EXHIBIT 11
DEUTSCHE BANK [logo omitted]
Deutsche Bank AG London
Winchester House
0 Xxxxx Xxxxxxxxxx Xxxxxx
Xxxxxxx Xxxxxxxxx X.X. Xxxxxx XX0X 0XX
00, xxxxxx xx Xxxxxxxxx
00000 Xxxxx Telephone: x00 00 0000 0000
8 October 2001
Share Swap Transaction - Our Transaction No.
Dear Sir / Madam,
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between Deutsche Bank AG
London ("Party A") and Vivendi Universal S.A. ("Party B") on the Trade Date
specified below (the "Transaction").
The definitions and provisions contained in the 2000 ISDA Definitions (the
"2000 Definitions") and in the 1996 ISDA Equity Derivatives Definitions (the
"Equity Definitions", and together with the 2000 Definitions, the
"Definitions") (each as amended and supplemented by the 1998 ISDA Euro
Definitions), in each case as published by the International Swaps and
Derivatives Association, Inc. are incorporated into this Confirmation. In the
event of any inconsistency between the 2000 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. References herein to a "Transaction" shall be deemed
to be references to a "Swap Transaction" for the purposes of the 2000
Definitions.
1. This Confirmation constitutes a "Confirmation" as referred to in, and
supplements, forms a part of and is subject to, the ISDA Master Agreement
dated as of 8 October 2001, as amended and supplemented from time to time
(the "Agreement"), between you and Deutsche Bank AG London. All
provisions contained in the Agreement govern this Confirmation except as
expressly modified below.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows: General Terms:
Trade Date: 8 October 2001
Effective Date: The Trade Date.
Termination Date: 8 October 2005, subject to the provisions
concerning "Settlement following Final
Valuation" and "Calculations following a
Recapitalisation of the Issuers"
Shares: Means:
(1) from and including the Trade Date up
to and including the Exchangeable Note
Exercise Date, the Exchangeable Notes,
and
(2) from but excluding the Exchangeable
Note Exercise Date to and including
the Termination Date, the Exchangeable
Shares.
Exchangeable Notes: The notes due 2005 issued in registered form by
each of the Issuers, respectively
Issuers: Xxxxxxxxx Finance (Number One) Limited and
Xxxxxxxxx Finance (NumberTwo) Limited
Exchangeable Shares: In respect of each Exchangeable Note, the
"Shares" as defined in the terms and conditions
of such Exchangeable Notes (and as adjusted in
accordance with the terms thereof), which, are,
as of the date hereof, the Underlying Shares.
Any such adjustment will continue after the
Exchangeable Note Exercise Date as if no
exchange had taken place.
Underlying Shares: Ordinary Shares of British Sky Broadcasting
Group plc ("BSkyB") (ISIN Number: GB0001411924)
Exchangeable Note
Exercise Date: Any date on which Party A exercises the Exchange
Right (as defined in each Exchangeable Note) in
accordance with the terms and conditions of such
Exchangeable Note, or any date on which Party A
sells the Exchangeable Notes to any person not
affiliated with Party A.
Exchange: London Stock Exchange plc, for so long as the
Exchangeable Shares are listed on such exchange;
if the Exchangeable Shares are not listed on the
London Stock Exchange plc at the relevant time,
such other North American or European Union
stock exchange on which the Exchangeable Shares
are so listed at such time, as selected by the
Calculation Agent
Calculation Agent: Party A
Equity Amounts Payable: In accordance with the Equity Definitions and
the provisions detailed herein, with respect to
each Valuation Date an Equity Amount and a
Dividend Amount, where relevant, shall be
determined and become payable between the
parties to this Transaction, subject in all
events to the Lower Limit and the Additional
Provisions concerning "Additional Collateral"
and "Calculations following a Recapitalisation
of the Issuers"
Equity Amount Payer: In the event the Final Price is greater than the
Initial Price, Party A; and
In the event the Initial Price is greater than the
Final Price, Party B.
If the Final Price is equal to the Initial Price,
no Equity Amount shall be paid.
Dividend Amount Payer: Party A
Equity Amount: An amount representing the aggregate change in
value of the Equity Notional Amount from the
previous Equity Payment Date to the current
Equity Payment Date (or, in the case of the
initial Equity Payment Date, from the Trade Date
until such date), which shall be determined by
the Calculation Agent, in respect of each Equity
Payment Date, as of the Valuation Date to which
such Equity Payment Date relates, and is equal
to the product of (i) the Equity Notional Amount
and (ii)(a) the absolute value of the Final
Price minus the Initial Price divided by (b) the
Initial Price.
Equity Notional Amount: (i) On the initial Equity Payment Date, GBP
2,519,753,859.42 (being on the Trade Date the
Number of Shares multiplied by the Initial
Price), and
(ii) On each Equity Payment Date thereafter, (a)
the Equity Notional Amount in respect of the
prior Equity Payment Date and (b)(i) plus any
Equity Amount paid by Party A to Party B in
respect of the prior Equity Payment Date or (ii)
minus any Equity Amount paid by Party B to Party
A in respect of the prior Equity Payment Date.
Equity Payment Dates: The 5th Exchange Business Day following each
Valuation Date (other than in the case of the
Termination Date, in which case the Equity
Payment Date shall be the Exchange Business Day
immediately following the related Valuation
Date)
Type of Return: Total Return
2
Number of Shares: (i) From and including the Trade Date up to and
including the Exchangeable Note Exercise Date,
the number of Exchangeable Shares represented by
the Exchangeable Notes; and
(ii) From but excluding the Exchangeable Note
Exercise Date to and including the Termination
Date, the number of Exchangeable Shares that
would have been represented by the Exchangeable
Notes as if no exchange had taken place
Initial Price: (i) In respect of the initial Valuation Date,
GBP 6.29; and
(ii) In respect of each Valuation Date
thereafter, the Final Price for the Valuation
Date immediately preceding such Valuation Date
Final Price: The official closing price per Exchangeable
Share (or, if there is more than one component
thereof, the aggregate of the prices of each
such component) on the Exchange at the Valuation
Time on the relevant Valuation Date, except as
otherwise provided below
Valuation Time: The time at which the official closing price per
Exchangeable Share is published and announced by
the Exchange
Valuation Dates: (i) The last Exchange Business Day of each of
March, June, September and December from, and
including, the first such date following the
Trade Date to, and including, the last such date
on or prior to the Termination Date (ii) the
Trigger Dates, (iii) the fifth Exchange Business
Day prior to each Break Date and (iv) the first
Exchange Business Day prior to the Termination
Date.
Dividend Amount: An amount, as determined by the Calculation
Agent in accordance with the following formulae:
(i) at all times from and including the Trade
Date up to and including the Exchangeable Note
Exercise Date:
Interest
where "Interest" means the interest actually
received by the holder(s) in respect of the
Exchangeable Notes; and
(ii) at all times from but excluding the
Exchangeable Note Exercise Date to and
including the Termination Date, provided that
Party A has received Exchangeable Shares in
any Exchange:
Number of Shares x Dividend
where "Dividend" means (i) an amount,
determined by the Calculation Agent,
equivalent to 100.00% of the total cash
paid in respect of the Exchangeable Shares
that is actually received by the holder(s)
thereof, including, without limitation, any
dividends paid in cash and (ii)(a) plus any
income which Party A generates on or in
respect of the Exchangeable Shares (net of
fees and expenses incurred in generating
such income) and (b) minus any external
costs (other than balance sheet costs)
which Party A incurs in holding the
Exchangeable Shares,
in each case after deduction for any
withholding tax, stamp tax, or any other
tax, duties, fees or commissions payable in
respect of such payment
Dividend Payment Dates: The Equity Payment Date relating to the
Valuation Date on which the relevant Dividend
Period ends.
Dividend Period: Each period from, and including, one Equity
Payment Date to, but excluding, the next
following Equity Payment Date, except that (i)
the initial Dividend Period will commence on,
but exclude, the Trade Date and (ii) the final
Dividend Period will end on, and include, the
Termination Date.
Re-investment of
Dividends: Inapplicable
Floating Amounts Payable: In accordance with the 2000 Definitions and the
provisions detailed herein, with respect to each
Valuation Date a Floating Amount shall be
determined and become payable between the
parties to this Transaction.
Floating Amount Payer: Party A and Party B
Notional Amount: For Party A, the Accumulated Amount; and
For Party B, the Equity Notional Amount
Payment Dates: Each Equity Payment Date
Floating Rate Option: GBP-LIBOR-BBA
Designated Maturity: 3 months
Spread: Plus 60 basis points (that is, 0.60% per annum)
Floating Rate for
Periods of less than
3 months: Linear Interpolation
Floating Rate Day Count
Fraction: Actual/365 (Fixed)
Reset Dates: The first (1st) day of each Calculation Period.
Business Days: London
Adjustments:
Method of Adjustment Calculation Agent Adjustment
Extraordinary Events:
Consequences of Merger Events:
(a) Share-for-Share: Alternative Obligation
(b) Share-for-Other: Alternative Obligation
(c) Share-for-Combined: Alternative Obligation
but subject, in each event, to the Additional Provisions concerning
"Merger Events" below.
Nationalisation,
Insolvency, De-listing
or Loss of FPI Status: Cancellation and Payment
Affected Party: Party B
3. Additional Provisions
(a) Share De-listing and Loss of FPI Status :
The provisions of Article 9 of the Equity Definitions shall apply as
amended below and as if reference therein to "Shares" were to the
Exchangeable Shares.
Article 9 section 9.6 (a) of the Equity Definitions shall be amended by
the addition of the following definition:
"(iii) "De-listing" means the Shares cease, for any reason, to be
listed on the Exchange and as of the date of such De-listing are not
listed on (i) another recognised Exchange or (ii) another quotation
system acceptable to the Calculation Agent; and
(iv) "Loss of FPI Status" means that BSkyB no longer qualifies as a
"foreign private issuer" as such term is defined in Rule 3b-4 under
the United States Securities Exchange Act of 1934, as amended; and
Section 9.6(b) of the Equity Definitions shall be deleted and replaced by
the following:
"Either party will, upon becoming aware of the occurrence of a
Nationalisation, Insolvency, De-listing or Loss of FPI Status,
notify the other party of such event."
Notwithstanding Section 9.6(c)(i) and Section 9.6(c) (ii) of the Equity
Definitions, line 1 of Section 9.6(c) of the Equity Definitions shall be
deleted and replaced by the following:
"For the purpose of determining the consequence of a
Nationalisation, Insolvency, De-listing or Loss of FPI Status:"
Article 9 section 9.7 of the Equity Definitions shall be amended by the
substitution of the phrase "Nationalisation, Insolvency, De-listing or
Loss of FPI Status " for the phrase "Nationalisation or Insolvency" at
each of its occurrences in said section.
(b) Lower Limit:
Notwithstanding anything to the contrary herein, any Equity Amount
payable by Party B to Party A shall not exceed the Lower Limit. The
"Lower Limit" shall mean an amount equal to 89.0% of the Equity Notional
Amount on (x) the Valuation Date immediately preceding the related Equity
Payment Date or (y) the Trade Date where no such preceding Valuation Date
has occurred, minus L200,000.
(c) Additional Collateral
On any Valuation Date other than the final Valuation Date or a Valuation
Date occurring as a result of a Break Date as set out under the terms of
the Optional Early Termination provisions below, any Equity Amount
payable by Party A to Party B shall be deemed to be divided into two
portions: the Current Payment and the Deferred Payment. The Current
Payment shall be payable on the associated Equity Payment Date, but Party
B consents to the retention of the Deferred Payment by Party A and its
addition to the Accumulated Amount to be held as collateral until (i) all
of the obligations of Party B under this Transaction have been satisfied
in full as and when due, (ii) the respective delivery and payment
obligations of the Issuers under the relevant Exchangeable Note have been
satisfied in full as and when due and (iii) any preferred equity
securities of the Issuers to which Party A (or one of its affiliates) has
subscribed have been redeemed in full. In the event either of the Issuers
fails to fulfil such obligations in full, the Accumulated Amount shall be
reduced to the extent of any unsatisfied performance (the amount of
which, to the extent such performance is not the payment of a cash
amount, shall be determined by the Calculation Agent). Notwithstanding
any deferral of payment, any such Deferred Payment shall be included as
part of the Equity Amount paid by Party A on any Equity Payment Date.
Notwithstanding the foregoing, any Equity Amount payable by Party B to
Party A shall be reduced to the extent of the Accumulated Amount as of
the associated Valuation Date and to such extent be satisfied; provided,
however, that on the final Valuation Date or a Valuation Date occurring
as a result of a Break Date as set out under the terms of Optional Early
Termination provisions below, the Accumulated Amount shall (i) first, be
used to satisfy any unsatisfied delivery and payment obligations under
the Exchangeable Notes, (ii) second, be used to reduce any Equity Amount
payable by Party B to Party A, and (iii) finally, be paid, if there is
any remainder, to Party B. Party A shall retain on its books an account
to reflect the balance of the Accumulated Amount under the sole dominion
and control of Party A which shall be credited in the amount of each
Deferred Payment on the relevant Equity Payment Dates and debited in the
amount of each application of such funds against the obligations of Party
B.
For these purposes:
"Accumulated Amount" means the sum of all Deferred Payments minus the sum
of all amounts deducted previously therefrom to satisfy any Equity
Amounts payable by Party B.
"Current Payment" means the Equity Amount, but in any event an amount not
exceeding the Equity Amount calculated by substituting the Upper Limit
for the Final Price.
"Deferred Payment" means the excess, if any, of the Equity Amount over
the Current Payment.
"Upper Limit" means an amount equal to GBP 6.29, which amount shall be
adjusted by the Calculation Agent in accordance with any adjustments made
to Number of Shares.
(d) Additional Valuation Dates:
If, on any Exchange Business Day (each, a "Trigger Date") from, and
excluding, the Trade Date to, and excluding, the final Valuation Date,
the Calculation Agent determines that the difference between the Initial
Price, and the official closing price per Exchangeable Share (or, if
there is more than one component thereof, the aggregate of the prices of
each such component) on the Exchange on such Exchange Business Day is
equal to, or greater than 10% of such Initial Price, such date shall
become a Valuation Date for the purpose of this Transaction.
In addition, the Calculation Agent shall determine the relevant Equity
Amount, Dividend Amount (where applicable) and Floating Amount payable in
accordance with the terms herein which shall include any adjustments
related to the cost or benefit of unwinding the Floating Rate funding for
this Transaction prior to the end of the Designated Maturity, including
as a result of the occurrence of a Trigger Date, Break Date or the final
Valuation Date in respect of the Termination Date.
(e) Additional Payments in respect of changes in the Lower Limit:
If, on any Equity Payment Date:
(a) an amount is payable (including by any Deferred Payment) by Party A
to Party B, Party B shall pay to Party A an amount, as determined by
the Calculation Agent, to reflect any change in the fair value of
this contract due to the corresponding change in the Lower Limit
(b) an amount is payable by Party B to Party A, Party A shall pay to
Party B an amount, based on the fair value as determined by the
Calculation Agent, to reflect any change in the fair value of this
contract due to the corresponding change in the Lower Limit.
(f) Interim Settlement:
With respect to any Valuation Date excluding the final Valuation Date or
a Valuation Date occurring as a result of a Break Date as set out under
the terms of Optional Early Termination provisions below, but including,
for the avoidance of doubt, a Valuation Date resulting from the
occurrence of a Trigger Date, contingent upon notice (which will be
written notice) from Party B to Party A not less than one Exchange
Business Day prior to such Valuation Date, Party B may elect to settle
its obligation to Party A (if any) with respect to any Equity Amount it
owes to Party A, as determined in accordance with the terms of this
Transaction, by effecting in the market the sale of an amount of ordinary
shares of Vivendi Universal SA (Bloomberg code "EX FP", or any successor
code) (the "VU Shares"), such that Party A receives cash equal to the
amount of such obligation of Party B, plus, if applicable, interest at
the overnight LIBOR rate on such amount from the due date thereof until
the date it is actually paid to Party A, but in no event later the date
three Exchange Business Days following the relevant Equity Payment Date.
If Party B requests and Party A agrees to sell any such VU Shares in any
such transaction, Party A shall act exclusively as agent for Party B.
(g) Settlement following Final Valuation:
For the purpose of calculating the final Equity Amount, the Final Price
shall be determined as follows: Beginning three months prior to the
expected Termination Date, Party A shall undertake to ascertain the
appropriate market price of the Exchangeable Shares based on the price
which would be required to sell the Number of Shares of such Exchangeable
Shares in the marketplace, taking into account, among other
considerations, the total number of shares relative to ordinary trading
volumes and prevailing market conditions. The Final Price shall be
determined either:
(i) by mutual consent between the parties with respect to the chosen
method of selling the Exchangeable Shares in the market; or
(ii) if the parties are unable to agree on a suitable method of selling
the Exchangeable Shares in the market in accordance with (i) above,
a price (net of fees and expenses) quoted by Party A to Party B that
Party A believes adequately represents the prevailing market
conditions and its ability to sell the Number of Shares of such
Exchangeable Shares in the market at a time of its choosing during
the 25 Exchange Business Day period preceding the Termination Date.
If, however, before or within one business hour in Paris of Party A
having provided Party B with such quote, Party B is able to provide
an unconditional written commitment to Party A from an international
investment bank or underwriter or another party which has the
ability to purchase such Number of Shares (in each case offering to
purchase such shares for persons other than Party B, its affiliates
and agents) offering to purchase such Number of Shares on
substantially equivalent terms and conditions during the same
25-Exchange Business Day period, but at a higher price (net of fees
and expenses) than that determined by Party A, such higher price
shall be the Final Price for purposes hereof.
Notwithstanding the foregoing, Party A shall not be required to sell the
Shares to determine a price. If, however, the Shares are sold in the
market or as a result of Party A having accepted the offer referred to in
clause (ii) of the paragraph above, the price (net of fees and expenses)
of the Shares in such sale shall be the Final Price.
Notwithstanding the then existing definition of the Termination Date, if
Party A chooses to sell the Shares in accordance with the above
provisions at any time before the existing Termination Date, the date on
which Party A receives the proceeds of such sale shall thereupon be
deemed to be the final Valuation Date and the date one Exchange Business
Day thereafter shall be the "Termination Date".
The final Equity Amount, if payable by Party B to Party A, shall not
exceed the Lower Limit.
(h) Optional Early Termination:
Either Party A or Party B (the "Terminating Party") may, with the written
consent of the other party, terminate this Transaction in whole or
partially in such portion thereof as mutually agreed, before the final
Valuation Date on a Break Date (which dates are set out below) by giving
notice (which will be written notice) to the other party (the "Non
Terminating Party") not less than five Exchange Business Days before the
relevant Break Date. Such notice shall specify:
(i) that this Transaction is to be wholly or partially terminated;
(ii) the number of Shares in respect of which this Transaction is to be
terminated;
(iii) the Break Date; and
in accordance with the provisions detailed herein, with respect to the
number of Shares in relation to which this Transaction is to be
terminated, the Calculation Agent will determine the Equity Amount, the
Dividend Amount and the Floating Amount which would become payable
pursuant to such Optional Early Termination and the relevant Break Date
shall be deemed to be a Valuation Date for the purposes of this
Transaction.
For the purposes of determining the Equity Amount payable pursuant to
such Optional Early Termination, the Final Price shall be determined by
mutual consent between the parties with respect to the chosen method of
selling the Shares in the market.
Notwithstanding the foregoing, Party A shall not be required to sell the
Shares to determine a price. If, however, the Shares are sold in the
market, the price (net of fees and expenses) of the Shares in such sale
shall be the Final Price.
In the event that mutual consent is not obtained, then no Optional Early
Termination shall occur.
In the event of partial termination, this Confirmation shall continue to
govern the outstanding Number of Shares and the Calculation Agent shall
adjust the Equity Notional Amount to take the reduction in the Number of
Shares into account. The obligations of the parties to make any further
payments under this Transaction with respect to the number of Shares in
relation to which this Transaction has been terminated (except payments
that are due but unpaid, and except payments required to be made pursuant
to this paragraph (h)) on or after the Break Date will terminate.
The Break Dates are any Exchange Business Day.
The Equity Amount payable pursuant to such Optional Early Termination, if
payable by Party B to Party A, shall not exceed the pro rata portion of
the Lower Limit with respect to the portion of shares as to which this
Transaction is terminated.
(i) Calculations following a Recapitalisation of the Issuers
If on an Exchangeable Note Exercise Date Party A exercises its Exchange
Right (as defined in the Exchangeable Notes) for cash and subscribes for
Preference Shares (defined below), thereafter, notwithstanding anything
to the contrary in this Confirmation:
(i) Extended Termination Date
The "Termination Date" shall mean the Exchange Business Day
immediately following the date on which the Preference Shares have
been wholly redeemed, whether by means of a sale of the Exchangeable
Shares held by either of the Issuers, in a liquidation of the
Issuers or otherwise.
"Preference Shares" shall mean such preferred shares or other equity
securities of the Issuers to which Party A (or one of its
affiliates) shall have subscribed in order to fund the payment of
cash to the holder of the Exchangeable Notes on the Exchangeable
Note Exercise Date.
(ii) Limit on Equity Amounts Payable by Party A
Other than on the final Equity Payment Date or an Equity Payment
Date occurring as a result of a Break Date as set out under the
terms of the Optional Early Termination provisions above, following
such Exchangeable Note Exercise Date, Party A shall have no further
obligation to pay any Equity Amounts to Party B in excess of the
Upper Limit.
For these purposes, at any time the "Upper Limit" shall mean an
Equity Amount calculated by the Calculation Agent by substituting
for the Final Price, an amount equal to the lesser of:
(a)(1) the aggregate proceeds of the subscription of the
Preference Shares, divided by (2) the Number of Shares as
of the Exchangeable Note Exercise Date
and
(b) the Upper Limit as of the Exchangeable Note Exercise Date
(iii) Adjustments to Calculations
Following such Exchangeable Note Exercise Date, the following
changes shall be made to the following defined terms for purposes of
calculating any Equity Amounts:
"Equity Payment Dates" shall mean, in addition to each Equity
Payment Date otherwise provided for, the Exchange Business Day
immediately following each date on which the holder(s) of
Preference Shares receives proceeds in respect of a redemption
thereof.
"Number of Shares" shall mean the number of Exchangeable Shares
that would have been represented by the Exchangeable Notes as
if no exchange had taken place less any such Exchangeable
Shares that have been sold since the Exchangeable Note Exercise
Date, other than any shares sold on the Equity Payment Date in
respect of which any calculation using such number is being
made.
"Final Price" shall mean, if any Preference Shares have been
redeemed since the immediately preceding Equity Payment Date,
(i) the aggregate proceeds received by the holder(s) of the
Preference Shares in respect of such redemption of Preference
Shares, divided by (ii) the number of Exchangeable Shares sold
in order to fund such redemption. For purposes of calculating
any Equity Amount payable on any other Equity Payment Date, the
Final Price provided for in the other provisions of this
Confirmation shall continue to apply.
"Valuation Date" shall mean, in addition to each Valuation Date
otherwise provided for, the Exchange Business Day on which the
holder(s) of Preference Shares receives proceeds in respect of
a redemption thereof.
"Dividend Amount" shall mean:
Number of Preference Shares x Dividend
where "Dividend" means (i) an amount, determined by the
Calculation Agent, equivalent to 100.00% of the cash dividends
paid in respect of the Preference Shares and interest on any
late payment thereof, in each case that is actually received by
the holder(s) thereof, after deduction for any withholding tax,
stamp tax, or any other tax, duties, fees or commissions
payable in respect of such payment.
In addition, on the first Valuation Date following each date on
which any Exchangeable Shares have been sold, the Calculation
Agent shall adjust the Equity Notional Amount applicable to the
related Equity Payment Date by subtracting from the Equity
Notional Amount that would otherwise apply, an amount equal to
(i) the number of Exchangeable Shares that were sold multiplied
by (ii) the Final Price calculated as provided in the definition
above with reference to the sale proceeds of such Exchangeable
Shares.
(iv) Settlement following Final Valuation
For the purpose of calculating the final Equity Amount, the
Final Price shall be calculated as provided above. The
provisions concerning "Settlement following Final Valuation" of
Section (g) above shall not apply.
(v) Other Provisions Unchanged
Except as specified in this Additional Provision (i), each of
the other terms of this Transaction shall continue unchanged.
(vi) Future Tax Liabilities
Notwithstanding anything to the contrary in any other provision
of this Transaction, any taxes that may become payable by or
assessable on any holder of the Preference Shares on any date
(as determined by the Calculation Agent in its reasonable
business judgement) with respect to the sale by or on behalf of
the Issuers of any of the Exchangeable Shares after any such
Exchangeable Note Exercise Date, shall be deducted from the
Final Price as of each Equity Payment Date. If the actual
amount paid in respect of such tax differs from the amount so
estimated, adjustments (and, if necessary, payments) shall be
made between the parties to reimburse or refund such
difference. This provision shall survive the termination of
this Transaction.
(j) Early Termination upon Exchange
If on an Exchangeable Note Exercise Date Party A exercises its Exchange
Rights (as defined in the Exchangeable Notes) for cash but does not
subscribe for Preference Shares (as defined above), this Transaction
shall automatically terminate. For purposes of calculating any Equity
Amounts payable in connection with such early termination, the Final
Price shall be equal to the aggregate proceeds received in cash by the
holder(s) of the Exchangeable Notes divided by the Number of Shares.
(k) Merger Events
In the event a Merger Event occurs as a result of which the holder(s) of
the Exchangeable Notes receives cash in redemption (in whole or in part)
of the Exchangeable Notes, then:
(i) "Equity Payment Dates" shall mean, in addition to each Equity
Payment Date otherwise provided for, the Exchange Business Day
immediately following each date on which the holder(s) actually
receives such cash;
(ii) "Valuation Date" shall mean, in addition to each Valuation Date
otherwise provided for, the Exchange Business Day on which the
holder(s) actually receives such cash;
(iii) the "Final Price" for purposes of such calculations shall be
calculated as otherwise provided in this Confirmation, including the
value of the cash proceeds (per Exchangeable Share) subtracted as
provided above;
(iv) the Calculation Agent shall adjust the Equity Notional Amount
applicable to each such Equity Payment Date by subtracting from the
Equity Notional Amount that would otherwise apply, an amount equal
to the aggregate cash proceeds actually received by the holder(s) of
the Exchangeable Notes; and
(v) if the Exchangeable Notes are redeemed in whole upon the receipt of
such cash, the "Termination Date" shall mean the Exchange Business
Day immediately following the date on which the holder(s) actually
receives such cash.
4. Representations and warranties:
Each party represents to the other party as of the date that it enters
into this Transaction that (absent a written agreement between the
parties that expressly imposes affirmative obligations to the contrary
for this Transaction):
(i) Non-Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into this Transaction and as to
whether the Transaction is appropriate or proper for it based
upon its own judgement and upon advice from such advisers as it has
deemed necessary. It is not relying on any communication (written or
oral) of the other party as investment advice or as a recommendation to
enter into this Transaction, it being understood that information and
explanations related to the terms and conditions of this Transaction
shall not be considered to be investment advice or a recommendation to
enter into the Transaction. No communication (written or oral) received
from the other party shall be deemed to be an assurance or guarantee as
to the expected results of this Transaction.
(ii) Assessment and Understanding. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts the terms and
conditions and risks of this Transaction. It is also capable of
assuming, and assumes, the risks of the Transaction.
(iii) Status of Parties. The other party is not acting as a fiduciary for
or adviser to it in respect of this Transaction.
In addition, Party B represents to Party A as of the date that it enters
into this Transaction that:
(iv) No individual who is an officer, director or employee of Party B or
of its subsidiaries or of its holding company or of any subsidiary
of its holding company who has knowledge of the Transaction (each a
"Relevant Individual") is in possession of information relating to,
or to the securities of BSkyB which has not been made public and
which if it were made public would be likely to have a significant
effect on the price (including the value) of any such securities
("price sensitive information").
(v) Neither Party B nor any Relevant Individual is, or at any time up
until immediately after the termination of the Transaction will be,
engaged in insider dealing for the purposes of the UK Criminal
Justice Act 1993 or comparable legislation of any other applicable
jurisdiction.
(vi) Neither Party B nor any Relevant Individual knows of nor plans to
announce any transaction or matter which might have a significant
effect on, or be likely materially to affect, the price of the
securities of BSkyB.
(vii) Party B and each Relevant Individual has and will at all times
fully comply with all applicable laws and regulations in each
relevant jurisdiction with regard to the Transaction, including
without limitation, those obligations arising with regard to
disclosure under the UK Companies Act 1985 and the City Code on
Takeovers and Mergers and the Rules Governing Substantial
Acquisition of Shares (this representation and warranty shall be
deemed to be continuing and repeated for the period up until
immediately after the termination of the Transaction).
(viii) Without prejudice to (vii) above, in entering in to the
Transaction, neither Party B nor any Relevant Individual shall
breach or be capable of being treated as breaching the prohibition
on market manipulation contained in section 47 of the UK Financial
Services Act 1986.
(ix) Party B has fully disclosed to Party A its reasons and objectives in
entering into the Transaction, which it hereby confirms are within
its corporate powers and constitute a genuine and legitimate
business and commercial purpose.
(x) The Transaction itself will not lead to Party A possessing price
sensitive information in relation to BSkyB.
5. Undertakings and Indemnities:
Party B shall indemnify and hold harmless Party A for and against any
losses, claims, damages or liabilities to which Party A may become
subject, and Party B will reimburse Party A for any legal or other
expenses reasonably incurred by it in connection with investigating or
defending any such action or claim as such expenses are incurred:
(a) in connection with any resale by Party A of Exchangeable Shares
obtained upon an exchange by Party B of the Exchangeable Notes or any
resale by Party A of VU shares delivered to Party A by Party B under
paragraph 3(f) hereof, in each case arising from the misstatement or
omission of any material fact in any disclosure made in connection with any
such sale; provided, however, that in connection with any such sale Party A
shall be entitled to rely on the advice of counsel as to any applicable
restrictions under applicable law (including, without limitation, under the
United States Securities Act of 1933, as amended, and the United States
Securities Exchange Act of 1934, as amended, in each case including under
any rules or regulations thereunder), and
(b) in connection with or arising out of either of the Subscription
Agreements dated on or about the date hereof between each of the Issuers,
respectively, and Deutsche Bank AG London on the same terms as the
indemnity set forth in such agreement, but without duplication of any
payments which Party A shall receive under such indemnity.
In addition, Party B shall indemnify and hold harmless Party A for and
against any amount in respect of, or corresponding to, taxes (including
any interest, penalties and associated costs imposed by the relevant
competent taxing authority) on any amounts payable by either of the
Issuers under the terms of the Exchangeable Notes which is subject to any
withholding or deduction for or on account of tax and which either of the
Issuers fails duly to pay to Party A pursuant to Condition 10(b)
[Grossing up of Payments] of the terms of the Exchangeable Notes. If
Party A determines in its sole discretion (exercised in good faith) that
it has obtained a refund of any such taxes or obtained and used a credit
against taxes on its own overall net income (a "Tax Credit") which Party
A is able to identify as attributable to the deduction or withholding
Party A shall (subject to Party B having paid any additional amount
payable in accordance with this provision) to the extent it can do so
without prejudice to the retention of the full amount of the Tax Credit,
pay an amount equal to that Tax Credit to Party B. Nothing in this
provision shall require Party A to order its affairs so as to obtain any
Tax Credit in respect of any such deduction or withholding. Party A shall
not be obliged to disclose any information regarding its tax affairs and
computations.
Notwithstanding anything to the contrary in the foregoing, no indemnity
shall cover any losses of Party A in respect of the Lower Limit.
6. Expenses:
Party B to bear costs associated with sale by Party A of VU Shares or
Exchangeable Shares including any brokerage fees.
7. Account Details:
Payments to Party A: Bank of England
A/C No. 0307983 0100 GBP 001 LDN
In favour of Deutsche Bank AG London
Payments to Party B: To be advised
8. Contact Names:
Confirmations Xxxxxxx Xxxxxxxx
Telephone: + 00 000 000 0000
Fax: + 44 207 545 4913 / 8312
e-mail address: xxxxxxx.xxxxxxxx@xx.xxx
Xxxxx Xxxxxxxx
+ 44 207 547 1202
+ 44 207 545 4913 / 8312
xxxxx.xxxxxxxx@xx.xxx
Xxxxxxxxx Xxxxx
+ 44 207 545 1612
+ 44 207 545 4913 / 8312
xxxxxxxxx.xxxxx@xx.xxx
Xxxxxxx Xxxx
+ 44 207 545 8793
+ 44 207 545 4913 / 8312
xxxxxxx.xxxx@xx.xxx
ISDA Negotiation Xxxxxx Xxxx / Xxxxxxx Xxxx
Telephone: x00 000 000 0000/4549
Fax: x00 000 000 0000
Payments/Fixings Xxxxx Xxxxxx
Telephone: + 00 000 000 0000
Fax: + 44 207 545 2336
xxxxx.xxxxxx@xx.xxx
9. Offices: The Office of Party A for the Transaction is
London
10. Broker / Arranger: Dealt direct
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. The time of execution of this Transaction will be made
available on request.
Yours faithfully,
for and on behalf of
DEUTSCHE BANK AG LONDON
By: /s/ Xxxx Xxxxxxx By: /s/ Xxxxxx Xxxxx
--------------------------- -------------------------------
Name: Xxxx Xxxxxxx Name: Xxxxxx Xxxxx
Title: Authorised Signatory Title: Authorised Signatory
Confirmed as of the date first above written:
VIVENDI UNIVERSAL S.A.
By: /s/ Xxxxxxxxx Xxxxxx
---------------------------
Name: Xxxxxxxxx Xxxxxx
Title: Deputy Chief Financial Officer
