Exhibit D
[Translation]
BASIC AGREEMENT CONCERNING STOCK LENDING TRANSACTIONS
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Revenue
Stamp
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THIS BASIC AGREEMENT CONCERNING STOCK LENDING TRANSACTIONS (the "Basic
Agreement") is made and entered into by and between Son Asset Management Yugen
Kaisha ("Party A") and Deutsche Securities Limited, Tokyo Branch ("Party B") in
connection with the Stock Lending Transaction to be effected between Party A and
Party B. A contract for an individual Stock Lending Transaction shall be
concluded separately herefrom in accordance with this Basic Agreement.
ARTICLE 1. DEFINITIONS
As used in this Basic Agreement, the following terms have the respective
meanings set forth below:
(1) "Share Lending Transaction" means a certain loan transaction in stock
whereby either party (i.e., a Lender) lends
stock to the other party (i.e., a Borrower),
and the Borrower returns to the Lender the
stock of the same type, quality and quantity
as the Subject Stock (hereinafter referred
to as the "Individual Transaction"), upon
expiration of an agreed period of time.
(2) "Lender" means, with respect to an Individual
Transaction, a person who lends stock.
(3) "Borrower" means, with respect to an Individual
Transaction, a person who borrows shares.
(4) "Individual Contract" means a contract concluded by both parties
in connection with an Individual Transaction
under this Basic Agreement.
(5) "Lending Period" means the period from the Execution Date up
to the Settlement Date.
(6) "Lending Fee" means the amount of money to be paid by the
Borrower to the Lender in consideration of
the lending of stock.
(7) "Lending Fee Rate" means the rate determined in the Individual
Contract as the basis for calculating the
Lending Fee.
(8) "Subject Stock" means stock subject to a transaction as
specified in an Individual Contract.
(9) "Lending Quantity" means the quantity of the Subject Stock as
specified in an Individual Contract.
(10) "Execution Date" means the commencement date of the Lending
Period as specified in an Individual
Contract.
(11) "Settlement Date" means the last date of the Lending Period as
specified in the
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Individual Contract.
(12) "Current Price" means the price of securities determined on
a certain day in accordance with the
following for each category of securities:
(i) with respect to stock (including
foreign investment securities) listed
on any securities exchange in Japan,
bonds with stock acquisition rights
issued by a company whose stock is
listed on any securities exchange in
Japan, and beneficiary certificates of
securities investment trust listed on
any securities exchange in Japan, the
closing price on such stock exchange
in Japan;
(ii) with respect to beneficiary
certificates of a securities
investment trust whose price as of the
preceding day is published by the
Investment Trusts Association, the
current price published by the
Investment Trusts Association;
(iii) with respect to securities whose
reference market statistical value is
published by the Japan Securities
Dealers Association (other than
securities listed in (i) and (ii)
above), the reference market
statistical value (average value)
published by the Japan Securities
Dealers Association;
(iv) with respect to securities listed at
any securities exchange in Japan
(other than securities listed in (i)
through (iii) above), the closing
price on any such securities exchange
in Japan; and
(v) with respect to securities other than
securities listed in (i) through (iv)
above, the reasonable and fair price
or quotation.
(13) "Margin" means the money the Lender receives from the
Borrower in order to secure the right to
request a return of stock and to secure any
other claims it has against the Borrower in
connection with the Stock Lending
Transaction.
(14) "Interest" means interest on the Margin.
(15) "Margin Interest Rate" means the rate to be used as the basis for
calculating the Interest as specified in an
Individual Contract.
(16) "Open-end Transaction" means an Individual Transaction for which
the Settlement Date is not fixed at the time
of conclusion of the Individual Contract and
which ends on the Settlement Date designated
thereafter by either the Lender or the
Borrower.
(17) "Basic Margin Amount" means the amount of the Margin to be
maintained by the Borrower as specified in
an Individual Contract or the Attached
Memorandum.
(18) "Basic Margin Rate" means the rate to be used as the basis for
calculating the Basic Margin Amount and as
specified in an Individual Contract or the
Attached Memorandum.
(19) "Substitute Price" means the valuation amount of the Substitute
Securities Or Other Substitute (as defined
in Article 5, Paragraph 2) as specified in
the
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Attached Memorandum.
(20) "Maximum Margin Amount" means the maximum amount of the Margin which
shall not require the Lender to return to
the Borrower as specified in an Individual
Contract or the Attached Memorandum.
(21) "Minimum Margin Amount" means the minimum amount of the Margin which
shall not require the Borrower to
additionally deposit with the Lender as
specified in an Individual Contract or the
Attached Memorandum.
(22) "Business Day" means a day on which both the Lender and
Borrower are open for business in Japan.
(23) "Attached Memorandum" means a written instrument that states such
matters as agreed upon by and between the
parties hereto as the terms and conditions
to all Individual Transactions.
ARTICLE 2. PREPARATION OF CONTRACT FOR THE INDIVIDUAL TRANSACTION
1. In order to confirm the matters that have been agreed upon in entering
into an individual Stock Lending Transaction, the representatives of the Lender
and the Borrower or their respective attorneys-in-fact shall prepare a contract
for the Individual Transaction without delay and exchange the same after
affixing their respective names and seals thereupon, or the Borrower shall
deliver to the Lender a loan certificate.
2. This Basic Agreement, the Attached Memorandum and the contracts for
the Individual Transactions shall together constitute a single contract
pertaining to the relevant Individual Transactions. In case of any inconsistency
or discrepancy between the provisions of this Basic Agreement and those of the
Attached Memorandum, the provisions of the Attached Memorandum shall prevail
over those of this Basic Agreement. In case of any inconsistency or discrepancy
between the provisions of the Attached Memorandum and the contract for the
Individual Transaction or the loan certificate, the provisions of the contract
for the Individual Transaction or the loan certificate shall prevail over the
provisions of the Attached Memorandum.
ARTICLE 3. LENDING AND RETURN OF STOCK; PAYMENT OF LENDING FEE
1. The Lender shall lend to the Borrower the stock of the Lending
Quantity for the Subject Stock on the Execution Date.
2. The Borrower shall return to the Lender the equivalent stock that has
been lent pursuant to the preceding Paragraph (hereinafter referred to as
"Lending Stock") on the Settlement Date.
3. The Borrower shall pay to the Lender the Lending Fee for the stock it
has borrowed in accordance with the conditions, such as the Lending Fee Rate,
stipulated in the Individual Contract, as well as the provisions of the Attached
Memorandum.
ARTICLE 4. DELIVERY OF STOCK
1. The lending and return of the stock under this Basic Agreement shall
be performed by either of the methods set forth below:
(1) Physical delivery of the relevant certificates; or
(2) Stock transfer through the system of the Japan Securities Depository
Center or delivery of any and all documents necessary therefor;
provided, however, that this procedure shall be
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performed with sufficient time prior to the Execution Date or the
Settlement Date to ensure that the transfer of rights to the party
entitled to take the delivery will take effect on such date.
2. If the transfer of rights fails to take effect as a result of delivery
through the methods as set forth in Item (2) of the preceding Paragraph, the
underlying lending or return shall not be deemed to have taken place.
ARTICLE 5. DEPOSIT AND RETURN OF MARGIN ITEMS; PAYMENT OF INTEREST
1. When the Borrower agrees to offer collateral in connection with the
Individual Transaction, the Borrower shall deposit the Margin as set forth in
the relevant Individual Contract on the Execution Date.
2. When the Lender agrees in advance, the Borrower may substitute
securities or other substitute, (hereinafter referred to as the "Substitute
Securities Or Other Substitute") for all or any part of the Margin and the
additional margin as specified in Article 6, Paragraph 1 of this Basic Agreement
in accordance with standards stipulated by the Lender.
3. If the Borrower deposits the Substitute Securities Or Other Substitute
with the Lender pursuant to the immediately preceding Paragraph, the Borrower
shall take such procedures necessary for creating a security interest on the
Substitute Securities Or Other Substitute as deemed by the Lender to be
appropriate by the date for depositing the relevant Margin, unless otherwise
agreed upon between the Parties.
4. The Lender shall return the Margin and the Substitute Securities Or
Other Substitute for each Individual Transaction (hereinafter referred to as the
"Margin Items") on the Settlement Date for such Individual Transaction, unless
otherwise agreed upon between the parties hereto.
5. Notwithstanding the provision of the immediately preceding Paragraph,
the Substitute Securities Or Other Substitute out of the Margin Items to be
returned pursuant to the immediately preceding Paragraph shall be returned to
the Borrower after releasing the security interest created in the Substitute
Securities Or Other Substitute immediately following the Settlement Date.
6. The Lender shall pay the Borrower the Interest on the Margin that it
has received in accordance with the terms of the Margin Interest Rate set forth
in the relevant Individual Contract and as set forth in the Attached Memorandum.
7. If any of the events enumerated in each of the Items of Article 10
occurs to the Borrower, the Margin Items shall secure in common any and all
claims that the Lender has against the Borrower.
ARTICLE 6. ADDITIONAL DEPOSIT OF DEFICIENT MARGIN AND RETURN OF SURPLUS MARGIN
1. If the aggregate amount of the Margin and the Substitute Price of the
Substitute Securities Or Other Substitute (hereinafter referred to as the
"Margin Amount") for an Individual Transaction falls below the Minimum Margin
Amount after depositing the Margin Items for such Individual Transaction due to
the fluctuation in the Current Price of the Lending Stock or the Substitute
Securities Or Other Substitute then the Borrower shall deposit additional Margin
Items with the Lender in accordance with the Attached Memorandum so that the
Margin Amount does not fall below the Basic Margin Amount, unless otherwise
agreed upon between the parties.
2. If the Margin Amount for an Individual Transaction exceeds the Maximum
Margin Amount after depositing the Margin Items for such Individual Transaction
due to the fluctuation in the Current Price of the Lending Shares or the
Substitute Securities Or Other Substitute, then the Lender shall return such
surplus Margin Items to the Borrower in accordance with the provisions of the
Attached Memorandum, to the extent that the Margin Amount does not fall below
the Basic Margin Amount, unless otherwise agreed upon between the parties.
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ARTICLE 7. HANDLING OF DIVIDENDS, STOCK SPLIT AND WARRANTS
1. If the Lender and the Borrower agree in advance that the Lending
Period of the stock extends beyond a certain date so as to fix the persons
entitled to exercise their rights as shareholders, all of the amount equal to
dividends attached to the stock that the Borrower has borrowed from the Lender,
any stock splits or grant of rights to warrants shall vest in the Lender, unless
otherwise agreed upon between the parties.
2. If the dividends that are to be vested in the Lender pursuant to the
preceding Paragraph are paid, the Borrower shall immediately remit the amount
equal to such dividends as agreed upon in advance between the Lender and the
Borrower.
3. Stock splits and grants of rights to warrants shall be handled as
otherwise agreed upon between the parties.
ARTICLE 8. RETURN OF THE STOCK PRIOR TO EXPIRATION OF THE LENDING PERIOD
1. If, and to the extent that, it is agreed in advance in connection with
an Individual Contract, or it is stipulated in the Attached Memorandum, that the
Lender may request upon prior notice to the Borrower that the Borrower return
all or any part of the stock that the Lender has lent to the Borrower hereunder
and that the Borrower may upon the prior notice to the Lender return all or any
part of the stock that the Lender has lent to the Borrower hereunder, then in
such case, the Borrower shall return the Lending Stock and the Lender shall
return the Margin Items.
2. The Lending Fee due pursuant to the preceding Paragraph shall be paid
on the basis of the number of the actual days elapsed from the Execution Date up
to the day preceding the date of return.
3. The Interest in Paragraph 1 shall be paid on the basis of the number
of the actual days elapsed from the date of deposit of the Margin Items up to
the day preceding the date of return.
4. If the Borrower receives from the Lender a request for return pursuant
to the provisions of Paragraph 1, the Borrower shall return the relevant stock
within four (4) Business Days from the date of receipt of the notice, except
when the parties otherwise agree on such period.
5. The Borrower may return the relevant stock to the Lender by giving at
least two (2) Business Days prior notice to the Lender, as set forth in
Paragraph 1.
ARTICLE 9. SIMULTANEOUS PERFORMANCE
1. The lending of the stock and deposit of the Margin, and the return of
the Lending Stock and return of the Margin in connection with each Individual
Transaction shall be performed simultaneously, unless otherwise stipulated in
the Attached Memorandum.
2. Notwithstanding the preceding Paragraph, if any of the events set
forth in Article 10 occurs to either of the parties hereto or there is a
reasonable cause to believe the occurrence of such event will take place, the
other party may refuse delivery or return of the stock or deposit or return of
the Margin to such party.
ARTICLE 10. TERMINATION DUE TO DEFAULT
If any of the events referred to in Items (1) through (6) below occurs to
either of the parties hereto (hereinafter referred to as the "Defaulting
Party"), all of the Individual Contracts shall be deemed to have been terminated
as a matter of course. If any of the events referred to in Items (7) through
(11) occurs to either of the parties, the other party (hereinafter referred to
as the "Non-Defaulting Party") may terminate all or a part of the Individual
Contracts upon notice to the Defaulting Party. Such termination by notice shall
take
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effect on the day on which such notice is dispatched to the Defaulting Party:
(1) When a petition is filed by or against a party for commencement of
bankruptcy procedures, commencement of civil rehabilitation
procedures, commencement of special liquidation, commencement of
corporate rearrangement or commencement of corporate reorganization
proceedings (including petitions under the Special Treatment Law
concerning the Rehabilitation of Financial Institutions);
(2) When a resolution for dissolution is adopted or such dissolution
otherwise becomes effective;
(3) When an order or notice of preservative attachment or attachment is
dispatched with respect to it's a party's right to claim the payment
of money or the delivery or return of the stock against the other
party under this Basic Agreement, or if the notice of assignment of
such right to claim or the notice of creation of a pledge is
dispatched;
(4) When a party suspends payment;
(5) When a party becomes subject to suspension of business by a clearing
house;
(6) When a party whereabouts become unknown due to its own fault;
(7) When a party fails to perform any of its obligations to deliver or
return the stock, money or Substitute Securities Or Other Substitute
to the other party under this Basic Agreement (except when a party
extends the date of performance to a later date with consent of the
other party);
(8) When acceleration of payment occurs with respect to any of a party's
obligations for an amount not less than 1% of the shareholders' equity
(i.e., the total of the capital and disclosed provisions, or, in the
case of a mutual company, the total shareholders' equity after
capitalization of dividend reserves) under any agreements other than
this Basic Agreement; provided that the Non-Defaulting Party also
determines in good faith that there is reasonable ground to conclude
that the Defaulting Party is likely to fail to perform its monetary
obligations under this Basic Agreement;
(9) When a party denies, in writing, the existence of a part or all of its
obligations to the other party under this Basic Agreement or admits
that it is insolvent;
(10) In addition to each of the foregoing, when a party commits any breach
under this Basic Agreement or with respect to any securities or other
transactions with the other party, and such breach is not remedied
within five (5) Business Days after notice from the other party; or
(11) When a guarantor of the Borrower (limited to the guarantor for the
obligations under this Basic Agreement) comes under any of the
preceding Items, and the Borrower promptly fails to take alternative
measures to secure the due payment of its obligations.
ARTICLE 11. LIQUIDATION AS A RESULT OF TERMINATION
If an Individual Contract is terminated pursuant to the immediately
preceding Article, the amounts set forth in Items (1) and (2) below shall be
deducted with respect to all of the Individual Contract so terminated. If the
amount set forth in Item (1) is greater than the amount set forth in Item (2),
the Defaulting party shall immediately pay the balance to the Non-Defaulting
Party. If the amount set forth in Item (1) is smaller than the amount set forth
in Item (2) , the Non-Defaulting Party shall immediately pay the balance to
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the Defaulting Party. In such event, both parties shall be released from any and
all obligations relating to all of the Individual Contracts so terminated (other
than those obligations set forth in this Article), unless it is otherwise agreed
upon between the parties for any transaction with the Substitute Securities Or
Other Substitute as collateral:
(1) The sum of the Current Price of the Lending Shares with respect to all
of the Individual Contracts terminated in which such Defaulting Party
is the Borrower on the date of termination, the Lending Fee calculated
in accordance with Article 8 and the damages for delayed payment
thereof, plus the Margin Items with respect to all of the Individual
Contracts terminated in which such Defaulting Party is the Lender,
plus the Interest calculated in accordance with Article 8, plus the
damages for delayed payment thereof; and
(2) The sum of the Current Price of the Lending Shares with respect to all
of the Individual Contracts terminated in which such Defaulting Party
is the Lender on the date of termination, the Lending Free calculated
in accordance with Article 8 and the damages for delayed payment
thereof, plus the Margin Items with respect to all of the Individual
Contract terminated in which such Defaulting Party is the Borrower,
plus the Interest calculated in accordance with Article 8, plus the
damages for delayed payment thereof.
2. Notwithstanding the preceding Paragraph, the Defaulting Party shall
reimburse the Non-Defaulting Party for the damages arising from or in connection
with any and all of the Individual Contracts terminated.
ARTICLE 12. DAMAGES FOR DELAYED PAYMENT
1. If the payment of money to be paid, or the delivery of the stock to be
delivered, or the payment or delivery of the Substitute Securities Or Other
Substitute by either party to the other party under this Basic Agreement is not
made on the date of performance set forth in this Basic Agreement or any other
date agreed between the parties, then such defaulting party shall pay: (1) the
amount concerned in the case of cash; (2) the higher of the Current Price on the
Execution Date or the Settlement Date or the Current Price on the Returning Date
in the case of stock; or (3) the Current Price of the Substitute Securities Or
Other Substitute, together with damages for the delayed payment calculated at
the rate of 14% per annum (on a 365 day basis), for the period from day
following when such payment wad due date up to the actual payment, or delivery
date in the case of the Substitute Securities Or Other Substitute.
2. The other party to whom the Lending Stock or the Substitute Securities
Or Other Substitute should be returned or delivered, in case of default of the
other party's obligation to deliver or return, may obtain from others such
stock, etc., of the same issue and quantity as the stock, etc., that should have
been returned or delivered, upon the prior notice to it's the counterparty. In
such case, the counterparty shall pay any and all amounts of money paid by such
other party to obtain such stock, etc., including, without limitation, the
purchase price of such stock, etc., interest for financing the purchase price
and brokerage commissions, to such other party, whereby the obligation to
deliver or return the stock or the Substitute Securities Or Other Substitute
shall be extinguished.
3. If the delivery of the Lending Stock or the Substitute Securities Or
Other Substitute or the obligation to return has not been performed on the
relevant day and it is impossible or substantially difficult for the other party
to obtain stock, etc., of the same issue and quantity as the Lending Stock or
the Substitute Securities Or Other Substitute, then the other party may demand
that the defaulting party compensate such other party for the purchase price and
any and all other amounts normally required when it obtains them at the Current
Price on the due return or delivery date of such stock, etc., or the Current
Price on the payment date of the compensation for damage, whichever is higher.
In such case, the obligation to deliver or return the stock or the Substitute
Securities Or Other Substitute shall be extinguished when either party pays such
amount to the other party.
4. The calculation period for the damages for delayed payment referred to
in Paragraph 1 for
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the purpose of the immediately preceding two Paragraphs shall be up to the date
on which such obligation to deliver or return is extinguished.
5. The provisions of each of the foregoing Paragraphs shall apply mutatis
mutandis to the return of the stock of less than a unit if the issuer of the
Lending Stock or the Substitute Securities Or Other Substitute adopts the unit
share system.
ARTICLE 13. SET-OFF
1. The Non-Defaulting Party may, at any time, set off the pecuniary claim
or obligation resulting from the liquidation pursuant to Article 11 against the
pecuniary claim or obligation to the Defaulting Party, regardless of the due
date of such claim or obligation.
2. In making the set-off under the preceding Paragraph, the
Non-Defaulting Party may withdraw deposits on behalf of the Defaulting Party and
appropriate the same for satisfaction of the obligation of the Defaulting Party,
without giving prior notice and completing the prescribed procedures.
3. Calculation of the interest on the claim or obligation, the damages
for delayed payment and other monetary obligation to be paid for the purpose of
the set-off under the preceding two Paragraphs shall be made with respect to
those generated on or before the date of calculation.
4. In the event that the Non-Defaulting Party has obtained a pecuniary
claim against the Defaulting Party under Article 11, the Non-Defaulting Party
may dispose of movables, drafts and other securities in its possession with
respect to any and all transactions between the parties. In such case, the
Non-Defaulting Party may, after collecting or disposing thereof in such manner
and at such timing and price as are generally deemed appropriate, at its own
cost, appropriate the proceeds therefrom net of the expenses incurred in
connection therewith for satisfaction of such claim regardless of the statutory
order of appropriation. If the Defaulting Party still has any outstanding
obligation thereafter, it shall immediately repay such outstanding obligation.
ARTICLE 14. OPEN-END TRANSACTION
If the parties hereto agree to enter into an Open-end Transaction in an
Individual Contract, the Borrower and the Lender may designate the Settlement
Date after the commencement of such transaction by giving notice to the other
party in the method stipulated in the Attached Memorandum, in which case the
parties hereto shall pay the Lending Fee and the Interest as set forth in the
Attached Memorandum.
ARTICLE 15. PAYMENT S AND THE LIKE IN FOREIGN CURRENCY
The methods of payment and receipt of the Lending Fee and the Margin in
foreign currency under this Basic Agreement, and conversions and handling of
forward foreign exchange transactions shall be as set forth separately herefrom.
ARTICLE 16. PROHIBITION OF ASSIGNMENT AND PLEDGE OF RIGHTS
No rights arising from or in connection with this Basic Agreement may be
assigned or pledged to a third party, without first obtaining the consent of the
other party.
ARTICLE 17. RISK OF LOSS
Expenses required for the exercise or preservation of rights, or collection
or disposition of collateral by the Lender against the Borrower, and expenses
required when the Borrower seeks cooperation from the Lender to protect its
rights shall be borne by the Borrower.
ARTICLE 18. CONFIDENTIALITY OBLIGATION
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Each party hereto shall be required to keep any information disclosed by
the other party hereunder in strict confidence and shall not disclose or make
available to a third party such information, without first obtaining the prior
consent of the disclosing party, except when such information becomes known to
the public, when such disclosure is made in compliance with the relevant laws,
ordinances or regulations, when such disclosure is made upon request of a
competent regulatory entity or other government agency, or when such information
is disclosed to lawyers or accountants.
ARTICLE 19. NOTICE
All notices given under this Basic Agreement shall be in writing and shall
be sent by facsimile transmission. If notice is sent to the address or number as
shown in the signature spaces of this Basic Agreement or other address or number
notified to the other party in writing, such notice shall be deemed to have been
duly given, and notice dispatched by registered mail shall be deemed to have
been duly given upon receipt thereof.
ARTICLE 20. CHANGES IN THE MATTERS NOTIFIED
1. In case of a change in the seal impression, name, trade name,
representative, address, facsimile number or other matters notified, the Lender
or the Borrower shall immediately give written notice thereof to the other
party.
2. If either party fails to give the notice referred to in the preceding
Paragraph, and a notice given or document sent by the other party is thereby
delayed in arrival or does not arrive at the such other party, then such notice
or document shall nevertheless be deemed to have been received when it would
have been received in a normal situation.
ARTICLE 21. PAYMENT OF EXPENSE
1. Revenue stamps and other charges arising out of this Basic Agreement
shall be borne equally by Party A and Party B, and expenses incurred by each of
Party A and Party B shall be borne by Party A and Party B, respectively.
2. Stamp duties and other charges arising out of the lending of
individual stock shall be borne by the Lender.
ARTICLE 22. TERM
1. The effective term of this Basic Agreement shall be one (1) year from
the date of execution of this Basic Agreement; provided, however, that the term
of this Basic Agreement shall be extended for a further one (1) year, unless
either party expresses its written intention to the contrary, and thereafter the
same shall apply. If this Basic Agreement is terminated due to expiration of the
term hereof, Party A and Party B shall have the obligation to ensure the
performance of all Individual Contracts under this Basic Agreement that exist
hereunder when the term of this Basic Agreement expires.
2. Party A and Party B may terminate this Basic Agreement by giving at
least one (1) month written notice to the other party, provided that the
terminating party shall have the obligation to ensure the performance of all
Individual Contracts under this Basic Agreement that exist hereunder when such
notice is given.
ARTICLE 23. REPORT AND RESEARCH
If either party is requested in writing by the other party for a report on
its assets, business management and business conditions for a justifiable
reason, it shall provide the other party with such report to the extent
objectively required, as well as with other facilities necessary for such
research.
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ARTICLE 24. AGREED JURISDICTION
The Lender and the Borrower shall subject to the jurisdiction of the Tokyo
District Court for any dispute arising in connection with the rights and
obligations arising out of, or in relation to, this Basic Agreement.
ARTICLE 25. GOVERNING LAW
This Basic Agreement shall be governed by the laws of Japan.
ARTICLE 26. REPRESENTATIONS AND WARRANTIES
Each of the parties hereby represents and warrants to the other party, with
the intent that such representations and warranties shall survive the completion
of any transaction hereunder and shall be deemed to be repeated on each day that
this Basic Agreement remains in effect, the following terms:
(1) it is duly organized and validly existing under the laws of its
incorporation:
(2) (i) it has the power to execute and deliver this Basic Agreement
(hereinafter, as used in this Article, including the Attached
Memorandum), to enter into the Individual Contracts contemplated
hereby and to perform its obligations under this Basic Agreement and
each Individual Contract;
(ii) it has taken all necessary action to authorize the execution,
delivery and performance of this Basic Agreement; and
(iii) this Basic Agreement constitutes its legal, valid, and binding
obligations enforceable against it;
(3) (i) when each Individual Contract is entered into, it has taken all
necessary action to authorize the execution, delivery and performance
of such Individual Contract; and
(ii) when any Individual Contract is entered into, such Individual
Contract constitutes its legal, valid, and binding obligations
enforceable against it;
(4) the execution, delivery and performance by it of this Basic Agreement
and each Individual Contract hereunder will at all times comply with
all applicable laws and regulations;
(5) it has made its own determination as to the tax treatment of any
dividends, remuneration or other money or assets received hereunder;
(6) at the time of delivery of any Margin or Substitute Securities Or
Other Substitute hereunder, the Borrower will be the owner of that
Margin or Substitute Securities Or Other Substitute free from all
liens, charges, equities and encumbrances and will have the right to
deliver such Margin or create a security interest in such Substitute
Securities Or Other Substitute on the terms of this Basic Agreement;
and
(7) at the time of lending or return of any stock pursuant to any
Individual Contract in accordance herewith, the Lender or the
Borrower, as the case may be, will be the owner of those Stocks free
from all liens, charges, equities and encumbrances and will have the
right to transfer the ownership of such Stocks on the terms of this
Basic Agreement.
ARTICLE 27. APPLICATION OF LAW CONCERNING CLOSE-OUT NETTING
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Party A and Party B agree that all Individual Transactions under this Basic
Agreement are "financial transactions" as defined in the Law for the Close-out
Netting of Financial Transactions Conducted by Financial Institutions, and that
the Law for the Close-out Netting of Financial Transactions Conducted by
Financial Institutions shall apply to this Basic Agreement and all Individual
Transactions under this Basic Agreement.
ARTICLE 28. DISCUSSION
Any matter not expressly provided for in this Basic Agreement shall be
resolved in accordance with the securities and exchange-related laws and
regulations, as well as with various rules and practices established by the
stock exchanges and the Japan Securities Dealers Association. Any matter not
expressly provided for therein shall be resolved through negotiation between the
Lender and Borrower.
IN WITNESS WHERE OF, the parties shall cause this Basic Agreement to be
executed in duplicate and retain one copy each, after their representatives or
their attorneys-in-fact affix their respective names and seals hereunto.
Date: August 25, 2005
Party A: ▇▇▇▇▇▇▇▇▇ ▇▇▇
Director
Son Asset Management
3rd Floor, Yutaka ▇▇. ▇ ▇▇▇▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
Party B : ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Representative in Japan
Deutsche Securities Limited, Tokyo Branch
Sanno Park Tower,
▇▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
11
[Translation]
MEMORANDUM
ANNEXED TO BASIC AGREEMENT FOR STOCK LENDING TRANSACTIONS
THIS MEMORANDUM ANNEXED TO BASIC AGREEMENT FOR STOCK LENDING TRANSACTIONS
(the "Memorandum") is made and entered into by and between Son Asset Management
Yugen Kaisha ("Party A") and Deutsche Securities Limited, Tokyo Branch ("Party
B"), which shall be applicable to all of the Individual Transactions under the
Basic Agreement Concerning Stock Lending Transactions, dated August 25, 2005
(the "Basic Agreement"), as follows (unless otherwise specifically provided,
terms used herein shall bear the same meanings as defined in the Basic
Agreement):
ARTICLE 1. DEFINITIONS
1. Notwithstanding Article 1, Item (12) of the Basic Agreement, Current Price
as defined separately herein, shall prevail herein.
2. Notwithstanding Article 1, Item (13) of the Basic Agreement, Margin means
any money received by the Lender from the Borrower for the purpose of securing
any present or future claims against the Borrower under the Basic Agreement.
3. Basic Margin Amount, defined in Article 1, Item (17) of the Basic
Agreement, shall be calculated in accordance with the following formula:
Basic Margin Amount = Total Current Price x Basic Margin Rate (rounded down
to the nearest whole yen)
Total Current Price = Lending Quantity x Current Price of the Lending Stock
The Current Price for the Lending Stock shall be the price agreed between
the parties hereto, based on an evaluation calculated in accordance with the
following classifications:
(i) Listed stock (where "listed stock" means stock listed at any
securities exchange in Japan):
The Closing price of any relevant stock on a securities exchange
at which such stock is principally traded on the Business Day
immediately preceding the calculation date for the Basic Margin
Amount (if no closing price is available, it shall be the latest
quotation for such day, and if neither the closing price nor the
latest quotation is available on such date, it shall be the last
closing price or latest quotation available prior to such date;
provided, however, that if both the closing price and the latest
quotation are available on the same day, the closing price shall
be applicable);
(ii) Stock other than that set out in (i) above:
Reasonable and fair price or quotation.
4. The Basic Margin Rate, defined in Article 1, Item (18) of the Basic
Agreement, shall be one hundred and five per cent (105%), unless otherwise set
out in any relevant Individual Contract.
1
5. The Substitute Price, defined in Article 1, Item (19) of the Basic
Agreement, shall be determined by the Lender, in accordance with the "Handling
of Stock Lending Transaction (Kabuken Taisyaku No Toriatsukai Nitsuite)"
(November 2, 1998) Resolution of the Board of Directors of Japan Securities
Dealers Association.
6. The Maximum Margin Amount, defined in Article 1, Item (20) of the Basic
Agreement, shall be equivalent to the Basic Margin Amount.
7. The Minimum Margin Amount, defined in Article 1, Item (21) of the Basic
Agreement, shall be equivalent to the Basic Margin Amount.
8. For the purpose of this Memorandum, the "calculation date" means each
calendar day during the period from the Execution Date to the day immediately
preceding the Settlement Date (or the date of return of the stock certificates
if they are to be returned prior to the expiration of the Lending Period
pursuant to Article 8 of the Basic Agreement).
9. For the purpose of this Memorandum, the "calculation period" means a period
from the first calendar day of each month or the Execution Date, as the case may
be, to the last calendar day of such month or the day immediately preceding the
Settlement Date, as the case may be.
ARTICLE 2. PAYMENT METHOD AND PAYMENT DATE OF THE LENDING FEE
1. The Lending Fee set out in Article 3, Paragraph 3 of the Basic Agreement
shall be calculated in accordance with the following formula:
Lending Fee = Total amount of the Lending Fee on each calculation date
during the relevant calculation period (rounded down to the
nearest whole yen)
Lending Fee on calculation date = Total Current Price x Lending Fee
Rate/365 (rounding to the nearest
hundredth)
Total Current Price = Lending Quantity x Current Price of the Lending Stock
on the relevant calculation date
The Current Price for the Lending Stock shall be the price agreed between
the parties hereto, based on the evaluation calculated in accordance with the
following categories:
(i) Listed stock: Closing price of any relevant stock on a securities
exchange at which such stock is principally traded on
the Business Day immediately preceding the calculation
date for the Lending Fee (if no closing price is
available, it shall be the latest quotation for such
day, and if neither the closing price nor the latest
quotation is available on such date, it shall be the
last closing price or latest quotation available prior
to such date; provided, however, that if both the
closing price and the latest quotation are available on
the same day, the closing price shall be applicable);
(ii) Stock other than that set out in (i) above:
Reasonable and fair price or quotation.
2. Unless otherwise separately agreed, payment of the Lending Fee shall be
made on the tenth (10th) of each month (or if such day is not a Business Day,
the immediately preceding Business Day) with respect the Lending Fee for the
immediately preceding calculation period.
ARTICLE 3. (RETURN OF SUBSTITUTE SECURITIES, ETC.)
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1. Notwithstanding the provisions of Article 5, Paragraph 3 of the Basic
Agreement, any right of pledge (shichiken) shall not be established with respect
to the Substitute Securities, substituted for all or any part of the Margin and
the additional Margin as stated in Article 5, Paragraph 2 of the Basic
Agreement, and the Borrower shall return the securities of the same type, with
equal terms and in equal quantity with the relevant securities on the Settlement
Date of each Individual Transaction.
2. Unless any event as set out in Article 10 of the Basic Agreement should
occur to the Borrower, any and all interests and dividends paid on the
Substitute Securities (including interim dividends) shall be vested in the
Borrower. If the Lender receives such payments, the Lender shall immediately
return such amount to the Borrower.
ARTICLE 4. CALCULATION METHOD AND PAYMENT DATE OF THE INTEREST
1. The Interest on the received Margin as set out in Article 5, Paragraph 6 of
the Basic Agreement shall be calculated in accordance with the following
formula:
Interest = Total amount of Interest on each calculation date during the
relevant calculation period (rounded down to the nearest whole
yen)
Interest Rate on calculation date = Amount of Margin in receipt as of the
relevant calculation date x Margin
Interest Rate/365 (rounding to the
nearest hundredth)
2. Unless otherwise separately agreed, payment of the Interest shall be made
on the tenth (10th) of each month (or, if such day is not a Business Day, the
immediately preceding Business Day) with respect the Interest for the
immediately preceding calculation period.
ARTICLE 5. ADDITIONAL DEPOSIT FOR DEFICIENT MARGIN AND RETURN OF SURPLUS MARGIN
1. The parties hereto shall calculate the current value (hereinafter referred
to as "▇▇▇▇-to-Market") of the Basic Margin Amount, the Maximum Margin Amount,
the Minimum Margin Amount and the Margin amount on each Business Day during the
period from the Business Day immediately preceding any Execution Date to the
Business Day two (2) days prior to the relevant Settlement Date (hereinafter
referred as to "▇▇▇▇-to-Market Date"), based on the Current Price of the Lending
Stock calculated in accordance with the following categories:
(i) Listed stock: Closing price of any relevant stock on a securities
exchange at which such stock is principally traded on
the Business Day immediately preceding the
▇▇▇▇-to-Market Date (if no closing price is available,
it shall be the latest quotation for such day, and if
neither the closing price nor the latest quotation is
available on such date, it shall be the last closing
price or latest quotation available prior to such date;
provided, however, that if both the closing price and
the latest quotation are available on the same day, the
closing price shall be applicable);
(ii) Stock other than those set out in (i) above:
Reasonable and fair price or quotation.
2. If the Margin amount under an Individual Transaction falls below the
Minimum Margin Amount calculated pursuant to Paragraph 1 hereof, the Lender may
request that the Borrower deposit as additional Margin the amount equivalent to
the balance between such Margin amount and the Basic Margin Amount by noon of
the ▇▇▇▇-to-Market Date. Upon such request to deposit additional Margin, the
Borrower shall deposit additional Margin with the Lender by 3:00 p.m. on the
Business Day following the ▇▇▇▇-to-Market Date.
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3. If the Margin amount under an Individual Transaction exceeds the Maximum
Margin Amount calculated pursuant to Paragraph 1 hereof, the Borrower may
request that the Lender return as a surplus Margin the amount equivalent to the
excess of such Margin amount over the Basic Margin Amount by noon of the
▇▇▇▇-to-Market Date. Upon such request to return excess Margin, the Lender shall
return the surplus Margin to the Borrower by 3:00 p.m. on the Business Day
following the ▇▇▇▇-to-Market Date.
4. When the payment of the Margin is made in accordance with Paragraphs 2 and
3 hereof, the Interest shall be calculated with respect to the period from the
date of such payment to the Settlement Date or, in the case of additional
payment of the Margin, to the payment date thereof.
5. Notwithstanding the provisions of Paragraphs 2 and 3 of this Article, upon
separate mutual agreement between the parties, the parties hereto may make the
▇▇▇▇-to-Market for the total amount of all Individual Transactions existent
between the parties, instead of making the ▇▇▇▇-to-Market for each Individual
Transaction. In such case, the amount which either party pays to the other party
shall be the balance between the amounts set forth in items (1) and (2).
(1) The additional Margin or the surplus Margin, calculated based on the
total sum of the Basic Margin Amount, the Maximum Margin Amount, the
Minimum Margin Amount and the Margin amount of all of the Individual
Transactions in which Party A is the Lender.
(2) The additional Margin or the surplus Margin calculated based on the
total sum of the Basic Margin Amount, the Maximum Margin Amount, the
Minimum Margin Amount and the Margin amount of all of the Individual
Transactions in which Party B is the Lender.
The party who claims such balance may make a claim for payment of such
amount by noon of the ▇▇▇▇-to-Market Date, and upon such claim for payment, the
other party shall pay the balance by 3:00 p.m. on the Business Day following the
▇▇▇▇-to-Market Date.
When the ▇▇▇▇-to-Market is made in accordance with this paragraph, unless
otherwise separately agreed, the party who claims the balance shall determine
how much amount of the Margin is deemed to be paid with respect to the
Individual Transaction.
ARTICLE 6. SPECIAL PROVISIONS OF INDIVIDUAL TRANSACTION FOR SALE
1. In respect of the Individual Transaction in which the Borrower borrows from
the Lender the stock for the purpose of selling the relevant stock through the
Lender (hereinafter referred as to the "Individual Transaction for Sale"), the
Lender shall accept from the Borrower a Margin greater than the total Current
Price of the Lending Stock by the Execution Date. Such total Current Price shall
be calculated in accordance with the provisions set out Article 1, Paragraph 3
hereof.
2. Notwithstanding the provisions of Article 5, Paragraph 3 hereof, with
respect to the Individual Transaction for Sale, if the Borrower deposits the
proceeds from sale of the stock as the Margin, then the relevant Margin shall
not be returned to the Borrower upon a ▇▇▇▇-to-Market.
3. With respect to the Individual Transactions for Sale, if the Borrower
deposits the proceeds from sale of the stock as the Margin amount, even when the
▇▇▇▇-to-Market pursuant to the provisions set out in Article 5, Paragraph 5
hereof applies, the relevant Individual Transaction shall be excluded from such
calculation and individually Marked-to-Market.
ARTICLE 7. TREATMENT OF WARRANTS AND STOCK SPLIT, ETC.
1. When warrants are granted for the Lending Stock during the Lending Period
and if the Lender selects to exercise the rights to such warrants and notifies
the Borrower of such event, the Lender shall
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deliver a cash amount equivalent to the cash payment on subscription to the
Borrower not later than the payment due date thereof. In such case, after
issuance of new shares, the number of new shares shall be added to the Lending
Quantity of the Individual Transaction unless otherwise agreed to; provided,
however, that if a share less than one unit or fractional share arises with
respect to new shares, the value of a share less than one unit or fractional
share shall be paid in cash in place of transmittal of any relevant certificate.
2. When a stock split or stock consolidation occurs with respect to the
Lending Stock during the Lending Period, the amount of stock after the stock
split or consolidation shall constitute the Lending Quantity under the
Individual Transaction; provided, however, that if a share less than one unit or
fractional share arises with respect to new shares, the value of a share less
than one unit or fractional share shall be paid in cash in place of transmittal
of any relevant certificate.
3. If the issuer of the Lending Stock is subject to a merger during the
Lending Period, and new certificates of the newly established issuer or existing
issuer are delivered, such delivered certificates shall constitute the
certificates for the Subject Stock under the Individual Transaction; provided,
however, that if a share less than one unit or fractional share arises with
respect to new shares, the value of a share less than one unit or fractional
share shall be paid in cash in place of transmittal of any relevant certificate.
4. In addition to any of the cases set out in the preceding paragraphs, if the
issuer requests the submission of its share certificates and delivers new share
certificates, then such new share certificates shall constitute the share
certificates for the Lending Stock under the initial Individual Transaction.
5. When any amendment in the Lending Quantity and the Subject Stock of an
Individual Transaction is made pursuant to any of the preceding paragraphs, the
▇▇▇▇-to-Market shall be made based on the new Lending Quantity and the Subject
Stock after the date of such amendment.
6. The value of new shares constituting less than a unit or fractional stock
shall be calculated in reference to the market price per unit or share, and
shall be agreed upon between the parties hereto in advance.
ARTICLE 8. SPECIAL PROVISIONS OF SIMULTANEOUS PERFORMANCE
Notwithstanding the provisions of Article 9, Paragraph 1 of the Basic
Agreement, with respect to the Individual Transaction for Sale, the Lender shall
return the Margin to the Borrower immediately after the Lending Stock is
returned by the Borrower.
ARTICLE 9. TERMINATION OF LISTING OF THE LENDING STOCK
When listing on a stock exchange of the Lending Stock is terminated, the
Borrower may pay a corresponding cash amount instead of returning any relevant
Lending Stock on the Settlement Date of the relevant Individual Transaction (or
the date of return of the stock certificates if they are to be returned prior to
the expiration of the Lending Period pursuant to Article 8 of the Basic
Agreement). In such case, Party A and Party B shall determine the relevant price
upon mutual agreement.
ARTICLE 10. LIQUIDATION DUE TO TERMINATION
1. Notwithstanding the provisions of Article 11, Paragraph 1 of the Basic
Agreement, payment from the Defaulting Party to the Non-Defaulting Party shall
be made not later than ten (10) Business Days from the termination date.
2. The Current Price of the Lending Stock set out in Article 11, Paragraph 1
of the Basic Agreement shall be calculated in accordance with the following
categories:
(i) Listed stock: Closing price of any relevant stock on a securities
exchange at which such stock is principally traded on
the Business Day immediately preceding the termination
date of the relevant Individual Transaction (if
5
no closing price is available, it shall be the latest
quotation for such day, and if neither the closing price
nor the latest quotation is available on such date, it
shall be the latest closing price or latest quotation
available prior to such date; provided, however, that if
both the closing price and the latest quotation are
available on the same day, the closing price shall be
applicable);
(ii) Stock other than those set out in (i) above:
Reasonable and fair price or quotation.
3. Any damages referred to in Article 11, Paragraph 2 of the Basic Agreement
shall include: (1) if the Non-Defaulting Party is the Borrower, the difference
between the proceeds from disposal of the Lending Stock and the Current Price
thereof when a the Non-Defaulting Party, after the termination of the Individual
Contracts, disposes of such stock which the Non-Defaulting Party would be
obligated to return, if the provisions in Article 11, Paragraph 1 of the Basic
Agreement did not exist, after deducting any costs for such disposal; and (2) if
the Non-Defaulting Party is the Lender, the surplus of the Current Price of the
Lending Stock as set out in the preceding paragraph beyond the money spent for
acquisition of the stock, such as the purchase amount, interest on funds for
such amount and transaction fees, of the same quantity and the same issuer as
the Lending Stock of the Defaulting Party who would be liable to return the
Lending Stock if the provisions of Article 11, Paragraph 1 did not exist
(whether the Non-Defaulting party is notified or not).
4. If any event set out in each Item of Article 10 of the Basic Agreement
occurs under the Individual Contract prior to the delivery of the share
certificates or deposit of the Margin on any Execution Date, and such Individual
Contract is terminated pursuant to Article 10 of the Basic Agreement, then any
stock certificate or Margin not delivered or deposited under the Individual
Contract shall be excluded from the calculation under Article 11, Paragraph 1 of
the Basic Agreement. This paragraph shall not prevent an application of Article
11, Paragraph 2 of the Basic Agreement.
5. When the Current Price, the Lending Fee or damages for delayed payment and
others referred to in Article 11, Paragraph 1 of the Basic Agreement is
denominated in any currency other than Japanese Yen, such amount shall be
converted into Japanese Yen at an exchange rate reasonably designated by the
Non-Defaulting Party.
ARTICLE 11. CURRENT PRICE IN ARTICLE 12 OF THE BASIC AGREEMENT
The Current Price set out in Article 12 of the Basic Agreement shall be
calculated in accordance with the following categories:
(i) Listed stock: Closing price of any relevant stock on a securities
exchange at which such stock is principally traded on
the Business Day immediately preceding the Evaluation
Date, where "Evaluation Date" means the relevant
"Execution Date," relevant "Settlement Date," the
"delivery date" and the "return date" set out in Article
12, Paragraph 1 of the Basic Agreement and the "return
or delivery due date" and the "payment date of
compensation for damages" set out in Article 12,
Paragraph 3 thereof (if no closing price is available,
it shall be the latest quotation for such day, and if
neither the closing price nor the latest quotation is
available on such date, it shall be the latest closing
price or latest quotation available prior to such date;
Provided, however, that if both the closing price and
the latest quotation are available on the same day,
the closing price shall prevail);
(ii) Stock other than those set out in (i) above:
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Reasonable and fair price or quotation.
ARTICLE 12. NETTING CALCULATION
If any liability or claim under Article 13, Paragraph 1 of the Basic
Agreement is denominated in any currency other than Japanese Yen, it shall be
converted into Yen at an exchange rate reasonably designated by the
Non-Defaulting Party.
ARTICLE 13. (OPEN-END TRANSACTION)
1. Notice to designate the Settlement Date shall be given as follows:
(1) Notice to designate any Settlement Date by the Lender shall be given
not later than four (4) Business Days prior to the designated
Settlement Date.
(2) Notice to designate any Settlement Date by the Borrower shall be given
not later than two (2) Business Days prior to the designated
Settlement Date.
(3) Notice to designate the Settlement Date shall be given by means of
telephone and facsimile transmission addressed to the number set out
in Article 19 of the Basic Agreement or such other numbers as the
parties hereto separately agree. Such notice shall include
specification of the Open-End Transaction of which the Settlement Date
is to be designated and Settlement Date thereof.
2. Unless otherwise separately agreed, the provisions of Article 2 hereof
shall apply to the calculation method and the payment date of the Lending Fee
and the provisions of Article 4 hereof shall apply to the calculation method and
the payment date of the Interest.
IN WITNESS WHEREOF, the parties shall cause this Memorandum to be executed
in duplicate and retain one copy each, after their representatives or
attorneys-in-fact affix their respective names and seals hereunto.
Dated August 25, 2005
The Party A: ▇▇▇▇▇▇▇▇▇ ▇▇▇
Director
Son Asset Management
3rd Floor, Yutaka ▇▇. ▇ ▇▇▇▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
The Party B: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Representative in Japan
Deutsche Securities Limited, Tokyo Branch
Sanno Park Tower,
▇▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
7
[Translation]
INDIVIDUAL CONTRACT CONCERNING STOCK LENDING TRANSACTIONS
THIS INDIVIDUAL CONTRACT CONCERNING STOCK LENDING TRANSACTIONS (the
"Individual Contract") is made and entered into by and between Son Asset
Management Yugen Kaisha ("Party A") and Deutsche Securities Limited, Tokyo
Branch ("Party B") in connection with the stock lending transaction (the
"Transaction") as set forth below subject to the application of the provisions
of the Basic Agreement Concerning Stock Lending Transactions between Party A and
Party B, dated August 25, 2005 (the "Basic Agreement"), and the Memorandum
Annexed to Basic Agreement for Stock Lending Transactions (the "Attached
Memorandum") executed in connection with the Basic Agreement.
Unless otherwise specifically provided, terms used herein shall bear the
same meanings as defined in the Basic Agreement and the Attached Memorandum.
The Special Conditions set forth in Attachment 2 as well as the General
Terms and Conditions set forth in Attachment 1 shall apply to the Transaction.
Except as provided for in the Basic Agreement and the Attached Memorandum, terms
used in the Special Conditions shall bear the same meanings as defined in the
General Terms and Conditions.
IN WITNESS WHEREOF, Party A and Party B shall cause this Individual
Contract to be signed and sealed in duplicate and each party shall retain one
copy each.
August 26, 2005
Party A: ▇▇▇▇▇▇▇▇▇ ▇▇▇
Director
Son Asset Management
3rd Floor, Yutaka ▇▇. ▇ ▇▇▇▇▇▇▇▇
▇-▇-▇ ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
Party B: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Representative in Japan
Deutsche Securities Limited, Tokyo Branch
Sanno Park Tower,
▇▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
1
Attachment 1
GENERAL TERMS AND CONDITIONS
Lender (Party A) Son Asset Management Yugen Kaisha
Borrower (Party B) Deutsche Securities Limited, Tokyo Branch
Subject Stock, Initial Lending As set forth below
Quantity, Initial Current Price
and Initial Total Current Price
---------------------------------------------------------------------------------------------------
Initial Lending Initial Total Current
Subject Stock Code Quantity Initial Current Price Price
---------------------------------------------------------------------------------------------------
1 Softbank Corp. 9984 18,000,000 shares 5,420 yen 97,560,000,000 yen
---------------------------------------------------------------------------------------------------
Total ----- ----- ----- ----- 97,560,000,000 yen
---------------------------------------------------------------------------------------------------
Execution Date August 26, 2005
Settlement Date August 24, 2007 (or, if such date is not a
Business Day, the preceding Business Day)
Lending Fee Rate 0.05% (on the basis of the number of the
actual days assuming that there are 360 days
per year)
Margin (Initial) 42,000,000,000 yen
Margin Interest Rate
(1) Margin Fixed Interest 3.50% (on the basis of the number of the
Rate actual days assuming that there are 360 days
per year)
(2) Margin Floating Interest Base rate + 0.25% (on the basis of the number
Rate of the actual days assuming that there are
365 days per year)
Base Rate Three-Month euro yen LIBOR to be published by
the British Bankers' Association at 11:00
a.m. (London time) on the first date (or, if
such date is not a bank Business Day in
London or Tokyo, the preceding bank Business
Day) of each calculation period (as defined
in Article 1, Paragraph 9 of the Attached
Memorandum) that includes the Execution Date
Payment Schedule of Fixed As set forth below (if the payment date
Interest described below is not a Business Day, the
preceding Business Day)
-----------------------------------------------------------------------------------------------
Payment Date Calculation Period of Interest Subject to Payment
-----------------------------------------------------------------------------------------------
1 Execution Date From the Execution Date to the last day of February 2006
-----------------------------------------------------------------------------------------------
2 March 10, 2006 From the first day of March 2006 to the last day of August 2006
-----------------------------------------------------------------------------------------------
3 September 10, 2006 From the first day of September 2006 to the last day of February 2007
-----------------------------------------------------------------------------------------------
4 March 10, 2007 From the first day of March 2006 to the Settlement Date
-----------------------------------------------------------------------------------------------
Maximum Margin Amount Amount to be calculated in accordance with
the following formula (where "Current Price
Decline Notice Level" means the Current Price
Decline Notice First Level and the Current
Price Decline Notice Second Level,
collectively; the Maximum Margin Amount is
calculated by using the
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Current Price Decline Notice First Level as
the Current Price Decline Notice Level and is
referred to as the "First Maximum Margin
Amount"; and the Maximum Margin Amount is
calculated by using the Current Price Decline
Notice Second Level as the Current Price
Decline Notice Level and referred to as the
"Second Maximum Margin Amount." The First
Maximum Margin Amount and the Second Maximum
Margin Amount shall be referred to
collectively as the "Maximum Margin Amount"):
Maximum Margin Aggregate of Total Basic Margin Rate
Amount = Current Price of X ----------------------------------
Lending Stock Current Price Decline Notice Level
Minimum Margin Amount Amount to be calculated in accordance with
the following formula:
Minimum Margin Aggregate of Total Basic Margin Rate
Amount = Current Price of X ---------------------------------------
Lending Stock Current Price Increase Adjustment Level
Current Price Decline Notice 90%
First Level
Current Price Decline Notice 80%
Second Level
Current Price Increase 120%
Adjustment Level
Maximum Lending Quantity 30,000,000 shares
Additional Unit of Lending 500,000 shares
Quantity
Initial Basic Margin Rate 50%
Review Date of Basic Margin Each corresponding day of the Execution Date
Rate of each month (or, if such date is not a
Business Day, the preceding Business Day)
First Reviewed Basic Margin 85%
Rate
Second Reviewed Basic Margin 70%
Rate
Last One-Month Average With respect to each Review Date of the Basic
Trading Volume Margin Rate, the average value (rounded to
the nearest whole number) of trading volume
(number of shares) in trading session of the
Subject Stock on the Tokyo Stock Exchange on
each trading day for the period from and
including the day that is One-Month prior to
such Review Date of the Basic Margin Rate to
and including the second Business Day prior
to such Review Date of the Basic Margin Rate
Last Three-Month Average With respect to each Review Date of the Basic
Trading Volume Margin Rate, the average value (rounded to
the nearest whole number) of trading volume
(number
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of shares) in trading session of the Subject
Stock on the Tokyo Stock Exchange on each
trading day for the period from and including
the day that is Three-Months prior to such
Review Date of the Basic Margin Rate to and
including the second Business Day prior to
such Review Date of the Basic Margin Rate
First Base of One-Month 6,000,000,000 yen
Average Trading Amount
Second Base of One-Month 5,000,000,000 yen
Average Trading Amount
First Base of Three-Month 7,500,000,000 yen
Average Trading Amount
Second Base of Three-Month 6,000,000,000 yen
Average Trading Amount
Minimum Stock Price 2,000 yen
Damage Rate for Early 3.50%
Termination
Transaction Fees 420,000,000 yen (= Amount of the Margin
(Initial) x 1.00%)
Transaction Fee Payment Date Execution Date
4
Attachment 2
SPECIAL CONDITIONS
ARTICLE 1. TRANSACTION FEES
The Lender shall pay the Transaction Fees to the Borrower on the
Transaction Fee Payment Date. The Transaction Fees shall be deemed to be paid by
the Lender to the Borrower when the Borrower pays to the Lender the amount of
the Margin less the Transaction Fees and consumption taxes imposed thereon upon
payment of the Margin by the Borrower to the Lender. The Borrower shall not be
required to return all or part of the Transaction Fees to the Lender at any time
(including, but not limited to, the case where the Transaction is terminated
prior to the expiration of the Lending Period).
ARTICLE 2. SPECIAL CONDITIONS OF RETURN OF STOCK
1. Notwithstanding each of the provisions as set forth in Article 1, Item (1)
and Article 3, Paragraph 2 of the Basic Agreement, the Borrower shall, with
respect to the Transaction, return to the Lender on the Settlement Date the
stock certificates (the actual certificates) that has been lent in accordance
with Article 3, Paragraph 1 of Basic Agreement. The term, "Lending Stock", as
set out in the Basic Agreement and the Attached Memorandum means the stock
described above (the "Lent Stock").
2. Except in the case of termination of this Individual Contract, the Borrower
shall not request the issuing company to register a share transfer of the Lent
Stock and shall not sell the Lent Stock. Further, except in the case of the
termination of this Individual Contract, if the Borrower lends the Lent Stock or
offers the Lent Stock as collateral, the Borrower shall cause the party who
borrows the Lent Stock or accepts the Lent Stock as collateral to be required to
do all of the matters described in (1) through (3) below:
(1) refrain from requesting an issuing company to register a share
transfer of the Lent Stock;
(2) refrain from selling the Lent Stock; and
(3) upon lending the Lent Stock or offering the Lent Stock as collateral
to another party, to cause the party who borrows the Lent Stock or
accepts the Lent Stock as collateral to be required to do all of the
matters described in (1) through (3) of this paragraph.
ARTICLE 3. SPECIAL CONDITIONS OF PAYMENT METHOD AND PAYMENT DATE OF THE LENDING
FEE
1. The formula of the "Lending Fee on calculation date" as set out in Article
2, Paragraph 1 of the Attached Memorandum shall, with respect to the
Transaction, be amended and apply as follows: "Lending Fee on calculation date =
Total Current Price x Lending Fee Rate / 360 (rounding to the nearest
hundredth)", where the "Total Current Price" indicated in Article 2, Paragraph 1
of the Attached Memorandum means the Initial Total Current Price, and remaining
unchanged for the Lending Period regardless of the increase, etc. of the Lending
Quantity under Article 7 of the Special Conditions.
2. Notwithstanding the provisions of Article 2, Paragraph 2 of the Attached
Memorandum, the Lending Fee for the last calculation period shall be paid on the
Settlement Date in a manner set forth in Article 12 of the Special Conditions.
ARTICLE 4. SPECIAL CONDITIONS OF DELIVERY OF STOCK
Notwithstanding the provisions of Article 4, Paragraph 1 of the Basic
Agreement, the lending and return of the stock under the Basic Agreement shall
be performed by physical delivery of the relevant certificates.
5
ARTICLE 5. SPECIAL CONDITIONS OF CALCULATION METHOD AND PAYMENT DATE OF THE
INTEREST
1. The formula of the "Interest rate on calculation date" as set out in
Article 4, Paragraph 1 of the Attached Memorandum shall, with respect to the
Transaction, be amended and apply as follows: "Interest rate on calculation date
= Amount of Margin x Margin Interest Rate / 360 (rounding to the nearest
hundredth)", with the "amount of Margin" indicated in the formula meaning the
amount of the initial Margin, and remaining unchanged for the Lending Period
regardless of the return of the Margin under Article 7 of the Special
Conditions.
For the Margin Interest Rate indicated in the above formula, the Interest
calculated by using the Margin Fixed Interest Rate as the Margin Interest Rate
(the "Fixed Interest") and the Interest calculated by using the Margin Floating
Interest Rate as the Margin Interest Rate (the "Floating Interest") shall be
calculated and shall be paid in a manner as set forth in the following
paragraphs.
2. The Fixed Interest shall be paid in accordance with the Payment Schedule of
Fixed Interest; provided, however, that upon the first payment of the Interest,
to be performed on the Execution Date, the Interest shall be deemed to be paid
by the Lender to the Borrower when the Borrower pays to the Lender the amount of
the Margin less the amount of the Fixed Interest upon payment of the Margin by
the Borrower to the Lender.
3. The Floating Interest shall be paid in accordance with Article 4, Paragraph
2 of the Attached Memorandum; provided, however, that the Interest for the last
calculation period shall be paid on the Settlement Date in a manner as set forth
in Article 12 of the Special Conditions.
ARTICLE 6. SPECIAL CONDITIONS OF ADDITIONAL DEPOSIT OF DEFICIENT MARGIN
Any provisions of Article 6, Paragraph 1 of the Basic Agreement and Article
5, Paragraph 2 of the Attached Memorandum shall not apply to the Transaction.
ARTICLE 7. SPECIAL CONDITIONS OF RETURN OF SURPLUS MARGIN AND ADDITIONAL
LENDING OF STOCK
1. Notwithstanding the provisions of Article 5, Paragraph 3 of the Attached
Memorandum, if the outstanding Margin amount of the Transaction exceeds the
Maximum Margin Amount calculated in accordance with Article 5, Paragraph 1 of
the Attached Memorandum, the surplus Margin shall be handled in accordance with
the provisions of each item set out below according to the Maximum Stock Margin
Amount (as defined below), the outstanding Lending Quantity (meaning, in this
paragraph, the outstanding Lending Quantity before additional lending of the
stock pursuant to this Article), and the outstanding Margin amount (meaning, in
this paragraph, the outstanding Margin amount before return of the surplus
Margin pursuant to this Article).
In this Article, the "Maximum Stock Margin Amount" means the amount
calculated in accordance with the following formula:
Maximum Stock Margin Amount = Maximum Lending Quantity x Current Price of
Lending Stock x Basic Margin Rate (rounding
down to the nearest whole Yen)
(1) Where the outstanding Lending Quantity falls below the Maximum Lending
Quantity:
(a) If the Maximum Stock Margin Amount is equal to or greater
than the outstanding Margin amount, then the Borrower may request
that the Lender lend to the Borrower the stock of the Additional
Lending Quantity (as defined below) for the Subject Stock by the
Request Due Date (as defined below). Upon such request, the
Lender shall lend to the Borrower such stock by the Performance
Due Date (as defined below). The stock lent as set forth above
shall constitute the Lending Stock under the Transaction, and the
Lending Quantity of the Transaction shall increase by the amount
of the Additional
6
Lending Quantity.
In this item, the "Additional Lending Quantity" means a multiple
of the Additional Unit of Lending Quantity and the minimum amount
that satisfies the following formula:
(Additional Lending Quantity + Outstanding Lending Quantity) x
Current Price of Lending Stock x Basic Margin Rate > or =
Outstanding Margin amount
(b) If the Maximum Stock Margin Amount is less than the outstanding
Margin amount, then the Borrower may, by the Request Due Date,
request that the Lender (i) lend to the Borrower the stock for
the Subject Stock in an amount of the Maximum Lending Quantity
less the outstanding Lending Quantity, and (ii) return to the
Borrower as the surplus Margin the amount equal to the
outstanding Margin amount less the Maximum Stock Margin Amount.
Upon such request, the Lender shall lend such stock as set forth
in (i) above and return such surplus Margin as set forth in (ii)
above by the Performance Due Date. The stock lent as set forth
above shall constitute the Lending Stock under the Transaction,
and the Lending Quantity of the Transaction shall become the
Maximum Lending Quantity.
(2) Where the outstanding Lending Quantity equals the Maximum Lending
Quantity:
The Borrower may request that the Lender return to the Borrower as the
surplus Margin the amount equal to the outstanding Margin Amount less
the Basic Margin Amount by the Request Due Date. Upon such request,
the Lender shall return such surplus Margin to the Borrower by the
Performance Due Date.
2. If the Lender fails to perform a lending or return as requested by the
Borrower in accordance with the preceding paragraph by the Performance Due Date,
this Individual Contract shall be terminated at the time of the Performance Due
Date, and each of the provisions of Article 11 of the Basic Agreement and
Article 10 of the Attached Memorandum shall apply. Provided, however, that in
such case, the Borrower may assert a claim against the Lender for damages as set
forth in Article 11, Paragraph 2 of the Basic Agreement up to the amount payable
to the Lender under Article 11, Paragraph 1 of the Basic Agreement.
3. In this Article, the Request Due Date and the Performance Due Date have the
following meanings:
(1) Where the outstanding Margin amount of the Transaction exceeds the
First Maximum Margin Amount:
(a) Request Due Date: Noon on the ▇▇▇▇-to-Market Date
(b) Performance Due Date: 3:00 p.m. on the fourth Business Day from
the ▇▇▇▇-to-Market Date
(2) Where the outstanding Margin amount of the Transaction exceeds the
Second Maximum Margin Amount,
(a) Request Due Date: 6:00 p.m. on the Business Day prior to the
▇▇▇▇-to-Market Date
(b) Performance Due Date: 3:00 p.m. on the ▇▇▇▇-to-Market Date
If the events set out in Items (1) and (2) of this paragraph occur at the
same time, Item (2) shall apply and Item (1) shall not apply. After the Borrower
makes a request as set forth in Paragraph 1 of this Article when the event as
set forth in Item (1) occurs, if Item (2) then occurs before the Lender performs
a lending or return (or both a lending and return), whereby the Borrower makes a
subsequent request as set
7
forth in Paragraph 1 of this Article, then the obligation of lending and return
by the Lender upon the request made under Item (1) shall be extinguished, and
only the obligation of lending and return by the Lender upon the request made
under Item (2) shall survive.
4. If the outstanding Lending Quantity exceeds the Initial Lending Quantity,
and if the outstanding Margin amount of the Transaction falls below the Minimum
Margin Amount calculated in accordance with Article 5, Paragraph 1 of the
Attached Memorandum, the Borrower shall return the Lending Stock of the Return
Quantity (as defined below) to the Lender by 3:00 p.m. on the fourth Business
Day from the ▇▇▇▇-to-Market Date.
In this paragraph, the "Return Quantity" means a multiple of the Additional
Unit of Lending Quantity and the maximum amount that satisfies the following
formula; provided, however, that if such amount exceeds the Accumulated
Additional Lending Quantity (as defined below), the Return Quantity shall be the
Accumulated Additional Lending Quantity:
(Outstanding Lending Quantity - Return Quantity) x Current Price of Lending
Stock x Basic Margin Rate > or = Outstanding Margin amount
In this paragraph, the "Accumulated Additional Lending Quantity" means the
amount calculated in accordance with the following formula:
Accumulated Additional Lending Quantity = Outstanding Lending Quantity -
Initial Lending Quantity
ARTICLE 8. NON-APPLICATION OF THE ▇▇▇▇-TO-MARKET
The ▇▇▇▇-to-Market as set forth in Article 5, Paragraph 5 of the Attached
Memorandum shall not be made in relation to the Transaction.
ARTICLE 9. REVIEW OF THE BASIC MARGIN RATE
1. The Basic Margin Rate of the Transaction shall be the Initial Basic Margin
Rate on the Execution Date.
2. The Basic Margin Rate of the Transaction shall be reviewed on each Review
Date of Basic Margin Rate. After each Review Date of Basic Margin Rate, the
figures described in the following items shall apply in accordance with the Last
One-Month Average Trading Amount and the Last Three-Month Average Trading
Amount.
In this paragraph, the "Last One-Month Average Trading Amount" means the
amount obtained by multiplying the Last One-Month Average Trading Volume by the
Current Price of the Lending Stock, and the "Last Three-Month Average Trading
Amount" means the amount obtained by multiplying the Last Three-Month Average
Trading Volume by the Current Price of the Lending Stock.
The "Current Price of the Lending Stock" used for the calculation of the
"Last One-Month Average Trading Amount" and "Last Three-Month Average Trading
Amount" means the closing price (if no closing price is available, it shall be
the latest quotation for such date, and if neither the closing price nor the
latest quotation is available on such date, it shall be the latest closing price
or latest quotation available prior to such date; provided, however, that if
both the closing price and the latest quotation are available on the same day,
the closing price shall be applicable) on the securities exchange where the
stock is principally traded on the second Business Day prior to the relevant
Review Date of Basic Margin Rate.
(1) If the formulae described in (a) and (b) below are satisfied, the
Basic Margin Rate after the Review Date of Basic Margin Rate shall be
the Initial Basic Margin Rate (the "Level 1"):
8
(a) Last One-Month Average Trading Amount > or = First Base of
One-Month Average Trading Amount
(b) Last Three-Month Average Trading Amount > or = First Base of
Three-Month Average Trading Amount
(2) If either of the formulae described in (a) or (b) below is satisfied
(except for the case where Item (3) of this paragraph applies), the
Basic Margin Rate after the Review Date of Basic Margin Rate shall be
the figure obtained by multiplying the Initial Basic Margin Rate by
the First Reviewed Basic Margin Rate (the "Level 2"):
(a) Last One-Month Average Trading Amount < First Base of One-Month
Average Trading Amount
(b) Last Three-Month Average Trading Amount < First Base of
Three-Month Average Trading Amount
(3) If either of the formulae described in (a) or (b) below is satisfied,
the Basic Margin Rate after the Review Date of Basic Margin Rate shall
be the figure obtained by multiplying the Initial Basic Margin Rate by
the Second Reviewed Basic Margin Rate (the "Level 3"):
(a) Last One-Month Average Trading Amount < Second Base of
One-Month Average Trading Amount
(b) Last Three-Month Average Trading Amount < Second Base of
Three-Month Average Trading Amount
(4) Notwithstanding each item described above, if the Basic Margin Rate is
the Level 2 or the Level 3 as a result of the review of the Basic
Margin Rate, as long as both of the formulae described in (a) and (b)
below are satisfied, the Basic Margin Rate after the Review Date of
Basic Margin Rate shall be the Level 1. Accordingly, if the Basic
Margin Rate is Level 1, each item described above shall apply
thereafter. If the Basic Margin Rate is ▇▇▇▇▇ ▇, except for
satisfaction of both of the formulae described in (a) and (b) below,
the Basic Margin Rate shall remain unchanged as Level 3. Even if
either of the formulae described in (a) or (b) of Item (2) of this
paragraph is satisfied, the Basic Margin Rate shall not be Level 2.
(a) Last One-Month Average Trading Amount > or = First Base of
One-Month Average Trading Amount x 110%
(b) Last Three-Month Average Trading Amount > or = First Base of
Three-Month Average Trading Amount x 110%
3. In the case as provided for in each of the provisions of Article 7,
Paragraphs 1 through 4 of the Attached Memorandum, if the Borrower reasonably
determines that the figures used for review of the Basic Margin Rate in
accordance with this Article are required to be adjusted, the preceding
paragraph shall apply after any of the Last One-Month Average Trading Volume,
the Last Three-Month Average Trading Volume, the First Base of One-Month Average
Trading Amount, the Second Base of One-Month Average Trading Amount, the First
Base of Three-Month Average Trading Amount, the Second Base of Three-Month
Average Trading Amount are amended as reasonably determined by the Borrower.
4. The Borrower shall notify the Lender of the revised Basic Margin Rate
determined in accordance with the preceding two paragraphs by 3:00 p.m. on the
Business Day prior to the Review Date of the Basic Margin Rate.
9
5. The reviewed revised Basic Margin Rate under this Article shall apply to
the ▇▇▇▇-to-Market to be performed in accordance with Article 7 of the Special
Conditions on the ▇▇▇▇-to-Market Date after the Review Date of the Basic Margin
Rate.
ARTICLE 10. SPECIAL CONDITIONS OF TREATMENT OF WARRANTS AND STOCK SPLIT, ETC.
1. Notwithstanding the provisions of Article 7 of the Attached Memorandum, in
the case as provided for in each of the provisions of Article 7, Paragraphs 1
through 4 of the Attached Memorandum, if the Borrower reasonably determines that
the Subject Stock, Lending Quantity and other general conditions of the
Transaction are required to be adjusted, the Borrower shall notify the Lender of
the adjusted general conditions as reasonably determined by the Borrower and the
date (the "Condition Adjustment Date") on which such adjustment becomes
effective by the fourth Business Day prior to the Condition Adjustment Date.
2. The Lender shall notify the Borrower by the third Business Day prior to the
Condition Adjustment Date if it agrees to the adjustment of the general
conditions as set forth in the preceding paragraph. In such case, the Lender and
the Borrower shall perform additional lending or return of the stock, and return
or additional deposits of the Margin as required for such adjustment of the
general conditions by the Condition Adjustment Date.
3. If the Lender fails to notify the Borrower of its agreement to adjust the
general conditions as set forth in Paragraph 1 of this Article by the third
Business Day prior to the Condition Adjustment Date, the Transaction shall be
terminated on the Business Day (the "Transaction Termination Date") immediately
prior to the Condition Adjustment Date. In such case, the Lender shall, in
addition to the outstanding Margin amount, pay to the Borrower the amount equal
to (i) all of the obligations owed to the Borrower (including, but not limited
to, damages for delayed payment) such as the Interest to be calculated in
accordance with Article 8 of the Basic Agreement and the Damages for Early
Termination as provided for in Article 11, Paragraph 3 of the Special Conditions
less (ii) the Lending Fee to be calculated in accordance with Article 8 of the
Basic Agreement (and, if the Interest, if any, to be calculated in accordance
with Article 8, Paragraph 3 of the Basic Agreement is returned, such Interest)
by the Transaction Termination Date. The Borrower shall return the Lending Stock
to the Lender immediately after confirming the receipt of such amount on the
Transaction Termination Date.
ARTICLE 11. SPECIAL CONDITIONS OF RETURN OF THE STOCK PRIOR TO EXPIRATION OF THE
LENDING PERIOD AND DAMAGES FOR EARLY TERMINATION
1. The provisions of Article 8 of the Basic Agreement shall apply to the
Transaction. Provided, however, the return of the Lending Stock under Article 8
of the Basic Agreement shall be limited to the return of all of the Lending
Stock. The return of the Lending Stock, with the Borrower giving notice to the
Lender, shall be performed only on a return date that is one year after the
Execution Date (or, if such date is not a Business Day, the preceding Business
Day). In such case, notwithstanding the provisions of Article 8, Paragraph 5 of
the Basic Agreement, the Borrower shall be required to give notice to the Lender
on the day that is one-month prior to the return date.
2. Upon return of the Lending Stock prior to expiration of the Lending Period
pursuant to the preceding paragraph, the Lender shall pay to the Borrower, in
addition to the outstanding Margin amount, the amount equal to (i) all of the
obligations owed to the Borrower (including, but not limited to, damages for
delayed payment), such as the Interest as set forth in Article 8, Paragraph 3 of
the Basic Agreement and the Damages for Early Termination as set forth in the
following paragraph, less (ii) the Lending Fee as set forth in Article 8,
Paragraph 2 of the Basic Agreement (and, if the Interest, if any, as set forth
in Article 8, Paragraph 3 of the Basic Agreement is returned, such Interest) by
the return date. The Borrower shall return the Lending Stock to the Lender
immediately after confirming the receipt of such amount on the return date.
3. The Lender shall pay to the Borrower the Damages for Early Termination in
addition to the Interest, damages for delayed payment and damages under the
Basic Agreement, if:
10
(1) all of the Lending Stock is returned prior to the expiration of the
Lending Period, with the Lender giving notice to the Borrower in
accordance with Article 8 of the Basic Agreement (in this case, the
termination record date is the return date);
(2) this Individual Contract is terminated when any of the events set
forth in Article 10, Items (1) through (11) of the Basic Agreement
occurs to the Lender (in this case, the termination record date is the
termination date);
(3) this Individual Contract is terminated in accordance with Article 7 of
the Special Conditions (in this case, the termination record date is
the termination date);
(4) the Transaction is terminated in accordance with Article 10 of the
Special Conditions (in this case, the termination record date is the
Transaction Termination Date); or
(5) the Transaction is terminated in accordance with Article 13 of the
Special Conditions (in this case, the termination record date is the
return date).
The amount of the Damages for Early Termination shall be the amount
calculated in accordance with the following formula according to the termination
record date (which means the date as set forth in each item described above);
provided, however, that if the termination record date falls on the date that is
one year after the Execution Date (or, if such date is not a Business Day, the
preceding Business Day), the Damages for Early Termination shall not arise.
Damages for Margin Damage Rate Number of remaining
Early = amount X for Early X record days
Termination Termination -------------------
360
The "Margin amount" indicated in the above formula means the amount of the
initial Margin, and remains unchanged regardless of return of the Margin under
Article 7 of the Special Conditions.
The "number of remaining record days" indicated in the above formula means,
if the termination record date falls on or before a date immediately prior to
the date that is one year after the Execution Date, the number of days for the
period from and including the termination record date to and including the date
immediately prior to the date that is one year after the Execution Date, and if
the termination record date falls on or after a date immediately following the
date that is one year after he Execution Date, the number of days for the period
from and including the termination record date to and including the Settlement
Date.
ARTICLE 12. SPECIAL CONDITIONS OF SIMULTANEOUS PERFORMANCE
Notwithstanding the provisions of Article 9, Paragraph 1 of the Basic
Agreement, upon expiration of the Lending Period, the Lender shall, in addition
to the outstanding Margin amount, pay to the Borrower the amount equal to (i)
all of the obligations owed to the Borrower (including, but not limited to,
damages for delayed payment) such as the Interest for the last calculation
period less (ii) the Lending Fee for the last calculation period by the
Settlement Date. The Borrower shall return the Lending Stock to the Lender
immediately after confirming the receipt of such amount on the Settlement Date.
ARTICLE 13. TERMINATION OF THE TRANSACTION DUE TO DECLINE IN THE CURRENT PRICE
OF THE LENDING STOCK
1. Notwithstanding each of the provisions of the Basic Agreement and the
Attached Memorandum, if the Current Price of the Lending Stock (in this
paragraph, the price most recently published by the securities exchange where
the stock is principally traded) falls below the Minimum Stock Price, the
Transaction shall be automatically terminated.
11
2. In the case of the preceding paragraph, the Borrower may, after the
Business Day immediately following the Transaction Termination Date, request
that the Lender return the Margin by giving notice specifying that the return
date shall be after the fourth Business Day from such notice day, and the Lender
shall pay to the Borrower, in addition to the outstanding Margin amount, the
amount equal to (i) all of the obligations owed to the Borrower (including, but
not limited to, damages for delayed payment) such as the Interest to be
calculated in accordance with Article 8 of the Basic Agreement and the Damages
for Early Termination as provided for in Article 11, Paragraph 3 of the Special
Conditions less (ii) the Lending Fee to be calculated in accordance with Article
8 of the Basic Agreement (and, if the Interest, if any, to be calculated in
accordance with Article 8, Paragraph 3 of the Basic Agreement is returned, such
Interest) by 3:00 p.m. on the designated return date. The Borrower shall return
the Lending Stock to the Lender immediately after confirming the receipt of such
amount on the return date.
3. If, for the period from the date on which the Transaction is terminated in
accordance with Paragraph 1 of this Article to the return date, the outstanding
Margin amount of the Transaction exceeds the Second Maximum Margin Amount as a
result of the ▇▇▇▇-to-Market performed in accordance with Article 11 of the
Special Conditions, the Borrower may change the return date that is designated
in accordance with the preceding paragraph and determine such ▇▇▇▇-to-Market
Date as a return date by giving notice to the Lender by 6:00 p.m. on the
Business Day prior to such ▇▇▇▇-to-Market Date.
4. If the Borrower fails to make payment in accordance with Paragraph 2 of
this Article by 3:00 p.m. on the return date, this Individual Contract shall be
automatically terminated at such due time, and each of the provisions of Article
11 of the Basic Agreement and Article 10 of the Attached Memorandum shall apply.
Provided, however, that in such case, the Borrower may claim against the Lender
damages set out in Article 11, Paragraph 2 of the Basic Agreement up to the
amount payable to the Lender under Article 11, Paragraph 1 of the Basic
Agreement.
12
[Translation]
AMENDMENT TO INDIVIDUAL CONTRACT
CONCERNING STOCK LENDING TRANSACTIONS
THIS AMENDMENT TO INDIVIDUAL CONTRACT CONCERNING STOCK LENDING TRANSACTIONS
(this "Amendment") is made and entered into by and between Son Asset Management
Yugen Kaisha ("Party A") and Deutsche Securities Limited, Tokyo Branch ("Party
B") in order to amend the Individual Contract Concerning Stock Lending
Transactions between Party A and Party B, dated August 26, 2005 (the "Individual
Contract").
Unless otherwise specifically provided, terms used herein shall bear the
same meanings as defined in the Individual Contract.
ARTICLE 1.
1. Party A and Party B agree to amend the provisions of the Individual
Contracts set forth below in accordance with the terms and conditions as set
forth in the Attachment:
(1) "Margin Interest Rate" of the General Terms and Conditions;
(2) "Payment Schedule of Fixed Interest" of the General Terms and
Conditions;
(3) Article 5 of the Special Conditions; and
(4) Definition of "number of remaining record days" of Article 11,
Paragraph 3 of the Special Conditions.
2. The amendment of the Individual Contract pursuant to the preceding
Paragraph shall become effective as of August 26, 2005.
ARTICLE 2.
Unless explicitly set forth in this Amendment, the provisions of this
Amendment shall have no effect on the remaining provisions of the Individual
Contract or the terms and conditions of the Transaction.
IN WITNESS WHEREOF, Party A and Party B shall cause this Amendment to be
signed and sealed in duplicate and each party shall retain one copy each.
August 26, 2005
Party A: ▇▇▇▇▇▇▇▇▇ ▇▇▇, Director
3rd Floor, Yutaka ▇▇. ▇ ▇▇▇▇▇▇▇▇
▇-▇-▇, ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇
Son Asset Management Yugen Kaisha
[Seal]
Party B: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Representative in Japan
Deutsche Securities Limited, Tokyo Branch
Sanno Park Tower,
▇▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
ATTACHMENT: THE RELEVANT PROVISIONS AFTER THE AMENDMENT
(1) "MARGIN INTEREST RATE" OF THE GENERAL TERMS AND CONDITIONS.
Margin Interest Rate
(1) Margin Fixed Interest Rate 3.50% (30E/ 360 basis (Eurobond basis))
(2) Margin Floating Interest Rate Base rate + 0.25% (on the basis of the
number of the actual days assuming that
there are 360 days per year)
(2) "PAYMENT SCHEDULE OF FIXED INTEREST" OF THE GENERAL TERMS AND CONDITIONS.
Payment Schedule of Fixed As set forth below (if the payment date
Interest described below is not a Business Day,
the preceding Business Day)
---------------------------------------------------------------------------------------------------------
Payment Date Calculation Period of Interest Subject to Payment Amount of Interest
-------------------------------------------------------
First Date of the Last Date of the
Calculation Period Calculation Period
---------------------------------------------------------------------------------------------------------
1 Execution Date Execution Date February 25, 2006 735,000,000 yen
---------------------------------------------------------------------------------------------------------
2 March 10, 2006 February 26, 2006 August 25, 2006 735,000,000 yen
---------------------------------------------------------------------------------------------------------
3 September 10, 2006 August 26, 2006 February 25, 2007 735,000,000 yen
---------------------------------------------------------------------------------------------------------
4 March 10, 2007 February 26, 2007 The date immediately prior to the 735,000,000 yen
date that is two year after the
Execution Date
---------------------------------------------------------------------------------------------------------
(3) ARTICLE 5 OF THE SPECIAL CONDITIONS.
ARTICLE 5. SPECIAL CONDITIONS OF CALCULATION METHOD AND PAYMENT DATE OF THE
INTEREST
1. The Interests on the Margin shall consist of the Fixed Interest and the
Floating Interest. The Fixed Interest and the Floating Interest shall be
calculated and shall be paid in a manner as set forth in the following
paragraphs.
2. Notwithstanding the provisions of Article 1, Paragraph 9 of the Attached
Memorandum, the calculation period for the Fixed Interest shall be the period
from the first date of the calculation period to the last date of the
calculation period as set forth in the Payment Schedule of Fixed Interest.
Notwithstanding the provisions of Article 4, Paragraph 1 of the Attached
Memorandum, the Fixed Interest for each calculation period shall be calculated
in accordance with the following formula, whose results are set forth in the
Payment Schedule of Fixed Interest as amount of Interest:
Fixed Interest = Amount of Margin X Margin Fixed Interest Rate X number of days in the calculation period/360
The "Amount of Margin" indicated in the above formula means the amount of
the initial Margin, and remains unchanged regardless of return of the Margin
under Article 7 of the Special Conditions.
The "number of days in the calculation period" indicated in the above
formula shall be calculated assuming that there are 30 days per month and 360
days per year consisting of 12 months. If it is necessary to calculate the Fixed
Interest for a period shorter than a calculation period due to early termination
of the Transaction before the expiration of the Lending Period or termination of
the Individual
Contract, the accrued date of the calculation period shall be calculated
assuming that there are 30 days per month and 360 days per year consisting of 12
months.
3. The Floating Interest shall be calculated by applying the formula of the
"Interest rate on calculation date" as set out in Article 4, Paragraph 1 of the
Attached Memorandum as amended as follows: "Interest rate on calculation date =
Amount of Margin x Margin Interest Rate / 360 (rounding to the nearest
hundredth)", with the "amount of Margin" indicated in the formula meaning the
amount of the initial Margin, and remaining unchanged for the Lending Period
regardless of the return of the Margin under Article 7 of the Special
Conditions.
4. The Fixed Interest shall be paid in accordance with the Payment Schedule of
Fixed Interest; provided, however, that upon the first payment of the Interest,
to be performed on the Execution Date, the Interest shall be deemed to be paid
by the Lender to the Borrower when the Borrower pays to the Lender the amount of
the Margin less the amount of the Fixed Interest upon payment of the Margin by
the Borrower to the Lender.
5. The Floating Interest shall be paid in accordance with Article 4, Paragraph
2 of the Attached Memorandum; provided, however, that the Interest for the last
calculation period shall be paid on the Settlement Date in a manner as set forth
in Article 12 of the Special Conditions.
(4) DEFINITION OF "NUMBER OF REMAINING RECORD DAYS" OF ARTICLE 11, PARAGRAPH 3
OF THE SPECIAL CONDITIONS.
The "number of remaining record days" indicated in the above formula means,
if the termination record date falls on or before a date immediately prior to
the date that is one year after the Execution Date, the number of days for the
period from and including the termination record date to and including the date
immediately prior to the date that is one year after the Execution Date, and if
the termination record date falls on or after a date immediately following the
date that is one year after he Execution Date, the number of days for the period
from and including the termination record date to and including the date
immediately prior to the date that is two years after the Execution Date (to be
calculated assuming that there are 30 days per month and 360 days per year
consisting of 12 months).
[Translation]
MEMORANDUM CONCERNING STOCK LENDING TRANSACTIONS
THIS MEMORANDUM CONCERNING STOCK LENDING TRANSACTIONS (this "Memorandum")
is made and entered into by and among ▇▇▇▇▇▇▇▇▇ ▇▇▇ ("Party A"), Son Asset
Management Yugen Kaisha ("Party B") and Deutsche Securities Limited, Tokyo
Branch ("Party C"), as a premise to conduct the stock lending transaction (the
"Transaction") by Party B and Party C under the Basic Agreement Concerning Stock
Lending Transactions, dated August 25, 2005 (the "Basic Agreement"), the
Memorandum Annexed to Basic Agreement for Stock Lending Transactions, dated
August 25, 2005 and the Individual Contract Concerning Stock Lending
Transactions, dated August 26, 2005 (the "Individual Contract"), executed
between Party B and Party C, in order to set out the agreements among Party A,
Party B and Party C with respect to the handling of the stock of the Subject
Stock (which means common stock of Softbank Corp. (Code: 9984)) of the
Transaction that is or will be held by Party A or Party B (including the stock
held by Party A or Party B in another person's name (including fictitious name))
(the "Stock").
Unless otherwise specifically provided, terms used herein shall bear the
same meanings as defined in the Basic Agreement and the Individual Contract.
ARTICLE 1. OBLIGATIONS OF PARTY A AND PARTY B
1. If, up until termination of the Transaction, Party A and Party B perform a
Stock Collateral Transaction (as defined below) with a party other than Party C
through Party A, Party B, or the companies controlled by Party A or Party B's
affiliates (Party A, Party B, companies controlled by Party A, and Party B's
affiliates shall be referred collectively as the "Affiliates") and both of Items
(1) and (2) described below apply, Party A and Party B shall obtain prior
written approval of Party C; provided, however, that Party C shall not refuse or
withhold such approval without reasonable grounds.
(1) the total number of the Stock deposited as collateral or other
security under the Stock Collateral Transaction (in the Transaction,
the number of such Stock is 18,000,000 shares on the Execution Date,
which is the Initial Lending Quantity, and thereafter in the case of
additional lending or return, the outstanding Lending Quantity
reflecting such additional lending or return) exceeds 50,000,000
shares; and
(2) the total outstanding funds under the Stock Collateral Transaction
exceeds the lesser of (a) or (b) below:
(a) 120,000,000,000 yen; and
(b) 10% of the Total Current Price of the Subject Stock of the
Transaction.
2. Upon the occurrence of a Stock Collateral Transaction, Party A and Party B
shall give prior written notice (including by e-mail) to Party C of the details
of the Stock Collateral Transaction, whether or not required to obtain Party C's
approval pursuant to the preceding paragraph.
3. If Party A or Party B breaches its obligations under this Article, it shall
be deemed that such party has committed a breach set forth in Article 10, Item
(10) of the Basic Agreement, and the provisions of Article 10 of the Basic
Agreement and other relevant provisions shall apply.
4. In this Article, the "Stock Collateral Transaction" means a financing
transaction by the Affiliates (which means a transaction where the Affiliates
raise the funds regardless of whether in the form of loan agreement, stock
lending agreement, bonds or otherwise) where the Stock is deposited as a
collateral (regardless of whether in the form of security assignment, pledge,
lease, custody or otherwise, and including a pre-engagement agreement for a
security assignment, pledge, lease or custody, and whether the accepting party
has the right to dispose of the Stock without the depositing party's approval
subject to the occurrence of
1
certain events).
ARTICLE 2. TERM
This Memorandum and the obligations of each party under this Memorandum
shall be effective for the period from the execution date of this Memorandum to
the termination of the Transaction.
ARTICLE 3. AGREED JURISDICTION
The parties agree that the parties shall be subject to the jurisdiction of
the Tokyo District Court for any dispute arising in connection with the rights
and obligations arising out of, or in relation to, this Memorandum.
ARTICLE 4. GOVERNING LAW
This Memorandum shall be governed by the laws of Japan.
IN WITNESS WHEREOF, Party A, Party B and Party C shall cause this
Memorandum to be signed and sealed in triplicate and each party shall retain one
copy each.
August 26, 2005
Party A: ▇▇▇▇▇▇▇▇▇ ▇▇▇
▇-▇-▇-▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
Party B: ▇▇▇▇▇▇▇▇▇ ▇▇▇
Director
Son Asset Management Yugen Kaisha
3rd Floor, Yutaka ▇▇. ▇ ▇▇▇▇▇▇▇▇
▇-▇-▇, ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
Party C: ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇, Representative in Japan
Deutsche Securities Limited, Tokyo Branch
Sanno Park Tower,
▇▇-▇, ▇▇▇▇▇▇▇▇▇ ▇-▇▇▇▇▇, ▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇
[Seal]
2
[Translation]
CONFIRMATION OF EXPLANATION
CONCERNING STOCK LENDING TRANSACTIONS
August 26, 2005
To: Deutsche Securities Limited, Tokyo Branch
Address: ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇. ▇ ▇▇▇▇▇▇▇▇
▇-▇-▇, ▇▇▇▇▇▇▇▇▇▇-▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇-▇▇, ▇▇▇▇▇
Company Name: Son Asset Management Yugen Kaisha
▇▇▇▇▇▇▇▇▇ ▇▇▇, Director
[Seal]
Having received an explanation of the following matters from your company
with respect to the share lending transaction, our company shall conduct the
transaction with your company at its own discretion and responsibility:
1. Basic structure of the stock lending transaction;
2. Risks involved in the stock lending transaction;
3. Rights and obligations of shareholders under the stock lending
transaction; and
4. Treatment of taxes concerning the stock lending transaction.
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