Exhibit 1.2
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(MULTICURRENCY-CROSS BORDER)
ISDA-Registered Trademark-
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of January 12, 2001
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
and
SEACOR SMIT INC.
have entered and/or anticipate entering into one or more transactions (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purposes of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmation form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in each
Confirmation to be made by it, subject to the other provisions of this
Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in
freely transferable funds and in the manner customary for payments in
the required currency. Where settlement is by delivery (that is, other
than by payment), such delivery will be made for receipt on the due
date in the manner customary for the relevant obligation unless
otherwise specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that
party ("X") will:--
(1) promptly notify the other ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required
to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by
X to Y under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or
receiving notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
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(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition
to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will
equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:--
A. the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or
B. the failure of a representation made by Y pursuant
to Section 3(f) to be accurate and true unless such
failure would not have occurred but for (I) any
action taken by a taxing authority, or brought in a
court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect
to a party to this Agreement) or (II) a Change in Tax
Law.
(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to
make any deduction or withholding in respect of which X would
not be required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the
amount of such liability (including any related liability for
interest, but including any related liability for penalties only if Y
has failed to comply with or perform any agreement contained in
Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under
the laws of the jurisdiction of its organisation or
incorporation and, if relevant under such laws, in good
standing;
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(ii) POWERS. It has the power to execute this Agreement and
any other documentation relating to this Agreement to which it
is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required
by this Agreement to deliver and to perform its obligations
under this Agreement and any obligations it has under any
Credit Support Document to which it is a party and has taken
all necessary action to authorise such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable
to it, any provision of its constitutional documents, any
order or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are
required to have been obtained by it with respect to this
Agreement or any Credit Support Document to which it is a
party have been obtained and are in full force and effect and
all conditions of any such consents have been complied with;
and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement
and any Credit Support Document to which it is a party
constitute its legal, valid and binding obligations,
enforceable in accordance with their respective terms (subject
to applicable bankruptcy, reorganisation, insolvency,
moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable
principles of general application (regardless of whether
enforcement is sought in a proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support Document to which it is a
party or its ability to perform its obligations under this Agreement or such
Credit Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other parry and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party: --
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
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(i) any forms, documents or certificates relating to taxation specified
in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any Confirmation;
and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and
to be executed and to be delivered with any reasonably required
certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organised, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity of
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party: --
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
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obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support
Document relates without the written consent of the other
party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party
in this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated
or deemed to have been made or repeated.
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified
Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in whole
or in part, a Specified Transaction (or such action is taken by any
person or entity appointed or empowered to operate it or act on its
behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable Specified 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
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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, staved or
restrained, in each case within 30 days thereafter; (8) causes
or is subject to any event with respect to it which, under the
applicable laws of any jurisdiction, has an analogous effect
to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its
obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event. Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
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(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 tax authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will,
or there is a substantial likelihood that it will, on the next
succeeding Scheduled Payment Date (1) be required to pay to the other
party an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is
required to be deducted or withheld for or on account of a Tax (except
in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no
additional amount is required to be paid in respect of such Tax under
Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or
(B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has
been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of
X consolidates or amalgamates with, or merges with or into, or
transfers all or substantially all its assets to, another entity and
such action does not constitute an event described in Section
5(a)(viii) but the creditworthiness of the resulting, surviving or
transferee entity is materially weaker than that of X, such Credit
Support Provider or such Specified Entity, as the case my 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 is 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)(l), (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
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petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its
right to designate an Early Termination Date under Section 6(b)(iv),
use all reasonable efforts (which will not require such party to incur
a loss, excluding immaterial, incidental expenses) to transfer within
20 days after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) Two Affected Parties. If an Illegality under Section 5(b)(i)(1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the
case of a Credit Event Upon Merger or an Additional Termination Event
if there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant Termination
Event is then continuing, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all
Affected Transactions.
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(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including)
the relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an
Event of Default:--
(1) First Method and Market Quotation. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if
a positive number, the Non-defaulting Party's Loss in respect
of this Agreement.
(3) Second Method and Market Quotation. If the Second Method
and Market Quotation apply, an amount will be payable equal to
(A) the sum of the Settlement Amount (determined by the
10
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:--
(1) One Affected Party. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected Parties:--
A. if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
B. if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Loss of the party with the higher Loss ("X") and
the Loss of the party with the lower Loss ("Y"). If
the amount payable is a positive number, Y will pay
it to X; if it is a negative number, X will pay the
absolute value of that amount to Y.
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 the 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
11
entitled to recover any additional damages as a consequence of such
losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
12
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organisation of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
13
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that
receipt, as applicable, is not a Local Business Day or that
communication is delivered (or attempted) or received, as applicable,
after the close of business on a Local Business Day, in which case that
communication shall be deemed given and effective on the first
following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
14
(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 ▇▇▇ ▇▇▇▇ or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:-
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
15
"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, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus l% 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 organised, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.
16
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and. if
different. in the principal financial centre, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (with regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
17
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organised, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:-
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (of any Credit Support Provider of such other parry 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
18
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 currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date the aggregate of (a) in respect of all Terminated Transactions, the amounts
that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to, such party on or prior to such Early Termination Date
and which has not been so settled as at such Early Termination Date an amount
equal to the fair market value of that which was (or would have been) required
to be delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
19
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.
20
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.
CREDIT SUISSE FIRST
BOSTON INTERNATIONAL SEACOR SMIT INC.
............................... .............................
(Name of Party) (Name of Party)
By:............................ By:..........................
Name: Name:
Title: Title:
Date: January __, 2001 Date: January __, 2001
21
SCHEDULE
to the
MASTER AGREEMENT
dated as of January 12, 2001
between
CREDIT SUISSE FIRST BOSTON INTERNATIONAL, AND SEACOR SMIT INC.
an unlimited company incorporated a Delaware corporation
under the laws of England and Wales
("PARTY A") ("PARTY B")
PART 1
TERMINATION PROVISIONS
In this Agreement:-
(A) SPECIFIED ENTITY. "Specified Entity" means "Affiliates" in relation to Party
A and Party B for the purpose of the "Default under Specified Transaction"
provision (Section 5(a)(v)).
(B) SPECIFIED TRANSACTION. Specified Transaction will have the meaning specified
in Section 14.
(C) CROSS DEFAULT. The "Cross Default" provision (Section 5(a)(vi)) will apply
to Party A and Party B amended as follows:-
Specified Indebtedness
Instead of the definition in Section 14 of this Agreement, "Specified
Indebtedness" shall mean any obligation (whether present or future,
contingent or otherwise, as principal or surety or otherwise) (a) in
respect of borrowed money, and/or (b) in respect of any Specified
Transaction (except that, for this purpose only, the words "and any
other entity" shall be substituted for the words "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)" where they
appear in the definition of Specified Transaction).
Threshold Amount
"Threshold Amount" means $10,000,000 (or its equivalent with respect
to obligations stated in any other currency or currency unit).
(D) CREDIT EVENT UPON MERGER. The "Credit Event Upon Merger" provision (Section
5(b)(iv)) will apply to Party A and Party B restated as follows:-
"Credit Event Upon Merger" shall mean that a Designated Event (as defined below)
occurs with respect to a party ("X"), and such Designated Event does not
constitute an event described in Section 5(a)(viii) of this Agreement but the
creditworthiness of X or, if applicable, the successor, surviving or transferee
entity of X, is materially weaker than that of X immediately prior to such
action (and, in such event, such party or its successor or transferee, as
appropriate, will be the Affected Party). For purposes hereof, a Designated
Event with respect to X means that, after the Trade Date of the first
Transaction between the parties:
(i) X consolidates or amalgamates with or merges with or into,
or transfers all or substantially all its assets (or any
substantial part of the assets comprising the business
conducted by X as of the execution date hereof) to, or
receives all or substantially all the assets or obligations
of, another entity;
(ii) any person or entity acquires directly or indirectly the
beneficial ownership of equity securities having the power
to elect a majority of the board of directors of X or
otherwise acquires directly or indirectly the power to
control the policy-making decisions of X; or
(iii) X effects any substantial change in its capital structure
by means of the issuance, incurrence or guarantee of debt
or the issuance of preferred stock or other securities
convertible into, or exchangeable for, debt or preferred
stock.
(E) AUTOMATIC EARLY TERMINATION. The "Automatic Early Termination" provision of
Section 6(a) will not apply to Party A and Party B.
(F) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e), the Second
Method and Market Quotation will apply.
(G) TERMINATION CURRENCY. "Termination Currency" means the currency selected in
good faith and in a commercially reasonable manner by the party which is not the
Defaulting Party or the Affected Party, as the case may be, or where there is
more than one Affected Party the currency agreed by Party A and Party B.
However, the Termination Currency shall be one of the currencies in which
payments are required to be made in respect of Transactions. If the currency
selected is not freely available, or where there are two Affected Parties and
they cannot agree on a Termination Currency, the Termination Currency shall be
United States Dollars.
(H) ADDITIONAL TERMINATION EVENT. Additional Termination Event will not apply.
2
PART 2
TAX REPRESENTATIONS
(A) PAYER TAX REPRESENTATIONS. For the purpose of Section 3(e), Party A and
Party B each makes 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)) 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 representation made by the other party
pursuant to Section 3(f);
(ii) the satisfaction of the agreement of the other party contained
in Section 4(a)(i) or 4(a)(iii) and the accuracy and
effectiveness of any document provided by the other party
pursuant to Section 4(a)(i) or 4(a)(iii); and
(iii) the satisfaction of the agreement of the other party contained
in Section 4(d);
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.
(B) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f),
(i) Party A represents that (A) it is entering into each
Transaction in the ordinary course of its trade as, and is, a
recognised U.K. bank and (B) it will bring into account
payments made and received in respect of each Transaction in
computing its income for United Kingdom tax purposes.
(ii) Party B makes no Payee Tax Representations.
3
PART 3
AGREEMENT TO DELIVER DOCUMENTS
Each party agrees to deliver the following documents as applicable:-
(a) For the purpose of Section 4(a)(i), tax forms, documents or certificates to
be delivered are:-
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH
DELIVER DOCUMENT CERTIFICATE TO BE DELIVERED
Not Applicable Not Applicable Not Applicable
(b) For the purpose of Section 4(a)(ii), other documents to be delivered are:-
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH COVERED BY
DELIVER DOCUMENT CERTIFICATE TO BE DELIVERED SECTION 3(D)
REPRESENTATION
Party A and Evidence reasonably Upon execution Yes
Party B satisfactory to the this Agreement
other party as to the and, if requested,
names, true signatures upon execution
and authority of the of any Confirmation
officers or officials
signing this Agreement
or any Confirmation on its
behalf
Party A and A copy of the annual Upon request, as No
Party B report for such party soon as publicly
certified financial available
statements for the
most recently ended
financial year
The parties hereto agree that any documents delivered by one party to another
hereunder shall be treated by the recipient as confidential and the information
contained therein shall not be copied or disclosed to any other person or entity
without the prior written consent of the party delivering such documents;
provided, however, notwithstanding anything to the contrary in this Agreement,
neither of the parties shall be prohibited from disclosing such material (i) to
officers in its credit departments and to any senior business managers having
credit and risk management responsibilities, or (ii) where such party is
required to do so pursuant to any applicable law or regulation
4
PART 4
MISCELLANEOUS
(A) ADDRESSES FOR NOTICES. For the purpose of Section 12(a):-
(i) (1) Address for notices or communications to Party A (other than by
facsimile):-
Address: One Cabot Square Attention: (1) Head of Credit Risk Management;
▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (2) Managing Director -
England Operations Department;
(3) Managing Director - Legal Department
Telex No.: 264521 Answerback: CSFBI G
(For all purposes.)
(2) For the purpose of facsimile notices or communications under this Agreement
(other than a notice or communication under Section 5 or 6):-
Facsimile No.: 020 7888 2686
Attention: Managing Director - Legal Department
Telephone number for oral confirmation of receipt of facsimile in
legible form: 020 7888 2028 Designated responsible employee for the
purposes of Section 12(a)(iii): Senior Legal Secretary
(ii) Address for notices or communications to Party B:-
Address: 1370 Avenue of the Americas Attention:▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
------------------------ ------------------------
Telex No.: ___________ Answerback: ___________
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇ Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
(For all purposes.)
(B) PROCESS AGENT. For the purpose of Section 13(c):-
Party A appoints as its Process Agent:- Credit Suisse First Boston, Eleven
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ (Attention:- General Counsel, Legal and
Compliance Department)
Party B appoints as its Process Agent: Not Applicable
(C) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(D) MULTIBRANCH PARTY. For the purpose of Section 10(c):-
5
Party A is not a Multibranch Party.
Party B is not a Multibranch Party
(E) CALCULATION AGENT. The Calculation Agent is Party A unless otherwise agreed
in a Confirmation in relation to the relevant Transaction and unless an Event of
Default or Termination Event with respect to Party A has occurred, which in such
case shall result in Party B being the Calculation Agent. The Calculation Agent
shall make all calculations under this Agreement in good faith and in a
commercially reasonable manner.
(F) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document: Not
applicable.
(G) CREDIT SUPPORT PROVIDER.
Credit Support Provider means in relation to Party A: Not applicable.
Credit Support Provider means in relation to Party B: Not applicable.
(H) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York without reference to choice of
law doctrine and each party hereby submits to the jurisdiction of the Courts of
the State of New York.
(I) NETTING OF PAYMENTS. Section 2(c)(ii) of this Agreement will apply to any
Transactions from the date of this Agreement. Nevertheless, to reduce settlement
risk and operational costs, the parties agree that they will endeavour to net
across as many Transactions as practicable wherever the parties can
administratively do so. The parties will confirm to each other, via telephone,
the net amounts to be transferred on each date that amounts are to be
transferred under this Agreement.
(J) AFFILIATE. Affiliate will have the meaning specified in Section 14.
6
PART 5
OTHER PROVISIONS
(A) SCOPE OF AGREEMENT. Any Specified Transaction (whether now existing or
hereafter entered into) between the parties, the confirmation of which fails by
its terms expressly to exclude application of this Agreement, shall be governed
by and be subject to this Agreement. Any such confirmation shall be a
"Confirmation", and any such Specified Transaction shall be a "Transaction", for
all purposes of this Agreement.
(B) DEFINITIONS. Unless otherwise specified in a Confirmation, this Agreement
and each Transaction between the parties are subject to the 1991 ISDA
Definitions as amended by the 1998 Supplement thereto as published by the
International Swaps and Derivatives Association, Inc. (the "1991 Definitions"),
and will be governed in all relevant respects by the provisions set forth in the
1991 Definitions, without regard to any amendment to the 1991 Definitions
subsequent to the date hereof. The provisions of the 1991 Definitions are
incorporated by reference in and shall be deemed a part of this Agreement,
except that references in the 1991 Definitions to a "Swap Transaction" shall be
deemed references to a "Transaction" for purposes of this Agreement.
(C) CONFIRMATIONS. Each Confirmation shall be substantially in the form of one
of the Exhibits to the 1991 Definitions, the 1993 ISDA Commodity Derivatives
Definitions, in any other form which is published by the International Swaps and
Derivatives Association, Inc. or in such other form as the parties may agree.
(D) INDEPENDENT RELIANCE. The parties agree to amend Section 3 of this Agreement
by the addition of the following provision at the end thereof and marked as
subsection (g).
"(g) INDEPENDENT RELIANCE. It is entering into this Agreement
and will enter into each Transaction in reliance upon such
tax, accounting, regulatory, legal, and financial advice as
it deems necessary and not upon any view, communication
(written or oral) expressed by the other party."
(E) CHANGE OF ACCOUNT. Section 2(b) of this Agreement is hereby amended by the
addition of the following after the word "delivery" in the first line thereof:-
"to another account in the same legal and tax jurisdiction as
the original account"
(F) ESCROW PAYMENTS. If (whether by reason of the time difference between the
cities in which payments are to be made or otherwise) it is not possible for
simultaneous payments to be made on any date on which both parties are required
to make payments hereunder, either party may at its option and in its sole
discretion notify the other party that payments on that date are to be made in
escrow. In this case deposit of the payment due earlier on that date shall be
made by 2.00 pm (local time at the place for the earlier payment) on that date
with an escrow agent selected by the notifying party, accompanied by irrevocable
payment instructions (i) to release the deposited payment to the intended
recipient upon receipt by the escrow agent of the required deposit of the
corresponding payment from the other party on the same date accompanied by
irrevocable payment instructions to the same effect or (ii) if the required
deposit of the corresponding payment is not made on that same date, to return
the payment deposited to the party that paid it into escrow. The party that
elects to have payments made in escrow shall pay all costs of the escrow
arrangements.
(G) 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 set-off or counterclaim; provided, however, that upon the
designation of any Early Termination Date, in addition to and not in limitation
of any other right or remedy (including any right to set-off, counterclaim, or
otherwise withhold payment) under applicable law:
7
the Non-defaulting Party or the party that is not the Affected Party
(in either case, "X") may, without prior notice to any person, set
off any sum or obligation (whether or not arising under this
Agreement, whether matured or unmatured and irrespective of the
currency, place of payment or booking office of the sum or
obligation) owed by the Defaulting Party or Affected Party (in either
case, "Y") to X or to any Affiliate of X, against any sum or
obligation (whether or not arising under this Agreement, whether
matured or unmatured and irrespective of the currency, place of
payment or booking office of the sum or obligation) owed by X or any
Affiliate of X to Y, and, for this purpose, may convert one currency
into another. If any sum or obligation is unascertained, X may in
good faith estimate that sum or obligation and set off in respect of
that estimate, subject to X or Y, as the case may be, accounting to
the other party when such sum or obligation is ascertained.
Nothing in this Agreement shall be effective or deemed to create any charge
under English law.
(H) INCORPORATION OF PROTOCOL TERMS. The parties agree that the definitions and
provisions contained in Annexes 1 to 5 and Section 6 of the EMU Protocol
published by the International Swaps and Derivatives Association, Inc., on 6
May, 1998 are incorporated into and apply to this Agreement. References in those
definitions and provisions to any "ISDA Master Agreement" will be deemed to be
references to this Agreement.
(I) RECORDING OF CONVERSATION. Each party to this Agreement acknowledges and
agrees to the tape recording of conversations between the parties to this
Agreement whether by one or other or both of the parties and each party hereby
consents to such recordings being used as evidence in Proceedings.
(J) WAIVER OF RIGHT TO TRIAL BY JURY. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in respect
of any suit, action or proceeding relating to this Agreement or any Credit
Support Document to this Agreement. Each party (i) certifies that no
representative, agent or attorney of the other party or any Credit Support
Provider has represented, expressly or otherwise, that such other party would
not, in the event of such a suit action or proceeding, seek to enforce the
foregoing waiver and (ii) acknowledges that it and the other party have been
induced to enter into this Agreement and provide for any Credit Support
Document, as applicable by, among other things, the mutual waivers and
certifications in this Section.
8
PART 6
PHYSICAL DELIVERY OF BONDS
Notwithstanding anything to the contrary in this Agreement, the following
provisions will apply for the purposes of any Transaction which contemplates by
its terms the physical delivery of bonds or other debt securities ("Bonds"): -
(I) PAYMENT AND DELIVERY
Section 2 of this Agreement is hereby amended as follows:
(a) Section 2(b) is amended by the substitution of "ten days"
for "five days";
(b) The following provision shall be included as Section 2(f):
"(f) Coupons and Expenses on Delivery: All
coupons on the Bonds to be delivered
shall be payable to and all costs and
expenses incurred in connection with
the delivery of Bonds (including,
without prejudice to Section 2(d), any
Tax or Stamp Tax and any interest or
penalties payable in connection
therewith) shall be payable by the
party who would customarily receive
such coupon or bear such costs or
expenses under a contract for the
purchase of the Bonds, as appropriate,
by the delivery through the clearance
system specified in the relevant
Confirmation."
(II) DEFAULT INTEREST
If, prior to the occurrence or effective designation of an
Early Termination Date in respect of any physically settled
Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will
indemnify the other party on demand, in accordance with the
practice of the principal market for or the Bonds, for any
costs reasonable and verifiable, losses or expenses
(including the costs of borrowing such Bonds, if
applicable) incurred from such default. A certificate
signed by the deliveree setting out such costs, losses or
expenses in reasonable detail shall be conclusive evidence
that they have been incurred.
(III) AMENDMENTS TO SECTION 14 OF THE AGREEMENT
The definition of "Tax" in Section 14 of the Agreement is
amended by the addition of "or delivery" after "of any
payment".
(IV) AGREEMENTS
Section 4(e) is amended by adding the words "Subject to
Section 2(f), where in respect of a Transaction,
performance under this Agreement consists in a delivery of
Bonds, and" before "subject to Section 11 ..." in line 1.
9
January 12, 2001
▇▇. ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Vice President - Finance
SEACOR SMIT Inc.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Credit Suisse First Boston International
One ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ ▇▇▇
▇▇▇▇▇▇▇
------------------------------------------------------------------------
Dear Sirs,
The purpose of this letter agreement (this "Confirmation") is to confirm the
terms and conditions of the Transaction entered into between Party A and Party B
through the Agent on the Trade Date specified below (the "Transaction"). This
Confirmation constitutes a "Confirmation", as referred to in the Agreement
specified below.
1. The definitions and provisions contained in the 1991 ISDA Definitions,
as supplemented by the 1998 Supplement to the 1991 ISDA Definitions
(the "Swap Definitions") and in the 1996 ISDA Equity Derivatives
Definitions (the "Equity Definitions", together with the Swap
Definitions, the "Definitions") (in each case as published by the
International Swaps and Derivatives Association, Inc.) are incorporated
into this Confirmation. In the event of any inconsistency between the
Swap Definitions and the Equity Definitions, the Equity Definitions
will govern, and between the Definitions and this Confirmation, this
Confirmation will govern. References herein to a "Transaction" shall be
deemed to be references to a "Swap Transaction" for the purposes of the
Swap Definitions and to a "Share Option Transaction" for the purposes
of the Equity Definitions.
This Confirmation supplements, forms part of, and is subject to, the
1992 ISDA Master Agreement dated as of January__, 2001, as amended and
supplemented from time to time (the "Agreement"), between Party A and
Party B. All provisions contained in the Agreement govern this
Confirmation except as expressly modified below.
10
IN THIS CONFIRMATION, "PARTY A" MEANS CREDIT SUISSE FIRST BOSTON
INTERNATIONAL AND "PARTY B" MEANS SEACOR SMIT INC. AND "ARRANGING
AGENT" MEANS CREDIT SUISSE FIRST BOSTON CORPORATION SOLELY IN ITS
CAPACITY AS ARRANGING AGENT FOR BOTH PARTY A AND PARTY B.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
General Terms:
Trade Date: February __, 2001
Effective Date: February __, 2001
Termination Date: February __, 2002, subject to
adjustment in accordance with the Modified
Following Business Day Convention and the
terms set forth below under Party B
Settlement Method Option and Party B
Optional Termination.
Transaction Type: Equity Forward
Seller: Party A
Buyer: Party B (also sometimes referred to herein
as the "Issuer")
Shares: Common Stock of Party B par value $0.01,
Ticker "CKH"
Notional Amount: The product of the Principal Share Amount
and the Initial Share Price
Principal Share Amount: The number of Purchased Shares (as defined
in the Underwriting Agreement)
Initial Share Price: The Purchase Price (as defined in the
Underwriting Agreement)
Underwriting Agreement: The Standby Agreement dated January __, 2001
between Party B and the Underwriter (as
defined below)
Party A Payment Amounts:
11
Party A Payment Date: The Settlement Date
Party A Payments: In respect of the Party A Payment Date, an
amount in U.S. Dollars equal to the Dividend
Amount.
Dividend Amount: An amount in U.S. Dollars, if any, equal to
the sum of:
(i) the sum of the per Share amount of
each dividend paid by the Issuer
from and including the Effective
Date to but excluding the
Termination Date multiplied by the
Principal Share Amount as of the
record date for such dividend;
provided, however, that for the
purpose of determining the Dividend
Amount in the case that Net Cash
Settlement has been designated as
the Method of Settlement, the
Principal Share Amount shall be
reduced by the number of Shares
sold by the Underwriter prior to
the record date in respect of such
dividend during the relevant Sale
Period (as defined below); and
(ii) the sum of the amounts representing
the interest that would have been
earned on each dividend described
in (i) above at a rate equal to
USD-LIBOR-BBA with a Designated
Maturity equal to the period of
time commencing from and including
the date that such dividends would
have been received in (i) above to
but excluding the Termination Date,
where Linear Interpolation is
applicable and the Day Count
Fraction is Actual/360.
12
Lagging Dividend
Payment Amount: In the event that a dividend is declared and
payable to a holder of record prior to the
Termination Date but such dividend has not
been paid on or before the Termination Date,
Party A shall pay to Party B on the
Termination Date, through the Arranging
Agent, an amount equal to the present value
on the Termination Date of the amount of
such dividend, which present value shall be
calculated by discounting from the dividend
payment date to the Termination Date at a
discount rate equal to USD-LIBOR-BBA with a
Designated Maturity equal to the period of
time from and including the Termination Date
to but excluding the dividend payment date,
where Linear Interpolation is applicable and
the Day Count Fraction is Actual/360.
Party B Floating Amount:
Floating Amount Payer: Party B
Floating Rate Option: USD-LIBOR-BBA
Spread: Plus 1.15%
Designated Maturity: 1, 2, 3 or 6 months, as determined by Party
B on the Effective Date.
Floating Rate
Day Count Fraction: Actual/360
Reset Dates: The first day of each Compounding Period
Compounding: Applicable
Compounding Date[s]: [_______], subject to adjustment in
accordance with the Modified Following
Business Day Convention.
Floating Rate Payment Date: The Settlement Date
13
Adjustments to the Calculation
Amount: In the case that Net Cash Settlement has
been designated as the Method of Settlement
in respect of this Transaction, then the
Calculation Amount shall be periodically
reduced during the Sale Period (as defined
below) by amounts equal to the Net Proceeds
(as defined below) received by the
Underwriter as proceeds from sales of the
Shares, which reduction shall occur on each
Business Day on which such Net Proceeds are
received as immediately available funds by
the Underwriter.
Additional Party B Payment: On the Trade Date, Party B shall pay to
Party A, through the Arranging Agent, the
standby fee, as set forth in paragraph 3(b)
of the Underwriting Agreement.
3. Party A and Party B Final Payments and Settlement Method Options:
3.1 Party B may elect, by notice in writing to Party A (given through the
Arranging Agent) on any Exchange Business Day on or prior to the date
that is three (3) Exchange Business Days prior to the Termination Date,
that Net Cash Settlement (as defined below) shall be the method of
settlement ("Method of Settlement") in respect of this Transaction in
place of Gross Physical Settlement (as defined below), subject to the
conditions set forth below. If no such election is made, or if any such
conditions are not met, "Gross Physical Settlement" shall apply to this
Transaction.
3.2 Gross Physical Settlement:
If Gross Physical Settlement is the Method of Settlement in respect of
this Transaction then, on the Settlement Date (as defined below), Party
A will deliver to Party B, through the Arranging Agent, the Principal
Share Amount, and Party B will pay to Party A, through the Arranging
Agent, an amount in U.S. Dollars equal to the sum of the Notional
Amount and the Party B Floating Amount (such sum being the "Party B
Payment Amount").
3.3 Net Cash Settlement:
3.3.1 If Party B elects Net Cash Settlement as the Method of Settlement and
Party B satisfies the conditions precedent set forth in paragraphs 3.1
and 3.3.4 hereof, then the Underwriter shall sell, in accordance with
the terms hereof, the number of Shares from the Principal Share Amount
14
(the "Shares Sold") necessary in order to realize sufficient Net
Proceeds (as defined below) to pay Party A the Party B Payment Amount,
and the Underwriter shall pay such proceeds to Party A on the
Settlement Date. If the number of Shares Sold is less than the
Principal Share Amount, the Underwriter shall also deliver to Party B
on the Settlement Date a number of Shares equal to the excess of the
Principal Share Amount over the number of Shares Sold. On the
Settlement Date, the Underwriter shall also pay to Party B a sum in
U.S. Dollars equal to the amount, if any, by which the Net Proceeds
from the sale of the Shares Sold exceeds the Party B Payment Amount.
3.3.2 If insufficient Net Proceeds have been realized from the sale of the
Shares Sold to pay Party A the Party B Payment Amount, then Party B
shall, on the Settlement Date, pay to Party A an amount in cash equal
to the amount by which the Party B Payment Amount exceeds the Net
Proceeds.
3.3.3 In the event that Party B elects Net Cash Settlement as the Method of
Settlement and Party B satisfies the conditions precedent set forth in
paragraphs 3.1 and 3.3.4 hereof, the Underwriter agrees to provide to
the Calculation Agent and the parties hereto, through the Arranging
Agent, not later than 5:00 p.m., New York time, on any Business Day on
which it has sold Shares, a report of the number of Shares sold, the
average sale price and the aggregate Net Proceeds received by the
Underwriter from such sales and a reasonable breakdown of the Sale
Expenses (as defined below).
The term "Net Proceeds" in respect of a sale of Shares shall mean gross
proceeds of such sale less reasonable and customary discounts, fees,
commissions and expenses (the "Sale Expenses"), including, but not
limited to, commissions in the amount of $.04 per Share, discounts,
fees and expenses customarily payable to underwriter(s) in the case of
a registered offering, which may include reasonable amounts customarily
payable to the Underwriter acting as underwriter, as well as any
additional reasonable fees and expenses of any dealers engaged by any
such underwriter which are customarily payable.
3.3.4 It shall be a condition precedent to Party B's election of Net Cash
Settlement that Party B shall have satisfied all of the conditions set
forth in the Underwriting Agreement in respect of such Net Cash
Settlement. If Party B elects Net Cash Settlement but such conditions
cease to be met at any time following the Termination Date but prior to
the last date of the Sale Period, then Gross Physical Settlement shall
apply to this Transaction, provided that the Party B Payment Amount
shall be deemed reduced by the amount of Net Proceeds from sales of
Shares that occurred prior to the time such conditions failed to be met
(which Net Proceeds shall be paid to Party A by the Underwriter), and
the Principal Share Amount shall be deemed reduced by the number of
Shares sold prior to the time such conditions failed to be met
15
4. Party B Early Termination Option:
4.1 On any Business Day during the period from, and including, the
Effective Date to, but excluding, the Termination Date, Party B may,
upon at least three (3) Exchange Business Days' prior notice to Party A
(an "Early Termination Notice"), designate any Exchange Business Day as
an optional termination date (the "Early Termination Date") in respect
of the whole or a part of the Principal Share Amount.
4.2 Upon the exercise of this option in respect of a part of the Principal
Share Amount, and with effect from (and including) the relevant Early
Termination Date, the Calculation Agent shall reduce by the Termination
Ratio (as defined below) the Principal Share Amount, Notional Amount
and Calculation Amount at that time. On each Early Termination Date the
terms of Section 3 herein shall be applicable, including the terms
relating to the Method of Settlement, as if such Early Termination Date
were the Termination Date and the Principal Share Amount, the Notional
Amount and the Calculation Amount were the product of the Termination
Ratio and the Principal Share Amount, the Notional Amount and the
Calculation Amount, respectively, at the time the Early Termination
Notice was given, that is the subject of the relevant Early Termination
Notice.
4.3 Upon the exercise of this option in respect of the whole of the
Principal Share Amount, this Transaction shall be terminated on the
relevant Early Termination Date and the terms of Section 3 hereof shall
be applicable, including the terms relating to the Method of
Settlement, as if such Early Termination Date were the Termination
Date.
4.4 As used herein, "Termination Ratio" means a fraction, the denominator
of which is the Principal Share Amount at that time and the numerator
of which is that part of such Principal Share Amount that is the
subject of the relevant Early Termination Notice.
4.5 Any notice given in accordance with this provision may be given in
writing or orally, including by telephone. Any notice given orally
shall be followed promptly by written confirmation of such notice,
provided, however, that failure to deliver such written confirmation
shall not vitiate the oral notice.
5. Gross Physical Settlement in Lieu of Certain Payment Obligations
If Party B shall owe Party A any amount pursuant to Section 9.7 of the
Equity Definitions (except in the event of a Nationalization, a Merger
Event in which the merger consideration to be paid to holders of Shares
consists solely of cash or an Insolvency) or pursuant to Section 6 of
the Agreement (except in the event of an Event of Default with respect
to which Party B is the Defaulting Party or a Termination Event in
which Party B is the only Affected Party) (in either case, a "Payment
16
Obligation"), Party B may, by notice in writing to Party A (given
through the Arranging Agent), elect in lieu of satisfying such Payment
Obligation that this Transaction be subject to Gross Physical
Settlement, in which case the provisions of Section 3.2 shall apply;
provided that (i) the Early Termination Date shall be deemed to be the
Settlement Date for purposes of such Section 3.2; (ii) in the case of a
Merger Event, Party A will deliver to Party B, through the Arranging
Agent, in lieu of the Principal Share Amount, the merger consideration
received by a holder of the Principal Share Amount in such Merger
Event, assuming for purposes of this calculation that such holder
elected to receive the maximum possible amount of cash as consideration
in such Merger Event; and (iii) the Calculation Agent shall be entitled
to adjust either the Party B Payment Amount or the Principal Share
Amount so that the net value to Party A of the payments and deliveries
set forth in Section 3.2 shall equal the Payment Obligation.
6. Party A agrees that in the event of the Bankruptcy of Party B, Party A
shall not have any right in respect of this Transaction or assert a
claim in respect of this Transaction that in either case is senior in
priority to the rights and claims available to the shareholders of the
Shares; provided that this provision shall not be applicable at any
time at which Party B would be required to account for this Transaction
as an asset or a liability in accordance with generally accepted
accounting principles.
7. For the avoidance of doubt, the last sentence of the first paragraph of
6(e) of the Agreement, the provisions in Part 5, Section 5(g)
("Set-Off") of the Schedule to the Agreement shall not apply with
respect to this Transaction; provided that this provision shall not be
applicable at any time at which Party B would be required to account
for this Transaction as an asset or a liability in accordance with
generally accepted accounting principles.
8. The parties acknowledge that this Transaction is not secured by any
collateral that would otherwise secure the obligations of Party B
herein under or pursuant to the Agreement. Without limiting the
generality of the foregoing, this Transaction will not be considered to
create obligations covered by any collateral credit support annex to
the Agreement and will be disregarded for the purposes of calculating
any exposures pursuant to any such annex.
9. Provisions related to Settlement:
9.1 Settlement Date:
The period commencing on the Termination Date and continuing until the
completion of the sales and any deliveries of Shares related thereto
required for Net Cash Settlement shall be referred to herein as the
"Sale Period."
17
The "Settlement Date" shall be (i) the third Exchange Business Day that
is also a Clearance System Business Day following the end of the Sale
Period in the case of Net Cash Settlement, and (ii) the Termination
Date in the case of Gross Physical Settlement.
9.2 Settlement Disruption Event:
An event beyond the control of the parties as a result of which (i) the
Clearance System cannot clear a transfer of Shares or (ii) in the case
of any Shares in physical certificate form, the payment systems for
bank fund transfers (e.g. the Federal Reserve wire payment system)
cannot make electronic funds payments or otherwise transfer funds in
the ordinary course.
10 Additional Terms:
10.1 Clearance System: The Depository Trust Company
10.2 Business Days: London and New York
10.3 Trading Day: An Exchange Business Day other than an
Exchange Business Day on which a Market
Disruption Event occurs.
10.4 Exchange Business Day: Any day that is (or, but for the occurrence
of a Market Disruption Event, would have
been) a Trading Day on the Exchange, other
than a day on which trading on the Exchange
is scheduled to close prior to its regular
weekday closing time.
10.5 Market Disruption Event: The occurrence or existence on any Exchange
Business Day of any suspension of or
material limitation imposed on trading (by
reason of movement in price exceeding limits
permitted by the Exchange or otherwise) on
the Exchange in the Shares if, in the
reasonable determination of the Calculation
Agent, such suspension or limitation
materially affects the liquidity of trading
in the Shares.
10.6 Exchange: The New York Stock Exchange
10.7 Calculation Agent: Party A, whose determinations and
calculations hereunder as Calculation Agent
will be binding in the absence of manifest
error and will be made in good faith and in
a commercially reasonable manner. Subject to
18
the foregoing, the Calculation Agent will
have no responsibility for good faith errors
or omissions in making any determination or
calculation as provided herein.
10.8 Underwriter: Credit Suisse First Boston Corporation. When
selling any Shares pursuant to this
Transaction, the Underwriter shall determine
the number of Shares to be sold on any
Trading Day and the price or prices at which
such Shares are sold, provided, however,
that it shall act in a commercially
reasonable manner.
11 Adjustments:
Method of Adjustment: Calculation Agent Adjustment
Extraordinary Events:
Consequences of Merger Events:
(a) Share-for-Share: Cancellation and Payment
(b) Share-for-Other: Cancellation and Payment
(c) Share-for-Combined: Cancellation and Payment
(d) Nationalization or Insolvency: Cancellation and Payment
For the purposes of Section 9.7 of the Equity Definitions, references
to "Seller" and "Buyer" therein shall be deemed to be references to
Party A and Party B, as applicable.
12. Miscellaneous Provisions:
12.1 Transfer: Neither the Transaction nor any interest or
obligation in or under the Transaction may
be transferred (whether by way of security
or otherwise) by either party without the
prior written consent of the other party,
except that a party may make a transfer of
the Transaction pursuant to a consolidation
or amalgamation with, or merger with or
into, or transfer of all or substantially
all its assets to, another entity, or upon
or after any default of the other party. Any
19
purported transfer that is not in compliance
with this paragraph will be void.
12.2 Securities Contract: Each party hereby represents to the other
that it intends this Confirmation to be a
securities contract within the meaning of
Section 741 of Bankruptcy Code, as amended
(11 U.S.C.ss.741).
13. Credit Support Documents: Party A: None
Party B: None
14. Account Details:
Payments to
the Arranging Agent: Citibank, NY ABA # ▇▇▇-▇▇▇-▇▇▇
A/C: Credit Suisse First Boston Corp.
A/C: 40804388
FFC:
A/C #:
Payments to Party A: To be advised
Payments to Party B: To be advised
Delivery of Shares
to the Arranging Agent: To be advised
Delivery of Shares to Party A: To be advised
Delivery of Shares to Party B: To be advised
15. U.S. Private Placement Representations
As this Transaction may constitute the sale, through Arranging Agent,
of a security or securities (as defined in the Securities Act of 1933
Act, as amended (the "1933 Act")), in addition to the representations
contained in Section 3 of the Agreement, Party B hereby represents to
Party A and Party A represents to Party B as follows:
(a) Each party is entering into this Transaction through the
Arranging Agent for its own account as principal, for
investment purposes only, and not with a view to, or for,
resale, distribution or fractionalization thereof, in whole or
20
in part, and no other person has a direct or indirect
beneficial this Transaction;
(b) Each party understands that the offer and sale by the other
party, through the Arranging Agent, of this Transaction are
intended to be exempt from registration under the 1933 Act, by
virtue of Section 4(2) thereof. In furtherance thereof, each
Party represents and warrants that (i) it has the financial
ability to bear the economic risk of its entry into this
Transaction and has adequate means of providing for its
current needs and other contingencies, (ii) it is experienced
in investing in forward purchase contracts and similar
instruments and has determined that such transactions are
suitable investments for it, and (iii) it is an institution
that qualifies as an "accredited investor" as that term is
defined in Regulation D under the 1933 Act; and
(c) Each party has been given the opportunity to ask questions of,
and receive answers from, the other party through the
Arranging Agent concerning the terms and conditions of this
Transaction and concerning the financial condition and
business operations of the other party and has been given the
opportunity to obtain such additional information necessary in
order for each party to evaluate the merits and risks of this
Transaction to the other party possesses such information or
can acquire it without unreasonable effort or expense.
16. Matters relating to the Arranging Agent:
(a) As a broker-dealer registered with the Securities and Exchange
Commission, Credit Suisse First Boston Corporation in its
capacity as Arranging Agent will be responsible for (i)
effecting this Transaction, (ii) issuing all required
confirmations and statements to Party A and Party B, (iii)
maintaining books and records relating to this Transaction as
required by Rules 17a-3 and 17a-4 under the Securities
Exchange Act of 1934, as amended (the "1934 Act") and (iv)
unless otherwise requested by Party B, receiving, delivering,
and safeguarding Party B's funds and any securities in
connection with this Transaction, in compliance with Rule
15c3-3 under the ▇▇▇▇ ▇▇▇.
(b) Credit Suisse First Boston Corporation is acting in connection
with this Transaction solely in its capacity as Arranging
Agent for Party A and Party B pursuant to instructions from
Party A and Party B. Credit Suisse First Boston Corporation
shall have no responsibility or personal liability to Party A
or Party B arising from any failure by Party A or Party B to
pay or perform any obligations hereunder, or to monitor or
enforce compliance by Party A or Party B with any obligation
hereunder, including without limitation, any obligations to
21
maintain collateral. Each of Party A and Party B agrees to
proceed solely against the other to collect or recover any
securities or monies owing to it in connection with or as a
result of this Transaction. Credit Suisse First Boston
Corporation shall otherwise have no liability in respect of
this Transaction, except for its gross negligence or wilful
misconduct in performing its duties as Arranging Agent.
(c) Any and all notices, demands, or communications of any kind
relating to this Transaction, including without limitation,
any option exercise notice, between Party A and Party B shall
be transmitted exclusively through the Arranging Agent at the
following address:
Credit Suisse First Boston Corporation
▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile No.: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
(d) The date and time of the Transaction evidenced hereby will be
furnished by the Arranging Agent to Party A and Party B upon
written request.
(e) The Arranging Agent will furnish to Party B upon written
request a statement as to the source and amount of any
remuneration received or to be received by the Arranging Agent
in connection with the Transaction evidenced hereby.
(f) Party A and Party B each represents and agrees (i) that this
Transaction is not unsuitable for it in the light of such
party's financial situation, investment objectives and needs
and (ii) that it is entering into this Transaction in reliance
upon such tax, accounting, regulatory, legal and financial
advice as it deems necessary and not upon any view expressed
by the other party or the Arranging Agent.
(g) Party A and Party B each is aware of and agrees to be bound by
the rules of the National Association of Securities Dealers,
Inc. ("NASD") applicable to the Transaction and is aware of
and agrees not to violate, either alone or in concert with
others, any applicable position or exercise limits established
by the NASD.
Credit Suisse First Boston International is regulated by The Securities and
Futures Authority and has entered into this transaction as principal. The time
22
at which the above Transaction was executed will be notified to Party B (through
the Arranging Agent) on request.
[THE REMAINDER OF THIS PAGE LEFT INTENTIONALLY BLANK]
23
Please confirm that the foregoing correctly sets forth the terms of the
agreement by executing the copy of this Confirmation enclosed for that purpose
and returning it to us.
Yours sincerely,
CREDIT SUISSE FIRST BOSTON CORPORATION,
solely in its capacities as
Arranging Agent and Underwriter
By: _____________________________
Name:
Title:
Confirmed as of the date first written above:
CREDIT SUISSE FIRST BOSTON INTERNATIONAL
By:_____________________________
Name:
Title:
SEACOR SMIT INC.
By:______________________________
Name:
Title:
24
