EXECUTION VERSION
EXECUTION
VERSION
Exhibit
99.16
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(Bilateral
Form - Security Interest)
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(ISDA
Agreements Subject to English Law)
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ISDA®
International
Swaps and Derivatives Association, Inc.
Between
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Deutsche
Bank AG, acting through its London branch
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(“Party
A”)
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(“Party
B”)
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made
on
10
December, 2009
relating
to the
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ISDA
Master Agreement
dated as
of 10 December, 2009 between Party A and Party B.
This Deed
is a Credit Support Document with respect to both parties in relation to the
ISDA Master Agreement referred to above (as amended and supplemented from time
to time, the “Agreement”).
Accordingly,
the parties agree as follows:
Paragraph
1. Interpretation
(a) Definitions and
Inconsistency.
Unless otherwise defined in this Deed, capitalised terms defined in the
Agreement have the same meaning in this Deed. Capitalised terms not otherwise
defined in this Deed or in the Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Deed to Paragraphs are to Paragraphs of
this Deed. In the event of any inconsistency between this Deed and the
provisions of the Agreement, this Deed will prevail, and in the event of any
inconsistency between Paragraph 13 and the other provisions of this Deed,
Paragraph 13 will prevail. For the avoidance of doubt, references to “transfer”
in this Deed mean, in relation to cash, payment and, in relation to other
assets, delivery.
(b) Secured Party and
Chargor. All references in this Deed to the “Secured Party” will be to
either party when acting in that capacity and all corresponding references to
the “Chargor” will be to
the other party when acting in that capacity; provided, however, that if Other
Posted Support is held by a party to this Deed, all references in this Deed to
that party as the Secured Party with respect to that Other Posted Support will
be to that party as the beneficiary of that Other Posted Support and will not
subject that support or that party as the beneficiary of that Other Posted
Support to provisions of law generally relating to security interests and
secured parties.
Paragraph
2. Security
(a) Covenant to
Perform. Each party as the Chargor covenants with the other party that it
will perform the Obligations in the manner provided in the Agreement, this Deed
or any other relevant agreement.
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(b) Security.
Each party as the Chargor, as security for the performance of the
Obligations:
(i)
mortgages, charges and pledges and agrees to mortgage, charge and pledge, with
full title guarantee, in favour of the Secured Party by way of first fixed legal
mortgage all Posted Collateral (other than Posted Collateral in the form of
cash), (ii) to the fullest extent permitted by law, charges and agrees to
charge, with full title guarantee, in favour of the Secured Party by way of
first fixed charge all Posted Collateral in the form of cash; and (iii) assigns
and agrees to assign, with full title guarantee, the Assigned Rights to the
Secured Party absolutely.
(c) Release of
Security. Upon the transfer by the Secured Party to the Chargor of Posted
Collateral, the security interest granted under this Deed on that Posted
Collateral will be released immediately, and the Assigned Rights relating to
that Posted Collateral will be re-assigned to the Chargor, in each case without
any further action by either party. The Chargor agrees, in relation to any
securities comprised in Posted Collateral released by the Secured Party under
this Deed, that it will accept securities of the same type, nominal value,
description and amount as those securities.
(d) Preservation of
Security. The security constituted by this Deed shall be a continuing
security and shall not be satisfied by any intermediate payment or satisfaction
of the whole or any part of the Obligations but shall secure the ultimate
balance of the Obligations. If for any reason this security ceases to be a
continuing security, the Secured Party may open a new account with or continue
any existing account with the Chargor and the liability of the Chargor in
respect of the Obligations at the date of such cessation shall remain regardless
of any payments into or out of any such account. The security constituted by
this Deed shall be in addition to and shall not be affected by any other
security now or subsequently held by the Secured Party for all or any of the
Obligations.
(e) Waiver of
Defences. The obligations of the Chargor under this Deed shall not be
affected by any act, omission or circumstance which, but for this provision,
might operate to release or otherwise exonerate the Chargor from its obligations
under this Deed or affect such obligations including (but without limitation)
and whether or not known to the Chargor or the Secured Party:
(i) any
time or indulgence granted to or composition with the Chargor or any other
person;
(ii) the
variation, extension, compromise, renewal or release of, or refusal or neglect
to perfect or enforce, any terms of the Agreement or any rights or remedies
against, or any security granted by, the Chargor or any other
person;
(iii) any
irregularity, invalidity or unenforceability of any obligations of the Chargor
under the Agreement or any present or future law or order of any government or
authority (whether of right or in fact) purporting to reduce or otherwise affect
any of such obligations to the intent that the Chargor ’s obligations under this
Deed shall remain in full force and this Deed shall be construed accordingly as
if there were no such irregularity, unenforceability, invalidity, law or
order;
(iv) any
legal limitation, disability, incapacity or other circumstance relating to the
Chargor, any guarantor or any other person or any amendment to or variation of
the terms of the Agreement or any other document or security.
(f) Immediate
Recourse. The Chargor waives any right it may have of first requiring the
Secured Party to proceed against or claim payment from any other person or
enforce any guarantee or security before enforcing this Deed.
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(g) Reinstatement.
Where any discharge (whether in respect of the security constituted by this
Deed, any other security or otherwise) is made in whole or in part or any
arrangement is made on the faith of any payment, security or other disposition
which is avoided or any amount paid pursuant to any such discharge or
arrangement must be repaid on bankruptcy, liquidation or otherwise without
limitation, the security constituted by this Deed and the liability of the
Chargor under this Deed shall continue as if there had been no such discharge or
arrangement.
Paragraph
3. Credit Support Obligations
(a) Delivery
Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Secured
Party on or promptly following a Valuation Date, if the Delivery Amount for that
Valuation Date equals or exceeds the Chargor ’s Minimum Transfer Amount, then
the Chargor will transfer to the Secured Party Eligible Credit Support having a
Value as of the date of transfer at least equal to the applicable Delivery
Amount (rounded pursuant to Paragraph 13). Unless otherwise specified in
Paragraph 13, the “Delivery Amount” applicable to the Chargor for any Valuation
Date will equal the amount by which:
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(i)
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the
Credit Support Amount
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exceeds
(ii) the
Value as of that Valuation Date of all Posted Credit Support held by the Secured
Party (as adjusted to include any prior Delivery Amount and to exclude any prior
Return Amount, the transfer of which, in either case, has not yet been completed
and for which the relevant Settlement Day falls on or after such Valuation
Date).
(b) Return
Amount. Subject to Paragraphs 4 and 5, upon a demand made by the Chargor
on or promptly following a Valuation Date, if the Return Amount for that
Valuation Date equals or exceeds the Secured Party’s Minimum Transfer Amount,
then the Secured Party will transfer to the Chargor Posted Credit Support
specified by the Chargor in that demand having a Value as of the date of
transfer as close as practicable to the applicable Return Amount (rounded
pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the
“Return Amount” applicable to the Secured Party for any Valuation Date will
equal the amount by which:
(i) the
Value as of that Valuation Date of all Posted Credit Support held by the Secured
Party (as adjusted to include any prior Delivery Amount and to exclude any prior
Return Amount, the transfer of which, in either case, has not yet been completed
and for which the relevant Settlement Day falls on or after such Valuation
Date)
exceeds
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(ii)
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the
Credit Support Amount.
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Paragraph
4. Conditions Precedent, Transfers, Calculations and Substitutions
(a) Conditions
Precedent. Each transfer obligation of the Chargor under Paragraphs 3 and
5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and 6(g) is subject
to the conditions precedent that:
(i) no
Event of Default, Potential Event of Default or Specified Condition has occurred
and is continuing with respect to the other party; and
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(ii) no
Early Termination Date for which any unsatisfied payment obligations exist has
occurred or been designated as the result of an Event of Default or Specified
Condition with respect to the other party.
(b) Transfers.
All transfers under this Deed of any Eligible Credit Support, Posted Credit
Support, Interest Amount or Distributions, shall be made in accordance with the
instructions of the Secured Party, Chargor or Custodian, as applicable, and
shall be made:
(i) in
the case of cash, by transfer into one or more bank accounts specified by the
recipient;
(ii) in
the case of certificated securities which cannot or which the parties have
agreed will not be delivered by book-entry, by delivery in appropriate physical
form to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and any other
documents necessary to constitute a legally valid transfer to the
recipient;
(iii) in
the case of securities which the parties have agreed will be delivered by
book-entry, by the giving of written instructions (including, for the avoidance
of doubt, instructions given by telex, facsimile transmission or
electronic messaging system) to the relevant depository institution or other
entity specified by the recipient, together with a written copy of the
instructions to the recipient, sufficient, if complied with, to result in a
legally effective transfer of the relevant interest to the recipient;
and
(iv) in
the case of Other Eligible Support or Other Posted Support, as specified in
Paragraph 13 (j)(ii).
Subject
to Paragraph 5 and unless otherwise specified, if a demand for the transfer of
Eligible Credit Support or Posted Credit Support is received by the Notification
Time, then the relevant transfer will be made not later than the close of
business on the Settlement Day relating to the date such demand is received; if
a demand is received after the Notification Time, then the relevant transfer
will be made not later than the close of business on the Settlement Day relating
to the day after the date such demand is received.
(c) Calculations.
All calculations of Value and Exposure for purposes of Paragraphs 3 and 5(a)
will be made by the relevant Valuation Agent as of the relevant Valuation Time.
The Valuation Agent will notify each party (or the other party, if the relevant
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or, in
the case of Paragraph 5(a), following the date of calculation).
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(d)
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Substitutions
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(i) Unless
otherwise specified in Paragraph 13, the Chargor may on any Local Business Day
by notice (a “Substitution Notice”) inform the Secured Party that it wishes to
transfer to the Secured Party Eligible Credit Support (the “Substitute Credit
Support”) specified in that Substitution Notice in substitution for certain
Eligible Credit Support (the “Original Credit Support”) specified in the
Substitution Notice comprised in the Chargor ’s Posted Collateral.
(ii) If
the Secured Party notifies the Chargor that it has consented to the proposed
substitution, (A) the Chargor will be obliged to transfer the Substitute Credit
Support to the Secured Party on the first Settlement Day following the date on
which it receives notice (which may be oral telephonic notice) from the Secured
Party of its consent and (B) subject to Paragraph 4(a), the Secured Party will
be obliged to transfer to the Chargor the Original Credit Support not later than
the Settlement Day
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following
the date on which the Secured Party receives the Substitute Credit Support,
unless otherwise specified in Paragraph 13(f) (the “Substitution Date”);
provided that the Secured Party will only be obliged to transfer Original Credit
Support with a Value as of the date of transfer as close as practicable to, but
in any event not more than, the Value of the Substitute Credit Support as of
that date.
Paragraph
5. Dispute Resolution
(a) Disputed
Calculations or Valuations. If a party (a “Disputing Party”) reasonably
disputes (I) the Valuation Agent’s calculation of a Delivery Amount or a Return
Amount or (II) the Value of any transfer of Eligible Credit Support or Posted
Credit Support, then:
(1) the
Disputing Party will notify the other party and the Valuation Agent (if the
Valuation Agent is not the other party) not later than the close of business on
the Local Business Day following, in the case of (I) above, the date that the
demand is received under Paragraph 3 or, in the case of (II) above, the date of
transfer;
(2) in
the case of (I) above, the appropriate party will transfer the undisputed amount
to theother party not later than the close of business on the Settlement Day
following the date that the demand is received under Paragraph 3;
(3) the
parties will consult with each other in an attempt to resolve the dispute;
and
(4) if
they fail to resolve the dispute by the Resolution Time, then:
(i) in
the case of a dispute involving a Delivery Amount or Return Amount, unless
otherwise specified in Paragraph 13, the Valuation Agent will recalculate the
Exposure and the Value as of the Recalculation Date by:
(A) utilising
any calculations of that part of the Exposure attributable to the Transactions
that the parties have agreed are not in dispute;
(B) calculating
that part of the Exposure attributable to the Transactions in dispute by seeking
four actual quotations at mid-market from Reference Marketmakers for purposes of
calculating Market Quotation, and taking the arithmetic mean of those obtained;
provided that if four quotations are not available for a particular Transaction,
then fewer than four quotations may be used for that Transaction, and if no
quotations are available for a particular Transaction, then the Valuation
Agent’s original calculations will be used for that Transaction;
and
(C) utilising
the procedures specified in Paragraph 13(g)(ii) for calculating the Value, if
disputed, of Posted Credit Support;
(ii) in
the case of a dispute involving the Value of any transfer of Eligible Credit
Support or Posted Credit Support, the Valuation Agent will recalculate the Value
as of the date of transfer pursuant to Paragraph 13(g)(ii).
Following
a recalculation pursuant to this Paragraph, the Valuation Agent will notify each
party (or the other party, if the Valuation Agent is a party) as soon as
possible but in any event not later than the Notification Time on the Local
Business Day following the Resolution Time. The appropriate party will, upon
demand following
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that
notice by the Valuation Agent or a resolution pursuant to (3) above and subject
to Paragraphs 4(a) and 4(b), make the appropriate transfer.
(b) Not a Relevant
Event. The failure by a party to make a transfer of any amount which is
the subject of a dispute to which Paragraph 5(a) applies will not constitute a
Relevant Event under Paragraph 7 for as long as the procedures set out in
Paragraph 5 are being carried out. For the avoidance of doubt, upon
completion of those procedures, Paragraph 7 will apply to any failure by a party
to make a transfer required under the final sentence of Paragraph 5(a) on the
relevant due date.
Paragraph
6. Holding Posted Collateral
(a) Care of Posted
Collateral. The Secured Party will exercise reasonable care to assure the
safe custody of all Posted Collateral to the extent required by applicable law.
Except as specified in the preceding sentence, the Secured Party will have no
duty with respect to Posted Collateral, including, without limitation, any duty
to collect any Distributions, or enforce or preserve any rights pertaining to
the Posted Collateral.
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(b)
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Eligibility
to Hold Posted Collateral;
Custodians.
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(i) General.
Subject to the satisfaction of any conditions specified in Paragraph 13 for
holding Posted Collateral, the Secured Party will be entitled to hold Posted
Collateral or to appoint an agent (a “Custodian”) to hold Posted Collateral for
the Secured Party. Upon notice by the Secured Party to the Chargor of the
appointment of a Custodian, the Chargor ’s obligations to make any transfer will
be discharged by making the transfer to that Custodian. The holding of Posted
Collateral by a Custodian will be deemed to be the holding of that Posted
Collateral by the Secured Party for which the Custodian is acting.
(ii) Failure to
Satisfy Conditions. If the Secured Party or its Custodian fails to
satisfy any conditions for holding Posted Collateral, then upon a demand made by
the Chargor, the Secured Party will, not later than five Local Business Days
after the demand, transfer or cause its Custodian to transfer all Posted
Collateral held by it to a Custodian that satisfies those conditions or to the
Secured Party if it satisfies those conditions.
(iii) Liability.
The Secured Party will be liable for the acts or omissions of its Custodian to
the same extent that the Secured Party would be liable under this Deed for its
own acts or omissions.
(d) No Use of
Collateral. For the avoidance of doubt, and without limiting the rights
of the Secured Party under the other provisions of this Deed, the Secured Party
will not have the right to sell, pledge, rehypothecate, assign, invest, use,
commingle or otherwise dispose of, or otherwise use in its business any Posted
Collateral it holds under this Deed.
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(e)
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Rights
Accompanying Posted
Collateral.
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(i) Distributions and
Voting Rights. Unless and until a Relevant Event or a Specified Condition
occurs the Chargor shall be entitled:
(A) to
all Distributions; and
(B) to
exercise, or to direct the Secured Party to exercise, any voting rights attached
to any of the Posted Collateral (but only in a manner consistent with the terms
of this Deed) and, if any expense would be incurred by the Secured Party in
doing so, only to the extent that the Chargor paid to the Secured Party in
advance of any such exercise an amount sufficient to cover that
expense.
(ii) Exercise by
Secured Party. At any time after the occurrence of a Relevant Event or
Specified Condition and without any further consent or authority on the part of
the Chargor the Secured Party may exercise at its discretion (in the name of the
Chargor or otherwise) in respect of any of the Posted Collateral any voting
rights and any powers or rights which may be exercised by the person or persons
in whose name or names the Posted Collateral is registered or who is the holder
or bearer of them including (but without limitation) all the powers given to
trustees by sections 10(3) and (4) of the Trustee Act 1925 (as amended by
section 9 of the Trustee Investments Act 1961) in respect of securities or
property subject to a trust. If the Secured Party exercises any such rights or
powers, it will give notice of the same to the Chargor as soon as
practicable.
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(f)
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Calls and
Other Obligations
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(i) Payment of
Calls. The Chargor will pay all calls or other payments which may become
due in respect of any of the Posted Collateral and if it fails to do so the
Secured Party may elect to make such payments on behalf of the Chargor. Any sums
so paid by the Secured Party shall be repayable by the Chargor to the Secured
Party on demand together with interest at the Default Rate from the date of such
payment by the Secured Party and pending such repayment shall form part of the
Obligations.
(ii) Requests for
Information. The Chargor shall promptly copy to the Secured Party and
comply with all requests for information which is within its knowledge and which
are made under section 212 of the Companies Xxx 0000 or any similar provision
contained in any articles of association or other constitutional document
relating to any of the Posted Collateral and if it fails to do so the Secured
Party may elect to provide such information as it may have on behalf of the
Chargor.
(iii) Continuing
Liability of Chargor. The Chargor shall remain liable to observe and
perform all of the other conditions and obligations assumed by it in respect of
any of the Posted Collateral.
(iv) No Liability of
Secured Party. The Secured Party shall not be required to perform or
fulfil any obligation of the Chargor in respect of the Posted Collateral or to
make any payment, or to make any enquiry as to the nature or sufficiency of any
payment received by it or the Chargor, or to present or file any claim or take
any other action to collect or enforce the payment of any amount to which it may
have been or to which it may be entitled under this Deed at any
time.
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(g)
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Distributions
and Interest Amount.
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(i) Distributions.
The Secured Party will transfer to the Chargor not later than the Settlement Day
following each Distributions Date any Distributions it receives to the extent
that a Delivery Amount would not be created or increased by the transfer, as
calculated by the Valuation Agent (and the date of calculation will be deemed a
Valuation Date for this purpose).
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(ii) Interest
Amount. Unless otherwise specified in Paragraph 13(i)(iii), with respect
to Posted Collateral in the form of cash, the Secured Party will transfer to the
Chargor at the times specified in Paragraph 13(i)(ii) the Interest Amount to the
extent that a Delivery Amount would not be created or increased by that
transfer, as calculated by the Valuation Agent (and the date of calculation will
be deemed to be a Valuation Date for this purpose).
Any
Distributions or Interest Amount (or portion of either) not transferred pursuant
to this Paragraph will constitute Posted Collateral and will be subject to the
security interest granted under Paragraph 2(b) or otherwise will be subject to
the set-off provided in Paragraph 8(a)(ii).
Paragraph
7. Default
For
purposes of this Deed, a “Relevant Event” will have occurred with respect to a
party if:
(i) an
Event of Default has occurred in respect of that party under the Agreement;
or
(ii) that
party fails (or fails to cause its Custodian) to make, when due, any transfer of
Eligible Collateral, Posted Collateral, Distributions or Interest Amount, as
applicable, required to be made by it and that failure continues for two Local
Business Days after notice of that failure is given to that party;
or
(iii) that
party fails to perform any Obligation other than those specified in Paragraph
7(ii) and that failure continues for 30 days after notice of that failure is
given to that party.
Paragraph
8. Rights of Enforcement
(a) Secured Party ’s
Rights. If at any time (1) a Relevant Event or Specified Condition with
respect to the Chargor has occurred and is continuing or (2) an Early
Termination Date has occurred or been designated under the Agreement as the
result of an Event of Default or Specified Condition with respect to the
Chargor, then, unless the Chargor has paid in full all of its Obligations that
are then due:
(i) the
Secured Party shall, without prior notice to the Chargor, be entitled to put
into force and to exercise immediately or as and when it may see fit any and
every power possessed by the Secured Party by virtue of this Deed or available
to a secured creditor (so that section 93 and section 103 of the Law of Property
Act 1925 shall not apply to this Deed) and in particular (but without
limitation) the Secured Party shall have power in respect of Posted Collateral
other than in the form of cash:
(A) to
sell all or any of the Posted Collateral in any manner permitted by law upon
such terms as the Secured Party shall in its absolute discretion determine;
and
(B) to
collect, recover or compromise and to give a good discharge for any moneys
payable to the Chargor in respect of any of the Posted Collateral;
(ii) the
Secured Party may in respect of Posted Collateral in the form of cash
immediately or at any subsequent time, without prior notice to the
Chargor:
(A) apply
or appropriate the Posted Collateral in or towards the payment or discharge of
any amounts payable by the Chargor with respect to any Obligation in such order
as the Secured Party sees fit; or
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(B) set
off all or any part of any amounts payable by the Chargor with respect to any
Obligation against any obligation of the Secured Party to repay any amount to
the Chargor in respect of the Posted Collateral; or
(C) debit
any account of the Chargor (whether sole or joint) with the Secured Party at any
of its offices anywhere (including an account opened specially for that purpose)
with all or any part of any amounts payable by the Chargor with respect to any
Obligation from time to time; or
(D) combine
or consolidate any account in the name of the Chargor (whether sole or joint) in
any currency at any of the Secured Party’s offices anywhere with the account
relating to the Posted Collateral;
and for
the purposes of this Paragraph 8(a)(ii) the Secured Party shall be
entitled:
(X) to
make any currency conversions or effect any transaction in currencies which it
thinks fit, and to do so at such times and rates as it thinks
proper;
(Y) to
effect any transfers between, or entries on, any of the Chargor ’s accounts with
the Secured Party as it thinks proper; and
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(iii)
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the
Secured Party may exercise any other rights and remedies available to the
Secured Party under the terms of Other Posted Support, if
any.
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(b) Power of
Attorney. The Chargor, by way of security and solely for the purpose of
more fully securing the performance of the Obligations, irrevocably appoints the
Secured Party the attorney of the Chargor on its behalf and in the name of the
Chargor or the Secured Party (as the attorney may decide) to do all acts, and
execute all documents which the Chargor could itself execute, in relation to any
of the Posted Collateral or in connection with any of the matters provided for
in this Deed, including (but without limitation):
(i) to
execute any transfer, xxxx of sale or other assurance in respect of the Posted
Collateral;
(ii) to
exercise all the rights and powers of the Chargor in respect of the Posted
Collateral;
(iii) to
ask, require, demand, receive, compound and give a good discharge for any and
all moneys and claims for moneys due and to become due under or arising out of
any of the Posted Collateral;
(iv) to
endorse any cheques or other instruments or orders in connection with any of the
Posted Collateral; and
(v) to
make any claims or to take any action or to institute any proceedings which the
Secured Party considers to be necessary or advisable to protect or enforce the
security interest created by this Deed.
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(c)
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Protection
of Purchaser
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(i) No
purchaser or other person dealing with the Secured Party or with its attorney or
agent shall be concerned to enquire (1) whether any power exercised or purported
to be exercised by the Secured Party has become exercisable, (2) whether any
Obligation remains due, (3) as to the propriety or regularity of any of the
actions of the Secured Party or (4) as to the application of any money paid to
the Secured Party.
(ii) In
the absence of bad faith on the part of such purchaser or other person, such
dealings shall be deemed, so far as regards the safety and protection of such
purchaser or other person, to be within the
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powers
conferred by this Deed and to be valid accordingly. The remedy of the Chargor in
respect of any impropriety or irregularity whatever in the exercise of such
powers shall be in damages only.
(d) Deficiencies and
Excess Proceeds. The Secured Party will transfer to the Chargor any
proceeds and Posted Credit Support remaining after liquidation, set-off and/or
application under Paragraph 8(a) and after satisfaction in full of all amounts
payable by the Chargor with respect to any Obligations; the Chargor in all
events will remain liable for any amounts remaining unpaid after any
liquidation, set-off and/or application under Paragraph 8(a).
(e) Final
Returns. When no amounts are or may become payable by the Chargor with
respect to any Obligations (except for any potential liability under Section
2(d) of the Agreement), the Secured Party will transfer to the Chargor all
Posted Credit Support and the Interest Amount, if any.
Paragraph
9. Representations
Each
party represents to the other party (which representations will be deemed to be
repeated as of each date on which it, as the Chargor, transfers Eligible
Collateral) that:
(i) it
has the power to grant a security interest in any Eligible Collateral it
transfers as the Chargor to the Secured Party under this Deed and has taken all
necessary actions to authorise the granting of that security
interest;
(ii) it
is the beneficial owner of all Eligible Collateral it transfers as the Chargor
to the Secured Party under this Deed, free and clear of any security interest,
lien, encumbrance or other interest or restriction other than the security
interest granted under Paragraph 2 and other than a lien routinely imposed on
all securities in a clearing system in which any such Eligible Collateral may be
held;
(iii) upon
the transfer of any Eligible Collateral by it as the Chargor to the Secured
Party under the terms of this Deed, the Secured Party will have a valid security
interest in such Eligible Collateral; and
(iv) the
performance by it as the Chargor of its obligations under this Deed will not
result in the creation of any security interest, lien or other interest or
encumbrance in or on any Posted Collateral other than the security interest
created under this Deed (other than any lien routinely imposed on all securities
in a clearing system in which any such Posted Collateral may be
held).
Paragraph
10. Expenses
(a) General. Except as otherwise
provided in Paragraphs 10(b) and 10(c), each party will pay its own costs and
expenses (including any stamp, transfer or similar transaction tax or duty
payable on any transfer it is required to make under this Deed) in connection
with performing its obligations under this Deed and neither party will be liable
for any such costs and expenses incurred by the other party.
(b) Posted Credit Support. The
Chargor will promptly pay when due all taxes, assessments or charges of any
nature that are imposed with respect to Posted Credit Support held by the
Secured Party upon becoming aware of the same.
(c) Liquidation/Application
of Posted Credit Support. All reasonable costs and expenses incurred by
the Secured Party in connection with the liquidation and/or application of any
Posted Credit Support under Paragraph 8 will be payable, on demand, by the
Defaulting Party or, if there is no Defaulting Party, equally by the
parties.
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Paragraph
11. Other Provisions
(a) Default
Interest. A Secured Party that fails to make, when due, any transfer of
Posted Collateral or the Interest Amount, will be obliged to pay the Chargor (to
the extent permitted under applicable law) an amount equal to interest at the
Default Rate multiplied by the Value on the relevant Valuation Date of the items
of property that were required to be transferred, from (and including) the date
that Posted Collateral or Interest Amount was required to be transferred to (but
excluding) the date of transfer of that Posted Collateral or Interest Amount.
This interest will be calculated on the basis of daily compounding and the
actual number of days elapsed.
(b) Further
Assurances. Promptly following a demand made by a party, the other party
will execute, deliver, file and record any financing statement, specific
assignment or other document and take any other action that may be necessary or
desirable and reasonably requested by that party to create, preserve, perfect or
validate any security interest granted under Paragraph 2, to enable that party
to exercise or enforce its rights under this Deed with respect to Posted Credit
Support or an Interest Amount or to effect or document a release of a security
interest on Posted Collateral or an Interest Amount.
(c) Further
Protection. The Chargor will promptly give notice to the Secured Party
of, and defend against, any suit, action, proceeding or lien that involves
Posted Credit Support transferred by the Chargor or that could adversely affect
the security interest granted by it under Paragraph 2.
(d) Good Faith
and Commercially Reasonable Manner. Performance of all obligations under this
Deed, including, but not limited to, all calculations, valuations and
determinations made by either party, will be made in good faith and in a
commercially reasonable manner.
(e) Demands and
Notices. All demands and notices made by a party under this Deed will be
made as specified in Section 12 of the Agreement, except as otherwise provided
in Paragraph 13.
(f) Specifications of
Certain Matters. Anything referred to in this Deed as being specified in
Paragraph 13 also may be specified in one or more Confirmations or other
documents and this Deed will be construed accordingly.
(g) Governing Law and
Jurisdiction. This Deed will be governed by and construed in accordance
with English law. With respect to any suit, action or proceedings relating to
this Deed, each party irrevocably submits to the jurisdiction of the English
courts.
Paragraph
12. Definitions
As used
in this Deed:
“Assigned
Rights” means all rights relating to the Posted Collateral which the
Chargor may have now or in the future against the Secured Party or any third
party, including, without limitation, any right to delivery of a security of the
appropriate description which arises in connection with (a) any Posted
Collateral being transferred to a clearance system or financial intermediary or
(b) any interest in or to any Posted Collateral being acquired while that Posted
Collateral is in a clearance system or held through a financial
intermediary.
“Base
Currency” means the currency specified as such in Paragraph
13(a)(i).
“Base Currency
Equivalent” means, with respect to an amount on a Valuation Date, in the
case of an amount denominated in the Base Currency, such Base Currency amount
and, in the case of an amount in a currency other than the Base Currency (the
“Other Currency”), the amount in the Base Currency required to purchase such
11
EXECUTION
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amount of
the Other Currency at the spot exchange rate determined by the Valuation Agent
for value on such Valuation Date.
“Chargor”
means either party, when (i) that party receives a demand for or is required to
transfer Eligible Credit Support under Paragraph 3(a) or (ii) in relation to
that party the other party holds any Posted Credit Support.
“Credit Support
Amount” means, with respect to a Secured Party on a Valuation Date, (i)
the Secured Party’s Exposure plus (ii) all Independent Amounts applicable to the
Chargor, if any, minus (iii) all Independent Amounts applicable to the Secured
Party, if any, minus (iv) the Chargor’s Threshold; provided, however, that the
Credit Support Amount will be deemed to be zero whenever the calculation of
Credit Support Amount yields a number less than zero.
“Custodian”
has the meaning specified in Paragraphs 6(b)(i) and 13.
“Delivery
Amount” has the meaning specified in Paragraph 3(a).
“Disputing
Party” has the meaning specified in Paragraph 5.
“Distributions”
means, with respect to Posted Collateral other than cash, all principal,
interest and other payments and distributions of cash or other property with
respect to that Posted Collateral. Distributions will not include any item of
property acquired by the Secured Party upon any disposition or liquidation of
Posted Collateral.
“Distributions
Date” means, with respect to any Eligible Collateral comprised in the
Posted Collateral other than cash, each date on which a holder of the Eligible
Collateral is entitled to receive Distributions or, if that date is not a Local
Business Day, the next following Local Business Day.
“Eligible
Collateral” means, with respect to a party, the items, if any, specified
as such for that party in Paragraph 13(c)(ii).
“Eligible Credit
Support” means Eligible Collateral and Other Eligible Support, including
in relation to any securities, if applicable, the proceeds of any redemption in
whole or in part of such securities by the relevant issuer.
“Eligible
Currency” means each currency specified as such in Paragraph 13(a)(ii),
if such currency is freely available.
“Exposure”
means with respect to a party on a Valuation Date and subject to Paragraph 5 in
the case of a dispute, the amount, if any, that would be payable to that party
by the other party (expressed as a positive number) or by that party to the
other party (expressed as a negative number) pursuant to Section 6(e)(ii)(1) of
the Agreement if all Transactions were being terminated as of the relevant
Valuation Time, on the basis that (i) that party is not the Affected Party and
(ii) the Base Currency is the Termination Currency; provided that Market
Quotation will be determined by the Valuation Agent on behalf of that party
using its estimates at mid-market of the amounts that would be paid for
Replacement Transactions (as that term is defined in the definition of “Market
Quotation”).
“Independent
Amount” means, with respect to a party, the Base Currency Equivalent of
the amount specified as such for that party in Paragraph 13(c)(iv)(A); if no
amount is specified, zero.
“Interest
Amount” means, with respect to an Interest Period, the aggregate sum of
the Base Currency Equivalent of the amounts of interest determined for each
relevant currency and calculated for each day in that Interest
12
EXECUTION
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Period on
the principal amount of Posted Collateral in the form of cash in such currency
held by the Secured Party on that day, determined by the Valuation Agent for
each such day as follows:
(x) the
amount of that cash in such currency on that day; multiplied by
(y) the
relevant Interest Rate in effect for that day; divided by
(z) 360
(or, if such currency is pounds sterling, 365).
“Interest
Period” means the period from (and including) the last Local Business Day
on which an Interest Amount was transferred (or, if no Interest Amount has yet
been transferred, the Local Business Day on which Posted Collateral in the form
of cash was transferred to or received by the Secured Party) to (but excluding)
the Local Business Day on which the current Interest Amount is
transferred.
“Interest
Rate” means, with respect to an Eligible Currency the rate specified in
Paragraph 13(i)(i) for that currency.
“Local Business
Day”, unless otherwise specified in Paragraph 13(1), means:
(i) in
relation to a transfer of cash or other property (other than securities) under
this Deed, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) in the place where
the relevant account is located and, if different, in the principal financial
centre, if any, of the currency of such payment;
(ii) in
relation to a transfer of securities under this Deed, a day on which the
clearance system agreed between the parties for delivery of the securities is
open for the acceptance and execution of settlement instructions or, if delivery
of the securities is contemplated by other means, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) in the place(s) agreed between the parties for this
purpose;
(iii) in
relation to a valuation under this Deed, a day on which commercial banks are
open for business (including dealings in foreign exchange and foreign currency
deposits) in the place of location of the Valuation Agent and in the place(s)
agreed between the parties for this purpose; and (iv) in relation to any notice
or other communication under this Deed, in the place specified in the address
for notice most recently provided by the recipient.
“Minimum Transfer
Amount” means, with respect to a party, the amount specified as such for
that party in Paragraph 13(c)(iv)(C); if no amount is specified,
zero.
“Notification
Time” has the meaning specified in Paragraph 13(d)(iv).
“Obligations”
means, with respect to a party, all present and future obligations of that party
under the Agreement and this Deed and any additional obligations specified for
that party in Paragraph 13(b).
“Other Eligible
Support” means, with respect to a party, the items, if any, specified as
such for that party in Paragraph 13.
“Other Posted
Support” means all Other Eligible Support transferred to the Secured
Party that remains in effect for the benefit of that Secured Party.
“Posted
Collateral” means all Eligible Collateral, other property, Distributions
and all proceeds of any such Eligible Collateral, other property or
Distributions that have been transferred to or received by the Secured Party
13
EXECUTION
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under
this Deed and not transferred to the Chargor pursuant to Paragraph 3(b),
4(d)(ii) or 6(g)(i) or realised by the Secured Party under Paragraph 8. Any
Distributions or Interest Amount (or portion of either) not transferred pursuant
to Paragraph 6(g) will constitute Posted Collateral.
“Posted Credit
Support” means Posted Collateral and Other Posted Support.
“Recalculation
Date” means the Valuation Date that gives rise to the dispute under
Paragraph 5; provided, however, that if a subsequent Valuation Date occurs under
Paragraph 3 prior to the resolution of the dispute, then the “Recalculation
Date” means the most recent Valuation Date under Paragraph 3.
“Relevant
Event” has the meaning specified in Paragraph 7.
“Resolution
Time” has the meaning specified in Paragraph 13(g)(i).
“Return
Amount” has the meaning specified in Paragraph 3(b).
“Secured
Party” means either party, when that party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
“Settlement
Day” means, in relation to a date, (i) with respect to a transfer of cash
or other property (other than securities), the next Local Business Day and (ii)
with respect to a transfer of securities, the first Local Business Day after
such date on which settlement of a trade in the relevant securities, if effected
on such date, would have been settled in accordance with customary practice when
settling through the clearance system agreed between the parties for delivery of
such securities or, otherwise, on the market in which such securities are
principally traded (or, in either case, if there is no such customary practice,
on the first Local Business Day after such date on which it is reasonably
practicable to deliver such securities).
“Specified
Condition” means, with respect to a party, any event specified as such
for that party in Paragraph 13(e).
“Substitute Credit
Support” has the meaning specified in Paragraph 4(d)(i).
“Substitution
Date” has the meaning specified in Paragraph 4(d)(ii).
“Substitution
Notice” has the meaning specified in Paragraph 4(d)(i).
“Threshold”
means, with respect to a party, the Base Currency Equivalent of the amount
specified as such for that party in Paragraph 13(c)(iv)(B); if no amount is
specified, zero.
“Valuation
Agent” has the meaning specified in Paragraph 13(d)(i).
“Valuation
Date” means each date specified in or otherwise determined pursuant to
Paragraph 13(d)(ii).
“Valuation
Percentage” means, for any item of Eligible Collateral, the percentage
specified in Paragraph 13(c)(ii).
“Valuation
Time” has the meaning specified in Paragraph 13(d)(iii).
“Value”
means for any Valuation Date or other date for which Value is calculated, and
subject to Paragraph 5 in the case of a dispute, with respect to:
|
(i)
|
Eligible
Collateral or Posted Collateral that
is:
|
14
EXECUTION
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(A) an
amount of cash, the Base Currency Equivalent of such amount multiplied by the
applicable Valuation Percentage, if any; and
(B) a
security, the Base Currency Equivalent of the bid price obtained by the
Valuation Agent multiplied by the applicable Valuation Percentage, if
any;
(ii) Posted
Collateral that consists of items that are not specified as Eligible Collateral,
zero; and
(iii) Other
Eligible Support and Other Posted Support, as specified in Paragraph
13(j).
15
EXECUTION
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Paragraph
13. Elections and Variables
|
(a)
|
Base
Currency and Eligible
Currency.
|
|
|
(i)
|
“Base Currency” means
United States Dollars.
|
|
|
(ii)
|
“Eligible Currency" means
the Base Currency.
|
|
(b)
|
Security
Interest for “Obligations”. The term “Obligations” as used in this Deed
includes the
following additional obligations:
|
With
respect to Party A: not applicable.
With
respect to Party B: not applicable.
|
(c)
|
Credit
Support Obligations.
|
|
|
(i)
|
Delivery
Amount, Return Amount and Credit Support
Amount.
|
| (A) | “Delivery Amount” has the meaning specified in Paragraph 3(a). | |
| (B) | “Return Amount” has the meaning specified in Paragraph 3(b). | |
|
|
(C)
|
“Credit
Support Amount” will not have the meaning specified in Paragraph
12.
|
| "Credit Support Amount" means, for so long as Party B has outstanding obligations (whether actual or contingent) under Section 2(a)(i) or Section 6 of the Agreement, an amount in the Base Currency equal to the Value of the Number of Shares and thereafter, Zero. |
|
|
(ii)
|
Eligible
Collateral. The following items will qualify as “Eligible
Collateral” for the party
specified:
|
|
Party
A
|
Party
B
|
Valuation
Percentage
|
|
|
(A)
the Shares (as defined below)
|
not
applicable
|
[X]
|
100%
|
|
(B)
Following the occurrence of a Potential Adjustment Event or Extraordinary
Event in respect of the Shares, other securities or assets (other than
Spin-off Shares, and whether of the Issuer of the Shares or a third party)
deriving from the Shares
|
not
applicable
|
[X]
|
Such
percentage as will, from time to time, be specified by the Valuation Agent
as applying to such Eligible Credit Support
|
16
EXECUTION
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|
Party
A
|
Party
B
|
Valuation
Percentage
|
|
|
(C)
Following the occurrence of a Spin-off, Spin-off Shares
|
not
applicable
|
[X]
|
Such
percentage as will, from time to time, be specified by the Valuation Agent
as applying to such Eligible Credit Support
|
|
|
(iii)
|
Other
Eligible Support. The following items will qualify as “Other
Eligible Support” for the party specified: Not
applicable.
|
|
|
(iv)
|
Thresholds.
|
|
|
(A)
|
“Independent
Amount” means with respect to Party A: not
applicable
|
|
|
“Independent
Amount” means with respect to Party B:
Zero
|
|
|
(B)
|
“Threshold”
means with respect to Party A: not
applicable
|
|
|
“Threshold”
means with respect to Party B: Zero
|
|
|
(C)
|
“Minimum
Transfer Amount” means with respect to Party A:
Zero
|
“Minimum Transfer
Amount” means with respect to Party B: Zero
(D) Rounding. The Delivery Amount
and the Return Amount will not be rounded.
|
(d)
|
Valuation
and Timing.
|
(i) “Valuation
Agent” means Party A.
|
|
(ii)
|
“Valuation
Date” means: Daily.
|
“Valuation
Time” means the close of business on the Local Business Day immediately
preceding the Valuation Date or date of calculation, as applicable; provided
that the calculations of Value and Exposure will, as far as practicable, be made
as of approximately the same time on the same date.
|
|
(iii)
|
“Notification
Time” means 1:00 p.m., London time, on a Local Business
Day.
|
|
(e)
|
Conditions
Precedent and Secured Party’s Rights and Remedies. The following
Termination Event(s) will be a “Specified Condition” for the party
specified (that party being the Affected Party if the Termination Event
occurs with respect to that party):
|
|
Party
A
|
Party
B
|
|
|
Illegality
|
not
applicable
|
not
applicable
|
17
EXECUTION
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|
Party
A
|
Party
B
|
|
|
Tax
Event
|
not
applicable
|
not
applicable
|
|
Tax
Event Upon Merger
|
not
applicable
|
not
applicable
|
|
Credit
Event Upon Merger
|
not
applicable
|
not
applicable
|
|
Additional
Termination Event(s):
|
not
applicable
|
not
applicable
|
|
(f)
|
Substitution.
|
“Substitution
Date” has the meaning specified in Paragraph 4(d)(ii).
|
(g)
|
Dispute
Resolution.
|
(i) “Resolution
Time” means 1:00 p.m., London time, on the Local Business Day following
the date on which the notice is given that gives rise to a dispute under
Paragraph 5.
(ii) Value. For the purpose of
Paragraphs 5(a)(4)(i)(C) and 5(a)(4)(ii), the Value of the outstanding Posted
Credit Support or of any transfer of Eligible Credit Support or Posted Credit
Support, as the case may be, will be calculated as follows:
|
|
(A)
|
with
respect to securities (“Securities”) the
sum of (a)(x) the last bid price on such date for such Securities on the
principal national securities exchange on which such Securities are
listed, multiplied by the applicable Valuation Percentage; or (y) where
any Securities are not listed on a national securities exchange, the bid
price for such Securities quoted as at the close of business on such date
by any principal market maker for such Securities chosen by the Valuation
Agent, multiplied by the applicable Valuation Percentage; or (z) if no
such bid price is listed or quoted for such date, the last bid price
listed or quoted (as the case may be), as of the day next preceding such
date on which such prices were available, multiplied by the applicable
Valuation Percentage; plus (b) the accrued interest on such Securities
(except to the extent that such interest has been paid to the Transferor
pursuant to Paragraph 6(g)(ii) or included in the applicable price
referred to in subparagraph (a) above) as of such
date;
|
|
|
(B)
|
with
respect to any cash, the amount thereof;
and
|
|
|
(C)
|
with
respect to any Posted Credit Support or of any transfer of Eligible Credit
Support or Posted Credit Support other than Securities and cash, the fair
market value thereof on such date, as determined in any reasonable manner
chosen by the Valuation Agent, multiplied by the applicable Valuation
Percentage.
|
(iii) Alternative.
The provisions of Paragraph 5 will apply.
|
(h)
|
Eligibility
to Hold Posted Collateral and Use of Posted Collateral;
Custodians.
|
18
EXECUTION
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|
|
(i)
|
Party
B may deliver Posted Collateral to Deutsche Bank International Limited (or
such other entity as Party A may agree in writing) ("Party B's
Custodian"), subject to Paragraph 13(l)(v). By doing so
it shall discharge its obligation to transfer Posted Collateral to the
Secured Party. Party B shall be liable for the acts or
omissions of Party B's Custodian.
|
(ii) Use of Posted
Collateral.
|
|
The
provisions of Paragraphs 6(c) and 6(d) will be deleted and replaced with
the following new Paragraphs 6(c) and
6(d):
|
"(c) Without
limiting the rights of the parties pursuant to Paragraphs 3, 5, 6(g) and 8, at
any time the Secured Party may notify Party B’s Custodian (in
writing) that it requires either (i) a certain number of Shares in order to
hedge its economic exposure under the Transaction evidenced by the Confirmation
(the "Hedge") or (ii) during the
period commencing 20 Scheduled Trading Days (as defined in the Confirmation)
prior to the Scheduled Valuation Date (as defined in the Confirmation), the
Number of Shares (such Number of Shares, the "Block Borrow" and such period,
the "Block Borrow
Period"). Upon delivery of such notice, the Secured Party will
have a right to use (a "Right
of Use") any Posted Collateral which constitutes "financial collateral"
(as defined in the Regulations) up to the level (x) required by it to acquire,
establish, re-establish or maintain the Hedge or (y) of the Block Borrow. Party
B’s Custodian will pursuant to the terms of the Jersey Security Interest
Agreement notify the Chargor in writing of the notice from the Secured Party
relating to the Right of Use election made by the Secured Party. A
Right of Use includes without limitation, the right of the Secured Party
to:
|
|
(1)
|
sell,
pledge, rehypothecate, assign, invest, use, commingle or otherwise dispose
of, or otherwise use in its business any Posted Collateral held by Party
B’s Custodian, free from any claim or right of any nature whatsoever of
the Chargor, including any equity or right of redemption of the Chargor
and as if the Secured Party were the owner thereof;
and
|
|
|
(2)
|
register
any Posted Collateral in the name of the Secured Party, its Custodian or a
nominee for either,
|
provided, however, that the Chargor
may, at any time (other than after the commencement of the Block Borrow Period)
following the exercise by the Secured Party of its Right of Use with respect to
any Posted Collateral pursuant to sub-paragraphs (1) and (2) above, on not less
than 20 Exchange Business Days’ prior written notice, request that the Secured
Party returns Equivalent Collateral to Party B’s Custodian and instructs Party
B’s Custodian to register such Equivalent Collateral in Party B’s name, the name
of Party B’s Custodian or a nominee for either in consideration of a borrowing
fee equal to the actual stock borrow costs incurred by the Secured Party in
borrowing such Equivalent Collateral (the Borrowing
Fee). Following
19
EXECUTION
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the date
of receipt of such request from Party B (provided that the Block Borrow Period
has not commenced), the Secured Party shall inform Party B of the Borrowing Fee
and if Party B notifies the Secured Party in writing that it wishes to continue
with the request (the date of delivery of such notice, the “Request Date”), the Secured
Party shall use all commercially reasonable endeavours to return such Equivalent
Collateral to Party B’s Custodian within 10 Exchange Business Days of the
Request Date and shall in any event (other than as further provided below)
return such Equivalent Collateral to Party B’s Custodian within 20 Exchange
Business Days of the Request Date; provided, however, that, notwithstanding the
foregoing, Party B agrees and acknowledges that the Secured Party shall not be
required to return any Equivalent Collateral during the Block Borrow
Period. For the avoidance of doubt, upon return, Paragraph 2(c)
shall not apply to such return and such Equivalent Collateral shall cease to
comprise Equivalent Collateral and shall instead immediately constitute Posted
Collateral for the purposes of this Deed.
For
purposes of the obligation to Transfer Eligible Credit Support or Posted Credit
Support pursuant to Paragraphs 3, 5 and 6 and any rights or remedies authorised
under this Agreement, all Posted Collateral will be deemed to be held in
accordance with Paragraph 4(b) (as amended below), regardless of whether the
Secured Party has exercised its Right of Use with respect to any Posted
Collateral pursuant to sub-paragraphs (1) or (2) above.
Upon
exercise of the Right of Use by the Secured Party in relation to any Posted
Collateral:
|
|
(1)
|
any
right, title or interest (including any equity of redemption) of the
Chargor to or in the Posted Collateral subject to the Right of Use is
extinguished and replaced by a contractual obligation of the Secured Party
to transfer Equivalent Collateral to the Chargor in the circumstances
described by Paragraph 6(c) (as amended by
Paragraph 13(h)(ii)) or 8(e) of this Deed, subject to the other provisions
of this Deed (and, in particular, Paragraphs 7 and
8);
|
|
|
(2)
|
any
reference to “Posted Collateral” or “Posted Credit Support” in Paragraph
8(e), 10 or 11(a) or in any other provision of this Deed in as far as it
relates to Posted Collateral subject to the Right of Use will, from the
time of such exercise up to the date of return of Equivalent Collateral in
respect thereof by the Secured Party as provided for in this Deed, be
construed as referring to Equivalent Collateral, unless otherwise provided
or context otherwise requires;
|
|
|
(3)
|
Paragraph
6, other than this Paragraph 6(c) and Paragraph 6(d) below, shall not
apply to any Credit Support Balance;
and
|
20
EXECUTION
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|
|
(4)
|
the
terms set out in Annex A shall apply in respect of the Credit Support
Balance.
|
|
|
(d)
|
The
parties hereby acknowledge that this Deed is intended to constitute a
“security financial collateral arrangement”, and that the Posted
Collateral is intended to constitute “financial collateral”, in each case
for the purposes of the Regulations. For the avoidance of doubt, the
Regulations (and in particular Regulation 16 thereof) shall apply to any
right of use exercised by the Secured Party under Paragraph
6(c).
|
|
|
For
the purposes of Paragraph 8, in relation to any Credit Support Balance,
the Secured Party may elect to set off under Paragraph 8(a)(ii)(B) any
amounts payable by the Chargor with respect to any Obligation against the
Close-out Value of the Credit Support Balance and any obligation of the
Secured Party to return Equivalent Collateral comprising the Credit
Support Balance at such time shall thereby be deemed to have
been discharged in full."
|
(iii) “Posted Collateral” and the Jersey
Security Interest Agreement
|
|
(a)
|
The
definition of Posted Collateral in Paragraph 12 will be amended by the
addition of the words "or transferred to or received by the Custodian of
Party B, whether as Equivalent Collateral in accordance with Paragraph 13
(h)(ii) or otherwise returned by Party A to the Custodian of Party B
following exercise by Party A of its Right of Use" immediately following
the words "or received by the Secured Party under the
Deed".
|
|
|
(b)
|
For
the avoidance of doubt, Paragraph 2(c) shall not apply to transfers of
Posted Collateral to the Custodian of Party B (or the nominee of Party B
or the Custodian) except in relation to Posted Collateral transferred by
Party B pursuant to Paragraph 3(b), 6(g)(i), 8(d) or 8(e) of this
Deed.
|
|
|
(c)
|
In
addition, to sub-paragraph (iii)(a) above, “Posted Collateral” will, for
the purpose hereof, include Collateral (as this term is defined in the
Jersey Security Interest
Agreement).
|
|
(i)
|
Distributions
and Interest Amount.
|
(i) Interest
Rate. The “Interest Rate” in relation to each Eligible Currency specified
below will be: not applicable.
(ii) Transfer of
Interest Amount. The transfer of the Interest Amount will be made on the
last Local Business Day of each calendar month and on any Local Business Day
that a Return Amount consisting wholly or partly of cash is transferred to the
Chargor pursuant to Paragraph 3(b), unless otherwise specified here: not
applicable.
(iii) Alternative to
Interest Amount. The provisions of Paragraph 6(g)(ii) will apply, unless
otherwise specified here: not applicable.
|
(j)
|
Other
Eligible Support and Other Posted
Support.
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21
EXECUTION
VERSION
|
|
(i)
|
“Value”
with respect to Other Eligible Support and Other Posted Support means: not
applicable.
|
|
|
(ii)
|
Transfer of
Other Eligible Support and Other Posted Support. All transfers
under this Deed of Other Eligible Support and Other Posted Support shall
be made as follows: not applicable.
|
|
(k)
|
Addresses
for Transfers.
|
|
Party
A:
|
|
|
Address:
|
Deutsche
Bank AG London,
Floor
1, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
|
|
Telephone:
|
x00
0000000000
|
|
Facsimile:
|
x00
0000000000
|
|
E-mail:
|
xxxxxx.xxxxxxx@xx.xxx
|
|
Attention:
|
Global
Margin Management
|
|
Party
B:
|
To
be advised
|
|
Address:
|
Xxxxxxxxx
Xxxxxxxx
X.X.
Xxx 00
Xxxx
Xxxx
Tortola
British
Virgin Islands
|
|
Telephone:
|
To
be advised
|
|
Facsimile:
|
x0
000 000 0000
|
|
E-mail:
|
To
be advised
|
|
Attention:
|
To
be advised
|
|
Copy:
|
RBC
Secretaries (CI) Limited
La
Motte Xxxxxxxx
La
Motte Street
St
Helier
JE1
1BJ
Jersey
|
|
Telephone:
|
To
be advised
|
|
Facsimile:
|
01534
602 035
|
|
E-mail:
|
To
be advised
|
|
Attention:
|
Xxxx
Xxxxxx
|
|
(l)
|
Other
Provisions.
|
(i)
Definitions
|
|
“Close out
Value”
means, in respect of any Credit Support Balance for purposes of
Paragraph 8, the Base Currency Equivalent of the bid price for the
Equivalent Collateral comprised in that Credit Support Balance at or about
the time the Secured Party is exercising its right of set off under
Paragraph 8(a)(ii)(B), as determined by the Secured
Party.
|
|
|
"Confirmation" means the
confirmation dated 10 December, 2009 as amended and restated from time to
time with a Trade Date of 10 December, 2009 relating to a Prepaid Variable
Forward Transaction between Party A and Party B (provided that such
confirmation relates to shares of the same type as and fungible with the
Shares (as defined below)).
|
22
EXECUTION
VERSION
|
|
“Credit
Support Balance”
means any Posted Collateral in respect of which the Secured Party
has exercised its Right of Use and has not yet returned Equivalent
Collateral to the Chargor pursuant to Paragraph 6(c) (as amended by
Paragraph 13(h)(ii)) or 8(e), as the case may
be.
|
|
|
“Custody
Account”
has the meaning given to such term in the Jersey Security Interest
Agreement.
|
|
|
“Equivalent
Collateral”
means, in relation to any Posted Collateral, financial instruments
of the same type, nominal value, description and amount as that Posted
Collateral.
|
"Extraordinary
Event" means
each event identified as such in a Confirmation.
|
|
"Exchange
Business Day" has the meaning given
to such term in the Confirmation.
|
|
|
"Jersey
Security Interest Agreement" means the Jersey law
security interest agreement entered into between the Chargor and the
Secured Party dated on or about the date
hereof.
|
“Local Business
Day” means any day on which commercial banks are open for business
(including dealings in foreign exchange and foreign currency deposits) in London
and New York.
" Number of
Shares"has the
meaning given to such term in the Confirmation. .
"Potential
Adjustment Event" means each event identified
as such in a Confirmation.
"Regulations" means the Financial
Collateral Arrangements (No. 2) Regulations 2003.
"Secured
Party" means
Party A and "Chargor" means Party B.
"Shares" means Common stock of
Virgin Media Inc. (Exchange Symbol: “VMED”).
“Treasury
Securities” means negotiable, registered debt obligations issued by the
U.S. Treasury Department but excluding principal-only and interest-only Treasury
strips.
|
(ii)
|
Rights
Accompanying Posted Collateral. The provisions of Paragraph 6(e)(i)
shall not apply with respect to any Posted Collateral in respect of which
the Secured Party has exercised its Right of Use pursuant to Paragraphs 6
(c) and (d) (as amended above).
|
|
(iii)
|
One-way
Security. For the avoidance of doubt, only Party A will
benefit from the Security and have the right to demand a Delivery Amount
under Paragraph 3. Party A does not undertake any of the
covenants or grant any of the rights with respect to itself or its
property that it would otherwise undertake or grant as Chargor under this
Deed.
|
|
(v)
|
Transfer
Restrictions. The Security is subject to requirements
arising under Section 5 of the U.S. Securities Act of 1933, as amended
(the “Securities
Act”) to the extent the Shares are a "restricted security" and
Party B is an "affiliate" of the issuer of the Shares (each as defined in
Rule 144 under the Securities Act) or to the extent a sale of the Shares
is subject to paragraph (c) of Rule 145 under the Securities
Act.
|
|
(vi)
|
Costs of
Transfer on Exchange. Notwithstanding Paragraph 10, the
Chargor will be responsible for, and will reimburse the Secured Party for,
all transfer and other taxes and other costs involved in the transfer of
Eligible Credit Support either from the Chargor to the Secured Party or
from the Secured Party to the Chargor pursuant to Paragraph
4(b).
|
23
EXECUTION
VERSION
|
(vii)
|
Transfer of
non-cash Posted Collateral. Paragraph 4(b)(iii) shall apply to the
transfer of the Shares with the following
amendments.
|
|
|
(A)
|
Party
B shall transfer Posted Collateral other than cash as Eligible Credit
Support under this Deed to the Custody Account. When required
to do so by this Deed, Party A shall agree to the release the applicable
quantity of any such Posted Collateral held as Posted Credit Support under
this Deed to Party B's securities account held at Party B's Custodian and
promptly give notice to Party B's Custodian that the security interest in
respect of that relevant quantity has been released. All such transfers
shall be made with a reference to "[Collateral under ISDA Credit Support
Deed between Deutsche Bank AG, London Branch and Virgin Entertainment
Investment Holding Ltd]".
|
|
|
(B)
|
Any
notice from Party A of the occurrence of a Relevant Event (including
without limitation an Event of Default) or Specified Condition with
respect to Party B (the Notice) will be
conclusive evidence for the Custodian of the matters to which it relates.
The parties expressly authorise Party B's Custodian to rely on the
Notice.
|
|
|
(C)
|
Until
Party B’s Custodian receives a Notice Party B’s Custodian will segregate
the Posted Collateral transferred as Eligible Credit Support in a blocked
securities sub-account of Party B’s custodian, indicating that such Shares
are held by Party B and are subject to a security interest in favour of
Party A.
|
|
|
(D)
|
Following
the receipt by Party B's Custodian of a Notice, it will promptly release
the Posted Collateral from the Custody Account and Party A will be able to
sell, transfer or otherwise dispose of such Posted Collateral in any
manner permitted by this Deed or the Jersey Security Interest
Agreement. Party A agrees that it will not deliver a Notice to
the Custodian or otherwise withdraw the Posted Collateral from the Custody
Account unless a Relevant Event has occurred and is continuing, or, in the
case of a withdrawal, such withdrawal is pursuant to Paragraph 6(c) or is
to deliver the Posted Collateral to, or as directed by, Party
B.
|
|
|
(E)
|
Party
B shall give notice to Party B's Custodian of this Deed and the agreements
contained herein in the form annexed to the Jersey Security Interest
Agreement as a condition to Party A incurring any obligations or
liabilities under this Deed or the Agreement. The parties
hereto shall give appropriate instructions to Party B's Custodian and
shall take any other action reasonably required in order to effect the
procedures described in this Paragraph
13(l)(vii).
|
|
(viii)
|
Chargor's
Undertaking. Subject to the provisions of this
Agreement, the Chargor unconditionally undertakes to the Secured Party for
the duration of this Agreement that it shall not do any thing or perform
or omit to perform any act that may adversely affect or prejudice the
rights, title, security or interest that the Secured Party has in the
Posted Collateral without the prior written consent of the Secured
Party.
|
|
(ix)
|
Cumulative
Rights. The rights, powers and remedies of the Secured
Party under this Deed are in addition to all rights, powers and remedies
given to the Secured Party by the Agreement or by virtue of any statute or
rule of law, all of which rights, powers and remedies will be cumulative
and may be exercised successively or concurrently without impairing the
rights of the Secured Party in the Credit Support Amount created pursuant
to this Deed.
|
|
(x)
|
Demands and
Notices. All demands, specifications and notices under
this Deed will be made pursuant to the Notices Section of this Agreement,
save that any demand, specification or
notice:
|
|
|
(A)
|
may
also be given by e-mail;
|
24
EXECUTION
VERSION
|
|
(B)
|
will
be given to or made at the following
addresses:
|
If to
Party A:
|
Address:
|
Deutsche
Bank AG London,
Floor
1, 000 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX
|
|
Telephone:
|
x00
0000000000
|
|
Facsimile:
|
x00
0000000000
|
|
E-mail:
|
xxxxxx.xxxxxxx@xx.xxx
|
|
Attention:
|
Global
Margin Management
|
|
|
If
to Party B:
|
|
Address:
|
Xxxxxxxxx
Xxxxxxxx
|
|
|
X.X.
Xxx 00
|
|
|
Xxxx
Xxxx
|
|
|
Xxxxxxx
|
|
|
Xxxxxxx
Xxxxxx Xxxxxxx
|
|
Facsimile:
|
x0
000 000 0000
|
|
Copy:
|
RBC
Secretaries (CI) Limited
|
|
|
La
Xxxxx Xxxxxxxx
|
|
|
Xx
Xxxxx Xxxxxx
|
|
|
Xx
Xxxxxx
|
|
|
XX0
0XX
|
|
|
Jersey
|
|
Attention:
|
Xxxx
Xxxxxx
|
|
Facsimile:
|
01534
602 035
|
|
|
or
at such other address as the relevant party may from time to time
designate by giving notice (in accordance with the terms of this
subparagraph) to the other
party;
|
|
|
(C)
|
will
be deemed to be effective at the time such notice is actually received
unless such notice is received on a day which is not a Local Business Day
or after the Notification Time on any Local Business Day in which event
such notice will be deemed to be effective on the next succeeding Local
Business Day.
|
|
(xi)
|
Form of
Deed. The parties hereby agree that the
text of the body of this Deed is intended to be the printed form of ISDA
Credit Support Deed (Bilateral Form – Security Interest – ISDA Agreements Subject to
English Law version) as published and copyrighted by the International
Swaps and Derivatives Association,
Inc.
|
25
EXECUTION
VERSION
IN
WITNESS of which this Deed has been executed as a deed and has been delivered on
the date first above written.
|
PARTY
A
|
|
|
EXECUTED
as a deed by Deutsche Bank AG,
|
)
|
|
acting
through its London branch: ………….
|
)
|
|
.....................................................................................…………..
|
)
|
|
acting
by two authorised
signatories................................……..
|
)
|
|
acting
under the authority of that company in the presence of:
|
)
|
|
Witness’
Signature: ....................................
|
|
|
Witness’
Name: ..................................…….
|
|
|
Witness’s
Address: .................................…
|
|
|
PARTY
B
|
|
|
EXECUTED
as a deed by Virgin Entertainment Investment
|
)
|
|
Holding
Ltd:
|
)
|
|
acting
by
|
)
|
|
and
|
)
|
|
acting
under the authority of that company in the presence of:
|
)
|
|
Witness’
Signature: ...................................
|
|
|
Witness’
Name: .................................…….
|
|
|
Witness’s
Address: ...................................
|
26
EXECUTION
VERSION
ANNEX A
Terms of use of Posted
Collateral pursuant to Paragraph 6(c) of the Credit Support Deed (as amended by
Paragraph 13(h)(ii))
Defined
terms used in this Annex A to the Credit Support Deed and not otherwise defined
herein shall have the meanings given to them in the Confirmation and the 2002
ISDA Equity Derivatives Definitions (the “Equity Definitions”) as incorporated
into such Confirmation.
|
|
1.
|
For
so long as any Posted Collateral is subject to the Right of Use by the
Secured Party, the Secured Party shall pay to the Chargor the Ordinary
Dividend Amount (as defined in the Confirmation) net of any applicable
withholding tax (the current applicable withholding tax rate being 30 per
cent.) (or, if the distribution by the Issuer (as defined in the
Confirmation) in such regular quarterly dividend period is less than the
Ordinary Dividend Amount, such lesser amount net of any applicable
withholding tax) in respect of the relevant quantity of Posted Collateral
that is subject to the Right of Use by the Secured Party (if any) on each
Dividend Payment Date (as defined in the
Confirmation).
|
|
|
2.
|
The
definition of "Distributions" in this Deed shall be amended by the
addition of the words "and will not include any Extraordinary Dividends up
to an amount equal to the Delta Hedge Extraordinary Dividends that have
been paid to Party A pursuant to the terms of the Confirmation", where
Delta Hedge Extraordinary Dividends has the meaning given to such term in
the Confirmation.
|
|
|
3.
|
Notwithstanding
anything else in this Deed, for the purposes of Paragraph 6(g)(i), the
obligation of the Secured Party to transfer any Distributions received
shall be deemed to apply only to Distributions that are not Extraordinary
Dividends.
|
1
