EXHIBIT 10.2
[LETTERHEAD]
VERSION 1
GROSS PAYING SECURITIES
GLOBAL MASTER REPURCHASE AGREEMENT
THIS AGREEMENT IS TO BE USED FOR REPOS OR REVERSE REPOS AND BUY/SELL BACKS OF
SECURITIES OTHER THAN EQUITIES, U.S. TREASURY INSTRUMENTS AND NET PAYING
SECURITIES
DATED AS OF December 11, 1998
--------------------
BETWEEN: Xxxxxxx Xxxxx Xxxxxx Inc. as Agent for
Salomon Brothers International Limited
-------------------------------------- ("PARTY A")
and
NC Residual II Corporation
--------------------------------- ("PARTY B")
1. APPLICABILITY
(a) From time to time the parties hereto may enter into transactions in which
one party, acting through a Designated Office, ("SELLER") agrees to sell to
the other, acting through a Designated Office, ("BUYER") securities and
financial instruments ("SECURITIES") (other than equities, U.S. Treasury
instruments and Net Paying Securities) against the payment of the purchase
price by Buyer to Seller, with a simultaneous agreement by Buyer to sell to
Seller Securities equivalent to such Securities at a date certain or on
demand against the payment of the purchase price by Seller to Buyer.
(b) Each such transaction (which may be a repurchase transaction ("REPURCHASE
TRANSACTION") or a buy and sell back transaction ("BUY/SELL BACK
TRANSACTION")) shall be referred to herein as a "TRANSACTION" and shall be
governed by this Agreement, including any supplemental terms or conditions
contained in Annex I hereto, unless otherwise agreed in writing. If this
Agreement may be applied to Buy/Sell Back Transactions, this shall be
specified in Annex I, and the provisions of Annex III shall apply to such
Buy/Sell Back Transactions. If Transactions are to be effected under this
Agreement by either party as an agent, this shall be specified in Annex I,
and the provisions of Annex IV shall apply to such Agency Transactions.
2. DEFINITIONS
(a) "ACT OF INSOLVENCY" shall occur with respect to any party hereto upon:
(i) its making a general assignment for the benefit of, or entering
into a reorganisation, arrangement, or composition with creditors;
or
(ii) its admitting in writing that it is unable to pay its debts as
they become due; or
(iii) its seeking, consenting to or acquiescing in the appointment of
any trustee, administrator, receiver or liquidator or analogous
officer of it or any material part of its property; or
(iv) the presentation or filing of a petition in respect of it (other
than by the counterparty to this Agreement in respect of any
obligation under this Agreement) in any court or
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before any agency alleging or for the bankruptcy, winding-up or
insolvency of such party (or any analogous proceeding) or seeking
any reorganisation, arrangement, composition, re-adjustment,
administration, liquidation, dissolution or similar relief under
any present or future statute, law or regulation, such petition
(except in the case of a petition for winding-up or any analogous
proceeding, in respect of which no such 30 day period shall apply)
not having been stayed or dismissed within 30 days of its filing; or
(v) the appointment of a receiver, administrator, liquidator or
trustee or analogous officer of such party or over all or any
material part of such party's property; or
(vi) the convening of any meeting of its creditors for the purposes of
considering a voluntary arrangement as referred to in section 3 of
the Insolvency Act 1986 (or any analogous proceeding);
(b) "AGENCY TRANSACTION", the meaning specified in paragraph 1 of Annex IV
hereto;
(c) "BASE CURRENCY", the currency indicated in Annex I hereto;
(d) "BUSINESS DAY":
(i) in relation to the settlement of any Transaction which is to be
settled through Cedel or Euroclear, a day on which Cedel or, as the
case may be, Euroclear is open to settle business in the currency in
which the Purchase Price and the Repurchase Price are denominated;
(ii) in relation to the settlement of any Transaction which is to be
settled through a settlement system other than Cedel or Euroclear,
a day on which that settlement system is open to settle such
Transaction;
(iii) in relation to any delivery of Securities not falling within (i) or
(ii) above, a day on which banks are open for business in the place
where delivery of the relevant Securities is to be effected; and
(iv) in relation to any obligation to make a payment not falling within
(i) or (ii) above, a day other than a Saturday or a Sunday on which
banks are open for business in the principal financial centre of
the country of which the currency in which the payment is denominated
is the official currency and, if different, in the place where any
account designated by the parties for the making or receipt of the
payment is situated (or, in the case of ECU, a day on which ECU
clearing operates);
(e) "CASH MARGIN", a cash sum paid to Buyer or Seller in accordance with
paragraph 4;
(f) "CEDEL", Cedel Bank, societe anonyme;
(g) "CONFIRMATION", the meaning specified in paragraph 3(b);
(h) "CONTRACTUAL CURRENCY", the meaning specified in paragraph 7(a);
(i) "DEFAULTING PARTY", the meaning specified in paragraph 10;
(j) "DEFAULT MARKET VALUE" with respect to any Securities on any date:
(i) in the case of Securities to be delivered to the Defaulting Party,
(aa) if the non-Defaulting Party has between the occurrence of the
relevant Event of Default and the Default Valuation Time (as
defined below) sold Securities forming part of the same issue
and being of an identical type and description to those
Securities and in substantially the same amount as those
Securities, the net proceeds of sale (after deducting all
reasonable costs, fees and expenses incurred in connection
therewith) and
(bb) failing such sale before the Default Valuation Time, the
Market Value of such Securities at the Default Valuation Time;
(ii) in the case of Securities to be delivered by the Defaulting Party,
(aa) if the non-Defaulting Party has between the occurrence of the
relevant Event of Default and the Default Valuation Time
purchased Securities forming part of the
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same issue and being of an identical type and description to
those Securities and in substantially the same amount as those
Securities, the cost of such purchase (including all reasonable
costs, fees and expenses incurred in connection therewith) and
(bb) failing such purchase before the Default Valuation Time, the
amount it would cost to buy such Securities at the Default
Valuation Time at the best available offer price therefor (and
where different offer prices are available for different delivery
dates, such offer price in respect of the earliest available such
delivery date) on the most appropriate market, together with all
reasonable costs, fees and expenses that would be incurred in
connection therewith (calculated on the assumption that the
aggregate thereof is the least that could reasonably be expected
to be paid in order to carry out the Transaction),
in each case as determined by the non-Defaulting Party; and for this purpose
the "DEFAULT VALUATION TIME" means, with respect to any Securities
(A) if the relevant Event of Default occurs during normal business
hours on a day which is a dealing day in the most appropriate
market for Securities of the relevant description (as determined
by the non-Defaulting Party), the close of business in that
market on the following dealing day;
(B) in any other case, the close of business on the second dealing
day in that market after the day on which the relevant Event of
Default occurs;
Where the amount of any Securities sold or purchased as mentioned in (i)(aa)
or (ii)(aa) above is not identical to that of the Securities to be valued
for the purposes of this definition, the Default Market Value of those
Securities shall be ascertained by dividing the net proceeds of sale or cost
of purchase by the amount of the Securities sold or purchased so as to obtain
a net unit price and multiplying that net unit price by the amount of the
Securities to be valued;
(k) "DEFAULT NOTICE", a written notice served by the non-Defaulting Party on
the Defaulting Party under paragraph 10 stating that an event shall be treated
as an Event of Default for the purposes of this Agreement;
(l) "DESIGNATED OFFICE", with respect to a party, a branch or office of that
party which is specified as such in Annex I hereto or such other branch or
office as may be agreed to by the Parties;
(m) "DISTRIBUTIONS", the meaning specified in sub-paragraph(s) below;
(n) "EQUIVALENT MARGIN SECURITIES", Securities equivalent to Securities
previously transferred as Margin Securities;
(o) "EQUIVALENT SECURITIES", with respect to a Transaction, Securities
equivalent to Purchased Securities under that Transaction. If and to the extent
that such Purchased Securities have been redeemed the expression shall mean a
sum of money equivalent to the proceeds of the redemption;
(p) Securities are "EQUIVALENT TO" other Securities for the purposes of this
Agreement if they are: (i) of the same issuer; (ii) part of the same issue;
and (iii) of an identical type, nominal value, description and (except where
otherwise stated) amount as those other Securities;
(q) "EUROCLEAR", Xxxxxx Guaranty Trust Company of New York, Brussels office,
as operator of the Euroclear System;
(r) "EVENT OF DEFAULT", the meaning specified in paragraph 10 hereof;
(s) "INCOME", with respect to any Security at any time, all interest,
dividends or other distributions thereon ("DISTRIBUTIONS");
(t) "INCOME PAYMENT DATE", with respect to any Securities, the date on which
Income is paid in respect of such Securities, or, in the case of registered
Securities, the date by reference to which particular registered holders are
identified as being entitled to payment of Income;
(u) "LIBOR", in relation to any sum in any currency, the one-month London
Inter Bank Offered Rate in respect of that currency as quoted on Page 3750 on
the Telerate Service (or such other page
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as may replace Page 3750 on that service) as of 11:00 a.m., London time, on
the date on which it is to be determined;
(v) "MARGIN RATIO", with respect to a Transaction, the Market Value of the
Purchased Securities at the time when the Transaction was entered into
divided by the Purchase Price (and so that, where a Transaction relates to
Securities of different descriptions and the Purchase Price is apportioned by
the parties among Purchased Securities of each such description, a separate
Margin Ratio shall apply in respect of Securities of each such description),
or such other proportion as the parties may agree with respect to that
Transaction;
(w) "MARGIN SECURITIES", in relation to a Margin Transfer, Securities
reasonably acceptable to the party calling for such Margin Transfer;
(x) "MARGIN TRANSFER", any, or any combination, of the payment or repayment
of Cash Margin and the transfer of Margin Securities or Equivalent Margin
Securities;
(y) "MARKET VALUE", with respect to any Securities as of any time on any
date, the price for such Securities at such time on such date obtained from a
generally recognised source agreed to by the parties (and where different
prices are obtained for different delivery dates, the price so obtainable for
the earliest available such delivery date) (provided that the price of
Securities that are suspended shall (for the purposes of paragraph 4) be nil
unless the parties otherwise agree and (for all other purposes) shall be the
price of those Securities as of close of business on the dealing day in the
relevant market last preceding the date of suspension) plus the aggregate
amount of income which, as of such date, has accrued but not yet been paid in
respect of the Securities to the extent not included in such price as of such
date, and for these purposes any sum in a currency other than the Contractual
Currency for the Transaction in question shall be converted into such
Contractual Currency at the Spot Rate prevailing at the relevant time;
(z) "NET EXPOSURE", the meaning specified in paragraph 4(c);
(aa) the "NET MARGIN" provided to a party at any time, the excess (if any) at
that time of (i) the sum of the amount of Cash Margin paid to that party
(including accrued interest on such Cash Margin which has not been paid to
the other party) and the Market Value of Margin Securities transferred to
that party under paragraph 4(a) (excluding any Cash Margin which has been
repaid to the other party and any Margin Securities in respect of which
Equivalent Margin Securities have been transferred to the other party) over
(ii) the sum of the amount of Cash Margin paid to the other party (including
accrued interest on such Cash Margin which has not been paid by the other
party) and the Market Value of Margin Securities transferred to the other
party under paragraph 4(a) (excluding any Cash Margin which has been repaid
by the other party and any Margin Securities in respect of which Equivalent
Margin Securities have been transferred by the other party) and for this
purpose any amounts not denominated in the Base Currency shall be converted
into the Base Currency at the Spot Rate prevailing at the relevant time;
(bb) "NET PAYING SECURITIES", Securities which are of a kind such that, were
they to be the subject of a Transaction to which paragraph 5 applies, any
payment made by Buyer under paragraph 5 would be one in respect of which
either Buyer would or might be required to make a withholding or deduction
for or on account of taxes or duties or Seller would or might be required to
make or account for a payment for or on account of taxes or duties (in each
case other than tax on overall net income) by reference to such payment;
(cc) "NEW PURCHASED SECURITIES", the meaning specified in paragraph 8(a) of
this Agreement;
(dd) "PRICE DIFFERENTIAL", with respect to any Transaction as of any date,
the aggregate amount obtained by daily application of the Pricing Rate for
such Transaction to the Purchase Price for such Transaction (on a 360 day
basis or 365 day basis in accordance with the applicable ISMA convention,
unless otherwise agreed between the parties for the Transaction), for the
actual number of days during the period commencing on (and including) the
Purchase Date for such Transaction and ending on (but excluding) the date of
calculation or, if earlier, the Repuchase Date;
(ee) "PRICING RATE", which respect to any Transaction, the per annum
percentage rate for calculation of the Price Differential agreed to by Buyer
and Seller in relation to that Transaction;
(ff) "PURCHASE DATE", with respect to any Transaction, the date on which
Purchased Securities are to be sold by Seller to Buyer in relation to that
Transaction;
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(gg) "PURCHASE PRICE", on the Purchase Date, the price at which Purchased
Securities are sold or are to be sold by Seller to Buyer;
(hh) "PURCHASED SECURITIES", with respect to any Transaction, the Securities
sold or to be sold by Seller to Buyer under that Transaction, and any New
Purchased Securities transferred by Seller to Buyer under paragraph 8 of this
Agreement in respect of that Transaction;
(ii) "REPURCHASE DATE", with respect to any Transaction, the date on which
Buyer is to sell Equivalent Securities to Seller in relation to that
Transaction;
(jj) "REPURCHASE PRICE", with respect to any Transaction and as of any date,
the sum of the Purchase Price and the Price Differential as of such date;
(kk) "SPOT RATE", where an amount in one currency is to be converted into a
second currency on any date, unless the parties otherwise agree, the spot
rate of exchange quoted by Barclays Bank PLC in the London inter bank market
for the sale by it of such second currency against a purchase by it of such
first currency;
(ll) "TERM", with respect to any Transaction, the interval of time commencing
with the Purchase Date and ending with the Repurchase Date;
(mm) "TERMINATION", with respect to any Transaction, refers to the
requirement with respect to such Transaction for Buyer to sell Equivalent
Securities against payment by Seller of the Repurchase Price in accordance
with paragraph 3(f), and references to a Transaction having a "FIXED TERM" or
being "TERMINABLE UPON DEMAND" shall be construed accordingly;
(nn) "TRANSACTION EXPOSURE", with respect to any Transaction at any time
during the period from the Purchase Date to the Repurchase Date (or, if
later, the date on which Equivalent Securities are delivered to Seller or the
Transaction is terminated under paragraph 10(e) or 10(f)), the difference
between (i) the Repurchase Price at such time multiplied by the applicable
Margin Ratio (or, where the Transaction relates to Securities of more than
one description to which different Margin Ratios apply, the amount produced
by multiplying the Repurchase Price attributable to Equivalent Securities of
each such description by the applicable Margin Ratio and aggregating the
resulting amounts, the Repurchase Price being for this purpose attributed to
Equivalent Securities of each such description in the same proportions as
those in which the Purchase Price was apportioned among the Purchased
Securities) and (ii) the Market Value of Equivalent Securities at such time.
If (i) is greater than (ii), Buyer has a Transaction Exposure for that
Transaction equal to that excess. If (ii) is greater than (i), Seller has a
Transaction Exposure for that Transaction equal to that excess; and
(oo) except in paragraphs 14(b)(i) and 18, references in this Agreement to
"WRITTEN" communications and communications "IN WRITING" include
communications made through any electronic system agreed between the
parties which capable of reproducing such communications in hard copy form.
3. INITIATION; CONFIRMATION; TERMINATION
(a) A Transaction may be entered into orally or in writing at the initiation
of either Buyer or Seller.
(b) Upon agreeing to enter into a Transaction hereunder Buyer or Seller (or
both), as shall have been agreed, shall promptly deliver to the other party
written confirmation of such Transaction (a "CONFIRMATION").
The Confirmation shall describe the Purchased Securities (including CUSIP or
CINS or other identifying number or numbers, if any), identify Buyer and
Seller and set forth-
(i) the Purchase Date;
(ii) the Purchase Price;
(iii) the Repurchase Date, unless the Transaction is to be terminable on
demand (in which case the Confirmation will state that it is
terminable on demand);
(iv) the Pricing Rate applicable to the Transaction;
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(v) in respect of each party the details of the bank account[s] to
which payments to be made hereunder are to be credited;
(vi) where Annex III applies, whether the Transaction is a Repurchase
Transaction or a Buy/Sell Back Transaction;
(vii) where Annex IV applies, whether the Transaction is an Agency
Transaction and, if so, the identity of the party which is acting as
agent and the name, code or identifier of the Principal; and
(viii) any additional terms or conditions of the Transaction;
and may be in the form of Annex II hereto or may be in any other form which
the parties agree.
The Confirmation relating to a Transaction shall, together with this
Agreement, constitute prima facie evidence of the terms agreed between Buyer
and Seller for that Transaction, unless objection is made with respect to the
Confirmation promptly after receipt thereof. In the event of any conflict
between the terms of such Confirmation and this Agreement, the Confirmation
shall prevail in respect of that Transaction and those terms only.
(c) On the Purchase Date for a Transaction, Seller shall transfer the
Purchased Securities to Buyer or its agent against the payment of the Purchase
Price by Buyer.
(d) Termination of a Transaction will be effected, in the case of on demand
Transactions, on the date specified for Termination in such demand, and, in
the case of fixed term Transactions, on the date fixed for Termination.
(e) In the case of on demand Transactions, demand for Termination shall be
made by Buyer or Seller, by telephone or otherwise, and shall provide for
Termination to occur after not less than the minimum period as is customarily
required for the settlement or delivery of money or Equivalent Securities of
the relevant kind.
(f) On the Repuchase Date, Buyer shall transfer to Seller or its agent
Equivalent Securities against the payment of the Repurchase Price by Seller
(less any amount then payable and unpaid by Buyer to Seller pursuant to
paragraph 5).
4. MARGIN MAINTENANCE
(a) If at any time either party has a Net Exposure in respect of the other
party it may by notice to the other party require the other party to make a
Margin Transfer to it of an aggregate amount or value at least equal to that
Net Exposure.
(b) A notice under sub-paragraph (a) above may be given orally or in writing.
(c) For the purposes of this Agreement a party has a Net Exposure in respect
of the other party if the aggregate of all the first party's Transaction
Exposures plus any amount payable to the first party under paragraph 5 but
unpaid less the amount of any Net Margin provided to the first party exceeds
the aggregate of all the other party's Transaction Exposures plus any amount
payable to the other party under paragraph 5 but unpaid less the amount of
any Net Margin provided to the other party; and the amount of the Net
Exposure is the amount of the excess. For this purpose any amounts not
denominated in the Base Currency shall be converted into the Base Currency at
the Spot Rate prevailing at the relevant time.
(d) To the extent that a party calling for a Margin Transfer has previously
paid Cash Margin which has not been repaid or delivered Margin Securities in
respect of which Equivalent Margin Securities have not been delivered to it,
that party shall be entitled to require that such Margin Transfer be
satisfied first by the repayment of such Cash Margin or the delivery of
Equivalent Margin Securities but, subject to this, the composition of a
Margin Transfer shall be at the option of the party making such Margin
Transfer.
(e) Any Cash Margin transferred shall be in the Base Currency or such other
currency as the parties may agree.
(f) A payment of Cash Margin shall give rise to a debt owing from the party
receiving such payment to the party making such payment. Such debt shall bear
interest at such rate, payable at such times, as may be specified in Annex I
in respect of the relevant currency or otherwise agreed between the parties,
and shall be repayable subject to the terms of this Agreement.
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(g) Where Seller or Buyer becomes obliged under sub-paragraph (a) above to
make a Margin Transfer, it shall transfer Cash Margin or Margin Securities or
Equivalent Margin Securities within the minimum period specified in Annex 1
or, if no period is there specified, such minimum period as is customarily
required for the settlement or delivery of money, Margin Securities or
Equivalent Margin Securities of the relevant kind.
(h) The parties may agree that, with respect to any Transaction, the
provisions of sub-paragraphs (a) to (g) above shall not apply but instead
that margin may be provided separately in respect of that Transaction in
which case -
(i) that Transaction shall not be taken into account when calculating
whether either party has a Net Exposure;
(ii) margin shall be provided in respect of that Transaction in such
manner as the parties may agree; and
(iii) margin provided in respect of that Transaction shall not be taken
into account for the purposes of sub-paragraphs (a) to (g) above.
(i) The parties may agree that any Net Exposure which may arise shall be
eliminated not by Margin Transfers under the preceding provisions of this
paragraph but by the repricing of Transactions under sub-paragraph (j) below,
the adjustment of Transactions under sub-paragraph (k) below or a combination
of both these methods.
(j) Where the parties agree that a Transaction is to be repriced under this
sub-paragraph, such repricing shall be effected as follows -
(i) the Repurchase Date under the relevant Transaction (the "ORIGINAL
TRANSACTION") shall be deemed to occur on the date on which the
repricing is to be effected (the "REPRICING DATE");
(ii) the parties shall be deemed to have entered into a new Transaction
(the "REPRICED TRANSACTION") on the terms set out in (iii) to (vi)
below;
(iii) the Purchased Securities under the Repriced Transaction shall be
Securities equivalent to the Purchased Securities under the
Original Transaction;
(iv) the Purchase Date under the Repriced Transaction shall be the
Repricing Date;
(v) the Purchase Price under the Repriced Transaction shall be such
amount as shall, when multiplied by the Margin Ratio applicable
to the Original Transaction, be equal to the Market Value of such
Securities on the Repricing Date;
(vi) the Repurchase Date, the Pricing Rate, the Margin Ratio and,
subject as aforesaid, the other terms of the Repriced Transaction
shall be identical to those of the Original Transaction;
(vii) the obligations of the parties with respect to the delivery of the
Purchased Securities and the payment of the Purchase Price under
the Repriced Transaction shall be set off against their
obligations with respect to the delivery of Equivalent Securities
and payment of the Repurchase Price under the Original Transaction
and accordingly only a net cash sum shall be paid by one party to
the other. Such net cash sum shall be paid within the period
specified in sub-paragraph (g) above.
(k) The adjustment of a Transaction (the "ORIGINAL TRANSACTION") under this
sub-paragraph shall be effected by the parties agreeing that on the date on
which the adjustment is to be made (the "ADJUSTMENT DATE") the Original
Transaction shall be terminated and they shall enter into a new Transaction
(the "REPLACEMENT TRANSACTION") in accordance with the following provisions -
(i) the Original Transaction shall be terminated on the Adjustment
Date on such terms as the parties shall agree on or before the
Adjustment Date;
(ii) the Purchased Securities under the Replacement Transaction shall
be such Securities as the parties shall agree on or before the
Adjustment Date (being Securities the aggregate Market Value of
which at the Adjustment Date is substantially equal to the
Repurchase Price under the Original Transaction at the Adjustment
Date multiplied by the Margin Ratio applicable to the Original
Transaction);
(iii) the Purchase Date under the Replacement Transaction shall be the
Adjustment Date;
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(iv) the other terms of the Replacement Transaction shall be such as
the parties shall agree on or before the Adjustment Date; and
(v) the obligations of the parties with respect to payment and
delivery of Securities on the Adjustment Date under the Original
Transaction and the Replacement Transaction shall be settled in
accordance with paragraph 6 within the minimum period specified
in sub-paragraph (g) above.
5. INCOME PAYMENTS
Unless otherwise agreed -
(i) where the Term of a particular Transaction extends over an Income
Payment Date in respect of any Securities subject to that
Transaction, Buyer shall on the date such Income is paid by the
issuer transfer to or credit to the account of Seller an amount
equal to (and in the same currency as) the amount paid by the
issuer;
(ii) where Margin Securities are transferred from one party ("the first
party") to the other party ("the second party") and an Income
Payment Date in respect of such Securities occurs before
Equivalent Margin Securities are transferred by the second party
to the first party, the second party shall on the date such Income
is paid by the issuer transfer to or credit to the account of the
first party an amount equal to (and in the same currency as) the
amount paid by the issuer;
and for the avoidance of doubt references in this paragraph to the amount of
any income paid by the issuer of any Securities shall be to an amount paid
without any withholding or deduction for or on account of taxes or duties
notwithstanding that a payment of such Income made in certain circumstances
may be subject to such a withholding or deduction.
6. PAYMENT AND TRANSFER
(a) Unless otherwise agreed, all money paid hereunder shall be in immediately
available, freely convertible funds of the relevant currency. All Securities
to be transferred hereunder (i) shall be in suitable form for transfer and
shall be accompanied by duly executed instruments of transfer or assignment
in blank (where required for transfer) and such other documentation as the
transferee may reasonably request, or (ii) shall be transferred through the
book entry system of Euroclear or Cedel, or (iii) shall be transferred
through any other agreed securities clearance system, or (iv) shall be
transferred by any other method mutually acceptable to Seller and Buyer.
(b) Unless otherwise agreed, all money payable by one party to the other in
respect of any Transaction shall be paid free and clear of, and without
withholding or deduction for, any taxes or duties of whatsoever nature
imposed, levied, collected, withheld or assessed by any authority having
power to tax, unless the withholding or deduction of such taxes or duties is
required by law. In that event, unless otherwise agreed, the paying party
shall pay such additional amounts as will result in the net amounts
receivable by the other party (after taking account of such withholding or
deduction) being equal to such amounts as would have been received by it had
no such taxes or duties been required to be withheld or deducted.
(c) Unless otherwise agreed in writing between the parties, under each
Transaction transfer of Purchased Securities by Seller and payment of
Purchase Price by Buyer against the transfer of such Purchased Securities
shall be made simultaneously and transfer of Equivalent Securities by Buyer
and payment of Repurchase Price payable by Seller against the transfer of
such Equivalent Securities shall be made simultaneously.
(d) Subject to and without prejudice to the provisions of sub-paragraph 6(c),
either party may from time to time in accordance with market practice and in
recognition of the practical difficulties in arranging simultaneous
delivery of Securities and money waive in relation to any Transaction its
rights under this Agreement to receive simultaneous transfer and/or payment
provided that transfer and/or payment shall, notwithstanding such waiver, be
made on the same day and provided also that no such waiver in respect of one
Transaction shall affect or bind it in respect of any other Transaction.
(e) The parties shall execute and deliver all necessary documents and take
all necessary steps to procure that all right, title and interest in any
Purchased Securities, any Equivalent Securities, any
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Margin Securities and any Equivalent Margin Securities shall pass to the
party to which transfer is being made upon transfer of the same in accordance
with this Agreement, free from all liens, claims, charges and encumbrances.
(f) Notwithstanding the use of expressions such as "REPURCHASE DATE",
"REPURCHASE PRICE", "MARGIN", "NET MARGIN", "MARGIN RATIO" and "SUBSTITUTION"
which are used to reflect terminology used in the market for transactions of
the kind provided for in this Agreement, all right, title and interest in and
to Securities and money transferred or paid under this Agreement shall pass
to the transferee upon transfer or payment, the obligation of the party
receiving Purchased Securities or Margin Securities being an obligation to
transfer Equivalent Securities or Equivalent Margin Securities.
(g) Time shall be of the essence in this Agreement.
(h) Subject to paragraph 10, all amounts in the same currency payable by each
party to the other under any Transaction or otherwise under this Agreement on
the same date shall be combined in a single calculation of a net sum payable
by one party to the other and the obligation to pay that sum shall be the
only obligation of either party in respect of those amounts.
(i) Subject to paragraph 10, all Securities of the same issue, denomination,
currency and series, transferable by each party to the other under any
Transaction or hereunder on the same date shall be combined in a single
calculation of a net quantity of Securities transferable by one party to the
other and the obligation to transfer the net quantity of Securities shall be
the only obligation of either party in respect of the Securities so
transferable and receivable.
7. CONTRACTUAL CURRENCY
(a) All the payments made in respect of the Purchase Price or the Repurchase
Price of any Transaction shall be made in the currency of the Purchase Price
(the "CONTRACTUAL CURRENCY") save as provided in paragraph 10(c)(ii).
Notwithstanding the foregoing, the payee of any money may, at its option,
accept tender thereof in any other currency, provided, however, that, to the
extent permitted by applicable law, the obligation of the payer to pay such
money will be discharged only to the extent of the amount of the Contractual
Currency that such payee may, consistent with normal banking procedures,
purchase with such other currency (after deduction of any premium and costs
of exchange) for delivery within the customary delivery period for spot
transactions in respect of the relevant currency.
(b) If for any reason the amount in the Contractual Currency received by a
party, including amounts received after conversion of any recovery under any
judgment or order expressed in a currency other than the Contractual
Currency, falls short of the amount in the Contractual Currency due and
payable, the party required to make the payment will, as a separate and
independent obligation, to the extent permitted by applicable law,
immediately transfer such additional amount in the Contractual Currency as
may be necessary to compensate for the shortfall.
(c) If for any reason the amount in the Contractual Currency received by a
party exceeds the amount of the Contractual Currency due and payable, the
party receiving the transfer will refund promptly the amount of such excess.
8. SUBSTITUTION
(a) A Transaction may at any time between the Purchase Date and the
Repurchase Date, if Seller so requests and Buyer so agrees, be varied by the
transfer by Buyer to Seller of Securities equivalent to the Purchased
Securities, or to such of the Purchased Securities as shall be agreed, in
exchange for the transfer by Seller to Buyer of other Securities of such
amount and description as shall be agreed ("NEW PURCHASED SECURITIES") (being
Securities having a Market Value at the date of the variation at least equal
to the Market Value of the Equivalent Securities transferred to Seller).
(b) Any variation under sub-paragraph (a) above shall be effected, subject to
paragraph 6(d), by the simultaneous transfer of the Equivalent Securities and
New Purchased Securities concerned.
(c) A Transaction which is varied under sub-paragraph (a) above shall
thereafter continue in effect as though the Purchased Securities under that
Transaction consisted of or included the New
November 1995 9
Purchased Securities instead of the Securities in respect of which Equivalent
Securities have been transferred to Seller.
(d) Where either party has transferred Margin Securities to the other party
it may at any time before Equivalent Margin Securities are transferred to it
under paragraph 4 request the other party to transfer Equivalent Margin
Securities to it in exchange for the transfer to the other party of new
Margin Securities having a Market Value at the time of transfer at least
equal to that of such Equivalent Margin Securities. If the other party agrees
to the request, the exchange shall be effected, subject to paragraph 6(d), by
the simultaneous transfer of the Equivalent Margin Securities and new Margin
Securities concerned. Where either or both of such transfers is or are
effected through a settlement system in circumstances which under the rules
and procedures of that settlement system give rise to a payment by or for the
account of one party to or for the account of the other party, the parties
shall cause such payment or payments to be made outside that settlement
system, for value the same day as the payments made through that settlement
system, as shall ensure that the exchange of Equivalent Margin Securities and
new Margin Securities effected under this sub-paragraph does not give rise to
any net payment of cash by either party to the other.
9. REPRESENTATIONS
Each party represents and warrants to the other that -
(a) it is duly authorised to execute and deliver this Agreement, to enter
into the Transactions contemplated hereunder and to perform its obligations
hereunder and thereunder and has taken all necessary action to authorise such
execution, delivery and performance;
(b) it will engage in this Agreement and the Transactions contemplated
hereunder (other than Agency Transactions) as principal;
(c) the person signing this Agreement on its behalf is, and any person
representing it in entering into a Transaction will be, duly authorised to do
so on its behalf;
(d) it has obtained all authorisations of any governmental or regulatory body
required in connection with this Agreement and the Transactions contemplated
hereunder and such authorisations are in full force and effect;
(e) the execution, delivery and performance of this Agreement and the
Transactions contemplated hereunder will not violate any law, ordinance,
charter, bye-law or rule applicable to it or any agreement by which it is
bound or by which any of its assets are affected;
(f) it has satisfied itself and will continue to satisfy itself as to the tax
implications of the Transactions contemplated hereunder;
(g) in connection with this Agreement and each Transaction:
(i) unless there is a written agreement with the other party to the
contrary, it is not relying on any advice (whether written or oral)
of the other party, other than the representations expressly set out
in this Agreement;
(ii) it has made and will make its own decisions regarding the entering
into of any Transaction based upon its own judgment and upon advice
from such professional advisers as it has deemed it necessary to
consult;
(iii) it understands the terms, conditions and risks of each Transaction
and is willing to assume (financially and otherwise) those risks;
(h) at the time of transfer to the other party of any Securities it will have
the full and unqualified right to make such transfer and that upon such
transfer of Securities the other party will receive all right, title and
interest in and to those Securities free of any lien, claim, charge or
encumbrance; and
(i) the paying and collecting arrangements applied in relation to any
Securities prior to their transfer from that party to the other under this
Agreement will not have resulted in the payment of any Income in respect of
such Securities to the party transferring such Securities under deduction or
withholding for or on account of UK tax.
November 1995 10
On the date on which any Transaction is entered into pursuant hereto, and on
each day on which Securities, Equivalent Securities, Margin Securities or
Equivalent Margin Securities are to be transferred under any Transaction,
Buyer and Seller shall each be deemed to repeat all the foregoing
representations. For the avoidance of doubt and notwithstanding any
arrangements which Seller or Buyer may have with any third party, each party
will be liable as a principal for its obligations under this Agreement and
each Transaction.
10. EVENTS OF DEFAULT
(a) If any of the following events (each an "EVENT OF DEFAULT") occurs in
relation to either party (the "DEFAULTING PARTY", the other party being the
"NON-DEFAULTING PARTY") whether acting as Seller or Buyer--
(i) Buyer fails to pay the Purchase Price upon the applicable Purchase
Date or Seller fails to pay the Repurchase Price upon the
applicable Repurchase Date, and the non-Defaulting Party serves a
Default Notice on the Defaulting Party; or
(ii) Seller or Buyer fails to comply with paragraph 4 and the
non-Defaulting Party serves a Default Notice on the Defaulting
Party; or
(iii) Seller or Buyer fails to comply with paragraph 5 and the
non-Defaulting Party serves a Default Notice on the Defaulting
Party; or
(iv) an Act of Insolvency occurs with respect to Seller or Buyer and
(except in the case of an Act of Insolvency which is the
presentation of a petition for winding-up or any analogous
proceeding or the appointment of a liquidator or analogous officer
of the Defaulting Party in which case no such notice shall be
required) the non-Defaulting Party serves a Default Notice on the
Defaulting Party; or
(v) any representations made by Seller or Buyer are incorrect or untrue
in any material respect when made or repeated or deemed to have
been made or repeated, and the non-Defaulting Party serves a
Default Notice on the Defaulting Party; or
(vi) Seller or Buyer admits to the other that it is unable to, or
intends not to, perform any of its obligations hereunder and/or in
respect of any Transaction and the non-Defaulting Party serves a
Default Notice on the Defaulting Party; or
(vii) Seller or Buyer is suspended or expelled from membership of or
participation in any securities exchange or association or other
self regulating organisation, or suspended from dealing in
securities by any government agency, or any of the assets of
either Seller or Buyer or the assets of investors held by, or to
the order of, Seller or Buyer are transferred or ordered to be
transferred to a trustee by a regulatory authority pursuant to any
securities regulating legislation and the non-Defaulting Party
serves a Default Notice on the Defaulting Party; or
(viii) Seller or Buyer fails to perform any other of its obligations
hereunder and does not remedy such failure within 30 days after
notice is given by the non-Defaulting Party requiring it to do
so, and the non-Defaulting Party serves a Default Notice on the
Defaulting Party;
then sub-paragraphs (b) to (d) below shall apply.
(b) The Repurchase Date for each Transaction hereunder shall be deemed
immediately to occur and, subject to the following provisions, all Cash
Margin (including interest accrued) shall be immediately repayable and
Equivalent Margin Securities shall be immediately deliverable (and so that,
where this sub-paragraph applies, performance of the respective obligations
of the parties with respect to the delivery of Securities, the payment of the
Repurchase Prices for any Equivalent Securities and the repayment of any Cash
Margin shall be effected only in accordance with the provisions of
sub-paragraph (c) below).
(c) (i) The Default Market Values of the Equivalent Securities and any
Equivalent Margin Securities to be transferred, the amount of any
Cash Margin (including the amount of interest accrued) to be
transferred and the Repurchase Prices to be paid by each party
shall be established by the non-Defaulting Party for all
Transactions as at the Repurchase Date; and
(ii) on the basis of the sums so established, an account shall be taken
(as at the Repurchase Date) of what is due from each party to the
other under this Agreement (on the basis
November 1995 11
that each party's claim against the other in respect of the
transfer to it of Equivalent Securities or Equivalent Margin
Securities under this Agreement equals the Default Market Value
therefor) and the sums due from one party shall be set off against
the sums due from the other and only the balance of the account
shall be payable (by the party having the claim valued at the lower
amount pursuant to the foregoing) and such balance shall be due and
payable on the next following Business Day. For the purposes of
this calculation, all sums not denominated in the Base Currency
shall be converted into the Base Currency on the relevant date at
the Spot Rate prevailing at the relevant time.
(d) The Defaulting Party shall be liable to the non-Defaulting Party for the
amount of all reasonable legal and other professional expenses incurred by
the non-Defaulting Party in connection with or as a consequence of an Event
of Default, together with interest thereon at LIBOR or, in the case of an
expense attributable to a particular Transaction, the Pricing Rate for the
relevant Transaction if that Pricing Rate is greater than LIBOR.
(e) If Seller fails to deliver Purchased Securities to Buyer on the
applicable Purchase Date Buyer may--
(i) if it has paid the Purchase Price to Seller, require Seller
immediately to repay the sum so paid;
(ii) if Buyer has a Transaction Exposure to Seller in respect of the
relevant Transaction, require Seller from time to time to pay Cash
Margin at least equal to such Transaction Exposure;
(iii) at any time while such failure continues, terminate the Transaction
by giving written notice to Seller. On such termination the
obligations of Seller and Buyer with respect to delivery of
Purchased Securities and Equivalent Securities shall terminate and
Seller shall pay to Buyer an amount equal to the excess of the
Repurchase Price at the date of Termination over the Purchase Price.
(f) If Buyer fails to deliver Equivalent Securities to Seller on the
applicable Repurchase Date Seller may--
(i) if it has paid the Repurchase Price to Buyer, require Buyer
immediately to repay the sum so paid;
(ii) if Seller has a Transaction Exposure to Buyer in respect of the
relevant Transaction, require Buyer from time to time to pay Cash
Margin at least equal to such Transaction Exposure;
(iii) at any time while such failure continues, by written notice to Buyer
declare that that Transaction (but only that Transaction) shall be
terminated immediately in accordance with sub-paragraph (c) above
(disregarding for this purpose references in that sub-paragraph to
transfer of Cash Margin and delivery of Equivalent Margin
Securities).
(g) The provisions of this Agreement constitute a complete statement of the
remedies available to each party in respect of any Event of Default.
(h) Neither party may claim any sum by way of consequential loss or damage
in the event of a failure by the other party to perform any of its
obligations under this Agreement.
(i) Each party shall immediately notify the other if an Event of Default, or
an event which, upon the serving of a Default Notice, would be an Event of
Default, occurs in relation to it.
11. TAX EVENT
(a) This paragraph shall apply if either party notifies the other that--
(i) any action taken by a taxing authority or brought in a court of
competent jurisdiction (regardless of whether such action is taken
or brought with respect to a party to this Agreement); or
(ii) a change in the fiscal or regulatory regime (including, but not
limited to, a change in law or in the general interpretation of law
but excluding any change in any rate of tax)
November 1995 12
has or will, in the notifying party's reasonable opinion, have a material
adverse effect on that party in the context of a Transaction.
(b) If so requested by the other party, the notifying party will furnish the
other with an opinion of a suitably qualified adviser that an event referred
to in sub-paragraph (a)(i) or (ii) above has occurred and affects the
notifying party.
(c) Where this paragraph applies, the party giving the notice referred to in
sub-paragraph (a) may, subject to sub-paragraph (d) below, terminate the
Transaction with effect from a date specified in the notice, not being
earlier (unless so agreed by the other party) than 30 days after the date of
the notice, by nominating that date as the Repurchase Date.
(d) If the party receiving the notice referred to in sub-paragraph (a) so
elects, it may override that notice by giving a counter-notice to the other
party. If a counter-notice is given, the party which gives the counter-notice
will be deemed to have agreed to indemnify the other party against the adverse
effect referred to in sub-paragraph (a) so far as relates to the relevant
Transaction and the original Repurchase Date will continue to apply.
(e) Where a Transaction is terminated as described in this paragraph, the
party which has given the notice to terminate shall indemnify the other party
against any reasonable legal and other professional expenses incurred by the
other party by reason of the termination, but the other party may not claim
any sum by way of consequential loss or damage in respect of a termination in
accordance with this paragraph.
(f) This paragraph is without prejudice to paragraph 6(b) (obligation to pay
additional amounts if withholding or deduction required); but an obligation
to pay such additional amounts may, where appropriate, be a circumstance
which causes this paragraph to apply.
12. INTEREST
To the extent permitted by applicable law, if any sum of money payable
hereunder or under any Transaction is not paid when due, interest shall
accrue on such unpaid sum as a separate debt at the greater of the Pricing
Rate for the Transaction to which such sum relates (where such sum is
referable to a Transaction) and LIBOR on a 360 day basis or 365 day basis in
accordance with the applicable ISMA convention, for the actual number of days
during the period from and including the date on which payment was due to,
but excluding, the date of payment.
13. SINGLE AGREEMENT
Each party acknowledges that, and has entered into this Agreement and will
enter into each Transaction hereunder in consideration of and in reliance
upon the fact that, all Transactions hereunder constitute a single business
and contractual relationship and are made in consideration of each other.
Accordingly, each party agrees (i) to perform all of its obligations in
respect of each Transaction hereunder, and that a default in the performance
of any such obligations shall constitute a default by it in respect of all
Transactions hereunder, and (ii) that payments, deliveries and other
transfers made by either of them in respect of any Transaction shall be
deemed to have been made in consideration of payments, deliveries and other
transfers in respect of any other Transactions hereunder.
14. NOTICES AND OTHER COMMUNICATIONS
(a) Any notice or other communication to be given under this Agreement--
(i) shall be in the English language and, except where expressly
otherwise provided in this Agreement, shall be in writing;
(ii) may be given in any manner described in sub-paragraph (b) below;
(iii) shall be sent to the party to whom it is to be given at the address
or number, or in accordance with the electronic messaging details,
set out in Annex V.
(b) Any such notice or other communication shall be effective--
(i) if in writing and delivered in person or by courier, at the time
when it is delivered;
November 1995 13
(ii) if sent by telex, at the time when the recipient's answerback is
received;
(iii) if sent by facsimile transmission, at the time when the
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), at the time when that
mail is delivered or its delivery is attempted;
(v) if sent by electronic messaging system, at the time that electronic
message is received;
except that any notice or communication which is received, or delivery of
which is attempted, after close of business on the date of receipt or
attempted delivery or on a day which is not a day on which commercial banks
are open for business in the place where that notice or other communication
is to be given shall be treated as given at the opening of business on the
next following day which is such a day.
(c) 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.
15. ENTIRE AGREEMENT; SEVERABILITY
This Agreement shall supersede any existing agreements between the parties
containing general terms and conditions for Transactions. Each provision and
agreement herein shall be treated as separate from any other provision or
agreement herein and shall be enforceable notwithstanding the
unenforceability of any such other provision or agreement.
16. NON-ASSIGNABILITY; TERMINATION
(a) Subject to sub-paragraph (b) below, the rights and obligations of the
parties under this Agreement and under any Transaction shall not be assigned,
charged or otherwise dealt with by either party without the prior written
consent of the other party. Subject to the foregoing, this Agreement and any
Transactions shall be binding upon and shall inure to the benefit of the
parties and their respective successors and assigns.
(b) Sub-paragraph (a) above shall not preclude a party from assigning,
charging, or otherwise dealing with all or any part of its interest in any
sum payable to it under paragraph 10(c) or (d) above.
(c) Either party may terminate this Agreement by giving written notice to
the other, except that this Agreement shall, notwithstanding such notice,
remain applicable to any Transactions then outstanding.
(d) All remedies hereunder shall survive Termination in respect of the
relevant Transaction and termination of this Agreement.
17. GOVERNING LAW
This Agreement shall be governed by and construed in accordance with the laws
of England. Buyer and Seller hereby irrevocably submit for all purposes of or
in connection with this Agreement and each Transaction to the jurisdiction of
the Courts of England.
Party A hereby appoints the person identified in Annex VI hereto as its agent
to receive on its behalf service of process in such courts. If such agent
ceases to be its agent, Party A shall promptly appoint, and notify Party B of
the identity of, a new agent in England.
Party B hereby appoints the person identified in Annex VII hereto as its agent
to receive on its behalf service of process in such courts. If such agent
ceases to be its agent, Party B shall promptly appoint, and notify Party A of
the identity of, a new agent in England.
Nothing in this paragraph shall limit the right of any party to take
proceedings in the courts of any other country of competent jurisdiction.
18. NO WAIVERS, ETC.
No express or implied waiver of any Event of Default by either party shall
constitute a waiver of any other Event of Default and no exercise of any
remedy hereunder by any party shall constitute a
November 1995 14
waiver of its right to exercise any other remedy hereunder. No modification
or waiver of any provision of this Agreement and no consent by any party to a
departure herefrom shall be effective unless and until such modification,
waiver or consent shall be in writing and duly executed by both of the
parties hereto. Without limitation on any of the foregoing, the failure to give
a notice pursuant to sub-paragraph 4(a) hereof will not constitute a waiver
of any right to do so at a later date.
19. WAIVER OF IMMUNITY
Each party hereto hereby waives, to the fullest extent permitted by applicable
law, all immunity (whether on the basis of sovereignty or otherwise) from
jurisdiction, attachment (both before and after judgment) and execution to
which it might otherwise be entitled in any action or proceeding in the
Courts of England or of any other country or jurisdiction, relating in any
way to this Agreement or any Transaction, and agrees that it will not raise,
claim or cause to be pleaded any such immunity at or in respect of any such
action or proceeding.
20. RECORDING
The parties agree that each may electronically record all telephone
conversations between them.
Xxxxxxx Xxxxx Xxxxxx Inc. as Agent for
Salomon Brothers International Limited NC Residual II Corporation
By /s/ Xxxxx Xxxxx By /s/ Xxxxxxx Xxxxxxxx
------------------------------------ -----------------------------
Title Title President
--------------------------------- --------------------------
Date Date December 11, 1998
---------------------------------- ---------------------------
November 1995 15
YOUR COUNTERPARTY IN ANY TRANSACTION ENTERED PURSUANT TO THIS MASTER AGREEMENT
IS SALOMON BROTHERS INTERNATIONAL LIMITED. SALOMON BROTHERS INTERNATIONAL
LIMITED IS NOT REGISTERED AS A BROKER-DEALER UNDER THE SECURITIES EXCHANGE
ACT OF 1934.
ANNEX 1, PART 1
Supplemental Terms and Conditions
for
TRANSACTIONS WITH XXXXXXX XXXXX XXXXXX INC. AS AGENT FOR
SALOMON BROTHERS INTERNATIONAL LIMITED
1. The following elections shall apply:
(a) paragraph 1. Provided Annex III hereto has been signed by both
parties to the Agreement (the "Parties"), Buy/Sell Back Transactions
may be effected under this Agreement, and Annex III will apply.
(b) paragraph 1. Provided Annex IV hereto has been signed by both
Parties, Agency Transactions may be effected under this Agreement,
and Annex IV will apply.
(c) paragraph 1. Provided Annex I, Part 2 has been signed by both
Parties, Transaction in gilt-edged securities may be effected
under this Agreement, and Annex I, Part 2 will apply.
(d) Provided Annex VIII has been signed by both Parties, the
Provisions thereof relating to Net Paying Securities will apply
under this Agreement.
(e) Provided Annex IX has been signed by both Parties, the provisions
thereof relating to Italian bonds will apply under this Agreement.
(f) Provided Annex 1, Part 3 has been signed by both Parties the
Additional Terms and Conditions relating to European Economic
Union, Annex 1, Part 3 will apply.
(g) paragraph 2 (c). The Base Currency shall be: US Dollars.
(h) paragraph 2 (i). Salomon Brothers International Limited's
Designated Offices shall be: Victoria Plaza, 000 Xxxxxxxxxx Xxxxxx
Xxxx, Xxxxxx, XX0X 0XX.
Party B's Designated Offices shall be:
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
(i) paragraph 2 (y). Market Value shall be calculated in accordance
with market practice in the principal market for the relevant
Securities or as otherwise agreed by the Parties.
(j) paragraph 4(f). Interest rate on Cash Margin to be agreed between
the Parties in writing prior to payment of the relevant Cash
Margin.
(k) All other elections shall be made by the Parties prior to a
particular Transaction or pursuant to a separate agreement.
2. The following Supplemental Terms and Conditions shall apply:
(a) With effect from the date of execution of the Agreement,
paragraphs 4 (Margin Maintenance), and 8 (Substitution) and 10
(Events of Default) of the Agreement shall apply to all
repurchase transactions and buy/sell back transactions into which
the Parties have entered before the date and which are outstanding
at that date in substitution for any corresponding provisions in
any previous master agreement between the Parties governing such
transactions.
(b) Each of the Parties agrees that they do not intend any Transaction
or transfer of Cash Margin to be for a Term of more than 364 days.
(c) Each party to this agreement (such party, "Party A") agrees that,
upon the insolvency of Party A or any of its affiliates or the
default of Party A or any of its affiliates under any transaction
with the other party hereto or any of such other party's
affiliates (such other party or any of its affiliates, a
"Non-Defaulting Party"), each Non Defaulting Party may, without
prior notice to Party A: (a) liquidate any transaction between
Party A and any Non-Defaulting Party (which liquidation may
include the conversion of amounts denominated in multiple
currencies into a single currency if deemed necessary or desirable
by the Non Defaulting Party), (b) reduce any amounts due and owing
to Party A under any transaction between Party A and any
Non-Defaulting Party by setting off against such amounts any
amounts due and owing to a Non-Defaulting Party by Party A, and
(c) treat all security for, and all amounts due and owing to Party
A under any transaction between Party A and any Non-Defaulting
Party as security for all transactions between Party A and any
Non-Defaulting Party; provided, however, that the exercise of the
remedies described in clauses (a), (b), and (c) above (or in any
other similar provision in any agreement between the parties) shall
be deemed to occur immediately subsequent to, but independent of, the
exercise of any netting, liquidation, set-off or other similar
provision contained in any master agreement between the parties;
provided further that each provision and agreement hereof shall be
treated as independent from any other provision or agreement herein
and shall be enforceable notwithstanding the unenforceability of any
such other provision or agreement.
For purposes of the foregoing, the term "affiliate" shall not
include any entity that controls or is under common control with
Xxxxxxx Xxxxx Xxxxxx Holdings, Inc., but in any event such term
shall include Xxxxxxx Xxxxx Barney Holdings, Inc. and any entity
controlled by it.
Clauses (a), (b) and (c) of this paragraph 2(c) shall be deemed
not to include any references to the affiliates of the
Non-Defaulting Party and Party X to the extent that their
inclusion would prejudice the enforceability of this paragraph 2(c).
(d) In the event that the Parties enter into a hold in custody repo
Transaction hereunder in which Salomon Brothers International
Limited acts as the Seller, segregation of the Securities the
subject of such repo Transaction shall take place by movement of
such Securities from Solomon Brothers International Limited's firm
account within the relevant settlement system to its customer
account within such relevant settlement system. The Buyer hereby
consents to such segregation arrangements.
(e) Annex 1, part 2 shall be amended by:
(a) inserting at the end of paragraph 1.1(d):
"or, following that provision ceasing to have effect in
accordance with section 37 of the Finance (No 2) Xxx 0000,
section 50(7) of the Income and Corporation Xxxxx Xxx 0000";
(b) adding after sub-paragraph 3.4(b)(iii):
"(vi) shall specify the pricing rate for that DBV
transaction."; and
inserting "through the CGO Service or" after "Such payment shall
be made" in the penultimate line of paragraph 3.4(d) and the last
line of paragraph 3.5(f).
(f) Paragraph 8 of the Agreement shall be amended by adding at the end
of the paragraph the following paragraphs (e), (f) and (g):
(e) In the case of any Transaction for which the Repurchase Date
is not the Business Day immediately following the Purchase
Date and with respect to which Seller does not have any
existing right to vary the Transaction, Seller shall have
the right (subject to the proviso to this sub-paragraph) by
notice to Buyer (such notice to be given at or prior to 12
pm (London time) on that Business Day) to vary that
Transaction in accordance with sub-paragraphs (a) and (b)
above, provided however that Buyer may elect by close of
business on the Business Day notice is received (or by close
of business on the next Business Day if notice is received
after 12 pm (London time) on that day) not to vary that
Transaction. If Buyer elects not to vary the Transaction,
Seller shall have the right, by notice to Buyer, to
terminate the Transaction on the Business Day specified in
that notice, such Business Day (unless the parties otherwise
agree) not to be later than two Business Days after the date
of the notice.
(f) If Seller exercises its right to vary the Transaction or to
terminate the Transaction under sub-paragraph (e) above,
notwithstanding paragraph 10(h), Seller shall be required to
pay to Buyer by close of business on the Business Day of
such variation of termination an amount equal to:
(i) Buyer's actual cost (including all fees, expenses
and commissions) of (aa) entering into replacement
transactions; (bb) entering into or terminating
hedge transactions; and (cc) terminating or varying
transactions with third parties in connection with
or as a result of such variation or termination; and
(ii) to the extent that Buyer party does not enter into
replacement transactions, the loss incurred by Buyer
directly arising or resulting from such variation or
termination.
in each case as determined and calculated in good faith by Buyer.
(f) If Seller exercises its right to vary the Transaction or to
terminate the Transaction under sub-paragraph (e) above,
notwithstanding paragraph 10(h), Seller shall be required to
pay to Buyer by close of business on the Business Day of such
variation or termination an amount equal to:
(i) Buyer's actual cost (including all fees, expenses and
commissions) of (aa) entering into replacement
transactions; (bb) entering into or terminating hedge
transactions; and (cc) terminating or varying
transactions with third parties in connection with or as
a result of such variation or termination; and
(ii) to the extent that Buyer party does not enter into
replacement transactions, the loss incurred by Buyer
directly arising or resulting from such variation or
termination,
in each case as determined and calculated in good faith by Buyer.
(g) Where one party (the "Requesting Party") has requested the
other party to transfer Equivalent Margin Securities to it in
exchange for the transfer to the other party of new Margin
Securities in accordance with paragraph 8(d) but the other
party does not agree to the request, if the Requesting Party
so elects by written notice specifying the Equivalent Margin
Securities to be transferred and the Business Day on which
those Equivalent Margin Securities are to be transferred (such
Business Day (unless the parties otherwise agree) not to be
later than two Business Days after the date of the notice) the
other party shall, unless otherwise agreed, transfer those
Equivalent Margin Securities to the Requesting Party in
exchange for the transfer to the other party of Cash Margin of
an amount equal to the Market Value of the Equivalent Margin
Securities so transferred.
(g) If assets of an employee benefit plan subject to any provision of the
Employee Retirement Income Security Act of 1974 ("ERISA") are
intended to be used by either party hereto (the "Plan Party") in a
Transaction, the Plan Party shall so notify the other party prior to
the Transaction. The Plan Party shall represent in writing to the
other party that the transaction does not constitute a prohibited
transaction under ERISA or is otherwise exempt therefrom, and the
other party may proceed in reliance thereon but shall not be required
to so proceed.
XXXXXXX XXXXX XXXXXX INC. AS AGENT FOR
SALOMON BROTHERS INTERNATIONAL LIMITED
Accepted as of:
By: /s/ Xxxxx Xxxxx
---------------------------------------
Authorised Signatory
Title:
NC Residual II Corporation
Accepted as of: December 11 / 1998
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Authorised Signatory Xxxxxxx Xxxxxxxx
Title: President
SUPPLEMENTAL TERMS AND CONDITIONS WHERE REPURCHASE
TRANSACTIONS ARE TO BE EFFECTED IN UK GILT-EDGED SECURITIES
ANNEX I, PART 2
1. Interpretation
1.1 In this Part of this Annex -
(a) the "AGREEMENT" means the Agreement substantially in the form of the
PSA/ISMA Global Master Repurchase Agreement for Gross Paying
Securities of which this Annex forms part;
(b) "CENTRAL GILTS OFFICE SERVICE" or "CGO SERVICE" means the
computer-based system for the transfer of gilt-edged securities by
exempt transfer (as defined in the Stock Transfer Act 1982) operated
by the Central Gilts Office of the Bank of England;
(c) "CHAPS SYSTEM" means the same day payment system operated by the
CHAPS Clearing Company Limited;
(d) "GILT-EDGED SECURITIES" means securities which are gilt-edged
securities for the purposes of section 51A(7) of the Income and
Corporation Taxes Xxx 0000 or, following that provision ceasing to
have effect in accordance with section 37 of the Finance (No 2) Xxx
0000, section 50(7) of the Income and Corporation Taxes Xxx 0000.
1.2 Terms to which a defined meaning is given in the Agreement have the same
meanings in this Annex.
2. Scope
2.1 The parties have agreed that the Transactions to which the Agreement
applies may include Transactions in respect of gilt-edged securities.
2.2 The terms and conditions set out in this Annex apply to Transactions in
respect of gilt-edged securities and, to the extent and in the
circumstances provided in paragraph 3.4(c) below, Transactions wholly or
partly in respect of such other securities as are referred to in that
paragraph.
3. CGO Service
3.1 The CGO Service shall be an agreed securities clearance system for the
purposes of paragraph 6(a)(iii) of the Agreement.
3.2 Where under the rules and procedures of the CGO Service the delivery of any
Securities from a securities account in the name of one party or its
nominee or agent ("THE TRANSFEROR") to a securities account in the name of
the other party or its nominee or agent ("THE TRANSFEREE") gives rise to an
assured payment obligation by which the settlement bank acting for the
transferee is obliged to make a payment to the settlement bank acting for
the transferor, the creation of that assured payment obligation shall for
the purposes of the Agreement and any Transaction be treated as a payment
from the transferee to the transferor of an amount equal to the amount of
the assured payment obligation.
3.3 Where any transfer of Securities under or for the purposes of the Agreement
or any Transaction results, under the rules and procedures of the CGO
Service, in a payment (whether under paragraph 3.2 above or otherwise)
which is not required to be made by the Agreement or the terms of the
relevant Transaction -
(a) where the amount of the relevant payment is less than L100, the
payment shall be treated as made by way of margin adjustment under
paragraph 4 of the Agreement;
(b) in any other case the party receiving such payment shall, unless the
parties shall have agreed otherwise, cause an irrevocable payment in
the same amount to be made to the other party for value the same day
through the CHAPS system or another guaranteed payment system agreed
between the parties.
November 1995 16-5
3.4 (a) Subject to and in accordance with the following provisions of this
sub-paragraph, the parties may agree to enter into an overnight sale
and repurchase transaction (a "DBV TRANSACTION") to be effected under
the "delivery-by-value" facility of the CGO Service.
(b) The Confirmation relating to a DBV Transaction -
(i) shall specify the Transaction as a DBV Transaction;
(ii) shall not describe the Purchased Securities;
(iii) shall specify as the Purchase Price the consideration to be
input in respect of the delivery of the Purchased Securities
through the CGO Service;
(iv) shall specify the pricing rate for the DBV Transaction.
(c) The Purchased Securities under a DBV Transaction shall be such
Securities (which may include Securities which are not gilt-edged
securities) as shall be selected and delivered by the CGO Service on
the apportionment of securities to the relevant delivery in
accordance with the rules and procedures of the CGO Service.
(d) The amount by which the Repurchase Price under a DBV Transaction
exceeds the Purchase Price shall be paid by the Seller to the Buyer
on the Repurchase Date on or as soon as practicable after the
delivery of Equivalent Securities through the CGO Service from a
securities account of the Buyer to a securities account of the
Seller. Such payment shall be made through the CGO Service or
outside the CGO Service in same day funds.
(e) If on the Repurchase Date of a DBV Transaction Equivalent Securities
are not delivered to the Seller by reason of the fact that -
(i) either party's membership of the CGO Service has been
terminated or suspended; or
(ii) overnight collateral chits issued by the CGO Service at the
request of the Buyer have not been returned to the CGO Service
on the Repurchase Date by the latest time fixed for such
return by the rules and procedures of the CGO Service;
then, unless before the latest time for delivery of such Equivalent
Securities under the rules and procedures of the CGO Service an Event
of Default has occurred under paragraph 10 of the Agreement in
respect of either Party, such non-delivery shall be deemed to
constitute -
(A) where the Buyer's membership of the CGO Service has been
terminated or suspended or sub-paragraph (ii) above applies, a
failure by the Buyer to deliver Equivalent Securities on the
Repurchase Date;
(B) where the Seller's membership of the CGO Service has been
terminated or suspended, a failure by the Seller to pay the
Repurchase Price on the Repurchase Date.
(f) If after an Event of Default has occurred under paragraph 10 of the
Agreement Equivalent Securities to the Purchased Securities are
delivered to a securities account of the Seller against the creation
of an assured payment obligation in accordance with the rules and
procedures of the CGO Service notwithstanding the termination of the
relevant DBV Transaction, such delivery shall give rise to the
following obligations, each of which shall be conditional on the
simultaneous performance of the other.
(i) an obligation on the Seller to deliver to the Buyer on demand
securities equivalent to the securities so delivered; and
(ii) an obligation on the Buyer to pay to the Seller on demand a sum
equal to the amount of the assured payment obligation so
created.
November 1995 16-6
3.5 (a) The parties may agree to enter into a series of DBV Transactions to
be confirmed by a single Confirmation, each such DBV Transaction
being for the same Purchase Price and each such DBV Transaction
other than the first commencing on the Repurchase Date of the
previous Transaction. Such a series of DBV Transactions is in this
paragraph referred to as -
(i) an "OPEN DBV REPO" if the Repurchase Date of the last
Transaction in the series is not specified in the
Confirmation but it is instead provided that, if either
Party gives to the other notice of not less than a stated
period, the DBV Transaction which will be due for
Termination on the date specified in the notice will be the
last Transaction in the series and the series will be
limited accordingly;
(ii) a "TERM DBV REPO" if the date on which the last Transaction
in the series is due for Termination is specified in the
Confirmation.
(b) Subject to the following provisions of this sub-paragraph,
paragraph 3.4 above shall apply in respect of each DBV Transaction
forming part of an Open DBV Repo or a Term DBV Repo.
(c) It shall not be necessary for any Transaction forming part of an
Open DBV Repo or a Term DBV Repo to be evidenced by a separate
Confirmation and, subject to sub-paragraph 3.5(d) below, each such
Transaction shall be deemed to be entered into on the Repurchase
Date of the preceding such Transaction.
(d) Notwithstanding the preceding provisions of this sub-paragraph, a
transaction which would otherwise be deemed to be entered into on
any day and would form part of an Open DBV Repo or a Term DBV Repo
shall be deemed not to be entered into if before the parties have
taken the steps necessary to effect delivery of the Purchased
Securities under that Transaction on that day in accordance with
the rules and procedures of the CGO Service -
(i) an Event of Default has occurred in relation to either party;
or
(ii) an earlier Transaction forming part of that Open DBV Repo or
Term DBV Repo has been terminated under paragraph 10(e) or
10(f) of the Agreement.
(e) In any case where sub-paragraph 3.5(d) above applies, no further
Transaction forming part of the relevant Open DBV Repo or Term DBV
Repo shall arise.
(f) Subject to sub-paragraph 3.5(h) below, and save in so far as the
Confirmation relating to an Open DBV Repo or Term DBV Repo may
otherwise provide, that part (if any) of the Repurchase Price in
respect of each Transaction in the relevant series (other than the
last such Transaction) which exceeds the Purchase Price shall not
be payable on the Repurchase Date, but shall instead be deferred
until, and shall be payable on, the Repurchase Date of the last
Transaction in the series. Such payment shall be made through the
CGO Service in same-day funds.
(g) Any amount payable in respect of a Transaction forming part of an
Open DBV Repo or Term DBV Repo payment of which has been deferred
under sub-paragraph (f) above shall, until it is paid or the
relevant Transaction is terminated under any provision of paragraph
10 of the Agreement, be treated for the purposes of paragraph 4(c)
of the Agreement as if it were an amount payable under paragraph 5
of the Agreement.
(h) If any Transaction forming part of an Open DBV Repo or Term DBV
Repo is terminated under any provision of paragraph 10 of the
Agreement, any amounts payable in respect of any earlier
Transactions forming part of that Open DBV Repo or Term DBV Repo
payment of which has been deferred under sub-paragraph 3.5(f) above
shall become due and payable immediately.
4. Transactions in partly-paid securities
4.1 This paragraph applies where -
(a) the Purchased Securities under a Transaction are Securities on which
a call or instalment remains to be paid; and
November 1995 16-7
(b) the due date for the payment of any such call or instalment occurs
before the Termination of the Transaction.
4.2 The Seller shall pay to the Buyer, for value on or before the due date
of the call or instalment, an amount equal to the call or instalment
payable on that date in respect of Securities equivalent to the
Purchased Securities.
4.3 No adjustment to the Repurchase Price shall be made in consequence of
the call or instalment or of the payment made by the Seller under
paragraph 4.2 above.
4.4 On and from the due date for the payment of the call or instalment the
expression "Equivalent Securities" shall with respect to that
Transaction be taken to mean Securities of the same issuer, forming part
of the same issue and being of an identical type, nominal value,
description and amount as the Purchased Securities but after payment of
the call or instalment in question.
5. Exercise of rights of conversion
5.1 This paragraph applies where the Purchased Securities under a
Transaction are Securities in respect of which a right of conversion
(whether arising under the terms of issue of the Securities or under a
conversion offer made after such issue) becomes exercisable before the
Termination of the Transaction.
5.2 The Seller may, not later than a reasonable period before the latest
time for the exercise of the right of conversion, give to the Buyer
written notice to the effect that, on Termination of the Transaction, it
wishes to receive Securities in such form as will arise if the right of
conversion is exercised or, in the case of a right of conversion which
may be exercised in more that one manner, is exercised in such manner as
is specified in the notice.
5.3 With effect from the latest time for the exercise of the right of
conversion the expression "Equivalent Securities" shall be taken to
mean -
(a) if a notice has been given under paragraph 5.2 above not later than
the time specified in that sub-paragraph, such amount of such
Securities of such description as fall to be held by a holder of
Securities of the same issuer, forming part of the same issue and
being of an identical type, nominal value, description and amount
as the Purchased Securities if he has exercised the right of
conversion in the manner specified in the notice;
(b) in any other case, such amount of Securities of such description as
fall to be held by a holder of Securities of the same issuer,
forming part of the same issue and being of an identical type,
nominal value, description and amount as the Purchased Securities if
he has not exercised the right of conversion.
6. Termination of on demand Transactions
6.1 Paragraph 3(e) of the Agreement shall not apply, but shall be replaced
by the following -
(a) "In the case of on demand Transactions, demand for Termination
shall be made by Buyer or Seller, by telephone or otherwise, and
shall provide for Termination to occur as soon as reasonably
practicable after such demand or on such date (being at least one
Business Day after that on which the demand is made) as may be
specified in the demand; provided that, unless otherwise agreed
between the Parties, a demand which is made before 10 a.m. on a
Business Day may provide for Termination to occur not later than
the close of business on that day."
7. Dividend entitlements; effect on margin provisions
7.1 This paragraph applies where -
(a) the ex-dividend date for the payment of any dividend on any
Purchased Securities occurs before the Termination of the relevant
Transaction; or
November 1995 16-8
(b) the ex-dividend date for the payment of any dividend on any
gilt-edged securities which have been delivered to a party as
Margin Securities occurs before Equivalent Margin Securities have
been delivered to the other party.
7.2 For the purposes of paragraph 4 of the Agreement -
(a) where the paragraph 7.1(a) above applies, from the period from the
ex-dividend date until the Termination of the Transaction, the
Purchaser shall be deemed to have received a payment of Cash Margin
equal to the amount of the dividend payable on the Purchased
Securities by reference to that ex-dividend date;
(b) where paragraph 7.1(b) above applies, the party which has received
those Margin Securities shall, from the period from the ex-dividend
date until Equivalent Margin Securities are delivered to the other
party, be deemed to have received a payment of Cash Margin equal to
the amount of the dividend payable on those Margin Securities by
reference to that ex-dividend date.
XXXXXXX XXXXX XXXXXX INC. AS AGENT FOR
SALOMON BROTHERS INTERNATIONAL LIMITED
Accepted as of:
By:
--------------------------------------
Authorised Signatory
Title:
< < > >
---------------------------------------------
Accepted as of:
-----------------------------------
By:
--------------------------------------
Authorised Signatory
Title:
November 1995 16-9
ANNEX 1, PART 3
ADDITIONAL TERMS AND CONDITIONS RELATING TO
EUROPEAN ECONOMIC AND MONETARY UNION
1. INTERPRETATION
In this Annex-
"EURO" means the currency of the member states of the European Union that
adopt a single currency in accordance with the Treaty establishing the
European Communities, as amended by the Treaty on European Union;
"EURO UNIT", "NATIONAL CURRENCY UNIT" and "TRANSITIONAL PERIOD" have the
meaning given to those terms in the European Council Regulation on the legal
framework for the introduction of the euro which is expected to come into
force 1 January 1999;
"TARGET" means the Trans-European Automated Real-time Gross Settlement
Express Transfer System.
2. CONTINUITY OF CONTRACT
The parties confirm that the introduction of the euro or the occurence or
non-occurence of any other event associated with economic and monetary union
in the European Community shall not have the effect of altering any term of
the Agreement or discharging; or excusing performance under the Agreement or
any Transaction thereunder, nor give a party the right unilaterally to alter
or terminate the Agreement or any Transaction thereunder.
3. BUSINESS DAYS
The parties agree that-
(a) references in paragraph 2(d)(iv) of the Agreement to a day on which
"banks are open for business in the principle financial centre" in
relation to a national currency until will be to a day on which banks
are open for settling payments in the national currency unit in the
principle financial centre of that national currency unit immediately prior
to the start of the transitional period;
(b) there shall be inserted at the end of paragraph 2(d)(iv) of the Agreement-
"(or, in the case of a payment denominated in euro, a day on which
TARGET operates)"; and
(c) the following words at the end of paragraph 2(d)(iv) of the Agreement
shall be deleted with effect from 1 January 1999-
"(or, in the case of ECU, a day on which ECU clearing operates)".
16-10
4. EQUIVALENT SECURITIES
The parties agree that for the purposes of paragraph 2(p) of the Agreement,
Securities will be equivalent to other Securities notwithstanding that those
Securities have been redenominated into euro or the nominal value of the
Securities has changed in connection with such redenomination.
5. PAYMENT AND TRANSFER
The parties agree that there shall be inserted at the end of paragraph 6(h)
of the Agreement-
"For the purposes of this paragraph, amounts in euros (whether
denominated in the euro unit or a national currency unit) shall be
treated as being in the same currency only if those amounts are
expressed in the euro unit or the same national currency unit".
XXXXXXX XXXXX XXXXXX INC. AS AGENT FOR
SALOMON BROTHERS INTERNATIONAL LIMITED
Accepted as of:
By: _______________________________________
Authorised Signatory
Title:
Accepted as of: ________________________
By: _______________________________________
Authorised Signatory
Title:
16-11
ANNEX II
FORM OF CONFIRMATION
To:____________________________________
From:__________________________________
Date:__________________________________
Subject: [Repurchase][Buy/Sell]*Transaction
(Reference Number: )
Dear Sirs,
The purpose of this [letter]/[facsimile]/[telex] is to set forth the terms
and conditions of the above repurchase transaction entered into between us on
the Contract Date referred to below.
This confirmation supplements and forms part of, and is subject to, the
Global Master Repurchase Agreement as entered into between us as of [] as the
same may be amended from time to time (the AGREEMENT). All provisions
contained in the Agreement govern this confirmation except as expressly
modified below. Words and phrases defined in the Agreement and used in this
confirmation shall have the same meaning herein as in the Agreement.
1. Contract Date:
2. Purchased Securities [state type[s] and nominal value[s]]:
3. CUSIP, CINS or other identifying number[s]:
4. Buyer:
5. Seller:
6. Purchase Date:
7. Purchase Price:
8. Contractual Currency:
[9. Repurchase Date]:*
[10. Terminable on demand]*
11. Pricing Rate:
[12. Sell Back Price:]
13. Buyer's Bank Account[s] Details:
14. Seller's Bank Account[s] Details:
[15. The Transaction is an Agency Transaction. [Name of Agent] is acting as
agent for [name or identifier of Principal]]*
[16. Additional Terms]:
Yours faithfully,
-------------------------------------------------------------------------------
* Delete as appropriate
November 1995
17
ANNEX III
BUY/SELL BACK TRANSACTIONS
1. In the event of any conflict between the terms of this Annex III and any
other term of the Agreement, the terms in this Annex shall prevail.
2. Each Transaction shall be identified at the time it is entered into and in
the Confirmation relating to it as either a Repurchase Transaction or a
Buy/Sell Back Transaction.
3. In the case of a Buy/Sell Back Transaction the Confirmation delivered in
accordance with paragraph 3 of the Agreement may consist of a single document
in respect of both of the transactions which together form the Buy/Sell Back
Transaction or separate Confirmations may be delivered in respect of each
such transaction. Such Confirmations may be in the form of Annex II to the
Agreement except that, subject to paragraph 5 below, such Confirmations shall
not include the item specified in paragraph 10 of Annex II.
4. The following definitions shall apply to Buy/Sell Back Transactions:
(i) "ACCRUED INTEREST", with respect to any Purchased Securities subject
to a Buy/Sell Back Transaction, unpaid Income that has accrued during
the period from (and including) the issue date or the last Income
Payment Date (whichever is the later) in respect of such Purchased
Securities to (but excluding) the date of calculation. For these
purposes unpaid Income shall be deemed to accrue on a daily basis from
(and including) the issue date or the last Income Payment Date (as the
case may be) to (but excluding) the next Income Payment Date or the
maturity date (whichever is the earlier);
(ii) "SELL BACK DIFFERENTIAL", with respect to any Buy/Sell Back
Transaction as of any date, the aggregate amount obtained by daily
application of the Pricing Rate for such Buy/Sell Back Transaction (on
a 360 day basis or 365 day basis in accordance with the applicable
ISMA convention, unless otherwise agreed between the parties for the
Transaction) to the sum of (a) the Purchase Price and (b) Accrued
Interest paid on the Purchase Date for such Transaction for the actual
number of days during the period commencing on (and including) the
Purchase Date for such Buy/Sell Back Transaction and ending on (but
excluding) the date of calculation;
(iii) "SELL BACK PRICE", with respect to any Buy/Sell Back Transaction, means:
(x) in relation to the date originally specified by the parties as
the Repurchase Date pursuant to paragraph 3(b)(iii) of the
Agreement, the price agreed by the Parties in relation to that
Buy/Sell Back Transaction, and
(y) in any other case (including for the purposes of the
application of paragraph 4 (margin maintenance) or paragraph 10
(Events of Default) of the Agreement, the product of the formula
(P + AI + D) - (IR + C), where -
P = the Purchase Price
AI = the amount, equal to Accrued Interest at the Purchase Date,
paid under paragraph 8 of this Annex
D = the Sell Back Differential
IR = the amount of any Income in respect of the Purchased
Securities payable by the issuer on or, in the case of
registered Securities, by reference to, any date falling
between the Purchase Date and the Repurchase Date
C = the aggregate amount obtained by daily application of the
Pricing Rate for such Buy/Sell Back Transaction to any such
income from (and including) the date of payment by the issuer
to (but excluding) the date of calculation
5. When entering into a Buy/Sell Back Transaction the parties shall also
agree the Sell Back Price and the Pricing Rate to apply in relation to that
Transaction on the scheduled Repurchase Date. The parties shall record the
Pricing Rate in at least one Confirmation applicable to that Buy/Sell Back
Transaction.
November 1995 18
6. Buy/Sell Back Transactions shall not be terminable on demand.
7. In the case of a Buy/Sell Back Transaction, the Purchase Price shall be
quoted exclusive of Accrued Interest to the Purchase Date on the Purchased
Securities and the Sell Back Price shall be quoted exclusive of Accrued
Interest.
8. For the purposes of paragraph 3(c) of the Agreement, in the case of a
Buy/Sell Back Transaction, the Purchased Securities shall be transferred to
Buyer or its agent against the payment of the Purchase Price plus an amount
equal to Accrued Interest to the Purchase Date on such Purchased Securities.
9. In the case of a Buy/Sell Back Transaction, paragraph 3(f) of the
Agreement shall not apply. Termination of such a Transaction will be effected
on the Repurchase Date by transfer to Seller or its agent of Equivalent
Securities against the payment by Seller of (i) in a case where the Repurchase
Date is the date originally scheduled by the parties pursuant to paragraph
3(b)(iii) of the Agreement, the Sell Back Price referred to in paragraph
4(iii)(x) of this Annex plus an amount equal to Accrued Interest to the
Repurchase Date; and (ii) in any other case, the Sell Back Price referred to
in paragraph 4(iii)(y) of this Annex.
10. If the parties agree that a Buy/Sell Back Transaction is to be repriced in
accordance with paragraph 4(i) of the Agreement, they shall at the time of
such repricing agree the Purchase Price, the Sell Back Price and the Pricing
Rate applicable to the Repriced Transaction.
11. Paragraph 5 of the Agreement (relating to Income payments) shall not
apply to Buy/Sell Back Transactions.
12. References to "Repurchase Price" throughout the Agreement shall be
construed as references to "Repurchase Price or the Sell Back Price, as the
case may be".
13. In Paragraph 10(c)(i) of the Agreement (relating to Events of Default),
the reference to the "Repurchase Prices" shall be construed as a reference
to "Repurchase Prices and Sell Back Prices".
Xxxxxxx Xxxxx Xxxxxx Inc. as Agent
for Salomon Brothers International Limited
___________________________________________
___________________________________________
By:________________________________________
November 1995 19
ANNEX IV
TRANSACTIONS ENTERED INTO AS AGENT
1. Subject to the following provisions of this Annex, either party may enter
into Transactions as agent for a third person (a "PRINCIPAL"), whether as
custodian or investment manager or otherwise (a Transaction so entered into
being an "AGENCY TRANSACTION"). In this Annex the party entering into an
Agency Transaction as agent is referred to as the "AGENT" and the other party
is referred to as the "OTHER PARTY".
2. A party may enter into an Agency Transaction if, but only if--
(a) it specifies that Transaction as an Agency Transaction at the time when
it enters into it and in the Confirmation;
(b) it enters into that Transaction on behalf of a single Principal whose
identity is disclosed to the other party (whether by name or by reference to
a code or identifier which the parties have agreed will be used to refer to a
specified Principal) at the time when it enters into the Transaction; and
(c) it has at the time when the Transaction is entered into actual authority
to enter into the Transaction on behalf of that Principal and to perform on
behalf of that Principal all of that Principal's obligations under the
Agreement.
3. A transaction shall not be entered into under the Agreement and this Annex
if both parties specify that they propose to enter into that transaction as
an agent.
4. Each party undertakes that, if it enters as agent into an Agency
Transaction, forthwith upon becoming aware-
(a) of any event which constitutes an Act of Insolvency with respect to the
relevant Principal; or
(b) of any breach of any of the warranties given in paragraph 8 below or of
any event or circumstance which has the result that any such warranty would
be untrue if repeated by reference to the current facts;
it will inform the other party of that fact and will, if so required by the
other party, furnish the other party with such additional information as the
other party may reasonably request.
5. (a) Each Agency Transaction shall be a transaction between the relevant
Principal and the other party and no person other than the relevant Principal
and the other party shall be a party to or have any rights or obligations
under an Agency Transaction. Without limiting the foregoing, the Agent shall
not be liable as principal for the performance of an Agency Transaction, but
this is without prejudice to any liability of the Agent under any other
provision of this Annex.
(b) All the provisions of the Agreement shall apply separately as between the
other party and each Principal for whom the Agent has entered into an Agency
Transaction or Agency Transactions as if each such Principal were a party to
a separate agreement with the other party in all respects identical with the
Agreement as supplemented by the provisions of this Annex other than this
paragraph, but with the following additions and modifications--
(i) if there occurs in relation to the Agent an Event of Default or
an event which would constitute an Event of Default if the other
party served a Default Notice or other written notice under any
sub-paragraph of paragraph 10 of the Agreement, the other party
shall be entitled by giving written notice to the Principal (which
notice shall be validly given if given to the Agent in accordance
with paragraph 14 of the Agreement) to declare that by reason of
that event an Event of Default is to be treated as occurring in
relation to the Principal. If the other party gives such a notice
then an Event of Default shall be treated as occurring in relation
to the Principal at the time when the notice is deemed to be given
in accordance with paragraph 14 of the Agreement;
(ii) if the Principal is neither incorporated nor has established a
place of business in Great Britain, the Principal shall for the
purposes of paragraph 17 of the Agreement as so applicable be
deemed to have appointed as its agent to receive on its behalf
service of process in the Courts of England the Agent, or if the
Agent is neither incorporated nor has established a place of
business in the United Kingdom, the person appointed by the Agent
under paragraph 17 of the Agreement, or such other person as the
Principal may from time to time specify in a written notice given
to the other party.
November 1995 20
(c) The Agent shall do all such things and provide the other party
with all such information as may be necessary to identify any Transaction
Exposure which may arise in respect of any Principal.
(d) The foregoing provisions do not affect the operation of the Agreement as
between the other party and the Agent in respect of any Transactions into
which the Agent may enter on its own account as a principal.
6. Paragraph 9(b) of the Agreement shall be deleted and replaced by the
following--
"(b) it will engage in this Agreement and the Transactions contemplated
hereunder as principal or, subject to and in accordance with of
Annex IV, as agent and the conditions referred to in Annex IV will
be fulfilled in respect of each Transaction into which it enters
as an agent;".
7. At the beginning of the last sentence of paragraph 9 of the Agreement
there shall be added the words "Subject to Annex IV,".
8. Each party warrants to the other that it will, on every occasion on
which it enters or purports to enter into a transaction as an Agency
Transaction, be duly authorised to enter into that transaction on behalf of
the person whom it specifies as the Principal in respect of that transaction
and to perform on behalf of that person all the obligations of that person
under the Agreement.
Xxxxxxx Xxxxx Xxxxxx Inc. as Agent for
Salomon Brothers International Limited
---------------------------------------
---------------------------------------
By:
------------------------------------
November 1995 21
ANNEX V
NAMES AND ADDRESSES FOR COMMUNICATION BETWEEN PARTIES
1. PARTY A
SALOMON BROTHERS INTERNATIONAL LIMITED
Victoria Plaza
000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxx XX0X 0XX
SETTLEMENTS
Attn: Customer Services
Tel: 0000 000 0000
Fax: 0000 000 0000
Tlx: 886441
REPO TRADING DESK
Tel: 0000 000 0000
Fax: 0000 000 0000
Tlx: 886441
NOTICES/CONTRACT ISSUES
Attn: Xxxx d'E Vallancey
Tel: 0000 000 0000
Fax: 0000 000 0000
Tlx: 886441
2. PARTY B
NC Residual II Corporation
00000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxx
Telephone:(000) 000-0000
Telex:
Fax: (000) 000-0000
November 1995 22
ANNEX VI
NAME AND ADDRESS OF PARTY A'S AGENT FOR SERVICE OF PROCESS
SALOMON BROTHERS INTERNATIONAL LIMITED
Victoria Plaza
000 Xxxxxxxxxx Xxxxxx Xxxx
Xxxxxx XX0X 0XX
November 1995 23
ANNEX VII
NAME AND ADDRESS OF PARTY B'S AGENT FOR SERVICE OF PROCESS
AS REQUIRED IN CLAUSE 17
November 1995 24
ANNEX VIII
NET PAYING SECURITIES
The term "gross paying securities" shall be deleted from the title page, and
in both the heading to the Agreement and paragraph 1(a) the phrase "other
than equities, U.S. Treasury instruments and Net Paying Securities" shall be
replaced by the phrase "other than equities and U.S. Treasury instruments".
The definition of "Net Paying Securities" shall be deleted.
In Annex III (Buy/Sell Transactions) the following words shall be added at
the end of the definition of the expression "IR";
" and for the avoidance of the doubt the reference to the amount of Income
for these purposes shall be to an amount paid without withholding or
deduction for or on account of taxes or duties notwithstanding that a payment
of such Income made in certain circumstances may be subject to such a
withholding or deduction."
XXXXXXX XXXXX XXXXXX INC. AS AGENT FOR
SALOMON BROTHERS INTERNATIONAL LIMITED
Accepted as of:
By:
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Authorised Signatory
Title:
< < > >
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Accepted as of:
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By:
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Authorised Signatory
Title:
November 1995 25
ANNEX IX
ITALIAN BONDS
"Italian bonds" means any Securities which are issued by the Italian
government or any other issuer in Italy. Where this paragraph applies its
terms shall prevail over any provision to the contrary in the Agreement,
including any other Annex.
Unless otherwise agreed -
(a) paragraph 5 of the Agreement shall apply without modification in
respect of any payment of Income in respect of Italian bonds which
could be received without a withholding or deduction on account of
Italian tax being made at source by an owner of such Italian bonds
which is a body corporate resident in Italy or in a jurisdiction with
an appropriate double tax treaty with Italy (whether or not either of
the parties is such a body corporate);
(b) paragraph 5 of the Agreement shall be modified, in its application to
any payment of Income in respect of Italian bonds other than such a
payment falling sub-paragraph (a) above, by deducting from the amount
required to be transferred or credited under that paragraph an amount
equal to any amount which would, on the assumption that Buyer owned
the bonds at the relevant Income Payment Date, be withheld or deducted
at source on account of Italian tax;
(c) in relation to Buy/Sell Back Transactions in Italian bonds, the amount
"IR" in the formula for computing the Sell Back Price pursuant to
paragraph 4 (iii)(y) shall be calculated on the same basis as the
amount required to be transferred or credited pursuant to paragraph 5
is calculated in accordance with sub-paragraphs (a) and (b) above;
(d) neither party shall be obliged to deliver or transfer to the other, or
to account to the other for, any tax credits or refunds to which it
may become entitled in respect of Income on Italian bonds; and
(e) paragraph 11 (Tax Event) shall not apply to any Transaction by virtue
of any Italian bonds ceasing to be Securities in respect of which a
deduction or withholding on account of Italian tax is required to be
made in respect of a payment of Income to such an owner as is referred
to in sub-paragraph (a) above.
XXXXXXX XXXXX XXXXXX INC. AS A AGENT FOR
SALOMON BROTHERS INTERNATIONAL LIMITED
Accepted as of:
By:
----------------------------------
Authorised Signatory
Title:
< < > >
-------------------------------
Accepted as of:
---------------------------
By:
----------------------------------
Authorised Signatory
Title:
November 1995 26
