Exhibit C
BEAR XXXXXXX
BEAR, XXXXXXX INTERNATIONAL LIMITED
XXX XXXXXX XXXXXX
XXXXXX X00 0XX, XXXXXXX
TEL: 0000-000-0000
FAX: 0000-000-0000
REGULATED BY FSA
FINAL DRAFT
CONFIRMATION
Reference Number: NC-1348
As of September 29, 2000
Starfire Holding Corporation
c/o Icahn Associates Corp.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
The purpose of this letter agreement is to confirm the terms and conditions of
the transaction entered into as of the Trade Date specified below (the
"Transaction") between Bear, Xxxxxxx International Limited ("Bear Xxxxxxx") and
Starfire Holding Corporation ("Counterparty"). This letter agreement constitutes
the sole and complete "Confirmation," as referred to in the "Reference Master"
(as defined below), with respect to the Transaction.
1. This Confirmation is subject to and incorporates the 1997 ISDA Government
Bond Option Definitions (the "Bond Option Definitions" or "Definitions"),
published by the International Swaps and Derivatives Association, Inc. ("ISDA"),
a copy of which is attached hereto as Exhibit A. The parties agree that the 1992
version of the preprinted Master Agreement form, as published by ISDA, without
amendation or alteration thereto and without a separate schedule (the "Reference
Master"), a copy of which is attached hereto as Exhibit B, shall be incorporated
by reference hereto and shall govern the Transaction referenced in this
Confirmation, except as expressly modified below. In the event any inconsistency
arises among or as to any terms or provisions of this Confirmation, the
Definitions or Reference Master, the terms and provisions of this Confirmation
shall prevail for the purpose of this Transaction.
2. This Transaction consists of a Put Option between Bear Xxxxxxx and
Counterparty. For purposes of this Put Option, the Bond Option Definitions shall
apply notwithstanding the fact that the securities referenced herein are not
Government Bonds and such Definitions have been incorporated for convenience of
documentation only. The terms of the particular Transaction to which this
Confirmation relates are as follows:
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1. General Terms Relating to the Put Option
Trade Date: September 29, 2000
Option Style: American
Option Type: Put
Seller: Counterparty
Buyer: Bear Xxxxxxx
Bonds: USD1,000 principal of the 10.875% bonds due 2004
issued by GB Property Funding Corp.(the GB Bonds)
unless the GB Bonds have been subject to a
mandatory exchange which has become effective,
in which case it will mean a unit comprising
a combination of USD602.73976 of principal of
11% First Mortgage due 2005 (the New Bonds)
and 29.45205479 shares of the common stock of
GB Holdings, Inc. (the Shares).
Number of Options: 16,750, subject to Section 5, "Sale of Covered
Securities by Bear Xxxxxxx"
Option Entitlement: One Bond (as defined above) per Option
Strike Price: USD965.6458, plus accrued but unpaid interest
on the bonds (the GB Bonds or New Bonds as the
case may be) underlying one "Bond".
Premium: See Section 6 below.
Premium Payment Date: Not Applicable
Business Days: New York
Calculation Agent: Bear Xxxxxxx, or any successor Calculation Agent
appointed by Bear Xxxxxxx. Counterparty may
challenge any determination or calculation
by the Calculation Agent within one Business
Day following the receipt by Counterparty
of such determination or calculation. If the
parties are unable to agree on a particular
determination or calculation, a mutually
acceptable third party will be appointed
within 24 hours following the challenge by
Counterparty, to make a determination as to
the disputed matter, which determination shall be
binding and conclusive.
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3. Procedures for Exercise of Put Option:
Commencement Date: October 4, 2001
Expiration Date: October 4, 2002
Expiration Time: 5:00 p.m. New York City Time
Multiple Exercise: Applicable
Reference Price: The price determined by the Calculation Agent
acting in good faith.
Business Days: New York
4. Settlement Terms for the Put Option:
Settlement: Physical, provided that,
notwithstanding anything to the contrary in
Section 6.2 of the Bond Option Definitions,
Settlement Disruption Event shall be deemed to
include any regulatory or legal restrictions
which, in the reasonable judgement of the
Calculation Agent, would prohibit Bear Xxxxxxx
from delivering the Bonds to the Counterparty.
Settlement Date: 3 Business Days after the relevant Exercise Date.
Clearance System: The Depository Trust Company (or any
successor), or otherwise specified by Bear
Xxxxxxx.
5. Sale of Covered Securities
Sale of Covered
Securities by Bear
Xxxxxxx: Bear Xxxxxxx or one of its affiliates may sell
all, or part of, the Covered Securities at any
time during the Term of the Transaction. Upon any
sale of the Covered Securities or any portion
thereof, the Calculation Agent shall reduce the
Number of Options as follows: the Number of
Options shall be reset to an amount equal to the
Number of Options prior to such sale minus the
number of Bonds sold (provided that if New Bonds
and Shares are sold in a proportion other than
that set out in "Bonds" above, the number of Bonds
sold will be deemed to be that number of Bonds
comprising the greater of the New Bonds or Shares
sold determined separately). For example, if Bear
Xxxxxxx sells USD3,013.70 of New Bonds and
294.5205479 Shares, then the Number of Options
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will be reset as follows: 16,750 (i.e., the Number
of Options prior to the sale) minus 10 (i.e., the
number of Bonds sold, being the greater of 5
(which is the number of Bonds comprising the New
Bonds sold) and 10 (which is the number of Bonds
comprising the Shares sold)).
"Covered Securities" means the GB Bonds purchased
by Bear Xxxxxxx (as summarized in Section 6
below), and any New Bonds and Shares issued and
exchanged therefor.
Notice Provisions for
Seller: c/o Icahn Associates Corp.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
6. Purchase of Bonds. The parties acknowledge that on September 29,
2000, in connection with this Transaction, Bear
Xxxxxxx purchased from New Generation, as
investment manager on behalf of one or more
parties, including defined benefit pension plans
(the "Original Sellers"), a face amount of GB
Bonds equal to USD16,750,000.
In connection with this Transaction, Bear Xxxxxxx
has not paid a Premium to Counterparty. This will
result in a higher price being paid by Bear
Xxxxxxx to the Original Sellers. Counterparty
acknowledges and agrees that it will not be paid a
Premium.
7. Account Details and
Settlement
Information: Payments to Bear Xxxxxxx:
The Chase Manhattan Bank, London
Sort Code: 60-92-42, for the account
of Bear, Xxxxxxx Securities Corp.
Account Number: 00000000, further credit to
Bear, Xxxxxxx International Limited Sub Account
Number: 000-00000-00
8. Adjustment Events: In order to preserve the benefit of the bargain of
the parties hereto, the Calculation Agent shall
adjust the terms of this Transaction following any
concentrative or dilutive events, including but
not limited to, stock splits, stock dividends,
reorganization, recapitalization or similar
transactions.
9. Early Termination If an Event of Default or Termination Event occurs
with respect to Counterparty, then (a) the
Commencement Date and the Expiration Date of the
Option will be accelerated to the Early
Termination
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Date elected by Bear Xxxxxxx and (b) the Bond
Payment (as defined in the Definitions) for
purposes of settling the Option on the Early
Termination Date will be deemed to be the present
value (using the prevailing USD LIBOR rate for the
period remaining between the Early Termination
Date and the Expiration Date set forth under
"Procedures for Exercise of Put Option" above as
the discount rate (subject to linear
interpolation)) of the Bond Payment determined as
of the Early Termination Date in accordance with
the terms set forth under "General Terms Relating
to the Put Option" above. On such Early
Termination Date, if Counterparty complies with
the Settlement Terms for the Option on the Early
Termination Date, then this Transaction will be
deemed to be terminated and no amounts will be due
under Section 6 of the Reference Master. If
Counterparty fails to comply with the Settlement
Terms for the Option on the Early Termination
Date, then Bear Xxxxxxx may exercise all its
rights under Section 6 in respect of such Event of
Default or Termination Event and any other
applicable provisions of the Reference Master.
10. Interest on Bonds If Bear Xxxxxxx does not receive interest on the
Covered Securities on the date such interest is
scheduled to be paid (the "Interest Payment
Date"), Counterparty will pay the shortfall to
Bear Xxxxxxx upon notice for value on the Interest
Payment Date.
If Bear Xxxxxxx exercises and settles with
Counterparty on the Put Option and subsequently
receives a payment in respect of the Covered
Securities, it will pay such amount to
Counterparty for value on the date it receives
such payment.
Additional Provisions:
Incorporation of Terms. For the avoidance of doubt, the Reference Master is
incorporated herein, and together with the elections and modifications herein is
deemed to be the Executed Master Agreement.
Tax Events. Section 2(d) and Sections 5(b)(ii) and (iii) of the Reference
Master will not apply to this Transaction.
Cross Default. The "Cross Default" provisions of Section 5(a)(vi) will apply
to Bear Xxxxxxx and to Counterparty. To the
extent such provisions apply:
"Specified Indebtedness" will have the meaning set forth in Section 14.
"Threshold Amount" means USD10,000,000, or the equivalent thereof, as
reasonably determined by the other party, if the applicable Specified
Indebtedness is stated in any currency other than USD.
Automatic Early Termination. The "Automatic Early Termination" provision of
Section 6(a) will not apply to Bear Xxxxxxx or Counterparty.
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Payment Measures: Second Method and Market Quotation are elected, subject to
Paragraph 9 above.
Termination Currency. The Termination Currency shall be USD.
Additional Termination Event. Section 5(b)(v) Additional Termination
Event will apply. Each of the following shall constitute an Additional
Termination Event:
If the Credit Support Provider (i) dies; (ii) is declared incompetent
by a court of competent jurisdiction due to a physical, mental or
emotional condition resulting from injury, sickness, disease or other
causes; (iii) becomes unable to act in a prudent, timely, and effective
manner as a consequence of any accident, physical or mental condition
(whether organic or psychological) or other similar cause for an
indefinite period of time (notwithstanding the appointment of a
guardian, conservator or other legal representative for Counterparty).
Non-Reliance. Each party represents to the other party that (a) it has not
received and is not relying upon any legal, tax, regulatory, accounting or other
advice (whether written or oral) of the other party regarding this Transaction,
other than representations expressly made by that other party in this
Confirmation and in the Master Agreement and (b) in respect of this Transaction,
(i) it has the capacity to evaluate (internally or through independent
professional advice) this Transaction and has made its own decision to enter
into this Transaction and (ii) it understands the terms, conditions and risks of
this Transaction and is willing to assume (financially and otherwise) those
risks. Counterparty acknowledges that Bear Xxxxxxx has advised Counterparty to
consult its own tax, accounting and legal advisors in connection with this
Transaction evidenced by this Confirmation and that the Counterparty has done
so. Counterparty and Bear Xxxxxxx each acknowledge that, as of the date hereof,
the New Bonds and Shares are illiquid securities and that each party has made
its own evaluation of the New Bonds and Shares.
Payment Date Netting. The parties agree that subparagraph (ii) of Section 2(c)
of the Master Agreement will apply to this Transaction. Thus all amounts payable
on the same date in the same currency in respect of this Transaction shall be
netted.
Governing Law: The laws of the State of New York, without reference to the
choice or conflicts of law principles thereof.
Credit Support Documents. The Guaranty of Xxxx X. Icahn will be the Credit
Support Document for the benefit of Bear Xxxxxxx.
Credit Support Provider: "Credit Support Provider" means, in relation to
Counterparty, Xxxx X. Icahn.
Transfer. Bear Xxxxxxx may also transfer its rights and obligations under
this Transaction, in whole or in part, to The Bear Xxxxxxx Companies Inc. or
any of its Affiliates.
No Agency. Each of Bear Xxxxxxx and Counterparty is entering into this Agreement
and each Transaction as principal (and not as agent or in any other capacity,
fiduciary or otherwise).
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Consent to Recording . Each party hereto consents to the monitoring or
recording, at any time and from time to time, by the other party of any and all
communications between officers or employees of the parties, waives any further
notice of such monitoring or recording, and agrees to notify its officers and
employees of such monitoring or recording.
Waiver of Jury Trial. Each party waives any right it may have to a
trial by jury in respect of any Proceedings relating to this Agreement or
any Credit Support Document.
This Confirmation may be executed in several counterparts, each of which shall
be deemed an original but all of which together shall constitute one and the
same instrument.
Counterparty hereby agrees to check this Confirmation and to confirm that the
foregoing correctly sets forth the terms of the Transaction by signing in the
space provided below and returning to Bear Xxxxxxx a facsimile of the
fully-executed Confirmation to 000-000-0000. For inquiries regarding U.S.
Transactions, please contact Xxxxx Xxxxx by telephone at 000-000-0000. For all
other inquiries please contact Xxxxx Xxxxxx by telephone at 000-0-000-0000.
Originals will be provided for your execution upon your request.
We are very pleased to have executed this Transaction with you and we look
forward to completing other transactions with you in the near future.
Very truly yours,
BEAR, XXXXXXX INTERNATIONAL LIMITED
By:
Name:
Title:
Counterparty, acting through its duly authorized signatory, hereby agrees to,
accepts and confirms the terms of the foregoing as of the Trade Date.
STARFIRE HOLDING CORPORATION
By:
Name:
Title:
(Authorized Signatory)
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