Exhibit 99.1
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of November 19, 1997
XXXXXX STORES LIQUIDATING TRUST and CANADIAN IMPERIAL BANK OF
COMMERCE 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.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving
a payment or delivery by giving notice to the other party at least five
Local Business Days prior to the scheduled date for the payment or
delivery to which such change applies unless such other party gives
timely notice of a reasonable objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation
to make payment of any such amount will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been
payable by one party exceeds the aggregate amount that would otherwise
have been payable by the other party, replaced by an obligation upon the
party by whom the larger aggregate amount would have been payable to pay
to the other party the excess of the larger aggregate amount over the
smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net
amount will be determined in respect of all amounts payable on the same
date in the same currency in respect of such Transactions, regardless of
whether such amounts are payable in respect of the same Transaction. The
election may be made in the Schedule or a Confirmation by specifying that
subparagraph (ii) above will not apply to the Transactions identified as
being subject to the election, together with the starting date (in which
case subparagraph (ii) above will not, or will cease to, apply to such
Transactions from such date). This election may be made separately for
different groups of Transactions and will apply separately to each
pairing of Offices through which the parties make and receive payments or
deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made
without any deduction or withholding for or on account of any
Tax unless such deduction or withholding is required by any
applicable law, as modified by the practice of any relevant
governmental revenue authority, then in effect. If a party is so
required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full
amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section
2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving
notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably
acceptable to Y, evidencing such payment to such
authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise
entitled under this Agreement, such additional amount
as is necessary to ensure that the net amount actually
received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full
amount Y would have received had no such deduction or
withholding been required. However, X will not be required
to pay any additional amount to Y to the extent
that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform
any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and
true unless such failure would not have
occurred but for (I) any action taken by a
taxing authority, or brought in a court of
competent jurisdiction, on or after the date
on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.
(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by
the practice of any relevant governmental revenue
authority, to make any deduction or withholding in
respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the
amount of such liability (including any related liability for
interest, but including any related liability for penalties only
if Y has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section
6(c), be required to pay interest (before as well as after judgment) on
the overdue amount to the other party on demand in the same currency as
such overdue amount, for the period from (and including) the original due
date for payment to (but excluding) the date of actual payment, at the
Default Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. If, prior to the
occurrence or effective designation of an Early Termination Date in
respect of the relevant Transaction, a party defaults in the performance
of any obligation required to be settled by delivery, it will compensate
the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction
is entered into and, in the case of the representations in Section 3(f),
at all times until the termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the
laws of the jurisdiction of its organisation or incorporation
and, if relevant under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any
other documentation relating to this Agreement to which it is a
party, to deliver this Agreement and any other documentation
relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement
and any obligations it has under any Credit Support Document to
which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable
to it, any provision of its constitutional documents, any order
or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are
required to have been obtained by it with respect to this
Agreement or any Credit Support Document to which it is a party
have been obtained and are in full force and effect and all
conditions of any such consents have been complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement
and any Credit Support Document to which it is a party
constitute its legal, valid and binding obligations, enforceable
in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur
as a result of its entering into or performing its obligations under this
Agreement or any Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or
proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to
affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its
ability to perform its obligations under this Agreement or such Credit
Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of
the date of the information, true, accurate and complete in every
material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is
accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is
accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may
have any obligation under this Agreement or under any Credit Support
Document to which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or
taxing authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing
in order to allow such other party or its Credit Support
Provider to make a payment under this Agreement or any
applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such deduction
or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not
materially prejudice the legal or commercial position of the
party in receipt of such demand), with any such form or document
to be accurate and completed in a manner reasonably satisfactory
to such other party and to be executed and to be delivered with
any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or,
if none is specified. as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or
other authority that are required to be obtained by it with respect to
this Agreement or any Credit Support Document to which it is a party and
will use all reasonable efforts to obtain any that may become necessary
in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to
comply would materially impair its ability to perform its obligations
under this Agreement or any Credit Support Document to which it is a
party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon
learning of such failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp
Tax levied or imposed upon it or in respect of its execution or
performance of this Agreement by a jurisdiction in which it is
incorporated, organised, managed and controlled, or considered to have
its seat, or in which a branch or office through which it is acting for
the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and
will indemnify the other party against any Stamp Tax levied or imposed
upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which is
not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any of the following events constitutes
an event of default (an "Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make,
when due, any payment under this Agreement or delivery under
Section 2(a)(i) or 2(e) required to be made by it if such
failure is not remedied on or before the third Local Business
Day after notice of such failure is given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to
make any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or
4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied
on or before the thirtieth day after notice of such failure is
given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider
of such party to comply with or perform any agreement
or obligation to be complied with or performed by it in
accordance with any Credit Support Document if such
failure is continuing after any applicable grace period
has elapsed;
(2) the expiration or termination of such Credit
Support Document or the failing or ceasing of such
Credit Support Document to be in full force and effect
for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to
the satisfaction of all obligations of such
party under each Transaction to which such Credit
Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider
disaffirms, disclaims, repudiates or rejects, in whole
or in part, or challenges the validity of, such Credit
Support Document;
(iv) MISREPRESENTATION. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or
deemed to have been made or repeated by the party or any Credit
Support Provider of such party in this Agreement or any Credit
Support Document proves to have been incorrect or misleading in
any material respect when made or repeated or deemed to have
been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit
Support Provider of such party or any applicable Specified
Entity of such party (1) defaults under a Specified Transaction
and, after giving effect to any applicable notice requirement or
grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified
Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date of,
or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business
Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate
it or act on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence
of (1) a default, event of default or other similar condition or
event (however described) in respect of such party, any Credit
Support Provider of such party or any applicable Specified
Entity of such party under one or more agreements or instruments
relating to Specified Indebtedness of any of them (individually
or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or
becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise
have been due and payable or (2) a default by such party, such
Credit Support Provider or such Specified Entity (individually
or collectively) in making one or more payments on the due date
thereof in an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace
period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its
debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment
of insolvency or bankruptcy or any other relief under
any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented
for its winding-up or liquidation, and, in the case of
any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) results in
a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed,
discharged, stayed or restrained in each case within 30
days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or
becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all
or substantially all its assets; (7) has a secured
party take possession of all or substantially all its
assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced
or sued on or against all or substantially all its
assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to
it which, under the applicable laws of any jurisdiction,
has an analogous effect to any of the events specified in
clauses (1) to (7) (inclusive); or (9) takes any action
in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing
acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit
Support Provider of such party consolidates or amalgamates with,
or merges with or into, or transfers all or substantially all
its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails
to assume all the obligations of such party or such
Credit Support Provider under this Agreement or any
Credit Support Document to which it or its predecessor
was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to
this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any event specified below constitutes
an Illegality if the event is specified in (i) below, a Tax Event if the
event is specified in (ii) below or a Tax Event Upon Merger if the event
is specified in (iii) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to (iv) below or an
Additional Termination Event if the event is specified pursuant to (v)
below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered
into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority
with competent jurisdiction of any applicable law after such
date, it becomes unlawful (other than as a result of a breach by
the party of Section 4(b)) for such party (which will be the
Affected Party):--
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply
with any other material provision of this Agreement
relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other
obligation which the party (or such Credit Support
Provider) has under any Credit Support Document
relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (y) a Change in Tax
Law, the party (which will be the Affected Party) will, or there
is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party
an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an
amount is required to be deducted or withheld for or on account
of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be
paid in respect of such Tax under Section 2(d)(i)(4) (other than
by reason of Section 2(d)(i)(4)(A) or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on
the next succeeding Scheduled Payment Date will either (1) be
required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount has been deducted or withheld for
or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other
than by reason of Section 2(d)(i)(4)(A) or (B)), in either case
as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all
its assets to, another entity (which will be the Affected Party)
where such action does not constitute an event described in
Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party
("X"), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or
merges with or into, or transfers all or substantially all its
assets to, another entity and such action does not constitute an
event described in Section 5(a)(viii) but the creditworthiness
of the resulting, surviving or transferee entity is materially
weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such
action (and, in such event, X or its successor or transferee, as
appropriate, will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as
applying, the occurrence of such event (and, in such event, the
Affected Party or Affected Parties shall be as specified for
such Additional Termination Event in the Schedule or such
Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also
constitutes an Illegality, it will be treated as an Illegality and will
not constitute an Event of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an
Event of Default with respect to a party (the "Defaulting Party") has
occurred and is then continuing, the other party (the "Non-defaulting
Party") may, by not more than 20 days notice to the Defaulting Party
specifying the relevant Event of Default, designate a day not earlier
than the day such notice is effective as an Early Termination Date in
respect of all outstanding Transactions. If, however, "Automatic Early
Termination" is specified in the Schedule as applying to a party, then an
Early Termination Date in respect of all outstanding Transactions will
occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to
the extent analogous thereto, (8), and as of the time immediately
preceding the institution of the relevant proceeding or the presentation
of the relevant petition upon the occurrence with respect to such party
of an Event of Default specified in Section 5(a)(vii)(4) or, to the
extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party
will, promptly upon becoming aware of it, notify the other
party, specifying the nature of that Termination Event and each
Affected Transaction and will also give such other information
about that Termination Event as the other party may reasonably
require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and
there is only one Affected Party, or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party, the
Affected Party will, as a condition to its right to designate an
Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a
loss, excluding immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section 6(b)(i) all
its rights and obligations under this Agreement in respect of
the Affected Transactions to another of its Offices or
Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it
will give notice to the other party to that effect within such
20 day period, whereupon the other party may effect such a
transfer within 30 days after the notice is given under Section
6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the
other party, which consent will not be withheld if such other
party's policies in effect at such time would permit it to enter
into transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected
Parties, each party will use all reasonable efforts to reach
agreement within 30 days after notice thereof is given under
Section 6(b)(i) on action to avoid that Termination Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not
been effected with respect to all Affected Transactions
within 30 days after an Affected Party gives notice
under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit
Event Upon Merger or an Additional Termination Event
occurs, or a Tax Event Upon Merger occurs and the
Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in
the case of a Tax Event Upon Merger, any Affected Party in the
case of a Tax Event or an Additional Termination Event if there
is more than one Affected Party, or the party which is not the
Affected Party in the case of a Credit Event Upon Merger or an
Additional Termination Event if there is only one Affected Party
may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then continuing,
designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all
Affected Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given
under Section 6(a) or (b), the Early Termination Date will occur
on the date so designated, whether or not the relevant Event of
Default or Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under
Section 2(a)(i) or 2(e) in respect of the Terminated
Transactions will be required to be made, but without prejudice
to the other provisions of this Agreement. The amount, if any,
payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following
the occurrence of an Early Termination Date, each party will
make the calculations on its part, if any, contemplated by
Section 6(e) and will provide to the other party a statement (1)
showing, in reasonable detail, such calculations (including all
relevant quotations and specifying any amount payable under
Section 6(e)) and (2) giving details of the relevant account to
which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect
of any Early Termination Date under Section 6(e) will be payable
on the day that notice of the amount payable is effective (in
the case of an Early Termination Date which is designated or
occurs as a result of an Event of Default) and on the day which
is two Local Business Days after the day on which notice of the
amount payable is effective (in the case of an Early Termination
Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted
under applicable law) interest thereon (before as well as after
judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs,
the following provisions shall apply based on the parties' election in
the Schedule of a payment measure, either "Market Quotation" or "Loss,"
and a payment method, either the "First Method" or the "Second Method."
If the parties fail to designate a payment measure or payment method in
the Schedule, it will be deemed that "Market Quotation" or the "Second
Method," as the case may be, shall apply. The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results
from an Event of Default:--
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party
will pay to the Non-defaulting Party the excess, if a
positive number, of (A) the sum of the Settlement
Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the
Non-defaulting Party, if a positive number, the
Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be
payable equal to (A) the sum of the Settlement Amount
(determined by the Non- defaulting Party) in respect of
the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number,
the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the
Defaulting Party.
(4) Second Method and Loss. If the Second Method and
Loss apply, an amount will be payable equal to the
Non-defaulting Party's Loss in respect of this
Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the
Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results
from a Termination Event:--
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance
with Section 6(e)(i)(3), if Market Quotation applies,
or Section 6(e)(i)(4), if Loss applies, except that, in
either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be
references to the Affected Party and the party which is
not the Affected Party, respectively, and, if Loss
applies and fewer than all the Transactions are being
terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:--
(A) if Market Quotation applies, each party
will determine a Settlement Amount in respect
of the Terminated Transactions, and an amount
will be payable equal to (I) the sum of (a)
one-half of the difference between the
Settlement Amount of the party with the higher
Settlement Amount ("X") and the Settlement
Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency
Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent
of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine
its Loss in respect of this Agreement (or, if
fewer than all the Transactions are being
terminated, in respect of all Terminated
Transactions) and an amount will be payable
equal to one-half of the difference between
the Loss of the party with the higher Loss
("X") and the Loss of the party with the lower
Loss ("Y").
If the amount payable is a positive number, Y will pay
it to X; if it is a negative number, X will pay the
absolute value of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are
appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement
(and retained by such other party) during the period from the
relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount
is payable for the loss of bargain and the loss of protection
against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way
of security or otherwise) by either party without the prior written
consent of the other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer
of all or substantially all its assets to, another entity (but without
prejudice to any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest
in any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will
be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this
Agreement will be made in the relevant currency specified in this
Agreement for that payment (the "Contractual Currency"). To the extent
permitted by applicable law, any obligation to make payments under this
Agreement in the Contractual Currency will not be discharged or satisfied
by any tender in any currency other than the Contractual Currency, except
to the extent such tender results in the actual receipt by the party to
which payment is owed, acting in a reasonable manner and in good faith in
converting the currency so tendered into the Contractual Currency, of the
full amount in the Contractual Currency of all amounts payable in respect
of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual
Currency payable in respect of this Agreement, the party required to make
the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount
in the Contractual Currency so received exceeds the amount in the
Contractual Currency payable in respect of this Agreement, the party
receiving the payment will refund promptly the amount of such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early
termination in respect of this Agreement or (iii) in respect of a
judgment or order of another court for the payment of any amount
described in (i) or (ii) above, the party seeking recovery, after
recovery in full of the aggregate amount to which such party is entitled
pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid
in such other currency and will refund promptly to the other party any
excess of the Contractual Currency received by such party as a
consequence of sums paid in such other currency if such shortfall or such
excess arises or results from any variation between the rate of exchange
at which the Contractual Currency is converted into the currency of the
judgment or order for the purposes of such judgment or order and the rate
of exchange at which such party is able, acting in a reasonable manner
and in good faith in converting the currency received into the
Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of
or conversion into the Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law,
these indemnities constitute separate and independent obligations from
the other obligations in this Agreement, will be enforceable as separate
and independent causes of action, will apply notwithstanding any
indulgence granted by the party to which any payment is owed and will not
be affected by judgment being obtained or claim or proof being made for
any other sums payable in respect of this Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss
had an actual exchange or purchase been made.
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and
supersedes all oral communication and prior writings with respect
thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or electronic messages on
an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will
survive the termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the
rights, powers, remedies and privileges provided in this Agreement are
cumulative and not exclusive of any rights, powers, remedies and
privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver
in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be
deemed an original.
(ii) The parties intend that they are legally bound by the terms
of each Transaction from the moment they agree to those terms
(whether orally or otherwise). A Confirmation shall be entered
into as soon as practicable and may be executed and delivered in
counterparts (including by facsimile transmission) or be created
by an exchange of telexes or by an exchange of electronic
messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein
or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right,
power or privilege in respect of this Agreement will not be presumed to
operate as a waiver, and a single or partial exercise of any right, power
or privilege will not be presumed to preclude any subsequent or further
exercise, of that right, power or privilege or the exercise of any other
right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken
into consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or
home office represents to the other party that, notwithstanding the place
of booking office or jurisdiction of incorporation or organisation of
such party, the obligations of such party are the same as if it had
entered into the Transaction through its head or home office. This
representation will be deemed to be repeated by such party on each date
on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and
receives payments or deliveries for the purpose of a Transaction without
the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office
through which it makes and receives payments or deliveries with respect
to a Transaction will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including
legal fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any
Credit Support Document to which the Defaulting Party is a party or by
reason of the early termination of any Transaction, including, but not
limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a
notice or other communication under Section 5 or 6 may not be given by
facsimile transmission or electronic messaging system) to the address or
number or in accordance with the electronic messaging system details
provided (see the Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the
date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile
machine);
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the
date that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received, unless the date of that delivery
(or attempted delivery) or that receipt, as applicable, is not a
Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of
business on a Local Business Day, in which case that
communication shall be deemed given and effective on the first
following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system
details at which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings
relating to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New
York and the United States District Court located in the Borough
of Manhattan in New York City, if this Agreement is expressed to
be governed by the laws of the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an
inconvenient forum and further waives the right to object, with
respect to such Proceedings, that such court does not have any
jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing
Proceedings in any other jurisdiction (outside, if this Agreement is
expressed to be governed by English law, the Contracting States, as
defined in Section 1(3) of the Civil Jurisdiction and Judgments Xxx 0000
or any modification, extension or re-enactment thereof for the time being
in force) nor will the bringing of Proceedings in any one or more
jurisdictions preclude the bringing of Proceedings in any other
jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it
and on its behalf, service of process in any Proceedings. If for any
reason any party's Process Agent is unable to act as such, such party
will promptly notify the other party and within 30 days appoint a
substitute process agent acceptable to the other party. The parties
irrevocably consent to service of process given in the manner provided
for notices in Section 12. Nothing in this Agreement will affect the
right of either party to serve process in any other manner permitted by
law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its
revenues and assets (irrespective of their use or intended use), all
immunity on the grounds of sovereignty or other similar grounds from (i)
suit, (ii) jurisdiction of any court, (iii) relief by way of injunction,
order for specific performance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v)
execution or enforcement of any judgment to which it or its revenues or
assets might otherwise be entitled in any Proceedings in the courts of
any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any
Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b)
with respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person,
any entity controlled, directly or indirectly, by the person, any entity
that controls, directly or indirectly, the person or any entity directly
or indirectly under common control with the person. For this purpose,
"control" of any entity or person means ownership of a majority of the
voting power of the entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with
Section 6(d)(ii)) on which that amount is payable, the Default Rate;
(c) is respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or
after the date on which the relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is
specified as such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it)
if it were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with
Section 6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or
former connection between the jurisdiction of the government or taxation
authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection
arising from such recipient or related person being or having been a
citizen or resident of such jurisdiction, or being or having been
organized, present or engaged in a trade or business in such
jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection
arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the
case of tax matters, by the practice of any relevant governmental revenue
authority) and "LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) (a) in relation to any obligation
under Section 2(a)(i), in the place(s) specified in the relevant
Confirmation or, if not so specified, as otherwise agreed by the parties
in writing or determined pursuant to provisions contained, or
incorporated by reference, in this Agreement, (b) in relation to any
other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of
such payment, (c) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), in the city
specified in the address for notice provided by the recipient and, in the
case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to
such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to
be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated
Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of
such party but without duplication, loss or cost incurred as a result of
its terminating, liquidating, obtaining or reestablishing any hedge or
related trading position (or any gain resulting from any of them). Loss
includes losses and costs (or gains) in respect of any payment or
delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early
Termination Date and not made, except, so as to avoid duplication, if
Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not
include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but
need not) determine its Loss by reference to quotations of relevant rates
or prices from one or more leading dealers in the relevant markets.
"MARKET QUOTATION" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount determined
on the basis of quotations from Reference Market-makers. Each quotation
will be for an amount, if any, that would be paid to such party
(expressed as a negative number) or by such party (expressed as a
positive number) in consideration of an agreement between such party
(taking into account any existing Credit Support Document with respect to
the obligations of such party) and the quoting Reference Market-maker to
enter into a transaction (the "Replacement Transaction") that would have
the effect of preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition
precedent) by the parties under Section 2(a)(i) in respect of such
Terminated Transaction or group of Terminated Transactions that would,
but for the occurrence of the relevant Early Termination Date, have been
required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but
for the relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be
subject to such documentation as such party and the Reference
Market-maker may, in good faith, agree. The party making the
determination (or its agent) will request each Reference Market-maker to
provide its quotation to the extent reasonably practicable as of the same
day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day
and time as of which those quotations are to be obtained will be selected
in good faith by the party obliged to make a determination under Section
6(e), and, if each party is so obliged, after consultation with the
other. If more than three quotations are provided, the Market Quotation
will be the arithmetic mean of the quotations, without regard to the
quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the Non-defaulting Party (as
certified by it) if it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's
head or home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of
notice or the lapse of time or both, would constitute an Event of
Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant
market selected by the party determining a Market Quotation in good faith
(a) from among dealers of the highest credit standing which satisfy all
the criteria that such party applies generally at the time in deciding
whether to offer or to make an extension of credit and (b) to the extent
practicable, from among such dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions
(a) in which the party is incorporated organized, managed and controlled
or considered to have its seat, (b) where an Office through which the
party is acting for purposes of this Agreement is located, (c) in which
the party executes this Agreement and (d) in relation to any payment,
from or through which such payment is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is
to be made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the
payer of an amount under Section 6 is entitled or subject (whether
arising under this Agreement, another contract, applicable law or
otherwise) that is exercised by, or imposed on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early
Termination Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation cannot be determined
or would not (in the reasonable belief of the party making the
determination) produce a commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or
surety or otherwise) in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such
party) and the other party to this Agreement (or any Credit Support
Provider of such other party or any applicable Specified Entity of such
other party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any
combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing
authority in respect of any payment under this Agreement other than a
stamp, registration, documentation or similar tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination
Date (a) if resulting from a Termination Event, all Affected Transactions
and (b) if resulting from an Event of Default, all Transactions (in
either case) in effect immediately before the effectiveness of the notice
designating that Early Termination Date (or, if "Automatic Early
Termination" applies, immediately before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency amount
and, in respect of any amount denominated in a currency other than the
Termination Currency (the "Other Currency"), the amount in the
Termination Currency determined by the party making the relevant
determination as being required to purchase such amount of such Other
Currency as at the relevant Early Termination Date, or, if the relevant
Market Quotation or Loss (as the case may be), is determined as of a
later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected
as provided below) for the purchase of such Other Currency with the
Termination Currency at or about 11:00 a.m. (in the city in which such
foreign exchange agent is located) on such date as would be customary for
the determination of such a rate for the purchase of such Other Currency
for value on the relevant Early Termination Date or that later date. The
foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party
and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or
an Additional Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of
the cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on
or prior to such Early Termination Date and which remain unpaid as at
such Early Termination Date and (b) in respect of each Terminated
Transaction, for each obligation under Section 2(a)(i) which was (or
would have been but for Section 2(a)(iii)) required to be settled by
delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an
amount equal to the fair market value of that which was (or would have
been) required to be delivered as of the originally scheduled date for
delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been
required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will
be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in
clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so
obliged, it shall be the average of the Termination Currency Equivalents
of the fair market values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on
the first page of this document.
XXXXXX STORES LIQUIDATING TRUST
(Name of Party)
By: /s/ Xxxxxxxxx X. Xxxxxx
Name: Xxxxxxxxx X. Xxxxxx
Title: Manager and Chief Executive Officer
CANADIAN IMPERIAL BANK OF COMMERCE
(Name of Party)
By: /s/ Xxxxx X. Xxxxxxx
Name: Xxxxx X. Xxxxxxx
Title: Vice President
By: /s/ Xxxxxxx Xxxx
Name: Xxxxxxx Xxxx
Title: Vice President
EXECUTION COPY
SCHEDULE TO THE MASTER AGREEMENT
DATED AS OF NOVEMBER 19, 1997
BETWEEN
CANADIAN IMPERIAL BANK OF COMMERCE ("PARTY A")
AND
XXXXXX STORES LIQUIDATING TRUST ("COUNTERPARTY")
Part 1
Termination Provisions
In this Agreement: -
(1) "Specified Entity" shall not apply to Party A or the Counterparty.
(2) "Specified Transaction" will have the meaning specified in Section
14.
(3) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and to the Counterparty, and for such purpose:
(a) "Specified Indebtedness" will have the meaning
specified in Section 14;
(b) "Threshold Amount" means 3% of the net assets of Party
A, in the case of Party A, and 3% of the net assets of
the Counterparty, in the case of the Counterparty; and
(c) Section 5(a)(vi) will be deemed to be amended to
include the following:
"or (3) a default or event of default (however
described) occurs and is continuing which entitles any
person or entity to terminate its commitment under any
agreement to lend or advance or make available funds to
a party in respect of an aggregate amount in excess of
the Threshold Amount."
(4) "Termination Currency" means United States Dollars.
(5) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Party A or the Counterparty.
(6) The "Automatic Early Termination" provisions of Section 6(a) will not
apply to Party A or the Counterparty.
(7) For the purpose of the "PAYMENTS ON EARLY TERMINATION" provisions of
Section 6(e), the Second Method and Loss will apply. Counterparty agrees
that if an Early Termination Date occurs and Party A is the party
calculating Loss in connection therewith, and if at the time of such
Early Termination Date any Shares of Stock pledged to Party A pursuant to
a Collateral Pledge Agreement executed by Counterparty are subject to any
restrictions on their transferability (including any restriction arising
under the securities laws) or if for any other reason Party A is unable
at such time to liquidate any Collateral pledged by Counterparty to
secure Counterparty's obligations to Party A, Party A may, in order to
more accurately determine and minimize its Loss with respect to any
Terminated Transaction, calculate and determine such Loss as of the date
or dates following such Early Termination Date on which Party A, in its
reasonable good faith judgment, is able to sell such Collateral at such
price or prices it deems reasonable under the circumstances and terminate
any hedge it may have in connection with such Terminated Transaction.
Part 2
Tax Representations
None.
Part 3
Agreements to Deliver Documents
For the purpose of Section 4(a)(i) or 4(a)(ii) of the Agreement, each
party (as specified below) agrees to deliver the following documents:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION
DELIVER DOCUMENT CERTIFICATE DELIVERED 3(D) REPRESENTATION
Counterparty Collateral Pledge Upon execution of the YES
Agreement transaction
Counterparty Enforceability Opinion Upon execution of the NO
transaction
Party A Enforceability Opinion Upon execution of the NO
transaction
all of such documents to be in form and substance satisfactory to Party A
or Counterparty, as applicable.
Part 4
Miscellaneous
(1) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO CHOICE OF LAW DOCTRINE.
(2) Notices.
(a) In connection with Section 12(a), all notices to Party
A shall, with respect to any particular Transaction, be
sent to the address, telex number or facsimile number
specified in the relevant Confirmation and any notice
for purposes of Sections 5 or 6 shall be sent to the
address or telex number specified below:
Addresses for notices or communications to Party A:
Office: Toronto, Canada
Address: Head Xxxxxx - Xxxxxxxx Xxxxx, Xxxxxxx,
Xxxxxxx, Xxxxxx X0X I A2
Attention: Manager, Swap Operations
Telex No: 065-24116 Answerback: CANBANK TOR
Facsimile No: 000-000-0000 Telephone: 000-000-0000
(Only with respect to Transactions through that Office)
Office: London, England
Address: Xxxxxxx Xxxxxx, Xxxxxxx Xxxx,
Xxxxxx XX0 0XX, Xxxxxxx
Attention: Executive Vice President
Telex No: 889342 Answerback: CIBC G
Facsimile No: 00-000-0000 Telephone: 00-000-0000
(Only with respect to Transactions through that Office)
Office: New York, U.S.A.
Address: 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
X.X.X. 00000
Attention: Manager, Swaps Operations
Telex No: Answerback:
Facsimile No: 000-000-0000 Telephone: 000-000-0000
(Only with respect to Transactions through that Office)
(b) In connection with Section 12(a), all notices to the
Counterparty shall, with respect to any particular
Transaction, be sent to the address, telex number or
purposes of Sections 5 or 6 shall be sent to the
address or telex number specified below:
Address: c/o The Director's Network, Inc.
000 Xxxxx Xxxxxx, Xxxxx 000
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxx X. Xxxxxx
Facsimile No: 000-000-0000
Telephone: 000-000-0000
(3) Netting of Payments. Subparagraph (ii) of Section 2(c) of this
Agreement will not apply for the purpose of Section 2(c) with
respect to all Transactions under this Agreement with effect
from the date of this Agreement.
(4) Offices; Multibranch Party.
(a) Section 10(a) shall apply to this Agreement.
(b) For the purpose of Section 10(c):
(i) Party A is a Multibranch Party and may act through
its Toronto, New York and London Offices; and
(ii) The Counterparty is not a Multibranch Party.
(5) Credit Support Documents.
The Collateral Pledge Agreement dated of even date herewith
shall be a Credit Support Document for purposes of this
Agreement.
(6) Credit Support Provider.
None.
Part 5
Other Provisions
(1) ISDA Definitions. Reference is hereby made to the 1991 ISDA
Definitions (the "1991 Definitions"), the 1992 ISDA FX and
Currency Option Definitions (the "FX Definitions") and the 1994
ISDA Equity Option Definitions (the "Equity Definitions") each
as published by the International Swap Dealers Association Inc.,
which are hereby incorporated by reference herein. Any terms
used and not otherwise defined herein which are contained in the
1991 Definitions, FX Definitions or the Equity Definitions shall
have the meaning set forth therein.
(2) Scope of Agreement. Notwithstanding anything contained in the
Agreement to the contrary, if the parties enter into any
Specified Transaction, such Specified Transaction shall be
subject to, governed by and construed in accordance with the
terms of this Agreement unless the Confirmation relating thereto
shall specifically state to the contrary. Each such Specified
Transaction shall be a Transaction for the purposes of this
Agreement.
(3) Inconsistency. In the event of any inconsistency between any of
the following documents, the relevant document first listed
below shall govern: (i) a Confirmation; (ii) the Schedule; (iii)
the 1991 Definitions, the Equity Definitions or the FX
Definitions; and (iv) the printed form of ISDA Master Agreement.
(4) Right of Set-Off.
(A) Party A has committed to providing a loan (the "Loan") to
Counterparty, as evidenced by a Secured Term Note dated as of
December 31, 1997 (the "Note"), and Counterparty has agreed to
repay the Loan in accordance with the terms of the Note if
Counterparty exercised its right to receive such Loan.
Counterparty agrees that Party A's obligation to make any
payment due Counterparty in connection with this Agreement
(including any Transaction executed hereunder) shall be
conditioned upon Counterparty's payment in full of all amounts,
if any, due and payable to Party A (acting through its New York
agency, or any permitted transferee thereof) under the
Note and any and all other agreements Counterparty may have with
Party A (regardless of the Office or agency through which it is
acting) at the time such payment is due.
(B) Upon any termination of a Transaction, Party A will have the
right to set-off or withhold any payment it (including any of
its branches or agencies) may owe Counterparty hereunder in
satisfaction of any obligation of the Counterparty to Party A
under the Note and any and all other agreements Counterparty may
have executed with Party A (including any branch or agency
thereof), irrespective of whether such obligations are at such
time matured or unmatured. Party A's obligations to Counterparty
in connection with such Transaction shall be deemed satisfied
and discharged to the extent of any such set off or withholding.
(5) Affiliate. "Affiliate" will have the meaning specified in Section 14.
(6) Calculation Agent. The Calculation Agent will be Party A unless
Party A is the Defaulting Party in which case the Calculation
Agent will be the Counterparty. All determinations by the
Calculation Agent shall be made in good faith and after
consultation with the other party and shall be binding and
conclusive on the parties absent manifest error.
(7) WAIVER OF JURY TRIAL. 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 AGREEMENT OR ANY CREDIT SUPPORT DOCUMENT. EACH PARTY (i)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER
PARTY OR ANY CREDIT SUPPORT PROVIDER 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 AGREEMENT AND PROVIDE FOR ANY
CREDIT SUPPORT DOCUMENT, AS APPLICABLE, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(8) Additional Representations. (i) Section 3 is amended by adding
the following subsections thereto:
"(g) Line of Business. This Agreement has been, and
each Transaction hereunder will be, entered into for
purposes of managing its borrowings or investments or
in connection with a line of business.
(h) Net Worth. The Counterparty hereby represents and
warrants that the Counterparty (i) has individual net
worth that exceeds USD 5,000,000 and (ii) has such
knowledge and experience in financial and business
matters that the Counterparty is capable of evaluating
the merits and risks of any Transactions under this
Agreement."
(9) Consent to Tape Recording. Each of Party A and the Counterparty
hereby consents to the tape recording of all conversations
between the Counterparty and the Counterparty's representatives
and Party A.
(10) No Reliance, etc. In connection with the negotiation of, the
entering into, and the confirming of the execution of this
Agreement, any Credit Support Document, each Transaction and any
other documentation relating to this Agreement to which it is a party
or that it is required by this Agreement to deliver, each party
hereby represents and warrants to the other that:
(i) the other party hereto or thereto is entering
into this Agreement and each Transaction as
principal (and not as agent or in any other
capacity) and is not acting as fiduciary for
it;
(ii) it is not relying (for purposes of making any
investment decision or otherwise) upon any
representations (whether written or oral) of
the other party hereto or thereto other than
the representations expressly set forth in
this Agreement, in such Credit Support
Document and in any Confirmation;
(iii) the other party hereto or thereto has not
given to it (directly or indirectly through
any other person) any assurance or guaranty as
to the success, profitability, return,
performance, result, effect, consequence, or
benefit (either legal, regulatory, tax,
financial, accounting, or otherwise) of this
Agreement, such Credit Support Document, such
Transaction or other documentation;
(iv) it 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 investment, hedging and trading
decisions (including decisions regarding the
appropriateness or suitability of any
Transaction pursuant to this Agreement) based
upon its own judgment and upon any advice from
such advisors as it has deemed necessary;
(v) it has determined that the rates, prices or
amounts and other terms of each Transaction
and the indicative quotations (if any)
provided by the other party hereto or thereto
reflect those in the relevant market for
similar transactions, and all trading
decisions have been the result of arm's-length
negotiations between the parties; and
(vi) it is entering into this Agreement, such
Credit Support Document, each Transaction and
any other documentation relating to this
Agreement with a full understanding of all of
the terms, conditions and risks hereof and
thereof (economic and otherwise), and it is
capable of assuming and willing to assume
(financially and otherwise) those risks.
(11) Generic Risk Disclosure Statement. Counterparty represents to
Party A that it has read and understands the Generic Risk
Disclosure Statement provided to the Counterparty by Party A.
(12) Illegality. The "Illegality" provisions Section 5(b)(i) shall be
expanded to include the obligation of a party to comply with any
directive, direction or similar order issued or given by any
government agency or authority with competent jurisdiction
(whether or not having the force of law) which prohibits its
performance under this Agreement, and in that event such party
will be the Affected Party for the purpose of that Section.
(13) Transfer. In addition to the permitted transfers set out in
Section 7 of this Agreement, this Agreement or any interest or
obligation of Party A in or under this Agreement may be
transferred to and assumed by any Affiliate of Party A, provided
that:
(i) the liabilities of such Affiliate (including
such assumed obligations) are unconditionally
guaranteed by Party A on terms reasonably
satisfactory to the Counterparty; and
(ii) such transfer and assumption will only be
effective upon the Counterparty receiving
notice of such transfer and assumption signed
by Party A and acknowledged by such Affiliate.
Upon the effective date of a transfer and assumption:
(i) each of Party A and the Counterparty shall
have no further rights against or obligations
to the other in connection with this Agreement
or any Transaction (other than Counterparty's
rights and Party A's obligations in connection
with such guarantee); and
(ii) each of such Affiliate and the Counterparty
shall have the same rights against, and shall
owe the same obligations to, the other in
connection with each Transaction as if such
Affiliate had been named as a party to that
Transaction and was a party to this Agreement
instead of Party A.
(14) U.S. Provisions.
(i) Master Agreement. The parties hereto intend
that this Agreement shall be a master
agreement (as described in 11 U.S.C. 101 and
12 U.S.C. 1821(e)(8)(D)(vii)) for a "swap
agreement" (as defined in 11 U.S.C. 101 and 12
U.S.C. 1821(e)(8)(D)(vi)).
Please confirm your agreement to the terms of the foregoing Schedule by
signing below.
CANADIAN IMPERIAL BANK OF COMMERCE XXXXXX STORES LIQUIDATING TRUST
/s/ Xxxxx X. Xxxxxxx /s/ Xxxxxxxxx X. Xxxxxx
Xxxxx X. Xxxxxxx Xxxxxxxxx X. Xxxxxx
Vice President Manager and Chief Executive Officer
/s/ Xxxxxxx Xxxx
Xxxxxxx Xxxx
Vice President
