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Physical Settlement Procedures

under 2003 ISDA Credit Derivatives Definitions

Upon the occurrence of a Credit Event, the party specified as the Notifying Party shall deliver to the other party a Credit Event Notice (CEN) and, if specified to be applicable, the Notice of Publicly Available Information (NOPAI).The parties may specify either “Buyer” or “Buyer or Seller” as the Notifying Party.

The Credit Event must be served within the Notice Delivery Period i.e. the period starting from the Effective Date to the date that is 14 days after (a) the Scheduled Termination Date (b) Grace Period Extension Date or (c) the Repudiation/Moratorium Evaluation Date.

The date the CEN and NOPAI (if applicable) are effectively served is the Event Determination Date.

Within 30 days from the Event Determination Date, the Buyer must send the Notice of Physical Settlement (NOPS) to the Seller. If the Buyer fails to do so, Termination Date will occur.When the NOPS is served, the Conditions to Settlement are said to be satisfied.

If the Notice of NOPS is duly served, on the Physical Settlement Date, i.e. last day of the ‘Physical Settlement Period’, the Buyer will deliver the Deliverable Obligations to the Seller and the Seller will pay the Physical Settlement Amount (which is principal amount of the obligations delivered).

Physical Settlement Period is the period having the number of days from the Event Determination Date specified by the parties. If the parties do not specified the number of days, the Physical Settlement Period will be determined by the Calculation Agent by reference to current market practice.

The above notes are intended to provide only general outlines and should be read in conjunction with, and are qualified in their entirety by, the full provisions of the relevant ISDA provisions and definitions. They should never be used in place of professional advice. We accept no responsibility for any loss arising from any action taken or not taken by anyone using this material or using this material in conjunction with any ISDA documentation in reliance thereof.

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