Confirmation of OTC Warrant Transaction
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Date:
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July
19, 2006
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To:
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New
River Pharmaceuticals Inc. (“Counterparty”)
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From:
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Xxxxxxx
Xxxxx International (“MLI”)
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MLI
Reference: 06816057
Dear
Sir
/ Madam:
The
purpose of this letter agreement (this “Confirmation”)
is to
confirm the terms and conditions of the above-referenced transaction entered
into among Counterparty, MLI and
Xxxxxxx Lynch, Xxxxxx, Xxxxxx & Xxxxx Incorporated (the “Agent”
or
“MLPFS”)
on the
Trade Date specified below (the “Transaction”).
This
Confirmation constitutes a “Confirmation” as referred to in the Agreement
specified below.
The
definitions and provisions contained in the 2000 ISDA Definitions (the
“Swap
Definitions”)
and
the 2002 ISDA Equity Derivatives Definitions (the “Equity
Definitions”
and,
together with the Swap Definitions, the “Definitions”),
in
each case as published by the International Swaps and Derivatives Association,
Inc., are incorporated into this Confirmation. In the event of any inconsistency
between the Swap Definitions and the Equity Definitions, the Equity Definitions
will govern, and in the event of any inconsistency between the Definitions
and
this Confirmation, this Confirmation will govern. References herein to a
“Transaction” shall be deemed to be references to a “Share Option Transaction”
for the purposes of the Equity Definitions and to a “Swap Transaction” for the
purposes of the Swap Definitions.
For
purposes of this Transaction, “Warrant Style”, “Warrant Type”, “Number of
Warrants” and “Warrant Entitlement” (each as defined below) shall be used herein
as if such terms were referred to as “Option Style”, “Option Type”, “Number of
Options” and “Option Entitlement”, respectively, in the
Definitions.
This
Confirmation evidences a complete binding agreement between you and us as to
the
terms of the Transaction to which this Confirmation relates. This Confirmation
(notwithstanding anything to the contrary herein), shall be subject to an
agreement in the 1992 form of the ISDA Master Agreement (Multicurrency Cross
Border) (the “Master
Agreement”
or
“Agreement”)
as if
we had executed an agreement in such form (but without any Schedule and with
elections specified in the “ISDA Master Agreement” Section of this Confirmation)
on the Trade Date. In the event of any inconsistency between the provisions
of
that Agreement and this Confirmation, this Confirmation will prevail for the
purpose of this Transaction. The parties hereby agree that the Transaction
evidenced by this Confirmation shall be the only Transaction subject to and
governed by the Agreement.
The
terms
of the particular Transaction to which this Confirmation relates are as
follows:
General
Terms:
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Trade
Date:
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July
19, 2006
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Effective
Date:
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July
25, 2006 subject to cancellation of the OTC Warrant Transaction prior
to
5:00 p.m. (New York City time) on such date by the
Counterparty.
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Warrant
Style:
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European
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Warrant
Type:
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Call
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1
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Seller:
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Counterparty
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Buyer:
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MLI
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Shares:
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Shares
of common stock, $0.001 par value, of Counterparty (Security Symbol:
“NRPH”).
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Number
of Warrants:
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3,635,042
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Daily
Number of Warrants:
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For
any day, the Number of Warrants on such day divided
by
the remaining number of Expiration Dates (including such day) and
rounded
down to the nearest whole number, with the balance of the Number
of
Warrants exercised on the final Expiration
Date.
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Warrant
Entitlement:
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One
(1) Share per Warrant
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Strike
Price:
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$41.27
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Premium:
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$26,750,000
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Premium
Payment Date:
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The
Effective Date; provided no cancellation of the OTC Warrant Transaction
has occurred prior to 5:00 p.m. (New York City time) on such date
by the
Counterparty.
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Exchange:
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The
NASDAQ Global Market.
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Related
Exchange(s):
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All
Exchanges
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Full
Exchange Business Day:
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A
Scheduled Trading Day that has a scheduled closing time for its regular
trading session at 4:00 p.m. (New York City time) or the then standard
closing time for regular trading on the Exchange and is not a Disrupted
Day.
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Procedures
for Exercise:
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Expiration
Time:
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11:59
p.m. (New York City time).
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Expiration
Dates:
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The
fifteen (15) consecutive Full Exchange Business Days beginning on
and
including October 30, 2013 each shall be an Expiration Date for a
number
of Warrants equal to the Daily Number of Warrants on such
date.
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Exercise
Dates:
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Each
Expiration Date
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Automatic
Exercise:
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Applicable;
provided that Section 3.4(a) of the Equity Definitions shall apply
to Cash
Settlement and Net Physical Settlement; and provided further that,
unless
all Warrants have been previously exercised hereunder, a number of
Warrants for each Expiration Date equal to the Daily Number of Warrants
for such Expiration Date shall be deemed to be automatically
exercised.
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Counterparty’s
Telephone
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Number
and Telex and/or
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Facsimile
Number and
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Contact
Details for purpose of Giving Notice:
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Address:
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0000
Xxxxx Xxxxxx
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Radford,
Virginia 24141
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Attention:
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Xxxxxxx
X. Xxxxxxx XX
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V.P.,
Finance and Controller
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Telephone
No.:
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000-000-0000
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Facsimile
No.:
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000-000-0000
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2
Valuation:
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Valuation
Dates:
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Each
Exercise Date
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Settlement
Terms:
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Cash
Settlement:
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Applicable.
If Counterparty elects to settle the Transaction by Cash Settlement,
Counterparty represents and agrees:
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(i)
that on the date of the Cash Settlement election, neither the Counterparty
nor any of its affiliates is in possession of any material non-public
information with respect to the Counterparty or the
Shares;
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(ii)
that the Counterparty is not, on the date of the Cash Settlement
election,
and will not be, on any day during the period from and including
the first
Expiration Date to and including the final Expiration Date, engaged
in a
distribution, as such term is used in Regulation M under the Securities
Exchange Act of 1934, as amended (the “Exchange
Act”);
and
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(iii)
that, during the period from and including the first Expiration Date
to
and including the final Expiration Date, without the prior written
consent
of MLI, the Counterparty shall not, and shall cause its affiliates
and
affiliated purchasers (each as defined in Rule 10b-18 under the Exchange
Act) not to, directly or indirectly (including, without limitation,
by
means of a derivative instrument) purchase, offer to purchase, place
any
bid or limit order that would effect a purchase of, or commence any
tender
offer relating to, any Shares (or equivalent interest, including
a unit of
beneficial interest in a trust or limited partnership or a depository
share) or any security convertible into or exchangeable for the
Shares.
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Settlement
Currency:
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USD
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Settlement
Price:
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For
each Valuation Date, the Volume Weighted Average Price of the Shares
(“VWAP”) calculated from 9:45 a.m. to 3:45 p.m., as observed on the
Bloomberg “VAP” Page.
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Cash
Settlement Payment Date:
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With
respect to each Valuation Date, three (3) Currency
Business Days after the final Valuation
Date.
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Settlement
Method Election:
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Applicable
with respect to Cash Settlement or Net Physical Settlement
only.
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Electing
Party:
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Counterparty
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Settlement
Method Election Date:
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Ten
(10) Business Days prior to the first Expiration
Date.
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Default
Settlement Method:
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Net
Physical Settlement.
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Net
Physical Settlement:
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In
the event that the Counterparty elects to settle this Transaction
by Net
Physical Settlement, subject to “Conditions of Net Physical Settlement”
below, Counterparty shall deliver to MLI on the Settlement Date a
number
of Shares (the “Delivered
Shares”)
equal to the Share Delivery Quantity, provided
that in the event that the number of Shares calculated comprises
any
fractional Share, only whole Shares shall be delivered and an amount
in
cash equal to the value of such fractional share shall be payable
by the
Counterparty to MLI in lieu of such fractional
Share.
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3
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Share
Delivery Quantity:
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For
each Exercise Date, a number of Shares, as calculated by the Calculation
Agent, equal to the Net Physical Settlement Amount for such Exercise
Date
divided by the Settlement Price on the Valuation Date in respect
of such
Settlement Date plus an amount in cash in lieu of any fractional
shares
(based on the Settlement Price).
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Net
Physical Settlement Amount:
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For
any Exercise Date, an amount equal to the product of (i) the Number
of
Warrants being exercised on the relevant Exercise Date, (ii) the
Strike
Price Differential for such Exercise Date and (iii) the Warrant
Entitlement.
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Strike
Price Differential:
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For
any Valuation Date, (i) if the Settlement Price is greater than the
Strike
Price, an amount equal to the excess of such Settlement Price over
the
Strike Price for such Valuation Date or (ii) if such Settlement Price
is
less than or equal to the Strike Price,
zero.
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Settlement
Date:
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Settlement
with respect to each Exercise Date shall occur on the third (3rd)
Full Exchange Business Day following the final Valuation Date, provided
that MLI shall have to right to request by prior written notice to
Counterparty a Settlement Date with respect to any Exercise Date
and the
related Share Delivery Quantity that is three (3) Full Exchange Business
Days following such Exercise Date. Such request shall not unreasonably
be
denied.
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Conditions
to Net
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Physical
Settlement:
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If,
in connection with or six months following delivery of Shares hereunder,
MLI notifies the Counterparty that MLI has reasonably determined
after
advice from counsel that there is a material risk that such Shares
are
subject to restrictions on transfer in the hands of MLI pursuant
to the
rules and regulations promulgated under the Securities Act of 1933,
as
amended (the “Securities
Act”),
then Counterparty shall either (i) deliver Shares that are covered
by an
effective registration statement of Counterparty for immediate resale
by
MLI or (ii) agree to deliver additional Shares so that the value
of such
Shares as determined by the Calculation Agent to reflect an appropriate
liquidity discount, equals the value of the number of Shares that
would
otherwise be deliverable if such Shares were freely tradable upon
receipt
by MLI.
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(A)
If Counterparty elects to deliver Shares as described in above clause
(i),
then Counterparty shall
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(a)
afford MLI a reasonable opportunity to conduct a due diligence
investigation with respect to Counterparty that is customary in scope
for
underwritten offerings of equity securities that yields a result
reasonably satisfactory to MLI;
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4
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(b)
promptly make available to MLI an effective registration statement
for
immediate resale (the “Registration
Statement”)
in form and content reasonably satisfactory to MLI and filed pursuant
to
Rule 415 under the Securities Act, and such prospectuses as MLI may
reasonably request to comply with the applicable prospectus delivery
requirements (the “Prospectus”)
for the resale by MLI of such number of Shares as MLI shall reasonably
specify in accordance with this paragraph, such Registration Statement
to
be effective and Prospectus to be current until the earliest of the
date
on which (1) all Delivered Shares have been sold by MLI, (2) MLI
has
advised Counterparty that it no longer requires that such Registration
Statement be effective, (3) all remaining Delivered Shares could
be sold
by MLI without registration pursuant to Rule 144 promulgated under
the
Securities Act (the “Registration
Period”)
or (4) Counterparty has provided a legal opinion in form and substance
satisfactory to MLI (with customary assumptions and exceptions) that
the
Shares issuable upon exercise of these Warrants will be freely tradable
under the Securities Act upon delivery to MLI and not subject to
any
legend restricting transferability. It is understood that the Registration
Statement and Prospectus may cover a number of Shares equal to the
aggregate number of Shares (if any) reasonably estimated by MLI to
be
potentially deliverable by Counterparty in connection with Net Physical
Settlement hereunder (not to exceed the Maximum Deliverable Share
Amount)
and shall be subject to the same suspension of sales during “blackout
dates” as provided in the following paragraph;
and
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(c)
Counterparty will enter into a registration rights agreement with
MLI in
form and substance reasonably acceptable to MLI, which agreement
will
contain among other things, customary representations and warranties
and
indemnification, restrictions on sales during “blackout dates” as provided
for in the registration rights agreement (the “Registration
Rights Agreement”)
entered into between Counterparty and the Initial Purchaser in connection
with Counterparty’s 3.5% Convertible Subordinated Notes due 2013 (the
“Convertible
Notes”),
provide for delivery of comfort letters and opinions of counsel and
other
rights relating to the registration of a number of Shares equal to
the
number of Delivered Shares and other Shares deliverable hereunder
up to
the Maximum Deliverable Share
Amount.
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(d)
Counterparty shall promptly pay to MLI a $0.03 per Share fee with
all
Shares delivered in connection with Net Physical Settlement pursuant
to a
Registration Statement.
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(B)
If
Counterparty elects to deliver Shares as described in above clause (ii),
then
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(a)
Counterparty shall afford MLI and any potential institutional purchaser
of
any Shares identified by MLI a reasonable opportunity to conduct
a due
diligence investigation with respect to Counterparty that is customary
in
scope for private placements of equity securities subject to execution
of
any customary confidentiality
agreements;
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(b)
Counterparty shall enter into an agreement (a “Private
Placement Agreement”)
with MLI on commercially reasonable terms in connection with the
private
placement of such Shares by Counterparty to MLI or an affiliate and
the
private resale of such shares by MLI or such affiliate, substantially
similar to private placement purchase agreements customary for private
placements of equity securities, in form and substance commercially
reasonably satisfactory to MLI and Counterparty, which Private Placement
Agreement shall include provisions relating to the indemnification
of, and
contribution in connection with the liability of, MLI and its affiliates,
shall provide for the payment by Counterparty of all expenses in
connection with such resale, including all reasonable and documented
fees
and expenses of counsel for MLI, shall contain representations, warranties
and agreements of Counterparty reasonably necessary or advisable
to
establish and maintain the availability of an exemption from the
registration requirements of the Securities Act for such resales,
and
shall use reasonable best efforts to provide for the delivery of
accountants’ “comfort letters” to MLI or such affiliate with respect to
the financial statements and certain financial information contained
in or
incorporated by reference into the offering memorandum prepared for
the
resale of such Shares;
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5
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(c)
MLI shall sell the Delivered Shares in a commercially reasonable
manner
until the amount received by MLI for the sale of the Shares (the
“Proceeds Amount”)
is equal to the Net Physical Settlement Amount. Any remaining Delivered
Shares shall be returned to Counterparty. If the Proceeds Amount
is less
than the Net Physical Settlement Amount, Counterparty shall promptly
deliver upon notice from MLI additional Shares to MLI until the dollar
amount from the sale of such Shares by MLI equals the difference
between
the Net Physical Settlement Amount and the Proceeds Amount. In no
event
shall Counterparty be required to deliver to MLI a number of Shares
greater than the Maximum Deliverable Share
Amount.
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(iv)
In the event Counterparty fails to comply with any of the conditions
set
forth in “Conditions
to Net Physical Settlement”
herein, Counterparty shall settle the Transaction through Cash Settlement;
provided,
however,
that notwithstanding the foregoing, if either (a) Counterparty does
not
provide for the sale of the Shares under the Registration Statement
as
provided in the Registration Rights Agreement, (b) some Shares cannot
be
registered under the Registration Statement due to Rule 415(a)(4)
under
the Securities Act, or (c) some or all of the Delivered Shares cannot
be
used to close out stock loans in the shares of Counterparty entered
into
to establish or maintain short positions by MLI in connection with
this
Transaction without a prospectus being required by applicable law
to be
delivered to such lender, then Counterparty may deliver unregistered
or
registered Shares. In the case of clauses (a) or (b) above, the value
of
any unregistered Shares so delivered shall be discounted to reflect
their
market value (calculated in a commercially reasonable manner). In
the case
of clause (c) above, the value of any such Delivered Shares shall
reflect
the cost (calculated in a commercially reasonable manner) to MLI
of
trading Shares in order to close out its hedge position if any, in
all
cases for purposes of calculating the Delivered Shares. In no event
shall
Counterparty be required to top-up the delivery in
cash.
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Limitations
on Net Physical
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Settlement
by Counterparty:
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Notwithstanding
anything herein or in the Agreement to the contrary, the number of
Shares
that may be delivered at settlement by Counterparty shall not exceed
4,543,803 at any time (“Maximum
Deliverable Share Amount”),
as adjusted by MLI to account for any subdivision, stock-split,
reclassification or similar dilutive event with respect to the
Shares.
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Counterparty
represents and warrants that the number of Available Shares as of
the
Trade Date is greater than the Maximum Deliverable Share Amount.
Counterparty covenants and agrees that Counterparty shall not take
any
action of corporate governance or otherwise to reduce the number
of
Available Shares below the Maximum Deliverable
Share.
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For
this purpose, “Available
Shares”
means the number of Shares Counterparty currently has authorized
(but not
issued and outstanding) less the maximum number of Shares that may
be
required to be issued by Counterparty in connection with stock options,
convertibles, and other commitments of Counterparty that may require
the
issuance or delivery of Shares in connection
therewith.
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6
Dividends:
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Extraordinary
Dividends:
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Any
and all dividends paid by the
Issuer.
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Adjustments:
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Method
of Adjustment:
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Calculation
Agent Adjustment
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Extraordinary
Events:
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Consequences
of Merger Events:
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(a)
Share-for-Share: Cancellation and Payment (Calculation Agent
Determination)
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(b)
Share-for-Other: Cancellation and Payment (Calculation Agent
Determination)
(c)
Share-for-Combined: Cancellation and Payment (Calculation Agent
Determination)
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Tender
Offer:
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Applicable
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Consequences
of Tender Offers:
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(a)
Share-for-Share: Modified Calculation Agent
Adjustment
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(b)
Share-for-Other: Cancellation and Payment (Calculation Agent
Determination)
(c)
Share-for-Combined: Component Adjustment (Calculation Agent
Determination)
With
respect to any Extraordinary Events hereunder, upon the occurrence of
Cancellation and Payment in whole or in part, the parties agree that the amount
to be paid, in accordance with the Equity Definitions, shall constitute a
Transaction Early Termination Amount, subject to satisfaction by the payment
or
delivery of Shares or cash as set forth in the Early Termination section below.
Nationalization,
Insolvency
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or
Delisting:
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Cancellation
and Payment (Calculation Agent Determination) (subject to satisfaction
by
payment or delivery of Shares or cash as set forth in “Early Termination”
below)
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Determining
Party:
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MLI
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Additional
Disruption Events:
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Change
in Law:
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Applicable
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Failure
to Deliver:
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Not
Applicable
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Insolvency
Filing:
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Applicable
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Hedging
Disruption Event:
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Applicable
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Increased
Cost of Hedging:
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Not
Applicable
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Loss
of Stock Borrow:
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Applicable
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7
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Maximum
Stock Loan Rate:
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3.00%
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Increased
Cost of Stock Borrow:
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Applicable
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Initial
Stock Loan Rate:
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0.40%
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Hedging
Party:
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MLI
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Determining
Party:
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MLI
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Non-Reliance:
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Applicable
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Agreements
and
Acknowledgments
Regarding
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Hedging
Activities:
|
Applicable
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Additional
Acknowledgments:
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Applicable
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Other
Provisions:
|
Additional
Agreements:
|
If
due to the occurrence of an Extraordinary Event or otherwise Counterparty
would be obligated to pay cash to MLI pursuant to the terms of this
Agreement for any reason without having had the right (other than
pursuant
to this paragraph) to elect to deliver Shares in satisfaction of
such
payment obligation, then Counterparty may elect to deliver to MLI
a number
of Shares (whether registered or unregistered) having a cash value
equal
to the amount of such payment obligation (such number of Shares to
be
delivered to be determined by the Calculation Agent acting in a
commercially reasonable manner to determine the number of Shares
that
could be sold by MLI over a reasonable period of time to realize
the cash
equivalent of such payment obligation taking into account any applicable
discount (determined in a commercially reasonable manner) to reflect
any
restrictions on transfer as well as the market value of the Shares).
Further, if Counterparty is delivering Shares as a result of a Merger
Event, the Settlement Date will be immediately prior to the effective
time
of the Merger Event and the Shares will be deemed delivered at such
time
such that MLI will be a holder of the Shares prior to such effective
time.
Settlement relating to any delivery of Shares pursuant to this paragraph
shall occur within a reasonable period of time. The number of Shares
delivered pursuant to this paragraph shall not exceed the Maximum
Deliverable Share Amount and shall be subject to the provisions under
“Early Termination” hereof regarding Proceeds
Amount.
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Early
Termination:
|
Notwithstanding
any provision to the contrary, upon the designation of an Early
Termination Date hereunder, Counterparty’s payment obligation in respect
of this Transaction as determined in accordance with Second Method
and
Loss (the “Transaction
Early Termination Amount”)
may, at the option of Counterparty, be satisfied by the delivery
of a
number of Shares equal to the Transaction Early Termination Amount
divided by
the Termination Price (“Early
Termination Stock Settlement”);
provided,
however,
that Counterparty must notify MLI of its election of Early Termination
Stock Settlement by the close of business on the day that is two
Exchange
Business Days following the day that the notice designating the Early
Termination Date is effective. “Termination
Price”
means the closing price per Share on the Exchange on the Early Termination
Date.
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8
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A
number of Shares calculated as being due in respect of any Early
Termination Stock Settlement will be deliverable on the third Exchange
Business Day following the date that notice pursuant to Section 6(d)(i)
of
the Agreement specifying the number of Shares deliverable is effective.
Section 6(d)(i) of the Agreement is hereby amended by adding the
following
words after the word “paid” in the fifth line thereof: “or any delivery is
to be made, as applicable.”
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On
or prior to the Early Termination Date (if Early Termination Stock
Settlement is elected), if so requested by MLI upon advice of counsel,
Counterparty shall enter into a registration rights agreement with
MLI in
form and substance reasonably acceptable to MLI which agreement will
contain among other things, customary representations and warranties
and
indemnification, restrictions on sales during “blackout dates” as provided
for in the Registration Rights Agreement and shall satisfy the conditions
contained therein and Counterparty shall file and diligently pursue
to
effectiveness a Registration Statement pursuant to Rule 415 under
the
Securities Act. If and when such Registration Statement shall have
been
declared effective by the Securities and Exchange Commission, Counterparty
shall have made available to MLI such Prospectuses as MLI may reasonably
request to comply with the applicable prospectus delivery requirements
for
the resale by MLI of such number of Shares as MLI shall specify (or,
if
greater, the number of Shares that Counterparty shall specify). Such
Registration Statement shall be effective and Prospectus shall be
current
until the earliest of the date on which (i) all Shares delivered
by
Counterparty in connection with an Early Termination Date, (ii) MLI
has
advised Counterparty that it no longer requires that such Registration
Statement be effective or (iii) all remaining Shares could be sold
by MLI
without registration pursuant to Rule 144 promulgated under the Securities
Act (the “Termination
Registration Period”).
It is understood that the Registration Statement and Prospectus will
cover
a number of Shares equal to the number of Shares plus the aggregate
number
of Shares (if any) reasonably estimated by MLI to be potentially
deliverable by Counterparty in connection with Early Termination
Stock
Settlement hereunder, but in no event exceeding the Maximum Deliverable
Share Amount. On each day during the Registration Period Counterparty
shall represent that each of its filings under the Securities Act,
the
Exchange Act or other applicable securities laws that are required
to be
filed have been filed and that, as of the respective dates thereof
and as
of the date of this representation, they do not contain any untrue
statement of a material fact or omission of a material fact required
to be
stated therein or necessary to make the statements made, in the light
of
the circumstances under which they were made, not misleading.
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If
Counterparty does not deliver Shares subject to an effective Registration
Statement as set forth above, Counterparty may deliver unregistered
Shares
in an amount determined by MLI based upon MLI’s commercially reasonable
judgment of the market value of such Shares. In no event shall
Counterparty be required to deliver to MLI a number of Shares greater
than
the Maximum Deliverable Share
Amount.
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If
MLI
receives Shares in connection with an Early Termination Stock Settlement that
cannot be freely sold under the Securities Act or that are subject to any legend
restricting transferability, MLI shall sell such Shares in a commercially
reasonable manner until the amount received by MLI for the sale of such Shares
(net of transaction costs, calculated in a commercially reasonable manner)
(the
“Proceeds
Amount”)
is
equal to the Transaction Early Termination Amount. Any remaining Shares shall
be
returned to Counterparty. If the Proceeds Amount is less than the Transaction
Early Termination Amount, Counterparty shall promptly deliver additional Shares
to MLI upon request until the dollar amount from the sale of such additional
Shares by MLI (net of transaction costs, calculated in a commercially reasonable
manner) equals the difference between the Transaction Early Termination Amount
and the Proceeds Amount. In no event shall Counterparty be required to deliver
to MLI a number of Shares greater than the Maximum Deliverable Share
Amount.
9
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Compliance
With Securities Laws:
|
Counterparty
represents and agrees that it has complied, and will comply, in connection
with this Transaction and all related or contemporaneous sales and
purchases of Shares, with the applicable provisions of the Securities
Act,
the Exchange Act and the rules and regulations promulgated thereunder,
including, without limitation, Rule 10b-5 and 13e and Regulation
M under
the Exchange Act.
|
|
Each
party acknowledges that the offer and sale of the Transaction to
it is
intended to be exempt from registration under the Securities Act
by virtue
of Section 4(2) thereof. Accordingly, Counterparty represents and
warrants
to MLI that (i) it has the financial ability to bear the economic
risk of
its investment in the Transaction and is able to bear a total loss
of its
investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act and (iii) the
disposition of the Transaction is restricted under this Confirmation,
the
Securities Act and state securities
laws.
|
|
Counterparty
further represents and warrants
that:
|
|
(a)
Counterparty is not entering into this Transaction to create actual
or
apparent trading activity in the Shares (or any security convertible
into
or exchangeable for Shares) or to raise or depress or otherwise manipulate
the price of the Shares (or any security convertible into or exchangeable
for Shares);
|
|
(b)
Counterparty represents and acknowledges that as of the date hereof
and
without limiting the generality of Section 13.1 of the Equity Definitions,
MLI is not making any representations or warranties with respect
to the
treatment of the Transaction under FASB Statements 149 or 150, EITF
Issue
No. 00-19 (or any successor issue statements) or under FASB’s Liabilities
& Equity Project.
|
Account
Details: Account
for payments to Counterparty:
ABA
# 021
001 033
Bankers
Trust / Deutsche Bank Trust Co America
Bankers
Trust Plaza
New
York,
NY
Account
#
008 10 775
For
account of Xxxxxxx Xxxxx
For
sub-account # 171-08A45
Account
of: New River Pharmaceuticals Inc.
Account
for payments to MLI:
Chase
Manhattan Bank, New York
ABA#:
000-000-000
FAO:
ML
Equity Derivatives
A/C:
066213118
10
|
Agreement
Regarding Shares:
|
Counterparty
agrees that, in respect of any Shares delivered to MLI, such Shares
shall
be, upon such delivery, duly and validly authorized, issued and
outstanding, fully paid and non-assessable and subject to no adverse
claims of any other party. The issuance of such Shares does not and
will
not require the consent, approval, authorization, registration or
qualification of any government authority, except such as shall have
been
obtained on or before the delivery date of any Shares or in connection
with any Registration Statement filed with respect to any
Shares.
|
|
Bankruptcy
Rights:
|
In
the event of Counterparty’s bankruptcy, MLI’s rights in connection with
this Transaction shall not exceed those rights held by common
shareholders. For the avoidance of doubt, the parties acknowledge
and
agree that MLI’s rights with respect to any other claim arising from this
Transaction prior to Counterparty’s bankruptcy shall remain in full force
and effect and shall not be otherwise abridged or modified in connection
herewith.
|
|
Set-Off:
|
Upon
the occurrence of an Event of Default or Termination Event with
respect to
Counterparty as the Defaulting Party or the Affected Party (“X”), MLI
(“Y”) will have the right (but not be obliged) without prior notice
to X
or any other person to set-off or apply any obligation of X under
an
Equity Contract owed to Y (or any Affiliate of Y) (whether or not
matured
or contingent and whether or not arising under this Agreement,
and
regardless of the currency, place of payment or booking office
of the
obligation) against any obligation of Y (or any Affiliate of Y)
under an
Equity Contract owed to X (whether or not matured or contingent
and
whether or not arising under this Agreement, and regardless of
the
currency, place of payment or booking office of the obligation).
Y will
give notice to the other party of any set-off effected under this
section.
|
|
“Equity
Contract”
shall mean for purposes of this section any Transaction relating
to Shares
between X and Y that qualifies as ‘equity’ under applicable accounting
rules other than the Confirmation of OTC Convertible Note Hedge,
dated
July 19, 2006, by and between Counterparty and MLI and any other
substantially similar transaction entered into between Counterparty
and
MLI relating to an exercise of an over-allotment option. Amounts
(or the
relevant portion of such amounts) subject to set-off may be converted
by Y
into the Termination Currency at the rate of exchange at which
such party
would be able, acting in a reasonable manner and in good faith,
to
purchase the relevant amount of such
currency.
|
|
If
any obligation is unascertained, Y may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the
relevant
party accounting to the other when the obligation is ascertained.
Nothing
in this section shall be effective to create a charge or other
security
interest. This section shall be without prejudice and in addition
to any
right of set-off, combination of accounts, lien or other right
to which
any party is at any time otherwise entitled (whether by operation
of law,
contract or otherwise).
|
|
Notwithstanding
any provision of the Agreement as incorporated in any Confirmation
or any
other existing or future agreement, Counterparty hereby waives
any and all
rights to set-off, whether arising under any agreement, applicable
law, or
otherwise, except as provided
herein.
|
|
In
the event of Counterparty’s bankruptcy, MLI waives any and all rights to
set-off it has, whether arising under any agreement, applicable
law or
otherwise.
|
11
|
Transfer:
|
Counterparty
may transfer its rights and delegate its obligations under this
Transaction in accordance with Section 7 of the Master Agreement.
MLI may
assign its rights and delegate its obligations hereunder, in whole
or in
part, to any other person (an “Assignee”)
without the prior consent of the Counterparty, effective (the
“Transfer
Effective Date”)
upon delivery to Counterparty of an executed acceptance and assumption
by
the Assignee (an “Assumption”)
of the transferred obligations of MLI under this Transaction (the
“Transferred
Obligations”).
Notwithstanding any other provision in this Confirmation to the contrary
requiring or allowing MLI to purchase, sell, receive or deliver any
Shares
or other securities to or from Counterparty, MLI may designate any
of its
affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform MLI’s obligations in respect of this
Transaction and any such designee may assume such obligations. MLI
shall
be discharged of its obligations to Counterparty to the extent of
any such
performance.
|
|
Regulation:
|
MLI
is regulated by The Securities and Futures Authority
Limited.
|
|
Indemnity:
|
Seller
agrees to indemnify MLI, its Affiliates and their respective directors,
officers, agents and controlling parties (each such person being
an
“Indemnified
Party”)
from and against any and all losses, claims, damages and liabilities,
joint and several, to which such Indemnified Party may become subject
because of a breach of any representation or covenant hereunder,
in the
Agreement or any other Agreement relating to the Agreement or Transaction
and will reimburse Indemnified Party for all reasonable expenses
(including reasonable legal fees and expenses) as they are incurred
in
connection with the investigation of, preparation for, or defense
of, any
pending or threatened claim or any action or proceeding arising therefrom,
whether or not such Indemnified Party is a party thereto. Seller
will not
be liable under the foregoing Indemnity provision to the extent that
any
loss, claim, damage, liability or expense is found in a final judgment
by
a court to have resulted from MLI’s gross negligence or willful
misconduct.
|
Additional
Agreements, Representations and Covenants of Counterparty,
Etc.:
|
(a)
|
Counterparty
hereby represents and warrants to MLI, on each day from the Trade
Date to
and including the earlier of (i) August 19, 2006, and (ii) the date
by
which MLI is able to initially complete a hedge of its position created
by
this Transaction, that:
|
|
(1)
|
it
will not, and will not permit any person or entity subject to its
control
to, bid for or purchase Shares during such period except as disclosed
in
the Offering Memorandum relating to the Convertible Notes;
and
|
|
(2)
|
it
has publicly disclosed all material information necessary for it
to be
able to purchase or sell Shares in compliance with applicable federal
securities laws and that it has publicly disclosed all material
information with respect to its condition (financial or
otherwise).
|
|
(b)
|
No
collateral shall be required by either party for any reason in connection
with this Transaction.
|
|
(c)
|
MLI
shall not be entitled to exercise any Warrant hereunder and Automatic
Exercise shall not apply with respect to any Warrant to the extent
(but
only to the extent) that the receipt of any Shares upon the exercise
of
such Warrant would result in MLI, or its ultimate parent entity becoming,
directly or indirectly, the beneficial owner (as such term is defined
for
purposes of Section 13(d) of the Exchange Act) at any time of more
than
8.0 percent of the class of the Counterparty’s
outstanding equity securities that is comprised of the Shares (an
“Excess
Share Owner”).
|
12
MLI
shall
provide prior notice to Counterparty
if the
exercise of any Warrant hereunder would cause MLI to become directly or
indirectly, an Excess Share Owner;
provided
that the
failure of MLI to provide such notice shall not alter the effectiveness of
the
provisions set forth in the preceding sentence and any purported exercise or
delivery in violation of such provisions shall be void and have no
effect.
If
MLI is
not entitled to exercise any Warrant because such exercise would cause MLI
to
become, directly or indirectly, an Excess Share Owner and MLI thereafter
disposes of Shares owned by it or any action is taken that would then permit
MLI
to exercise such Warrant without such exercise causing it to become, directly
or
indirectly, an Excess Share Owner, then MLI shall provide notice of the taking
of such action to Counterparty
and such
Warrant shall then become exercisable by MLI to the extent such Warrant is
otherwise or had otherwise become exercisable hereunder. In such event, the
Expiration Date with respect to such Warrant shall be the date on which
Counterparty
receives
such notice from MLI, and the related Settlement Date shall be as soon as
reasonably practicable after receipt of such notice but no more than three
(3)
Exchange Business Days thereafter (but in no event shall the Settlement Date
occur prior to the date on which it would have otherwise occurred but for the
provisions of this subsection); provided
that the
related Net Physical Settlement Amount shall be the same as the Net Physical
Settlement Amount but for the provisions of this subsection. In addition, within
30 calendar days of the Settlement Date, Counterparty shall use its reasonable
efforts to refrain from activities that could reasonably be expected to result
in MLI’s ownership of Shares exceeding 10% of all issued and outstanding
Shares.
Matters
Relating to Agent:
|
1.
|
MLPFS
will be responsible for the operational aspects of the Transactions
effected through it, such as record keeping, reporting, and confirming
Transactions to Counterparty and
MLI;
|
|
2.
|
Unless
MLI is a “major U.S. institutional investor,” as defined in Rule 15a-6 of
the Exchange Act, neither Counterparty not MLI will contact the other
without the direct involvement of
MLPFS;
|
|
3.
|
MLPFS’s
sole role under this Agreement and with respect to any Transaction
is as
an agent of Counterparty and MLI on a disclosed basis and MLPFS shall
have
no responsibility or liability to Counterparty or MLI hereunder except
for
gross negligence or willful misconduct in the performance of its
duties as
agent. MLPFS is authorized to act as agent for MLI, but only to the
extent
expressly required to satisfy the requirements of Rule 15a-6 under
the
Exchange Act in respect of the Options described hereunder. MLPFS
shall
have no authority to act as agent for Counterparty generally or with
respect to transactions or other matters governed by this Agreement,
except to the extent expressly required to satisfy the requirements
of
Rule 15a-6 or in accordance with express instructions from
Counterparty.
|
ISDA
Master Agreement:
With
respect to the Agreement, MLI and Counterparty each agree as
follows:
“Specified
Entity”
means
in relation to Seller and in relation to Counterparty for purposes of this
Transaction: Not applicable.
“Specified
Transaction”
will
have the meaning specified in Section
14
of this
Agreement.
The
“Cross
Default”
provisions of Section
5(a)(vi)
of the
Agreement will not apply to Seller and will not apply to
Counterparty.
The
“Credit
Event Upon Merger”
provisions of Section
5(b)(iv)
of the
Agreement will not apply to MLI and Counterparty.
13
The
“Automatic
Early Termination”
provision of Section
6(a)
of the
Agreement will not apply to MLI or to Counterparty.
Payments
on Early Termination.
For the
purpose of Section
6(e)
of the
Agreement: (i) Loss shall apply; and (ii) the Second Method shall
apply.
“Termination
Currency”
means
USD.
Tax
Representations.
|
(I)
|
Payer
Representations. For
the purpose of Section 3(e) of the Agreement, each party represents
to the
other party that it is not required by any applicable law, as modified
by
the practice of any relevant governmental revenue authority, of any
Relevant Jurisdiction to make any deduction or withholding for or
on
account of any Tax from any payment (other than interest under Section
2(e), 6(d)(ii), or 6(e) of the Agreement) to be made by it to the
other
party under the Agreement. In making this representation, each party
may
rely on (i) the accuracy of any representations made by the other
party
pursuant to Section 3(f) of the Agreement, (ii) the satisfaction
of the
agreement contained in Section 4(a)(i) or 4(a)(iii) of the Agreement,
and
the accuracy and effectiveness of any document provided by the other
party
pursuant to Section 4(a)(i) or 4(a)(iii) of the Agreement, and (iii)
the
satisfaction of the agreement of the other party contained in Section
4(d)
of the Agreement; provided
that it will not be a breach of this representation where reliance
is
placed on clause (ii) above and the other party does not deliver
a form or
document under Section 4(a)(iii) of the Agreement by reason of material
prejudice to its legal or commercial position.
|
|
(II)
|
Payee
Representations. For
the purpose of Section 3(f) of the Agreement, each party makes the
following representations to the other
party:
|
|
(i)
|
MLI
represents that it is a corporation organized under the laws of England
and Wales.
|
|
(ii)
|
Counterparty
represents that it is a corporation incorporated
in the Commonwealth of Virginia.
|
Delivery
Requirements.
For the
purpose of Sections
4(a)(i)
and
(ii)
of the
Agreement, each party agrees to deliver the following documents:
|
(a)
|
Tax
forms, documents or certificates to be delivered
are:
|
Each
party agrees to complete (accurately and in a manner reasonably satisfactory
to
the other party), execute, and deliver to the other party, United States
Internal Revenue Service Form W-9 or W-8 BEN, or any successor of such form(s):
(i) before the first payment date under this agreement; (ii) promptly upon
reasonable demand by the other party; and (iii) promptly upon learning that
any such form(s) previously provided by the other party has become obsolete
or
incorrect.
|
(b)
|
Other
documents to be delivered:
|
|
Party
Required to Deliver Document
|
Document
Required to be Delivered
|
When
Required
|
Covered
by Section 3(d) Representation
|
|
Counterparty
|
Evidence
of the authority and true signatures of each official or representative
signing this Confirmation
|
Upon
or before execution and delivery of this Confirmation
|
Yes
|
|
Counterparty
|
Certified
copy of the resolution of the Board of Directors or equivalent
document
authorizing the execution and delivery of this Confirmation and
such other
certificate or certificates as MLI shall reasonably
request
|
Upon
or before execution and delivery of this Confirmation
|
Yes
|
|
MLI
|
Guarantee
of its Credit Support Provider, substantially in the form of
Exhibit A
attached hereto, together with evidence of the authority and
true
signatures of the signatories, if applicable
|
Upon
or before execution and delivery of this Confirmation
|
Yes
|
14
Addresses
for Notices:
For the
purpose of Section
12(a)
of the
Agreement:
Address
for notices or communications to MLI for all purposes:
|
Address:
|
Xxxxxxx
Xxxxx International
|
||
|
Xxxxxxx
Xxxxx Financial Centre
|
|||
|
0
Xxxx Xxxxxx Xxxxxx
|
|||
|
London
EC1A 1HQ
|
|||
|
Attention:
|
Manager,
Fixed Income Settlements
|
||
|
Facsimile
No.:
|
00
000 000 0000
|
||
|
Telephone
No.:
|
00
000 000 0000
|
Address
for notices or communications to Counterparty for all purposes:
|
Address:
|
|||
|
0000
Xxxxx Xxxxxx
|
|||
|
Radford,
Virginia 24141
|
|||
|
Attention:
|
Xxxxxxx
X. Xxxxxxx XX
|
||
|
V.P.,
Finance and Controller
|
|||
|
Telephone
No.:
|
000-000-0000
|
||
|
Facsimile
No.:
|
000-000-0000
|
Process
Agent:
For the
purpose of Section 13(c) of the Agreement, MLI appoints as its process agent:
|
Address:
|
Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
|
||
|
000
Xxxxxxxx, 00xx
Floor
|
|||
|
Attention:
|
Litigation
Department
|
||
| Counterparty does not appoint a Process Agent. | |||
Multibranch
Party.
For the
purpose of Section
10(c)
of the
Agreement: Neither MLI nor Counterparty is a Multibranch Party.
Calculation
Agent. The
Calculation Agent is MLI.
Credit
Support Document.
MLI:
Guarantee of ML & Co. in the form attached hereto as Exhibit A.
Counterparty:
Not Applicable
Credit
Support Provider.
15
With
respect to MLI: ML & Co.
With
respect to Counterparty: Not Applicable.
Governing
Law. This
Confirmation will be governed by, and construed in accordance with, the laws
of
the State of New York.
Waiver
of Jury Trial.
Each
party waives, to the fullest extent permitted by applicable law, any right
it
may have to a trial by jury in respect of any suit, action or proceeding
relating to this Transaction. Each party (i) certifies that no representative,
agent or attorney of the other party has represented, expressly or otherwise,
that such other party would not, 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 into this Transaction, as
applicable, by, among other things, the mutual waivers and certifications
provided herein.
Netting
of Payments.
The
provisions of Section
2(c)
of the
Agreement shall not be applicable to this Transaction.
Basic
Representations. Section
3(a)
of the
Agreement is hereby amended by the deletion of “and” at the end of Section
3(a)(iv);
the
substitution of a semicolon for the period at the end of Section
3(a)(v)
and the
addition of Sections
3(a)(vi),
as
follows:
Eligible
Contract Participant; Line of Business. Each
party agrees and represents that it is an “eligible contract participant” as
defined in Section 1a(12) of the U.S. Commodity Exchange Act, as amended
(“CEA”),
this
Agreement and the Transaction thereunder are subject to individual negotiation
by the parties and have not been executed or traded on a “trading facility” as
defined in Section 1a(33) of the CEA, and it has entered into this Confirmation
and this Transaction in connection with its business or a line of business
(including financial intermediation), or the financing of its
business.
Amendment
of Section 3(a)(iii). Section
3(a)(iii) of the Agreement is modified to read as follows:
No
Violation or Conflict.
Such
execution, delivery and performance do not materially violate or conflict with
any law known by it to be applicable to it, any provision of its constitutional
documents, any order or judgment of any court or agency of government applicable
to it or any of its assets or any material contractual restriction relating
to
Specified Indebtedness binding on or affecting it or any of its assets.
Amendment
of Section
3(a)(iv).
Section
3(a)(iv) of the Agreement is modified by inserting the following at the
beginning thereof:
“To
such
party’s best knowledge,”
Acknowledgements:
|
(a)
|
The
parties acknowledge and agree that there are no other representations,
agreements or other undertakings of the parties in relation to this
Transaction, except as set forth in this
Confirmation.
|
|
(b)
|
The
parties hereto intend for:
|
|
(i)
|
this
Transaction to be a “securities contract” as defined in Section 741(7) of
Title 11 of the United States Code (the “Bankruptcy
Code”),
qualifying for the protections under Section 555 of the Bankruptcy
Code;
|
|
(ii)
|
a
party’s right to liquidate this Transaction and to exercise any other
remedies upon the occurrence of any Event of Default under the Agreement
with respect to the other party to constitute a “contractual right” as
defined in the Bankruptcy Code;
|
16
|
(iii)
|
all
payments for, under or in connection with this Transaction, all payments
for the Shares and the transfer of such Shares to constitute “settlement
payments” as defined in the Bankruptcy
Code.
|
|
(c)
|
The
parties acknowledge and agree that in the event of an Early Termination
Date as a result of an Event of Default, the amount payable under
the
Agreement will be a cash amount calculated as described therein and
that
any delivery specified in this Transaction will no longer be
required.
|
Amendment
of Section
6(d)(ii).
Section
6(d)(ii) of
the
Agreement is
modified by deleting the words “on the day” in the second line thereof and
substituting therefor “on the day that is three Local Business Days after the
day”. Section
6(d)(ii)
is
further modified by deleting the words “two Local Business Days” in the fourth
line thereof and substituting therefor “three Local Business Days.”
Amendment
of Definition of Reference Market-Makers.
The
definition of “Reference Market-Makers” in Section
14
is
hereby amended by adding in clause (a) after the word “credit” and before the
word “and” the words “or to enter into transactions similar in nature to the
Transactions.”
Consent
to Recording.
Each
party consents to the recording of the telephone conversations of trading and
marketing personnel of the parties and their Affiliates in connection with
this
Confirmation. To the extent that one party records telephone conversations
(the
“Recording Party”) and the other party does not (the “Non-Recording Party”), the
Recording Party shall in the event of any dispute, make a complete and unedited
copy of such party’s tape of the entire day’s conversations with the
Non-Recording Party’s personnel available to the Non-Recording Party. The
Recording Party’s tapes may be used by either party in any forum in which a
dispute is sought to be resolved and the Recording Party will retain tapes
for a
consistent period of time in accordance with the Recording Party’s policy unless
one party notifies the other that a particular transaction is under review
and
warrants further retention.
Disclosure.
Each
party hereby
acknowledges and agrees that MLI has authorized Counterparty to disclose this
Transaction and any related hedging transaction between the parties if and
to
the extent that Counterparty reasonably determines (after consultation with
MLI)
that such disclosure is required by law or by the rules of The NASDAQ Global
Market or any securities exchange.
Severability.
If any
term, provision, covenant or condition of this Confirmation, or the application
thereof to any party or circumstance, shall be held to be invalid or
unenforceable in whole or in part for any reason, the remaining terms,
provisions, covenants, and conditions hereof shall continue in full force and
effect as if this Confirmation had been executed with the invalid or
unenforceable provision eliminated, so long as this Confirmation as so modified
continues to express, without material change, the original intentions of the
parties as to the subject matter of this Confirmation and the deletion of such
portion of this Confirmation will not substantially impair the respective
benefits or expectations of parties to this Agreement; provided,
however,
that
this severability provision shall not be applicable if any provision of
Section
2,
5,
6
or
13
of the
Agreement (or any definition or provision in Section
14
to the
extent that it relates to, or is used in or in connection with any such Section)
shall be so held to be invalid or unenforceable.
Affected
Parties.
For
purposes of Section
6(e)
of the
Agreement, each party shall be deemed to be an Affected Party in connection
with
Illegality and any Tax Event.
[Signatures
follow on separate page]
17
Please
confirm that the foregoing correctly sets forth the terms of our agreement
by
executing the copy of this Confirmation enclosed for that purpose and returning
it to us.
|
Very
truly yours,
|
|||
|
XXXXXXX
XXXXX INTERNATIONAL
|
|||
|
By:
|
/s/
|
Xxxx
Xxxxxxxx
|
|
|
Name:
|
Xxxx Xxxxxxxx | ||
Confirmed
as of the date first above written:
|
By:
|
/s/
|
Xxxxx X. Xxxxxxxx | |
| Name: | Xxxxx X. Xxxxxxxx | ||
|
Title:
|
Chief Operating Officer, Chief | ||
| Financial Officer and Secretary | |||
Acknowledged
and agreed as to matters to the Agent:
XXXXXXX
LYNCH, XXXXXX, XXXXXX & XXXXX INCORPORATED,
Solely
in
its capacity as Agent hereunder
|
By:
|
/s/
|
Xxxxxx
Xxxxxxxx
|
|
Name:
|
Xxxxxx
Xxxxxxxx
|
|
EXHIBIT
A
GUARANTEE
OF XXXXXXX XXXXX & CO., INC.
FOR
VALUE
RECEIVED, receipt of which is hereby acknowledged, XXXXXXX XXXXX & CO.,
INC., a corporation duly organized and existing under the laws of the State
of
Delaware (“ML & Co.”), hereby unconditionally guarantees to New River
Pharmaceuticals Inc. (the “Company”), the due and punctual payment of any and
all amounts payable by Xxxxxxx Xxxxx International, a company organized under
the laws of England and Wales (“ML”), under the terms of the Confirmation of OTC
Warrant Transaction between the Company and ML (ML as Buyer), dated as of July
19, 2006 (the “Confirmation”), including, in case of default, interest on any
amount due, when and as the same shall become due and payable, whether on the
scheduled payment dates, at maturity, upon declaration of termination or
otherwise, according to the terms thereof. In case of the failure of ML
punctually to make any such payment, ML & Co. hereby agrees to make such
payment, or cause such payment to be made, promptly upon demand made by the
Company to ML & Co.; provided, however that delay by the Company in giving
such demand shall in no event affect ML & Co.’s obligations under this
Guarantee. This Guarantee shall remain in full force and effect or shall be
reinstated (as the case may be) if at any time any payment guaranteed hereunder,
in whole or in part, is rescinded or must otherwise be returned by the Company
upon the insolvency, bankruptcy or reorganization of ML or otherwise, all as
though such payment had not been made.
ML
&
Co. hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Confirmation;
the absence of any action to enforce the same; any waiver or consent by the
Company concerning any provisions thereof; the rendering of any judgment against
ML or any action to enforce the same; or any other circumstances that might
otherwise constitute a legal or equitable discharge of a guarantor or a defense
of a guarantor. ML covenants that this guarantee will not be discharged except
by complete payment of the amounts payable under the Confirmation. This
Guarantee shall continue to be effective if XX xxxxxx or consolidates with
or
into another entity, loses its separate legal identity or ceases to
exist.
ML
&
Co. hereby waives diligence; presentment; protest; notice of protest,
acceleration, and dishonor; filing of claims with a court in the event of
insolvency or bankruptcy of ML; all demands whatsoever, except as noted in
the
first paragraph hereof; and any right to require a proceeding first against
ML.
ML
&
Co. hereby certifies and warrants that this Guarantee constitutes the valid
obligation of ML & Co. and complies with all applicable laws.
This
Guarantee shall be governed by, and construed in accordance with, the laws
of
the State of New York.
This
Guarantee may be terminated at any time by notice by ML & Co. to the Company
given in accordance with the notice provisions of the Confirmation, effective
upon receipt of such notice by the Company or such later date as may be
specified in such notice; provided, however, that this Guarantee shall continue
in full force and effect with respect to any obligation of ML under the
Confirmation.
This
Guarantee becomes effective concurrent with the effectiveness of the
Confirmation, according to its terms.
IN
WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed in its
corporate name by its duly authorized representative.
|
XXXXXXX
XXXXX & CO., INC.
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|||
|
By:
|
/s/ |
Xxxxxxxx
Xxxxxxxxxxxx
|
|
|
Name:
Xxxxxxxx Xxxxxxxxxxxx
|
|||
|
Title:
Designated Secretary
|
|||
|
Date:
July 19, 2006
|
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