Xxxx Xxxxxx
39 Xxxxxx Xxx Xxx St.
Givataiim
Israel 53631
Credit Suisse Capital LLC
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Transaction ID: ORCT001
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Dear Sir or Madam,
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"). Additional terms of the Transaction
will be set forth in one or more Supplemental Confirmations in the form set
forth in Annex A hereto (the "Supplemental Confirmation"). This Confirmation
constitutes, and upon execution of the Supplemental Confirmation, this
Confirmation together with each Supplemental Confirmation shall constitute a
"Confirmation" as referred to in the Agreement specified below.
In this Confirmation, "CSCL" means Credit Suisse Capital LLC, "Counterparty"
means Xxxx Xxxxxx and "Agent" means Credit Suisse Securities (USA) LLC, solely
in its capacity as agent for CSCL and Counterparty.
1. The definitions and provisions contained in the 2000 ISDA
Definitions (the "2000 Definitions") and the 2002 ISDA Equity
Derivatives Definitions (the "2002 Definitions" and, together
with the 2000 Definitions, the "Definitions"), each as published by
the International Swaps and Derivatives Association, Inc. ("ISDA"),
are incorporated into this Confirmation and the Supplemental
Confirmation. In the event of any inconsistency between the 2000
Definitions and the 2002 Definitions, the 2002 Definitions will
govern. In the event of any inconsistency between the Definitions
and this Confirmation or a Supplemental Confirmation, this
Confirmation or such Supplemental Confirmation, as the case may be
will govern. In the event of any inconsistency between this
Confirmation and a Supplemental Confirmation, such Supplemental
Confirmation shall govern. The Transaction shall be deemed to be a
Share Forward Transaction within the meaning set forth in the
Equity Definitions.
This Confirmation and each Supplemental Confirmation shall supplement,
form a part of and be subject to an agreement (the "Agreement") in the
form of the 1992 ISDA Master Agreement (Multicurrency - Cross Border)
(the "ISDA Form"), as published by the International Swaps and
Derivatives Association, Inc., as if CSCL and Counterparty had executed
the ISDA Form (without any Schedule thereto) on the date hereof. All
provisions contained in the Agreement are incorporated into and shall
govern this Confirmation and each Supplemental Confirmation except as
expressly modified below. This Confirmation, together with each
Supplemental Confirmation, evidence a complete and binding agreement
between you and us as to the terms of the Transaction to which they
relate and replace any previous agreement between us with respect to
the subject matter hereof. This Confirmation, together with each
Supplemental Confirmation and all other confirmations or agreements
between us referencing the ISDA Form, shall be deemed to supplement,
form part of and be subject to the same, single Agreement.
If there exists any ISDA Master Agreement between CSCL and Counterparty
or any confirmation or other agreement between CSCL and Counterparty
pursuant to which an ISDA Master Agreement is deemed to exist between
CSCL and Counterparty, then notwithstanding anything to the contrary in
such ISDA Master Agreement, such confirmation or agreement or any other
agreement to which CSCL and Counterparty are parties, this Transaction
shall not be considered a Transaction under, or otherwise governed by,
such existing or deemed ISDA Master Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
General Terms:
Trade Date: As set forth in the
relevant Supplemental
Confirmation, to be the
date of completion of
CSCL's Initial Hedge.
Seller: Counterparty
Buyer: CSCL
Shares: Common stock of Orckit
Communications Ltd.
(the "Issuer") (Exchange
Symbol: "ORCT").
Number of Shares: As set forth in the relevant
Supplemental Confirmation,
the aggregate number of
Shares to which CSCL's
Initial Hedge relates, as
determined by the
Calculation Agent, not to
exceed 420,000.
Prepayment: Applicable
Conditions to
SCL's Obligation
to Pay Prepayment
Amount: It shall be a condition to
CSCL's obligation to pay
any Prepayment Amount
hereunder on any Prepayment
Date that (i) the relevant
Supplemental Confirmation
shall have been executed by
the parties hereto and (ii)
Counterparty shall have
performed its obligations
under paragraphs 4.a.,
"Delivery of Collateral,"
and 5, "Agreements to
Deliver Documents," below.
Counterparty Option to
Receive Prepayment
Amounts: Counterparty may, from
time to time, upon no less
than five Scheduled
Trading Days prior written
notice to CSCL, designate
a Currency Business Day
the First Averaging Date
(each, an "Prepayment
Date") to receive from
CSCL an amount in
immediately available
funds equal to the
Prepayment Amount for such
Prepayment Date. In the
notice provided by
Counterparty in
connection with the first
Prepayment Date,
Counterparty shall
specify whether or not
"Discounted Advance"applies
to the Transaction.
Prepayment Amount: For any Prepayment
Date, the amount as
indicated in the written
notice provided by
Counterparty to CSCL in
connection with such
Prepayment Date; provided
that in no event shall an
Prepayment Amount be (i)
less than USD 1,000,000 or
(ii) greater than the
Maximum Prepayment Amount.
Maximum Prepayment Amount: (i) If Discounted Advance
applies, the Present Value
of the Forward Amount and
(ii) if Discounted Advance
does not apply, (A) the
Present Value of the
Initial Forward Amount
minus (B) the Funded
Amount.
Counterparty Option to
Pay Return Payment
Amounts: Counterparty may, from time
to time, upon no less than
five Scheduled Trading Days
prior written notice to
CSCL, designate a Currency
Business Day (each, a
"Return Payment Date") to
pay to CSCL an amount in
immediately available funds
equal to the Return Payment
Amount for such Return
Payment Date.
Return Payment Amount: For any Return Payment
Date, the amount as
indicated in the written
notice provided by
Counterparty to CSCL in
connection with such Return
Payment Date; provided that
in no event shall a Return
Payment Amount be (i) less
than USD 1,000,000 or (ii)
greater than the Maximum
Return Payment Amount.
Maximum Return Payment Amount: (i) If Discounted Advance
applies, the Present Value
of the Funded Amount and
(ii) if Discounted Advance
does not apply, the Funded
Amount.
Future Value: The future value of an
amount on the Future
Value Date calculated using
an interest rate determined
by the Calculation Agent by
reference to the LIBOR/swap
curve assuming (i) a tenor
of the period of time from
and including such
calculation date, as the
case may be, to but
excluding the Future Value
Date and (ii) a spread of
zero basis points.
Present Value: The present value of an
amount calculated using
an interest rate determined
by the Calculation Agent by
reference to the LIBOR/swap
curve assuming (i) a tenor
of the period of time from
but excluding such
calculation date, as the
case may be, to and
including the Future Value
Date and (ii) a spread of
zero basis points.
Initial Forward Amount: As set forth in the
relevant Supplemental
Confirmation, to be the
product of (i) the
aggregate Number of
Shares and (ii) the Forward
Floor Price.
Forward Amount: At any time, the Initial
Forward Amount minus the
Funded Amount at such time.
Funded Amount: At any time, the sum of all
Forward Reduction Amounts
minus the sum of all
Forward Addition Amounts
for all Prepayment Dates
or Return Payment Dates,
as the case may be,
occurring at or prior to
such time.
Forward Reduction Amount: For any Prepayment Date
(as defined under
"Counterparty Option
to Receive Prepayment
Amounts" above), (x) if
Discounted Advance applies,
the Future Value of the
Prepayment Amount for such
Prepayment Date, and (y) if
Discounted Advance does not
apply, the Prepayment
Amount for such Prepayment
Date.
Forward Addition Amount: For any Return Payment Date
(as defined under
"Counterparty Option to Pay
Return Payment Amounts"
above), (x) if Discounted
Advance applies, the Future
Value of the Return Payment
Amount for such Return
Payment Date, and (y) if
Discounted Advance does not
apply, the Return Payment
Amount for such Return
Payment Date.
Future Value Date: The scheduled Settlement
Date
Initial Price: As set forth in the
relevant Supplemental
Confirmation, to be the
actual execution price of
CSCL's Initial Hedge.
Variable Obligation: Applicable
Forward Floor Price: As set forth in the
relevant Supplemental
Confirmation, provided that
CSCL shall endeavor to
maximize each such Forward
Floor Price based on, among
other things, then
applicable interest rates
and that each such Forward
Flore Prices shall be at
least 120% above the
relevant Initial Price.
Forward Cap Price: As set forth in the
relevant Supplemental
Confirmation, provided that
each such Forward Cap Price
shall be no less than
$27.12 per Share.
Notwithstanding the above,
CSCL shall be under no
obligation to execute any
Transaction if the above
Forward Floor Price
provisions and the Forward
Cap Price provisions cannot
be met.
CSCL's Initial Hedge: Upon the execution of this
Confirmation, CSCL (or an
affiliate of CSCL) shall
establish CSCL's initial
hedge of the price and
market risk under the
Transaction as set forth in
Appendix A hereto.
CSCL's Initial Hedge shall
be established by selling
shares in transactions
conforming to the
manner-of-sale conditions
described in Rule 144 (e),
(f) and (g) under the
Securities Act of 1933, as
amended.
Exchange: NASDAQ
Related Exchange(s): All Exchanges
Valuation:
Scheduled Maturity Date: As set forth in the
relevant Supplemental
Confirmation.
Valuation Date: The final Averaging Date.
Market Disruption Event: Section 6.3(a) of the 2002
Definitions is hereby
amended by replacing
clause (ii) thereof in its
entirety with the
following: "(ii) an
Exchange Disruption,
or" and inserting
immediately following
clause (iii) thereof the
following: "; in each
case that the Calculation
Agent, in a commercially
reasonable matter,
determines is material."
Averaging Dates: The five consecutive
Scheduled Trading Days
starting on the First
Averaging Date.
First Averaging Date: The date five Scheduled
Trading Days immediately
prior to and including
the Scheduled Maturity
Date.
Averaging Date Disruption: Modified Postponement;
provided that
notwithstanding anything
to the contrary in the 2002
Definitions, if a Market
Disruption Event occurs on
any Averaging Date, the
Calculation Agent may
determine that such
Averaging Date is a
Disrupted Day only in part,
in which case the
Calculation Agent shall
make adjustments to the
number of Shares for
which such day shall be
an Averaging Date and
shall designate the
Scheduled Trading Day
determined in the manner
described in Section
6.7(c)(iii) of the 2002
Definitions as an
Averaging Date for the
remaining Shares, and
shall determine any
Settlement Price based
on an appropriately
weighted average instead of
the arithmetic average
described under "Settlement
Terms--Settlement Price"
below. Such determination
and adjustments will be
based on, among other
factors, the duration of
any Market Disruption
Event and the volume,
historical trading patterns
and price of the Shares.
Relevant Price: VWAP Price
VWAP Price: On any day, the "Volume
Weighted Average
Price" per Share on such
day, as displayed on
Bloomberg Page "AQR" (or
any successor thereto) for
the Issuer with respect to
the period from 9:30 a.m.
to 4:00 p.m. (New York City
time) on such day, as
determined by the
Calculation Agent.
Settlement Terms:
Physical Settlement: Applicable
Settlement Method Election: Applicable
Electing Party: Counterparty
Settlement Method
Election Date: The date that is 30
Scheduled Trading Days
prior to the First
Averaging Date
Default Settlement Method: Physical Settlement
Settlement Price: The arithmetic mean of the
Relevant Prices on each
Averaging Day
Automatic Physical Settlement: If (x) Counterparty has
not elected Cash
Settlement, (y) by 10:00
A.M., New York City time,
on the Settlement Date,
Counterparty has not
otherwise effected
delivery of the Number of
Shares to be Delivered
and (z) the collateral
then held hereunder by or
on behalf of CSCL includes
Shares with respect to
which the Representation
and Agreement set forth
in Section 9.11 of the 2002
Definitions are true and
satisfied (or, at the
absolute discretion of
CSCL, Shares with respect
to which such
Representation and
Agreement are not true or
satisfied), then the
delivery required by
Section 9.2 of the Equity
Definitions shall be
effected, in whole or in
part, as the case may
be by delivery from the
Collateral Account (as
defined below under
"Collateral Provisions")
to CSCL of a number of
Shares equal to the Number
of Shares to be Delivered.
Cash Settlement: If Applicable,
Counterparty shall pay the
Preliminary Cash Settlement
Amount to CSCL on the
Preliminary Cash
Settlement Date. If the
Preliminary Cash
Settlement Amount exceeds
the Forward Cash Settlement
Amount, CSCL shall pay to
Counterparty the amount of
such excess on the Cash
Settlement Payment Date.
If the Forward Cash
Settlement Amount exceeds
the Preliminary Cash
Settlement Amount,
Counterparty shall pay to
CSCL the amount of such
excess on the Cash
Settlement Payment Date.
Preliminary Cash
Settlement Amount: The Forward Cash
Settlement Amount that
would apply if every
Averaging Date were the
Preliminary Cash Settlement
Pricing Date.
Preliminary Cash
Settlement Pricing Date: The fourth (4th) Exchange
Business Day immediately
preceding the First
Averaging Date.
Preliminary Cash
Settlement Date: The first (1st)
Exchange Business day
immediately preceding the
First Averaging Date;
provided that if such day
is not a Currency Business
Day, the next following
Currency Business Day.
Settlement Currency: USD
CSCL Payment Upon
Settlement: On the Settlement Date,
CSCL shall pay
Counterparty, in
immediately available
funds, an amount equal to
the Forward Amount, if
any, as of the Future
Value Date.
Dividends:
Extraordinary Dividend: Any dividend or
distribution on the Shares
(other than any dividend or
distribution of the type
described in Section
11.2(e)(i) or Section
11.2(e)(ii)(A) or (B) of
the 2002 Definitions) the
amount or value of which
differs in amount from the
Ordinary Dividend Amount
for such dividend or
distribution, as determined
by the Calculation Agent.
Ordinary Dividend Amount: USD 0.00
for the first dividend or
distribution on the Shares
for which the ex-dividend
date falls within a regular
dividend period of the
Issuer, and zero for any
subsequent dividend or
distribution on the Shares
for which the ex-dividend
date falls within the same
regular dividend period of
the Issuer.
Payment Obligation in Respect
of Extraordinary Dividends: In the event of any
Extraordinary Dividend,
Counterparty shall make a
cash payment to CSCL, on
the date such
Extraordinary Dividend is
paid to holders of Shares,
in an amount equal to the
product of (i) the Number
of Shares on the
ex-dividend date for such
Extraordinary Dividend and
(ii) the excess, if any, of
the per share amount or
value of such
Extraordinary Dividend
over the Ordinary
Dividend Amount for
such Extraordinary
Dividend, as determined
by the Calculation Agent.
Excess Dividend Amount: For the
avoidance of doubt, all
references to the Excess
Dividend Amount shall be
deleted from Section 8.4(b)
and 9.2(a)(iii) of the 2002
Definitions.
Share Adjustments:
Potential Adjustment Events: If an
event occurs that
constitutes both a
Potential Adjustment Event
under Section
11.2(e)(ii)(C) of the 2002
Definitions and a Spin-off
as described below, it
shall be treated hereunder
as a Spin-off and not as a
Potential Adjustment Event.
Method of Adjustment: Calculation Agent
Adjustment
Spin-off: A distribution of New
Shares (the "Spin-off
Shares") of a subsidiary
of the Issuer (the
"Spin-off Issuer") to
holders of the Shares
(the "Original Shares").
With respect to a
Spin-off, "New Shares"
shall have the meaning
provided in Section
12.1(i) of the 2002
Definitions except that
the phrase immediately
preceding clause (i)
thereof shall be replaced
by the following:
"`New Shares" means
ordinary or common shares
of the Spin-off Issuer
that are, or that as of the
ex-dividend date of such
Spin-off are scheduled
promptly to be,".
Consequences of Spin-offs: As of the ex-dividend
date of a Spin-off, (i)
"Shares" shall mean the
Original Shares and the
Spin-off Shares; (ii) the
Transaction shall
continue but as a Share
Basket Forward Transaction
with a Number of Baskets
equal to the Number of
Shares prior to such
Spin-off, and each Basket
shall consist of one
Original Share and a number
of Spin-off Shares that a
holder of one Original
Share would have been
entitled to receive in such
Spin-off; and (iii) the
Calculation Agent shall
make such adjustments to
the exercise, settlement,
payment or any other
terms of the Transaction
as the Calculation Agent
determines appropriate to
account for the economic
effect on the Transaction
of such Spin-off
(provided that no
adjustments will be made
to account solely for
changes in volatility,
expected dividends, stock
loan rate or liquidity
relevant to the Shares or
to the Transaction),
which may, but need not,
be determined by
reference to the
adjustment(s) made in
respect of such Spin-off by
an options exchange to
options on the Shares
traded on such options
exchange. As of the
ex-dividend date of
any subsequent Spin-off,
the Calculation Agent
shall make adjustments to
the composition of the
Basket and other terms of
the Transaction in
accordance with
the immediately preceding
sentence.
Extraordinary Events:
Consequences of Merger Events:
Share-for-Share: Calculation Agent Adjustment
Share-for-Other: Cancellation and Payment
Share-for-Combined: Component Adjustment
Composition of
Combined Consideration: Not Applicable
Tender Offer: Applicable
Consequences of Tender Offers:
Share-for-Share: Calculation Agent Adjustment
Share-for-Other: Calculation Agent Adjustment
Share-for-Combined: Calculation Agent Adjustment
Nationalization, Insolvency
or Delisting: Cancellation and Payment
Additional Disruption Events:
Change in Law: Applicable
Failure to Deliver: Not Applicable
Insolvency Filing: Applicable
Hedging Disruption: Not Applicable
Increased Cost of Hedging: Not Applicable
Loss of Stock Borrow: Applicable, provided that
the phrase "at a rate
equal to or less than the
Maximum Stock Loan Rate"
at the end of the
definition of Loss of
Stock Borrow shall be
deleted, and, for the
avoidance of doubt, for
purposes of determining
any Cancellation Amount
payable as the result of a
Loss of Stock Borrow, the
Determining Party may take
into account any amounts
payable by the Hedging
Party under any buy-in
provisions contained in
any securities loan
agreements governing loans
of Shares borrowed in
respect of the Transaction.
Maximum Stock Loan Rate: Not Applicable
Increased Cost of Stock Borrow: Not Applicable
Hedging Party: CSCL
Determining Party: CSCL
Non-Reliance: Applicable
Agreements and Acknowledgments
Regarding Hedging Activities: Applicable
Additional Acknowledgments: Applicable
Credit Support Documents: Section 4 shall be a Credit
Support Document under the
Agreement with respect to
Counterparty.
Guarantee dated May 16,
2001 made by Credit Suisse
(USA), Inc., a Delaware
corporation, in favor of
each and every counterparty
to one or more Financial
Transactions (as defined
therein) with CSCL shall be
a Credit Support Document
under the Agreement with
respect to CSCL.
Account Details:
Payments to CSCL: Citibank, N.A., New York
000-000-000
For A/C of: Credit Suisse
Capital LLC
Account Number: 00000000
Payments to Counterparty: To be advised under
separate cover prior to the
Trade Date.
Delivery of Shares to CSCL: Credit Suisse Securities
(USA) LLC DTC# 355
Account # 2HRY60
Account Name: CSCL
Collateral Management
Account
Office: CSCL is acting through its
New York Office for the
purposes of the
Transaction; Counterparty
is not a Multibranch Party.
Calculation Agent: CSCL. The Calculation
Agent will have no
responsibility for good
faith errors or omissions
in any determination under
the Transaction.
3. Other Provisions:
Reimbursement Obligation:
If Counterparty exercises the right, from time to time, to vote
and to give consents, ratifications and waivers with respect to
the Shares pursuant to Section 4(f) below and if as a result CSCL
will incur any costs from the borrowing of Shares in connection
with the continued hedging of CSCL's exposure to the Transaction,
CSCL shall inform Counterparty of the amount of such anticipated
costs and Counterparty shall make monthly cash payments to CSCL
from time to time in an amount sufficient to reimburse CSCL for
such costs.
Termination by Counterparty:
At any time, Counterparty may terminate the Transaction in
whole or in part upon 35 Exchange Business Days' prior written
notice to CSCL (the termination date specified in such notice,
the "Optional Termination Date"). If Counterparty terminates
the Transaction in whole, Counterparty shall make a cash
payment to CSCL (or vice versa, as the case may be) on the
Optional Termination Date in an amount equal to the amount
that would be payable under Section 6 of the Agreement if (i)
such Optional Termination Date were an Early Termination Date
(without regard to the provisions set forth under "Payment on
Early Termination" below), (ii) Counterparty were the sole
Affected Party and (iii) the Transaction were the only
Terminated Transaction. If Counterparty terminates the
Transaction in part, Counterparty shall specify the number of
Shares with respect to which the Transaction is to be
terminated and Counterparty shall make a cash payment to CSCL
on the Optional Termination Date (or vice versa, as the case
may be) in an amount equal to the amount that would be payable
under Section 6 of the Agreement if (i) such Optional
Termination Date were an Early Termination Date (without
regard to the provision set forth under "Payments on Early
Termination" below), (ii) Counterparty were the sole Affected
Party and (iii) the Transaction were the only Terminated
Transaction; provided that (a) for purposes of such
calculation, the Number of Shares shall be deemed to be such
number of Shares with respect to which the Transaction is to
be terminated, and (b) the Number of Shares shall be reduced
by such number of Shares with respect to which such
Transaction is to be terminated.
Additional Representations and Warranties of Counterparty:
Counterparty hereby represents and warrants to CSCL as of the
date hereof, and as of every day from the date hereof to and
including the Trade Date, that:
1. From the date three months prior to the date hereof or
the date on which this representation and warranty is
deemed to be repeated, as the case may be, neither
Counterparty nor any person who would be considered
to be the same "person" as Counterparty or "acting in
concert" with Counterparty (as such terms are used in
clauses (a)(2) and (e)(3)(vi) of Rule 144 under the
Securities Act of 1933, as amended (the "Securities
Act")) has, without the written consent of CSCL, sold any
Shares or hedged (through swaps, options, short sales
or otherwise) any long position in the Shares, other than
pursuant to Counterparty's (i) outstanding 10b5-1 plan
and (ii) Volaris Discretionary Investment Management
Agreement (the "Volaris Program") entered into with CSCL
or an affiliate thereof. Counterparty does not know or
have any reason to believe that the Issuer has not
complied with the reporting requirements contained in
Rule 144(c)(1) under the Securities Act.
2. Counterparty is an "eligible contract participant" as such
term is defined in Section 1(a)(12) of the Commodity
Exchange Act, as amended.
3. Counterparty is not on the date hereof, in possession of
any material non-public information regarding the Issuer.
Other than the Volaris Program, Counterparty has not
entered into or altered hedging transaction relating to
the Shares corresponding to or offsetting the Transaction.
None of the transactions contemplated herein will violate
any corporate policy of the Issuer or other rules or
regulations of the Issuer applicable to Counterparty or
its affiliates, including, but not limited to, the
Issuer's window period policy.
4. Counterparty shall file or cause to be filed, on the date
hereof and in the manner contemplated by Rule 144(h) under
the Securities Act, a notice on Form 144 relating to the
Transaction contemplated hereby in the form attached
hereto as Annex B.
5. Counterparty is, and shall be as of the date of any
payment or delivery by Counterparty hereunder, solvent and
able to pay its debts as they come due, with assets having
a fair value greater than liabilities and with capital
sufficient to carry on the businesses in which it engages.
6. Counterparty (a) has timely filed, caused to be timely
filed or will timely file or cause to be timely filed all
material tax returns that are required to be filed by it
as of the date hereof and (b) has paid all material taxes
shown to be due and payable on said returns or on any
assessment made against it or any of its property and all
other material taxes, assessments, fees, liabilities or
other charges imposed on it or any of its property by any
governmental authority, unless in each case the same are
being contested in good faith. For purposes of determining
whether a tax return has been timely filed, any extensions
shall be taken into account.
7. Counterparty's holding period (calculated in
accordance with Rule 144(d) under the Securities Act)
with respect to the Initial Pledged Items commenced on a
date at least two years prior to the Trade Date.
Counterparty agrees that Counterparty has not (i)
created or permitted to exist any Lien (as defined in
Section 4 below, other than the security interests in the
collateral created by Section 4) or any Transfer
Restriction (other than the Existing Transfer
Restrictions, as defined in Section 4 below) upon or
with respect to the Collateral, (ii) sold or
otherwise disposed of, or granted any option with
respect to, any of the Collateral or (iii) entered into
or consented to any agreement (other than, in the case of
clause (x), this Confirmation) (x) that restricts in any
manner the rights of any present or future owner of any
Collateral with respect thereto or (y) pursuant to
which any person other than Counterparty, CSCL and
any securities intermediary through whom any of the
Collateral is held (but in the case of any such
securities intermediary only in respect of Collateral
held through it) has or will have Control in respect of
any Collateral. "Control" means "control" as defined
in Section 8-106 and 9-106 of the Uniform Commercial Code
as in effect in the State of New York ("UCC").
8. Other than financing statements or other similar or
equivalent documents or instruments with respect to the
security interests in the Collateral created by Section 4
below, no financing statement, security agreement or
similar or equivalent document or instrument covering all
or any part of the Collateral is on file or of record in
any jurisdiction in which such filing or recording would
be effective to perfect a lien, security interest or other
encumbrance of any kind on such Collateral.
9. All Collateral consisting of securities and all financial
assets underlying Collateral consisting of security
entitlements (each as defined in Section 8-102 of the
UCC) at any time pledged hereunder is and will be issued
by an issuer organized under the laws of the United
States, any State thereof or the District of Columbia and
is and will be (i) certificated (and the certificate or
certificates in respect of such securities or financial
assets are and will be located in the United States) and
registered in the name of Counterparty or held through a
securities intermediary whose securities intermediary's
jurisdiction (within the meaning of Section 8-110(e) of
the UCC) is located in the United States or (ii)
uncertificated and either registered in the name of
Counterparty or held through a securities intermediary
whose securities intermediary's jurisdiction (within
the meaning of Section 8-110(e) of the UCC) is located in
the United States; provided that this representation
shall not be deemed to be breached if, at any time, any
such Collateral is issued by an issuer that is not
organized under the laws of the United States, any
State thereof or the District of Columbia, and the
parties hereto agree to procedures or amendments
hereto necessary to enable CSCL to maintain a valid
and continuously perfected security interest in such
Collateral, in respect of which CSCL will have Control,
subject to no prior Lien. The parties hereto agree to
negotiate in good faith any such procedures or amendments.
10. No registration, recordation or filing with any
governmental body, agency or official is required or
necessary for the validity or enforceability hereof or for
the perfection or enforcement of the security interests in
the Collateral created by Section 4 below, other than the
filing of financing statement in any appropriate
jurisdiction.
11. Counterparty has not performed and will not perform any
acts that might prevent CSCL from enforcing any of the
terms of Section 4, "Collateral Provisions," or that might
limit CSCL in any such enforcement.
Representations, Warranties and Covenants of CSCL:
1. CSCL represents to Counterparty that an affiliate of CSCL
(the "CSCL Affiliate") is registered as a broker and a
dealer with the Securities and Exchange Commission and is
a "market maker" or a "block positioner", as such terms
are used in Rule 144 under the Securities Act, with
respect to the Shares.
2. CSCL agrees that CSCL Affiliate shall, as promptly as
practicable consistent with market conditions, introduce
into the public market a quantity of securities of the
same class as the Shares equal to the Number of Shares
minus the number of securities of such class sold in
connection with CSCL's Initial Hedge position.
U.S. Private Placement Representations:
Each of CSCL and Counterparty hereby represents and warrants
to the other party as of the date hereof that:
1. It is an "accredited investor" (as defined in Regulation D
under the Securities Act) and has such knowledge and
experience in financial and business matters as to be
capable of evaluating the merits and risks of the
Transaction, and it is able to bear the economic risk of
the Transaction.
2. It is entering into the Transaction for its own account
and not with a view to the distribution or resale of the
Transaction or its rights thereunder except pursuant to a
registration statement declared effective under, or an
exemption from the registration requirements of, the
Securities Act.
Covenants of Counterparty:
1. Counterparty agrees that each of Counterparty and its
affiliates will comply with all applicable disclosure or
reporting requirements in respect of the Transaction,
including, without limitation, any requirement imposed by
Section 13 or Section 16 of the Securities and Exchange
Act of 1934, as amended (the "Exchange Act"), if any, and
Counterparty will provide CSCL with a copy of any report
filed in respect of the Transaction promptly upon filing
thereof.
2. Counterparty is aware of and agrees to be bound by the
rules of the National Association of Securities Dealers,
Inc. ("NASD") applicable to option trading and is aware of
and agrees not to violate, either alone or in concert with
others, the position or exercise limits established by the
NASD.
Binding Commitment:
The parties intend that this Confirmation constitutes a
"preliminary agreement" and, upon execution of a Supplemental
Confirmation, a "Final Agreement" as described in the letter
dated December 14, 1999 submitted by Xxxxxx X. Xxxxxx and Xxxx
X. Xxxxxx to Xxxxxxx Xxxxxx of the staff of the Securities and
Exchange Commission (the "Staff") to which the Staff responded
in an interpretative letter dated December 20, 1999.
Additional Termination Event:
For purposes of Section 5(b)(v) of the Agreement, the following
event shall be an Additional Termination Event with respect to
which Counterparty shall be the sole Affected Party:
Immediately following the close of business on any Contract
Continuation Payment Date, Discounted Advance does not apply
and the Funded Amount is not zero; provided that such event
shall not be an Additional Termination Event if Counterparty
elects, at its option, to pay the Contract Continuation
Payment for such Contract Continuation Payment Date at or
prior to the close of business on such Contract Continuation
Payment Date.
"Contract Continuation Payment Date" means each of (x) the
first day of January 1, April 1, July 1 and October 1 of each
year occurring during the period from and including the first
Prepayment Date to but excluding the Settlement Date, subject
to adjustment in accordance with the Modified Following
Business Day Convention (each, a "Quarterly Contract
Continuation Payment Date") and (y) each Prepayment Date.
"Contract Continuation Payment" means, for any Contract
Continuation Date, an amount equal to the product of (A) the
Contract Continuation Calculation Amount for such Contract
Continuation Payment Date, (B) the Applicable Rate for such
Contract Continuation Date, (C) the number of calendar days in
the period from and including such Contract Continuation
Payment Date to but excluding the immediately following
Quarterly Contract Continuation Payment Date or, if there is
no following Quarterly Contract Continuation Payment Date, the
Settlement Date, and (D) 1/360.
"Contract Continuation Calculation Amount" means, for any
Quarterly Contract Continuation Payment Date, the Funded
Amount on such date, and, for any Prepayment Date, the
Prepayment Amount for such date.
"Applicable Rate" means, on any date, USD-LIBOR-BBA for a
Designated Maturity of three months and a Reset Date of such
date.
Payments on Early Termination:
Upon (x) the occurrence or effective designation of an Early
Termination Date in respect of the Transaction or (y) the
occurrence of an Extraordinary Event that results in the
cancellation or termination of the Transaction pursuant to
Section 12.2, 12.3, 12.6 or 12.9 of the 2002 Definitions (any
such event as described in clause (x) or (y) above, an "Early
Termination Event"), if Counterparty would owe any amount to
CSCL pursuant to Section 6(d)(ii) of the Agreement (determined
as if the Transaction were the only Transaction under the
Agreement) or any Cancellation Amount pursuant to Section
12.2, 12.3, 12.6 or 12.9 of the 2002 Definitions (any such
amount, a "Counterparty Payment Amount" and any Early
Termination Event that would so result in Counterparty owing
any such amount, a "Counterparty Payment Event"), then, except
to the extent that CSCL proceeds to realize upon the
Collateral and to apply the proceeds of such realization to
any obligation of Counterparty hereunder and under the
Agreement:
(i) on the date on which any Counterparty Payment Amount is
due, in lieu of any payment or delivery of such
Counterparty Payment Amount, Counterparty shall deliver to
CSCL a number of Shares (or, if the Shares have been
converted into other securities or property in connection
with an Extraordinary Event, a number or amount of such
securities or property) with a value equal to the
Counterparty Payment Amount based on the market value of
the Shares (or such other securities or property) as of
the Early Termination Date or the date as of which the
Cancellation Amount is determined, as the case may be, as
determined by the Calculation Agent; and
(ii) for purposes of determining any Loss under Section 6(e) of
the Agreement in respect of any other Transactions under
the Agreement, the Transaction shall be deemed not to be a
Transaction under the Agreement; provided that, for the
avoidance of doubt, if Counterparty fails to deliver
Shares pursuant to clause (i) above at the time required,
then, the Transaction (including such delivery obligation)
shall be included for the purpose of determining CSCL's
Loss for all Transactions (including the Transaction)
under the Agreement.
Securities Contract:
The parties hereto acknowledge and agree that each of CSCL and
the Custodian (as defined in Section 4 below) is a
"stockbroker" within the meaning of Section 101 (53A) of Title
11 of the United States Code (the "Bankruptcy Code") and that
the Custodian is acting as agent and custodian for CSCL in
connection with the Transaction and that CSCL is a "customer"
of the Custodian within the meaning of Section 741(2) of the
Bankruptcy Code. The parties hereto further recognize that the
Transaction is a "securities contract", as such term is
defined in Section 741(7) of the Bankruptcy Code, entitled to
the protection of, among other provisions, Sections 555 and
362(b)(6) of the Bankruptcy Code, and that each payment or
delivery of cash, Shares or other property or assets hereunder
is a "settlement payment" within the meaning of Section 741(8)
of the Bankruptcy Code.
Assignment:
The rights and duties under this Confirmation and each
Supplemental Confirmation may not be assigned or transferred
by any party hereto without the prior written consent of the
other parties hereto, such consent not to be unreasonably
withheld; provided that (i) CSCL may assign or transfer any of
its rights or duties hereunder to any of its affiliates
without the prior written consent of Counterparty and (ii) the
Agent may assign or transfer any of its rights or duties
hereunder without the prior written consent of the other
parties hereto to any affiliate of Credit Suisse First Boston,
so long as such affiliate is a broker-dealer registered with
the Securities and Exchange Commission.
Non-Confidentiality:
The parties hereby agree that (i) effective from the date of
commencement of discussions concerning the Transaction,
Counterparty and each of its employees, representatives, or
other agents may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of
the Transaction and all materials of any kind, including
opinions or other tax analyses, provided by CSCL and its
affiliates to Counterparty relating to such tax treatment and
tax structure (provided that the foregoing does not constitute
an authorization to disclose the identity of CSCL or its
affiliates, agents or advisers, or, except to the extent
relating to such tax structure or tax treatment, any specific
pricing terms or commercial or financial information) and (ii)
CSCL does not assert any claim of proprietary ownership in
respect of any description contained herein or therein
relating to the use of any entities, plans or arrangements to
give rise to a particular United States federal income tax
treatment for Counterparty.
Matters relating to Credit Suisse Capital LLC and Credit Suisse
Securities (USA) LLC:
1. Agent shall act as "agent" for CSCL and Counterparty in
connection with the Transaction.
2. Agent will furnish to Counterparty upon written request a
statement as to the source and amount of any remuneration
received or to be received by Agent in connection
herewith.
3. Agent has no obligation hereunder, by guaranty,
endorsement or otherwise, with respect to performance of
CSCL's obligations hereunder or under the Agreement.
4. CSCL is an "OTC derivatives dealer" as such term is
defined in the Exchange Act and is an affiliate of Agent.
5. CSCL is not a member of the Securities Investor Protection
Corporation.
4. Collateral Provisions:
a. Delivery of Collateral:
On or prior to the Trade Date, Counterparty shall deliver to the CSCL
in pledge hereunder, Eligible Collateral consisting of a number of
Shares equal to the Number of Shares (the "Initial Pledged Items").
"Eligible Collateral" means Shares; provided that Counterparty has good
and marketable title thereto, free of all of any and all lien,
mortgage, interest, pledge, charge or encumbrance of any kind (other
than the security interests in the Collateral created hereby, a "Lien")
and Transfer Restrictions (other than the Existing Transfer
Restrictions) and that CSCL has a valid, first priority perfected
security interest therein, a first lien thereon and Control with
respect thereto. "Transfer Restriction" means, with respect to any item
of collateral pledged hereunder, any condition to or restriction on the
ability of the owner thereof to sell, assign or otherwise transfer such
item of collateral or enforce the provisions thereof or of any document
related thereto whether set forth in such item of collateral itself or
in any document related thereto, including, without limitation, (i) any
requirement that any sale, assignment or other transfer or enforcement
of such item of collateral be consented to or approved by any Person,
including, without limitation, the issuer thereof or any other obligor
thereon, (ii) any limitations on the type or status, financial or
otherwise, of any purchaser, pledgee, assignee or transferee of such
item of collateral, (iii) any requirement of the delivery of any
certificate, consent, agreement, opinion of counsel, notice or any
other document of any Person to the issuer of, any other obligor on or
any registrar or transfer agent for, such item of collateral, prior to
the sale, pledge, assignment or other transfer or enforcement of such
item of collateral and (iv) any registration or qualification
requirement or prospectus delivery requirement for such item of
collateral pursuant to any federal, state or foreign securities law
(including, without limitation, any such requirement arising under
Section 5 of the Securities Act as a result of such security being a
"restricted security" or Counterparty being an "affiliate" of the
issuer of such security, as such terms are defined in Rule 144 under
the Securities Act, or as a result of the sale of such security being
subject to paragraph (c) of Rule 145 under the Securities Act);
provided that the required delivery of any assignment, instruction or
entitlement order from the seller, Counterparty, assignor or transferor
of such item of collateral, together with any evidence of the corporate
or other authority of such Person, shall not constitute a "Transfer
Restriction". "Existing Transfer Restrictions" means Transfer
Restrictions existing with respect to any securities by virtue of the
fact that Counterparty is an "affiliate", within the meaning of Rule
144 under the Securities Act, of the Issuerby virtue of the fact that
such securities are "restricted securities", within the meaning of Rule
144 under the Securities Act. "Person" means an individual, a
corporation, a limited liability company, a partnership, an
association, a trust or any other entity or organization, including a
government or political subdivision or an agency or instrumentality
thereof.
Any delivery of any securities or security entitlements (each as
defined in Section 8-102 of the UCC) as Collateral to CSCL by
Counterparty shall be effected (A) in the case of Collateral consisting
of certificated securities registered in the name of Counterparty, by
delivery of certificates representing such securities to the Custodian,
accompanied by any required transfer tax stamps, and in suitable form
for transfer by delivery or accompanied by duly executed instruments of
transfer or assignment in blank, with signatures appropriately
guaranteed, all in form and substance satisfactory to CSCL, and the
crediting by the Custodian of such securities to a securities account
(as defined in Section 8-501 of the UCC) (the "Collateral Account") of
CSCL maintained by the Custodian, (B) in the case of Collateral
consisting of uncertificated securities registered in the name of
Counterparty, by transmission by Counterparty of an instruction to the
issuer of such securities instructing such issuer to register such
securities in the name of the Custodian or its nominee, accompanied by
any required transfer tax stamps, the issuer's compliance with such
instructions and the crediting by the Custodian of such securities to
the Collateral Account, (C) in the case of securities in respect of
which security entitlements are held by Counterparty through a
securities intermediary, by the crediting of such securities,
accompanied by any required transfer tax stamps, to a securities
account of the Custodian at such securities intermediary or, at the
option of CSCL, at another securities intermediary satisfactory to CSCL
and the crediting by the Custodian of such securities to the Collateral
Account or (D) in any case, by complying with such alternative delivery
instructions as CSCL shall provide to Counterparty in writing.
"Custodian" means Credit Suisse Securities (USA) LLC, or any other
custodian appointed by CSCL and identified to Counterparty.
x. Xxxxx of Security Interests in the Collateral:
In order to secure the full and punctual observance and performance of
the covenants and agreements contained in this Confirmation, each
Supplemental Confirmation and in the Agreement, Counterparty hereby
assigns and pledges to CSCL, and grants to CSCL, as secured party,
security interests in and to, and a lien upon and right of set-off
against, and transfers to CSCL, as and by way of a security interest
having priority over all other security interests, with power of sale,
all of Counterparty's right, title and interest in and to (i) the
Initial Pledged Items; (ii) all additions to and substitutions for the
Initial Pledged Items (including, without limitation, any securities,
instruments or other property delivered or pledged hereunder) (such
additions and substitutions, the "Additions and Substitutions"); (iii)
the Collateral Account of CSCL maintained by the Custodian and all
securities and other financial assets (each as defined in Section 8-102
of the UCC) and other funds, property or assets from time to time held
therein or credited thereto; and (iv) all income, proceeds and
collections received or to be received, or derived or to be derived, at
the time that the Initial Pledged Items were delivered to the Custodian
or any time thereafter (whether before or after the commencement of any
proceeding under applicable bankruptcy, insolvency or similar law, by
or against Counterparty, with respect to Counterparty) from or in
connection with the Initial Pledged Items or the Additions and
Substitutions, excluding any Excluded Proceeds (collectively, the
"Collateral"). The parties hereto expressly agree that all rights,
assets and property at any time held in or credited to the Collateral
Account shall be treated as financial assets (as defined in Section
8-102 of the UCC). "Excluded Proceeds" means any ordinary cash
dividend, to the extent not an Extraordinary Dividend, in respect of
Shares that is not distributed after the occurrence and during the
continuance of any Default Event.
c. Certain Covenants of Counterparty relating to the Collateral:
Counterparty agrees that, so long as any of Counterparty's obligations
under the Agreement remain outstanding:
1. Counterparty shall ensure at all times that a Collateral Event
of Default shall not occur, and shall pledge additional
Collateral in the manner described hereunder as necessary to
cause such requirement to be met. "Collateral Event of
Default" means, at any time, the occurrence of either of the
following: (A) failure of the Collateral to include, as
Eligible Collateral, a number of Shares at least equal to the
Number of Shares or (B) failure at any time of the security
interests in the Collateral created hereby to constitute valid
and perfected security interests in all of the Collateral,
subject to no prior, equal or junior Lien, and, with respect to
any Collateral consisting of securities or security entitlements
(each as defined in Section 8-102 of the UCC), as to which CSCL
has Control, or, in each case, assertion of such by Counterparty
in writing.
2. Counterparty shall, at its own expense and in such manner and form
as CSCL may require, give, execute, deliver, file and record any
financing statement, notice, instrument, document, agreement or
other papers that may be necessary or desirable in order to (i)
create, preserve, perfect, substantiate or validate any security
interest granted pursuant hereto, (ii) create or maintain Control
with respect to any such security interests in any investment
property (as defined in Section 9-102(a) of the UCC) or (iii)
enable CSCL to exercise and enforce its rights hereunder with
respect to such security interest.
3. Counterparty shall warrant and defend Counterparty's title to the
Collateral, subject to the rights of CSCL, against the claims and
demands of all persons. CSCL may elect, but without an obligation
to do so, to discharge any Lien of any third party on any of the
Collateral.
4. Counterparty agrees that Counterparty shall not change (i)
Counterparty's name in any manner or (ii) Counterparty's
"location" (as defined in Section 9-307 of UCC), unless
Counterparty shall have given CSCL not less than 10 days' prior
notice thereof.
5. Counterparty agrees that Counterparty shall not (i) create or
permit to exist any lien (other than the security interests in
the Collateral created hereby) or any Transfer Restriction
(other than Existing Transfer Restrictions) upon or with
respect to the Collateral, (ii) sell or otherwise dispose of, or
grant any option with respect to, any of the Collateral
or (iii) enter into or consent to any agreement (x) that
restricts in any manner the rights of any present or future
owner of any Collateral with respect thereto (other than this
Confirmation) or (y) pursuant to which any person other than
Counterparty, CSCL and any securities intermediary through whom
any of the Collateral is held (but in the case of any such
securities intermediary only in respect of Collateral held
through it) has or will have Control in respect of any Collateral.
d. Administration of the Collateral and Valuation of Securities:
1. CSCL shall determine on each Business Day whether a Collateral
Event of Default shall have occurred. If on any Business
Day CSCL determines that a Collateral Event of Default shall have
occurred, CSCL shall promptly notify Counterparty of such
determination by telephone call to Counterparty followed by
a written confirmation of such call. If on any Business Day
CSCL determines that no Default Event or failure by Counterparty
to meet any of Counterparty's obligations under "Certain
Covenants of Counterparty relating to the Collateral" or
under this section has occurred and is continuing,
Counterparty may obtain the release from the security interests
in the Collateral created hereby of any Collateral upon
delivery to CSCL of a written notice from Counterparty indicating
the items of Collateral to be released so long as, after such
release, no Collateral Event of Default shall have occurred.
"Default Event" means any Collateral Event of Default, any Event
of Default with respect to Counterparty or any Termination
Event with respect to which Counterparty is the Affected Party
or an Affected Party or an Extraordinary Event that results in
an obligation of Counterparty to pay an amount pursuant to
Section 12.7 or Section 12.9 of the 2002 Definitions;
2. CSCL may at any time or from time to time, in its sole discretion,
cause any or all of the Collateral that is registered in the name
of Counterparty or Counterparty's nominee to be transferred of
record into the name of the Custodian, CSCL or its nominee.
Counterparty shall promptly give to CSCL copies of any notices or
other communications received by Counterparty with respect to
Collateral that is registered, or held through a securities
intermediary, in the name of Counterparty or Counterparty's
nominee and CSCL shall promptly give to Counterparty copies of any
notices and communications received by CSCL with respect to
Collateral that is registered, or held through a securities
intermediary, in the name of Custodian, CSCL or its nominee.
3. Counterparty agrees that Counterparty shall forthwith upon demand
pay to CSCL:
(i) the amount of any taxes that CSCL or the Custodian may have
been required to pay by reason of the security interests in
the Collateral created hereby or to free any of the Collateral
from any Lien thereon; and
(ii) the amount of any and all costs and expenses, including the
fees and disbursements of counsel and of any other experts,
that CSCL or the Custodian may incur in connection with (A)
the enforcement of this pledge, including such expenses as are
incurred to preserve the value of the Collateral and the
validity, perfection, rank and value of the security interests
in the Collateral created hereby, (B) the collection, sale or
other disposition of any of the Collateral, (C) the exercise
by CSCL of any of the rights conferred upon it hereunder or
(D) any Default Event.
Any such amount not paid on demand shall bear interest (computed
on the basis of a year of 360 days and payable for the actual
number of days elapsed) at a rate per annum equal to 2.5% plus the
prime rate as published from time to time in The Wall Street
Journal, Eastern Edition.
e. Rehypothecation of Collateral:
The parties hereto agree that CSCL may sell, lend, pledge,
rehypothecate, assign, invest, use, commingle or otherwise dispose of,
or otherwise use in its business (collectively, "rehypothecate") any
Collateral; provided that CSCL may only rehypothecate the Collateral in
connection with hedging its exposure to this Transaction.
f. Income and Voting Rights in Collateral:
CSCL shall have the right to receive and retain as Collateral hereunder
all proceeds, excluding any Excluded Proceeds, but including, without
limitation, any Extraordinary Dividend in excess of the Ordinary
Dividend Amount and interest of the Collateral; provided that CSCL
shall have such right with respect to any and all proceeds, including
without limitation any Excluded Proceeds, after the occurrence and
during the continuance of a Default Event (such proceeds as CSCL shall
have the right to receive and retain at any time, "Retained Proceeds"),
and Counterparty shall take all such action as CSCL shall deem
necessary or appropriate to give effect to such right. All such
Retained Proceeds that are received by Counterparty shall be received
in trust for the benefit of CSCL and, if CSCL so directs, shall be
segregated from other funds of Counterparty and shall, forthwith upon
demand by CSCL, be delivered over to the Custodian on behalf of CSCL as
Collateral in the same form as received (with any necessary
endorsement).
Unless a Default Event shall have occurred and be continuing,
Counterparty shall have the right, from time to time, to vote and to
give consents, ratifications and waivers with respect to the
Collateral.
If a Default Event shall have occurred and be continuing, CSCL shall
have the right, to the extent permitted by law, and Counterparty shall
take all such action as may be necessary or appropriate to give effect
to such right, to vote and to give consents, ratifications and waivers,
and to take any other action with respect to any or all of the
Collateral with the same force and effect as if CSCL were the absolute
and sole owner thereof.
g. Remedies upon Counterparty Payment Events:
If any Counterparty Payment Event shall have occurred, CSCL may
exercise all the rights of a secured party under the UCC (whether or
not in effect in the jurisdiction where such rights are exercised).
Counterparty hereby irrevocably appoints CSCL as Counterparty's true
and lawful attorney (which power of attorney is coupled with an
interest), with full power of substitution, in the name of
Counterparty, CSCL or otherwise, for the sole use and benefit of CSCL,
but at the expense of Counterparty, to the extent permitted by law, to
exercise, at any time and from time to time while a Counterparty
Payment Event has occurred, all or any of the following powers with
respect to all or any of the Collateral:
(i) to demand, sue for, collect, receive and give acquittance for
any and all monies due or to become due upon or by virtue
thereof;
(ii)to settle, compromise, compound, prosecute or defend any
action or proceeding with respect thereto;
(iii) to sell, transfer, assign or otherwise deal in or with the
same or the proceeds or avails thereof, as fully and
effectually as if CSCL were the absolute owner thereof and in
connection therewith, to make all necessary deeds, bills of
sale, instruments of assignment, transfer or conveyance of the
property, and all instructions and entitlement orders in
respect of the property thus to be (or that is being or has
been) sold, transferred, assigned or otherwise dealt in; and
(iv)to extend the time of payment of any or all thereof and to
make any allowance and other adjustments with reference
thereto;
provided that CSCL shall give Counterparty not less than one day's
prior written notice of the time and place of any sale or other
intended disposition of any of the Collateral, except any Collateral
that (A) threatens to decline speedily in value, including, without
limitation, equity securities, or (B) is of a type customarily sold on
a recognized market. CSCL and Counterparty agree that such notice
constitutes "reasonable authenticated notification" within the meaning
of Section 9-611(b) of the UCC.
h. Termination:
The rights hereby granted by Counterparty in the Collateral shall
cease, terminate and be void upon fulfilment of all of the obligations
of Counterparty under this Confirmation and each Supplemental
Confirmation. Any Collateral remaining at the time of such termination
shall be fully released and discharged from the security interests in
the Collateral created hereby and delivered to Counterparty by CSCL,
all at the request and expense of Counterparty.
5. The Agreement is further supplemented by the following provisions:
Termination Provisions.
1. "Specified Entity" means in relation to CSCL, none, and in
relation to Counterparty for the purpose of Section
5(a)(v) of the Agreement only, any Affiliate (as defined
in Section 14 of the Agreement) of Counterparty.
2. "Specified Transaction" will have the meaning specified in
Section 14 of the Agreement.
3. The "Cross Default" provision of Section 5(a)(vi) of the
Agreement will not apply to CSCL and will apply to
Counterparty.
For the purpose of such provision:
"Specified Indebtedness" means any obligation (whether
present or future, contingent or otherwise, as principal
or surety or otherwise) (a) in respect of borrowed money,
or (b) in respect of any Specified Transaction (except
that, for this purpose only, the words "and any other
entity" shall be substituted for the words "and the other
party to the Agreement (or any Credit Support Provider of
such other party or any applicable Specified Entity of
such other party)" where they appear in the definition of
Specified Transaction).
"Threshold Amount" means USD 10,000,000 (including the
United States Dollar equivalent of obligations stated in
any other currency or currency unit).
4. The "Credit Event Upon Merger" provisions of Section
5(b)(iv) of the Agreement will not apply to CSCL and will
apply to Counterparty.
5. The "Automatic Early Termination" provisions of Section
6(a) of the Agreement will not apply to CSCL and
Counterparty.
6. Payments on Early Termination. For the purpose of Section
6(e) of the Agreement, Second Method and Loss will apply.
7. "Termination Currency" means United States Dollars.
8. Set-Off. In addition to and without limiting any
rights of set-off that a party hereto may have as a
matter of law, pursuant to contract or otherwise, upon
the occurrence of an Early Termination Event, such
Party ("Party X") shall have the right to terminate,
liquidate and otherwise close out the transactions
contemplated by this Confirmation and each Supplemental
Confirmation pursuant to the terms hereof and thereof,
and to set off any obligation that Party X or any
affiliate of Party X may have to the other party
("Party Y") hereunder, thereunder or otherwise,
including without limitation any obligation to make any
release, delivery or payment to Party Y pursuant to this
Confirmation and any Supplemental Confirmation or any
other agreement between Party X or any of its affiliates
and Party Y, against any right Party X or any of its
affiliates may have against Party Y, including without
limitation any right to receive a payment or delivery
pursuant to this Confirmation and each Supplemental
Confirmation or any other agreement between Party X or
any of its affiliates and Part Y. In the case of a
set-off of any obligation to release, deliver or pay
assets against any right to receive assets of the same
type, such obligation and right shall be set off in
kind. In the case of a set-off of any obligation to
release, deliver or pay assets against any right to
receive assets of any other type, the value of each of
such obligation and such right shall be determined by
the Calculation Agent and the result of such set-off
shall be that the net obligor shall pay or deliver to the
other party an amount of cash or assets, at the net
obligor's option, with a value (determined, in the
case of a delivery of assets, by the Calculation
Agent) equal to that of the net obligation. In
determining the value of any obligation to release or
deliver Shares or right to receive Shares, the value at
any time of such obligation or right shall be
determined by reference to the market value of the
Shares at such time. If an obligation or right is
unascertained at the time of any such set-off, the
Calculation Agent may in good faith estimate the
amount or value of such obligation or right, in which
case set-off will be effected in respect of that estimate,
and the relevant party shall account to the other party at
the time such obligation or right is ascertained.
Tax Representations. None.
Agreements to Deliver Documents. For the purpose of Sections
4(a)(i) and (ii) of the Agreement, each of CSCL and Counterparty
agrees to deliver the following documents, as applicable:
1. Counterparty will deliver to CSCL, prior to or upon
execution of this Confirmation, evidence reasonably
satisfactory to CSCL as to the names, true signatures and
authority of the officers or officials signing this
Confirmation on its behalf.
Such documents shall be covered by the representation set
forth in Section 3(d) of the Agreement.
Miscellaneous:
1. Addresses for Notices. For the purpose of Section 12(a) of the Agreement:
Address for notices or communications to CSCL (other than
by faCSCLimile) (for all purposes):
Address: Credit Suisse Capital LLC
c/o Credit Suisse Securities(USA)LLC
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Senior Legal Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
With a copy to: Credit Suisse Securities (USA) LLC
Xxx Xxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
For payments and deliveries:
Attn: Xxxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
For all other communications:
Attn: Xxxx Xxxx
Tel.: (000) 000-0000
Fax: (000) 000-0000
Designated responsible employee for the purposes of
Section 12(a)(iii) of the Agreement: Senior Legal Officer
Address for notices or communications to Counterparty:
Xxxx Xxxxxx
39 Xxxxxx Xxx Xxx St.
Givataiim
Israel 53631
2. The date and time of the Transaction will be furnished by
CSCL to Counterparty upon written request by Counterparty.
3. Waiver of Right to Trial by Jury. Each party waives, to
the fullest extent permitted by applicable law, any right
it may have to a trial by jury in respect of any suit,
action or proceeding relating to this Confirmation or any
Credit Support Document. Each party (i) certifies that no
representative, agent or attorney of the other party has
represented, expressly or otherwise, that such other party
would not, in the event of such a suit action or
proceeding, seek to enforce the foregoing waiver and (ii)
acknowledges that it and the other party have been induced
to enter into this Confirmation by, among other things,
the mutual waivers and certifications in this Section.
4. Service of Process. The parties irrevocably consent to
service of process given in the manner provided for
notices in Section in paragraph 1 immediately above.
Nothing in this Confirmation will affect the right of
either party to serve process in any other manner
permitted by law.
5. Breakage Costs: If any Supplemental Confirmation has not
been executed by 5:00 p.m., New York City time, on the
date ten (10) Exchange Business Days following completion
of CSCL's Initial Hedge, the transactions contemplated by
this Confirmation may be terminated and unwound at CSCL's
election and Counterparty shall be responsible for all
costs and expenses (including market losses) relating to
the unwinding of CSCL's hedging activities; provided that
any gains accruing to CSCL (less any costs and expenses)
arising out of such termination shall be paid to
Counterparty.
6. THE AGREEMENT AND EACH CONFIRMATION THEREUNDER WILL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF
LAW DOCTRINE (PROVIDED THAT AS TO PLEDGED ITEMS
LOCATED IN ANY JURISDICTION OTHER THAN THE STATE OF NEW
YORK, CSCL SHALL, IN ADDITION TO ANY RIGHTS UNDER
THE LAWS OF THE STATE OF NEW YORK, HAVE ALL OF THE
RIGHTS TO WHICH A SECURED PARTY IS ENTITLED UNDER THE
LAWS OF LAW OF SUCH OTHER JURISDICTION). EACH PARTY
HEREBY SUBMITS TO THE JURISDICTION OF THE COURTS OF THE
STATE OF NEW YORK. THE PARTIES HERETO HEREBY AGREE THAT
THE CUSTODIAN'S JURISDICTION, WITHIN THE MEANING OF
SECTION 8-110(e) OF THE UCC, INSOFAR AS IT ACTS AS A
SECURITIES INTERMEDIARY HEREUNDER OR IN RESPECT HEREOF,
IS THE STATE OF NEW YORK.
7. This Confirmation and each Supplemental Confirmation is
not intended and shall not be construed to create any
rights in any person other than Counterparty, CSCL and
their respective successors and assigns and no other
person shall assert any rights as third-party beneficiary
hereunder. Whenever any of the parties hereto is referred
to, such reference shall be deemed to include the
successors and assigns of such party. All the covenants
and agreements herein contained by or on behalf of
Counterparty and CSCL shall bind, and inure to the benefit
of, their respective successors and assigns whether so
expressed or not.
8. Any provision of this Confirmation and each Supplemental
Confirmation may be amended or waived if, and only if,
such amendment or waiver is in writing and signed, and in
the case of an amendment, by Counterparty and CSCL or, in
the case of a waiver, by the party against whom the waiver
is to be effective.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.
Yours faithfully,
CREDIT SUISSE CAPITAL LLC
By:/s/ Xxxx Xxxx
----------------------
Name: Xxxx Xxxx
Title: A.V.P. Operations
Confirmed as of the date first written above:
XXXX XXXXXX
By:/s/ Xxxx Xxxxxx
------------------
Name:
Title:
CREDIT SUISSE SECURITIES (USA) LLC,
as Agent
By:/s/ Xxxxxxx Xxxxx
----------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
FORM OF SUPPLEMENTAL CONFIRMATION
in respect of the
CONFIRMATION
of the
TRANSACTION
between
CREDIT SUISSE CAPITAL LLC
and
[COUNTERPARTY]
(CSCL Ref: [_____])
This Supplemental Confirmation (this "Supplemental Confirmation") supplements,
forms part of and is subject to, the above-referenced Confirmation dated as of
[Date] (the "Confirmation") between Credit Suisse Capital LLC and [Counterparty]
and the Agreement referred to therein. Capitalized terms used and not otherwise
defined herein shall have the meanings ascribed to them in the Confirmation.
The additional terms of the Transaction are as follows:
Trade Date: [______]
Initial Price: USD[_____]
Initial Forward Price: USD[_____]
Forward Floor Price: USD[_____]
Forward Cap Price: USD[_____]
Scheduled Maturity Date: [______]
First Averaging Date: [______]
Number of Shares: [______]
Confirmed as of the date first written above:
XXXX XXXXXX
By: /s/ Xxxx Xxxxxx
-------------------
Name:
Title:
CREDIT SUISSE CAPITAL LLC
By:/s/ Xxxx Xxxx
--------------------
Name: Xxxx Xxxx
Title: A.V.P. Operations
CREDIT SUISSE SECURITIES (USA) LLC,
as Agent
By:/s/ Xxxxxxx Xxxxx
----------------------
Name: Xxxxxxx Xxxxx
Title: Vice President
[PG NUMBER]
ANNEX B
[Form of Form 144]
