating Amounts:
Floating Rate Payer:
Party A.
Calculation Periods:
For the initial Floating Rate Payer Payment
<PAGE>
Date, the period from and including the Effective Date through the day
preceding the first Distribution Date; and for each Floating Rate
Payer Payment Date thereafter, each Calculation Period will be the
period from and including the previous Distribution Date through the
day preceding the current Distribution Date; provided, however, that
solely with respect to the Floating Rate Payer Payment Date, if any,
coinciding with the Expected Final Payment Date, the related
Calculation Period will be the period from and including the
Distribution Date immediately preceding the Expected Final Payment
Date through the day preceding October 15, 2005.
Floating Rate Payer Payment Dates:
Each Distribution Date.
Floating Rate Option:
USD-LIBOR-BBA; provided, however, that the definition of
"USD-LIBOR-Reference Banks" is hereby amended (i) to replace the
penultimate use of "that Reset Date" in the last sentence of the
definition of "USD-LIBOR-Reference Bank" with "the day that is two
London Banking Days preceding that Reset Date" and (ii) to replace
each use of "Calculation Agent" in the definition of
"USD-LIBOR-Reference Banks" with "Servicer."
Reset Dates:
Means, with respect to each Floating Rate Payer Payment Date after the
initial Floating Rate Payer Payment Date, the first day of the related
Calculation Period for such Floating Rate Payer Payment Date.
Designated Maturity:
One month.
Floating Rate Spread:
Plus %.
Floating Amount for Initial Floating Rate Payer Payment Date:
$3,661,666.67.
Floating Rate Notional Amount:
For the initial Floating Rate Payer Payment Date, $975,000,000 (the
initial outstanding principal balance of the Class A Certificates),
and for each Floating Rate Payer Payment Date thereafter the
outstanding principal balance of the Class A Certificates as of the
Record Date
<PAGE>
immediately preceding such Floating Rate Payer Payment Date.
Floating Rate Day Count Fraction:
Actual/360.
Compounding:
Not Applicable.
Calculation Agent:
Trustee.
Business Days:
New York and Richmond, Virginia.
Credit Support Document:
Not Applicable.
Governing Law:
New York.
Offices:
Party A is a Multibranch Party and may act through its London, New
York and Tokyo Offices.
Party B is not a Multibranch Party.
Payment Instructions for Party A USD:
Morgan Guaranty Trust Co of New York
ABA 021000238
Favour: Morgan Guaranty Trust Co of New
York, London Branch
Account No.: 670-07-054
Reference: Swaps Group
Payment Instructions for the Trust in USD:
The Bank of New York, New York
ABA# 021000018
A/C of Capital One Master Trust
Series 2000-4
A/C# 052246
<PAGE>
All inquiries regarding payments and/or rate resettings only should be sent to:
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London. EC4Y0JP
Attention: Derivatives Processing Center
Telephone: 011 44 171 325 3783
Facsimile: 011 44 171 325 7400
Telex: 896631 MGT G
Cable: Morganbank
Please quote the Morgan Deal Number indicated above.
All inquiries regarding confirmations should be sent to:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attention: Vola Grilli
Telephone: 1-212-648-6712
Facsimile: 1-212-648-5117
Please quote the Morgan Deal Number indicated above.
<PAGE>
Please confirm that the foregoing correctly sets forth the terms of our
agreement with respect to the Swap Transaction by signing in the space provided
below and sending a copy of the executed Confirmation to us.
It has been a pleasure working with you on this transaction and we look forward
to working with you again in the future.
Very truly yours,
J.P. MORGAN SECURITIES INC., as agent for
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By:
----------------------------------------
Name:
Title:
Agreed and Accepted by:
THE BANK OF NEW YORK, solely
in its capacity as trustee for the
CAPITAL ONE MASTER TRUST and not
in its individual capacity
By:
-------------------------------------------------
Name:
Title:
<PAGE>
Date: October 26, 2000
To: The Bank of New York acting as
Trustee for the
Capital One Master Trust
Telephone: (212) 815-5738
Telecopier: (212) 815-5544
From: Morgan Guaranty Trust Company of New York
Subject: Swap Transaction
The purpose of this communication is to set forth the terms and conditions
of the swap transaction entered into on the Trade Date referred to below (the
"Swap Transaction"), between THE BANK OF NEW YORK (the "Trustee") acting as
trustee for the CAPITAL ONE MASTER TRUST ("Party B"), but only as relates to the
Series 2000-4 Class A Floating Rate Asset Backed Certificates (the "Trust") and
Morgan Guaranty Trust Company of New York ("Party A"). This communication
constitutes a "Confirmation" as referred to in the Swap Agreement specified
below.
This Confirmation supplements, forms part of, and is subject to, the Master
Agreement dated as of October 26, 2000 between Party A and Party B (the "Master
Agreement"). All provisions contained in, or incorporated by reference to, such
Master Agreement shall govern this Confirmation except as expressly modified
below.
This Confirmation and the Schedule to the Master Agreement (the "Schedule")
each incorporate the definitions and provisions contained in (i) the 1991 ISDA
Definitions (as supplemented by the 1998 Supplement) (as published by the
International Swaps and Derivatives Association, Inc.) (the "Definitions"),
without regard to any amendment to the Definitions subsequent to the date
hereof, and (ii) the Series 2000-4 Supplement dated as of October 26, 2000 (the
"Supplement") to the Pooling and Servicing Agreement dated as of September 30,
1993 by and between Capital One Bank, as Seller and Servicer, and The Bank of
New York, as Trustee (as amended, the "Pooling and Servicing Agreement",
together with the Supplement, the "Trust Agreement"), and relating to the Trust,
Series 2000-4 ("Series 2000-4") and, in particular, for the purposes hereof, the
Class A Floating Rate Asset Backed Certificates, Series 2000-4 (the "Class A
Certificates"). In the event of any inconsistency between the definitions in the
Supplement and any of the Definitions, the Schedule or this Confirmation, the
definitions in the Supplement will govern; in the event of any inconsistency
between this Confirmation and either the Schedule or the Definitions, this
Confirmation will govern; and in the event of any inconsistency between the
Schedule and the Definitions, the Schedule will govern.
<PAGE>
The terms of this particular Swap Transaction to which this Confirmation
relates are as follows:
Trade Date:
October 26, 2000
Effective Date:
October 26, 2000
Termination Date:
The earlier of (i) the date on which the Notional Amount is zero and
(ii) the October 2005 Distribution Date.
Expected Final Payment Date
The October 2005 Distribution Date.
Fixed Amounts:
Fixed Rate Payer:
Party B.
Fixed Rate:
6.763%.
Fixed Amount for Initial Fixed Rate Payer Payment Date:
$3,480,127.08.
Fixed Amount:
For each Fixed Rate Payer Payment Date other than the initial Fixed
Rate Payer Payment Date, an amount calculated on a formula basis for
that Fixed Rate Payer Payment Date as follows:
Fixed Rate
Fixed = Notional x Fixed
Amount Amount Rate
------------------------------------
12
Fixed Rate Notional Amount:
For the initial Fixed Rate Payer Payment Date, $975,000,000 (the
initial outstanding principal balance of the Class A Certificates),
and for each Fixed Rate Payer Payment Date thereafter the outstanding
principal balance of Class A Certificates as of the Record Date
immediately preceding such Fixed Rate Payer Payment Date.
Fixed Rate Payer Payment Dates:
Each Distribution Date.
Distribution Date:
The fifteenth (15th) day of each calendar month, commencing November
15, 2000, or, if such day is not a Business Day, the next following
Business Day.
Floating Amounts:
Floating Rate Payer:
Party A.
Calculation Periods:
For the initial Floating Rate Payer Payment
<PAGE>
Date, the period from and including the Effective Date through the day
preceding the first Distribution Date; and for each Floating Rate
Payer Payment Date thereafter, each Calculation Period will be the
period from and including the previous Distribution Date through the
day preceding the current Distribution Date; provided, however, that
solely with respect to the Floating Rate Payer Payment Date, if any,
coinciding with the Expected Final Payment Date, the related
Calculation Period will be the period from and including the
Distribution Date immediately preceding the Expected Final Payment
Date through the day preceding October 15, 2005.
Floating Rate Payer Payment Dates:
Each Distribution Date.
Floating Rate Option:
USD-LIBOR-BBA; provided, however, that the definition of
"USD-LIBOR-Reference Banks" is hereby amended (i) to replace the
penultimate use of "that Reset Date" in the last sentence of the
definition of "USD-LIBOR-Reference Bank" with "the day that is two
London Banking Days preceding that Reset Date" and (ii) to replace
each use of "Calculation Agent" in the definition of
"USD-LIBOR-Reference Banks" with "Servicer."
Reset Dates:
Means, with respect to each Floating Rate Payer Payment Date after the
initial Floating Rate Payer Payment Date, the first day of the related
Calculation Period for such Floating Rate Payer Payment Date.
Designated Maturity:
One month.
Floating Rate Spread:
Plus %.
Floating Amount for Initial Floating Rate Payer Payment Date:
$3,661,666.67.
Floating Rate Notional Amount:
For the initial Floating Rate Payer Payment Date, $975,000,000 (the
initial outstanding principal balance of the Class A Certificates),
and for each Floating Rate Payer Payment Date thereafter the
outstanding principal balance of the Class A Certificates as of the
Record Date
<PAGE>
immediately preceding such Floating Rate Payer Payment Date.
Floating Rate Day Count Fraction:
Actual/360.
Compounding:
Not Applicable.
Calculation Agent:
Trustee.
Business Days:
New York and Richmond, Virginia.
Credit Support Document:
Not Applicable.
Governing Law:
New York.
Offices:
Party A is a Multibranch Party and may act through its London, New
York and Tokyo Offices. Party B is not a Multibranch Party.
Payment Instructions for Party A USD:
Morgan Guaranty Trust Co of New York
ABA 021000238
Favour: Morgan Guaranty Trust Co of New York, London
Branch
Account No.: 670-07-054
Reference: Swaps Group
Payment Instructions for the Trust in USD:
The Bank of New York, New York
ABA# 021000018
A/C of Capital One Master Trust
Series 2000-4
A/C# 052246
<PAGE>
All inquiries regarding payments and/or rate resettings only should be sent to:
Morgan Guaranty Trust Company of New York
60 Victoria Embankment
London. EC4Y0JP
Attention: Derivatives Processing Center
Telephone: 011 44 171 325 3783
Facsimile: 011 44 171 325 7400
Telex: 896631 MGT G
Cable: Morganbank
Please quote the Morgan Deal Number indicated above.
All inquiries regarding confirmations should be sent to:
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, New York 10260
Attention: Vola Grilli
Telephone: 1-212-648-6712
Facsimile: 1-212-648-5117
Please quote the Morgan Deal Number indicated above.
<PAGE>
Please confirm that the foregoing correctly sets forth the terms of our
agreement with respect to the Swap Transaction by signing in the space provided
below and sending a copy of the executed Confirmation to us.
It has been a pleasure working with you on this transaction and we look forward
to working with you again in the future.
Very truly yours,
J.P. MORGAN SECURITIES INC., as agent for
MORGAN GUARANTY TRUST COMPANY
OF NEW YORK
By: /s/ Eric Miller
--------------------------------------
Name: Eric Miller
Title: Associate
Agreed and Accepted by:
THE BANK OF NEW YORK, solely
in its capacity as trustee for the
CAPITAL ONE MASTER TRUST and not
in its individual capacity
By:/s/ Scott J. Tepper
----------------------------------
Name: Scott J. Tepper
Title: Assistant Treasurer
