EXHIBIT 99.9
December 22, 2004
United Service Technologies Limited
9 Columbus Center
Pelican Drive, Road Town
Tortola
British Virgin Islands
Bear, Xxxxxxx International Limited
Xxx Xxxxxx Xxxxxx
Xxxxxx X00 0XX
Xxxxxxx
Reference Number: NY33558
Dear Sir or Madam,
The purpose of this letter agreement (this "CONFIRMATION") is to confirm the
terms and conditions of the transaction specified below entered into between us
on the Trade Date (as defined below) (the "TRANSACTION"). This Confirmation
shall constitute the "Confirmation" as referred to in the Agreement (as defined
below).
In this Confirmation, "BSIL" means Bear, Xxxxxxx International Limited,
"COUNTERPARTY" means United Service Technologies Limited, and its successors,
assigns and permitted transferees ("UNISERV"). On and after the time of
effectiveness of the Novation Agreement (as defined in the Amended and Restated
Credit Agreement dated as of December 16, 2004 (the "CREDIT AGREEMENT")) on the
Novation Date (as defined in the Credit Agreement), "Counterparty" will mean the
SPV (as defined in the Credit Agreement), and on and after that time, Uniserv
shall have been released from certain Claims (as defined in the Novation
Agreement).
1. The definitions and provisions contained in the 2002 ISDA Equity
Derivatives Definitions (the "2002 DEFINITIONS"), each as published by the
International Swaps and Derivatives Association, Inc. ("ISDA"), are
incorporated into this Confirmation. In the event of any inconsistency
between the Definitions and this Confirmation, this Confirmation shall
govern. In the event of any inconsistency in the defined terms in this
Confirmation and the Credit Agreement, the Credit Agreement shall govern.
Each Transaction shall be deemed to be a Share Option Transaction or a
Share Forward Transaction, within the meaning set forth in the 2002
Definitions.
This Confirmation shall supplement, form a part of and be subject to an
agreement (the "AGREEMENT") in the form of the 1992 ISDA Master Agreement
(Multicurrency - Cross Border) (the "ISDA FORM"), as published by ISDA, as
if BSIL and Counterparty had executed the ISDA Form (without any Schedule
or Annex thereto and without reference to the 2002 Master Agreement
Protocol) on the date hereof. All provisions contained in the Agreement
are incorporated into and shall govern this Confirmation except as
expressly modified below. This Confirmation evidences a binding agreement
between you and us as to the terms of the Transaction relating to each
Tranche and shall replace any previous agreement between us with respect
to the subject matter hereof. This Confirmation shall be deemed to
supplement, form part of and be subject to the same, single Agreement.
If there exists any ISDA Master Agreement between BSIL and Counterparty or
any confirmation or other agreement between BSIL and Counterparty pursuant
to which an ISDA Master Agreement is deemed to exist between BSIL and
Counterparty, then notwithstanding
anything to the contrary in such ISDA Master Agreement, such confirmation
or agreement or any other agreement to which BSIL and Counterparty are
parties, the Transaction shall not be considered a Transaction under, or
otherwise governed by, such existing (or deemed to exist) ISDA Master
Agreement.
The Transaction shall consist of a number of tranches (each, a "TRANCHE")
as set forth herein and each such Tranche shall, for purposes of
determining the payments and deliveries under this Confirmation,
constitute a Transaction. Each Tranche will further consist of individual
components (each a "COMPONENT" and together the "COMPONENTS"), each with
the terms and conditions as set forth in this Confirmation. The payments
and deliveries to be made upon settlement of each Tranche shall be
determined separately for each Component of each Tranche as if such
Component were a separate Transaction (but each Component shall not be
deemed a separate transaction for any other purpose). Each particular
Component of each Tranche shall consist of (i) a Share Forward Transaction
and (ii) Share Option Transactions that constitute a Collar (as defined
below), and the terms of such Share Forward Transaction and Collar are set
forth below. In addition, any Potential Adjustment Event or Spin-off (each
as defined below) and the application of the consequences of any
Extraordinary Event shall be determined separately for each Tranche, as if
each Tranche were a separate Transaction and as if the Transaction were a
Share Forward Transaction; provided that, for the avoidance of doubt, for
purposes of determining any Cancellation Amount or amounts due on an Early
Termination Date all Components of each Tranche shall be considered as one
Share Forward Transaction. Notwithstanding anything to the contrary
herein, the Collar and the Share Forward Transaction that together
constitute a Tranche shall constitute a single, inseparable transaction.
2. The terms of each Tranche are as follows. For purposes of this
Confirmation, the words and expressions in the first column have the
meanings stated opposite them in the second column:
(a) General Terms:
Trade Date: December 22, 2004. Notwithstanding the
foregoing, the obligations of the parties
under this Confirmation are subject to
the condition that all the conditions in
Section 4.01 of the 5-year Credit
Agreement (as defined in the Credit
Agreement) have been satisfied.
Option Style: In respect of any Collar, European
Option Type: A combination of a Put and a Call (a
"COLLAR")
Put Seller (Call Buyer): BSIL
Call Seller (Put Buyer): Counterparty
Forward Seller: Counterparty
Forward Buyer: BSIL
Prepayment: In respect of any Share Forward
Transaction, not applicable
Variable Obligation: In respect of any Share Forward
Transaction, not applicable
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Shares: Ordinary shares, no par value per share,
of UTi Worldwide Inc., an international
business company incorporated under the
laws of the British Virgin Islands (the
"ISSUER") (Exchange symbol: UTIW).
Number of Tranches: 3
Number of Options: In respect of any Collar, 3,806,500 in
the aggregate with respect to the
Transaction. The Number of Options for
each Tranche shall be as set forth below:
Tranche No. 1 1,268,833 options
Tranche No. 2 1,268,833 options
Tranche No. 3 1,268,834 options
With respect to any Component of each
Tranche, the Number of Options for such
Component shall be as set forth in Annex
C attached hereto.
Number of Shares: In respect of any Share Forward
Transaction, the Number of Shares for
each Tranche and each Component of each
Tranche shall be equal to the Number of
Options for such Tranche and such
Component of such Tranche, respectively.
Number of Components: 30 per Tranche, as set forth in Annex C
attached hereto.
Initial Price: USD 65.00 per Share, the public offering
price per Share at which the Underwriters
(as defined below) in the Underwriting
Agreement (as defined below) sell Shares
constituting the Initial Short, pursuant
to such Underwriting Agreement.
Call Strike Price: USD 78.00 per Share, which is 120% of the
Initial Price.
Put Strike Price: USD 65.00 per Share, which is 100% of the
Initial Price.
Initial Hedge: On or prior to the date of execution of
this Confirmation, BSIL (or an affiliate
of BSIL) shall establish BSIL's initial
delta hedge of the price and market risk
under this Confirmation by short selling
in an underwritten public offering (the
"INITIAL SHORT"), subject to the terms
and conditions in an underwriting
agreement to be entered into among the
Issuer, Counterparty and the underwriters
named therein (the "UNDERWRITERS")
relating to this Confirmation (the
"UNDERWRITING AGREEMENT"), a number of
Shares equal to 2,896,325 (as such number
may increase up to 3,330,600 pursuant to
"Option to Increase the Number of Options
and the Number of Shares"
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below) pursuant to an effective
Registration Statement provided by the
Issuer. Following consummation of the
Initial Short, BSIL (or an affiliate of
BSIL) shall short sell in accordance with
the Underwriting Agreement, the
Registration Rights Agreement and such
effective Registration Statement and
repurchase a number of Shares equal to
413,675, which is the aggregate Number of
Options (as such number may increase up
to 475,900 pursuant to "Option to
Increase the Number of Options and the
Number of Shares" below) less the Initial
Short. BSIL shall use commercially
reasonable efforts to complete the short
sales (the "ADDITIONAL SHORT")
contemplated by the second sentence of
this section as promptly as practicable,
subject to the Issuer's performance of
its obligations pursuant to the
Registration Rights Agreement. Following
the close of business on the Trade Date,
BSIL shall notify Counterparty of the
number of Shares sold as part of the
Additional Short and shall further notify
Counterparty upon completion of the:
Additional Short.
Exchange: The National Association of Securities
Dealers Automated Quotation National
Market System
Related Exchange(s): All Exchanges
Options to Increase the If, pursuant to the Underwriting
Number of Options and the Agreement, the Underwriters exercise
Number of Shares: their option to purchase Optional
Securities (as defined in the
Underwriting Agreement), then, effective
as of the date of such option closing
(the "OPTION CLOSING DATE"), the
aggregate Number of Options in respect of
the Collar and the aggregate Number of
Shares in respect of the Share Forward
Transaction for all Tranches and all
Components of all such Tranches shall be
increased by the number of Optional
Securities to be purchased and the
corresponding increase to the number of
Additional Securities as set forth in the
Underwriting Agreement, and the Number of
Options and Number of Shares, as
applicable, for each Tranche and each
Component of such Tranche shall be
proportionally increased (rounded on the
same basis in determining the Number of
Options for each such Component as set
forth under "Number of Options" above).
Each of the parties to this Confirmation
hereby acknowledges that the Underwriters
have exercised in full their option to
purchase Optional Securities and that the
Option Closing Date shall be December 22,
2004.
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(b) Procedures for
Exercise/Valuation:
Scheduled Maturity Date For each Tranche, the date as set forth
for Each Tranche: below:
Tranche No. 1 July 16, 2007
Tranche No. 2 January 16, 2008
Tranche No. 3 July 15, 2008
Expiration Dates or As applicable, in respect of each
Valuation Dates: Component of each Tranche of the Collar
and the Share Forward Transaction, a date
as set forth in Annex C attached hereto,
to be one of a number of consecutive
Scheduled Trading Days equal to the
Number of Components for such Tranche,
starting on the First Expiration Date or
First Valuation Date relating to such
Tranche, as applicable; provided that if
that date is a Disrupted Day, the
Expiration Date or Valuation Date, as
applicable, for such Component shall be
the first succeeding Scheduled Trading
Day that is not a Disrupted Day and that
is not or is not deemed to be an
Expiration Date or Valuation Date, as
applicable, in respect of any other
Component under the Transaction; and
provided further that if the Expiration
Date or Valuation Date, as applicable,
for any Component has not occurred
pursuant to the preceding proviso as of
the eighth Scheduled Trading Day
following the last scheduled Expiration
Date for such Component of such Tranche,
that eighth Scheduled Trading Day shall
be the Expiration Date or Valuation Date,
as applicable, for such Component
(irrespective of whether such day is an
Expiration Date or Valuation Date as
applicable, in respect of any other
Component) and the Calculation Agent
shall determine its good faith estimate
of the value for the Shares as of the
Valuation Time on that eighth Scheduled
Trading Day. Notwithstanding the
foregoing and anything to the contrary in
the 2002 Definitions, if a Market
Disruption Event occurs on any Expiration
Date or Valuation Date, as applicable,
the Calculation Agent may determine that
such Expiration Date or Valuation Date,
as applicable, is a Disrupted Day only in
part, in which case the Calculation Agent
shall make reasonable and appropriate
adjustments to the Number of Options or
the Number of Shares, as applicable, for
the relevant Component for which such day
shall be the Expiration Date or Valuation
Date, as applicable, and shall designate
the Scheduled Trading Day determined in
the manner described in the immediately
preceding sentence as the Expiration Date
or Valuation Date, as applicable, for the
remaining Options and Shares
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for such Component. Such determination
and adjustments will be based on, among
other factors, the duration of any Market
Disruption Event and the volume,
historical trading patterns and price of
the Shares.
First Expiration Date or The date 30 Scheduled Trading Days
First Valuation Date: immediately prior to and including the
Scheduled Maturity Date.
Settlement Date: For each Component of each Tranche, the
date that is one Settlement Cycle
following the Valuation Date of the final
Component of such Tranche; provided that,
and for the avoidance of doubt, the Cash
Settlement Payment Date in respect of a
Cash Settlement of each Component of each
Tranche, shall be as set forth in Section
8.8 of the 2002 Definitions with respect
to the Valuation Date for such Component.
Market Disruption Event: Section 6.3(a) of the 2002 Definitions is
hereby amended by replacing clause (ii)
thereof in its entirety with the
following: "(ii) an Exchange Disruption,
or" and inserting immediately following
clause (iii) thereof the following: "; in
each case that the Calculation Agent
determines is material."
Automatic Exercise: In respect of any Collar, Applicable;
provided that "IN-THE-MONEY" means (A)
the Relevant Price is less than the Put
Strike Price or (B) the Relevant Price is
more than the Call Strike Price.
(c) Valuation:
Relevant Price: VWAP Price
VWAP Price: On any day, the "Volume Weighted Average
Price" per Share on such day, as
displayed on Bloomberg Page "UTIW UQ
AQR" (or any successor thereto)
for the Issuer with respect to the period
from 9:30 a.m. to 4:00 p.m. (New York
City time) on such day, as determined by
the Calculation Agent.
Forward Price: In respect of any Share Forward
Transaction, for any Component of any
Tranche, the Relevant Price on the
Valuation Date for such Component.
Number of Shares to be Solely with respect to any Share Forward
Delivered: Transaction, including each Component of
each Tranche of such Forward Transaction,
notwithstanding anything to the contrary
herein or in Section 9.5(b) of the 2002
Definitions, the
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Number of Shares to be Delivered for such
Component shall be: (i) if the Relevant
Price is less than the Put Strike Price
for such Tranche or greater than the Call
Strike Price for such Tranche, zero and
(ii) otherwise, a number equal to:
Put Strike Price
--------------------------------- x Number of Shares for such Component
Relevant Price for such Component
(d) Settlement Terms:
Settlement Method Applicable for any Tranche, subject to
Election: Cash Settlement below; provided that the
Settlement Method Election shall apply to
all Components of such Tranche.
Default Settlement Method: Physical Settlement
Electing Party: Counterparty
Settlement Method For any Tranche, the date that is 10
Election Date: Scheduled Trading Days prior to the First
Expiration Date or First Valuation Date,
as applicable, for such Tranche.
Settlement Currency: USD
Cash Settlement: For Cash Settlement of any Tranche, the
amount due upon cash settlement (the
"CASH SETTLEMENT AMOUNT") for each
Component of such Tranche shall be, in
respect of the Collar, the Option Cash
Settlement Amount for the Put Option or
Call Option, as applicable and, in
respect of the Share Forward Transaction,
zero.
If Cash Settlement in respect of any
Component of any Tranche is applicable:
(i) on the Exchange Business Day
immediately preceding the First
Expiration Date for such Tranche,
Counterparty shall deliver to BSIL in
pledge pursuant to the Pledge
Agreement (as defined below) Eligible
Collateral (as defined in the Pledge
Agreement) in an amount equal to the
Principal Amount at Maturity of the
related Tranche Loan (as defined in
the Credit Agreement) for such
Tranche;
(ii) on the Exchange Business Day
immediately preceding the Valuation
Date for such Component of such
Tranche (the "PRELIMINARY CASH
SETTLEMENT DATE"), Counterparty shall
pay to BSIL an amount equal to the
110% of the Option Cash Settlement
Amount in respect of the Call
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Option (if any) as if such
Preliminary Cash Settlement Date were
the Valuation Date for such
Component; and
(iii) if the Relevant Price on such
Preliminary Cash Settlement Date is
less than the Call Strike Price, but
equal to or greater than 97% of the
Call Strike Price, Counterparty shall
pay to BSIL on such Preliminary Cash
Settlement Date an amount equal to
110% of the product of the difference
between the Call Strike Price and the
Relevant Price, times the Number of
Options (such amount, together with
any amount set forth in clause (ii)
above, the "PRELIMINARY OPTION CASH
SETTLEMENT AMOUNT").
If the Option Cash Settlement Amount due
on the Cash Settlement Payment Date for
such Component exceeds the Preliminary
Option Cash Settlement Amount for such
Component, Counterparty shall pay to BSIL
the amount of such excess on such Cash
Settlement Payment Date (in addition to
any other amounts required by clause (ii)
or (iii) above if such Cash Settlement
Payment Date is also a Preliminary Cash
Settlement Date for any following
Component). If the Preliminary Option
Cash Settlement Amount for such Component
exceeds the Option Cash Settlement Amount
for such Component, BSIL shall pay to
Counterparty the amount of such excess on
such Cash Settlement Payment Date.
If Counterparty fails to make the
payments and deliveries required in
clause (i), (ii) or (iii) above (other
than, for the avoidance of doubt, the
obligation to pay any excess of the
Option Cash Settlement Amount over the
Preliminary Cash Settlement Amount),
then, notwithstanding any Settlement
Method Election to the contrary, Physical
Settlement shall apply in respect of all
remaining Components.
(e) Excess Dividend Amount: With respect to any Share Forward
Transaction and for the avoidance of
doubt, all references to the Excess
Dividend Amount shall be deleted from
Section 8.4(b) and 9.2(a)(iii) of the
2002 Definitions.
(f) Dividends:
Extraordinary Dividend: Any dividend or distribution on the
Shares (other than any dividend or
distribution of the type described in
Section
8
11.2(e)(i) or Section 11.2(e)(ii)(A) or
(B) of the 2002 Definitions) the amount
or value of which differs in amount from
the Ordinary Dividend Amount for such
dividend or distribution, as determined
by the Calculation Agent.
Ordinary Dividend Amount: USD 0.00
Payment Obligation in In the event of any Extraordinary
Respect of Extraordinary Dividend, Counterparty shall make a cash
Dividends: payment to BSIL, on the date such
Extraordinary Dividend is paid to holders
of Shares, in an amount equal to the
product of (i) the aggregate Number of
Options for all Tranches on the
ex-dividend date on the Exchange for such
Extraordinary Dividend and (ii) the
excess, if any, of the per Share amount
or value of such Extraordinary Dividend
over the Ordinary Dividend Amount for
such Extraordinary Dividend, as
determined by the Calculation Agent.
(g) Share Adjustments:
Potential Adjustment If an event occurs that constitutes both
Events: a Potential Adjustment Event under
Section 11.2(e)(ii)(C) of the 2002
Definitions and a Spin-off as described
below, it shall be treated hereunder as a
Spin-off and not as a Potential
Adjustment Event.
Method of Adjustment: Calculation Agent Adjustment
Spin-off: A distribution of New Shares or a
reclassification of Shares into such
Shares and New Shares (in each case, the
"SPIN-OFF SHARES") in respect of a
subsidiary or business unit of the Issuer
(the "SPIN-OFF ISSUER") to holders of the
Shares (the "ORIGINAL SHARES"). Solely
with respect to a Spin-off, "New Shares"
shall have the meaning provided in
Section 12.1(i) of the 2002 Definitions
except that the phrase immediately
preceding clause (i) thereof shall be
replaced by the following: "'New Shares'
means ordinary or common shares of the
Spin-off Issuer that are, or that as of
the ex-dividend date of such Spin-off are
scheduled promptly to be,".
Consequences of Spin-offs: As of the ex-dividend date on the
Exchange of a Spin-off, at the election
of BSIL, either (i) (A) "Shares" shall
mean the Original Shares and the Spin-off
Shares; (B) the Transaction (and each
Collar and Share Forward Transaction of
such Transaction) shall continue but as a
Share Basket Transaction with a Number of
Baskets equal to the Number of Options
and the Number of Shares, as applicable,
prior to such Spin-off, and each Basket
shall consist of one Original Share and a
number of
9
Spin-off Shares that a holder of one
Original Share would have been entitled
to receive in such Spin-off; and (C) the
Calculation Agent shall make such
adjustments to the exercise, settlement,
payment or any other terms of the
Transaction as the Calculation Agent
determines appropriate to account for the
economic effect on the Transaction of
such Spin-off, which may, but need not,
be determined by reference to the
adjustment(s) made in respect of such
Spin-off by an options exchange to
options on the Shares traded on such
options exchange; or (ii) (A) the
Transaction (and each Collar and Share
Forward Transaction of such Transaction)
shall continue with respect to the Shares
and the parties hereto, shall be deemed
to have entered into a separate
transaction on the Spin-off Shares (the
"DEEMED TRANSACTION") relating to, in the
aggregate, a number of Spin-off Shares
that a holder of one Original Share would
have been entitled to receive in such
Spin-off, multiplied by the Number of
Options, and (B) the Calculation Agent
shall make such adjustments to the
exercise, settlement, payment or any
other terms of the Transaction and such
Deemed Transaction as the Calculation
Agent determines appropriate to account
for the economic effect on the
Transaction of such Spin-off, which may,
but need not, be determined by reference
to the adjustment(s) made in respect of
such Spin-off by an options exchange to
options on the Shares traded on such
options exchange. As of the ex-dividend
date of any subsequent Spin-off, the
Calculation Agent shall make adjustments
to the composition of the Basket and
other terms of the Transaction or Deemed
Transaction, as applicable, in accordance
with the immediately preceding sentence.
Notwithstanding the foregoing, (i) if the
Calculation Agent determines that any
adjustments to the Transaction or Deemed
Transaction in accordance with this
paragraph would not produce a
commercially reasonable result, or would
not preserve the economics of the
Transaction to the parties, BSIL, at its
election, shall either terminate the
Transaction as if (x) such Spin-Off were
an Extraordinary Event to which
Cancellation and Payment (Calculation
Agent Determination) applies and (y) the
announcement date for the Spin-off were
the date of such Extraordinary Event or
(ii) continue the Transaction but only on
the Shares or Spin-off Shares, as it
shall elect, and the Calculation Agent
shall make such adjustments to the
exercise, settlement, payment or any
other terms of the Transaction as the
Calculation Agent
10
determines appropriate to account for the
economic effect on the Transaction of
such Spin-off, which may, but need not,
be determined by reference to the
adjustment(s) made in respect of such
Spin-off by an options exchange to
options on the Shares traded on such
options exchange.
(h) Extraordinary Events:
(i) Merger For the avoidance of doubt, the
definition of Merger Event in 12.1(b)
shall not include a merger, amalgamation
or consolidation of Counterparty and any
of its affiliates (as defined in the
Securities Act of 1933, as amended, and
the rules and regulations promulgated
thereunder (the "SECURITIES ACT"))
without regard to the definition of
Affiliate hereunder) so long as such
transaction would not result in an Event
of Default under the Credit Agreement.
(ii) Consequences
of Merger Events:
Share-for-Share: Modified Calculation Agent Adjustment
Share-for-Other: Cancellation and Payment (Calculation
Agent Determination)
Share-for-Combined: Modified Calculation Agent Adjustment
(iii) Tender Offer: Applicable; provided that the definition
of "Tender Offer" in Section 12.1(d) is
amended to replace the phrase "greater
than 10% and less than 100% of the
outstanding voting shares of the Issuer"
with "greater than 15% and less than 100%
of the outstanding shares of the Issuer"
and making corresponding changes to the
terms.
Share-for-Share: Modified Calculation Agent Adjustment
Share-for-Other: Modified Calculation Agent Adjustment
Share-for-Combined: Modified Calculation Agent Adjustment
(iv) Nationalization, Cancellation and Payment (Calculation
Insolvency or Agent Determination)
Delisting:
(v) Additional Disruption
Events:
Change in Law: Applicable (Determining Party: BSIL);
provided that if such change in law
results in a DRL Event (as defined in the
Credit Agreement) but no other event that
would result in a Change in Law, then it
shall not be a Change in Law.
Notwithstanding
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anything to the contrary herein or in any
other Financing Documents, Counterparty
shall use its reasonable efforts to cure
such DRL Event at the expense of BSIL to
the extent reasonably possible unless the
consequences of taking any actions
related to such cure or such cure would
be materially adverse to Uniserv. Without
limiting the foregoing, on and after the
Novation Date, it is understood and
agreed that in Uniserv's reasonable
judgment, such action or cure may be
deemed to be materially adverse to
Uniserv if it would (i) be materially
adverse to SPV and (ii) increase the
scope of the Obligations that may
constitute Guaranteed Obligations (as
defined in the Guarantee).
Failure to Deliver: Not Applicable
Insolvency Filing: Applicable (Determining Party: BSIL)
Hedging Disruption: Not Applicable
Increased Cost of Not Applicable
Hedging:
Loss of Stock Borrow: Not Applicable
Increased Cost of Not Applicable
Stock Borrow:
(i) Certain Acknowledgments:
Non-Reliance: Applicable
Agreements and Applicable
Acknowledgments Regarding
Hedging Activities:
Additional Applicable
Acknowledgments:
(j) Other:
Credit Support Documents: (i) The Pledge Agreement dated as of
December 22, 2004 between Counterparty
and BSIL (the "PLEDGE AGREEMENT");
(ii) The Guarantee dated as of the
Novation Date (as defined in the Credit
Agreement) among Uniserv, as guarantor,
SPV, as obligor, and BSIL, as beneficiary
(the "GUARANTEE");
(iii) The Pledge Agreement dated as of
the Novation Date between Uniserv and
BSIL; and
(iv) The Deed of Debenture dated as of
December
12
23, 2004 between SPV and BSIL (the
"DEBENTURE")
shall each be a Credit Support Document
under the Agreement with respect to which
Counterparty is the sole Credit Support
Provider. For purposes of determining an
Event of Default or a similar event,
howsoever described, under the Credit
Support Documents, any event or
transaction that causes a DRL Event shall
not result in an Event of Default or a
similar event, howsoever described.
Credit Support Provider: Counterparty
Account Details:
Payments to BSIL: To be advised under separate cover prior
to the Trade Date
Payments to The Collateral Account (as defined in the
Counterparty: Pledge Agreement)
Delivery of Shares
to BSIL: DTC#: 352
Account#: 353-04164-1-5
Account Name: United Service
Technologies Limited
Calculation Agent: BSIL. The Calculation Agent will have no
responsibility for good faith errors or
omissions in any determination under the
Transaction.
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3. Other Provisions:
(a) HEDGING DISRUPTIONS:
If at any time BSIL (or an affiliate of BSIL) is unable to (i) (A)
acquire, establish, re-establish, substitute, maintain, unwind or dispose
of any transaction in Shares it deems necessary to hedge the equity price
and market risk of entering into and performing its obligations with
respect to the Transaction or (B) realize, recover, or remit the proceeds
of any such transaction or (ii) borrow from any party reasonably
satisfactory to BSIL (or maintain a borrowing of or any such party
notifies BSIL that it will terminate such borrowing) Shares with respect
to the Transaction in an amount equal to a number of Shares that BSIL
reasonably deems necessary to hedge the equity and market price risk of
entering into and performing its obligations with respect to the
Transaction (but in no event in an amount greater than the aggregate
Number of Options for all Tranches under this Confirmation) at a cost
(inclusive of any tax, duty, expense or fee) equal to or less than 40
basis points per annum as calculated by the Calculation Agent (each such
event, a "HEDGING DISRUPTION EVENT"), then, upon notice of the occurrence
of such Hedging Disruption Event by BSIL to Counterparty and on and after
the Novation Date, Counterparty and Uniserv (but in no event later than
the Exchange Business Day immediately following such notice), Counterparty
and on and after the Novation Date, Counterparty or Uniserv shall either:
(i) lend, or cause to be lent, Shares to BSIL (on an
uncollateralized basis and at a cost as calculated by the
Calculation Agent to BSIL of no more than 40 basis points per annum)
in an amount as BSIL may require (but not to exceed the aggregate
Number of Options, as such number may be adjusted pursuant to the
terms and conditions of this Confirmation, for all Tranches under
this Confirmation); provided that:
(A) any such loan shall be on a term basis, terminating on the
final Settlement Date for the final Tranche hereunder, or at
such earlier time as BSIL shall determine;
(B) if (x) BSIL no longer requires such Shares or any portion
of such Shares in hedging the Transaction, (y) the return of
such Shares or such other portion to Counterparty would, in
the opinion of BSIL and its counsel, cause such Shares or such
portion (or any other Shares in an amount equal to such Shares
or such portion) to become, upon settlement of the
Transaction, "restricted securities" within the meaning of
Rule 144 under the Securities Act and (z) BSIL keeps the loan
of such Shares or such portion outstanding, then Counterparty
shall pay monthly to BSIL, in immediately available funds in
USD, all expenses, fees costs or rebates of stock lender's
fees (including any regulatory charges, costs of funding or
other internal costs or charges) associated with the loan of
such Shares or such portion that BSIL keeps outstanding; and
(C) any Shares to be loaned by Counterparty shall be in
book-entry form and freely tradable without any Transfer
Restrictions (as defined in the Pledge Agreement) so long as
they are transferred in compliance with the position taken by
the staff of the Securities and Exchange Commission in the
Xxxxxxx, Xxxxx & Co. interpretive letter dated October 9,
2003; or
(ii) pay to BSIL upon demand, in immediately available funds in USD,
the costs (inclusive of any tax, duty, expense or fee) of borrowing
(or maintain a borrowing of) Shares, in an amount BSIL reasonably
deems desirable from time to time, from any party reasonably
satisfactory to BSIL to hedge the equity price and market risk of
entering into and performing its obligations with respect to the
Transaction in excess of 40 basis points
14
per annum as calculated by the Calculation Agent; provided that (i)
BSIL provides a reasonably detailed calculation and invoice for such
amount and (ii) BSIL is actually able to borrow or maintain a
borrowing of Shares.
The failure to deliver any Shares or pay any such amount when due shall
constitute an immediate Event of Default with respect to Counterparty.
(b) TERMINATION BY COUNTERPARTY:
Counterparty shall pay to BSIL on the Trade Date an amount in immediately
available funds in USD equal to 3% of the Put Strike Price multiplied by
the aggregate Number of Options for all Tranches hereunder (the
"SUPPLEMENTAL FEE"); provided that in lieu of such payment on the Trade
Date, Counterparty and BSIL agree that the Supplemental Fee may be netted
against the obligation of BSIL to make Loans under the Credit Agreement on
the Closing Date (as defined in the Credit Agreement) and the Loans made
thereunder on the Closing Date shall be reduced by such Supplemental Fee.
So long as (i) no Event of Default (as defined in the Credit Agreement)
shall have occurred or is continuing and (ii) either (a) BSIL, or an
affiliate of BSIL, shall have consummated the Additional Short or (b) the
Issuer shall have satisfied all its obligations under the Registration
Rights Agreement between itself and Counterparty dated as of November 23,
2004, as amended by Amendment No. 1 to the Registration Rights Agreement
dated as of December 17, 2004 (together, the "REGISTRATION RIGHTS
AGREEMENT") (including the availability of the Registration Statement and
Prospectus (each as defined in the Registration Rights Agreement) for at
least 10 Trading Days (as defined in the Registration Rights Agreement)
following the consummation of the Initial Short and (excluding such 10
Trading Day Period) at least 8 calendar weeks prior to any termination
under this paragraph), Counterparty may terminate (the "EARLY UNWIND
OPTION") the Transaction in whole, but not in part, on any date (the
"EARLY UNWIND DATE") following the date that is 7 months from the Trade
Date and prior to the date that is 15 months from the Trade Date, upon
delivery of notice to BSIL at least 20 Exchange Business Days prior to the
Early Unwind Date and delivery on the Early Unwind Date, without payment
by BSIL therefor, of a number of Shares equal to 87.5% of the aggregate
Number of Options for all Tranches under this Confirmation, rounded up to
the nearest whole Share (the "EARLY UNWIND SHARES"). Any Early Unwind
Shares shall be subject to the representation and agreement set forth in
Section 9.11 of the 2002 Definitions (other than the Security Interests as
defined in the Pledge Agreement). Upon delivery of the Early Unwind
Shares, together with any other accrued and unpaid amounts under this
Confirmation, Counterparty's and BSIL's obligations under the Transaction
shall terminate without any further payment or delivery by either
Counterparty or BSIL. For the avoidance of doubt, this clause (b) shall
not apply, and Counterparty shall not have the right to terminate the
Transaction, upon any Termination Payments as defined in clause (c) below.
Notwithstanding anything to the contrary in this Confirmation, upon the
exercise of the Early Unwind Option and the delivery of the Early Unwind
Shares, together with any other accrued and unpaid amounts under this
Confirmation, under no circumstances shall (i) such exercise or delivery
or (ii) any action or event occurring subsequent to such exercise or
delivery constitute a Termination Event, an Event of Default under the
Credit Agreement or this Confirmation or any default or event of default
or termination event under any Financing Document, howsoever described.
(c) TERMINATION VALUATION AND SETTLEMENT IN SHARES:
Notwithstanding anything to the contrary in the Agreement or the 2002
Definitions, and for the avoidance of doubt, any payments in respect of an
Early Termination Date under the Agreement, or any Cancellation Amount
under the 2002 Definitions (each, a "TERMINATION PAYMENT"), shall include
BSIL's (or an affiliate of BSIL) actual costs of unwinding, adjusting
15
or terminating all or any portion of BSIL's (or an affiliate of BSIL)
hedge in respect of the Transaction and BSIL shall notify Counterparty of
any such Termination Payment as soon as reasonably practicable following
BSIL's incurrence of such costs. At Counterparty's election (as
Counterparty shall notify BSIL no later than such Early Termination Date
or the date following the cancellation or termination of the Transaction
giving rise to the Cancellation Amount), Counterparty shall satisfy the
Termination Payment by either (i) making the payments and deliveries set
forth in clause (a) below (the "CASH TERMINATION OBLIGATION") or (ii)
delivering Shares (the "SHARE DELIVERY OBLIGATION") as set forth in clause
(b) below. Notwithstanding Section 6(d)(ii) of the Agreement or Section
12.8 of the Equity Definitions, the payment date in respect of such Early
Termination Date or Cancellation Amount to which a Cash Termination
Obligation or Share Delivery Obligation applies shall be as set forth in
clause (a) or clause (b) below, as applicable.
(a) If Counterparty shall have elected the Cash Termination
Obligation to satisfy the Termination Payment:
(i) on or prior to the date Counterparty elects the Cash
Termination Obligation, it shall deliver to BSIL, in pledge pursuant
to the Pledge Agreement, Eligible Collateral (as defined in the
Pledge Agreement) in an amount equal to BSIL's reasonable estimate
of such Termination Payment as of such date;
(ii) on each Exchange Business Day during the period
commencing on the Early Termination Date or date of cancellation or
termination of the Transaction giving rise to a Cancellation Amount
until the determination of the Termination Payment (which, for the
avoidance of doubt, shall be upon BSIL's (or an affiliate of BSIL)
completion of its unwinding, adjusting or terminating its hedge in
respect of the Transaction) (the "UNWIND PERIOD"), Counterparty
shall deliver to BSIL, in pledge pursuant to the Pledge Agreement,
additional Eligible Collateral in an amount as necessary such that
the value of all Eligible Collateral delivered under clause (i) and
this clause (ii) shall be equal to the Termination Payment as of
such Exchange Business Day, as BSIL shall inform Counterparty;
provided that if on any such Exchange Business Day BSIL has not
informed Counterparty of any adjustments to the amount of the
Termination Payment prevailing on or prior to the immediately
preceding Exchange Business Day, then Counterparty shall have no
obligations under this paragraph on such Exchange Business Day; and
(iii)promptly following the Unwind Period, BSIL shall inform
Counterparty of the Termination Payment and Counterparty shall pay
such Termination Payment in USD no later than the second Exchange
Business Day thereafter.
(b) If Counterparty shall have elected the Share Delivery Obligation
to satisfy the Termination Payment, then on a date specified by BSIL,
Counterparty shall deliver Shares in an amount equal to such Termination
Payment divided by a price per Share reasonably determined by BSIL after
taking into account its actual costs and Share purchase or sale prices on
the Exchange in determining such Termination Payment. Notwithstanding the
foregoing, the Shares deliverable under this clause (b) in satisfaction of
Counterparty's Termination Payment shall not exceed the aggregate Number
of Options for all Tranches hereunder, as such number may be adjusted
pursuant to the terms and conditions of this Confirmation.
(d) ADDITIONAL REPRESENTATIONS AND WARRANTIES OF COUNTERPARTY AND UNISERV:
Uniserv, as Counterparty, as of the date hereof, and SPV, as Counterparty,
on the Novation Date, hereby represents and warrants to BSIL that:
16
(i) Counterparty is an "eligible contract participant" as such term is
defined in Section 1(a)(12) of the Commodity Exchange Act, as
amended.
(ii) Counterparty is not on the date hereof, in possession of any
material non-public information regarding the Issuer.
(iii) Counterparty is not and, after giving effect to the transactions
contemplated to occur on the date of this Confirmation, will not be
required to register as an "investment company" under the Investment
Company Act of 1940, as amended.
(iv) Counterparty is, and shall be as of the date of any payment or
delivery by Counterparty hereunder, able to pay its debts as they
come due, with assets having a fair value greater than liabilities
and with capital sufficient to carry on the businesses in which it
engages.
(v) Counterparty (A) has timely filed, caused to be timely filed or will
timely file or cause to be timely filed all material tax returns
that are required to be filed by it as of the date hereof and (B)
has paid all material taxes, assessments, fees, liabilities or other
charges imposed on it or any of its property by any governmental
authority and required to have been paid by it as of the date
hereof, except (x) taxes that are being contested in good faith, or
(y) to the extent that the failure to do so could not reasonably be
expected to result in a material adverse effect on the ability of
the Counterparty to perform any of its obligations under the
Agreement.
(vi) Counterparty's holding period (calculated in accordance with Rule
144(d) under the Securities Act) with respect to any Shares pledged
pursuant to the terms and conditions of the Pledge Agreement
commenced more than two years prior to the date thereof.
Counterparty agrees that Counterparty has not (A) created or
permitted to exist any Lien (as defined in the Pledge Agreement),
other than the Permitted Security Interests (as defined in the
Debenture), or any Transfer Restriction (as defined in the Pledge
Agreement), other than the Existing Transfer Restrictions (as
defined in the Pledge Agreement), upon or with respect to the
Collateral (as defined in the Pledge Agreement), (B) sold or
otherwise disposed of, or granted any option with respect to, any of
the Collateral or (C) entered into or consented to any agreement
(other than, in the case of clause (x), this Confirmation, the
Pledge Agreement and the Debenture) (x) that restricts in any manner
the rights of any present or future owner of any Collateral with
respect thereto or (y) pursuant to which any person other than
Counterparty, BSIL and any securities intermediary through whom any
of the Collateral is held (but in the case of any such securities
intermediary only in respect of Collateral held through it) has or
will have Control (as defined in the Pledge Agreement) in respect of
any Collateral.
(vii) Other than financing statements or other similar or equivalent
documents or instruments with respect to the Permitted Security
Interests (as defined in the Debenture), no financing statement,
security agreement or similar or equivalent document or instrument
covering all or any part of the Collateral is on file or of record
in any jurisdiction in which such filing or recording would be
effective to perfect a lien, security interest or other encumbrance
of any kind on such Collateral.
(viii) All Collateral consisting of securities and all financial assets
underlying Collateral consisting of security entitlements (each as
defined in Section 8-102
17
of the UCC) at any time pledged under the Pledge Agreement is and
will be issued by an issuer incorporated under the laws of the
British Virgin Islands, and will be uncertificated and either
registered in the name of Counterparty or held through a securities
intermediary whose securities intermediary's jurisdiction (within
the meaning of Section 8-110(e) of the UCC) is located in the United
States.
(ix) No registration, recordation or filing with any governmental body,
agency or official is required or necessary for the perfection or
enforcement of the Security Interests (as defined in the Pledge
Agreement), other than filing of financing statements in any
appropriate jurisdiction and a notation on the register of
mortgages, charges and encumbrances of Counterparty which shall be
filed after the Novation Date with the Registry of Companies in the
British Virgin Islands.
(x) Counterparty has not performed and will not perform any acts that
are reasonably likely to prevent BSIL from enforcing any of the
terms of the Agreement, the Pledge Agreement or the Credit Agreement
or that might limit BSIL in any such enforcement.
(xi) The Location (as defined in the Pledge Agreement) of Counterparty is
at the address set forth in Section 4(e)(i) of this Confirmation.
The following is the mailing address, county and state of each chief
executive office not at such Location maintained by Counterparty at
any time during the past five years:
Equity Trust (BVI) Limited
XX Xxx 000
Xxxx Xxxxx House, Road Town
Tortola
British Virgin Islands.
(xii) The representations and warranties made to the Underwriters in the
Underwriting Agreement are true and correct as of the Trade Date.
(e) ADDITIONAL TERMINATION EVENTS:
(i) The occurrence of any Event of Default under the Credit Agreement
shall constitute an Event of Default for all Transactions hereunder,
with respect to Counterparty.
(i) Unless the Additional Short has been completed, it shall be an
Additional Termination Event if, on or following the Committed
Availability Date (as defined in the Registration Rights Agreement),
(a) the Issuer shall not have satisfied all its obligations under
the Registration Rights Agreement or (b) the Registration Statement
or Prospectus (each as defined in the Registration Rights Agreement)
shall not have been available, for any reason whatsoever, for the
period of 10 Trading Days (as defined in the Registration Rights
Agreement) following the consummation of the Initial Short and
(excluding such 10 Trading Day Period) at least 8 calendar weeks
prior to the Committed Availability Date.
(f) U.S. PRIVATE PLACEMENT REPRESENTATIONS:
Each of BSIL and Counterparty hereby represents and warrants to the other
party as of the date hereof that:
18
(i) It is an "accredited investor", as defined in Regulation D under
the Securities Act, and has such knowledge and experience in financial
and business matters as to be capable of evaluating the merits and
risks of the Transaction, and it is able to bear the economic risk of
the Transaction indefinitely.
(ii) It is entering into the Transaction for its own account and not
with a view to the distribution or resale of the Transaction or its
rights thereunder except pursuant to a registration statement declared
effective under, or an exemption from the registration requirements
of, the Securities Act.
(g) COVENANT OF COUNTERPARTY:
Counterparty agrees that each of Counterparty and its affiliates will
comply with all applicable disclosure or reporting requirements in respect
of the Transaction, including, without limitation, any requirement imposed
by Section 13 or Section 16 of the Exchange Act, if any.
(h) COVENANTS OF BSIL:
(i) BSIL agrees that none of the Share Collateral (as defined in the
Pledge Agreement), the Affiliated Loaned Shares (as defined in the
Underwriting Agreement) or the Shares delivered upon settlement of
this Confirmation (or purchased in the open market in connection with
cash settlement of this Confirmation) will be used to settle any
offers or sales of Shares exceeding the Maximum Number of Shares (as
defined in the Underwriting Agreement) in connection with its dynamic
hedging activities relating to its exposure under this Confirmation
("DYNAMIC HEDGING SALES");
(ii) BSIL agrees that the Share Collateral and the Shares delivered upon
settlement of this Confirmation (or purchased in the open market in
connection with cash settlement of this Confirmation) will only be
used to close out open borrowings created in the course of the
Dealer's (as defined in the Underwriting Agreement) hedging activities
related to its exposure under this Confirmation; and
(iii) BSIL agrees that the Dynamic Hedging Sales effected without delivering
a prospectus will occur following the consummation of the offering of
Offered Securities (as defined in the Underwriting Agreement) and the
sales of Additional Securities (as defined in the Underwriting
Agreement).
(i) SECURITIES CONTRACT:
The parties hereto acknowledge and agree that each of BSIL and the
Custodian (as defined in the Pledge Agreement) is a "stockbroker" within
the meaning of Section 101 (53A) of Title 11 of the United States Code
(the "BANKRUPTCY CODE") and that the Custodian is acting as custodian for
BSIL in connection with the Transaction and that BSIL is a "customer" of
the Custodian within the meaning of Section 741(2) of the Bankruptcy Code.
The parties hereto further recognize that the Transaction is a "securities
contract", as such term is defined in Section 741(7) of the Bankruptcy
Code, entitled to the protection of, among other provisions, Sections 555
and 362(b)(6) of the Bankruptcy Code, and that each payment or delivery of
cash, Shares or other property or assets hereunder is a "settlement
payment" within the meaning of Section 741(8) of the Bankruptcy Code.
(j) ASSIGNMENT:
19
The rights and duties under this Confirmation may not be assigned or
transferred by any party hereto without the prior written consent of the
other parties hereto, such consent not to be unreasonably withheld;
provided that BSIL may assign or transfer any of its rights or duties
hereunder to any Eligible Assignee (as defined in the Credit Agreement)
without the prior written consent of Counterparty.
Notwithstanding the foregoing or anything to the contrary in the Agreement
or this Confirmation, the Confirmation (i) may be assumed, transferred or
assigned by Counterparty without the prior written consent of the other
parties hereto in connection with any consolidation, merger amalgamation,
sale, conveyance or lease permitted by Section 7.01 of the Credit
Agreement and (ii) may be novated pursuant to the Novation Agreement (as
defined in the Credit Agreement) without the requirement of any additional
consent.
(k) NON-CONFIDENTIALITY:
The parties hereby agree that (i) effective from the date of commencement
of discussions concerning the Transaction, Counterparty and each of its
employees, representatives, or other agents may disclose to any and all
persons, without limitation of any kind, the tax treatment and tax
structure of the Transaction and all materials of any kind, including
opinions or other tax analyses, provided by BSIL and its affiliates to
Uniserv relating to such tax treatment and tax structure; provided that
the foregoing does not constitute an authorization to disclose the
identity of BSIL or its affiliates, agents or advisers, or, except to the
extent relating to such tax structure or tax treatment, any specific
pricing terms or commercial or financial information, and (ii) BSIL does
not assert any claim of proprietary ownership in respect of any
description contained herein or therein relating to the use of any
entities, plans or arrangements to give rise to a particular United States
federal income tax treatment for Counterparty.
(l) MATTERS RELATING TO BEAR, XXXXXXX INTERNATIONAL LIMITED:
(i) The date and time of the Transaction evidenced hereby will be
furnished by BSIL and Counterparty upon written request.
(ii) Bear, Xxxxxxx International Limited is regulated by the Financial
Services Authority and has entered into this Transaction as principal.
(m) BENEFICIAL OWNERSHIP:
Notwithstanding anything to the contrary in the Agreement or this
Confirmation, in no event shall BSIL be entitled to receive any Shares if,
upon such receipt of such Shares, its direct or indirect "beneficial
ownership" (within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated
thereunder) would be equal to or greater than 9.9% or more of the
outstanding Shares. In no event shall a failure by Counterparty to deliver
Shares to BSIL as a result of the operation of this paragraph be deemed to
be a Default (as defined in the Credit Agreement) or Termination Event.
4. THE AGREEMENT IS FURTHER SUPPLEMENTED BY THE FOLLOWING PROVISIONS:
(a) Termination Provisions.
(i) "SPECIFIED ENTITY" means in relation to BSIL, none, and in relation to
Counterparty, none.
20
(ii) "SPECIFIED TRANSACTION" will have the meaning specified in Section
14 of the Agreement.
(iii) The "CROSS DEFAULT" provision of Section 5(a)(vi) of the Agreement
will not apply to BSIL and will apply to Counterparty.
For the purpose of such provision:
"SPECIFIED INDEBTEDNESS" means any obligation (whether present or
future, contingent or otherwise, as principal or surety or
otherwise) (A) in respect of borrowed money, or (B) in respect of
any Specified Transaction (except that, for this purpose only, the
words "and any other entity" shall be substituted for the words
"and the other party to the Agreement (or any Credit Support
Provider of such other party or any applicable Specified Entity of
such other party)" where they appear in the definition of Specified
Transaction).
"THRESHOLD AMOUNT" means USD 25,000,000 (including the United
States Dollar equivalent of obligations stated in any other
currency or currency unit).
(iv) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) of
the Agreement will not apply to BSIL and will apply to
Counterparty.
(v) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) of the
Agreement will not apply to BSIL and Counterparty.
(vi) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of
the Agreement, Second Method and Loss will apply.
(vii) "TERMINATION CURRENCY" means United States Dollars.
(viii) NETTING. The provisions of Section 2(c) of the Agreement shall
apply, provided that (i) Section 2(c) shall be amended by deleting
"and" at the end of clause (i) thereof and deleting clause (ii)
thereof. For the avoidance of doubt, any amounts due under the
Credit Agreement or any of the other Financing Documents (as
defined in the Credit Agreement) shall be included in the netting
provisions of Section 2(c) of the Agreement.
(ix) SET-OFF. In addition to and without limiting any rights of set-off
that a party hereto may have as a matter of law, pursuant to
contract or otherwise, upon the occurrence of an Early Termination
Date, or any date which a Cancellation Amount shall be due (as
defined in the 2002 Definitions), such Party ("PARTY X") shall have
the right to terminate, liquidate and otherwise close out the
transactions contemplated by this Confirmation pursuant to the
terms hereof and thereof, and to set off any obligation that Party
X (other than, with respect to Counterparty, the Issuer) or any
affiliate of Party X (other than, with respect to Counterparty, the
Issuer) may have to the other party ("PARTY Y") hereunder,
thereunder or otherwise, including without limitation any
obligation to make any release, delivery or payment to Party Y
pursuant to this Confirmation or any other agreement between Party
X or any of its affiliates (other than, with respect to
Counterparty, the Issuer) and Party Y, against any right Party X or
any of its affiliates (other than, with respect to Counterparty,
the Issuer) may have against Party Y, including without limitation
any right to receive a payment or delivery pursuant to this
Confirmation or any other agreement between Party X or any of its
affiliates (other than, with respect to Counterparty, the Issuer)
and Party Y. In
21
the case of a set-off of any obligation to release, deliver or
pay assets against any right to receive assets of the same
type, such obligation and right shall be set off in kind. In
the case of a set-off of any obligation to release, deliver or
pay assets against any right to receive assets of any other
type, the value of each of such obligation and such right
shall be determined by the Calculation Agent and the result of
such set-off shall be that the net obligor shall pay or
deliver to the other party an amount of cash or assets, at the
net obligor's option, with a value (determined, in the case of
a delivery of assets, by the Calculation Agent) equal to that
of the net obligation. In determining the value of any
obligation to release or deliver Shares or right to receive
Shares, the value at any time of such obligation or right
shall be determined by reference to the market value of the
Shares at such time. If an obligation or right is
unascertained at the time of any such set-off, the Calculation
Agent may in good faith estimate the amount or value of such
obligation or right, in which case set-off will be effected in
respect of that estimate, and the relevant party shall account
to the other party at the time such obligation or right is
ascertained.
(b) TAX REPRESENTATIONS.
(i) PAYER REPRESENTATION. For the purpose of Section 3(e) of the
Agreement, BSIL shall make the following representation and
Counterparty shall make 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 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 this
Agreement. In making this representation, it may rely on (i)
the accuracy of any representations made by the other party
contained in 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 shall not be a
breach of this representation where reliance is placed on
clause (ii) 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 purposes of Section 3(f) of the
Agreement,
(A) BSIL makes no representations;
(B) Counterparty makes the following representation: It is
not a "United States person" as defined in Internal
Revenue Code Section 7701(a)(30).
(c) CERTAIN AMENDMENTS. Section 3 of the Agreement is hereby amended as
follows:
(i) Clause (a)(i) thereof is hereby restated in its entirety to
read as follows: "STATUS. It is duly incorporated and validly
existing under the laws of the jurisdiction of its
organization or incorporation and, if relevant under such
laws, in good standing;"
22
(ii) Clause (a)(iii) thereof is hereby restated in its entirety to
read as follows: "NO VIOLATION OR CONFLICT. Such execution,
delivery and performance do not violate or conflict with (A)
any law applicable to it, (B) any provision of its
constitutional documents, (C) any order or judgment of any
court or other agency of government applicable to it or any of
its assets or (D) any contractual restriction binding on or
affecting it or any of its assets, except in the case of
clauses (C) and (D), to the extent such violation or conflict
would not have a Material Adverse Effect (as defined in the
Credit Agreement);"
(iii) Clause (a)(iv) thereof is hereby modified with the addition,
immediately before the semicolon, of the words: ", except to
the extent the failure to have any such consent would not have
a Material Adverse Effect";
(d) AGREEMENTS TO DELIVER DOCUMENTS. For the purpose of Sections 4(a)(i)
and (ii) of the Agreement, each of BSIL and Counterparty agrees to
deliver the following documents, as applicable:
(i) Counterparty shall deliver to BSIL, upon execution of this
Confirmation, an opinion of each of Harney, Westwood, and
Riegels and Xxxxxx Xxxxxxx Xxxxxx in the respective forms set
forth in Annex A and Annex B hereto.
(ii) The Counterparty shall have executed and delivered to BSIL
upon execution of this Confirmation, the Pledge Agreement.
(iii) Counterparty shall deliver to BSIL, upon execution of this
Confirmation and upon reasonable demand by BSIL thereafter, a
properly completed Internal Revenue Service Form W-8BEN.
(e) MISCELLANEOUS:
(i) ADDRESSES FOR NOTICES.
For the purpose of Section 12(a) of the Agreement, send all
notices or communications to:
Bear, Xxxxxxx International Limited
Address: Xxx Xxxxxxxxx Xxxxxx Xxxxx, Xxxxxxxx, XX 00000
Attention: Derivatives Operation - 7th Floor
Facsimile No.: (000) 000-0000
Address: Xxx Xxxxxx Xxxxxx, Xxxxxx X00 0XX, Xxxxxxx
Attention: Derivatives Middle Office
Facsimile No.: (000) 000-00-000-000-0000
With a copy to:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
Attention: Equity Derivatives-4th Floor
Facsimile No.: (000) 000-0000
For purposes of Sections 5 and 6 of the Agreement, a copy to:
Address: 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
23
Attention: Derivatives Documentation - 35th Floor
Facsimile No.: (000) 000-0000 and (000) 000-0000
Designated responsible employee for the purposes of Section
12(a)(iii) of the Agreement: Senior Legal Officer
Address for notices or communications to Counterparty prior to
the Novation Date and Uniserv on and after the Novation Date:
Address: United Service Technologies Limited
9 Columbus Center
Pelican Drive, Road Town
Tortola
British Virgin Islands
Attention: Xxxxxx XxXxxx
Telephone No.: (00) 00 000 0000
Facsimile No.: (00) 00 000 0000
Address for notices or communications to SPV on and after the
Novation Date:
Address: Uniserv Securities Holdings Limited
Midocean Xxxxxxxx
P.O. Box 805
Road Town, Tortola
British Virgin Islands
Attention: Xxxxxx XxXxxx
Telephone No.: (00) 00 000 0000
Facsimile No.: (00) 00 000 0000
(ii) GOVERNING LAW. THE AGREEMENT AND EACH CONFIRMATION THEREUNDER
SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS
OF THE STATE OF NEW YORK WITHOUT GIVING EFFECT TO THE CONFLICT
OF LAW PRINCIPLES THEREOF THAT WOULD APPLY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEW YORK (PROVIDED THAT
AS TO PLEDGED ITEMS LOCATED IN ANY JURISDICTION OTHER THAN THE
STATE OF NEW YORK, SECURED PARTY SHALL, IN ADDITION TO ANY
RIGHTS UNDER THE LAWS OF THE STATE OF NEW YORK, HAVE ALL OF
THE RIGHTS TO WHICH A SECURED PARTY IS ENTITLED UNDER THE LAWS
OF SUCH OTHER JURISDICTION).
ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THE AGREEMENT
AND EACH CONFIRMATION THEREUNDER MAY BE BROUGHT IN XXX XXXXXX
XX XXX XXXXX XX XXX XXXX SITTING IN THE BOROUGH OF MANHATTAN,
CITY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THE
AGREEMENT AND EACH CONFIRMATION THEREUNDER, EACH PARTY TO THIS
CONFIRMATION CONSENTS, FOR ITSELF AND IN RESPECT OF ITS
PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS.
EACH PARTY TO THIS CONFIRMATION IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR
24
BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW
OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION OR PROCEEDING
IN SUCH JURISDICTION IN RESPECT OF THE AGREEMENT AND EACH
CONFIRMATION THEREUNDER OR OTHER DOCUMENT RELATED THERETO.
EACH PARTY TO THIS CONFIRMATION WAIVES PERSONAL SERVICE OF ANY
SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY
OTHER MEANS PERMITTED BY THE LAW OF SUCH STATE.
(iii) WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS
CONFIRMATION HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY
JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING
UNDER THE AGREEMENT AND EACH CONFIRMATION THEREUNDER OR IN ANY
WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF
THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THE
AGREEMENT AND EACH CONFIRMATION THEREUNDER, OR THE
TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND
CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND
THAT ANY PARTY TO THIS CONFIRMATION MAY FILE AN ORIGINAL
COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
(iv) SERVICE OF PROCESS. With respect to the Agreement and each
Confirmation thereunder and the Pledge Agreement, Counterparty
irrevocably appoints CT Corporation System, 000 Xxxxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx 00000 as its authorized agent in the
Borough of Manhattan in The City of New York upon which
process may be served in any suit or proceeding, and agrees
that service of process upon such agent, and written notice of
said service to Counterparty by the person serving the same to
the address provided in Section 3(k)(iii) of this
Confirmation, shall be deemed in every respect effective
service of process upon Counterparty in any suit or
proceeding. Counterparty further agrees to take any and all
action as may be necessary to maintain such designation and
appointment of such agent in full force and effect until the
earlier of (a) 3.5 years from the date of the Credit Agreement
or (b) the date of the termination of this Confirmation.
(v) This Confirmation is not intended and shall not be construed
to create any rights in any person other than Counterparty,
BSIL and their respective successors and assigns and no other
person shall assert any rights as a third-party beneficiary
hereunder. Whenever any of the parties hereto is referred to,
such reference shall be deemed to include the successors and
assigns of such party. All the covenants and agreements herein
contained by or on behalf of Counterparty and BSIL shall bind,
and inure to the benefit of, their respective successors and
assigns whether so expressed or not.
25
(vi) Any provision of this Confirmation may be amended or waived
if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Counterparty and BSIL
or, in the case of a waiver, by the party against whom the
waiver is to be effective.
(vii) This Confirmation may be executed in any number of
counterparts, and all such counterparts taken together shall
be deemed to constitute one and the same agreement. Delivery
of an executed signature page to this Confirmation by
facsimile transmission shall be as effective as delivery of a
manually signed counterpart of this Confirmation.
26
Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.
Yours faithfully,
BEAR, XXXXXXX INTERNATIONAL LIMITED
By: /s/ Xxxxx Xxxxx
_________________________________
Name:
Title:
Confirmed as of the date first written above:
UNITED SERVICE TECHNOLOGIES LIMITED
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Director
28
ANNEX A
FORM OF OPINION OF BVI COUNSEL FOR COUNTERPARTY
A-1
ANNEX B
FORM OF OPINION OF SOUTH AFRICAN COUNSEL FOR COUNTERPARTY
B-1
ANNEX C
SCHEDULE OF NUMBER OF OPTIONS AND EXPIRATION DATES
The Number of Options and the Expiration Date for each Component of each Tranche
shall be as set forth below:
TRANCHE NO. 1
COMPONENT NO. EXPIRATION DATE NUMBER OF OPTIONS
---------------- --------------- -----------------
Component No. 1 June 4, 2007 42,295
Component No. 2 June 5, 2007 42,295
Component No. 3 June 6, 2007 42,295
Component No. 4 June 7, 2007 42,295
Component No. 5 June 8, 2007 42,295
Component No. 6 June 11, 2007 42,295
Component No. 7 June 12, 2007 42,295
Component No. 8 June 13, 2007 42,295
Component No. 9 June 14, 2007 42,295
Component No. 10 June 15, 2007 42,295
Component No. 11 June 18, 2007 42,295
Component No. 12 June 19, 2007 42,295
Component No. 13 June 20, 2007 42,295
Component No. 14 June 21, 2007 42,295
Component No. 15 June 22, 2007 42,295
Component No. 16 June 25, 2007 42,295
Component No. 17 June 26, 2007 42,295
Component No. 18 June 27, 2007 42,295
Component No. 19 June 28, 2007 42,295
Component No. 20 June 29, 2007 42,295
Component No. 21 July 2, 2007 42,295
Component No. 22 July 3, 2007 42,295
Component No. 23 July 5, 2007 42,295
Component No. 24 July 6, 2007 42,295
Component No. 25 July 9, 2007 42,295
Component No. 26 July 10, 2007 42,295
Component No. 27 July 11, 2007 42,295
Component No. 28 July 12, 2007 42,295
Component No. 29 July 13, 2007 42,295
Component No. 30 July 16, 2007 42,278
X-0
XXXXXXX XX. 0
COMPONENT NO. EXPIRATION DATE NUMBER OF OPTIONS
---------------- ----------------- -----------------
Component No. 1 December 4, 2007 42,295
Component No. 2 December 5, 2007 42,295
Component No. 3 December 6, 2007 42,295
Component No. 4 December 7, 2007 42,295
Component No. 5 December 10, 2007 42,295
Component No. 6 December 11, 2007 42,295
Component No. 7 December 12, 2007 42,295
Component No. 8 December 13, 2007 42,295
Component No. 9 December 14, 2007 42,295
Component No. 10 December 17, 2007 42,295
Component No. 11 December 18, 2007 42,295
Component No. 12 December 19, 2007 42,295
Component No. 13 December 20, 2007 42,295
Component No. 14 December 21, 2007 42,295
Component No. 15 December 24, 2007 42,295
Component No. 16 December 26, 2007 42,295
Component No. 17 December 27, 2007 42,295
Component No. 18 December 28, 2007 42,295
Component No. 19 December 31, 2007 42,295
Component No. 20 January 2, 2008 42,295
Component No. 21 January 3, 2008 42,295
Component No. 22 January 4, 2008 42,295
Component No. 23 January 7, 2008 42,295
Component No. 24 January 8, 2008 42,295
Component No. 25 January 9, 2008 42,295
Component No. 26 January 10, 2008 42,295
Component No. 27 January 11, 2008 42,295
Component No. 28 January 14, 2008 42,295
Component No. 29 January 15, 2008 42,295
Component No. 30 January 16, 2008 42,278
X-0
XXXXXXX XX. 0
COMPONENT NO. EXPIRATION DATE NUMBER OF OPTIONS
---------------- --------------- -----------------
Component No. 1 June 3, 2008 42,295
Component No. 2 June 4, 2008 42,295
Component No. 3 June 5, 2008 42,295
Component No. 4 June 6, 2008 42,295
Component No. 5 June 9, 2008 42,295
Component No. 6 June 10, 2008 42,295
Component No. 7 June 11, 2008 42,295
Component No. 8 June 12, 2008 42,295
Component No. 9 June 13, 2008 42,295
Component No. 10 June 16, 2008 42,295
Component No. 11 June 17, 2008 42,295
Component No. 12 June 18, 2008 42,295
Component No. 13 June 19, 2008 42,295
Component No. 14 June 20, 2008 42,295
Component No. 15 June 23, 2008 42,295
Component No. 16 June 24, 2008 42,295
Component No. 17 June 25, 2008 42,295
Component No. 18 June 26, 2008 42,295
Component No. 19 June 27, 2008 42,295
Component No. 20 June 30, 2008 42,295
Component No. 21 July 1, 2008 42,295
Component No. 22 July 2, 2008 42,295
Component No. 23 July 3, 2008 42,295
Component No. 24 July 7, 2008 42,295
Component No. 25 July 8, 2008 42,295
Component No. 26 July 9, 2008 42,295
Component No. 27 July 10, 2008 42,295
Component No. 28 July 11, 2008 42,295
Component No. 29 July 14, 2008 42,295
Component No. 30 July 15, 2008 42,279
D-3
