Exhibit 99.3
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
INTERNATIONAL SWAP DEALERS ASSOCIATION, INC.
MASTER AGREEMENT
dated as of
March 13, 2000
---------------
Credit Agricole Lazard Financial Products Bank
----------------------------------------------
AND
Taurus International S.A.
-------------------------
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions
of the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the
fact that this Master Agreement and all Confirmations form a single agreement
between the parties (collectively referred to as this "Agreement"), and the
parties would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in
each Confirmation to be made by it, subject to the other provisions of
this Agreement.
(ii) Payments under this Agreement will be made on the due date
for value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this
(iii) Agreement, in freely transferable funds and in the manner
customary for payments in the required currency. Where settlement is by
delivery (that is, other than by payment), such delivery will be made
for receipt on the due date in the manner customary for the relevant
obligation unless otherwise specified in the relevant Confirmation or
elsewhere in this Agreement.
(iv) Each obligation of each party under Section 2(a)(i) is
subject to (1) the condition precedent that no Event of Default or
Potential Event of Default with respect to the other party has occurred
and is continuing, (2) the condition precedent that no Early
Termination Date in respect of the relevant Transaction has occurred or
been effectively designated and (3) each other applicable condition
precedent specified in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made
without any deduction or withholding for or on account of any Tax
unless such deduction or withholding is required by any applicable law,
as modified by the practice of any relevant governmental revenue
authority, then in effect. If a party is so required to deduct or
withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full amount
required to be deducted or withheld from any additional amount
paid by X to Y under this Section 2(d)) promptly upon the
earlier of determining that such deduction or withholding is
required or receiving notice that such amount has been
assessed against Y;
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably acceptable
to Y, evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise entitled under
this Agreement, such additional amount as is necessary to
ensure that the net amount actually received by Y (free and
clear of Indemnifiable Taxes, whether assessed against X or Y)
will equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform
any agreement contained in Section 4(a)(i), 4(a)(iii)
or 4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this Agreement) or
(II) a Change in Tax Law.
(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by
the practice of any relevant governmental revenue authority,
to make any deduction or withholding in respect of which X
would not be required to pay an additional amount to Y under
Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the
laws of the jurisdiction of its organisation or incorporation and, if
relevant under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any
other documentation relating to this Agreement to which it is a party,
to deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) CONSENTS. All governmental and other consents that are
required to have been obtained by it with respect to this Agreement or
any Credit Support Document to which it is a party have been obtained
and are in full force and effect and all conditions of any such
consents have been complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and
any Credit Support Document to which it is a party constitute its
legal, valid and binding obligations, enforceable in accordance with
their respective terms (subject to applicable bankruptcy,
reorganisation, insolvency, moratorium or similar laws affecting
creditors' rights generally and subject, as to enforceability, to
equitable principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has occurred
and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or proceeding at
law or in equity or before any court, tribunal, governmental body, agency or
official or any arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit Support Document to
which it is a party or its ability to perform its obligations under this
Agreement or such Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is accurate
and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party
or, in certain cases under subparagraph (iii) below, to such government or
taxing authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in
order to allow such other party or its Credit Support Provider to make
a payment under this Agreement or any applicable Credit Support
Document without any deduction or withholding for or on account of any
Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would
not materially prejudice the legal or commercial position of the party
in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to such
other party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORISATIONS. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a
representation made by it under Section 3(f) to be accurate and true promptly
upon learning of such failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any of the following events constitutes an event of
default (an "Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when
due, any payment under this Agreement or delivery under Section 2(a)(i)
or 2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider
of such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to
which such Credit Support Document relates without the written
consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to
have been made or repeated by the party or any Credit Support Provider
of such party in this Agreement or any Credit Support Document proves
to have been incorrect or misleading in any material respect when made
or repeated or deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit
Support Provider of such party or any applicable Specified Entity of
such party (1) defaults under a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, there
occurs a liquidation of, an acceleration of obligations under, or an
early termination of, that Specified Transaction, (2) defaults, after
giving effect to any applicable notice requirement or grace period, in
making any payment or delivery due on the last payment, delivery or
exchange date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence of (1) a
default, event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or
liquidation, and, in the
case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (A) results
in a judgment of insolvency or bankruptcy or the entry of an
order for relief or the making of an order for its winding-up
or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6)
seeks or becomes subject to the appointment of an
administrator, provisional liquidator, conservator, receiver,
trustee, custodian or other similar official for it or for all
or substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it
which, under the applicable laws of any jurisdiction, has an
analogous effect to any of the events specified in clauses (1)
to (7) (inclusive); or (9) takes any action in furtherance of,
or indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails
to assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity
of its obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):--
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or delivery
in respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other obligation
which the party (or such Credit Support Provider) has under
any Credit Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y) a Change in Tax Law, the party (which will be the Affected
Party) will, or there is a substantial likelihood that it will, on the
next succeeding Scheduled Payment Date (1) be required to pay to the
other party an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
is required to be deducted or withheld for or on account of a Tax
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e))
and no additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A)
or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on
the next succeeding Scheduled Payment Date will either (1) be required
to pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as applying,
the occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated as an Illegality and will not constitute an
Event of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event
of Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(l), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality
under Section 5(b)(i)(l) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition to
its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such party
to incur a loss, excluding immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section 6(b)(i) all its
rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties,
each party will use all reasonable efforts to reach agreement within 30
days after notice thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not been
effected with respect to all Affected Transactions within 30
days after an Affected Party gives notice under Section
6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit
Event Upon Merger or an Additional Termination Event occurs,
or a Tax Event Upon Merger occurs and the Burdened Party is
not the Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then continuing, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all
Affected Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following
the occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of
any Early Termination Date under Section 6(e) will be payable on the
day that notice of the amount payable is effective (in the case of an
Early Termination Date which is designated or occurs as
a result of an Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable is
effective (in the case of an Early Termination Date which is designated
as a result of a Termination Event). Such amount will be paid together
with (to the extent permitted under applicable law) interest thereon
(before as well as after judgment) in the Termination Currency, from
(and including) the relevant Early Termination Date to (but excluding)
the date such amount is paid, at the Applicable Rate. Such interest
will be calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from
an Event of Default:--
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party will
pay to the Non-defaulting Party the excess, if a positive
number, of (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss
in respect of this Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from
a Termination Event:--
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance with
Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:--
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (i) the sum of (a) one-half of the
difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine
its Loss in respect of this Agreement (or, if fewer
than all the Transactions are being terminated, in
respect of all Terminated Transactions) and an amount
will be payable equal to one-half of the difference
between the Loss of the party with the higher Loss
("X") and the Loss of the party with the lower Loss
("Y").
If the amount payable is a positive number, Y will pay it to
X; if it is a negative number, X will pay the absolute value
of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms
of each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power
or privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or home
office represents to the other party that, notwithstanding the place of booking
office or jurisdiction of incorporation or organisation of such party, the
obligations of such party are the same as if it had entered into the Transaction
through its head or home office. This representation will be deemed to be
repeated by such party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the
date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the recipient in
legible form (it being agreed that the burden of proving receipt will
be on the sender and will not be met by a transmission report generated
by the sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas)
or the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the
close of business on a Local Business Day, in which case that communication
shall be deemed given and effective on the first following day that is a Local
Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating
to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient
forum and further waives the right to object, with respect to such
Proceedings, that such court does not have any jurisdiction over such
party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it and on
its behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its revenues and
assets (irrespective of their use or intended use), all immunity on the grounds
of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with Section
6(d)(ii)) on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF' means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating
the Early Termination Date (or, if "Automatic Early Termination" applies,
immediately before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the
average of the Termination Currency Equivalents of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
Credit Agricole Lazard
Financial Products Bank Taurus International S.A.
................................ ...................................
(Name of Party) (Name of Party)
By: /s/ Xxxxxxx X. Xxxxxx By: /s/ X.X.X. Xxxxxxx
............................ ...............................
Name: X. X. Xxxxxx Name: X.X.X. Xxxxxxx
Title: Designated Signatory Title: Director
Date: March 13, 2000 Date: March 13, 2000
ISDA
International Swap and Derivatives Association, Inc.
SCHEDULE
to the
Master Agreement
dated as of March 13, 2000
between CREDIT AGRICOLE LAZARD FINANCIAL PRODUCTS BANK ("Party A")
and
TAURUS INTERNATIONAL S.A. ("Party B")
Part 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:--
Section 5(a)(v) : Caisse Nationale de Credit Agricole.
Section 5(a)(vi) : Caisse Nationale de Credit Agricole.
Section 5(a)(vii) : Caisse Nationale de Credit Agricole.
Section 5(b)(iv) : Caisse Nationale de Credit Agricole.
and in relation to Party B for the purpose of:--
Section 5(a)(v) : Not Applicable.
Section 5(a)(vi) : Not Applicable.
Section 5(a)(vii) : Not Applicable.
Section 5(b)(iv) : Not Applicable.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi), as amended herein,
will apply to Party A and will not apply to Party B. Section 5(a)(vi) is
hereby amended by deleting in the seventh line thereof the words ", or
becoming capable at such time of being declared," and the following
proviso is inserted at the end of said Section 5(a)(vi): "provided,
however, that notwithstanding the forgoing, an Event of Default shall not
occur under either (1) or (2) above if (a) the event or condition referred
to in (1) or the failure to pay referred to in (2) is a failure to pay
caused by an error or omission of an administrative or operational nature;
and (b) funds were available to such party to enable it to make the
relevant payment when due; and (c) such relevant payment is made within
three Local Business Days following receipt of written notice from an
interest party of such failure to pay."
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section 14
of this Agreement.
"THRESHOLD AMOUNT" means, with respect to Party A, USD $10,000,000 or
its equivalent in any currency.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will apply
to Party A and will apply to Party B; provided, however, that the phrase
"materially weaker" means the senior long-term debt or deposits of the
resulting, surviving or transferee entity is or are, as the case may be,
rated less than investment grade by Standard & Poor's Corporation or its
successor or Xxxxx'x Investors Service, Inc. or its successor."
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A and will not apply to Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:--
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) ADDITIONAL TERMINATION EVENT will not apply.
For purposes of this Agreement:
"CALL OPTION" means the call option Party B purchased from Party A
pursuant to the Confirmation dated as of the date of this Agreement.
"ISSUER" means the issuer of the Shares with respect to a
Transaction.
"PURCHASE AGREEMENT" means the Purchase Agreement dated on the date
of this Agreement among Party A, Party B, Taurus Investments S.A.
and Tokyo-Mitsubishi International plc in relation to the sale and
purchase of Shares.
"SHARES" means the Common Shares, without par value, of Terra
Industries Inc., a company incorporated in the State of Maryland,
United States of America.
"TMI" is Tokyo-Mitsubishi International plc, a purchaser of Shares
pursuant to the Purchase Agreement.
"TRANSACTION" means any Transaction entered into pursuant to a
Confirmation delivered pursuant to, and forming a part of, this
Agreement, as amended or modified from time to time.
2
Part 2. TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this Agreement,
Party A will make the following representation and Party B will 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 this
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 pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement of the other party
contained in Section 4(a)(i) or 4(a)(iii) of this 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 this Agreement and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d)
of this 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) by reason of
material prejudice to its legal or commercial position.
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this Agreement,
Party A makes no representations and Party B makes no representations.
Part 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:--
(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 (or any Credit Support Provider thereof),
execute, arrange for any required certification of, and deliver to the other
party (or any Credit Support Provider thereof) or such government or taxing
authority as the other party (or any Credit Support Provider thereof) directs,
any form or document that may be required or reasonably requested in order to
assist or enable the other party (or any Credit Support Provider thereof) to
secure the benefit of any available exemption or relief from any deduction or
withholding for or on account of any Tax or, if there is no available exemption
or relief as aforesaid, to secure the benefit of any reduced rate of deduction
or withholding in respect of any payment under this Agreement (or any Credit
Support Document) promptly upon the earlier of: (i) reasonable demand by the
other party (or any Credit Support Provider thereof); and (ii) learning that the
form or document is required.
(b) Other documents to be delivered are:--
3
PARTY REQUIRED FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY
TO DELIVER CERTIFICATE DELIVERED SECTION 3(D)
DOCUMENT REPRESENTATION
Party A Guarantee of Caisse At execution Yes
Nationale de Credit
Agricole (the
"Guarantor") executed
by way of a deed poll
in the form attached as
Exhibit A to the
Purchase Agreement
Party A Guarantee of the Within 10 business Yes
Guarantor in the form days following
attached as Exhibit E to execution
the Purchase Agreement
Party A Evidence of the At execution Yes
authority of a specified
person or persons to
execute this Agreement,
including the
Confirmation, on behalf
of Party A
Party A Annual Financial On demand of Party Yes
Statements of the B, in respect of the
Guarantor latest publicly
available financial
statements prior to the
date of this
Agreement and in
respect of financial
statements that
hereafter become
publicly available
Party B Evidence of the At execution Yes
authority of a specified
person or persons to
execute this Agree-
ment, including the
Confirmation, on
behalf of Party B
4
Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:--
Address for notices or communications to Party A:--
Address: 00 Xxxxxxxxxx Xxxxxxxx, Xxxxxx XX0X 0XX, U.K.
Attention: Settlements
Telex: Not Applicable Answerback: Not Applicable
Facsimile No.: x00 000 000 0000 Telephone No.: x00 000 000 0000
Electronic Messaging System Details: Not Applicable.
Address for notices or communications to Party B:--
Address: 0 xxx Xxxxxx Xxxxx, X-0000, Xxxxxxxxxx
Attention: Company Secretary
Telex: Not Applicable Answerback: Not Applicable
Facsimile No.: x000 000 000-00 Telephone No.: x000 000 000-0
Electronic Messaging System Details: Not Applicable
With a copy to: Anglo American plc
Address: 00 Xxxxxxx Xxxxx Xxxxxxx, Xxxxxx XX0X 0XX, U.K.
Attention: Company Secretary
Telex: Not Applicable Answerback: Not Applicable
Facsimile No.: x00 000 000 0000 Telephone No.: x00 000 000 0000
Electronic Messaging System Details: Not Applicable.
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:--
Party A: Not applicable
Party B appoints as its Process Agent: Anglo American Services (UK)
Limited at present of 00 Xxxxxxx Xxxxx Xxxxxxx, Xxxxxx XX0X 0XX, Xxxxxx
Xxxxxxx.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:--
Party A is not a Multibranch Party.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:
5
In the case of Party A, the Guarantee of Party A's obligations hereunder
by the Guarantor dated as of the date hereof.
In the case of Party B, not applicable.
(g) CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
Party A: Caisse Nationale de Credit Agricole, a corporation incorporated
under the laws of the Republic of France.
Credit Support Provider means in relation to Party B: Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of England.
Each party to this Agreement agrees for the benefit of the other parties
hereto that (i) if any party has any claim against the other arising out
of or in connection with this Agreement such claim shall be referred to
the High Court of Justice in England, to the exclusive jurisdiction of
which each of the parties irrevocably submits; and (ii) each party to this
Agreement irrevocably waives any objection it may now or hereafter have to
the laying of venue of any action or proceeding in any court and any claim
it may now or hereafter have that any action or proceeding has been
brought in an inconvenient or inappropriate forum.
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
will not apply to any Transactions under this Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
(k) RECORDED CONVERSATIONS. Each party may electronically record all telephone
conversations between them in connection with this Agreement or any
Transaction, and any such recordings may be submitted in evidence in any
proceeding to establish any matters pertinent to this Agreement or any
Transaction.
Part 5. OTHER PROVISIONS.
(a) DEFINITIONS. This Agreement, each Confirmation and each Transaction are
subject to the 1991 ISDA Definitions as supplemented by the 1998
Supplement to the ISDA Definitions and the 1996 ISDA Equity Derivatives
Definitions (the "Equity Derivatives Definitions") (each as published by
the International Swaps and Derivatives Association, Inc. (formerly the
International Swap Dealers Association, Inc.)) (collectively, the
"Definitions"), and will be governed in all respects by the provisions set
forth in the Definitions. The provisions of the Definitions are
incorporated by reference in, and shall be deemed to be part of, this
Agreement and each Confirmation, as if set forth in full in this Agreement
or in that Confirmation. In the event of any inconsistency between the
provisions of this Agreement and the Definitions, this Agreement will
prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Agreement, such Confirmation will prevail for the
purpose of the relevant Transaction.
6
(b) GROSS UP. The third line of Section 2(d)(i) of this Agreement is hereby
amended by the insertion before the phrase "of any relevant governmental
revenue authority" of the words ", application or official interpretation"
and the insertion of the words "(either generally or with respect to a
party to this Agreement)" after such phrase.
(c) ANNUAL FINANCIAL STATEMENTS. "Annual Financial Statements" means, in
respect of the Guarantor, a statement of its assets and liabilities,
certified by a public accountant and prepared in accordance with
accounting principles that are generally accepted in France, as of the end
of the most recent calendar year or such other date as Party B may
reasonably specify.
(d) SET-OFF. Any amount (the "Early Termination Amount") payable to one Party
("Receiving Party") by the other ("Paying Party") under Section 6(e), in
circumstances where the Receiving Party is the Defaulting Party or the
only Affected Party in the case where a Termination Event has occurred,
will, at the option of Paying Party (and without prior notice to the
Receiving Party), be reduced by its set-off against any amount(s) (the
"Other Agreement Amount") payable (whether at such time or in the future
or upon the occurrence of a contingency) by the Receiving Party to the
Paying Party (irrespective of the currency, place of payment or booking
office of the obligation) under any other agreement(s) between the
Receiving Party and the Paying Party or instrument(s) or undertaking(s)
issued or executed by the Receiving to, or in favour of, the Paying Party
(and the Other Agreement Amount will be discharged promptly and in all
respects to the extent it is so set-off). The Paying Party will give
notice to the Receiving Party of any set-off effected under this Part
5(d).
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be
converted by the Paying Party into the currency in which the other is
denominated at the rate of exchange at which the Paying Party would be
able, acting in a reasonable manner and in good faith, to purchase the
relevant amount of such currency.
If an obligation is unascertained, the Paying Party may in good faith
estimate that obligation and set-off in respect of the estimate, subject
to the Paying Party accounting to the Receiving Party when the obligation
is ascertained.
Nothing in this Part 5(d) shall be effective to create a charge or other
security interest. This Part 5(d) shall be without prejudice and in
addition to any right of set-off, combination of accounts, lien or other
right to which the Paying Party is at any time otherwise entitled (whether
by operation of law, contract or otherwise).
(e) REPRESENTATIONS. Section 3 is hereby amended by (i) adding the following
sentence at the end of subparagraph (c) of Section 3 of the Agreement:
"Without limitation of the foregoing, Party A will make any and all
filings or reports required to be made by it under applicable laws and
regulations in connection with its ownership of any Shares that are the
subject of any Transaction entered into under this Agreement"; and (ii)
adding at the end thereof the following subparagraphs (g) and (h):
(g) ELIGIBLE SWAP PARTICIPANT. It constitutes an "eligible swap
participant" as such term is defined in Rule 35.1(b)(2) of the Commodity
Futures Trading Commission, 17 C.F.R. ss. 35.1(b)(2)(1993).
7
(h) LINE OF BUSINESS. Each of Party A and Party B has entered into this
Agreement (including each Transaction entered into hereunder) in
conjunction with its line of business (including financial intermediation
services) or the financing of its business.
(f) PARTY A REPRESENTATIONS. Party A hereby represents to Party B that:--
(i) Party A is an "accredited investor" within the meaning of Rule 501(a)
of Regulation D under the United States Securities Act of 1933
("Securities Act").
(ii) Party A is acting as a principal and not as an agent in connection
with this Agreement and each Transaction entered into under this
Agreement.
(iii) Party A is solely responsible for Party A's trading or investment
decisions with respect to this Agreement and each Transaction entered into
under this Agreement and is not relying on Party B or its affiliates in
connection with any such decisions, and neither Party B nor any such
affiliate is acting as an adviser to or fiduciary of Party A in connection
with any Transaction under this Agreement.
(iv) Party A has sufficient knowledge, experience and access to
professional advice to make its own legal, tax, accounting, financial and
other evaluation of the merits and risks of entering into this Agreement
and each Transaction hereunder, has reviewed the documentation relating to
this Agreement and each Transaction hereunder carefully with Party A's
financial, legal and tax advisers and has determined that entering into
this Agreement and each Transaction hereunder is consistent with Party A's
objectives. Without limitation of the foregoing, or of any other
provisions of this Agreement, Party A acknowledges and understands that
Transactions entered into under this Agreement may involve complex legal,
tax and regulatory considerations that are highly dependent on facts and
circumstances related to itself, that Party A will have sufficient
information regarding such facts and circumstances to determine the legal,
tax and regulatory consequences of such Transactions for Party A and that
Party A, together with its legal, tax and financial advisers, will be
solely responsible for determining and evaluating such consequences and
making its own independent decisions with respect to such Transactions
based on such determinations and evaluations and any other factors or
considerations deemed relevant by Party A or its advisers.
(v) Neither Party A nor any person (including without limitation Caisse
Nationale de Credit Agricole and Lazard Freres & Co., LLC) acting on its
behalf has offered or sold any Shares by means of any general solicitation
or general advertising within the meaning of Rule 502(c) under the
Securities Act.
(vi) Party A is not in possession of, and does not have special access to,
any material non-public information regarding the Issuer. Party A is not,
and during the term of any Transaction will not become, an "affiliate" (as
defined in Rule 144 under the Securities Act) of the Issuer.
(vii) Party A understands that the securities subject to this Agreement
have not been registered under the Securities Act or any state securities
law of the United States of America, and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available.
8
(viii) Party A further acknowledges and agrees that Party B and its
affiliates may engage in sale, purchase, proprietary trading or other
transactions for their own accounts and the accounts of their affiliates
in the Shares or in securities that are convertible, exercisable or
exchangeable into or for the Shares (including such trading as Party B or
its affiliates deem appropriate in their sole discretion to hedge its or
their market risk in any transaction whether between Party A and Party B
or with other third parties) and that such trading may affect the value of
the Option Transactions (as defined in the Confirmation), the Shares or
other instruments underlying the Option Transactions.
(g) PARTY B REPRESENTATIONS. Party B hereby represents to Party A that:--
(i) Party B is solely responsible for Party B's trading or investment
decisions with respect to this Agreement and each Transaction entered into
under this Agreement and is not relying on Party A or its affiliates in
connection with any such decisions, and neither Party A nor any such
affiliate is acting as an adviser to or fiduciary of Party B in connection
with any Transaction under this Agreement.
(ii) Party B has sufficient knowledge, experience and access to
professional advice to make its own legal, tax, accounting, financial and
other evaluation of the merits and risks of entering into this Agreement
and each Transaction hereunder, has reviewed the documentation relating to
this Agreement and each Transaction hereunder carefully with Party B's
financial, legal and tax advisers and has determined that entering into
this Agreement and each Transaction hereunder is consistent with Party B's
objectives. Without limitation of the foregoing, or of any other
provisions of this Agreement, Party B acknowledges and understands that
Transactions entered into under this Agreement may involve complex legal,
tax and regulatory considerations that are highly dependent on facts and
circumstances related to itself, that Party B will have sufficient
information regarding such facts and circumstances to determine the legal,
tax and regulatory consequences of such Transactions for Party B and that
Party B, together with its legal, tax and financial advisers, will be
solely responsible for determining and evaluating such consequences and
making its own independent decisions with respect to such Transactions
based on such determinations and evaluations and any other factors or
considerations deemed relevant by Party B or its advisers.
(h) ADDITIONAL COVENANTS. The following paragraphs (f), (g), (h) and (i) are
hereby added at the end of Section 4 of this Agreement:
(f) EXERCISE OF CALL OPTIONS.
(i) Party B agrees that it shall not exercise the Call Option at any time
that it is in possession of material non-public information regarding the
Issuer. Party B agrees to indemnify and hold harmless Party A against any
losses, claims, damages or liabilities to which Party A may become subject
insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or result from any breach by Party B of the
covenant set forth in the immediately preceding sentence. In case any such
action described in this clause (i) shall be brought against Party A, it
shall notify Party B of the commencement thereof; provided, however, that
failure to notify shall not relieve Party B from any liability it may have
to Party A under this Section. Party B shall be entitled to participate
therein and, to the extent that it wishes, assume the defence thereof,
with counsel of its choice. Party A shall not, without the written consent
of Party B, effect the settlement or
9
compromise of, or consent to the entry of any judgment with respect to,
any pending or threatened action or claim in respect of which
indemnification may be sought hereunder (whether or not Party A is an
actual or potential party to such action or claim) unless such settlement,
compromise or judgment (i) includes an unconditional release of Party A
from all liability arising out of such action or claim and (ii) does not
include a statement as to, or an admission of, fault, culpability or a
failure to act, by or on behalf of Party A.
(ii) Party B shall be deemed to represent to Party A that it is in
compliance with the covenant set forth in clause (i) on each occasion on
which it exercises the Call Option.
(iii) In connection with any sale of Shares by Party A contemporaneous in
time with an exercise of the Call Option by Party B, Party B agrees to use
commercially reasonable efforts to seek an indemnity from the Issuer in
favour of Party A against any losses, claims, damages or liabilities to
which Party A may become subject insofar as such losses, claims, damages
or liabilities (or actions in respect thereof) arise out of or are based
upon an untrue statement or omission or alleged untrue statement or
omission of a material fact contained in any offering document used in
connection with such sale, including without limitation any filing made by
the Issuer under the Securities Act or the United States Securities
Exchange Act of 1934 ("Exchange Act") and incorporated by reference
therein.
In connection with any sale of Shares by TMI contemporaneous in time with
an exercise of the Call Option by Party B, Party B agrees to use
commercially reasonable efforts to seek an indemnity from the Issuer in
favour of Party A against losses, claims, damages or liabilities to which
Party A may become subject as a result of providing an indemnity in favour
of TMI against any losses, claims, damages or liabilities to which TMI may
become subject insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue
statement or omission or alleged untrue statement or omission of a
material fact contained in any offering document used in connection with
such sale, including without limitation any filing made by the Issuer
under the Securities Act or the Exchange Act and incorporated by reference
therein.
(iv) Notwithstanding anything in this Agreement to the contrary, Party B
shall not have the right to exercise the Call Option unless at the time
the Call Option is exercised:
(A) Party A and TMI are permitted by applicable law to dispose of
(or have in fact disposed of) all or any portion of their Shares
pursuant to an effective registration statement covering the total
number of Shares sold to the two purchasers under the Purchase
Agreement; or
(B) Party A or TMI is permitted by applicable law to dispose of (or
have in fact disposed of) all or any portion of its Shares in a
transaction exempt from registration under the Securities Act;
provided that in connection with a transaction exempt from
registration, subject to clauses (i) and (ii) Party B may exercise
the Call Option with respect to the number of Deemed Disposal Shares
(as defined below) or, if so contemplated by the offer in respect
thereof, any number of Shares not in excess of the sum of the Deemed
Disposal Shares (i) within five Local Business Days after Party B
receives notice from Party A of the offer relating to the Deemed
Disposal Shares or (ii) at any time and from time to time
10
after an Independent Disposal, provided that in the case of clause
(i) such offer does not terminate prior to the date on which Party A
and/or TMI dispose of their Shares (or the date Party A and/or TMI
could have disposed of their Shares).
For all purposes under this Agreement:
"Deemed Disposal Shares" shall mean (1) the number or numbers of
Shares in respect of which (a) Party A and/or TMI shall have been
obligated to notify Party B in accordance with Section 6(e)(i) of
the Purchase Agreement or (b) Party B shall have notified Party A in
accordance with Section 6(e)(ii) of the Purchase Agreement, in
connection with an offer from a purchaser or purchasers on
commercially reasonable terms (it being understood that price is not
to be taken into account in assessing such commercial
reasonableness) and which, on the date on which Party A and/or TMI
is able to dispose of all or any portion of their Shares pursuant to
that offer (whether or not Party A and/or TMI accept such offer and
in fact dispose of their Shares), has not been withdrawn or reduced
(and if so reduced, the reduced number of Shares shall be deemed to
be the Deemed Disposal Shares); (2) in the event that there is a
contemporaneous sale of Shares in which Party B (or an affiliate
thereof) and one or both of Party A and TMI are selling to the same
purchaser or purchasers, the number of Shares such purchaser or
purchasers offers to purchase from Party A and/or TMI; or (3) any
number of Shares not in excess of the number of Shares disposed of
in an Independent Disposal.
"Independent Disposal" means a private placement arranged between
Party A and/or TMI and a purchaser or purchasers in which Party B is
not participating and which Party A and/or TMI dispose of Shares not
in response to an exercise of Call Options by Party B.
(g) NOTICE OF TAX LIENS. Promptly upon (and in any event within three days
after) becoming aware that any filing of a federal lien in respect of
Party A or any of Party A's property has been made in the United States of
America, or that the United States Internal Revenue Service intends to
make or contemplates making any such filing, Party A shall give notice of
such occurrence to Party B, specifying the nature and status of such
filing.
(h) INFORMATION AND CONFIDENTIALITY. Party A shall give prior notice to
Party B of, and shall give Party B the opportunity to review in advance,
any filing to be made by Party A relating to this Agreement or the
transactions contemplated herein and Party B shall have the right to
consult with the Purchasers regarding any information relating to Party B
or its affiliates therein.
Party A shall supply such information with respect to itself, its
directors, officers and shareholders and such other matters as may be
reasonably necessary as Party B may reasonably request for the purpose of
preparation of any registration statement, notice, form or other documents
to be filed with any court or governmental agency or body having
jurisdiction over Party B or any of its subsidiaries or any of their
properties, or any stock exchange authority or self-regulatory
organisation ("Governmental Authority").
Party B shall supply such information with respect to itself, its
directors, officers and shareholders and such other matters as may be
reasonably necessary, as Party A may reasonably request for the
11
purpose of preparation of any registration statement, notice, form or
other documents to be filed with any Governmental Authority.
Neither party will, without the prior written consent of the other,
directly or indirectly, make any disclosure with respect to this
Agreement, except as may be required by applicable law or any order, rule
or regulation of any Governmental Authority. Party A acknowledges and
agrees that Party B or its affiliates thereof will be filing this
Agreement as an exhibit to a form on Schedule 13D it will be filing under
the Exchange Act.
(i) NOTICES. Each Party will immediately notify the other of the
occurrence of an Event of Default under this Agreement, where that Party
is the Defaulting Party, or the occurrence of any event that with the
giving of notice, the lapse of time or both would be such an Event of
Default.
(i) TRANSFER. Section 7 of this Agreement is replaced in its entirety with the
following:
(a) Neither this Agreement nor any interest or obligation in or under this
Agreement or any Transaction may be transferred by Party A without the
prior written consent of Party B and any purported transfer without such
consent will be void; provided, however, that Party A may transfer the
Agreement, or any of its interests and obligations in and under the
Agreement or all or any number of Transactions, to Caisse Nationale de
Credit Agricole with prior written notice to Party B.
(b) Neither this Agreement nor any interest or obligation in or under this
Agreement or any Transaction may be transferred by Party B without the
prior written consent of Party A and any purported transfer without such
consent will be void, provided however that Party B may transfer the
Agreement, or any of its interests and obligations in and under this
Agreement or all or any number of Transactions, to an Affiliate of Party B
with prior notice to Party A.
(j) BINDING EFFECT.
The following paragraph (h) is hereby added at the end of Section 9 of
this Agreement:
(h) BINDING EFFECT. This Agreement shall bind and inure to the benefit of
Party A and Party B and their respective heirs, distributees, executors,
personal representatives and administrators and permitted successors and
assigns.
(k) DEFINITIONS.
(i) For all purposes of this Agreement, "Contractual Currency" means
United States Dollars.
(ii) The definition of "law" in Section 14 of this Agreement is hereby
amended by the insertion of the words "either generally or with respect to
a party to this agreement" after the phrase "any relevant governmental
revenue authority" and the addition of the words "Change in Tax Law,"
before the word "lawful" in the second line.
(l) CONFIRMATIONS. On or promptly following the Trade Date or other
transaction date of each Transaction, Party A will send to Party B a
Confirmation. Party B will promptly thereafter confirm
12
the accuracy of, or request the correction of, such Confirmation, in the
latter case indicating how it believes the terms of such Confirmation
should be correctly stated and such other terms which should be added to
or deleted from such Confirmation to make it correct.
(m) MAINTAIN AUTHORISATIONS. Section 4(b) of this Agreement is hereby amended
by deleting the words "use all reasonable efforts to" from the first and
third lines thereof.
(n) BREACH OF AGREEMENT. Section 5(a)(ii) of this Agreement is hereby amended
by replacing the word "thirtieth", in the fifth line thereof, with the
word "fifth".
(o) DEFAULT UNDER SPECIFIED TRANSACTIONS. Section 5(a)(v)(2) of this Agreement
is hereby amended by replacing the words "the last" with the word "any".
(p) CONDITIONS PRECEDENT. The condition precedent set forth in clause (1) of
Section 2(a)(iii) of this Agreement shall not apply to payments scheduled
to be made by Party B pursuant to Section 2(a)(i) hereof at a time when
Party A has no further payment or delivery obligations (contingent or
other) under this Agreement.
(q) LAZARD DISCLAIMER. The Sellers are hereby notified and acknowledge that
none of Lazard Freres et Cie, Lazard Freres & Co., LLC, Lazard Brothers &
Co. Limited or any of their partners, officers, employees or any of their
subsidiaries or associates have any responsibility of any kind for any of
the debts, liabilities or other obligations of Credit Agricole Lazard
Financial Product Bank, or to ensure its solvency or to make any
contribution to its assets as a result of its becoming insolvent,
notwithstanding their interests in its shares, representations on its
board and its rights to use the Lazard name.
IN WITNESS WHEREOF, the parties have executed this document as of the
date specified on the first page hereof.
Party A
-------
CREDIT AGRICOLE LAZARD FINANCIAL PRODUCTS BANK
By: /s/ Xxxxxxx X. Xxxxxx
------------------------------------------
Name: X. X. Xxxxxx
Title: Designated Signatory
Party B
-------
TAURUS INTERNATIONAL S.A.
By: /s/ X.X.X. Xxxxxxx
------------------------------------------
Name: X.X.X. Xxxxxxx
Title: Director
13
Credit Agricole Lazard Financial Products Bank
--------------------------------------------------------------------------------
Share Option Transaction (Cash Settlement)
13 March 2000
Confirmation
Taurus International S.A.,
0 xxx Xxxxxx Xxxxx,
X-0000,
Xxxxxxxxxx
--------------------------------------------------------------------------------
Dear Sirs,
The purpose of this letter agreement (this "Confirmation") is to
confirm the terms and conditions of the Transaction entered into between us on
the Trade Date specified below (the "Transaction"). This Confirmation
constitutes a "Confirmation" as referred to in the ISDA Master Agreement
specified below.
The definitions and provisions contained in the 1991 ISDA Definitions,
as supplemented by the 1998 Supplement to the ISDA Definitions (the "Swap
Definitions") and in the 1996 Equity Derivatives Definitions (the "Equity
Definitions" and together with the Swap Definitions, the "Definitions"), 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. In the event of any inconsistency between either set of Definitions and
this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to,
the ISDA Master Agreement dated as of 13 March 2000, as amended and supplemented
from time to time (the "Agreement"), between Credit Agricole Lazard Financial
Products Bank ("Party A") and Taurus International S.A. ("Party B"). All
provisions (including definitions) contained in the Agreement govern this
Confirmation except as expressly modified below.
1
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
A. GENERAL TERMS:
Trade Date: 13 March 2000
Option Style: American
Option Type: Call
Seller: Party A
Buyer: Party B
Shares: Common shares of the Issuer, no par value
Issuer: Terra Industries Inc.
Number of Options: 5,000,000
Option Entitlement: 1 Share per Option
Multiple Exercise: Applicable, subject to Limitations to
Exercise set out below;
Minimum Number of Options: The lesser of (i) 75,000 Options and (ii)
the number of Options not yet exercised
by Party B;
Maximum Number of Options: A number of Options equal to the number
of Deemed Disposal Shares or, if so
contemplated by any offer in respect
thereof, any number of Shares not in
excess of the sum of the Deemed Disposal
Shares, provided that if the relevant
Tranche Price for such exercise shall be
derived from a Market Disposal, the
Maximum Number of Options shall be equal
to the Permitted Number; and provided
further that if the relevant exercise
shall be an Independent Exercise Date
following a Final Disposal, then the
Maximum Number of Options shall
2
be equal to the number of Options not yet
exercised by Party B;
Deemed Disposal Shares: The meaning set out in Section (h) of
Part 5 of the Schedule to the Agreement;
Permitted Number: A number equal to twice the average daily
trading volume of Shares on the Exchange
for the 20 Exchange Business Days prior
to the Tranche Exercise Date;
Premium: $10,000,000
Fee: $1,250,000
Premium and Fee Payment Date: The Trade Date
Exchange: NYSE
B. EXERCISE TERMS
I. PROCEDURE FOR EXERCISE:
Tranche Exercise Date: Any Seller Business Day from and
including the Premium Payment Date to and
including the Expiration Date (a) on
which Party A and TMI are permitted by
applicable law to dispose of all or any
portion of their Shares pursuant to an
effective registration statement covering
the total number of Shares purchased by
Party A and TMI on the date of the
Purchase Agreement, prior to the Latest
Exercise Time on such date or (b) on
which Party A or TMI is permitted by
applicable law to dispose of all or any
portion of the Shares in a transaction
exempt from registration under the
Securities Act of 1933, as amended; or
(c) is a day which follows an Independent
Disposal or a Final Disposal; other than,
in the case of an exercise which is to
give rise to a Market Tranche
Commencement Date, a day in the period
from and including a previous Market
3
Tranche Notification Date to and
including the 10th Exchange Business Day
next following such Market Tranche
Notification Date;
Independent Exercise Date: A Tranche Exercise Date which arises as
the result of an Independent Disposal or
a Final Disposal, which date may be at
any time and from time to time following
an Independent Disposal or a Final
Disposal;
Disposal Date: (A) in respect of a Joint Block Trade,
Joint Disposal or Individual Disposal,
the date of such sale, (B) in respect of
an Independent Disposal or a Final
Disposal, the third Exchange Business Day
following the related subsequent Exercise
Date, (C) in respect of a Market
Disposal, the relevant Market Tranche
Notification Date;
Market Tranche Execution The period from and including the
Period: relevant Market Tranche Commencement Date
to, but excluding, the Market Tranche
Notification Date;
Market Tranche Commencement the Business Day next following a Tranche
Date: Exercise Date which gives rise to a
Market Disposal;
Market Tranche Notification the Business Day following a Market
Date: Tranche Commencement Date on which Party
A serves a notice of completion of a
Tranche, which shall be as close as
possible to the Market Tranche
Commencement Date as commercially
practicable, taking into account the
likely effect on the market price of the
Shares and in any event, no later than
the Seller Business Day next following
the Maximum Period End Date;
Maximum Period End Date: the date which falls 20 Exchange Days (on
which a Market Disruption Event does not
4
occur) from and including the Market
Tranche Commencement Date;
Latest Exercise Time: 3.00 p.m. (local time in London) on the
relevant Tranche Exercise Date. If any
notice of exercise shall be received
after the Latest Exercise Time, then the
relevant- Tranche Exercise Date shall be
deemed to be the next following Seller
Business Day;
Expiration Time: 3.00 p.m. (local time in London);
Expiration Date: at the Expiration Time on the fourth
anniversary of the Premium and Fee
Payment Date, or if such anniversary is
not an Exchange Business Day then the
next following Exchange Business Day
Automatic Exercise: Inapplicable
Party A's Telephone Number Tel: 00 000 000 0000
and Telex and/or Facsimile Fax: 00 000 000 0000
Number and Contact Details Attn: Derivatives Settlements
for Purpose of Giving Notice;
II. LIMITATIONS TO EXERCISE
No purported exercise shall be valid in the event that on the date which,
but for this provision, would be the relevant Market Tranche Commencement
Date (the "Failed Market Tranche Commencement Date"), the Calculation Agent
notifies the parties that a Liquidity Event has occurred, where:
Liquidity Event: means, with respect to a Failed Market
Tranche Commencement Date, the
determination of the Calculation Agent on
such Failed Market Tranche Commencement
Date that the average daily trading
volume of Shares on the Exchange on the
20 Exchange Business Days prior to the
Failed Market Tranche Commencement Date
is less than 100,000 Shares;
5
C. SETTLEMENT TERMS:
Cash Settlement: Applicable, subject to Section D(b)
relating to a Merger Event or Tender
Offer Event of this Confirmation;
Tranche Differential: (i) If the Tranche Price is equal to or
less than $0.25, zero;
(ii) If the Tranche Price is greater than
$0.25 and equal to or less than $4.00,
the difference between the Tranche Price
and $0.25;
(iii) if the Tranche Price is greater
than $4.00 and equal to or less than
$6.00, $3.75 plus 75% of the difference
between the Tranche Price and $4.00;
(iv) if the Tranche Price is greater than
$6.00 and equal to or less than $8.00,
$5.25 plus 50% of the difference between
the Tranche Price and $6.00; or
(v) if the Tranche Price is greater than
$8.00, $6.25.
Tranche Price: Subject to Section D(b) relating to a
Merger Event or Tender Offer Event of
this Confirmation,
(i) Where, following a Tranche Exercise
Date, Party A is to dispose of Shares
through a Market Disposal, the arithmetic
average of the last traded price per
Share as reported by the Exchange at or
about each Valuation Time on each
Averaging Date;
(ii) Where, on the Tranche Exercise Date,
Party A and Party B have agreed that a
Joint Block Trade is to occur, then the
lesser of (a) the arithmetic average of
the price per Share (net of brokerage,
underwriting and other
6
reasonable related costs) at which Party
B is able to sell Shares and (b) the
arithmetic average of the price per Share
(net of brokerage, underwriting and other
reasonable related costs) at which Party
A is able to sell Shares;
(iii) Where on the Tranche Exercise Date,
Party A and Party B have agreed that a
Joint Disposal is to occur, then the
lesser of (a) the arithmetic average of
the price per Share (net of brokerage,
underwriting and other reasonable related
costs) at which Part B is able to sell
Shares and (b) the arithmetic average of
the price per Share (net of brokerage,
underwriting and other reasonable related
costs) at which Party A is able to sell
Shares;
(iv) In relation to a Tranche Exercise
Date which is followed by an Individual
Disposal the arithmetic average of the
price per Share (net of brokerage,
underwriting and other reasonable related
costs) at which Party A and/or TMI is
able to sell Shares whether or not Party
A and/or TMI actually accept such offer
and dispose of their Shares provided that
Party B consults with its U.S. counsel in
connection with such Tranche Exercise; or
(v) In the event of a Tranche Exercise
Date which arises from an Independent
Disposal or a Final Disposal, the
arithmetic average of the last traded
price per Share as reported by the
Exchange at or about each Valuation Time
on the Exchange Business Day next
following the Tranche Exercise Date;
Where:
Market Disposal: means, following a Tranche Exercise Date,
Party A and/or TMI is to dispose of
Shares subject to an effective
registration statement and no Joint
7
Block Trade is agreed between Party A
and/or TMI and Party B;
Joint Block Trade: means, following a Tranche Exercise Date,
Party A and/or TMI and Party B are to
dispose of Shares subject to an effective
registration statement as part of a
simultaneous sale in which Party A and/or
TMI and Party B are both selling to the
same purchaser or purchasers;
Joint Disposal: means a simultaneous private placement in
which Party A and/or TMI and Party B are
both selling to the same purchaser;
Independent Disposal: means a private placement arranged
between Party A and/or TMI and a
purchaser or purchasers, which is not a
Joint Disposal and which is not in
response to an exercise of Options by
Party B, which in turn permits Party B to
exercise Options at any time and from
time to time in an amount not exceeding
the number of Shares sold in such
Independent Disposal;
Final Disposal: means a disposal of Shares by Party A
and/or TMI which is not in response to an
exercise of Options by Party B and
following which the number of Shares then
held by Party A and TMI (taken together)
is zero, which in turn permits Party B to
exercise Options at any time and from
time to time in an amount not exceeding
the number of Options not yet exercised
immediately prior to such disposal;
Individual Disposal: means a private placement arranged
between Party A and/or TMI and a
purchaser or purchasers, which is not a
Joint Disposal and which is in response
to an exercise of Options by Party B
whether or not Party A and/or TMI
actually accept such offer and dispose of
their Shares;
8
Averaging Date: each Exchange Business Day on which no
Market Disruption Event occurs from and
including the Market Tranche Commencement
Date to but excluding the Market Tranche
Notification Date;
Valuation Time: as advised by the Calculation Agent;
Tranche Shares: In respect of a Tranche, a number of
Shares equal to the number of Options
exercised;
Settlement Payment Date: The third Exchange Business Day next
following the relevant Disposal Date; and
Settlement Amount: The product of the Tranche Differential
and the number of Tranche Shares.
D. TERMS OF DELISTING, MERGER AND POTENTIAL ADJUSTMENT EVENTS
Delisting Event: (a) all or part of the Shares or all the assets or
substantially all the assets of the Issuer are
nationalised, expropriated or are otherwise required
to be transferred to any governmental agency,
authority or entity or (b) by reason of the voluntary
or involuntary liquidation, bankruptcy or insolvency
of, or any analogous proceeding affecting the Issuer,
holders of the Shares become legally prohibited from
transferring them or (c) the Shares are suspended
from quotation on the Exchange for a continuous
period of more than 7 Exchange Business Days or (d)
the Shares are delisted from the Exchange and do not
subsequently become listed or quoted on one or more
of the NASDAQ National Market, the London Stock
Exchange, the Toronto Stock Exchange or any other
exchange or quotation system of similar repute;
9
Merger Event: any (a) consolidation, amalgamation or merger of the
Issuer with or into another entity or (b) person or
entity together with any companies controlled by such
person and persons acting in concert with such person
acquire directly or indirectly the beneficial
ownership of equity securities having the power to
elect a majority of the board of directors of the
Issuer or otherwise acquires directly or indirectly
the power to contest the policy-making decisions of
the Issuer other than a Tender Offer Event;
Tender Offer Event: any tender offer (made to holders of Shares
generally) for Shares, including Shares held by Party
A or TMI, made pursuant to Section 14 and Regulation
14D thereunder of the United States Securities
Exchange Act of 1934, as amended;
Potential Adjustment means any of the following:
Event: (i) a subdivision, consolidation or reclassification
of Shares;
(ii) a reconstruction of the Issuer;
(iii) a distribution of assets of the Issuer;
(iv) a reduction of share capital of the Issuer;
(v) a distribution of capital profits or capital
reserves by the Issuer;
(vi) a bonus issue of shares or securities giving
rights to shares by the Issuer (other than a scrip
issue in lieu of a cash dividend);
(vii) an allotment or issue of securities or rights
over securities by the Issuer to its shareholders by
way of rights;
(viii) a purchase by the Issuer of Shares whether out
of profits or capital and whether the consideration
for such purchase is cash, securities or otherwise;
and
(ix) any other event (other than a Merger Event or
Tender Offer Event) that may, in the opinion of the
Bank, have a material diluting or concentrative
effect on the value of the Shares.
(a) Following the occurrence of any Delisting Event, each of Party A and Party B
will use their respective reasonable endeavours to agree in good faith upon
another exchange or other quotation system in respect of the Shares. If there is
any failure of Party A or Party B to reach agreement within 10 Business Days
relating thereto, Party A, acting in good faith, shall have the right to
determine another exchange or other quotation system or to terminate the
transaction;
10
(b)(1) Following the occurrence of a Merger Event or a Tender Offer Event
during which holders of Shares are offered shares or other non-cash
consideration, the Tranche Price per Share shall be such non-cash consideration
(per Share) offered to the holders of Shares;
(b)(2) Following the occurrence of a Merger Event or a Tender Offer Event
during which holders of Shares are offered a choice or a combination of cash or
non-cash consideration, the Tranche Price per Share shall, to the fullest extent
such holders of Shares may receive cash, be cash, and the balance shall be the
amount of such non-cash consideration (per Share) offered to the holders of
Shares; and
(c) Following the declaration by the Issuer of the terms of/or any
Potential Adjustment Event, Party A, if Party A is a holder of any Shares at
such time, acting in good faith, shall:
(i) determine whether such Potential Adjustment Event will have a
material diluting or concentrative effect on the value of the Shares;
(ii) determine any adjustment(s) to be made to the settlement terms of
this Transaction but only to account for any material effect which such
adjustment(s) shall take place; and
(iii) exercise any right attached to the Shares owned by Party A or TMI
in accordance with Party B's instructions provided that any expenses incurred in
the exercise of such rights shall be met by Party B or agreed to be financed by
Party A.
5. Account Details:
Account for payments to Party A: Chase Manhattan Bank, New York
(XXXXXX00) ABA 000000000,
Favour Caisse Nationale de Credit
Agricole London Branch
(AGRIGB2L) - A/C nb 400924633
Beneficiary CAL FP Bank
(CALFGB21)
Account for payments to Party B: Barclays Bank, 00 Xxxxxxx Xxxxxx,
Xxxxxx A/c Taurus International
S.A. A/c No: 59257755
6. Offices:
(a) The Office of Party A for the Transaction is at 00 Xxxxxxxxxx
Xxxxxxxx, Xxxxxx XX0X 0XX, Xxxxxx Xxxxxxx; and
11
(b) The Office of Party B for the Transaction is 0 xxx Xxxxxx
Xxxxx, X-0000, Xxxxxxxxxx.
7. Broker/Arranger: Not applicable.
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 or by sending to us a letter substantially similar to
this letter, which letter sets forth the material terms of the Transaction to
which this Confirmation relates and indicates your agreement to those terms.
Yours sincerely,
CREDIT AGRICOLE LAZARD FINANCIAL PRODUCTS BANK
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------
Name: X. X. Xxxxxx
Title: Designated Signatory
CONFIRMED AS OF THE DATE FIRST ABOVE WRITTEN:
Taurus International S.A.
By: /s/ X.X.X. Xxxxxxx
---------------------------
Name: X.X.X. Xxxxxxx
Title: Director
12
