EXHIBIT 4
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of 21 May 2002
among
XXXXXX BROTHERS FINANCE S.A. ("PARTY A")
and SMITHKLINE XXXXXXX CORPORATION ("PARTY B")
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows: --
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for value
on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than by
payment), such delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise specified in
the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event of
Default with respect to the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in respect of
the relevant Transaction has occurred or been effectively designated and
(3) each other applicable condition precedent specified in this Agreement.
value of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the
extent permitted under applicable law) interest, in the currency of such
amounts, from (and including) the date such amounts or obligations were or would
have been required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will be
calculated on the basis of daily compounding and the actual number of days
elapsed. The fair market value of any obligation referred to in clause (b) above
shall be reasonably determined by the party obliged to make the determination
under Section 6(e) or, if each party is so obliged, it shall be the average of
the Termination Currency Equivalents of the fair market values reasonably
determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
XXXXXX BROTHERS FINANCE S.A. SMITHKLINE XXXXXXX CORPORATION
By: /s/Xxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxx
________________________________ ________________________________
Name: Xxxx Xxxxx Name: Xxxxxx X. Xxxxxx
Title: Director Title: Vice President & Secretary
By: /s/Xxxxx Xxxxxxx
________________________________
Name: Xxxxx Xxxxxxx
Authorised Signatory
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EXECUTION COPY
SCHEDULE
TO THE
ISDA MASTER AGREEMENT
dated as of 21 May 2002
Between (1) XXXXXX BROTHERS FINANCE S.A. ("PARTY A") a company organised under
the laws of Switzerland, and any successor thereof, and (2) SMITHKLINE XXXXXXX
CORPORATION ("PARTY B") a company organised under the laws of the State of
Pennsylvania, and any successor thereof.
Scope of Agreement
Party A and Party B have entered into a confirmation dated 21 May 2002 (the
"CONFIRMATION") that is expressed to be governed, subject to, and determined in
accordance with the terms and conditions set out in this Agreement. Such
Confirmation constitutes the sole Confirmation for the purposes of this
Agreement and has the benefit of the Credit Support Documents set out in Part
4(f) to this Agreement. Party A and Party B intend that, subject to any
agreement to the contrary, such Confirmation shall evidence the sole Transaction
(the "TRANSACTION") with respect to this Agreement.
Part 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" does not apply.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party A
and Party B and Specified Indebtedness in respect of Party B will have the
meaning specified in paragraph 11 of Part 5 of this Schedule.
"THRESHOLD AMOUNT" shall mean USD40 million for both Party A and Party B.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will apply
to Party A and will apply to Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will apply to
Party A and will not apply to Party B, provided that there is an Event of
Default under section 5(a)(vii)(1), (3), (4), (5), (6), or, to the extent
analogous thereto, (8), and the Defaulting Party is governed by a system
of law that does not permit termination to take place after the occurrence
of such Event of Default, then the Automatic Early Termination provisions
of Section 6(a) will apply.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:-
(i) Market Quotation will apply.
(ii) The Second Method will apply.
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(g) "TERMINATION CURRENCY" means United States Dollars.
(h) Additional Termination Event will apply.
The following shall constitute Additional Termination Events:-
(i) RATINGS DECLINE IN RESPECT OF PARTY B. Party B, if at any time it is
rated by Xxxxx'x Investors Service Inc. ("MOODY'S") or Standard &
Poor's Ratings Group ("S&P"), or its Credit Support Provider (i) fails
to maintain a long term senior unsecured debt rating of at least Baa2
as determined by Moody's; or (ii) fails to maintain a long term senior
unsecured debt rating of at least BBB as determined by S&P; or (iii)
ceases to be rated by either Moody's or S&P. For clarification, if
Moody's and S&P assign ratings at different levels, the lower of such
ratings shall be determinative. For the purpose of the foregoing
Termination Event, Party B shall be the Affected Party.
(ii) RATINGS DECLINE IN RESPECT OF PARTY A. Party A, if at any time it is rated
by Xxxxx'x Investors Service Inc. ("MOODY'S") or Standard & Poor's Ratings
Group ("S&P"), or its Credit Support Provider (i) fails to maintain a long
term senior unsecured debt rating of at least Baa2 as determined by
Moody's; or (ii) fails to maintain a long term senior unsecured debt
rating of at least BBB as determined by S&P; or (iii) ceases to be rated
by either Moody's or S&P. For clarification, if Moody's and S&P assign
ratings at different levels, the lower of such ratings shall be
determinative. For the purpose of the foregoing Termination Event, Party A
shall be the Affected Party.
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Part 2. TAX REPRESENTATIONS.
(a) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following
representation:-
It is not required by any applicable law, as modified by the practice of
any relevant governmental revenue authority, of any Relevant Jurisdiction
to make any deduction or withholding for or on account of any Tax from any
payment (other than interest under Sections 2(e), 6(d)(ii) and 6(e) of
this Agreement) to be made by it to the other party under this Agreement.
In making this representation, it may rely on (i) the accuracy of any
representation made by the other party pursuant to Section 3(f) of this
Agreement, (ii) the satisfaction of the agreement of the other party
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement, and (iii) the
satisfaction of the agreement of the other party contained in Section 4(d)
of this Agreement, provided that it shall not be a breach of this
representation where reliance is placed on clause (ii) and the other party
does not deliver a form or document under Section 4(a)(iii) of this
Agreement by reason of material prejudice to its legal or commercial
position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified below,
if any:
The following representation will apply to Party A:
It is fully eligible for the benefits of the "Business Profits" or
"Industrial and Commercial Profits" provision, as the case may be, the
"Interest" provision or the "Other Income" provision (if any) of the
Specified Treaty with respect to any payment described in such provisions
and received or to be received by it in connection with this Agreement and
no such payment is attributable to a trade or business carried on by it
through a permanent establishment in the Specified Jurisdiction."
"Specified Treaty" means with respect to Party A: The Income Tax
Convention between the United States and Switzerland.
"Specified Jurisdiction" means with respect to Party A: The United
States
THE FOLLOWING REPRESENTATION WILL APPLY TO PARTY B:
Party A represents that it is a corporation duly organized and validly
existing under the laws of the State of Pennsylvania.
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Part 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:-
(a) Tax forms, documents or certificates to be delivered are:-
PARTY REQUIRED TO
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED
Party B One duly executed and completed (i) Upon execution and delivery
U.S. Internal Revenue Service Form of this Agreement, with such
W-9 (or successor thereto) form to be updated at the
beginning of each succeeding
three calendar year period
beginning after execution of
this Agreement, or as otherwise
required under then applicable
U.S. Treasury Regulations; (ii)
promptly upon reasonable demand
by Party A; and (iii) promptly
upon learning that any Form W-9
(or any successor thereto) has
become obsolete or incorrect.
Party A One duly executed and completed (i) Upon execution and delivery
U.S. Internal Revenue Service Form of this Agreement, with such
W-8BEN (or successor thereto) on form to be updated at the
which Party A claims exemption beginning of each succeeding
from withholding as a resident of three calendar year period
Switzerland. beginning after execution of
this Agreement, or as otherwise
required under then applicable
U.S. Treasury Regulations; (ii)
promptly upon reasonable demand
by Party B; and (iii) promptly
upon learning that any Form
W-8BEN (or any successor
thereto) has become obsolete or
incorrect.
(b) Other documents to be delivered are:-
PARTY REQUIRED TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED 3(d) REPRESENTATION
Party A and Party B Copy of authorised signature Upon execution of this Agreement Yes
list or relevant pages of authorised and thereafter on request
signature book setting out names,
positions and specimen signatures of
each person or persons authorised to
execute and deliver this Agreement.
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PARTY REQUIRED TO COVERED BY SECTION
DELIVER DOCUMENT FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED 3(d) REPRESENTATION
Party A and A copy of a Resolution of the Upon execution of this Yes
Party B Board of Directors pursuant to Agreement and thereafter
which each party is authorised on request
to enter into this Agreement
and each Transaction hereunder.
Party A and Party B A copy of the annual report Upon request. Yes
of its Credit Support
Provider, containing audited
consolidated financial
statements for such fiscal
year certified by
independent public
accountants and prepared in
accordance with generally
accepted accounting
practices consistently
applied.
Party B An opinion of counsel to Promptly after execution of this No
Party B substantially in the Agreement.
form of Exhibit C to this
Schedule.
Party A An opinion of counsel to Party A Promptly after execution of this No
substantially in the form of Agreement
Exhibit D to this Schedule
Party B A guarantee of GlaxoSmithKline Upon execution of this Agreement. Yes
plc in the form of Exhibit A to
this Schedule.
Party A A guarantee of Xxxxxx Brothers Upon execution of this Agreement. Yes
Holdings Inc. in the form of
Exhibit B to this Schedule.
Party A Process Agent letter Upon execution of this Agreement No
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Part 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:-
Address for notices or communications to Party B:-
Address: GLAXO XXXXXXXX XXXXX, XXXXXXXX XXXXXX, XXXXXXXXX, XXXXXXXXX, XXXXXX
XXXXXXX UB6 0NN
Attention: THE TREASURER
Facsimile No.: 000 0000 0000 Telephone No.: 000 0000 0000
Address for notices or communications to Party A:-
Address: XXXXXXXXXX 00, XX XXX 0000, XX-0000, XXXXXX, XXXXXXXXXXX
Facsimile No.: xx 00 0000 0000 Telephone No.: xx 00 0000 0000
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent Xxxxxx Brothers Inc.
Party B appoints as its Process Agent GlaxoSmithKline plc
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement
neither Party A nor Party B is a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A, unless otherwise
specified in a Confirmation in relation to the relevant Transaction;
provided however, that if an Event of Default has occurred and is
continuing and Party A is the Defaulting Party, Party B shall be the
Calculation Agent.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:-
In relation to Party B, the Credit Support Document are: (i) the
Guarantee executed by GlaxoSmithKline plc in the form annexed hereto as
Exhibit A and (ii) the Credit Support Annex to this Schedule.
In relation to Party A, the Credit Support Documents are the Guarantee
executed by Xxxxxx Brothers Holdings Inc. in the form annexed hereto as
Exhibit B and (ii) the Credit Support Annex to this Schedule.
(g) CREDIT SUPPORT PROVIDER. Credit Support Provider means, in relation to
Party B, GlaxoSmithKline plc.
Credit Support Provider means, in relation to Party A, Xxxxxx Brothers
Holdings Inc.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the state of New York (without reference to
the choice of law doctrine).
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(i) NETTING OF PAYMENTS. Sub-paragraph (ii) of Section 2(c) of this
Agreement will not apply.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
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Part 5. OTHER PROVISIONS
The following changes are made to this Agreement:-
1. the insertion of the words "ACCOUNT FOR OR" at the beginning of Section
2(d)(i)(2);
2. the insertion of the words "ACCOUNTING OR" after "evidencing such" in
Section 2(d)(i)(3);
3. the insertion of the word "MATERIALLY" after the word "likely" in line
3 of Section 3(c);
4. the insertion of the words "AND SUCH FAILURE IS, IN THE OPINION OF THE
NON-DEFAULTING PARTY ACTING IN A COMMERCIALLY REASONABLE MANNER,
MATERIAL IN THE CONTEXT OF ANY TRANSACTION" at the end of Section
5(a)(ii);
5. (i) The terms of Section 5(a)(vii)(4) of the Agreement are amended
in their entirety as follows:
"(4)(A) INSTITUTES, OR HAS INSTITUTED AGAINST IT BY A
REGULATOR, SUPERVISOR OR ANY SIMILAR OFFICIAL WITH PRIMARY
INSOLVENCY, REHABILITATIVE OR REGULATORY JURISDICTION OVER IT
IN THE JURISDICTION OF ITS INCORPORATION OR ORGANIZATION OR
THE JURISDICTION OF ITS HEAD OR HOME OFFICE, A PROCEEDING
SEEKING A JUDGMENT OF INSOLVENCY OR BANKRUPTCY OR ANY OTHER
RELIEF UNDER ANY BANKRUPTCY OR INSOLVENCY LAW OR OTHER SIMILAR
LAW AFFECTING CREDITOR'S RIGHTS, OR A PETITION IS PRESENTED
FOR ITS WINDING-UP OR LIQUIDATION BY IT OR SUCH REGULATOR,
SUPERVISOR OR OFFICIAL, OR (B) HAS INSTITUTED AGAINST IT A
PROCEEDING UNDER THE LAWS OF OR IN THE COURTS OF A
JURISDICTION IN WHICH THE PARTY, ITS CREDIT SUPPORT PROVIDER
OR SPECIFIED ENTITY ARE INCORPORATED OR HAS ITS PRINCIPAL
PLACE OF BUSINESS, SEEKING A JUDGMENT OF INSOLVENCY OR
BANKRUPTCY OR ANY OTHER RELIEF UNDER ANY BANKRUPTCY OR
INSOLVENCY LAW OR OTHER SIMILAR LAW AFFECTING CREDITORS'
RIGHTS, OR A PETITION IS PRESENTED FOR ITS WINDING-UP OR
LIQUIDATION, AND SUCH PROCEEDING OR PETITION IS INSTITUTED OR
PRESENTED BY A PERSON OR ENTITY NOT DESCRIBED IN CLAUSE (A)
AND EITHER (I) RESULTS IN A JUDGMENT OF INSOLVENCY OR
BANKRUPTCY OR THE ENTRY OF AN ORDER FOR RELIEF OR THE MAKING
OF AN ORDER FOR ITS WINDING-UP OR LIQUIDATION OR (II) IS NOT
DISMISSED, DISCHARGED, STAYED OR RESTRAINED IN EACH CASE
WITHIN FIVE LOCAL BUSINESS DAYS OF THE INSTITUTION OR
PRESENTATION THEREOF;".
(ii) The terms of Section 6(a) of the Agreement are amended by the
replacement of the reference to "Section 5(a)(vii)(4)" with a
reference to "Section 5(a)(vii)(4)(A)"
6. Section 5(b)(iv) of this Agreement is amended by deletion of the word
"CREDITWORTHINESS" in Section 5(b)(iv) and the insertion in
substitution therefor of "ABILITY" and the insertion of the words "TO
MEET THE OBLIGATIONS CONTAINED IN THIS AGREEMENT" after the word
"entity" in line 5 of that Section.
7. the deletion of Sections 7(a) and 7(b) and the insertion in
substitution therefor of
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"(i) PARTY B MAY TRANSFER IN WHOLE BUT NOT IN PART ITS RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT AS SUPPLEMENTED BY ALL
CONFIRMATIONS TO GLAXOSMITHKLINE PLC OR ANY AFFILIATE OF
GLAXOSMITHKLINE PLC UPON 5 BUSINESS DAYS' PRIOR NOTICE,
PROVIDED THAT (I) SUCH NOTICE IS ACCOMPANIED BY A WRITTEN
INSTRUMENT PURSUANT TO WHICH THE TRANSFEREE ASSUMES THE RIGHTS
AND OBLIGATIONS OF PARTY B SO TRANSFERRED WITH SUCH
MODIFICATIONS RELATING TO TAXES AS ARE NECESSARY TO PRESERVE
THE POSITION OF THE NON-TRANSFERRING PARTY, (II) IF SUCH
TRANSFER IS TO AN ENTITY OTHER THAN GLAXOSMITHKLINE PLC, SUCH
NOTICE IS ACCOMPANIED BY A GUARANTEE BY GLAXOSMITHKLINE PLC OF
SUCH TRANSFEREE'S OBLIGATIONS IN SUBSTANTIALLY THE FORM OF THE
CREDIT SUPPORT DOCUMENT EXECUTED BY GLAXOSMITHKLINE PLC, AND
(III) AS A RESULT OF SUCH TRANSFER NO EVENT OF DEFAULT OR
TERMINATION EVENT WOULD OCCUR AND BE CONTINUING.
(ii) PARTY A MAY TRANSFER IN WHOLE BUT NOT IN PART ITS RIGHTS AND
OBLIGATIONS UNDER THIS AGREEMENT AS SUPPLEMENTED BY ALL
CONFIRMATIONS TO XXXXXX HOLDINGS INC. OR ANY AFFILIATE OF
XXXXXX HOLDINGS INC. PLC UPON 5 BUSINESS DAYS' PRIOR NOTICE,
PROVIDED THAT (I) SUCH NOTICE IS ACCOMPANIED BY A WRITTEN
INSTRUMENT PURSUANT TO WHICH THE TRANSFEREE ASSUMES THE RIGHTS
AND OBLIGATIONS OF PARTY A SO TRANSFERRED WITH SUCH
MODIFICATIONS RELATING TO TAXES AS ARE NECESSARY TO PRESERVE
THE POSITION OF THE NON-TRANSFERRING PARTY, (II) IF SUCH
TRANSFER IS TO AN ENTITY OTHER THAN XXXXXX HOLDINGS INC., SUCH
NOTICE IS ACCOMPANIED BY A GUARANTEE BY XXXXXX HOLDINGS INC.
OF SUCH TRANSFEREE'S OBLIGATIONS IN SUBSTANTIALLY THE FORM OF
THE CREDIT SUPPORT DOCUMENT EXECUTED BY XXXXXX HOLDINGS INC.
AND (III) AS A RESULT OF SUCH TRANSFER NO EVENT OF DEFAULT OR
TERMINATION EVENT WOULD OCCUR AND BE CONTINUING."
8. the deletion of the words "OR ELECTRONIC MESSAGES ON AN ELECTRONIC
MESSAGING SYSTEM" from Section 9(b);
9. Section 12 of the Agreement shall be amended by (1) deleting
sub-paragraph a(ii) and sub-paragraph (a)(v), (2) adding "OR" at the
end of sub-paragraph (a)(iii) and deleting "OR" at the end of
sub-paragraph (a)(iv), and (3) deleting from paragraph (b) ",TELEX"
from the first line, and "OR ELECTRONIC MESSAGING SYSTEM" from the
second line.
10. the insertion of the words "NOTWITHSTANDING THE FOREGOING,
"INDEMNIFIABLE TAX" ALSO MEANS ANY TAX IMPOSED IN RESPECT OF A PAYMENT
UNDER THIS AGREEMENT BY REASON OF A CHANGE IN TAX LAW BY A GOVERNMENT
OR TAXING AUTHORITY OF A RELEVANT JURISDICTION OF THE PARTY MAKING SUCH
PAYMENT, UNLESS THE OTHER PARTY IS INCORPORATED, ORGANISED, MANAGED AND
CONTROLLED OR CONSIDERED TO HAVE ITS SEAT IN SUCH JURISDICTION, OR IS
ACTING FOR THE PURPOSES OF THIS AGREEMENT THROUGH A BRANCH OR OFFICE
LOCATED IN SUCH JURISDICTION." at the end of the definition of
"Indemnifiable Tax" in Section 14;
11. the deletion of the definition of "Specified Indebtedness" in Section
14 and the insertion of substitution therefor of ""SPECIFIED
INDEBTEDNESS" MEANS ANY OBLIGATION (WHETHER PRESENT OR FUTURE, SECURED
OR UNSECURED, AS PRINCIPAL OR OTHERWISE) FOR THE PAYMENT OR REPAYMENT
OF MONEY BORROWED OR RAISED, BY WHATEVER MEANS (INCLUDING LETTERS OF
CREDIT, BANKERS' ACCEPTANCES OR DOCUMENTARY CREDITS OR ANY GUARANTEE
GIVEN IN RESPECT OF MONEY BORROWED) BUT EXCLUDING ANY OBLIGATIONS
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OWED BY ANY SUBSIDIARY OF A PARTY, ANY CREDIT SUPPORT PROVIDER OR A
SPECIFIED ENTITY (OR ANY PARTY, ANY CREDIT SUPPORT PROVIDER OR ANY
SPECIFIED ENTITY) TO ANY OTHER SUBSIDIARY OF THAT PARTY (OR THE
RELATIVE PARTY, CREDIT SUPPORT PROVIDER OR SPECIFIED ENTITY).";
12. the insertion of the following additional agreements:
(a) ESCROW PAYMENTS. If by reason of the time difference between the
cities in which payments are to be made, it is not possible for
simultaneous payments to be made on any date on which both parties are
required to make payments hereunder, either party may at its option and
in its sole discretion notify the other party that payments on that
date are to be made in escrow. In this case deposit of the payment due
earlier on that date shall be made by 2:00 p.m. (local time at the
place for the earlier payment) on that date with an escrow agent
selected by the party giving the notice, accompanied by irrevocable
payment instructions (i) to release the deposited payment to the
intended recipient upon receipt by the escrow agent of the required
deposit of the corresponding payment from the other party on the same
date accompanied by irrevocable payment instructions to the same effect
or (ii) if the required deposit of the corresponding payment is not
made on that same date, to return the payment deposited to the party
that paid it into escrow. The party that elects to have payments made
in escrow shall pay the costs of the escrow arrangements and shall
cause those arrangements to provide that the intended recipient of the
payment due to be deposited first shall be entitled to interest on that
deposited payment for each day in the period of its deposit at the rate
offered by the escrow agent for that day for overnight deposits in the
relevant currency in the office where it holds that deposited payment
(at 11:00 a.m. local time on that day) if that payment is not released
by 5:00 p.m. local time on the date it is deposited for any reason
other than the intended recipient's failure to make the escrow deposit
it is required to make hereunder in a timely fashion.
(b) CONSENT TO RECORDING. Each party (i) consents to the recording of
the telephone conversations of trading, marketing and other relevant
personnel of the parties in connection with this Agreement or any
potential transaction and (ii) agrees that any such recording may be
submitted in evidence to any court or in any proceedings with respect
to this Agreement or any Transaction thereunder.
(c) For purposes of Sections 2(d)(i)(4) and 3(f), any payee tax
representation specified in a Confirmation under this Agreement shall
be deemed to be specified in this Schedule.
(d) WAIVER OF TRIAL BY JURY. Insofar as is permitted by law, each party
irrevocably waives any and all rights to trial by jury in any legal
proceeding in connection with this Agreement or any Transaction, and
acknowledges that this waiver is a material inducement to the other
party's entering into this Agreement and each Transaction hereunder.
(e) ACCURACY OF SPECIFIED INFORMATION. Section 3(d) is hereby amended
by adding in the third line thereof after the word "respect" and before
the period the words "or, in the case of audited financial statements,
a true and fair view of the affairs of the company".
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(f) SET-OFF.
(1) In addition to any rights of set-off a party may have as a
matter of law or otherwise, upon the occurrence of an Event of
Default or an Additional Termination Event with respect to a
party ("X"), the other party ("Y") will have the right (but
not be obliged) without prior notice to X or any other person
to set-off or apply any obligation of X owed to Y (whether or
not matured or contingent and whether or not arising under
this Agreement, and regardless of the currency, place of
payment or booking office of the obligation) against any
obligation of Y owed to X (whether or not matured or
contingent and whether or not arising under this Agreement,
and regardless of the currency, place of payment or booking
office of the obligation.)
(2) For the purpose of cross-currency set-off, Y may convert
either obligation at the applicable market exchange rate
selected by Y on the relevant date.
(3) If the amount of an obligation is unascertained, Y may in
good faith estimate that amount and set-off in respect of the
estimate, subject to the relevant party accounting to the
other when the amount of the obligation is ascertained.
(4) This clause (f) shall not constitute a mortgage, charge,
lien or other security interest upon any of the property or
assets of either party to this Agreement.
(g) REPRESENTATIONS. Section 3 is hereby amended by adding the
following additional subsections:
(h) NO AGENCY. It is entering into this Agreement and each
Transaction as principal (and not as agent or in any other
capacity, fiduciary or otherwise).
(i) ELIGIBLE CONTRACT PARTICIPANT. It is an "eligible contract
participant" as that term is defined in Section 1a(12) of the
Commodity Exchange Act of 2000, as amended.
(j) NO RELIANCE. In connection with the negotiation of, the
entering into, and the execution of, this Agreement, any
Credit Support Document to which it is a party, and each
Transaction hereunder, Party B acknowledges and agrees that:
(i) Party A is acting for its own account and is not acting as
a fiduciary for, or a financial or investment advisor to Party
B (or in any similar capacity); (ii) Party B is not relying
upon any communications (whether written or oral) from Party A
as investment advice or as a recommendation to enter into this
Agreement, any Credit Support Document to which it is a party
and each Transaction hereunder (other than the representations
expressly set forth in this Agreement and in such Credit
Support Document), it being understood that information and
explanations related to the terms and conditions of a
Transaction shall not be considered investment advice or a
recommendation to enter into that Transaction; (iii) Party B
has not received from Party A any assurance or guarantee as to
the expected results of any Transaction; and (iv) Party B has
consulted with its own legal, regulatory, tax, business,
investment, financial, and accounting advisors to the extent
it has deemed necessary, and it has made its own independent
investment, hedging, and trading decisions
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based upon its own judgment and upon any advice from such
advisors as it has deemed necessary and not upon any view
expressed by Party A.
(k) SWAP AGREEMENT. Without limiting any other protections under
the Bankruptcy Code (Title 11 of the United States Code) (the
"Bankruptcy Code"), the parties hereto intend for:
This Agreement and each Transaction to be a "swap agreement"
as defined in the Bankruptcy Code, and the parties hereto to
be entitled to the protections afforded by, among other
Sections, Section 560 of the Bankruptcy Code.
A party's right to liquidate this Agreement or any Transaction
and to exercise any other remedies upon the occurrence of any
Event of Default or Termination Event under this Agreement or
any Transaction to constitute a "contractual right" as
described in Section 560 of the Bankruptcy Code.
Any cash, securities or other property provided as performance
assurance, credit support of collateral with respect to this
Agreement or any Transaction to constitute "transfers" under
"swap agreement" as defined in the Bankruptcy Code.
All payments for, under or in connection with this Agreement
or any Transaction, all payments for any securities or other
assets and the transfer of such securities or other assets to
constitute "transfers" under a "swap agreement" as defined in
the Bankruptcy Code.
(l) ADDITIONAL REPRESENTATIONS OF PARTY B. Party B represents to
Party A (at all times until termination of this Agreement)
that:
(i) It understands that the Transactions contemplated
hereunder are subject to complex risks which may arise without
warning, may at times be volatile, and that losses may occur
quickly and in unanticipated magnitude.
(ii) It is a sophisticated investor able to evaluate the
terms, conditions and risks of the Transactions contemplated
hereunder and accepts such terms, conditions and risks.
(iii) It is capable of assuming and assumes, all risks
(financial and otherwise) associated with the Transactions
contemplated hereunder.
(iv) This Agreement and each Transaction have been, and will
be, entered into not for the purpose of speculation but solely
in connection with the portfolio management, asset, risk, and
liability management and hedging activities of Party B.
(v) It is and will comply in all respects with all applicable
laws and with rules, regulations, interpretations, guidelines,
procedures, and policies of applicable regulatory authorities
affecting Party B, this Agreement, the Transactions, or the
performance of Party B's obligations hereunder.
(m) TRANSACTIONS. With respect to each Option Transaction, Party B
represents to Party A (at all times until termination of this
Agreement) that Party B:
-30-
(i) understands that the Option Transactions have not been
registered under the Securities Act of 1933, as amended (the
"Securities Act") and are being offered and sold in reliance
on the exemption to the registration requirements of the
Securities Act provided under Section 4(2) thereof:
(ii) understands and acknowledges that Party A has no
obligation to register the Option Transactions under the
Securities Act or any other United States federal or state
securities law, and that the Option Transactions must be held
indefinitely by the purchaser thereof unless subsequently
registered under such securities laws or an exemption from
such registration is available;
(iii) agrees that in the event that at some future time it
wishes to dispose of the Option Transactions in whole or in
part (such disposition currently not being foreseen or
contemplated), it will not transfer the same except in a
transaction exempt from or not subject to the registration
requirements of the Securities Act; and
(iv) understands that each Confirmation may bear a legend to
substantially the following effect:
THE SECURITIES REPRESENTED BY THE CONFIRMATION HAVE BEEN
ACQUIRED FOR INVESTMENT AND HAVE NOT BEEN REGISTERED UNDER THE
UNITED STATES SECURITIES ACT OF 1933, AS AMENDED, OR ANY OTHER
UNITED STATES FEDERAL OR STATE SECURITIES LAWS; AND SUCH
SECURITIES MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF APPROPRIATE REGISTRATION UNDER SUCH SECURITIES LAWS
OR EXCEPT IN A TRANSACTION EXEMPT FROM OR NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF SUCH SECURITIES LAWS.
(n) OUTSTANDING SPECIFIED TRANSACTIONS. Upon the effectiveness of this
Agreement, unless otherwise agreed to in writing by the parties to this
Agreement with respect to enumerated Specified Transactions, all
Specified Transactions then outstanding between the parties shall be
subject to the terms hereof.
(o) DISCLOSURE OF DETAILS. The parties hereby irrevocably agree that
each party may disclose details with respect to this Agreement and the
Transactions documented hereunder to, and share information concerning
this Agreement and the Transactions documented hereunder with, their
respective branches and Affiliates.
The parties executing this Schedule have executed the Master Agreement
and have agreed as to the contents of this Schedule.
-00-
XXXXXXXXXX XXXXXXX CORPORATION XXXXXX BROTHERS FINANCE S.A.
Party B Party A
/s/ Xxxxxx X. Xxxxxx /s/ Xxxx Xxxxx
----------------------------------- --------------------------------
Name: Xxxxxx X. Xxxxxx Name: Xxxx Xxxxx
Title: Vice President & Secretary Title: Director
Date: May 21, 2002 Date:
/s/ Xxxxx Xxxxxxx
--------------------------------
Name: Xxxxx Xxxxxxx
Authorised Signatory
-32-
EXHIBIT A to Schedule
THIS DEED OF GUARANTEE is dated 21 May 2002 and made
BETWEEN:
(1) GLAXOSMITHKLINE PLC (the "Guarantor"); and
(2) XXXXXX BROTHERS FINANCE S.A. ("Party A").
BACKGROUND:
(A) Party A will enter into a Master Agreement (the "Agreement") with
SmithKline Xxxxxxx Corporation ("Party B") of even date herewith and
Party A and Party B expect to enter into one or more Transactions
(as defined therein).
(B) It will be a condition of the entering into of any Transaction that
the Guarantor guarantees the obligations of Party B in respect of
such Transaction on the following terms and conditions.
THE PARTIES AGREE THAT:
In this Guarantee, words and expressions, unless otherwise defined
herein, or unless the context otherwise requires, have the meanings
given to them in the Agreement and, in particular, "Agreement"
includes each Confirmation exchanged between Party A and Party B
confirming a Transaction.
The Guarantor unconditionally and irrevocably guarantees that, if
for any reason Party B does not pay any sum payable by it under the
Agreement by the time and on the date specified for such payment,
upon demand by Party A the Guarantor will pay that sum to or to the
order of Party A in the Contractual Currency not later than the
Local Business Day succeeding receipt of demand, if the Contractual
Currency is sterling or US Dollars, and, otherwise, not later than
the second Local Business Day succeeding receipt of demand.
As between the Guarantor and Party A but without affecting Party B's
obligations, the Guarantor will be liable under this Guarantee as if
it were the sole principal debtor and not merely a surety.
Accordingly, it will not be discharged, nor will its liability be
affected, by anything which would not discharge it or affect its
liability if it were the sole principal debtor (including: (i) any
time, indulgence, waiver or consent at any time given to Party B or
any other person; (ii) any amendment to any provision of this
Guarantee or to the Agreement, any Confirmation or any Transaction
or to any security or other guarantee or indemnity; (iii) the making
or absence of any demand on Party B or any other person for payment;
(iv) the enforcement or absence of enforcement of this Guarantee,
the Agreement or of any security or other guarantee or indemnity;
(v) the release of any such security, guarantee or indemnity; (vi)
the dissolution, amalgamation, reconstruction or reorganisation of
Party B or any other person; or (vii) the illegality, invalidity or
unenforceability of or any defect in any provision of this
Guarantee, the Agreement or any of Party B's obligations under the
Agreement), provided, however, that the
-1-
Guarantor shall be entitled to exercise any right that Party B could
have exercised under the Agreement to cure any default in respect of
its obligations under the Agreement or to set-off, counterclaim or
withhold payment in respect of any Event of Default or Potential
Event of Default in respect of Party B, but only to the extent such
right is provided to Party B under the Agreement.
The Guarantor's obligations under this Guarantee are and will remain
in full force and effect by way of continuing security until no sum
remains payable under this Guarantee or the Agreement. Furthermore,
those obligations of the Guarantor are additional to, and not
instead of, any security or other guarantee or indemnity at any time
existing in favour of any person, whether from the Guarantor or
otherwise. The Guarantor irrevocably waives all notices and demands
whatsoever.
So long as any sum remains payable under this Guarantee or the
Agreement any right of the Guarantor, by reason of performance of
any of its obligations under this Guarantee, to be indemnified by
Party B or to take the benefit of or to enforce any security or
other guarantee or indemnity will be exercised and enforced by the
Guarantor only in such manner and on such terms, as Party A may
approve.
Party A shall give prompt written notice to the Guarantor of any
failure of Party B to pay when due any sum due under the Agreement
but failure to give such notice shall not in any manner affect the
rights of Party A under this Guarantee.
The Guarantor shall reimburse Party A on demand for all
out-of-pocket costs, expenses and charges (including without
limitation reasonable fees and charges of legal counsel for Party A)
incurred by Party A in connection with the performance or
enforcement of this Guarantee.
The following sections of the Agreement shall be deemed to be
incorporated into this Guarantee, mutatis mutandis, as if references
to "Agreement" were to "Guarantee":-
Section 2(d), except paragraph (i)(1) thereof;
Section 3, except clauses (e) and (f), in relation to the
Guarantor only;
Section 4, except clause (d), in relation to the
Guarantor only;
Section 7;
Section 8; and
Section 9, except clause (e).
(A) Any notice or communication in respect of this Guarantee
will be sufficiently given to a party if given in writing
at the address set out below and will be effective on the
day it is delivered (or if that day is not a Local
Business Day, or if delivered after the close of business
on a Local Business Day, on the first following day that
is a Local Business Day).
-2-
Address for notices or communications to the Guarantor:-
GlaxoSmithKline plc,
000 Xxxxx Xxxx Xxxx
Xxxxxxxxx,
Xxxxxxxxx XX0 0XX
Attention: The Secretary
Address for notices or communications to Party A:-
Address: XXXXXXXXXX 00, XX XXX 0000, XX-0000, XXXXXX, XXXXXXXXXXX
Facsimile No.: xx 00 0000 0000
Telephone No.: xx 00 0000 0000
(B) The Guarantor or Party A may by notice to the other
change the address or telex number at which notices or
communications are to be given to it.
This Deed shall be governed by and construed in accordance with
English law.
IN WITNESS WHEREOF this document has been duly executed as a deed and is
delivered as a deed on the date stated at the beginning of this Deed.
EXECUTED as a Deed by ) ......................................
GLAXOSMITHKLINE PLC ) Director
acting by a Director and a Secretary )
in the presence of: ) ......................................
) Secretary
Witness' signature: ......................
Witness' name: ...........................
Witness' address: ...........................
...........................
...........................
-3-
EXHIBIT B to Schedule
GUARANTEE OF XXXXXX BROTHERS HOLDINGS INC.
XXXXXX BROTHERS FINANCE S.A. ("Party A") and SMITHKLINE XXXXXXX
CORPORATION ("Party B") have entered into a Master Agreement dated as of May 21,
2002, (the "Master Agreement"), pursuant to which Party A and Party B have
entered and/or anticipate entering into one or more transactions (each a
"Transaction"), the Confirmation of each of which supplements, forms part of,
and will be read and construed as one with, the Master Agreement (collectively
referred to as the "Agreement"). This Guarantee is a Credit Support Document as
contemplated in the Agreement. For value received, and in consideration of the
financial accommodation accorded to Party A by Party B under the Agreement,
XXXXXX BROTHERS HOLDINGS INC., a corporation organized and existing under the
laws of the State of Delaware ("Guarantor"), hereby agrees to the following:
(a) Guarantor hereby unconditionally guarantees to Party B the due and
punctual payment of all amounts payable by Party A under each Transaction when
and as Party A's obligations thereunder shall become due and payable in
accordance with the terms of the Agreement. In case of the failure of Party A to
pay punctually any such amounts, Guarantor hereby agrees, upon written demand by
Party B, to pay or cause to be paid any such amounts punctually when and as the
same shall become due and payable.
(b) Guarantor hereby agrees that its obligations under this Guarantee
constitute a guarantee of payment when due and not of collection.
(c) Guarantor hereby agrees that its obligations under this Guarantee
shall be unconditional, irrespective of the validity, regularity or
enforceability of the Agreement against Party A (other than as a result of the
unenforceability thereof against Party B), the absence of any action to enforce
Party A's obligations under the Agreement, any waiver or consent by Party B with
respect to any provisions thereof, the entry by Party A and Party B into
additional Transactions under the Agreement or any other circumstance which
might otherwise constitute a legal or equitable discharge or defense of a
guarantor (excluding the defense of payment or statute of limitations, neither
of which is waived); provided, however, that Guarantor shall be entitled to
exercise any right that Party A could have exercised under the Agreement to cure
any default in respect of its obligations under the Agreement or to setoff,
counterclaim or withhold payment in respect of any Event of Default or Potential
Event of Default in respect of Party B or any Affiliate, but only to the extent
such right is provided to Party A under the Agreement. The Guarantor
acknowledges that Party A and Party B may from time to time enter into one or
more Transactions pursuant to the Agreement and agrees that the obligations of
the Guarantor under this Guarantee will upon the execution of any such
Transaction by Party A and Party B extend to all such Transactions without the
taking of further action by the Guarantor.
(d) This Guarantee shall remain in full force and effect until such
time as Party B shall receive written notice of termination. Termination of this
Guarantee shall not affect Guarantor's liability hereunder as to obligations
incurred or arising out of Transactions entered into prior to the termination
hereof.
-4-
(e) Guarantor further agrees that this Guarantee shall continue to be
effective or be reinstated, as the case may be, if at any time, payment, or any
part thereof, of any obligation or interest thereon is rescinded or must
otherwise be restored by Party B upon an Event of Default as set forth in
Section 5(a)(vii) of the Master Agreement affecting Party A or Guarantor.
(f) Guarantor hereby waives (i) promptness, diligence, presentment,
demand of payment, protest, order and, except as set forth in paragraph (a)
hereof, notice of any kind in connection with the Agreement and this Guarantee,
or (ii) any requirement that Party B exhaust any right to take any action
against Party A or any other person prior to or contemporaneously with
proceeding to exercise any right against Guarantor under this Guarantee.
(g) Guarantor further agrees that all payments to be made hereunder
shall be made without setoff or counterclaim and free and clear of, and without
deduction for, any taxes, levies, imposts, duties, charges, fees, deductions,
withholdings or restrictions or conditions of any nature whatsoever now or
hereafter imposed, levied, collected, withheld or assessed by any country or by
any political subdivision or taxing authority thereof or therein.
(h) Guarantor shall reimburse Party B on demand for all out-of-pocket
costs, expenses and charges (including without limitation reasonable fees and
charges of legal counsel for Party B) incurred by Party B in connection with the
performance or enforcement of this Guarantee.
This Guarantee shall be governed by and construed in accordance with
the laws of the State of New York, without reference to choice of law doctrine.
All capitalized terms not defined in this Guarantee, but defined in the
Agreement, shall have the meanings assigned thereto in the Agreement.
Any notice hereunder will be sufficiently given if given in accordance
with the provisions for notices under the Agreement and will be effective as set
forth therein. All notices hereunder shall be delivered to Xxxxxx Brothers
Holdings Inc., Attention: Treasurer, 000 Xxxxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx,
XX 00000 XXX (Facsimile No. 212-526-0039) with a copy to Xxxxxx Brothers Finance
S.A., Attention: Transaction Management at Xxxxxxxxxx 00, XX Xxx 0000, XX-0000
Xxxxxx, Xxxxxxxxxxx (Telex No: 812 096 Answerback: LBFS CH, Facsimile No.
411-287-8825).
IN WITNESS WHEREOF, Guarantor has caused this Guarantee to be executed
in its corporate name by its duly authorized officer as of the date of the
Agreement.
XXXXXX BROTHERS HOLDINGS INC.
----------------------------------------
Name:
Title:
Date:
-5-
EXHIBIT C to Schedule
[Form of Opinion of Counsel for Party B](1)
[Date]
Xxxxxx Brothers Finance S.A.
Xxxxxxxxxx 00
XX Xxx 0000
XX-0000 Xxxxxx
Xxxxxxxxxxx
Ladies and Gentlemen:
I have acted as counsel to ((Counterparty)), a ((entity_type))
corporation ("Party B"), and am familiar with matters pertaining to the
execution and delivery of the Master Agreement (the "Master Agreement") dated as
of ((as_of_date)) between Party B and Xxxxxx Brothers Finance S.A. ("Party A").
In connection with this opinion, I have examined, or have had examined
on my behalf, an executed copy of the Master Agreement, certificates and
statements of public officials and officers of Party B and such other
agreements, instruments, documents and records as I have deemed necessary or
appropriate for the purposes of this opinion.
Based on the foregoing but subject to the assumptions, exceptions,
qualifications and limitations hereinafter expressed, I am of the opinion that:
1. Party A is a((entity_type))duly organized, validly existing
and in good standing under the laws of((cp_jurisdiction)).
2. The execution, delivery and performance of the Master
Agreement by or on behalf of Party A are within Party A's
[corporate] power, have been duly authorized by all necessary
[corporate] action and do not conflict with any provisions of
Party As [articles of incorporation or by-laws].
3. To the best of my knowledge no consent, authorization, license
or approval of or registration or declaration with, any U.S.
federal or state governmental authority is required in
connection with the execution, delivery and performance of the
Master Agreement by Party A.
The foregoing opinions are subject to the following assumptions,
exceptions, qualifications and limitations:
A. My opinion is subject to the effect of any bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors rights generally (including, without limitation, the effect of
statutory or other laws regarding fraudulent or other similar transfers) and
general principles of equity, regardless of whether enforceability is considered
in a proceeding in equity or at law.
--------
(1) SUBJECT TO REVIEW
-6-
B. I am a member of the Bar of the State of ((licensed State)) and
render no opinion on the laws of any jurisdiction other than the laws of the
State of ((cp_jurisdiction)), the federal laws of the United States of America
and the General Corporation Law of the State of ((cp_jurisdiction)).
C. My opinions are limited to the present laws and to the facts as they
presently exist. I assume no obligation to revise or supplement this opinion
should the present laws of the jurisdictions referred to in paragraph B above be
changed by legislative action, judicial decision or otherwise.
D. This letter is rendered to you in connection with the Master
Agreement and the Guarantee and the transactions related thereto and may not be
relied upon by any other person or by you in any other context or for any other
purpose. This letter may not be quoted in whole or in part, nor may copies
thereof be furnished or delivered to any other person, without the prior written
consent of Party A, except that you may furnish copies hereof (i) to your
independent auditors and attorneys, (ii) to any United States, state or local
authority having jurisdiction over you or over Party B, (iii) pursuant to the
order of any legal process of any court of competent jurisdiction or any
governmental agency, and (iv) in connection with any legal action arising out of
the Master Agreement.
E. I have assumed with your permission (i) the genuineness of all
signatures by each party other than Party A, (ii) the authenticity of documents
submitted to me as originals and the conformity to authentic original documents
of all documents submitted to me as copies, and (iii) the due execution and
delivery, pursuant to due authorization, of the Master Agreement by each party
other than Party A.
Very truly yours,
-7-
EXHIBIT D to Schedule
[Form of Opinion of Counsel for Party A]
[Date]
Glaxo Wellcome House
Berkeley Avenue
Greenford, Middlesex
United Kingdom UB6 0NN
Ladies and Gentlemen:
I am acting in my capacity as internal Legal Counsel to Xxxxxx
Brothers Finance SA, a Swiss corporation ("Party A") and am familiar with
matters pertaining to the execution and delivery of the Master Agreement (the
"Master Agreement") dated as of ((as_of_date)), between Party A and
((counterparty)) ("Party B"). The Master Agreement is to be supplemented by
confirmations of Transactions to be entered into by Party A and Party B from
time to time (each a "Confirmation") and the Master Agreement, together with all
such Confirmations, shall constitute one agreement (the "Agreement").
In connection with this opinion, I have examined, or have had examined
on my behalf, an executed copy of the Master Agreement, certificates and
statements of public officials and officers of Party A and such other
agreements, instruments, documents and records as I have deemed necessary or
appropriate for the purposes of this opinion.
I have assumed that the Agreement and the rights and obligations
created thereby, are valid and binding in accordance with their respective terms
under the laws governing the Agreement and that such choice of law to govern the
Agreement is recognized by the competent courts.
Based upon the foregoing, I am of the opinion that:
1. Party A is a corporation duly organized and validly existing under
the laws of Switzerland.
2. The execution, delivery and performance of the Master Agreement, in
the case of Party A is within its corporate power, has been duly authorized by
all necessary corporate action and does not, or, in the case of Party A with
respect to each Confirmation, will not, conflict with any provision of its
articles of incorporation or by-laws.
3. To the best of my knowledge no consent, authorization, license or
approval of or registration or declaration with, any Swiss governmental
authority is required in connection with the execution, delivery and performance
of the Master Agreement and each Confirmation, in the case of Party A.
4. The present opinion is given in my capacity as internal Swiss Legal
Counsel to Party A. In this opinion, I do not express or purport to express or
imply any opinions with respect to any laws, rules or regulations other than the
laws, rules and regulations of Switzerland in force and currently applied by the
Swiss courts as of the date of this opinion.
-8-
5. For the purpose of this opinion, I relied on information obtained
from public records, officers of the Xxxxxx Brothers Group and other sources
believed by me to be responsible and assured that all the documents examined by
me and the signatures of the officers appearing thereon were genuine.
6. This opinion has been delivered to you in connection with the
execution of the Master Agreement by Party A and may not be published or
communicated to, or relied upon by any third party.
Very truly yours,
-9-
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
MASTER AGREEMENT
DATED AS OF MAY 21, 2002
BETWEEN
XXXXXX BROTHERS FINANCE S.A. SMITHKLINE XXXXXXX CORPORATION
("PARTY A") ("PARTY B")
This Annex supplements, forms part of, and is subject to, the above-referenced
Agreement, is part of its Schedule and is a Credit Support Document under this
Agreement with respect to each party.
Accordingly, the parties agree as follows:
PARAGRAPH 1. INTERPRETATION
(a) DEFINITIONS AND INCONSISTENCY. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) SECURED PARTY AND PLEDGOR. All references in this Annex to the "Secured
Party" will be to either party when acting in that capacity and all
corresponding references to the "Pledgor" will be to the other party when acting
in that capacity; provided, however, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
with respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
PARAGRAPH 2. SECURITY INTEREST
Each party, as the Pledgor, hereby pledges to the other party, as the Secured
Party, as security for its Obligations, and grants to the Secured Party a first
priority continuing security interest in, lien on and right of Set-off against
all Posted Collateral Transferred to or received by the Secured Party hereunder.
Upon the Transfer by the Secured Party to the Pledgor of Posted Collateral, the
security interest and lien granted hereunder on that Posted Collateral will be
released immediately and, to the extent possible, without further action by
either party.
CREDIT SUPPORT ANNEX
Elections and Variables
dated as of May 21, 2002
between
XXXXXX BROTHERS FINANCE S.A.
(hereinafter referred to as "Party A")
and
SMITHKLINE XXXXXXX CORPORATION
(hereinafter referred to as "Party B")
PARAGRAPH 13. ELECTIONS AND VARIABLES
(a) SECURITY INTEREST FOR "OBLIGATIONS". The term "OBLIGATIONS" as used in
this Annex includes the following additional obligations: None.
(b) CREDIT SUPPORT OBLIGATIONS.
(i) DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT AMOUNT
(A) "DELIVERY AMOUNT" has the meaning specified in
Paragraph 3(a).
(B) "RETURN AMOUNT" has the meaning specified in
Paragraph 3(b).
(C) "CREDIT SUPPORT AMOUNT" has the meaning specified in
Paragraph 3; provided, however, that in the event
that the sum of the Independent Amounts applicable to
Pledgor exceed zero, the Credit Support Amount will
not be less than the sum of all Independent Amounts
applicable to the Pledgor.
(ii) ELIGIBLE COLLATERAL. The following items will qualify as
"ELIGIBLE COLLATERAL" for the party specified:
VALUATION
PARTY A PARTY B PERCENTAGE
(A) Cash, in the form of USD [X] [X] 100%
(B) negotiable debt obligations issued by the U.S. [X] [X] 100%
Treasury Department having a maturity at issuance of
not more than one year ("Treasury Bills").
(C) negotiable debt obligations issued by the U.S. [X] [X] 100%
Treasury Department having a maturity at
issuance of more than one year but not more than
ten years ("Treasury Notes").
(D) negotiable debt obligations issued by the U.S. [X] [X] 100%
Treasury Department having a maturity at
issuance of more than ten years ("Treasury
Bonds").
11
VALUATION
PARTY A PARTY B PERCENTAGE
(E) corporate securities rated Aa2 or better by [X] [X] 100%
Xxxxx'x Investors Service Inc. ("Moody's") and
AA or better by Standard & Poor's Ratings Group
("S&P") having a maturity at issuance of not
more than ten years ("Corporate Securities").
(F) G9 Government Securities (government securities [X] [X] 100%
issued by the governments of Japan, Germany,
France, Canada, Italy, United Kingdom, Belgium,
Netherlands, or Sweden that are rated Aa2 or better by
Moody's and AA or better by S&P having a maturity at
issuance of not more than ten years ("Government
Securities").
(G) negotiable debt obligations which are fully [X] [X] 100%
guaranteed as to both principal and interest by
the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation that are
not Pass-Throughs, multi-class or multi-branch
securities or paying interest only or principal
only ("Agency Securities").
(H) Other securities acceptable to the secured [X] [X] To be
party: None, unless otherwise specified in the determined
relevant Confirmation.
(iii) OTHER ELIGIBLE SUPPORT. The following items will qualify as
"OTHER ELIGIBLE SUPPORT" for the party specified: Not
applicable.
(iv) THRESHOLDS.
(A) "INDEPENDENT AMOUNT" (i) shall not be applicable with
respect to Party A or Party B unless otherwise
specified in a Confirmation, and (ii) to the extent
applicable and notwithstanding anything to the
contrary contained herein, shall not be subject to
the Minimum Transfer Amount.
(B) "THRESHOLD" means, with respect to Party A, USD
100,000,000, provided that if an Event of Default or
Additional Termination Event has occurred and is
continuing with respect to Party A, then the
Threshold with respect to such party shall be zero.
12
"THRESHOLD" means, with respect to Party B, USD
100,000,000, provided that if an Event of Default or
Additional Termination Event has occurred and is
continuing with respect to Party B, then the
Threshold with respect to such party shall be zero.
(C) "MINIMUM TRANSFER AMOUNT" means, with respect to a
party, USD25,000,000, provided that, notwithstanding
anything to the contrary contained herein, and the
Minimum Transfer Amount shall not apply to the
Independent Amount, and provided further that if an
Event of Default or Additional Termination Event has
occurred and is continuing, then the Minimum Transfer
Amount with respect to such party shall be zero.
(D) ROUNDING. The Delivery Amount and the Return Amount
shall be rounded up and down respectively to the
nearest integral multiple of USD 1,000.
(c) VALUATION AND TIMING.
(i) "VALUATION AGENT" means Party A.
(ii) "VALUATION DATE" means any Local Business Day.
(iii) "VALUATION TIME" means the close of business in the location
where the relevant product is traded provided that the
calculations of Value and Exposure will be made as of
approximately the same time on the same date.
(iv) "NOTIFICATION TIME" means by 3:00 p.m., New York time, on a
Local Business Day.
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. The
following Termination Event(s) will be a "Specified Condition" for the
party specified (that party being the Affected party if the Termination
Event occurs with respect to that party):
PARTY A PARTY B
Illegality [ ] [ ]
Tax Event [ ] [ ]
Tax Event Upon Merger [ ] [ ]
Credit Event Upon Merger [X] [X]
Additional Termination Event(s): as set [X] [X]
forth in Part 1 (h)
(e) SUBSTITUTION
(i) "SUBSTITUTION DATE" has the meaning specified in Paragraph
4(d)(ii).
(ii) "CONSENT." The Pledgor need not obtain the Secured Party's
consent for any substitution pursuant to Paragraph 4(d).
(f) DISPUTE RESOLUTION
(i) "RESOLUTION TIME" means 1:00 p.m., on the Local Business Day
following the date on which notice is given that gives rise to
a dispute.
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(ii) "VALUE." For the purpose of Paragraph 5(i)(c) and 5(ii), the
Value of Posted Credit Support other than Cash will be
calculated as follows:
With respect to any Treasury Bills, Treasury Notes, Treasury
Bonds, Agency Securities, Corporate Securities or Government
Securities (referred to herein as "Collateral Obligations")
the sum of (I) (x) the mean of the mid-market prices quoted on
such date by two mutually acceptable principal market makers
for such Collateral Obligations, or (y) if no such quotations
are available from two principal market makers for such date,
a principal market maker's mid market quotation, if available,
as of the day, next preceding such date, on which such
quotation was available, or (z) if no mid-market price is
available pursuant to subparagraph (y) hereof, a mid-market
quotation provided by a principal market maker in the relevant
market jointly appointed by Party A and Party B, in each case,
multiplied by the applicable Valuation Percentage, plus (II)
the accrued interest on such Collateral Obligations (except to
the extent Transferred to a party pursuant to any applicable
section of this Agreement or included in the applicable price
referred to in (I) of this Clause) as of such date.
(iii) "ALTERNATIVE." Paragraph 5 will apply.
(iv) In line 6 of Paragraph 5(i)(B), the words "the Valuation
Agent's original calculation will be used for that Transaction
(or Swap Transaction)" will be replaced with "the parties will
jointly appoint a leading dealer in the relevant market to
make such calculation which will be used for that Transaction
(or Swap Transaction), the expenses of whom will be borne
equally by the parties."
(g) HOLDING AND USING POSTED COLLATERAL.
(i) "ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS."
Party B and/or its Custodian will be entitled to hold Posted
Collateral pursuant to Paragraph 6(b), provided that the
following conditions applicable to it are satisfied:
(1) Party B is not a Defaulting Party.
(2) The Custodian, if any, is a bank or trust company
located in the State of New York having total assets
of at least USD 1 billion.
Initially, the CUSTODIAN for Party B is: Not applicable.
Party A and/or its Custodian will be entitled to hold Posted
Collateral pursuant to Paragraph 6(b), provided that the
following conditions applicable to it are satisfied:
(1) Party A is not a Defaulting Party.
(2) The Custodian, if any, is either a bank or trust
company located in the State of New York having total
assets of at least USD 1 billion or a wholly owned,
direct or indirect, subsidiary of Xxxxxx Brothers
Holdings Inc.
Initially, the CUSTODIAN for Party A is: Xxxxxx Brothers Inc.
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(ii) "USE OF POSTED COLLATERAL" The provisions of Paragraph 6(c)
will apply to Party A and Party B.
(h) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) "INTEREST RATE." Except as set forth in subparagraph (iii)
below, the Interest Rate will be the rate per annum equal to
USD LIBOR BBA with a Designated Maturity of one week as
defined in the 2002 ISDA Definitions.
(ii) "TRANSFER OF INTEREST AMOUNT." Except as set forth in
subparagraph (iii) below, the Transfer of the Interest Amount
will be made on the first Local Business Day of each calendar
month and on any Local Business Day that Posted Collateral in
the form of Cash is Transferred to the Pledgor pursuant to
Paragraph 3(b).
(iii) "ALTERNATIVE TO INTEREST AMOUNT." The provisions of Paragraph
6(d)(ii) will apply, except as set forth below:
With respect to Posted Collateral in the form of Cash when
Party A shall be the Secured Party and Party B shall be the
Pledgor, Pledgor hereby instructs Secured Party to deposit
such Cash with a money market fund offered by Federated
Investors (the "Fund") in Secured Party's own name but for the
account and at the risk of Pledgor. Except as provided in
Paragraph 4(a), the Secured Party shall instruct the Fund to
remit to Pledgor any interest or dividends earned on the
Posted Collateral in the form of Cash so invested.
(i) ADDITIONAL REPRESENTATION(S). Not applicable.
(j) "OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT."
(i) "VALUE" with respect to Other Eligible Support and Other
Posted Support means: Not applicable.
(ii) "TRANSFER" with respect to Other Eligible Support and Other
Posted Support means: Not applicable.
(k) DEMANDS AND NOTICES. All demands, specifications and notices made by a
party to this Annex will be made pursuant to the Notices Section of
this Agreement.
(l) ADDRESSES FOR TRANSFERS.
Party B:
(i) In the case of Cash, by wire transfer of immediately available
funds for credit to a bank account of Party B to be designated
in Party B's demand for the Delivery Amount or Return Amount,
as applicable.
(ii) In the case of securities or obligations that can be paid or
delivered by book-entry (on the records of U.S. Federal
Reserve Banks) by delivery to an account designated by Party
B.
Party A:
(i) in the case of cash with respect to a Delivery Amount , as
follows: at Citibank, N.A., New York, New York, ABA Number
000000000; Account Name: FAO
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Xxxxxx Brothers Holdings Inc. in the favor of LB Finance S.A.,
Account Number 00000000; or otherwise in accordance with any
instructions provided by Party A; and in the case of cash with
respect to a Return Amount, for credit to a bank account of
Party A to be designated in Party A's demand for the Return
Amount, as applicable.
(ii) in the case of securities or obligations that cannot be paid
or delivered by book-entry, deliver to Party A or (as
instructed by Party A in writing) either Xxxxxx Brothers Inc.
or Xxxxxx Government Securities Inc. as agent for Party A,
definitive certificates for such Posted Collateral in suitable
form for transfer or accompanied by duly executed instruments
of transfer or appropriate updated powers of assignment duly
executed in blank. All deliveries of certificated securities
shall be made at the NSCC New York Window, NSC Clearing 0074,
00 Xxxxx Xxxxxx, Xxxxx Xxxxx-0xx Xxxxx, Xxx Xxxx, XX 00000,
Attn: Xx X'Xxxxxxx, a/c Xxxxxx Brothers Inc.; Clearing Number
#074, or such other account as is specified in a written
notice furnished by Party A to Party B (which may be a
Confirmation).
(iii) In the case of securities or obligations that can be paid or
delivered by book-entry (on the records of U.S. Federal
Reserve Banks, unless otherwise in accordance with any
instructions provided by Party A:
(A) securities or obligations issued or guaranteed by the
government of the United States of America or any of
its agencies or instrumentalities, credit Chase
NYC/Xxxxxx, ABA #000000000, Attn: Collateral
Management 7th floor WFC;
(B) mortgage-backed securities paid or delivered through
a U.S. Federal Reserve Bank, credit Chase NYC/LMBS,
ABA #000000000, Attn: Collateral Management 7th floor
WFC;
(m) OTHER PROVISIONS.
(i) NO DISPOSITION. Without the prior written consent of Secured
Party, Pledgor agrees that it will not sell, assign, transfer,
exchange or otherwise dispose of, or grant any option with
respect to, Posted Collateral, nor will it create, incur or
permit to exist any pledge, lien, mortgage, hypothecation,
security interest, charge, option or any other encumbrance
with respect to any of the Posted Collateral, or any interest
therein, or any proceeds thereof, except for the lien and
security interest provided for by this Annex.
(ii) LOCAL BUSINESS DAY. For purposes of effecting a Transfer
pursuant to this Annex, "Local Business Day" shall mean a day
on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) in
both the jurisdiction of the party obligated to make such
Transfer and the place, if different, where the relevant
Eligible Collateral or Posted Collateral subject to such
Transfer, is located.
(iii) POSTED CREDIT SUPPORT. Line 1 and line 4 of Paragraph 10(b) of
the Credit Support Annex are hereby amended by inserting the
words "transfer, recording or other similar" before the word
"taxes".
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(iv) CONTROL. Party A and Party B agree that all references herein
to the "UCC" shall mean the Uniform Commercial Code as in
effect in the State of New York.
Party A's Custodian (the "Custodian") has heretofore
established an account, held in the name of "Xxxxxx Brothers
Inc. as Custodian for Xxxxxx Brothers Finance S.A. as Pledgee
for Smithkline Xxxxxxx Corporation" with Party B as
"entitlement holder" (as defined in Section 8-102(a)(7) of the
UCC), subject to the security interest of Party A ("Secured
Party") (the "Account"), and maintained as a segregated
account by the Custodian, as a custodian and as securities
intermediary.
The Custodian hereby confirms and agrees that:
(i) The Custodian shall not change the name or account
number of the Account without the prior written
consent of the Secured Party;
(ii) All securities or other property in the form of an
instrument or security underlying any financial asset
credited to the Account shall, as applicable, be
registered in the name of the Custodian, endorsed to
the Custodian or in blank or credited to another
securities account maintained in the name of the
Custodian, and in no case will any financial asset
credited to the Account be registered in the name of
Party B, payable to the order of Party B or specially
endorsed to Party B, except to the extent the
foregoing have been specially endorsed to the
Custodian or in blank;
(iii) All financial assets and funds delivered to the
Custodian pursuant to the Agreement, including
without limitation Posted Collateral, will be
promptly credited to the Account; and
(iv) The Account is an account to which financial assets
and funds are or may be credited.
The Custodian hereby agrees that each item of property
(whether investment property, a financial asset, a security,
an instrument or cash) credited to the Account shall be
treated as a "financial asset" (within the meaning of Section
8-102(a)(9) of the UCC). If at any time the Custodian shall
receive any "entitlement order" (within the meaning of Section
8-102(a)(8) of the UCC) or other instruction from the Secured
Party, including without limitation directing the transfer or
redemption of any financial asset credited to the Account, the
Custodian shall comply with such entitlement order or
instruction without further consent by Party B or any other
person. The Custodian shall not comply with any entitlement
orders or other instructions originated by Party B with
respect to the Account or the financial assets credited
thereto without the prior written consent of the Secured
Party, which consent may be granted or withheld by the Secured
Party in its sole discretion.
Party B and the Secured Party hereby agree that (a) the
Custodian is released from any and all liabilities to Party B
and the Secured Party arising from the terms of this Agreement
and this Annex and the compliance of the Custodian with the
terms hereof, except to the extent that such liabilities arise
from the Custodian's bad faith, willful misconduct or gross
negligence and (b) Party B, its successors and assigns shall
at all times indemnify and save harmless the Custodian from
and
17
against any loss, liability or expense incurred without bad
faith, willful misconduct or gross negligence on the part of
the Custodian, its officers, directors and agents, arising out
of or in connection with the execution and performance of this
Agreement or the maintenance of the Account, including the
costs and expenses of defending themselves against any claim
or liability in connection with the performance of any of
their powers or duties hereunder, until the termination of
this Agreement.
(v) AMENDMENT TO PARAGRAPH 2. Paragraph 2 of the Credit Support
Annex is hereby amended by adding the following phrase at the
end of the first sentence: "or subject to Control as set forth
in paragraph 13 (m)(iv)".
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The parties executing this Credit Support Annex have executed the
Master Agreement and have agreed as to the contents of this Credit Support
Annex.
XXXXXX BROTHERS FINANCE S.A. SMITHKLINE XXXXXXX CORPORATION
Party A Party B
/s/ Xxxx Xxxxx /s/ Xxxxxx X. Xxxxxx
---------------------------------- -----------------------------------
Name: Xxxx Xxxxx Name: Xxxxxx X. Xxxxxx
Title: Director Title: Vice President & Secretary
Date: Date: May 21, 2002
/s/ Xxxxx Xxxxxxx
--------------------------
Name: Xxxxx Xxxxxxx
Authorised Signatory
XXXXXX BROTHERS INC.
By: Xxxxxx Brothers Inc. as Custodian in respect of
Paragraph 13(m)(iii) of this Annex
Name:/s/ XXXXX XXXXX
-----------------------------------
Name: XXXXX XXXXX
Title: Vice President
Date: May 21, 2002
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