EXHIBIT 10.3(b)
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
TERMS SHEET
1 DEFINITIONS
In this Agreement:
"Base Rate" means the floating annual rate equal to the rate of interest as
quoted to MLI determined by ▇▇▇▇▇▇▇ ▇▇▇▇▇ International Bank ("MLIB") rate
on the second Business Day before the first Business Day of each week at
which MLIB offers deposits in the relevant currency in the London inter-
bank market for a term of one week or if at any time such rate in a
currency other than Dollars, does not accurately reflect the cost to MLI of
funding the relevant Advance or other amount, the floating annual rate
certified by MLI to be equal to its cost of funding at the relevant time
(Base Rate to change when and as the applicable floating annual rate
changes)
"Business Day" means a day on which (1) Dollar deposits may be dealt in on
the London inter-bank market, (2) if the context so requires, deposits in
any other relevant currency may be dealt in on the London inter-bank
market, (3) banks are open in London and New York City and, if the context
so requires, the principal financial centre of the country of each other
relevant currency (or, in relation to ECU, those banks which operate a
clearing system in ECU will clear payments in ECU through that clearing
system), and (4) if the context so requires, the exchange or settlement
system through which Securities are to be loaned, transferred or
redelivered or Equivalent Securities are to be returned is open to settle
such transfer
"Collateral" means all Securities, including any certificates and documents
of or evidenc ing title to the same (and the claim represented thereby)
and cash balances (and the debt represented thereby) in or credited to the
Collateral Account all right, title and interest in and to which are, to
the satisfaction of MLI, subject to the security created by or pursuant to
this Agreement
"Collateral Account" means the one or more accounts, having such
designations as MLI may determine, opened or to be opened by MLI pursuant
to, or used for the purposes of, the Facilities for the Borrower with the
Custodian or any other person (including MLIB or any other member of the
▇▇▇▇▇▇▇ ▇▇▇▇▇ Group) chosen by MLI in respect of Collateral, all such
Collateral Accounts to be maintained under the complete discretion of MLI
"Custodian" means MLI in its capacity as such under the Custodian Agreement
"Custodian Agreement" means the Custodian Agreement between MLI and the
Borrower, as amended from time to time
"Dollar(s)" and "$" means lawful currency of the United States of America
"ECU" means European Currency Units, being units of account for the time
being used in the European Monetary System
"Equivalent Securities" or "Securities equivalent to" means securities
of an identical type, nominal value, description and amount to
particular Securities the subject of a Securities Loan or, as the case
may be, a utilisation under Clause 13 (including any certificates and
other documents of or evidencing title to the same). If and to the
extent that such Securities are partly paid and a call is made or have
been converted, subdivided, consolidated, redeemed, made the subject
of a takeover, merger, capitalisation issue, rights issue or similar,
the Equivalent Securities shall be as accordingly determined by MLI
"Hedging Contract" means any contract entered into by the Borrower and
designated as such by the Borrower and MLI by exchange of letters
substantially in the form set out in Schedule 1
"Letter" means the cover letter to, and forming part of, this Agreement
"▇▇▇▇▇▇▇ ▇▇▇▇▇ Group" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc. together with any
company (whether now existing or hereafter formed) of which ▇▇▇▇▇▇▇ ▇▇▇▇▇ &
Co., Inc. is or becomes a Subsidiary and all companies (whether now
existing or hereafter formed or acquired) which are Subsidiaries of ▇▇▇▇▇▇▇
▇▇▇▇▇ & Co., Inc. or any such company including, but not limited to,
▇▇▇▇▇▇▇ Lynch, Pierce, ▇▇▇▇▇▇ & ▇▇▇▇▇ Incorporated, and any partnership,
association, firm or other organisation (whether now existing or hereafter
formed or acquired) which is owned or controlled (whether directly or
indirectly and whether by the ownership of share capital, possession of
voting power, contract or otherwise) by ▇▇▇▇▇▇▇ ▇▇▇▇▇ & Co., Inc. and/or
any such company and/or one or more of their Subsidiaries including, but
not limited to, ▇▇▇▇▇▇▇ ▇▇▇▇▇ International & Co.
"Secured Liabilities" means all the Borrower's liabilities under or in
connection with this Agreement, including any Advances, Securities Loans,
FX Transactions and Guarantees (including amounts payable under Clause 5.2)
"Securities" includes all investments, as defined in the Financial Services
Act 1986 (as amended or re-enacted from time to time) and physical
commodities (or any certificates or documents of or evidencing title to any
of the same), in each case acceptable to MLI
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"Subsidiary" means at any time, in relation to a company, any other company
which is directly or indirectly controlled, or more than 50% of whose
issued or outstanding shares or stock having general voting power in
ordinary circumstances is beneficially owned directly or indirectly, by
that first company.
In this Terms Sheet, references to the "Agreement" or "this Agreement" mean
and include (1) the Letter, (2) this Terms Sheet, (3) all letters (if any)
exchanged in respect of Hedging Contracts and (4) all confirmations (if
any), all as amended and supplemented from time to time, and it is
acknowledged and agreed that all Advances and Securities Loans are made,
all FX Transactions are entered into, and all Guarantees are issued, in
reliance on the fact that this Agreement forms a single agreement between
the parties, and that the parties would not otherwise make or do any of the
foregoing.
Headings shall be ignored in construing this Agreement.
2 CREDIT FACILITY
2.1 Drawdown: Without prejudice to (A) any other requirements of MLI in
relation to any Advance, and (B) MLI's right to refuse to make an
Advance in its absolute discretion, Advances will be made as follows:
2.1.1 the Borrower may give to MLI notice satisfactory to MLI not
later than 2 p.m. (London time) on the first (in the case of a
Dollar Advance) or (in any other case) third Business Day before
the proposed date (which must itself be a Business Day) of the
relevant Advance requesting the Advance of all or part of the
unused portion of the Facilities or
2.1.2 the Borrower hereby requests and authorises MLI to make Advances
(without any further request by the Borrower) for the purposes
of financ ing the payment by the Custodian on behalf of the
Borrower pursuant to the Custodian Agreement for Securities
purchased by the Borrower, to reimburse MLI or, as the case may
be, MLIB in accordance with Clause 5.2 for any payment which has
been made by it pursuant to a Guarantee, and for such other
purposes as may be agreed by the Borrower and MLI from time to
time.
For this purpose, the unused portion of the Facilities at any date is
the amount specified in paragraph (A) of the Letter less the aggregate
Dollar equivalent (as determined by MLI as at that date) of all
outstanding Advances.
2.2 Repayment: The Borrower may, if it gives MLI not less than one
Business Day's notice (in the case of a Dollar Advance) or (in any
other case) three Business
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Days' notice (which shall be irrevocable) repay any Advance at any
time, except that any Advance which has a fixed Interest Period shall
be repaid (and shall, subject as otherwise provided in this Agreement,
only be repaid) on the last day of that fixed Interest Period. Any
such repayment must be accompanied by interest accrued on the amount
repaid.
In addition, the Borrower hereby requests and authorises MLI to apply
funds made available to it by the Custodian pursuant to the Custodian
Agreement in or towards repayment of any Advances (or any other amount
debited to the Collat eral Account) in the same currency, Funds so
received which cannot be so applied will be credited to the Collateral
Account.
2.3 Interest: Interest shall be calculated on the outstanding principal
amount from time of each Advance at the rate per annum equal to the
sum of the Spread specified in the Letter and Base Rate. The Borrower
shall pay the unpaid interest accrued on each Advance monthly in
arrears in the currency in which the relevant Advance is denominated.
However, if MLI and the Borrower so agree in relation to an Advance,
that Advance shall have a fixed Interest Period (and shall be repaid
accordingly) and shall bear interest at the rate agreed between MLI
and the Borrower for such Advance. The Borrower shall pay the unpaid
interest accrued on any such Advance in arrears on the last day of the
Interest Period for which it was made and in the currency in which the
relevant Advance is denominated.
3 SECURITIES LENDING FACILITY
3.1 Making: MLI shall be entitled but not bound to act on the request of
the Bor rower to make a Securities Loan to the Borrower.
A Securities Loan shall be effected by MLI delivering or crediting the
relevant Securities in accordance with the Borrower's instructions,
together with any appropriate instruments of transfer or the like.
3.2 Return: The Borrower shall return Securities equivalent to the
Securities the subject of a Securities Loan by delivering or crediting
those Equivalent Securities in accordance with MLI's instructions:
3.2.1 in accordance with the terms of the request for that Securities
Loan or
3.2.2 if earlier, upon notice from MLI of not less than the standard
settlement time for those Equivalent Securities according to
the exchange or settle-
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ment system through which the Securities the subject of the
relevant Securities Loan were originally delivered.
All returns of Equivalent Securities must be made together with
any appropriate instruments of transfer or the like, and so that
all right, title and interest in and to those Equivalent
Securities shall vest in MLI, free from all liens, charges and
encumbrances.
3.3 Interest and Dividends: Where a Securities Loan is outstanding over
an income payment date or a record date for the relevant Securities,
the Borrower shall, on the date of the payment or distribution of any
interest, dividend or other distribu tion of any kind whatsoever
(each a "Distribution") on or with respect to any Securities the
subject of a Securities Loan, or on such other date as MLI and the
Borrower may from time to time agree (the "Relevant Payment Date") pay
and deliver a sum of money or property equivalent to the same (with
any such en dorsements or assignments as shall be customary and
appropriate to effect the delivery) to MLI, irrespective of whether
the Borrower received the same. In the case of any Distribution
comprising a payment, unless agreed otherwise:
3.3.1 where and to the extent that MLI has funded a Securities Loan
with Securities borrowed by MLI under a securities loan from a
third party, the Borrower shall pay such amount and deliver
such tax vouchers as may be relevant and appropriate so as to
enable MLI (out of those payments/tax vouchers paid/delivered
by the Borrower under this Clause 3.3) to meet its own
obligations to pay amounts and/or deliver tax vouchers to the
third party in respect of those same Distributions under the
securities loan from the third party to MLI, and after taking
account of all taxes of whatever nature arising in connection
with either the payments from the Borrower to MLI under this
Clause 3.3 or the payments from MLI to the third party and
3.3.2 where and to the extent MLI has funded a Securities Loan with
Securities from MLI's own books, the Borrower shall pay to MLI
such amount and deliver such tax vouchers as may be relevant
and appropriate as shall ensure that MLI is placed in the same
after-tax position (including for these purposes and for the
avoidance of doubt any taxation arising under paragraph 4(3) of
Schedule 23A of the Income and Corporation Taxes Act 1988 and
associated provisions concerning manufactured payments, but
ignoring any taxation by reference to MLI's general profits) as
if MLI had been the Holder of the relevant Securities at all
relevant times. For the purposes of this Clause 3.3.2 "Holder"
in relation to registered securities means the person whose
name or whose nominee is shown on the relevant
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register of ownership and in relation to bearer Securities means
the bearer thereof.
3.4 Fees: The Borrower shall pay such fees in respect of Securities Loans
as shall be agreed with MLI from time to time. Such fees shall be
payable monthly in arrears.
3.5 Title: Notwithstanding the use of expressions such as "Securities
Loan", "Bor rower", "loan", "loaned", "borrowed", "return" and
"returned" which are used in relation to Securities Loans to reflect
market terminology, title to Securities the subject of a Securities
Loan shall pass to the Borrower, and the Borrower shall be obliged to
return Equivalent Securities.
3.6 Rights and Remedies: It is agreed in relation to legal proceedings
that neither party will seek specific performance of the other's
obligation to deliver, redeliver, credit or return Securities or
Equivalent Securities, but without prejudice to any other rights it
may have.
4 FOREIGN EXCHANGE FACILITY
4.1 Entry Into: MLIB shall be entitled but not bound to act on the
request of the Borrower to enter into an FX Transaction.
4.2 Payments: MLIB and the Borrower shall each make each payment to be
made by it in accordance with the terms of each FX Transaction, but
subject to the other provisions of this Agreement. Each amount
payable by MLIB shall be paid by it direct into the Collateral
Account.
5 GUARANTEE FACILITIES
5.1 Issue: Either MLI or MLIB (in this Clause 5 and Clause 7 and in
relation to a Guarantee provided by it, each an "Issuer") shall be
entitled but not bound to act on the request of the Borrower to
provide a Guarantee.
5.2 Indemnity: The Borrower hereby unconditionally and irrevocably:
5.2.1 agrees on demand to indemnify the Issuer of any Guarantee from
and against any and all actions, proceedings, costs, claims,
demands, damages, expenses, losses, charges and liabilities
which may be brought, made or preferred against the Issuer or
which the Issuer may suffer, incur or sustain in relation to or
arising out of its providing any Guarantee (including (A)
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any payment(s) which may be payable by or claimed or demanded
from the Issuer pursuant to a Guarantee, and (B) any taxes
required to be paid by the Issuer on account of which it makes
any deduction or withholding from any such payment) together
with interest on all such amounts from the date(s) on which the
same are incurred by the Issuer in accordance with Clause 8.2
5.2.2 authorises the Issuer to rely without further enquiry on
documents pre sented under any Guarantee which appear on their
face to be in compli ance with the terms and conditions of that
Guarantee (for which purpose the Issuer shall apply the same
standards and have the same protections as set out in the
Uniform Customs and Practice for Documentary Credits (1993
Revision, ICC Publication No. 500 or its subsequent revisions))
and on first claim or demand to make any payment which may or
may appear to be claimed or demanded from the Issuer in
relation to or arising out of any Guarantee without requiring
or obtaining any evidence or proof that the amount claimed or
demanded is due and payable and without any notice or reference
to or the agreement of or further authority from the Borrower
and
5.2.3 agrees that any payment which the Issuer shall make in
accordance Or purported accordance with a Guarantee shall be
binding on the Borrower and shall be accepted by the Borrower
as conclusive evidence of the Issuer's liability to make such
payment.
5.3 Fees: The Borrower shall pay to the Issuer of any Guarantee such fees
in respect thereof and at such times as shall be agreed with the
Issuer from time to time.
6 SECURITY
6.1 Charging Provisions:
6.1.1 The Borrower, as continuing security for the due payment of the
Secured Liabilities and with full title guarantee, hereby (A)
pledges and charges by way of first fixed legal mortgage (in
priority to all other security whatso ever, whether fixed or
floating) in favour of MLI for itself and as trustee for MLIB
all the Borrower's right, title and interest in and to all
Securities and all related documents from time to time held by
or for the account or to the order of MLI (whether in its
capacity as Custodian under the Custo dian Agreement or
otherwise) or in or credited to the Collateral Account and the
claims represented thereby (together, the "Charged Securities")
and (B) pledges and charges in favour of MLI for itself and as
trustee for
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MLIB all the Borrower's right, title and interest in and to all
monies, debts, claims, Securities and other property whatsoever
from time to time depos ited with or held by or for the account
or to the order of or owed or owing by MLI, MLIB and/or any other
member of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group, in whatever capacity. The
security created by or pursuant to this Agreement shall affect
and include all dividends, distributions and interest on and
other proceeds of the Charged Securities or other property hereby
pledged or charged, whether capital or income, and all property
distributed, paid, accruing or offered at any time on, to, in
respect of or in substitution for, any of the Charged Securities
or other property hereby pledged or charged, and all of the
foregoing which relate to the Charged Securities shall be
promptly paid or delivered to MLI for credit to the Collateral
Account.
6.1.2 The Borrower, as continuing security for the due payment of the
Secured Liabilities and with full title guarantee, hereby charges
by way of first fixed legal mortgage (in priority to all other
security whatsoever, whether fixed or floating) in favour of MLI
for itself and as trustee for MLIB all monies (and all the
Borrower's right, title and interest in and to such monies and
the debt represented thereby) from time to time standing to the
credit of the Collateral Account, in whatever currency, and
including any interest accrued or accruing thereon.
6.1.3 The Borrower, as continuing security for the due payment of the
Secured Liabilities and with full title guarantee, hereby assigns
absolutely to MLI for itself and as trustee for MLIB all its
rights and benefits under or in connection with the Custodian
Agreement, the FX Transactions, utilisations of Securities under
Clause 13 and the Hedging Contracts, including in particular all
monies paid or payable in respect thereof, in the case of FX
Transactions whether in accordance with Clause 4.2 or 7 or
otherwise, all securities delivered or deliverable in respect
thereof, and all other rights or benefits thereunder or in
connection therewith (together, the "Charged Rights"). Provided
that, upon receipt from the Borrower of a request made after
termination of the Facilities and subject to the Secured
Liabilities having been duly and properly paid in full, MLI shall
at the expense of the Borrower re-assign to the Borrower so much
(if any) of the Charged Rights as then remains.
6.1.4 None of the monies from time to time standing to the credit of
the Collat eral Account (nor the Borrower's right, title and
interest in and to such monies) shall, during the continuance of
the Facilities and until the Se cured Liabilities have been duly
and properly paid in full, be capable of being withdrawn,
assigned or otherwise disposed of or encumbered except with MLI's
prior written consent or as otherwise specifically provided in
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this Agreement. Any such consent of MLI (and any payment whether
with or without such consent) shall operate as a release of the
relevant monies and the provisions of this Agreement shall
continue to apply to the Collateral Account and the monies from
time to time standing to the credit thereof.
6.1.5 The Borrower hereby undertakes to MLI for itself and as trustee
for MLIB that, at all times during the continuance of the
Facility and until the Secured Liabilities have been properly and
duly paid in full:
(i) it will on demand duly pay any calls, subscription monies
and/or other monies payable on or in respect of any of the
Charged Securities and will perform all obligations under
taken by it under or in connection with Hedging Contracts in
accordance with their terms. If it does not do so, MLI may
(but shall not be obliged to) do so and, if MLI does so, the
Borrower shall on demand indemnify MLI against such payment
or performance and
(ii) it will not (nor will it agree, conditionally or uncondition
ally, to) create or have outstanding any call option,
pledge, assignment, transfer, hypothecation, mortgage,
charge, encumbrance, security interest or lien on or
affecting any of the Charged Securities (except as
contemplated by this Agreement or the Custodian Agreement or
with MLI's prior written consent).
MLI and MLIB each acknowledge that the Borrower may request
consent to options, assignments and transfers (including
agreements therefor) on or of Charged Securities in the normal
course of its trading operations and MLI will consider any such
request in good faith.
6.1.6 Without prejudice to 6.1.4 above or Clause 11.2, each of MLI and
MLIB is authorised to debit the Secured Liabilities to any
account of the Bor rower with MLI and MLI is authorised to
combine or consolidate such account with the Collateral Account
and/or set off, transfer or apply any monies standing to the
credit of the Collateral Account in or towards satisfaction of
any of the Secured Liabilities.
6.1.7 The security created by or pursuant to this Agreement shall be a
continu ing security notwithstanding any intermediate payment or
settlement of account and, without prejudice to the generality of
the foregoing, shall continue in full force and effect until MLI
executes a formal release of
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such security, which it may do in whole or from time to time in
part, and any withdrawal or other disposal of any of the property
subject to the security created by or pursuant to this Agreement
shall operate as a release of such property, and the provisions
of this Agreement shall continue to apply to the remainder
thereof. The security created by or pursuant to this Agreement
shall be in addition to and shall not prejudice any other secu
rity, guarantee, indemnity, right or remedy of whatever nature
which MLI and/or MLIB may now or at any time have in respect of
any of the Se cured Liabilities.
6.2 Further Assurance: The Borrower, at its own expense, will execute or
cause to be executed all such documents, and will do or cause to be
done all such things, which are reasonably requested by MLI (1) to
enable MLI for itself and as trustee for MLIB to enjoy, exercise or
enforce its rights as a secured party under the Facilities and (2) to
evidence, and to establish and maintain the perfection and first
priority of, MLI's security interest in the Charged Securities, the
Collateral Account (and the monies for the time being standing to the
credit thereof and the debt represented thereby) and the Charged
Rights and the perfection of MLI's security interest in the other
property hereby pledged or charged. Without limiting the generality
of the foregoing the Borrower, at its own expense, will execute and
give or file, or both, all notices and documents (including, but not
limited to, notice of the security created by or pursuant to this
Agreement) in such manner, to such persons and at such places as may
be reasonably requested by MLI to establish and maintain the
perfection and, as appropriate, first priority of MLI's said security
interest. The Borrower irrevocably and by way of security authorises
MLI, if the Borrower does not do so, to take any step contemplated by
this Clause 6.2 (but MLI shall have no obligation to do so).
6.3 MLI's Responsibilities: Except as provided in the Custodian
Agreement, MLI shall at all times while any Collateral remains
credited to the Collateral Account use reasonable care in connection
therewith but shall not thereby be responsible for the value of the
Collateral or the other property hereby pledged or charged or, except
to the extent otherwise specifically agreed, for the collection or
payment of any dividends, distributions, interest or other receipts in
respect of Charged Securities, other property hereby pledged or
charged or Hedging Contracts or the delivery or receipt of any
securities or other property in respect of Hedging Contracts nor to
ensure the taking up of any securities, rights, monies or other
property distributed, paid, accruing or offered at any time on, to, in
respect of or in substitution for any of the Collateral or the other
property hereby pledged or charged.
6.4 Value and Margin Calls: The Borrower hereby agrees that it will,
immediately upon MLI at any time making a request or delivering to the
Borrower (whether
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under this Agreement or in its capacity as Custodian under the
Custodian Agree ment) a statement reflecting a shortfall in the margin
referred to below, deposit additional Securities acceptable to MLI
and/or monies with MLI for the credit of the Collateral Account as MLI
may require in order to ensure that the aggregate of the market value
of the Charged Securities and the monies standing to the credit of the
Collateral Account will at all times exceed by a margin satisfactory
to MLI the Secured Liabilities (all as determined by MLI).
6.5 Release: Until such time as an Event of Default as set out in Clause
10 occurs, and without prejudice to any other requirements of MLI, the
Borrower may at any time request MLI to release and reconvey to the
Borrower (or as it may direct) Charged Securities and/or monies
standing to the credit of the Collateral Account and, provided that
the margin as aforesaid after any such release or reconveyance would
be satisfactory to MLI, MLI will give effect to such request.
7 CANCELLATION AND REPAYMENT
7.1 General: The Borrower will (A) upon not less than 30 days' written
notice from MLI given at any time on or after 1 December 1999 or (B)
after an Event of Default has occurred on demand of MLI at any time
or (C) after MLI has given written notice to the Borrower that it has
determined that it is or will become unlawful or contrary to any
directive or the like (whether or not having the force of law) of any
governmental or other regulatory body or authority for MLI and/or
MLIB to carry out all or any of its obligations under or in
connection with this Agreement on demand of MLI at any time:
7.1.1 repay to MLI all or any Advances then outstanding together with
accrued interest thereon and any other sum then payable under
or in connection with this Agreement and/or
7.1.2 return to MLI Securities equivalent to all or any Securities
the subject of any Securities Loan(s) and/or
7.1.3 close out through MLIB all or any FX Transactions which have
not been closed out by entering into a transaction for purchase
or sale (as the case may require) equal and opposite to the
relevant FX Transaction and having the same value date and
otherwise matching the relevant FX Transaction, so as to fix
the amount of profit or loss arising to the Borrower from the
relevant FX Transaction (and the parties' liabilities shall be
adjusted accordingly) and/or
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7.1.4 pay to the Issuer an amount (as conclusively determined by the
Issuer) equal to the Issuer's maximum outstanding liability
(whether actual or contingent) under all Guarantees provided by
it. Without prejudice to Clause 6 or any other provision of this
Agreement any amount so received by the Issuer in respect of its
liability under Guarantees may be retained by the Issuer for the
purpose of payment and/or paid in accordance with the relevant
Guarantee and/or paid into the Collateral Account and retained
there for the purpose of application and/or applied by MLI in or
towards satisfaction of the Borrower's obligations under or in
connection with this Agreement.
Upon the making of any such demand under (B) or (C) above the
Facilities shall be cancelled and, on giving any notice under A above
and the expiry of the 30 day period referred to therein MLI shall have
the option to cancel the Facilities by notice to the Borrower (but in
each case without prejudice to rights and obliga tions then
existing).
7.2 Securities Loans: If the Borrower fails or is unable to MLI's
satisfaction to return any Securities equivalent to the Securities the
subject of a Securities Loan in accordance with any notice or demand
under 7.1.2 above or on such other date on which in accordance with
this Agreement it is obliged to do so, MLI shall have the right on the
Borrower's behalf to purchase from such source(s), at such time(s) and
at such price(s) as it thinks appropriate Equivalent Securities and
the Bor rower shall on demand pay in the currency/ies specified by
MLI to MLI all amounts (including costs, expenses, commissions and
taxes thereon) incurred in connection with such purchase, together
with interest on all such amounts from the date(s) on which the same
are incurred by MLI in accordance with Clause 8.2. However, if for any
reason MLI does not or is unable to exercise such right, upon notice
to the Borrower, the Borrower's obligation to return the relevant
Equivalent Securities will be automatically replaced by an obligation
on the Borrower to pay to MLI an amount in cash equal to the market
value of those Equivalent Securities as derived from rates offered by
a dealer reasonably chosen by MLI or, if in MLI's reasonable belief
that would not produce a commercially reasonable result, the amount it
would cost MLI to purchase those Equivalent Securities, together with
all costs, expenses, commissions and taxes thereon which would be
incurred in connection therewith (such value or, as the case may be,
amount and the currency to be as determined by MLI).
7.3 FX Transactions: If the Borrower fails or is unable to MLI's
satisfaction to close out any FX Transaction in accordance with any
notice or demand under 7.1.3 above (an "Open Transaction"), MLIB shall
have the right on the Borrower's behalf to close out all or from time
to time any part of that Open Transaction at MLIB's applicable spot
rate of exchange at the relevant time (and the parties'
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liabilities shall be adjusted accordingly). However, if for any reason
MLIB does not or is unable to exercise its right to close out any Open
Transaction, upon notice to the Borrower:
7.3.1 no further payments by MLIB or the Borrower under that Open
Transac tion shall be required to be made (and the obligations
to make any such payments shall be cancelled) and
7.3.2 an amount of compensation (calculated by MLIB in accordance
with (i) to (iii) below) shall automatically become immediately
due and payable by the Borrower to MLIB (or, subject to the
proviso in Clause 11.1, vice versa):
(i) MLIB shall ascertain in relation to each Open Transaction
as to witch notice was given to the Borrower in accordance
with the preceding paragraph on the date of such notice
(the "Calculation Date") the amount (if any) which would
fall to be paid to MLIB (expressed as a negative amount)
or which would have to be paid by ▇▇▇▇ (expressed as a
positive amount) if it were to enter into a transaction in
the foreign exchange market at or about 11 a.m. (London
time) on that Calculation Date which would have the effect
of closing out that Open Transaction.
(ii) If any such amount is in a currency other than Dollars, it
shall be converted into Dollars at the rate of exchange at
which, at or about 11 a.m. (London time) on the relevant
Calculation Date, MLIB could enter into a transaction on
the foreign exchange market to purchase or sell, as appro
priate, for delivery on the second Business Day after that
Calculation Date (whichever is later) that other currency
in exchange for Dollars.
(iii) MLIB shall then ascertain the difference between:
(a) the sum of the positive amounts ascertained under (i)
(each converted where applicable in accordance with
(ii)) and
(b) the sum of the negative amounts ascertained under (i)
(each converted where applicable in accordance with
(ii)) together with any costs and expenses aris ing
as a result of the operation of 7.3.1 above.
13
If the amount in (b) exceeds the amount in (a) the differ
ence shall be due and payable immediately by the Borrower to
MLIB. If the amount in (a) exceeds the amount in (b) the
difference shall be paid by MLIB direct into the Collat
eral Account or, subject to the proviso in Clause 11.1, be
due and payable by MLIB to the Borrower.
It is agreed that the amount of compensation recoverable by a party
under this Clause 7.3 is a reasonable pre-estimate of loss in respect
of Open Transactions and not a penalty. Such amount is payable for the
loss of bargain and, except as otherwise provided in this Agreement,
neither MLIB nor the Borrower will be entitled to recover additional
damages as a consequence of such loss of bargain.
7.4 Margin Call not Required: Any action referred to in this Clause 7 may
be taken by MLI and/or MLIB without request for additional Securities
or monies by way of margin call.
8 PAYMENTS
8.1 Taxes: All sums payable by the Borrower under or in connection with
this Agreement shall be paid free and clear of any restrictions or
conditions, without set-off or counterclaim, and free and clear of,
and (subject as hereinafter provided) without deduction tor, any
taxes, deductions or withholdings of any nature. If any deduction or
withholding on account of any such tax or other amount is required by
law to be made from any such sum, the Borrower shall pay in the same
manner and at the same time such additional amounts as will result in
receipt by MLI or, as the case may be, MLIB, free from any liability
in respect of any such deduction or withholding, of such amount as
would have been received by it had no such deduction or withholding
been required to be made.
8.2 Default Interest: If the Borrower does not pay any sum payable under
or in connection with this Agreement when due, it shall pay interest
on the amount from time to time outstanding in respect of that overdue
sum for the period beginning on its due date and ending on the date of
its receipt by MLI or (as appropriate) MLIB (the "payee"), both before
and after judgement. Such interest shall be calculated from time to
time at the rate per annum equal to the sum of the Spread and the rate
certified by the payee as being equal to its cost of funding that
overdue sum for such period(s) as the payee may from time to time
reasonably select. Such interest shall be payable on demand. All
interest payable under this Clause 8.2 which is not paid when due
shall be added to the overdue sum and itself bear interest
accordingly.
14
8.3 Non-Business Days: If any payment falls to be made on a day which is
not a Business Day, it shall be postponed so as to fall on the next
succeeding Business Day in the same calendar month (if there is one)
or the preceding Business Day (if there is not). Interest shall be
adjusted accordingly.
9 WARRANTIES
The Borrower represents and warrants to and for the benefit of each of MLI
and MLIB that:
9.1 the Borrower is duly organised and validly existing under the laws of
its jurisdic tion of establishment and has the power and authority to
own its assets and to conduct the business which it conducts
9.2 its entry into, exercise of its rights and/or performance of or
compliance with its obligations under this Agreement do not and will
not violate (1) any law to which it is subject, (2) any of its
constitutional documents or (3) any agreement to which it is a party
or which is binding on it or its assets
9.3 it has the power to enter into, exercise its rights and perform and
comply with its obligations under this Agreement and has taken all
necessary action to authorise the execution, delivery and performance
of this Agreement
9.4 it will obtain and maintain in effect and comply with the terms of all
necessary consents, registrations and the like of or with any
government or other regulatory body or authority applicable to this
Agreement
9.5 its obligations under this Agreement are valid, binding and
enforceable at law
9.6 it is not in default under any agreement to which it is a party or by
which it or its assets is or are bound and no litigation, arbitration
or administrative proceedings are current or pending, which default,
litigation, arbitration or administrative proceedings are material in
the context of this Agreement
9.7 it is not necessary or advisable in order to ensure the validity,
effectiveness, performance or enforceability of this Agreement or the
perfection of the security created by or pursuant to this Agreement
that any document be filed, registered or recorded in any public
office or elsewhere
9.8 except by this Agreement and the Custodian Agreement, it has not
assigned, transferred or otherwise disposed of the Collateral (or its
rights, title and interest to and in the Collateral) or its rights and
benefits under or in connection with the
15
Custodian Agreement, the FX Transactions and the Hedging Contracts,
either in whole or in part, nor agreed to do so, and will not at any
time do so or agree to do so, and it will at all times be the sole
beneficial owner of and fully guarantee title to all Collateral and
rights and benefits which are now or may at any time hereaf ter
become subject to the security created by or pursuant to this
Agreement
9.9 except for the security created by or pursuant to this Agreement and
the Custodian Agreement, no mortgage, charge, pledge, lien or other
encumbrance or security of any kind exists on or over the Collateral
(or its right, title and interest in and to the Collateral) or its
rights and benefits under or in connection with the Custodian
Agreement, the FX Transactions and the Hedging Contracts, either in
whole or in part, nor has it agreed to create any such other security
nor will it at any time do so or agree to do so and
9.10 each of the above representations and warranties will be correct and
complied with in all respects during the continuance of the
Facilities and until all the Secured Liabilities have been duly and
properly paid in full, as if repeated then by reference to then
existing circumstances.
10 EVENTS OF DEFAULT
it shall be an Event of Default if:
10.1 the Borrower does not pay any sum payable under or in connection with
this Agreement or any other agreement with MLI, MLIB or any other
member of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group on its due date or
10.2 the Borrower does not return any Equivalent Securities required to be
returned under this Agreement on their due date or
10.3 any representation, warranty or statement by the Borrower in this
Agreement or in any document delivered under this Agreement is not
complied with or is or proves to have been incorrect in any material
respect when made or, if it had been made on any later date by
reference to the circumstances then existing, would have been
incorrect in any material respect on that later date or
10.4 the Borrower does not comply with its obligations under Clause 6.4
promptly, which may i the circumstances at MLI's discretion be
immediately, and in any event not later than MLI's close of business
on the next Business Day after the shortfall occurs or
16
10.5 the Borrower fails duly to perform any one or more of its other
obligations under this Agreement or any other agreement with MLI, MLIB
or any other member of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group and, other than in the
case of Clause 6.4, if, in MLI's opinion, that default is capable of
remedy it is not, in MLI's opinion, remedied within 15 days after
notice of that default has been given to the Borrower or
10.6 any provision of this Agreement which is material to the interests of
MLI and/or MLIB is not (or is claimed by the Borrower not to be) in
full force and effect and, other than in the case of Clause 6.4, if,
in MLI's opinion, such circumstance is capable of remedy it is not, in
MLI's opinion, remedied within 30 days after notice thereof has been
given to the Borrower or
10.7 MLI reasonably determines by written notice to the Borrower that the
security (in whole or in part) created by or pursuant to this
Agreement is not in full force and effect or does not have the
priority stated herein or
10.8 a distress, attachment, execution or other legal process is levied,
enforced or sued out on or against any item of Collateral by any third
party or
10.9 a distress, attachment, execution or other legal process is levied,
enforced or sued out on or against any other asset of the Borrower and
is not discharged or stayed within 7 days and, in MLI's conclusive
opinion, such event has or could have a material adverse effect on MLI
and/or MLIB or
10.10 any step is taken or legal proceeding started by any person in the
bankruptcy or insolvency of the Borrower or for the appointment of a
receiver, administrator, trustee or similar of the Borrower or of any
or all of the revenues and assets of the Borrower or for the
liquidation, winding-up, administration, dissolution or reorganisation
of the Borrower or its merger With or into any other person(s)
(together "Winding-up") (except on terms approved by MLI before that
step is taken) and, in the case of any such step or proceeding taken
or started against it, the same (1) results in a judgement of
bankruptcy or insolvency or the making of any such appointment or the
making of an order for Winding-up, or (2) is not discharged within 60
days or
10.11 any indebtedness of the Borrower in respect of monies borrowed or
raised of not less than $500,000 or its equivalent (1) is not paid
when due nor within any applicable grace period in any agreement
relating to that indebtedness, or (2) becomes due and payable before
its normal maturity by reason of a default or event of default,
however described or
10.12 the Borrower is insolvent, is unable to pay its debts as they fall
due, stops, suspends or threatens to stop or suspend payment of all or
a material part of its
17
debts, begins negotiations or takes any proceeding or other step with
a view to readjustment, rescheduling or deferral of all of its
indebtedness or any part of its indebtedness which it would or might
otherwise be unable to pay when due or proposes or makes a general
assignment or an arrangement or composition with or for the benefit of
creditors or
10.13 any event occurs which under the laws of any relevant jurisdiction has
an effect equivalent to any of the events referred to in this Clause
10.
If any person (the "Guarantor") has provided to MLI and MLIB a
guarantee or other performance assurance (the "Performance Assurance
Agreement") of the Borrower's obligations under this Agreement and the
Custodian Agreement, then it shall also be an Event of Default if any
of the events referred to in any of Clauses 10.1, 10.3, 10.5, 10.6 and
10.9 to 10.13 (all inclusive) occurs in relation to the Guarantor (and
for this purpose references, however expressed, to "the Borrower" and
"this Agreement" respectively shall be deemed to be references to "the
Guarantor" and "the Performance Assurance Agreement").
11 ENFORCEMENT
If the Borrower fails or is unable to MLI's satisfaction duly to comply
with any demand under Clause 7.1 (B) or (C), MLI may at any time
thereafter:
11.1 without further notice to the Borrower and without prejudice to any
other right or remedy, dispose or procure the disposal, by sale or
otherwise, of all or from time to time part of the Charged Securities
(including any securities or other property delivered or deliverable
under Clause 13, any Hedging Contracts or the Custodian Agreement) or
other property hereby pledged or charged or otherwise realise or
procure the realisation of the same, in such manner and at such price
or prices (whether payable or deliverable immediately, on a deferred
basis or by instal ments) without being responsible for any loss or
diminution in price, as it may think fit, close out or liquidate any
option, future, long position or short position which the Borrower
may have (by sale, purchase or otherwise howsoever), take possession
of all or from time to time part of such Charged Securities or other
property hereby pledged or charged and proceed forthwith to sell,
assign, give options to purchase, contract to sell or otherwise
dispose of and deliver such Charged Securities or other property
hereby pledged or charged or any part thereof in one or more parts at
public or private sale at any exchange, broker's board or at any of
MLI's offices or elsewhere at such prices and on such terms as MLI
deems appropriate, and exercise all or any rights conferred by and
collect any proceeds of and monies, securities or other property paid
or delivered under or otherwise receive and realise the benefits of
the Hedging Contracts and the
18
Custodian Agreement, all without demand for performance, advertisement
or other notice of any kind, and apply the proceeds thereof and all
cash balances in the Collateral Account or otherwise hereby pledged or
charged as follows:
11.1.1 first, in or towards payment of all amounts (including costs,
expenses, commissions and taxes) arising as a result thereof
11.1.2 secondly, in or towards payment and satisfaction of the Secured
Liabilities in such order and manner as MLI may determine
11.1.3 thirdly, in payment of any surplus to the Borrower or other
person entitled thereto. Provided always that MLI shall not be
obliged to apply any part of such proceeds in accordance with
sub-clause 11.1.3 and MLIB shall not be obliged to pay any
amount of compensation in accordance with Clause 7.3 until all
liabilities (including future and contingent liabilities) to,
and/or amounts due or owing to, MLI and MLIB under or in
connection with this Agreement have been discharged to the
satisfaction of each of MLI and MLIB and until after each of
them has exercised all set-offs and other rights which it is
expressed to be entitled to make or exercise under this
Agreement. Until such time such proceeds and compensation shall
be held in or credited to the Collateral Account or such other
account with MLI as MLI may (in its absolute discretion)
decide.
Upon any disposal of any such Charged Securities or other property
hereby pledged or charged or realisation in respect of any Hedging
Contracts or the Custodian Agreement made or purported to be made
under the provisions of this Clause, a certificate of any officer or
employee of MLI that a default has occurred and that the power to do
so has become exercisable shall be conclusive evidence of that fact in
favour of any purchaser or other person to whom any of such Charged
Securities or other property hereby pledged or charged may be trans
ferred under such disposal or, as the case may be, any person liable
under or in respect of any such Hedging Contract or the Custodian
Agreement and the Borrower agrees to indemnify MLI (on a full
indemnity basis) against any claim which may be made against it by
such purchaser or person by reason of any defect in title to any such
Charged Securities or other property hereby pledged or charged unless
such claim has arisen as a result of the negligence or wilful
misconduct of MLI.
11.2 in addition to any general lien, right to combine or consolidate
accounts, set-off or other similar right to which it may be entitled
at law, by contract, or otherwise, each of MLI and MLIB may at any
time without notice to the Borrower, debit any liabilities of the
Borrower under or in connection with this Agreement to any account of
the Borrower with either of them (including without limitation the
19
Collateral Account) and combine or consolidate all or any one or more
of the Borrower's then existing accounts (including without
limitation the Collateral Account) with, and liabilities of the
Borrower to, it and/or set off, transfer or apply any sum(s) standing
to the credit of any one or more of the Borrower's accounts with it
(including without limitation the Collateral Account) in or towards
satisfaction of any of the liabilities of the Borrower to MLI and/or
MLIB, whether present or future, actual or contingent.
11.3 do all such other acts and things as it may consider necessary or
desirable in connection with the realisation of the security created
by or pursuant to this Agreement.
Each of MLI and MLIB shall have authority to purchase one currency
with another for purposes of this Clause 11.
12 INDEMNITY
The Borrower shall on demand indemnify each of MLI and MLIB (in this Clause
12, each an "Indemnified Party") against:
12.1 any funding and any other costs, expenses or liabilities (including
loss of profit and including taxes (other than taxes on the overall
net income of the Indemnified Party), any stamp duty or similar tax,
legal fees and value added tax) sustained or incurred by the
Indemnified Party (1) to render this Agreement (including the
security created by or pursuant to this Agreement) enforceable and
admissible in evidence in the courts referred to in Clause 20; (2) in
the administration of this Agreement (including the making of
Securities Loans and the return of Equivalent Securities); (3) as a
result of the assignment, exercise or performance of any Hedging
Contract(s); (4) in protecting or enforcing the Indemnified Party's
rights under this Agreement and/or any amendment; (5) as a result of
the occurrence or continuance of any Event of Default or default by
the Borrower under this Agreement (whether in connection with any act
or thing done as set out in Clause 11 or otherwise); or (6) as a
result of the receipt or recovery by the Indemnified Party (whether
or not as a result of any application in accordance with Clause 2.2)
of all or any part of an Advance which has a fixed Interest Period
otherwise than on the last day of that fixed Interest Period and
12.2 all costs, expenses and losses sustained or incurred by the
Indemnified Party as a result of or in connection with the payment of
any amount due under this Agree ment, whether as a result of any
judgement or order, the winding up or bankruptcy of the Borrower, or
otherwise, in a currency other than that due under this Agree ment,
including any variation between the rate of exchange at which such
amount
20
is converted into such currency for the purpose of such judgement or
order or otherwise, and the rate prevailing on the date on which the
Indemnified Party first receives actual payment of such amount in
such currency other than that due under this Agreement.
13 UTILISATION OF COLLATERAL BY MLI
13.1 Authorisation: The Borrower hereby authorises MLI from time to time
to utilise Securities comprised in the Collateral for MLI's own
purposes or the purposes of any third party. To enable MLI so to
utilise Securities comprised in the Collateral the following
provisions of this Clause 13 shall have effect.
13.2 Transfer of Securities by Borrower to MLI: Where MLI wishes to use
Securities comprised in the Collateral for any purpose the Securities
in question shall be simultaneously released from the security
created by or pursuant to this Agree ment and transferred by the
Borrower to MLI in accordance with the provisions of this Clause
13.2. The Borrower authorises MLI to take such steps to deliver or
credit the relevant Securities to MLI (or, as appropriate, the third
party in ques tion) and execute such instruments of transfer or the
like as MLI considers necessary or desirable to vest the full legal
and beneficial right, title and interest in and to those Securities
in MLI (or, as the case may be, that third party).
13.3 Return of Securities:
13.3.1 Where Securities have been utilised by MLI for any purpose
and those Securities cease to be required for that purpose,
MLI shall thereupon return or procure redelivery of those
Securities or of Equivalent Securities to the Borrower by
redelivering or crediting those Securities or Equivalent
Securities to the Collateral Account, whereupon those
Securities or Equiv alent Securities shall automatically be
subject to the security created by or pursuant to this
Agreement.
13.3.2 All returns and redeliveries of Securities or Equivalent
Securities must be made together with any appropriate
instruments of transfer or the like, and so that all right,
title and interest in and to those Securities or Equivalent
Securities shall vest in the Borrower, free from all liens,
charges and encumbrances, other than the security created by
or pursuant to this Agreement.
13.3.3 MLI shall be obliged to return or procure redelivery of
Equivalent Securi ties not necessarily the original
Securities and Clause 3.6 shall apply (with any necessary
modifications) to a return or redelivery under this Clause
13.3 as it applies to a Securities Loan under Clause 3.
21
13.4 Distributions:
13.4.1 Where any Securities have been transferred by the Borrower
under this Clause 13 and have not been returned or redelivered
to the Borrower before an applicable income payment date or
record date in respect of those Securities, MLI shall, on the
date of payment of any dividend, interest or other distribution
on or with respect to the Securities in question or on such
other date as MLI and the Borrower may agree, pay to the
Borrower such amount in relation to such dividend, interest or
distribution and deliver such tax vouchers as may be available
or appropriate as shall ensure that the Borrower is placed in
the same after-tax position (but ignoring for these purposes
any tax by reference to the general income or profits of the
Borrower or other similar reference) as if it had been the
Holder of the relevant Securities at all relevant times.
However, MLI's obligations under this sub-clause 13.4.1 are
subject to the Borrower where appropriate delivering to MLI a
duly completed and certified Certificate (MOD2) or a photocopy
thereof bearing an Inland Revenue acknowledge ment and unique
number which Certificate or photocopy remains valid and/or
taking all such further steps as are necessary and reasonable
to enable MLI to make payment under this Clause 13.4 without
accounting to the Inland Revenue for any relevant withholding
tax and/or UK tax. If in consequence of a failure by the
Borrower to observe its obligations set out in this sub-clause
13.4.1 MLI is or will become liable to account to the Inland
Revenue for any relevant withholding tax and/or UK tax the
amount otherwise payable by MLI under this Clause 13.4 shall be
reduced by the amount of such tax.
13.4.2 For the purposes of this Clause 13.4 "Holder" in relation to
registered securities means the person whose name or whose
nominee is shown on the relevant register of ownership and in
relation to bearer Securities means the bearer thereof.
13.5 Miscellaneous:
13.5.1 If on the due date for return or redelivery thereof MLI shall
for any reason be unable to return or redeliver any Securities
or Equivalent Securities in connection with any transfer of
Securities to MLI under this Clause 13, MLI's obligation to
return or redeliver those Securities or Equivalent Securities
shall be replaced by an obliga tion to pay to the Borrower an
amount in cash equal to the market value of those Securities or
Equivalent Securities derived from rates offered by a dealer
reasonably chosen by
22
MLI. Any such amount shall be paid or credited to the Collateral
Account.
13.5.2 The Borrower shall, subject as otherwise provided in this Agree
ment and in particular to the security created by or pursuant to
this Agreement, have all the incidents of ownership of Securities
transferred under this Clause 13, including the right to transfer
them to others, and such Securities shall continue to be taken
into account for the purpose of Clause 6.4.
14 SUCCESSORS AND ASSIGNS
14.1 The Borrower may not assign or transfer all or any part of its rights
or obligations under this Agreement. However, this Agreement shall be
binding on the Bor rower and its successors as from time to time
constituted.
14.2 Where the Borrower is a partnership, this Agreement is being executed
on behalf of the Borrower by one of its general partners and, by such
execution, such general partner agrees and warrants that the
partnership of which he or it is a general partner is and will be
fully bound by this Agreement as the Borrower.
14.3 Each of MLI and MLIB may at any time assign or transfer all or part
of its rights and/or obligations under this Agreement to any other
member of the ▇▇▇▇▇▇▇ ▇▇▇▇▇ Group or, with the prior written consent
of the Borrower (such consent not to be unreasonably withheld), to
any other person. MLI shall after any such assignment or transfer and
to the extent (if at all) appropriate or required hold the security
created by or pursuant to this Agreement for itself and as trustee
for MLIB and each assignee or transferee. Any reference in this
Agreement to MLI or MLIB shall be construed accordingly and shall
also include their respective successors. Any such assignee or
transferee shall be entitled to the full benefit of this Agreement to
the same extent as if it were an original party in respect of the
rights or obligations assigned or transferred to it.
14.4 Each of MLI and MLIB may disclose to any other member of the ▇▇▇▇▇▇▇
▇▇▇▇▇ Group or, subject to prior notice to the Borrower, any other
potential assignee or transferee or person who has entered or
proposes to enter into contractual arrange ments with it in relation
to or concerning this Agreement such information about the Borrower
and this Agreement as it may think fit.
23
15 INFORMATION
During the continuance of the Facilities and until the Secured Liabilities
have been duly and properly paid in full, the Borrower shall furnish to MLI
within 90 days after the end of each of its financial years its annual
audited accounts and promptly such other financial and other information as
MLI may reasonably request from time to time.
16 REMEDIES AND WAIVERS
No failure by MLI or MLIB to exercise, and no delay by MLI or MLIB in
exercising, any right or remedy will operate as a waiver thereof, nor will
any single or partial exercise of any such right or remedy preclude any
other or further exercise thereof or the exercise of any other right or
remedy. The authority to debit, charge and pledge and the right of set-off
and other rights and remedies provided in this Agreement are separate,
independent and cumulative and not exclusive of any rights or remedies
(including any other security, right of set-off, lien, right to combine or
consolidate accounts or similar right) to which MLI or MLIB is at any time
entitled anywhere, whether by operation of law or otherwise.
17 PARTIAL INVALIDITY
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforce able in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement, nor the legality, validity or
enforceability of such provisions under the law of any other jurisdiction
shall in any way be affected or impaired thereby. If and to the extent
that the security expressed to be created by or pursuant to this Agreement
is at any time and for any reason not effective as a fixed charge, it shall
instead take effect as a floating charge.
18 MISCELLANEOUS
18.1 All interest shall accrue from day to day and shall be calculated on
the basis of a 360-day year (365 days where that is market practice,
as determined by MLI) and the number of days elapsed.
18.2 The certificate of an officer or employee of MLI as to any sum
payable to MLI or MLIB under this Agreement shall be final,
conclusive and binding on the Bor rower save in the case of manifest
error.
18.3 Except to the extent otherwise specifically provided in any other
agreement between MLI and the Borrower, if there is any conflict or
inconsistency between
24
this Agreement and any other such agreement, the terms of this
Agreement shall prevail.
18.4 MLIB appoints MLI its agent for the purposes of this Agreement and
authorises it to take such action as contemplated by this Agreement,
and in particular author ises it to receive payment of any monies
payable to MLIB under or in connection with this Agreement.
Notwithstanding that appointment, and MLI's holding the security
created by or pursuant to this Agreement for itself and as trustee
for MLIB, the rights and obligations of each of MLI and MLIB with
respect to the facilities provided by it shall be several and not
joint or joint and several, and neither of them shall be responsible
for the obligations of the other.
19 NOTICES
19.1 The Borrower and MLI may from time to time issue instructions,
notices, de mands or requests either orally or in writing (but in
writing only where so pro vided under this Agreement) and MLI shall
be entitled to rely on and shall not be liable for any action taken
or omitted to be taken in good faith pursuant to instruc tions,
notices, demands or requests (believed by it to be genuine and to be
given or made by the appropriate person(s)) from the Borrower shall
indemnify each of MLI and MLIB against all costs, expenses and
liabilities arising from MLI's relying on any such instructions,
notices, demands or requests.
19.2 Each oral communication under this Agreement shall be directed, if to
MLI, to such of its officer(s) as may be notified by MLI to the
Borrower from time to time, and if to the Borrower, to such of its
representative(s) as may be notified to MLI from time to time. Each
written communication under this Agreement shall be addressed as
follows:
MLI: ▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
P.O. Box 293
London EC1M 3NH
Attention: International Prime Brokerage
Fax No: ▇▇▇▇ ▇▇▇ ▇▇▇▇
The Borrower: As set out in the Letter
or to such other address, telex or facsimile number or marked for the
attention of such other person as may be notified by the relevant
addressee from time to time to the other party. Notices shall be
deemed to have been received seven days after being posted and
immediately in the case of a telex, fax or oral communication.
25
20 GOVERNING LAW
This Agreement shall be governed by and construed in accordance with
English law and, in relation to any legal action or proceedings arising out
of or in connection with this Agreement ("Proceedings"), the Borrower
hereby and for the benefit of each of MLI and MLIB irrevocably submits to
the jurisdiction of the courts of England and any New York State or United
States Federal court sitting in New York City, and waives any objection to
Proceedings in such courts on the grounds of venue or on the grounds that
the Proceed ings have been brought in an inconvenient forum. Those
submissions shall not affect MLI's or MLIB's right to take Proceedings in
any other court of competent jurisdiction, nor shall the taking of
Proceedings in any court of competent jurisdiction preclude MLI and/or MLIB
from taking Proceedings in any other court of competent jurisdiction
(whether concurrently or not).
26
SCHEDULE 1
. , 199.
[Borrower]
Dear Sirs,
This letter is supplemental to the facility letter (the "Facility Letter") dated
., 199. addressed to you and confirmed and accepted by you on ., 199 . and this
letter (including your acceptance of it) and the Facility Letter shall be read
and construed as one document.
Further to your request, we agree that the following contracts entered or to be
entered into by you shall, for the purposes of the Facility Letter, be "Hedging
Contracts" (and accordingly are subject to the security created by or pursuant
to the Facility Letter):
[Contract Description]
[All options, futures, etc. now or at any time held in Account No. . with . of.]
We also agree that the guarantee dated ., 199. issued by [us/▇▇▇▇▇▇▇ ▇▇▇▇▇
International Bank Limited] in favour of . in relation to your obligations under
the above Hedging Contract(s) shall be a "Guarantee" for the purpose of the
Facility Letter.
You will [at our request/promptly after execution of the enclosed copy of this
letter] (but without prejudice to Clause 6.2 of the Facility Letter) give notice
in the form attached to . of such security, and you will in any event ensure
that all monies and securities payable or deliverable pursuant to the above
Hedging Contract(s) are paid or delivered direct by . to us, without set-off or
deduction except on account of liabilities under the same Hedging Contract, for
credit to the Collateral Account.
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Please signify your agreement to the foregoing by executing and returning the
enclosed copy of this letter.
For and on behalf of
▇▇▇▇▇▇▇ ▇▇▇▇▇ INTERNATIONAL
By:
---------------------------
Name:
Title:
To: ▇▇▇▇▇▇▇ ▇▇▇▇▇ International
. hereby confirm agreement to the above, and also that any necessary consent of
. has been obtained.
Dated ., 199.
For and on behalf of
[ .]
By:
Name:
Title:
28
NOTICE OF ASSIGNMENT
.,199.
[
]
We refer to the [Contract Description] (the "Hedging Contract(s)") made between
ourselves and yourselves.
We hereby give you notice:
1 that we have assigned to ▇▇▇▇▇▇▇ ▇▇▇▇▇ International (for itself and as
trustee for ▇▇▇▇▇▇▇ ▇▇▇▇▇ International Bank Limited) all our rights and
benefits under or in connection with the Hedging Contract(s) including (but
without prejudice to the generality of the foregoing) any monies payable to
us, any securities deliverable to us, and the right to exercise any option
conferred thereby. Nothing in that assignment or this notice affects our
obligations to you under the Hedging Contract(s).
2 that you are hereby authorised and instructed to:
2.1 pay any such monies to [account details] and
2.2 deliver any such securities to [account details].
3 the authority and instructions herein contained cannot be revoked or varied
by us without the consent of ▇▇▇▇▇▇▇ ▇▇▇▇▇ International.
Please execute and return the enclosed copy of this notice to ▇▇▇▇▇▇▇ ▇▇▇▇▇
International, Ropemaker Place, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇, Fax
No: ▇▇▇▇-▇▇▇-▇▇▇▇, Attention: Special Finance Group. Such execution and
return will constitute your agreement to the foregoing and that you will
not exercise any right to net or set-off for any liability (except for any
liability of ours to you under the same Hedging Contract) or any competing
lien, charge or other security interest as against any Hedging Contract or
any monies or securities payable or deliverable to us under it.
[BORROWER]
By:
-----------------------------
29