EUR 3000000000 debt issuance programme, 10 ... - Volksbank AG

arise under such Compartment Assets. Thus, a Derivative Agreement may result in the reduction of risks of
the relevant Main Compartment Assets, or in the increase of such risks against receipt by the Issuer of consideration
from the Derivative Counterparty, which consideration could enhance the return payable by the
Issuer to Security Holders. However, a Derivative Agreement (where such is entered into), will always be
entered into in addition to the Issuer purchasing the Main Compartment Assets.
Generally, each Derivative Agreement will be designed so as to provide the Issuer with those funds which
the Issuer will require to make payments under the Securities (or in respect of any other Derivative Agreement
entered into by the same Compartment), to the extent that such funds will not be provided to the Issuer
through the Main Compartment Assets (or, where applicable, such other Derivative Agreement), under
the terms of such Main Compartment Assets and (where applicable) other Derivative Agreement.
Termination
Each Derivative Agreement will terminate, at the latest, once the relevant Securities issued through the
Compartment are redeemed. The Master Agreement will also provide for early termination which may take
place as follows:
- (1) Where a transaction (or transactions) under the terms of the Derivative Agreement has been entered
into and not yet fully settled, the Derivative Agreement will only be terminated (wholly and
not partly), by way of written notice by either party for important reason (wichtiger Grund). The
Derivative Agreement provides for a non-exhaustive list of important reasons which includes the
following:
• A breach of contract, that is, any type of breach not provided for by the above-mentioned
list which is not rectified within 30 calendar days after a demand is made by a party.
• A delay, that is, when an outstanding obligation under the terms of the Master Agreement
remains unfulfilled for more than 5 banking days (as defined in the Master Agreement) after
notice is given to the obligor.
• Misrepresentation: the provision of false information by one of the parties in respect of its
legal or business relationships.
• Cross default, that is, when one of the parties to the agreement defaults on a non-disputed
debt obligation (even where such obligation is owed to a third party) and this default remains
outstanding for more than 30 calendar days after the other party becomes aware of
the above, or where the default is anticipatory (provided that the amount of the debt is not
higher than a certain minimum sum, as provided by the Master Agreement).
• Consolidation or merger of one of the parties to the agreement with another entity where
the above results in the party consolidated or merged having, in its new guise, a worse
credit-worthiness than before.
• Loss of concession: where one of the parties to the agreement loses one or more concessions
it has in respect of banking transactions.
• Termination of the contractual relationship, that is, when the agreement is terminated under
the standard business terms of a party (where such party is a bank).
- (2) Additionally, a Master Agreement will come to an end without the need to terminate for an important
reason where:
• the opening of bankruptcy (Konkurs) or another insolvency proceeding over the assets of
one of the parties to the agreement takes place;
• one of the parties makes known its inability to pay its debts as they fall due;
• one of one of the parties is liquidated; or
• one of the parties becomes subject to receivership.
- (3) Further, the Master Agreement will provide for termination where, after conclusion of the
agreement there occurs a change in law or its application which leads to one of the parties (the
“Affected Party”) (i) becoming liable to pay additional taxes or (ii) not being allowed by law to
carry out its obligations under the agreement. In such a case the Affected Party (and, where (ii)
above is applicable, also the other party - the “Counterparty”) will, within 2 weeks designate a
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