Exhibit 4.5
THIS SECOND AMENDING AGREEMENT is dated 6 August 2003 but is made as of
and with effect from 8 May 0000
X X X X X X X:
NORSKE XXXX CANADA LIMITED, NORSKE XXXX CANADA FINANCE LIMITED
AND THE OTHER RESTRICTED PARTIES FROM TIME TO TIME
- and -
THE LENDERS WHO ARE PARTIES
TO THE EXISTING CREDIT AGREEMENT
- and -
THE TORONTO-DOMINION BANK
in its capacity as Administration Agent
(the "AGENT")
RECITALS:
A. The parties to this agreement are parties to a credit agreement made as of 19
July 2002 (the "ORIGINAL CREDIT AGREEMENT").
B. The Original Credit Agreement was amended by the parties thereto pursuant to
an amending agreement (the "FIRST AMENDING AGREEMENT") made as of 8 May 2003
(the Original Credit Agreement as amended by the First Amending Agreement is
herein called the "EXISTING CREDIT AGREEMENT").
C. Capitalized terms used in this agreement and not otherwise defined have the
meanings defined in the Existing Credit Agreement.
D. The Agent and the Restricted Parties have agreed to amend Schedule L (Form of
Repricing Agreement) of the Existing Credit Agreement as of and with effect from
8 May 2003 for the sole purpose of curing defects in Section 5(d) thereof in
order to correctly reflect the intention and agreement of the Lenders and
Restricted Parties that the phrase "Unpaid Amounts" in the third and fourth
sentences of Section 5(d) should be "unpaid amounts".
E. The Agent and the Restricted Parties also have agreed to amend Section
7.7.2(e) of the Existing Credit Agreement for the sole purpose of curing a
defect and ambiguity therein.
F. This agreement is being signed by the Agent on behalf of the Lenders pursuant
to Section 9.7.4 of the Existing Credit Agreement.
THEREFORE, for value received, and intending to be legally bound by this
agreement, the parties agree as follows:
1. AMENDMENT TO SCHEDULE L OF EXISTING CREDIT AGREEMENT
Schedule L of the Existing Credit Agreement is deleted and replaced by
Schedule L attached to this agreement.
2. AMENDMENT TO SECTION 7.7.2(E)
Section 7.7.2(e) of the Existing Credit Agreement is deleted and
replaced by the following:
"the amount, as determined under the 1999 Indenture, the 2001
Indenture or any Similar Indenture, of any other obligations
that have been classified as being incurred under clauses (i)
or (ix) of the definitions of "Permitted Indebtedness" or
"Permitted Debt" in those indentures"
3. CONDITIONS PRECEDENT
The obligations of the Lenders under this agreement are subject to the
Agent receiving opinions of counsel to the Restricted Parties concerning the
authorization, execution and enforceability of this agreement, all in form and
substance satisfactory to the Agent.
4. REPRESENTATIONS OF RESTRICTED PARTIES
The Restricted Parties acknowledge that this agreement is a Credit
Document and that all of their representations and warranties concerning Credit
Documents that are contained in the Existing Credit Agreement apply to this
agreement and are deemed to be repeated on their execution of this agreement as
if set out in full in this agreement. The Restricted Parties also represent that
there are no consents or other agreements required from third parties to avoid
this agreement causing a breach or default under any other agreement to which
any Restricted Party is a party.
5. RATIFICATION AND CONFIRMATION
The Existing Credit Agreement, as amended by this agreement, remains in
full force and effect and is hereby ratified and confirmed. Without in any way
limiting the terms of the Existing Credit Agreement or the other Credit
Documents, the Restricted Parties confirm that the Security shall continue to
secure the Obligations and the Other Secured Obligations, including but not
limited to any arising as a result of this agreement.
6. COUNTERPARTS AND FACSIMILE
This agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original, and such
counterparts together shall constitute one and the same agreement. The delivery
of a facsimile copy of an executed counterpart of this agreement shall be deemed
to be valid execution and delivery of this agreement, but the party delivering a
facsimile copy shall deliver an original copy of this agreement as soon as
possible after delivering the facsimile copy.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS OF WHICH, the parties have executed this agreement.
NORSKE XXXX CANADA LIMITED
/s/ Xxxxx Xxxxxxx
By:______________________________
Xxxxx Xxxxxxx
Treasurer
/s/ Xxxxxxx Xxxxxx
By:______________________________
Xxxxxxx Xxxxxx
Corporate Secretary and
Legal Counsel
NORSKE XXXX CANADA
FINANCE LIMITED
/s/ Xxxxx Xxxxxxx
By:______________________________
Xxxxx Xxxxxxx
Treasurer
ELK FALLS PULP AND PAPER
LIMITED
/s/ Xxxxx Xxxxxxx
By:______________________________
Xxxxx Xxxxxxx
Treasurer
[SIGNATURE PAGE FOR SECOND AMENDING AGREEMENT DATED 6 AUGUST 2003 BUT MADE AS OF
AND WITH EFFECT FROM 8 MAY 2003 RELATING TO NORSKE XXXX CANADA LIMITED ET AL]
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NORSKE XXXX CANADA LIMITED
AS MANAGING PARTNER FOR AND ON
BEHALF OF NORSKECANADA
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
/s/ Xxxxxxx Xxxxxx
By:___________________________
Xxxxxxx Xxxxxx
Corporate Secretary and
Legal Counsel
NORSKE XXXX CANADA PULP
OPERATIONS LIMITED
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
NORSKE XXXX CANADA SALES INC.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
NSCL HOLDINGS INC.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
NORSKE XXXX CANADA (USA) INC.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
[SIGNATURE PAGE FOR SECOND AMENDING AGREEMENT DATED 6 AUGUST 2003 BUT MADE AS OF
AND WITH EFFECT FROM 8 MAY 2003 RELATING TO NORSKE XXXX CANADA LIMITED ET AL]
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NORSKE XXXX CANADA (JAPAN) LTD.
/s/ Xxxxx X. Xxxxxxxx
By:___________________________
Xxxxx X. Xxxxxxxx
Director
NORSKE XXXX CANADA PULP
SALES INC.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
PACIFICA PAPERS SALES LTD.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
President
PACIFICA PAPERS SALES INC.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
PACIFICA POPLARS LTD.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
President
PACIFICA POPLARS INC.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
PACIFICA PAPERS US INC.
/s/ Xxxxx Xxxxxxx
By:___________________________
Xxxxx Xxxxxxx
Treasurer
[SIGNATURE PAGE FOR SECOND AMENDING AGREEMENT DATED 6 AUGUST 2003 BUT MADE AS OF
AND WITH EFFECT FROM 8 MAY 2003 RELATING TO NORSKE XXXX CANADA LIMITED ET AL]
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XXX XXXXXXX-XXXXXXXX BANK, as Agent.
/s/ Xxxxx Xxxxxxxx
By:__________________________________________
Xxxxx Xxxxxxxx
Vice President, Loan Syndications - Agency
[SIGNATURE PAGE FOR SECOND AMENDING AGREEMENT DATED 6 AUGUST 2003 BUT MADE AS OF
AND WITH EFFECT FROM 8 MAY 2003 RELATING TO NORSKE XXXX CANADA LIMITED ET AL]
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SCHEDULE L
FORM OF REPRICING AGREEMENT
[NOTE: SEE ATTACHED]
AGGREGATE REPRICING AGREEMENT
This Agreement is made as of the [ ] day of May, 2003
BETWEEN NORSKE XXXX CANADA FINANCE LIMITED
("NSCFL")
AND [NOTE: IDENTIFY LENDERS / AFFILIATES AS PARTIES HERE AND ON
SIGNATURE PAGES AS REQUIRED]
AND ANY OTHER PARTY WHO HAS SIGNED AN AGREEMENT PURSUANT TO
SECTION 10(c) HEREOF
AND ROYAL BANK OF CANADA
as "Group Valuation Agent"
WHEREAS NSCFL and the Hedging Parties or their affiliates are party to a credit
agreement dated as of July 19, 2002 (as amended, supplemented, restated or
replaced from time to time, the "Credit Agreement");
AND WHEREAS the terms and conditions of the Credit Agreement permit NSCFL to
enter into Hedging Transactions with one or more of the Hedging Parties;
AND WHEREAS the Credit Agreement requires that Hedging Parties be parties to
this Aggregate Repricing Agreement if they enter into Special Derivatives with
NSCFL and permits, but does not require, Hedging Parties to be parties if they
are only entering into Hedging Transactions that are not Special Derivatives;
AND WHEREAS NSCFL has agreed to the repricing arrangements as more fully
described herein;
AND WHEREAS the terms and conditions of each ISDA Agreement may permit NSCFL to
reprice, terminate or transfer Hedging Transactions in accordance with the
repricing arrangements set forth in such ISDA Agreement;
AND WHEREAS the parties hereto agree that the Group Valuation Agent will perform
certain calculations and reporting on behalf of the Hedging Parties;
NOW THEREFORE THIS AGREEMENT WITNESSES that, in consideration of the mutual
representations, warranties and covenants contained herein and other good and
valuable consideration (the receipt and sufficiency of which are hereby
acknowledged by each of the parties), the parties hereto agree as follows:
1. DEFINED TERMS AND INTERPRETATION
(a) HEDGING TRANSACTIONS AND HEDGING PARTIES. Unless otherwise expressly
indicated in this Aggregate Repricing Agreement, all references to Hedging
Transactions and Hedging Parties apply to all Hedging Transactions and Hedging
Parties, whether or not the relevant Hedging Parties are parties hereto. While
Hedging Parties who are not parties hereto may agree in the Credit Agreement to
specific terms of this Aggregate Repricing Agreement that are incorporated by
reference in the Credit Agreement, they are not bound by this Aggregate
Repricing Agreement.
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(b) CALCULATION. The purpose of this Aggregate Repricing Agreement is, in
part, to address amounts payable by NSCFL to Hedging Parties in respect of
Hedging Transactions, i.e. amounts by which NSCFL is "out of the money." Amounts
payable by NSCFL shall be expressed as positive numbers in this Aggregate
Repricing Agreement, while amounts payable by Hedging Parties to NSCFL (i.e.
where NSCFL is "in the money") shall be expressed as negative numbers. Negative
numbers shall be netted against positive numbers in determining aggregate
amounts owing by NSCFL to individual Hedging Parties in respect of multiple
Hedging Transactions (any aggregate amount being expressed as a negative number
if NSCFL is "in the money" on an aggregate basis with an individual Hedging
Party) and in determining aggregate amounts owing by NSCFL to all Hedging
Parties. For example, in calculating the Hedging Transaction Exposure for a
Hedging Party, if it was party to two Hedging Transactions and NSCFL owed CAD
5,100,000 in respect of one Hedging Transaction and was owed CAD 2,700,000 in
respect of the other, the Hedging Transaction Exposure would be CAD 5,100,000
minus CAD 2,700,000 or CAD 2,400,000. If another Hedging Party was a party to
one Hedging Transaction and owed NSCFL CAD 1,300,000 in respect of that Hedging
Transaction, its Hedging Transaction Exposure would be negative CAD 1,300,000.
If there were only those two Hedging Parties, the Aggregate Hedging Transaction
Exposure would be CAD 2,400,000 minus CAD 1,300,000 or CAD 1,100,000 and the
Aggregate Positive Hedging Transaction Exposure would be CAD 2,400,000.
(c) DEFINED TERMS. All capitalized terms used herein and not otherwise
defined shall have the meaning ascribed to them in the ISDA Agreement. In
addition,
"Administration Agent" means the "Agent" under the Credit Agreement.
"Aggregate Hedging Transaction Exposure" means, as of any Valuation
Date, the net amount calculated in accordance with Section 1(b) above
by aggregating all Hedging Parties' Hedging Transaction Exposures.
"Aggregate Positive Hedging Transaction Exposure" means, as of any
Valuation Date, the sum of all Positive Hedging Transaction Exposures
under each ISDA Agreement.
"Aggregate Positive Special Derivative Exposure" means, as of any
Valuation Date, the sum of all Positive Special Derivative Exposures.
"Aggregate Special Derivative Exposure" means as of any Valuation Date,
the net amount calculated in accordance with Section 1(b) above by
aggregating all Hedging Parties' Special Derivative Exposures.
"Excess Credit Agreement Exposure Amount" means the amount, as
determined by the Administration Agent pursuant to Section 7.7.2 of the
Credit Agreement, by which the Aggregate Hedging Transaction Exposure
needs to be reduced in order to satisfy the requirements under Section
7.7.2 of the Credit Agreement.
"Excess Hedging Transaction Exposure" means (subject to Section 5(e)
below) the Aggregate Hedging Transaction Exposure minus CAD
135,000,000.
"Excess Special Derivative Exposure" means the Aggregate Special
Derivative Exposure minus the Permitted Special Derivative Exposure
plus CAD 15,000,000.
"Floating Rate Transaction" means any interest rate swap Hedging
Transaction under which the obligation of NSCFL is to pay a floating
interest rate.
"Hedging Party" means each person that enters into a Hedging
Transaction with NSCFL.
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"Hedging Transaction" means any transaction entered into by NSCFL that
is an "Other Secured Obligation" as defined in Section 1.1.79 of the
Credit Agreement, and, for greater certainty, includes without
limitation all Special Derivatives.
"Hedging Transaction Exposure" means, with respect to a Hedging Party
on any Valuation Date, the estimated net amount that would be payable
to or by that Hedging Party pursuant to Section 6(e)(ii)(2)(A) of an
ISDA Agreement to which it is a party as if such ISDA Agreement and all
Hedging Transactions thereunder were being terminated; provided that,
in estimating the amount that would be payable, the Group Valuation
Agent shall use its estimates at mid-market of the amounts that would
be paid for Replacement Transactions (as defined within the definition
of "Market Quotation" in the ISDA Agreement) in respect of all Hedging
Transactions. In addition, if any Hedging Transaction is terminated
other than as required by this Aggregate Repricing Agreement, it shall
be considered not to have been terminated for the purposes of
calculating the Hedging Transaction Exposure until any amount payable
by NSCFL to the Hedging Party as a result of the termination has been
paid.
"ISDA Agreement" means the 1992 ISDA Master Agreement entered into
between the relevant Hedging Party and NSCFL in respect of one or more
Hedging Transactions, except that, for the purposes of this Aggregate
Repricing Agreement, any Hedging Transaction shall be deemed to be
governed by the 1992 ISDA Master Agreement in the form attached hereto
if the relevant Hedging Party has not entered into a 1992 ISDA Master
Agreement and to the extent that there is a relevant difference between
the 1992 ISDA Master Agreement entered into and the form attached
hereto.
"Oil and Gas Transaction" means any Hedging Transaction under which the
obligations of the parties are derived from the price of oil or natural
gas.
"Permitted Special Derivative Exposure" means (subject to Sections 5(e)
and 6(b) below), as of any Valuation Date, an amount determined by the
following formula:
CAD 135,000,000 - (an aggregate amount determined by adding
the amounts calculated by multiplying the notional amount of
each Special Derivative outstanding on such Valuation Date,
subject to the adjustments referred to immediately below, by
the volatility factor for that type of Special Derivative
established in accordance with the attached Schedule A and
Section 6(b) below)
For the purpose of the foregoing formula, the notional amount shall be
the notional amount specified in the terms of the relevant Special
Derivative, converted to Canadian dollars if necessary using the Group
Valuation Agent's mid rate (i.e. the average of the Group Valuation
Agent's spot buying and selling rates) at the relevant time. If the
notional amount is expressed in units of a commodity rather than in
currency, the notional amount shall be determined by multiplying the
notional amount expressed in units by the fixed price per unit to be
paid to or received by NSCFL for the commodity under the relevant
Special Derivative. In addition, in determining the notional amount of
Special Derivatives for the purpose of the foregoing formula:
(A) the Group Valuation Agent shall net commodity purchase Special
Derivatives entered into by NSCFL against commodity sale Special
Derivatives entered into by NSCFL (whether or not with the same
Hedging Party), where (a) the commodities that are the subject of
the relevant Special Derivatives are determined by the Group
Valuation Agent to be the same in all material respects and (b)
either (i) the settlement dates of both the commodity sale
Special Derivatives and the commodity purchase Special
Derivatives to
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be netted are at least 45 days after the Valuation Date or (ii)
the settlement dates of the commodity sale Special Derivatives
and the commodity purchase Special Derivatives to be netted are
within five Local Business Days of each other, and the Group
Valuation Agent shall apply the volatility factor to the net
notional amount and include only the resulting amount in the
foregoing formula; and
(B) if NSCFL has entered into other Special Derivatives that do not
fall within item (A) above, but relate to commodities of the same
type (each of Oil and Gas Transactions, Pulp and Paper
Transactions, and other types established under section 6(b)
below being deemed to be the same type), the Group Valuation
Agent shall add the notional amounts of those Special Derivatives
of each type in which NSCFL's role is seller and those in which
its role is buyer and shall not apply the volatility factor to,
or include in the foregoing formula, those Special Derivatives of
each type having the smaller sum of notional amounts. For
example, if the aggregate notional amount of Pulp and Paper
Transactions that do not fall within item (A) above where NSCFL
is seller is smaller than the aggregate notional amount of those
Pulp and Paper Transactions where NSCFL is buyer, and the
aggregate notional amount of Oil and Gas Transactions that do not
fall within item (A) above where NSCFL is buyer is smaller than
the aggregate notional amount of those Oil and Gas Transactions
where NSCFL is seller, the Group Valuation Agent shall not apply
the respective volatility factors to, or include in the foregoing
formula, the Pulp and Paper Transactions that do not fall within
item (A) above where NSCFL is seller or the Oil and Gas
Transactions that do not fall within item (A) above where NSCFL
is buyer.
"Positive Hedging Transaction Exposure" means, as of any Valuation
Date, the amount that would be payable, if any, to a Hedging Party (but
not by a Hedging Party) as a result of the calculation of the Hedging
Transaction Exposure of such Hedging Party.
"Positive Special Derivative Exposure" means, as of any Valuation Date,
the amount that would be payable, if any, to a Hedging Party (but not
by a Hedging Party) as a result of the calculation of the Special
Derivative Exposure of such Hedging Party.
"Pro Rata Excess Credit Agreement Exposure Amount" means, in respect of
a Hedging Party, the amount determined by the following formula,
rounded up to the nearest integral multiple of CAD 100,000:
Excess Credit Agreement Exposure Amount X (the Positive Hedging
Transaction Exposure applicable to such Hedging Party / the
Aggregate Positive Hedging Transaction Exposure)
"Pro Rata Hedging Transaction Exposure Reduction Amount" means, in
respect of a Hedging Party, the amount determined by the following
formula, rounded up to the nearest integral multiple of CAD 100,000:
Excess Hedging Transaction Exposure X (the Positive Hedging
Transaction Exposure applicable to such Hedging Party / the
Aggregate Positive Hedging Transaction Exposure)
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"Pro Rata Special Derivative Exposure Reduction Amount" means, in
respect of a Hedging Party the amount determined by the following
formula, rounded up to the nearest integral multiple of CAD 100,000:
Excess Special Derivative Exposure X (the Positive Special
Derivative Exposure applicable to such Hedging Party / the
Aggregate Positive Special Derivative Exposure)
"Pulp and Paper Transaction" means any Hedging Transaction under which
the obligations of the parties are derived from the price of pulp or
paper.
"Special Derivative" means a Hedging Transaction described in Sections
1.1.79(c), 1.1.79(d) and 1.1.79(e) of the Credit Agreement and entered
into by NSCFL, and "Special Derivatives" means all such Hedging
Transactions.
"Special Derivative Exposure" means, with respect to a Hedging Party on
any Valuation Date, the estimated net amount that would be payable to
or by that Hedging Party pursuant to Section 6(e)(ii)(2)(A) of the ISDA
Agreement as if such ISDA Agreement and all Special Derivatives
thereunder (but no other Hedging Transactions) were being terminated;
provided that, in estimating such amount that would be payable, the
Group Valuation Agent shall use its estimates at mid-market of the
amounts that would be paid for Replacement Transactions in respect of
all Special Derivatives. In addition, if any Special Derivative is
terminated other than as required by this Aggregate Repricing
Agreement, it shall be considered not to have been terminated for the
purposes of calculating the Special Derivative Exposure until any
amount payable by NSCFL to the Hedging Party as a result of the
termination has been paid.
"Valuation Date" means daily beginning on * May 2003 except that, if
the then-current Aggregate Hedging Transaction Exposure and Aggregate
Special Derivative Exposure are low in comparison to the maximum
amounts permitted herein, the Group Valuation Agent may from time to
time establish the Valuation Date as occurring not less frequently than
monthly.
(d) INTERPRETATION. In the event of any inconsistency between the
provisions of this Aggregate Repricing Agreement and any ISDA Agreement the
terms of this Aggregate Repricing Agreement will prevail.
2. EXPOSURE REDUCTION PAYMENT AND AMENDMENTS
(a) RIGHT TO DEMAND PRO RATA EXPOSURE REDUCTION AMOUNT. The Group Valuation
Agent will, promptly following (A) a Valuation Date on which the Aggregate
Hedging Transaction Exposure is greater than or equal to CAD 150,000,000 or (B)
a Valuation Date on which the Aggregate Special Derivative Exposure is greater
than the Permitted Special Derivative Exposure or (C) its receipt of a notice
from the Administration Agent that there is an Excess Credit Agreement Exposure
Amount, notify NSCFL of the Pro Rata Hedging Transaction Exposure Reduction
Amount, the Pro Rata Special Derivative Exposure Reduction Amount, or the Pro
Rata Excess Credit Agreement Exposure Amount, in each case, as applicable to
each Hedging Party. The Group Valuation Agent agrees to promptly notify the
Hedging Parties of any such notification to NSCFL.
(b) ELECTION. Within three (3) Local Business Days of receiving the notice
described in Section 2(a), NSCFL will consult with each Hedging Party having a
Pro Rata Hedging Transaction Exposure Reduction Amount, Pro Rata Special
Derivative Exposure Reduction Amount, or Pro Rata Excess Credit Agreement
Exposure Amount, as applicable (taking into account any reduction of up to CAD
1,000,000 referred to below), and determine whether it will (A) terminate
Hedging Transactions with the Hedging
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Party, (B) reprice certain Hedging Transactions with the Hedging Party on the
basis described in Section 2(d), and/or (C) transfer NSCFL's obligations in
respect of Hedging Transactions to a third party acceptable to the Hedging Party
in its sole discretion that will assume NSCFL's obligations. Such actions shall
be taken so that the Hedging Transaction Exposure or the Special Derivative
Exposure, as applicable, with respect to such Hedging Party is reduced by an
amount at least equal to the Pro Rata Hedging Transaction Exposure Reduction
Amount and the Pro Rata Special Derivative Exposure Reduction Amount,
respectively, applicable to such party or, if the notice under Section 2(a)
relates to an Excess Credit Agreement Exposure Amount, so that the Hedging
Transaction Exposure is reduced by an amount equal to or greater than the Pro
Rata Excess Credit Agreement Exposure Amount. However, the Hedging Transaction
Exposure or the Special Derivative Exposure, as applicable, with respect to any
particular Hedging Party may be reduced by up to CAD 1,000,000 less than the
amount required by the preceding sentence if the Excess Credit Agreement
Exposure Amount, the Excess Hedging Transaction Exposure or the Excess Special
Derivative Exposure, as applicable, is entirely eliminated as a result of
reductions with other Hedging Parties being greater than the required minimums.
If NSCFL chooses to terminate or transfer Hedging Transactions, it will, after
consultation with the applicable Hedging Party, provide the Hedging Party with a
list of those Hedging Transactions that will be terminated and/or transferred.
Any amounts payable as a result of the termination of Hedging Transactions will
be calculated in accordance with the Loss method of calculation and payments
shall be made in accordance with the Second Method. For that purpose, references
to the Defaulting Party and Non-Defaulting Party will be deemed to be references
to NSCFL and the applicable Hedging Party, respectively.
(c) PROPOSAL. Within one (1) Local Business Day of finalizing NSCFL's
election under Section 2(b), if NSCFL has decided to reprice Hedging
Transactions with a Hedging Party, such Hedging Party will make a proposal to
NSCFL (a "Proposal"), with a copy to the Group Valuation Agent, outlining the
amendments to an existing Hedging Transaction or Hedging Transactions in
accordance with Section 2(d) below, which Proposal shall be drafted based on the
consultation with NSCFL in Section 2(b) above.
(d) CONTENT OF PROPOSAL. The Proposal will provide for the payment of the
Pro Rata Hedging Transaction Exposure Reduction Amount, the Pro Rata Special
Derivative Exposure Reduction Amount or the Pro Rata Excess Credit Agreement
Exposure Amount, as applicable, by NSCFL to that Hedging Party (less amounts
paid to that Hedging Party as a result of termination of Hedging Transactions,
less reductions resulting from the transfer of Hedging Transactions and subject
to the adjustments of up to CAD 1,000,000 permitted under Section 2(b) above)
and will identify the Hedging Transaction or Hedging Transactions to be amended
and the proposed amendments. Subject to amounts paid and reductions as a result
of termination or transfer of Hedging Transactions and subject to the
adjustments permitted under Section 2(b) above, any amendments (A) will be
variations of the applicable reference rates effective from the date that
payment of each Pro Rata Hedging Transaction Exposure Reduction Amount, each Pro
Rata Special Derivative Exposure Reduction Amount or each Pro Rata Excess Credit
Agreement Exposure Amount, as applicable, is received by that Hedging Party, (B)
are to reflect current market and banking practices, (C) if applicable, are to
create a portfolio of Hedging Transactions between NSCFL and such Hedging Party
that results in a Hedging Transaction Exposure that is equal to the Hedging
Transaction Exposure as it existed prior to the payment of the Pro Rata Hedging
Transaction Exposure Reduction Amount minus the Pro Rata Hedging Transaction
Exposure Reduction Amount, (D) if applicable, are to create a portfolio of
Special Derivatives between NSCFL and such Hedging Party that results in a
Special Derivative Exposure that is equal to the Special Derivative Exposure as
it existed prior to the payment of the Pro Rata Special Derivative Exposure
Reduction Amount minus the Pro Rata Special Derivative Exposure Reduction
Amount, (E) if applicable, are to create a portfolio of Hedging Transactions
between NSCFL and such Hedging Party that results in a Hedging Transaction
Exposure that is equal to the Hedging Transaction Exposure as it existed prior
to the payment of the Pro Rata Excess Credit Agreement Exposure
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Amount minus the Pro Rata Excess Credit Agreement Exposure Amount and (F) will
be calculated using the Hedging Party's estimates at mid-market of the amounts
that would be paid for Replacement Transactions (as defined within the
definition of "Market Quotation" in the ISDA Agreement) in respect of the
relevant Hedging Transactions. Any Proposal that is in accordance with the
foregoing requirements shall be implemented by NSCFL.
(e) TIMING FOR PAYMENT OR TRANSFER. If NSCFL has chosen to transfer or
terminate any Hedging Transactions, such transfer or termination and any
termination payment will be made by the fifth (5th) Local Business Day following
the receipt by NSCFL of notice under Section 2(a). If NSCFL has chosen to
reprice certain Hedging Transactions and if the Proposal is received by NSCFL by
11:00 am, Toronto time, on a Local Business Day, then the relevant payments to
the Hedging Party will be made by the later of (A) close of business on the next
Local Business Day and (B) the fifth (5th) Local Business Day following the
receipt by NSCFL of notice under Section 2(a). If the Proposal is received by
NSCFL after 11:00 Toronto time on a Local Business Day, the relevant payments
will be made by the later of (X) the second (2nd) Local Business Day thereafter
and (Y) the fifth (5th) Local Business Day following the receipt by NSCFL of
notice under Section 2(a).
(f) NON-SIGNATORY HEDGING PARTIES. To the extent that NSCFL is unable or
does not wish to implement the provisions of Sections 2(b) to 2(e) inclusive
with any Hedging Party that is not a party hereto, NSCFL shall entirely
eliminate the Excess Credit Agreement Exposure Amount or the Excess Hedging
Transaction Exposure, as applicable, by reductions with other Hedging Parties in
excess of the minimums required by this Aggregate Repricing Agreement.
(g) CONFIRMATIONS. Upon settlement of any amendments to Hedging
Transactions in accordance with the Proposals, NSCFL and each Hedging Party will
promptly execute a replacement Confirmation evidencing each such amended Hedging
Transaction.
(h) CALCULATIONS. Unless otherwise specified, all calculations of Hedging
Transaction Exposure, Special Derivative Exposure, Excess Hedging Transaction
Exposure and Excess Special Derivative Exposure will be made by the Group
Valuation Agent in accordance with current market and banking practices. When
those calculations are to be made as of a particular day, they may be made
either at or around noon, Toronto time on such Valuation Date or as of the close
of business in the city of the Group Valuation Agent on the immediately
preceding Local Business Day. For greater certainty, the Group Valuation Agent
shall not be responsible for calculating the Excess Credit Agreement Exposure
Amount, but shall be responsible for calculating each Hedging Party's Pro Rata
Excess Credit Agreement Exposure Amount.
3. REPORTING REQUIREMENTS
(a) On the next Local Business Day after NSCFL enters into a Hedging
Transaction with a Hedging Party, NSCFL shall notify and provide the particulars
of such Hedging Transaction to the Group Valuation Agent; provided that, if
NSCFL enters into a Hedging Transaction with a Hedging Party and NSCFL has
actual notice that it will be syndicated to some or all of the other Hedging
Parties, NSCFL shall notify the Group Valuation Agent of such Hedging
Transaction on the next Local Business Day after the relevant Hedging Parties
have been notified of their portion of the Hedging Transaction. NSCFL further
agrees to deliver a copy of the relevant trade confirmation(s) to the Group
Valuation Agent promptly upon request.
(b) NSCFL shall, on the next Local Business Day, notify the Group Valuation
Agent and provide the particulars of any amendment of a Hedging Transaction that
could reasonably be expected to affect the calculation of any Hedging
Transaction Exposure or Special Derivative Exposure.
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(c) Upon request by the Group Valuation Agent, each Hedging Party agrees to
promptly provide trade details of any Hedging Transaction that may be required
by the Group Valuation Agent to facilitate its calculations under this
Agreement. Each Hedging Party agrees to promptly notify the Group Valuation
Agent of any Event of Default or Potential Event of Default known to it under
that Hedging Party's ISDA Agreement.
(d) Where either NSCFL or any Hedging Party exercises an optional early
termination provision under any Hedging Transaction or otherwise terminates or
cancels any Hedging Transaction (including voluntary unwinding of any such
Hedging Transaction), NSCFL agrees to notify and provide the particulars of such
Hedging Transaction and the termination or unwinding thereof to the Group
Valuation Agent on the next Local Business Day after such termination,
cancellation or unwinding is effective.
(e) Upon request by NSCFL, any Hedging Party or the Administration Agent,
on any Local Business Day, the Group Valuation Agent agrees to provide a
statement of its calculations hereunder for the previous Valuation Date. The
Group Valuation Agent shall also confirm, on request, that any particular
Hedging Transaction has been reported to it by NSCFL. The Group Valuation Agent
shall, at the request of any Hedging Party, advise that Hedging Party of each
valuation and calculation by the Group Valuation Agent in respect of each
Hedging Transaction between that Hedging Party and NSCFL.
(f) If the then-current Aggregate Hedging Transaction Exposure and
Aggregate Special Derivative Exposure are low in comparison to the maximum
amounts permitted herein, the Group Valuation Agent may permit NSCFL to reduce
its reporting frequency to not less frequently than once each week (in respect
of Special Derivatives) or once each month (in respect of other Hedging
Transactions), but the Group Valuation Agent may revoke any such permission at
any time. In any event, NSCFL shall report to the Group Valuation Agent at least
weekly or monthly, respectively, including by "nil" report if applicable.
(g) Each Hedging Party shall provide NSCFL by the fourth (4th) Local
Business Day of each month with a listing of its Hedging Transactions as of the
end of the preceding month and NSCFL shall provide the Group Valuation Agent by
the fifth (5th) Local Business Day of each month with copies of those listings.
The Group Valuation Agent shall, by the eighth (8th) Local Business Day of each
month provide each Hedging Party with its calculations as of the end of the
preceding month in respect of each Hedging Transaction between that Hedging
Party and NSCFL. Each Hedging Party shall promptly compare the Group Valuation
Agent's calculations with similar calculations by the Hedging Party and, if
there is any material discrepancy, shall promptly contact the Group Valuation
Agent to reconcile the discrepancy.
4. ADDITIONAL HEDGING TRANSACTIONS
NSCFL agrees that, so long as the Credit Agreement remains in effect,
it will not enter into any transaction of the kind described in Section 1.1.79
of the Credit Agreement with any entity other than a Hedging Party under which
it agrees to provide security over its property. NSCFL may provide letters of
credit issued under the Credit Agreement to entities other than Hedging Parties
with whom it enters into transactions of the kind described in Section 1.1.79 of
the Credit Agreement.
5. EVENT OF DEFAULT AND CLOSE-OUT OF HEDGING TRANSACTIONS
(a) HEDGING TRANSACTION EXPOSURE AMOUNT AND EXCESS CREDIT AGREEMENT
EXPOSURE AMOUNT. For purposes of the ISDA Agreement between NSCFL and each
Hedging Party, an Event of Default will exist with respect to NSCFL if NSCFL
fails to make, when due, any payment in respect of the Excess Hedging
Transaction Exposure or the Excess Credit Agreement Exposure Amount required to
be made by it or to
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otherwise comply with the provisions of Section 2(b) or 2(e) above in relation
to the Excess Hedging Transaction Exposure or the Excess Credit Agreement
Exposure Amount and such failure to pay or comply continues for one (1) Local
Business Day after notice of that failure is given to NSCFL by such Hedging
Party.
(b) SPECIAL DERIVATIVE EXPOSURE AMOUNT. The ISDA Agreement between NSCFL
and each Hedging Party is hereby amended to provide that (i) an Additional
Termination Event will exist with NSCFL as the Affected Party and the Affected
Transactions shall be deemed to be all Special Derivatives entered into between
NSCFL and each Hedging Party if NSCFL fails to make, when due, any payment in
respect of the Excess Special Derivative Exposure required to be made by it or
to otherwise comply with the provisions of Section 2(b) or 2(e) above in
relation to the Excess Special Derivative Exposure and (ii) an Event of Default
will exist with respect to NSCFL if NSCFL fails to make, when due, any payment
in respect of the Excess Special Derivative Exposure required to be made by it
or to otherwise comply with the provisions of Section 2(b) or 2(e) above in
relation to the Excess Special Derivative Exposure, and such failure to pay or
comply continues for one Local Business Day after notice of that failure is
given to NSCFL by such Hedging Party.
(c) IMMEDIATE TERMINATIONS OF SPECIAL DERIVATIVES. The Group Valuation
Agent shall immediately notify each Hedging Party as soon as the Aggregate
Special Derivative Exposure is equal to or exceeds CAD 135,000,000 (or any lower
amount established in accordance with Section 5(e) below). If the Aggregate
Special Derivative Exposure at any time is equal to or exceeds CAD 135,000,000
(or the lower amount), notwithstanding any provision herein to the contrary,
there shall be an automatic termination (on the date that the Group Valuation
Agent determines the Aggregate Special Derivative Exposure is equal to or
exceeds CAD 135,000,000 (or the lower amount)) of those Special Derivatives
necessary to equal or exceed the Excess Special Derivative Exposure, beginning
with the Special Derivatives (regardless of the respective Hedging Parties
involved) that have the largest individual Positive Special Derivative Exposures
(i.e. the Positive Special Derivative Exposure calculated as if each Special
Derivative was the only Special Derivative entered into by a particular Hedging
Party). For purposes of such termination, an Additional Termination Event shall
be deemed to have occurred with NSCFL as the Affected Party and the Hedging
Party as the Non-Affected Party, and the Special Derivatives that are designated
as being terminated by the preceding sentence shall be deemed to be Affected
Transactions. The Loss method of calculation shall be used in determining the
amount payable and the Second Method shall apply for the purposes of Section
6(e) of the ISDA Agreement. The Group Valuation Agent shall immediately confirm
to NSCFL, each Hedging Party and the Administration Agent the identity of the
Special Derivatives that have been automatically terminated. Each Hedging Party
shall immediately notify the Group Valuation Agent, NSCFL and the Administration
Agent of the amount payable by NSCFL in respect of the automatically terminated
Special Derivatives to which it is a party, the Administration Agent shall
immediately notify NSCFL, the Group Valuation Agent and each Hedging Party as to
whether or not an advance may be made under the Credit Agreement equal to those
amounts and NSCFL shall pay those amounts not later than the second (2nd) Local
Business Day after such notice is given by the Hedging Party. If NSCFL fails to
make any payment when due as required by this Section 5(c), or if the
Administration Agent has notified NSCFL, the Group Valuation Agent and the
Hedging Parties that an advance is not available under the Credit Agreement,
then without further notice there shall be an automatic termination of all
remaining Special Derivatives effective on the date that the Administration
Agent gives notice that an advance is not available, or on the second (2nd)
Local Business Day if payment is not made, whichever is earlier. For purposes of
such termination, an Event of Default shall be deemed to have occurred with
NSCFL as the Defaulting Party. The Loss method of calculation shall be used in
determining the amount payable and the Second Method shall apply for the
purposes of Section 6(e) of the ISDA Agreement. Each Hedging Party shall
immediately notify the Group Valuation Agent, NSCFL and the Administration Agent
of the amount payable by or to NSCFL in respect of any further
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automatically terminated Special Derivatives to which it is a party. The ISDA
Agreement between NSCFL and each Hedging Party is hereby amended to incorporate
this Section 5(c).
(d) LIMIT ON LIABILITY UNDER SPECIAL DERIVATIVES. The ISDA Agreement
between NSCFL and each Hedging Party is hereby amended to incorporate this
Section 5(d). Notwithstanding any other terms of this Aggregate Repricing
Agreement but in all other respects subject to the terms hereof, for as long as
the 1999 Notes, the 2001 Notes or any Similar Notes (each as defined in the
Credit Agreement) are outstanding and do not expressly permit the incurrence of
Special Derivatives, the liability of the Restricted Parties (as defined in the
Credit Agreement) in respect of all Special Derivatives outstanding at any time
with all Hedging Parties is limited to an aggregate amount of CAD 150,000,000.
The foregoing limitation shall not, however, in any way limit the liability of
the Restricted Parties in respect of Hedging Transactions other than Special
Derivatives, nor shall it prevent the Hedging Parties from recovering interest
on unpaid amounts owing by the Restricted Parties in respect of terminated
Special Derivatives, nor shall it apply to any derivative transaction that would
have been a Special Derivative but for it not being reported to the Group
Valuation Agent as required by this Aggregate Repricing Agreement. The aggregate
liability of the Restricted Parties for the purpose of this Section 5(d) shall
be calculated at any time using the methods described in Section 5(c) in respect
of all Special Derivatives that have then been terminated and in respect of
which there are unpaid amounts outstanding, by netting amounts payable by
Hedging Parties to NSCFL against amounts payable by NSCFL to Hedging Parties, in
each case under such terminated Special Derivatives. The agreement of the
Hedging Parties to limit the liability of NSCFL is conditional upon such netting
occurring. In order to effect the netting, any net amount payable by a Hedging
Party to NSCFL (taking into account all terminated Special Derivatives between
that Hedging Party and NSCFL) shall instead be paid to the Group Valuation Agent
and distributed by it to the Hedging Parties to whom net amounts are payable by
NSCFL in respect of Special Derivatives, PRO RATA in accordance with the
respective net amounts payable to them. If, following such netting, the
aggregate liability of the Restricted Parties in respect of Special Derivatives
would exceed CAD 150,000,000 but for the limitation established in this Section
5(d), the excess shall be borne by the Hedging Parties to whom amounts are
payable by NSCFL in respect of Special Derivatives, PRO RATA in accordance with
the respective net amounts that would have been payable to them but for the
limitation.
(e) AMENDMENT TO LIMIT ON LIABILITY UNDER SPECIAL DERIVATIVES. NSCFL may
from time to time reduce the CAD 150,000,000 limit specified in Section 5(d),
and thereafter increase it, in accordance with the following: (A) the limit
shall never be less than CAD 25,000,000 or more than CAD 150,000,000, (B) the
references to CAD 135,000,000 in the definition of "Permitted Special Derivative
Exposure" and in Section 5(c) and the reference to CAD 15,000,000 in the
definition of "Excess Special Derivative Exposure" shall each be automatically
reduced or increased by the same percentage that the CAD 150,000,000 limit
specified in Section 5(d) is reduced or increased, (C) any change in the limit
must not result in there being a positive Excess Credit Agreement Exposure
Amount or Excess Special Derivative Exposure, taking into account the changes in
(B), (D) no amendment may be made within thirty (30) days of the preceding
amendment, and (E) NSCFL shall give the Group Valuation Agent at least ten (10)
Local Business Days' notice of the proposed amendment and the Group Valuation
Agent shall promptly notify each of the Hedging Parties of the amendment. For
greater certainty, references in this Section 5(e) to particular CAD amounts
specified in other sections or definitions are to the current amounts specified
in those sections or definitions and, following any amendment pursuant to this
section, references to those amounts shall be interpreted having regard to the
previous amendment(s).
6. RESTRICTED PAYMENTS/TRANSACTIONS
(a) RESTRICTED PAYMENTS. Upon any Early Termination Date occurring with
respect to a Hedging Transaction or any Hedging Transactions being terminated
prior to the stated maturity, in each case, if the
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Hedging Party or Hedging Parties (for the purposes of this provision, the
"Payers") are required to make a payment to NSCFL in accordance with the
settlement obligations under such Hedging Transaction(s), such payment shall be
made to NSCFL provided that immediately after such payment and termination (i)
the Aggregate Hedging Transaction Exposure does not exceed CAD 150,000,000, (ii)
the Aggregate Special Derivative Exposure does not exceed the Permitted Special
Derivative Exposure and (iii) there is no Excess Credit Agreement Exposure
Amount. The Payers, NSCFL and the Administration Agent shall consult the Group
Valuation Agent to determine if the Aggregate Hedging Transaction Exposure will
exceed CAD 150,000,000 or if the Aggregate Special Derivative Exposure will
exceed the Permitted Special Derivative Exposure or if there will be any Excess
Credit Agreement Exposure Amount. In the event that the Aggregate Hedging
Transaction Exposure will exceed CAD 150,000,000 or in the event that the
Aggregate Special Derivative Exposure will exceed the Permitted Special
Derivative Exposure or in the event that there will be any Excess Credit
Agreement Amount, in each case, immediately after such payment and termination,
NSCFL agrees that the Payers may withhold the applicable payment, and such
failure to pay will not be a default under any ISDA Agreement, until the Excess
Hedging Transaction Exposure or the Excess Special Derivative Exposure or the
Excess Credit Agreement Amount, as applicable, that would have been created if
the withheld payment had been made is reduced in accordance with this Agreement
and any payments made by NSCFL hereunder to reduce the Excess Hedging
Transaction Exposure or the Excess Special Derivative Exposure or the Excess
Credit Agreement Exposure Amount, as applicable, may be set off against amounts
owed to NSCFL by the Payers.
(b) RESTRICTED TRANSACTIONS. Each of the parties hereto agrees that it
shall not enter into any Special Derivative other than a Floating Rate
Transaction, an Oil and Gas Transaction, a Pulp and Paper Transaction or a
Special Derivative of a type previously dealt with under this Section 6(b)
without giving at least ten (10) Local Business Days' notice to the Group
Valuation Agent and without receiving the subsequent notice from the Group
Valuation Agent that is referred to below. The parties agree that, upon any such
notice being given to the Group Valuation Agent, the Group Valuation Agent and
the Administration Agent, after consulting NSCFL, shall establish a volatility
factor for the additional type of Special Derivative. The Group Valuation Agent
shall then notify all parties of the volatility factor that has been
established.
7. FURNISH SPECIFIED INFORMATION
Section 4(a)(ii) of each ISDA Agreement between NSCFL and a Hedging
Party that is a party hereto is deemed to be amended to read as follows:
"(ii) any other documents specified in the Schedule, any
Confirmation or the Aggregate Repricing Agreement dated as of
* May 2003 as amended, restated or replaced from time to time,
entered into between, among others, Party B and Party A as a
Hedging Party thereto; and"
8. REPRESENTATIONS AND WARRANTIES
Each party hereto represents and warrants to the other parties as
follows:
(a) it has full power and authority to execute and deliver this
Aggregate Repricing Agreement and to perform and observe the
provisions hereof;
(b) the execution, delivery and performance of this Aggregate
Repricing Agreement either have been or will be duly authorized
by all necessary corporate action and do not and will not
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contravene any requirement of law, its charter or by-laws or any
contractual restriction or agreement binding on or affecting such
party or its assets; and
(c) this Aggregate Repricing Agreement has been duly and properly
executed and delivered by such party and constitutes and will
constitute the legal, valid and binding obligation of such party
enforceable in accordance with its terms.
9. NOTICES
Unless otherwise specified, all notices and other communications to be
given to a party hereunder shall be given to the address, facsimile (confirmed
if requested) or telephone number and to the individual or department specified
by such party on Schedule B hereto or such other address, facsimile or telephone
number as such party may hereafter specify for the purpose by notice given in
accordance with this section. Unless otherwise specified, any notice,
instruction or other communication shall be effective upon receipt if given in
accordance with this section.
10. AMENDMENTS
(a) No amendment, modification, supplement or waiver in respect of this
Aggregate Repricing Agreement will be effective unless in writing and signed by
each of the parties intended to be bound thereby.
(b) If the Credit Agreement is amended in accordance with the terms
thereof, the parties shall in good faith negotiate and enter into any amendments
hereof which are reasonably required as a result of such amendment of the Credit
Agreement.
(c) Any person that is not a party hereto and is otherwise entitled to be a
party to an Other Secured Obligation (as defined in the Credit Agreement) may
become a Hedging Party hereunder and agree to be bound hereby by executing such
instrument or agreement as the Group Valuation Agent may reasonably prescribe in
order to evidence its accession hereto. Any ISDA agreement entered into between
NSCFL and such person shall have substantially the same terms and conditions as
the ISDA Agreement. In particular, each ISDA agreement shall continue to be
based on the 1992 ISDA Master Agreement notwithstanding any subsequent form of
ISDA Master Agreement being issued.
11. GROUP VALUATION AGENT
(a) The Group Valuation Agent shall have no duties or obligations other
than as expressed herein, and without limitation, the Group Valuation Agent does
not undertake, and the Hedging Parties relieve the Group Valuation Agent from,
any implied duties (including fiduciary duties) and there shall not be construed
against the Group Valuation Agent any implied covenants or terms. The Group
Valuation Agent may execute or perform, and may delegate the execution and
performance of, any of its duties hereunder through or to any of its own
employees or to a recognized dealer designated by it. References herein or in
any of the other agreements to the Group Valuation Agent shall include
references to any such employees or recognized dealers to whom the Group
Valuation Agent shall have delegated any of its duties.
(b) The Group Valuation Agent shall not be obliged to incur or subject
itself to any cost or expenditure in connection herewith unless it is first
indemnified or furnished with security by the Hedging Parties on a rateable
basis, in form and substance satisfactory to it (which may include further
agreements of indemnity or the deposit of funds or security or other suitable
measures).
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(c) Neither the Group Valuation Agent nor its directors, officers, agents
or employees shall be liable to NSCFL or any Hedging Party for any action taken
or omitted to be taken by it or them under or in connection with this Aggregate
Repricing Agreement except for its or their own gross negligence or wilful
misconduct. Without limiting the generality of the foregoing, the Group
Valuation Agent (i) makes no warranty or representation to NSCFL nor any Hedging
Party (except as set out in section 8 above) and shall not be responsible to
NSCFL or any Hedging Party for the form, substance, accuracy or completeness of
this Aggregate Repricing Agreement or any other documents, information or
financial data made available to the parties hereto, or for any statements,
warranties or representations made by others in or in connection with this
Aggregate Repricing Agreement; (ii) shall not have any duty to ascertain or to
inquire as to the existence of an Event of Default or Potential Event of Default
or the performance or observance of any of the terms or conditions of this
Aggregate Repricing Agreement on the part of NSCFL or any Hedging Party; (iii)
shall not be responsible to NSCFL nor any Hedging Party for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of this
Aggregate Repricing Agreement other than the representations and warranties made
herein with respect to the Group Valuation Agent; and (iv) shall incur no
liability under or in respect of this Aggregate Repricing Agreement by acting
upon any notice, consent, certificate or other instrument or writing (which may
have been sent by facsimile transmission, by telex or by hand) believed by it in
good faith to be genuine and signed or sent by the proper party or parties.
(d) With respect to Hedging Transactions between Royal Bank of Canada
("RBC") and NSCFL, RBC has the same rights and powers under this Aggregate
Repricing Agreement as any other Hedging Party hereunder and may exercise the
same as though it were not the Group Valuation Agent and the term "Hedging
Party" or "Hedging Parties" shall, unless otherwise expressly indicated, include
it in its individual capacity. RBC and its affiliates may accept deposits from,
lend money to, act as trustee under indentures of, and generally engage in any
kind of business with NSCFL and its affiliates or any person who may do business
with or own securities of NSCFL, all as if it were not the Group Valuation
Agent, and without any duty to account therefor to the Hedging Parties.
12. REPLACEMENT OF GROUP VALUATION AGENT
In the event that: (A) the Group Valuation Agent resigns (which
resignation shall be given in writing to the parties hereto with at least five
(5) Business Days notice); (B) the Group Valuation Agent materially breaches its
duties hereunder; or (C) NSCFL or the other Hedging Parties notify the other
parties to this Aggregate Repricing Agreement on at least five (5) Business Days
notice that they wish to replace the Group Valuation Agent, NSCFL will appoint a
replacement Group Valuation Agent who is a Hedging Party with the consent of
such successor and the consent of the remaining Hedging Parties, which consent
shall not be unreasonably withheld. The successor Group Valuation Agent shall
succeed to and become vested with all the rights, powers and duties of the Group
Valuation Agent as described herein and the retiring Group Valuation Agent shall
be discharged from its duties and obligations in its capacity as Group Valuation
Agent.
13. GOVERNING LAW AND SEVERABILITY
This Aggregate Repricing Agreement shall be construed in accordance
with and governed by the laws of the Province of British Columbia without
reference to choice of law doctrine. Wherever possible each provision of this
Aggregate Repricing Agreement shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of this Aggregate
Repricing Agreement shall be prohibited by or be invalid or unenforceable under
such law, such provision shall be ineffective to the extent of such prohibition,
invalidity or unenforceability without otherwise affecting the validity or
enforceability of such provision or the remaining provisions of this Aggregate
Repricing Agreement.
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14. COUNTERPARTS
This Aggregate Repricing Agreement (and any amendment hereto) may be
executed and delivered in counterparts (including by facsimile transmission),
each of which will be deemed an original.
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IN WITNESS WHEREOF, the parties hereto have caused this Aggregate Repricing
Agreement to be duly executed by their respective authorized officers as of the
date first above written.
NORSKE XXXX CANADA FINANCE LIMITED ROYAL BANK OF CANADA, as a Hedging
Party and Group Valuation Agent
By:_________________________ By:_________________________
Name: Name:
Title: Title:
By:_________________________ By:_________________________
Name: Name:
Title: Title:
[NOTE: ADD OTHER SIGNATURE BLOCKS AS REQUIRED]
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SCHEDULE A
VOLATILITY FACTORS
The volatility factors for the currently contemplated types of Special
Derivatives are as follows:
Floating Rate Transactions - nil
Oil and Gas Transactions - 0.25
Pulp and Paper Transactions - 0.10
SCHEDULE B
ADDRESSES FOR NOTICE
NORSKE XXXX CANADA FINANCE LIMITED ROYAL BANK OF CANADA
00XX XXXXX 0XX XXXXX, XXXXX BANK PLAZA
000 XXXX XXXXXX 000 XXX XXXXXX
XXXXXXXXX, XXXXXXX XXXXXXXX XXXXXXX, XXXXXXX
X0X 0X0 X0X 0X0
ATTENTION: TREASURER ATTENTION: MANAGING DIRECTOR
GLOBAL MIDDLE OFFICE
FACSIMILE NO.: 000-000-0000
TELEPHONE NO.: 000-000-0000 FACSIMILE NO.: (000) 000-0000
TELEPHONE NO.: (000) 000-0000
[NOTE: ADD ADDITIONAL ADDRESSES; MULTIPLE CONTACTS
SHOULD BE PROVIDED IF POSSIBLE]
(Multicurrency-Cross Border)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of August 20, 0000
XXXXX XXXX XX XXXXXX AND NORSKE XXXX CANADA FINANCE LIMITED
have entered and/of anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:-
1. INTERPRETATION
(a) DEFINITIONS: The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
2
(ii) payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is, other
than by payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation unless
otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:-
(i) the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that
party ("X") will:-
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required
to be deducted or withheld from any
3
additional amount paid by X to Y under this Section 2(d))
promptly upon the earlier of determining that such deduction
or withholding is required or receiving notice that such
amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will
equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:-
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and true
unless such failure would not have occurred but for
(I) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or
after the date on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this Agreement) or
(II) a Change in Tax Law.
(ii) LIABILITY. If:-
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate
4
the other party on demand if and to the extent provided for in the relevant
Confirmation or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:-
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organized and validly existing under the laws of
the jurisdiction of its organization or incorporation and, if relevant
under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to deliver and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorize such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable to it,
any provision of its constitutional documents, any order or judgment of
any court or other agency of government applicable to it or any of its
assets or any contractual restriction binding on or affecting it or any
of its assets;
(iv) CONSENTS. All governmental and other consents that are relied to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitute its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement, or such
Credit Support Document.
5
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(1f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:-
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:-
(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation,
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and
to be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future,
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
6
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled, or considered to have its seat, or in which a branch office through
which it is acting for the purpose of this Agreement is located ("Stamp Tax
Jurisdiction") and will indemnify the other party against any Stamp Tax levied
or imposed upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which is not
also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:-
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support
Document relates without the written consent of the other
party; or
(3) the party or such Credit Support Provider disaffirms,
disowns, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party
in this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated
or deemed to have been trade or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
7
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment delivery or exchange
date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in tire
Schedule) which has resulted in such Specified Indebtedness, becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Threshold Amount
under such agreements or instruments (after giving effect to any
applicable notice requirement or grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party:
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors'
rights, or a petition is presented for its winding-up or
liquidation, and, in the case of any such proceeding or
petition instituted or presented against it, such proceeding
or petition (A) results in a judgment of insolvency or
bankruptcy or the entry of an order for relief or the making
of an order for its winding-up or liquidation or (B) is not
dismissed, discharged, stayed or restrained in each case
within 30 days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes
subject to the appointment of an administrator, provisional
liquidator, conservator, receiver, trustee, custodian or other
similar official for it or for all or substantially all its
assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied,
enforced or sued on or against all or substantially all its
assets and such secured party maintains possession, or any
such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
8
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:-
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other xxxxx to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its
obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:-
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):-
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of such
party to perform, any contingent or other obligation which the
party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will,
or there is a substantial likelihood that it will, on the next
succeeding Scheduled Payment Date (1) be required to pay to the other
party an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is
required to be deducted or withheld for or on account of a Tax (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to
9
pay an additional amount (other than by reason of Section 2(d)(i)(4)(A)
or (B)), in either case as a result of a party consolidating or
amalgamating with, or merging with or into, or transferring all or
substantially all its assets to, another entity (which will be, the
Affected Party) where such action does not constitute an event
described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party);
or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT:
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
The other party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(1)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section 6(b)(iv),
use all reasonable efforts (which will not require such party to incur
a loss, excluding immaterial, incidental expenses) to transfer within
20 days after it gives notice under Section 6(b)(i) all its rights and
obligations under this
10
Agreement in respect of the Affected Transactions to another of its
Offices or Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(f) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days after
notice hereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. If: -
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then continuing, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all
Affected Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by
11
Section 6(e) and will provide to the other party a statement (1)
showing, in reasonable detail, such calculations (including all
relevant quotations and specifying any amount payable under Section
6(e)) and (2) giving details of the relevant account to which any
amount payable to it is to be paid. In the absence of written
confirmation from the source of a quotation obtained in determining a
Market Quotation, the records of the party obtaining such quotation
will be conclusive evidence of the existence and accuracy of such
quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that note of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) rind on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an, Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including)
the relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an
Event of Default:-
(1) FIRST METHOD AND MARKET QUOTATION. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Nondefaulting Party over (B) The
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) FIRST METHOD AND LOSS. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if
a positive number, the Non-defaulting Party's Loss in respect
of this Agreement.
(3) SECOND METHOD AND MARKET QUOTATION. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) The sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) SECOND METHOD AND LOSS. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party;
12
if it is a negative number, the Non-Defaulting Party will pay
the absolute value of that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:-
(1) ONE AFFECTED PARTY. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) TWO AFFECTED PARTIES. If there are two Affected Parties:-
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the
difference between the Settlement xxxx of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Less of the party with the bigger Loss ("X") and
the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to
X, if it is a negative number, X will pay the absolute value
of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies
an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement maybe transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:-.
13
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(c).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency; except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good fault in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
14
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power, or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organization of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
15
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:-
(i) if in writing, and delivered in person or by courier, on the date
it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it bring 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 facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following, day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
16
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:-
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying
of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Xxx 0000 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets night otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement: -
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality Tax Event or Tax Event Upon Merger, all Transactions
affected by the occurrence of such Termination Event and (b) with respect to any
other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
17
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:-
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date determined in accordance with Section 6(d)(ii)) on
which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, The Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation. execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organized, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient
18
or related person having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or a Credit Support
Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial center, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
re-establishing any hedge or related trading position (or any gain resulting
from any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made. except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of The earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant-rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be in an amount, if
any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will
19
request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(c), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the biggest and lowest values. If exactly three such
quotations arc provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the biggest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a)
in which the party is incorporated, organized, managed and controlled or
considered to have its seat, (b) where an Office through which the party is
acting for purposes of this Agreement is located, (c) in which the party
executes this Agreement and (d) in relation to any payment, from or through
which such payment is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or used on,
such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, The sum of:
(a) The Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation
20
cannot be determined or would not (in the reasonable belief of the party making
the determination) produce a commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
21
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
ROYAL BANK OF CANADA NORSKE XXXX CANADA FINANCE LIMITED
By: /S/ XXXXX XXXXX By: /S/ XXXXX XXXXXXXX
------------------------------ -------------------------------
Name: Xxxxx Xxxxx Name: Xxxxx Xxxxxxxx
Title: Title: Director
Date: Date: August 20, 2001
By: By: /S/ XXXXX XXXXXXX
------------------------------ -------------------------------
Name: Name: Xxxxx Xxxxxxx
Title: Title: Director
Date: Date: August 20, 2001
Execution Copy
ISDA
INTERNATIONAL SWAPS AND DERIVATIVES ASSOCIATION, INC.
SCHEDULE
TO THE
MASTER AGREEMENT
DATED AS OF AUGUST 20, 0000
XXXXXXX
XXXXX XXXX XX XXXXXX
("PARTY A")
AND
NORSKE XXXX CANADA FINANCE LIMITED
("PARTY B")
PART 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:-
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None
in relation to Party B for the purpose of:-
Section 5(a)(v), None
Section 5(a)(vi), None
Section 5(a)(vii), None
Section 5(b)(iv), None
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14
of this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party
A and will apply to Party B, provided that the words ", or becoming
capable at such time of being declared", appearing on the seventh line
thereof shall be deleted therefrom;.
23
If such provisions apply:-
The "." at the end of the definition of "SPECIFIED INDEBTEDNESS" in
Section 14 of this Agreement shall be deleted and replaced by the
following: ", except that such term shall not include obligations in
respect of deposits received in the ordinary course of Party A's
banking business, if any."
"THRESHOLD AMOUNT" means in relation to Party A, 2.5% of its
shareholders' equity (as disclosed in its most recent financial
statements) and Party B, CAD 25,000,000 or the equivalent in any other
currency.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will
apply to Party A and will apply to Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provision of Section 6(a) will not
apply to Party A and will not apply to Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:-
(i) Market Quotation will apply.
(ii) The Second Method will apply.
"TERMINATION CURRENCY" means Canadian Dollars.
(h) ADDITIONAL TERMINATION EVENT will not apply.
PART 2. TAX REPRESENTATIONS.
(a) PAYER REPRESENTATIONS. For the purpose of Section 3(e) of this
Agreement, Party A will make the following representation and Party B
will not make the following representation:
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on (i)
the accuracy of any representations made by the other party pursuant to
Section 3(f) of this Agreement, (ii) the satisfaction of the agreement
contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the
accuracy and effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii)
the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement, provided that it shall not be a breach
of this representation where reliance is placed on clause (ii) and the
other party does not deliver a form or document under Section 4(a)(iii)
by reason of material prejudice to its legal or commercial position.
24
(b) PAYEE REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified
below, if any:
(i) The following representation will not apply to Party A and will
apply to Party B if Party A is not acting out of its Toronto office:-
It is fully eligible for the benefits of the "Business Profits" or
"Industrial and Commercial Profits" provision, as the case may be, the
"Interest" provision or the "Other Income" provision (if any) of the
Specified Treaty with respect to any payment described in such
provisions and received or to be received by it in connection with this
Agreement and no such payment is attributable to a trade or business
carried on by it through a permanent establishment in the Specified
Jurisdiction.
If such representation applies, then:-
"SPECIFIED TREATY" means with respect to Party A not applicable.
"SPECIFIED JURISDICTION" means with respect to Party A not applicable.
"SPECIFIED TREATY" means with respect to Party B the income tax convention or
treaty, if any, between the Government of Canada and the Government of the
jurisdiction in which Party A's office is located for the purpose of the
Transaction.
"SPECIFIED JURISDICTION" means with respect to Party B the country in which is
located the office through which Party A is acting for the purpose of the
Transaction.
(ii) Other Payee Representations:-
(a) Party A is not a non-resident of Canada for purposes of the
Income Tax Act (Canada).
(b) Party B is not a non-resident of Canada for purposes of the
Income Tax Act (Canada).
PART 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Sections 4(a)(i) and (ii) of this Agreement, each party
agrees to deliver the following documents, as applicable:-
(a) Tax forms, documents or certificates to be delivered are:-
PARTY REQUIRED TO DELIVER FORM/DOCUMENT/ DATE BY WHICH
DOCUMENT CERTIFICATE TO BE DELIVERED
Party A and Any form or document, accurately Promptly upon request of other party
Party B completed, and in a manner
reasonably satisfactory to the other
party, that may be required or
reasonably requested in order
25
to allow the other party to make a
payment under this Agreement without
any deduction or withholding for or
on account of any Tax or with such
deduction at a reduced rate
(b) Other documents to be delivered are:-
PARTY REQUIRED TO FORM/DOCUMENT CERTIFICATE DATE BY WHICH TO BE COVERED BY SECTION
DELIVER DOCUMENT DELIVERED 3(d) REPRESENTATION
Party A Power of Attorney and Certificate of Upon execution of Yes
Incumbency this Agreement, and,
if requested, each
Confirmation
Party A Copy of extract of resolutions with respect Upon execution of Yes
to execution of agreements this Agreement
Party B Copies of the incorporating documents and Upon execution of Yes
by-laws (or other equivalent or analogous this Agreement
rules) of Party B certified as at the date
hereof as true and in full force and effect
Party B Certified copies of all resolutions required Upon execution of Yes
to authorize the signing, delivery and this Agreement, and,
performance of this Agreement by Party B and if requested, each
appointing and empowering individuals with Confirmation
specimens of their respective signatures for
and on behalf of Party B to sign and deliver
this Agreement and sign under seal or
otherwise and deliver all agreements,
documents and instruments, and give all
instructions, in connection herewith
Party B Opinion of legal advisors to Party B in form Upon execution of No
and substance satisfactory to Party A this Agreement
Party A and Party B Annual and/or quarterly financial statements Promptly upon request Yes
of the other party
26
PART 4. MISCELLANEOUS.
(a) ADDRESS FOR NOTICES. For the purpose of Section 12(a) of this
Agreement:-
Address for notices or communications to Party A with respect to this Agreement
shall be given to it at the following address:
Address: Royal Bank of Canada
0xx Xxxxx
Xxxxx Xxxx Xxxxx
000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx
XXXXXX X0X 0X0
Attention: Managing Director, Global Middle Office
Facsimile No.: (000) 000-0000
Unless otherwise provided herein, address for notices or communications to Party
A relating to a particular Swap Transaction including FX Transactions and
Currency Option Transactions concluded with its TORONTO office, shall be given
to it at the following address:
------------------------------------------------------------- ---------------------------------------------------------
SWAP TRANSACTION FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------------------------- ---------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada
0xx Xxxxx, Xxxxx Xxxxx 0xx Xxxxx, Xxxxx Xxxxx
Xxxxx Bank Xxxxx Xxxxx Xxxx Xxxxx
000 Xxx Xxxxxx 000 Xxx Xxxxxx
Xxxxxxx, Xxxxxxx Toronto, Ontario
CANADA M5J 2W7 CANADA X0X 0X0
------------------------------------------------------------- ---------------------------------------------------------
Attention: Manager, Capital Market Attention: FX Settlement (FX Transaction)
Products Operations Financial Engineering (Currency Option
Transaction)
------------------------------------------------------------- ---------------------------------------------------------
Facsimile No.: (000) 000-0000 or Facsimile: (000) 000-0000 / (000) 000-0000
(000) 000-0000 (FX Transaction)
(000) 000-0000 (Currency Option
Transaction)
------------------------------------------------------------- ---------------------------------------------------------
Electronic Messaging System: Not Applicable Electronic Messaging System: ROYCCAT3IMM
------------------------------------------------------------- ---------------------------------------------------------
Address for notices or communications to Party A relating to a particular Swap
Transaction including FX Transactions and Currency Option Transactions concluded
with its TOKYO Office, shall be given to it at the following address:-
------------------------------------------------------------ ---------------------------------------------------------
SWAP TRANSACTION FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------------------------ ---------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada
Treasury Department Treasury Department
27
------------------------------------------------------------ ---------------------------------------------------------
SWAP TRANSACTION FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------------------------ ---------------------------------------------------------
32nd Floor, ARK Mori Building 32nd Floor, ARK Xxxx Xxxxxxxx
00-00, Xxxxxxx, 1-chome 00-00, Xxxxxxx, 0-xxxxx
Xxxxxx-xx, Xxxxx 000 Xxxxxx-xx, Xxxxx 000
XXXXX JAPAN
------------------------------------------------------------ ---------------------------------------------------------
Attention: Manager, Capital Markets Attention: Manager, Operations
------------------------------------------------------------ ---------------------------------------------------------
Telex: J26636 Answerback: ROYTOK Telex: N/A
------------------------------------------------------------ ---------------------------------------------------------
Facsimile No.: (00) 0000-0000 Facsimile: (00) 0000-0000
------------------------------------------------------------ ---------------------------------------------------------
Electronic Messaging System: N/A Electronic Messaging System: ROYC JPJT
------------------------------------------------------------ ---------------------------------------------------------
Addresses for notices or communications to Party A relating to a particular Swap
Transaction including FX and Currency Option Transactions concluded with its
SYDNEY Office shall be given to it at the following address:
------------------------------------------------------------ ---------------------------------------------------------
SWAP TRANSACTION FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------------------------ ---------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada
Xxxxx 00 Xxxxx 00
000 Xxxxxxxxx Xxxxxx 000 Xxxxxxxxx Xxxxxx
Xxxxxx XXX 0000, Xxxxxxxxx Xxxxxx XXX 0000, Xxxxxxxxx
------------------------------------------------------------ ---------------------------------------------------------
Attention: Manager, Operations Attention: Manager, Operations
------------------------------------------------------------ ---------------------------------------------------------
Facsimile: 612 9221 1526 Facsimile: 612 9221 1526
------------------------------------------------------------ ---------------------------------------------------------
Telex: AA20060 Answerback: RBC SYD Telex: AA20060 Answerback: RBC SYD
------------------------------------------------------------ ---------------------------------------------------------
Electronic Messaging System: ROYC AU 21 Electronic Messaging System: ROYC AU 21
------------------------------------------------------------ ---------------------------------------------------------
Address for notices or communications to Party A relating to a particular Swap
Transaction including FX Transactions and Currency Option Transactions concluded
with its LONDON Office, shall be given to it at the following address:-
------------------------------------------------------------ ---------------------------------------------------------
SWAP TRANSACTION FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------------------------ ---------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada
00/00X Xxxxx Xxxxxxxx Xxxxxx 00/00X Xxxxx Xxxxxxxx Xxxxxx
Xxxxxx XX0X 0XX Xxxxxx XX0X 0XX
XXXXXXX XXXXXXX
------------------------------------------------------------ ---------------------------------------------------------
Attention: Derivative Product Operations Attention: FX Settlement (FX Transaction)
Capital Market Operations (Currency
Option Transaction)
------------------------------------------------------------ ---------------------------------------------------------
Telex: 92 6933 Answerback: RBCSWP G
------------------------------------------------------------ ---------------------------------------------------------
Facsimile No.: 00-000-000-0000 Facsimile: 000-000-0000 (FX Transaction)
000-000-0000 (Currency Option
Transaction)
------------------------------------------------------------ ---------------------------------------------------------
Electronic Messaging System: N/A Electronic Messaging System: ROYC XX 0X
------------------------------------------------------------ ---------------------------------------------------------
Address for notices or communications to Party A relating to a particular Swap
Transaction (EXCLUDING FX TRANSACTIONS OR CURRENCY OPTION TRANSACTIONS)
concluded with its NEW YORK Office, shall be given to it at the following
address:-
28
------------------------------------------------------------ ---------------------------------------------------------
SWAP TRANSACTION FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------------------------ ---------------------------------------------------------
Royal Bank of Canada N/A
New York Branch
One Liberty Plaza, 2nd Floor
000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx
00000-0000
U.S.A
------------------------------------------------------------ ---------------------------------------------------------
Attention: RBC DS Global Markets N/A
Capital Markets Group
------------------------------------------------------------ ---------------------------------------------------------
Telex: 420464 Answerback: RBOC N/A
------------------------------------------------------------ ---------------------------------------------------------
Facsimile No.: 000-000-0000 N/A
------------------------------------------------------------ ---------------------------------------------------------
Electronic Messaging System: N/A N/A
------------------------------------------------------------ ---------------------------------------------------------
Address for notices or communications to Party A relating to a particular Swap
Transaction including FX Transactions and Currency Option Transactions concluded
with its SINGAPORE Office, shall be given to it at the following address:-
------------------------------------------------------------ ---------------------------------------------------------
SWAP TRANSACTION FX AND CURRENCY OPTION TRANSACTIONS
------------------------------------------------------------ ---------------------------------------------------------
Royal Bank of Canada Royal Bank of Canada
00 Xxxxxxx Xxxxx 00 Xxxxxxx Xxxxx
#00-00/00 Xxxxx Xxxxxx #00-00/00 Xxxxx Xxxxxx
Xxxxxxxxx, 000000 Xxxxxxxxx, 000000
Republic of Singapore Republic of Singapore
------------------------------------------------------------ ---------------------------------------------------------
Attention: Head, Treasury Operations, Asia Attention: Manager, Operations
------------------------------------------------------------ ---------------------------------------------------------
Telex: RS 23451 Answerback: ROYSPO Telex: RS 23451 Answerback: ROYSPO
------------------------------------------------------------ ---------------------------------------------------------
Facsimile: 00-000-0000 Facsimile: 00-000-0000
------------------------------------------------------------ ---------------------------------------------------------
Electronic Messaging System: N/A Electronic Messaging System: ROYC SG SG
------------------------------------------------------------ ---------------------------------------------------------
Address for notices or communications to Party B with respect to this
Agreement and any Transactions shall be given to it at the following
address:
Address: Norske Xxxx Canada Finance Limited
9th Floor, 000 Xxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX Xxxxxx X0X 0X0
Attention: Treasurer
Fax: (000) 000-0000
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent - None
Party B appoints as its Process Agent - None
(c) OFFICES. The provisions of Section 10(a) will apply to Party A and
Party B; provided, however, that without in any way limiting the effect
of the foregoing, each party agrees to deal first with the Office of
the other party specified in the Confirmation rather than such
29
party's head or home office with respect to resolving any default that
results solely from wire transfer difficulties or an error or omission
of an administrative or operational nature. Notwithstanding the
foregoing, a party (the "Owed Party") may seek payment from the head or
home office of the other party (the "Owing Party") with respect to this
Agreement in the event that an amount payable to the Owed Party by the
Owing Party pursuant to this Agreement as a result of the designation
of an Early Termination Date has not been paid in full when due.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:-
Party A is a Multibranch Party and may act through the following
offices:
(i) for the purposes of FX Transactions and Currency Options entered
into hereunder, Toronto, London, Singapore, Sydney and Tokyo; and
(ii) for the purposes of all other Transactions entered into hereunder,
Toronto, New York, London, Singapore, Sydney and Tokyo.
Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent is Party A unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
With respect to Section 5(a)(ii) of the Agreement, if a party hereto is
designated as the Calculation Agent for any Transaction, then Section
5(a)(ii) shall not include any failure by that party to comply with its
obligations as Calculation Agent and the sole remedy of the other party
for such failure shall be the right, upon notice to the Calculation
Agent, to designate itself or a third party as a replacement
Calculation Agent.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document:-
Credit Agreement and any document providing for Security (as defined in
the Credit Agreement)
(g) CREDIT SUPPORT PROVIDER. Credit Support Provider means in relation to
Party B:- "Restricted Parties" (as defined in the Credit Agreement)
(g) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the Province of Ontario and the federal
laws of Canada applicable therein.
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this
Agreement will apply to all Transactions.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement except in respect of Party B it will mean any Restricted
Party and for the purpose of Section 3(c) it will mean for each party
any Specified Entity or Credit Support Provider designated for the
purpose of Sections 5(a)(v), (vi) or (vii).
PART 5. OTHER PROVISIONS.
1. DEFINITIONS. This Agreement, each Confirmation, and each Transaction
are subject to the 2000 ISDA Definitions (the "Definitions"), as
published by the International Swaps and Derivatives Association, Inc.,
and will be governed in all respects by the provisions
30
set forth in the Definitions with references to "Swap Transaction"
therein being a reference to "Transaction" for purposes of this
Agreement. The provisions of the Definitions are incorporated by
reference in, and made part of, this Agreement as if set forth in full
in this Agreement and each Confirmation. In the event of any
inconsistency between (i) (A) the provisions of this Schedule and the
Master Agreement of which it is a part; and (B) the Definitions, the
provisions set forth in this Schedule will prevail; and (ii) in the
event of any inconsistency between (A) the provisions of a
Confirmation, and (B) any of this Schedule, the Master Agreement or the
Definitions, the provisions set forth in the Confirmation will prevail.
2. OBLIGATIONS BINDING. For purposes of Section 3(a)(v) the representation
as to enforceability of such obligation shall also be subject to the
fact that judgments awarded by Canadian courts may only be in Canadian
dollars and that such judgments may be awarded based on a rate of
exchange in existence on a day other than the day of payment.
3. ILLEGALITY. For purposes of Section 5(b)(i), the obligation of Party A
to comply with any official directive issued or given by any government
agency or authority with competent jurisdiction which has the result
referred to in Section 5(b)(i) will be deemed to be an "Illegality".
4. PAYMENTS ON EARLY TERMINATION - EVENTS OF DEFAULT - SECOND METHOD.
Section 6 of this Agreement is amended by the inclusion of the
following Section 6(f):
"(f) CONDITIONS TO CERTAIN PAYMENTS. Notwithstanding the provisions of
Section 6(e)(i)(3) and (4), as applicable, if the amount referred to
therein is a positive number, the Defaulting Party will pay such amount
to the Non-defaulting Party, and if the amount referred to therein is a
negative number, the Non-defaulting Party shall have no obligation to
pay any amount thereunder to the Defaulting Party unless and until the
conditions set forth in (i) and (ii) below have been satisfied at which
time there shall arise an obligation of the Non-defaulting Party to pay
to the Defaulting Party an amount equal to the absolute value of such
negative number less any and all amounts which the Defaulting Party may
be obligated to pay under Section 11:
(i) the Non-defaulting Party shall have received confirmation
satisfactory to it in its sole discretion (which may include
an unqualified opinion of its counsel) that (x) no further
payments or deliveries under Section 2(a)(i) or 2(e) in
respect of Terminated Transactions will be required to be made
in accordance with Section 6(c)(ii) and (y) each Specified
Transaction shall have terminated pursuant to its specified
termination date or through the exercise by a party of a right
to terminate and all obligations owing under each such
Specified Transaction shall have been fully and finally
performed; and
(ii) all obligations (contingent or absolute, matured or unmatured)
of the Defaulting Party and any Affiliate of the Defaulting
Party to make any payment or delivery to the Non-defaulting
Party or any Affiliate of the Non-defaulting Party shall have
been fully and finally performed."
5. EXECUTION. Section 9(e)(ii) of this Agreement is deleted and replaced
in its entirety with the following provision:
31
"(ii) EXECUTION OF TRANSACTIONS. For the purposes of this Agreement,
the parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally
or otherwise) with respect to each Transaction. A Confirmation shall be
entered into by the parties and may be executed and delivered in
counterparts including by facsimile transmission which will be
sufficient for all purposes to evidence a binding supplement to this
Agreement. Unless a Transaction has been or will be confirmed by way of
an electronic messaging system: (a) Party A will, on or promptly after
entering into each Transaction, send to Party B by facsimile
transmission a Confirmation in the form utilized by Party A; (b) Party
B will promptly thereafter confirm by facsimile the accuracy of or
request the correction of such Confirmation; and (c) upon such
confirmation by Party B, such facsimile transmissions shall be deemed
to constitute a legally binding supplement to this Agreement upon the
particular terms stated therein."
6. SERVICE OF PROCESS. With respect to the provisions of Section 13(c) of
the Agreement, the reference therein to Section 12 to the contrary
notwithstanding, no consent is given by either party to service of
process by telex, facsimile transmission or electronic messaging
system.
7. EQUIVALENCY CLAUSE. For the purpose of disclosure pursuant to the
INTEREST ACT (Canada), the yearly rate of interest to which any rate of
interest payable under this Agreement that is to be calculated on any
basis other than a full calendar year is equivalent may be determined
by multiplying such rate by a fraction the numerator of which is the
actual number of days in the calendar year in which such yearly rate of
interest is to be ascertained and the denominator of which is the
number of days comprising such other basis.
8. SET-OFF. Without affecting the provisions of this Agreement requiring
the calculation of certain net payment amounts, all payments under this
Agreement will be made without setoff or counterclaim; PROVIDED,
however, that upon the designation or deemed designation of
any Early Termination Date, in addition to and not in limitation of any
other right or remedy (including any right to setoff, counterclaim, or
otherwise withholding payment) under any agreement or applicable law ,
rule or regulation, the Non-defaulting Party or the party which is not
the Affected Party (in either case, "X") shall at its option have the
right, at any time and from time to time, without prior notice to the
Defaulting Party or the Affected Party (in either case "Y") to setoff
any sum or obligation (whether or not arising under this Agreement and
whether matured or unmatured) owed or due by Y to X against any sum or
obligation (whether or not arising under this Agreement and whether
matured or unmatured) owed or due by X or any Affiliate of X (the
"Original Obligation") to Y, and, for this purpose, may convert one
currency into another at the rate of exchange stipulated by Party A for
the purchase of such other currency from time to time. Any such setoff
shall automatically satisfy and discharge the Original Obligation to Y
and, if the Original Obligation exceeds the sum or obligation to be set
off against, the Original Obligation shall be novated and replaced by
an obligation to pay to Y only the excess of the Original Obligation
over such sum or obligation. Y authorizes X and its Affiliates, on
behalf of and in the name of Y, to do all such acts and to execute all
such documents as may be required to effect such application.
9. JURISDICTION. In substitution for the provisions of Section 13 (b)(i),
each party agrees that any suit, action or proceeding arising out of or
relating to this Agreement against it
32
or any of its assets may be brought in Province of Ontario and hereby
attorns to the non-exclusive jurisdiction of such courts over the
subject matter of any such suit, action or proceeding.
10. COVENANTS. Party B agrees with and confirms to Party A that all
covenants and amendments, and replacements thereto from time to time
(the "Covenants") on the part of Party B contained in the
CDN$700,000,000 Credit Facility of August 14, 2001 between Party A and
Party B as may be amended, restated, supplemented, modified or replaced
from time to time (the "Credit Agreement" ), shall be incorporated in
this Agreement by reference and form a part of this Agreement with
references to the Credit Agreement and Borrowings deemed references to
this Agreement and obligations under this Agreement respectively. Party
B agrees and confirms that if the Credit Agreement shall expire, be
cancelled or terminated, the Covenants then existing in the Credit
Agreement at the time of such expiration, cancellation or termination
shall remain in full force and effect and be the Covenants which form a
part of this Agreement.
11. CREDIT EVENT. In addition to any other rights of Party A herein
contained and notwithstanding anything to the contrary in this
Agreement, upon the expiration, cancellation or termination of the
Credit Agreement, or if Party A shall cease to be a Lender under the
Credit Agreement, Party A may upon giving two (2) Business Days notice
to Party B, which shall be the Affected Party, terminate this Agreement
and all Transactions thereunder in accordance with the terms and
conditions hereof. Notwithstanding the foregoing, in the event that the
Credit Agreement is not terminated but Party A ceases to be a Lender
under the Credit Agreement, within one Business Day of receiving notice
of termination from Party A hereunder, Party B may notify Party A that
within five Business Days it will either (A) provide security to cover
all Transactions hereunder that ranks pari passu with the Security (as
defined in the Credit Agreement) or (B) provide an assignment agreement
under which Party A will assign the Transactions to another entity. If
the Transactions are not covered by adequate security or assigned as
provided herein, Party A will have the right to terminate this
Agreement and all Transactions.
12. RELATIONSHIP BETWEEN PARTIES. Each party will be deemed to represent to
the other party on the date on which it enters into a Transaction that
(absent a written agreement between the parties that expressly imposes
affirmative obligations to the contrary for the Transaction):
(a) Non Reliance. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon its
own judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or oral) of
the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction shall
not be considered investment advice or a recommendation to enter into
that Transaction. No communication (written or oral) received from the
other party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
(b) Assessment and Understanding. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and
33
understands and accepts, the terms, conditions and risks of that
Transaction. It is also capable of assuming and assumes, the risks of
that Transaction.
(c) Status of Parties. The other party is not acting as a fiduciary for
or as an advisor to it in respect of that Transaction.
13. ELECTRONIC CONFIRMATIONS. Transactions may be confirmed in accordance
with this subpart, notwithstanding anything to the contrary herein.
Where a Transaction is confirmed by means of an electronic messaging
system (including without limitation, circumstances where such
electronic message is printed and faxed or otherwise delivered by one
party to the other party) that the parties have elected to use to
confirm such Transaction,
(i) such confirmation will constitute a 'Confirmation' as referred
to in this Agreement even where not so specified in the
Confirmation, and
(ii) such Confirmation will supplement, form part of, and be
subject to this Agreement and all provisions in this Agreement
will govern the Confirmation except as modified therein.
14. ELECTRONIC SIGNATURES. Party A confirms, and Party B acknowledges, that
Party A uses a computer-based system to execute certain Confirmations
and that each such Confirmation executed by Party A by means of an
electronically-produced signature shall have the same legal effect as
if such signature had been manually written on such Confirmation and
that each such Confirmation shall be deemed to have been signed for the
purposes of any statute or rule of law that requires such Confirmation
to be signed. The parties acknowledge that in any legal proceedings
between them respecting or in any way relating to this Agreement, each
party expressly waives any right to raise any defence or waiver of
liability based upon the execution of a Confirmation by Party A by
means of an electronically-produced signature. This provision shall
apply to all Confirmations outstanding as of the date hereof and
executed by Party A by means of an electronically-produced signature,
and to all Confirmations in respect of Transactions entered into
between Party A and Party B after the date hereof.
15. CONSENT TO RECORDING. The parties agree that each may electronically
record all telephonic conversations between their trading and marketing
personnel and that any such tape recordings may be submitted in
evidence in any Proceedings relating to the Agreement. In the event of
any dispute between the parties as to the terms of any Transaction
governed by this Agreement, the parties may use the electronic
recordings as the preferred evidence of the terms of the Transaction,
notwithstanding the existence of any writing to the contrary.
16. QUALIFIED PARTY REPRESENTATION. Each party represents to the other
party (which representations will be deemed to be repeated by each
party on each date on which a Transaction is entered into) that it is a
Qualified Party as such term is defined in any securities act, order,
rule, decree or regulation which is applicable to such party.
17. REPRICING, TERMINATION OR ASSIGNMENT. The parties hereto acknowledge
that they will enter into an aggregate repricing or termination
agreement with each other and with other hedge providers of Party B and
that such agreement (the "Aggregate Repricing Agreement") may require
the parties hereto to reprice, transfer or assign certain
34
Transactions hereunder in order to comply with the xxxx to market cap
provisions of the Aggregate Repricing Agreement.
18. TRANSACTIONS WITH AFFILIATES. Party B agree that all transactions of
the type described in the definition of Specified Transaction between
Party A and any of Party B's Affiliates will be transferred from such
Affiliate or Affiliates to Party B within thirty days of the date of
this Agreement. Party A hereby consents to any such transfer.
PART 6. FOREIGN EXCHANGE AND CURRENCY OPTION TRANSACTIONS
1. SCOPE/DEFINITIONS/INCONSISTENCY
The terms and conditions of this Part 6 shall apply only to a
Transaction entered into between the offices specified by the parties
in Part 4(d) of this Schedule which are also Designated Offices and
which is described in the related Confirmation as a Currency Option or
FX Transaction. Any such Transaction shall constitute a "Transaction"
for the purposes of this Agreement and this Schedule, but shall be
referred to in this Part 6 as a "Currency Option" or "FX Transaction".
The definitions and provisions contained in the 1998 FX and Currency
Option Definitions (the "FX Definitions") as published by the
International Swaps and Derivatives Association, Inc., the Emerging
Markets Traders Association and The Foreign Exchange Committee are
incorporated by reference into, and made part of, this Part 6 and any
Confirmation of a Currency Option or FX Transaction.
In the event of any inconsistencies, the parts of this Agreement shall
rank as follows and the relevant term in the highest ranking document
shall prevail:
(i) the Confirmation;
(ii) this Part 6 of this Schedule;
(iii) the remainder of this Schedule;
(iv) the printed form of Agreement;
(v) the FX Definitions; and
(vi) the Definitions,
provided that, in the event that the FX Definitions or the Definitions
are incorporated by reference into a Confirmation, any amendments to
the FX Definitions or the Definitions made herein will prevail unless
further amended in the Confirmation.
2. PAYMENT INSTRUCTIONS
All payments to be made hereunder in respect of FX Transactions and
Currency Options shall be made in accordance with standing payment
instructions exchanged by the parties (or as otherwise agreed or
specified in a Confirmation or other written communication signed by
the relevant party and delivered to the other party in accordance with
Part 4 of this Schedule).
3. PREMIUM PAYMENTS
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Article 3 of the FX Definitions is amended by the addition of the
following as a new Section 3.9:
"Section 3.9. TERMS RELATING TO PAYMENT OF PREMIUM.
(a) PAYMENT OF PREMIUM. Unless otherwise agreed in writing by the
parties hereto, the Buyer shall be obligated to pay the
Premium related to a Currency Option no later than its Premium
Payment Date.
(b) LATE PAYMENT OR NON-PAYMENT OF PREMIUM. If a Premium is not
received on or before the Premium Payment Date, the Seller may
elect: (i) to accept a late payment of such Premium; (ii) to
give written notice of such non-payment and, if such payment
shall not be received within two (2) Local Business Days of
such notice, treat the related Currency Option as void; or
(iii) to give written notice of such non-payment and, if such
payment shall not be received within two (2) Local Business
Days of such notice, treat such non-payment as an Event of
Default under Section 5(a)(i). If the Seller elects to act
under clause (i) of the preceding sentence, the Buyer shall
pay interest on such Premium from and including the Premium
Payment Date to but excluding the late payment date in the
same currency as such Premium at overnight LIBOR. If the
Seller elects to act under clause (ii) or (iii) above, the
Buyer shall pay all out-of-pocket costs and actual damages
incurred in connection with such unpaid Premium or void
Currency Option, including, without limitation, interest on
such Premium from and including the Premium Payment Date to
but excluding the late payment date in the same currency as
such Premium at overnight LIBOR and any other losses, costs or
expenses incurred by the Seller in connection with such
terminated Currency Option, for the loss of its bargain, its
cost of funding, or the loss incurred as a result of
terminating, liquidating, obtaining or re-establishing a delta
hedge or related trading position with respect to such
Currency Option.
4. TERMINATION AND DISCHARGE OF CURRENCY OPTIONS; NETTING OF OPTION
PREMIUMS AND OTHER AMOUNTS
Section 2(c) of the Agreement shall not apply to Currency Options and
instead the following shall apply to Currency Options.
(a) DISCHARGE AND TERMINATION. Unless otherwise agreed in writing
by the parties, any Call Option or any Put Option written by a
party will automatically be terminated and discharged, in
whole or in part, as applicable, against a Call Option or a
Put Option, respectively, written by the other party, such
termination and discharge to occur automatically upon the
payment in full of the last Premium payable in respect of such
Currency Options; PROVIDED that such termination and discharge
may only occur in respect of Currency Options:
(i) each being with respect to the same Put Currency and
the same Call Currency;
(ii) each having the same Expiration Date and Expiration
Time;
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(iii) each being of the same style, i.e., either both being
American Style Options or both being European Style
Options;
(iv) each having the same Strike Price;
(v) each being transacted by the same pair of Designated
Offices of Buyer and Seller;
(vi) neither of which shall have been exercised by
delivery of a Notice of Exercise; and
upon the occurrence of such termination and discharge, neither
party shall have any further obligation to the other party in
respect of the relevant Currency Options or, as the case may
be, parts thereof so terminated and discharged. Such
termination and discharge shall be effective notwithstanding
that either party may fail to record such termination and
discharge on its books. In the case of a partial termination
and discharge (i.e. where the relevant Currency Options are
for different amounts of the Currency Pair), the remaining
portion of the Currency Option which is partially discharged
and terminated shall continue to be a Currency Option for all
purposes of this Agreement.
(b) NETTING OF CURRENCY OPTIONS - PREMIUMS. If, on any date, and
unless otherwise mutually agreed by the parties, Premiums
would otherwise be payable hereunder in the same currency
between the same respective pair of Currency Option Netting
Offices of the parties, then, on such date, each party's
obligation to make payment of any such Premium will be
automatically satisfied and discharged and, if the aggregate
Premium(s) that would otherwise have been payable by such
Currency Option Netting Office of one party exceeds the
aggregate Premium(s) that would otherwise have been payable by
such Currency Option Netting Office of the other party,
replaced by an obligation upon the party by whom the larger
aggregate Premium(s) would have been payable to pay the other
party the excess of the larger aggregate Premium(s) over the
smaller aggregate Premium(s) and, if the aggregate Premiums
are equal, no payment shall be made.
(c) NETTING OF CURRENCY OPTIONS - OTHER AMOUNTS. If, on any date,
and unless otherwise mutually agreed by the parties, amounts
other than Premium payments would otherwise be payable under
the Agreement in the same currency between the same respective
pair of Currency Option Netting Offices of the parties, then,
on such date, each party's obligation to make payment of any
such amount will be automatically satisfied and discharged
and, if the aggregate amount that would otherwise have been
payable by such Currency Option Netting Office of one party
exceeds the aggregate amount that would otherwise have been
payable by such Currency Option Netting Office of the other
party, replaced by an obligation upon the party by whom the
larger aggregate amount would have been payable to pay the
other party the excess of the larger aggregate amount over the
smaller aggregate amount and, if the aggregate amounts are
equal, no payment shall be made.
5. NETTING OF FX TRANSACTIONS
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Section 2(c) of the Agreement shall not apply to FX Transactions and
instead the following shall apply to FX Transactions.
(a) PAYMENT NETTING. If on any date, more than one delivery of a
particular currency is to be made between a pair of FX Payment
Netting Offices, then each party shall aggregate the amounts
of such currency deliverable by it and only the difference
between these aggregate amounts shall be delivered by the
party owing the larger aggregate amount to the other party,
and, if the aggregate amounts are equal, no delivery of the
currency shall be made.
(b) NOVATION NETTING. If the parties enter into an FX Transaction
through a pair of Novation Netting Offices giving rise to a
Currency Obligation for the same Settlement Date and in the
same currency as a then existing Currency Obligation between
the same pair of Novation Netting Offices, then immediately
upon entering into such FX Transaction, each such Currency
Obligation shall automatically and without further action be
individually cancelled and simultaneously replaced by a new
Currency Obligation for such Settlement Date determined as
follows: the amounts of such currency that would otherwise
have been deliverable by each party on such Settlement Date
shall be aggregated and the party with the larger aggregate
amount shall have a new Currency Obligation to deliver to the
other party the amount of such currency by which its aggregate
amount exceeds the other party's aggregate amount, PROVIDED
that if the aggregate amounts are equal, no new Currency
Obligation shall arise. This section shall not affect any
other Currency Obligation of a party to deliver any different
currency on the same Settlement Date.
(c) INAPPLICABILITY OF PARTS 6 (4)(b) AND (c) AND (5)(a) AND
(5)(b) ABOVE. The provisions of Parts 6 (4)(b) and (c) and
(5)(a) and (b) shall not apply if an Early Termination Date
has been designated or been deemed to be designated under the
Agreement or if any of the circumstances described in Section
5(a)(vii)(3), (4), (5), (6), (7) or (8) (in the case of (8),
so far as the analogy is with the aforementioned
sub-paragraphs) have occurred without being dismissed in
relation to either party.
(d) FAILURE TO RECORD. The provisions of Part 6 (5)(b) above shall
apply notwithstanding that either party may fail to record the
new Currency Obligations in its books.
(e) CUT OFF DATE AND TIME. The provisions of Part 6 (5)(b) above
are subject to any cut-off date and cut-off time agreed
between the applicable Novation Netting Offices of the
parties.
6. AMENDMENTS TO THE FX DEFINITIONS
The following amendments are made to the FX Definitions:
(a) Section 3.1 is amended by the addition of the following
definitions:
CURRENCY OBLIGATION. "Currency Obligation" means the
obligation of a party to deliver currency under the Agreement
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DESIGNATED OFFICE. "Designated Office" means in respect of a
party, those offices specified both below and in Part 4(d) of
this Schedule:
Party A Toronto, London, Singapore, Sydney,
Tokyo
Party B Vancouver
NOVATION NETTING OFFICE. "Novation Netting Office" means in
respect of a party, those offices specified both below and in
Part 4(d) of this Schedule:
Party A None
Party B None
CURRENCY OPTION NETTING OFFICE. "Currency Option Netting
Office" means in respect of a party, those offices specified
both below and in Part 4(d) of this Schedule:
Party A Toronto
Party B Vancouver
FX PAYMENT NETTING OFFICE. "FX Payment Netting Office" means
in respect of a party, those offices specified both below and
in Part 4(d) of this Schedule:
Party A Toronto, London
Party B Vancouver
(b) Section 3.6(a) is amended by the deletion of the final
sentence thereof and the addition of the following two
sentences at the end thereof:
"A Currency Option may be exercised in whole or in part. If a
Currency Option is exercised in part, the unexercised portion
of the Currency Option shall continue to be a Currency Option
for all purposes of this Agreement."
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7. PRIOR AGREEMENT
The parties acknowledge that any FX Transactions and Currency
Obligations entered into between the offices specified by the parties
in Part 4(d) of this Schedule which are also Designated Offices and
before this Agreement was signed are Transactions governed by and
forming part of this Agreement. This applies notwithstanding any
statement to the contrary contained in the relevant Confirmations
exchanged between the parties.
ROYAL BANK OF CANADA NORSKE XXXX CANADA FINANCE LIMITED
By: /s/ Xxxxx Xxxxx By: /s/ X. Xxxxxxxx
--------------------------- ---------------------------
Name: Name: Xxxxx Xxxxxxxx
Title: Title: Director
By: By: /s/ Xxxxx Xxxxxxx
--------------------------- ---------------------------
Name: Name: Xxxxx Xxxxxxx
Title: Title: Director
