Terms of Business for Swap Transactions

Set forth certain important additional terms of business that apply to our swap trading relationships with our U.S. Person clients. Please contact either your primary SG relationship contact or send an email to Us-Legal-DFCompliance@sgcib.com and we will be happy to assist with any queries you may have.

U.S. Persons who have not already done so should consider adherence to the ISDA March 2013 DF Protocol (“Protocol 2”). SG has already adhered to Protocol 2. If you have already adhered to Protocol 2, you can ignore the terms of business set forth below.

We have set forth below the terms of business that will apply to any swap transactions entered into by SG with clients that have not yet adhered to Protocol II. By transacting any swap with SG, you will be deemed to agree that the following terms will apply to our trading relationship:

1. You agree that a confirmation of a Swap (as defined in Section 1a(47) of the Commodity Exchange Act, as amended, and the regulations thereunder (the “CEA”)) or another type of transaction under the ISDA Master Agreement in place between us from time to time (the “Agreement”) may be created by delivery of written terms by each party; provided that (i) the terms delivered by each party match the terms delivered by the other party and (ii) the terms are either delivered by each party to the other party in a manner that permits each party to review such terms or delivered by each party to a third-party agent or service provider that confirms the matching of such terms to the parties (in each case by telex, electronic messaging system, email or otherwise). In each case, such a confirmation will be sufficient for all purposes to evidence a binding supplement to the Agreement. The foregoing shall not limit other agreed methods of creating binding confirmations and shall not be construed as an agreement to use a method provided in this paragraph to confirm any transaction.

2. You are hereby notified that, upon acceptance of a Swap by a derivatives clearing organization (“DCO”) as defined in Section 1a(15) of the CEA:

a. the original Swap between us is extinguished and replaced by equal and opposite Swaps with the DCO; and

b. all terms of the Swap shall conform to the product specifications of the cleared Swap established under the DCO’s rules.

3. You and we each agree to provide the other party with written notice if you or we become, or cease to be, an “insured depository institution” (as defined in 12 U.S.C. § 1813) or a “financial company” (as defined in Section 201(a)(11) of the Dodd-Frank Act, 12 U.S.C. § 5381(a)(11)).

4. In the event that either of us is (i) a “covered financial company” (as defined in Section 201(a)(8) of the Dodd-Frank Act, 12 U.S.C. § 5381(a)(8)) or (ii) an insured depository institution for which the Federal Deposit Insurance Corporation (“FDIC”) has been appointed as a receiver (the “covered party”):  

a. certain limitations under Title II of the Dodd-Frank Act or the Federal Deposit Insurance Act of 1950, as amended, may apply to the rights of the non-covered party to terminate, liquidate, or net any Swap by reason of the appointment of the FDIC as receiver, notwithstanding any agreement between us; and

b. the FDIC may have certain rights to transfer Swaps of the covered party under Section 210(c)(9)(A) of the Dodd-Frank Act, 12 U.S.C. § 5390(c)(9)(A), or 12 U.S.C. § 1821(e)(9)(A).

5. In the event that you are a “financial entity,” as defined in Section 2(h)(7)(C)(i) of the CEA, then the provisions of Schedule 3 of the Supplement to Protocol 2 (together with all applicable defined terms set forth in Schedule 1 thereof) shall be incorporated into the Agreement and will be deemed to be a part thereof to the same extent as if such provisions were restated therein in their entirety.