2007 MASTER CORPORATE BOND TOTAL RETURN SWAP
CONFIRMATION AGREEMENT
This 2007 Master Corporate Bond Total Return Swap Confirmation Agreement (this “Master
Confirmation Agreement”) is dated as of [insert date] between [Insert full legal name of Party A]
(“Party A”) and [Insert full legal name of Party B] (“Party B”).
The parties wish to facilitate the process of entering into and confirming Bond Total Return Swap
Transactions and accordingly agree as follows:
1. Definitions. This Master Confirmation Agreement hereby incorporates by reference the 2006
ISDA Definitions (the “Swap Definitions”) (as published by the International Swaps and
Derivatives Association, Inc. (“ISDA”). Any capitalized term not otherwise defined herein
shall have the meaning assigned to such term in the Swap Definitions.
2. Confirmation Process. The parties intend to enter into separate bond total return swap
transactions (each a “Transaction”) set out in a transaction supplement substantially in the
form attached to an Annex specified in Exhibit I hereto (each, a “Transaction Supplement”).
The confirmation applicable to each Transaction, which shall constitute a “Confirmation” for
the purposes of, and will supplement, form a part of, and be subject to, the ISDA Master
Agreement between Party A and Party B dated as of [insert date], as amended and
supplemented from time to time (the “Master Agreement”), shall consist of this Master
Confirmation Agreement including the relevant form of General Terms Confirmation
contained in an Annex specified in Exhibit I hereto (each, a “General Terms Confirmation”),
as supplemented by the trade details applicable to such Transaction as set forth in the
Transaction Supplement for that Transaction. In the event of any inconsistency between this
Master Confirmation Agreement and a General Terms Confirmation, the General Terms
Confirmation shall govern for the purpose of the Transactions related to such General Terms
Confirmation. In the event of any inconsistency between (i) this Master Confirmation
Agreement (including the relevant form of General Terms Confirmation) and a Transaction
Supplement and/or (ii) the Definitions and a Transaction Supplement, the Transaction
Supplement shall govern for the purpose of the relevant Transaction. The Transaction
Supplement shall contain, at a minimum, the relevant information set out in the form of
Transaction Supplement attached to the applicable General Terms Confirmation.
3. Non-Exclusive. The parties acknowledge and agree that the execution of this Master
Confirmation Agreement does not require them to document Transactions in accordance with
this Master Confirmation Agreement.
4. Preparation of Transaction Supplements.
Confirmation.
As specified in the relevant General Terms
5. Miscellaneous.
(a) Entire Agreement. This Master Confirmation Agreement constitutes the entire agreement
and understanding of the parties with respect to its subject matter and supersedes all oral
communication and prior writings with respect specifically thereto.
(b) Amendments. An amendment, modification or waiver in respect of this Master
Confirmation Agreement will only be effective if in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the parties or confirmed
Copyright © 2007 by International Swaps and Derivatives Association Inc.
by an exchange of telexes, by an exchange of electronic messages on an electronic
messaging system or by an exchange of emails.
(c) Counterparts. This Master Confirmation Agreement and each Transaction Supplement
documented hereunder may be executed in counterparts, each of which will be deemed an
original.
(d) Headings. The headings used in this Master Confirmation Agreement are for
convenience of reference only and shall not affect the construction of or be taken into
consideration in interpreting this Master Confirmation Agreement.
(e) Governing Law; Jurisdiction.
This Master Confirmation Agreement and each
Transaction confirmed by a Confirmation documented hereunder will be governed by and
construed in accordance with the law specified in the Master Agreement and will be
subject to the jurisdiction, service of process and waiver of immunities provisions of
Section 13 of the Master Agreement.
IN WITNESS WHEREOF the parties have executed this document with effect from the date
specified on the first page of this document.
[Insert full legal name of Party A]
[Insert full legal name of Party B]
By:___________________________
Name:
Title:
Date:
By:___________________________
Name:
Title:
Date:
2
EXHIBIT I
ANNEXES
to 2007 Master Corporate Bond Total Return Swap Confirmation Agreement
The following Annexes (including the related Transaction Supplements) attached hereto will be subject to
this Master Confirmation Agreement, effective as of the date set forth below:
Annex
Date
Annex BOND (Corporate Bond (Non-Convertible/Exchangeable)
Total Return Swap)
Annex CB (Corporate Convertible or Exchangeable Bond Total
Return Swap)
Exhibit I-1
ANNEX BOND
(Corporate Bond (Non-Convertible/Exchangeable) Total Return Swap)
[Date]
Re:
Corporate Bond (Non-Convertible/Exchangeable) Total Return Swap General
Terms Confirmation
Dear Sir or Madam,
The purpose of this Corporate Bond (Non-Convertible/Exchangeable) Total Return Swap General Terms
Confirmation (the “Bond TRS General Terms Confirmation”) is to confirm certain general terms and
conditions of total return swap transactions on corporate bonds that, pursuant to their terms, are neither
convertible nor exchangeable by the issuer or a holder of the relevant bonds into stock or other securities
(each, a “Transaction”), entered into between us under the 2007 Master Corporate Bond Total Return
Swap Confirmation Agreement dated as of [insert date] (the “Master Confirmation Agreement”).
This Bond TRS General Terms Confirmation hereby incorporates by reference the 2006 ISDA
Definitions (the “Swap Definitions”), as published by the International Swaps and Derivatives
Association, Inc. In the event of any inconsistency between the Swap Definitions and this Bond TRS
General Terms Confirmation, this Bond TRS General Terms Confirmation will govern.
All provisions contained in the Master Agreement govern each Confirmation (each as defined in the
Master Confirmation Agreement) except as expressly modified below or in the relevant Transaction
Supplement.
1. The general terms of each Transaction to which this Bond TRS General Terms Confirmation relates
are as follows (unless otherwise specified in the relevant Transaction Supplement), as supplemented
by the Transaction Supplement related to such Transaction:
General Terms:
Trade Date:
As specified in the relevant Transaction
Supplement.
Effective Date:
As specified in the relevant Transaction
Supplement.
Termination Date:
The earliest of (a) the final Total Return
Amount Payment Date, (b) the Scheduled
Maturity Date of Bonds, (c) the Full
Redemption Date, if any, (d) the Optional
Termination Payment Date, if any, on which
the Transaction is terminated in whole.
Settlement Currency:
As specified in the relevant Transaction
Supplement.
GTC: BOND-1
Relevant Jurisdiction:
As specified in the relevant Transaction
Supplement.
Bonds:
As specified in the relevant Transaction
Supplement.
Issuer:
The issuer of the Bonds.
Scheduled Maturity Date of Bonds:
As specified in the relevant Transaction
Supplement.
Notional Amount:
(A) With respect to the initial Value Date,
an amount equal to the Transaction Face
Amount multiplied by the Initial Price and
(B) with respect to each subsequent Value
Date, the sum of (i) the Notional Amount in
respect of the prior Value Date and (ii) the
Total Return Amount, whether positive or
negative, determined as of the prior Value
Date.
Transaction Face Amount:
As specified in the relevant Transaction
Supplement, subject to reduction(s) in the
event of any Optional Termination and/or
any Partial Redemptions.
Full Redemption Date:
The date, if any, on which the Issuer pays all
holders of the Bonds in the Relevant
Jurisdiction in respect of the entire then
outstanding principal amount of Bonds held
by such holders in cash (a “Full
Redemption”) in respect of a record date (as
specified by the Issuer or in the indenture or
other legal instrument governing the Bonds
or as otherwise determined by the
Calculation Agent) (the “Record Date”) that
occurs during the period extending from and
including the Effective Date to but excluding
the Termination Date.
Full Redemption Amount:
The amount of principal actually paid by the
Issuer in cash on the Full Redemption Date
to holders of the Bonds in the Relevant
Jurisdiction in respect of Bonds with an
outstanding principal amount equal to the
Transaction Face Amount as of the Record
Date relating to the Full Redemption Date.
Initial Price:
In respect of the initial Value Date or any
date that occurs prior to the initial Value
Date, the Initial Price per Bond specified in
GTC: BOND-2
the relevant Transaction Supplement,
expressed as a percentage of par and
inclusive of accrued interest through the
Effective Date, unless the parties otherwise
agree or the Calculation Agent determines
that on the Effective Date the Bonds trade
exclusive of accrued interest; and
in respect of each subsequent Value Date
and any other date that occurs after the initial
Value Date, the Final Price determined for
the immediately preceding Value Date.
Final Price:
Select one of the following:
[The price of the Bonds, expressed as a
percentage of par, at or about the Valuation
Time (or such other time as may be agreed
by the parties) on the relevant Value Date, as
mutually agreed by Party A and Party B. If
Party A and Party B do not agree on the
price of the Bonds, the Final Price will be
the [highest firm bid price][average of the
firm bid prices], expressed as a percentage of
par, as the Calculation Agent is able to
obtain for the sale of the Transaction Face
Amount of the Bonds (a “Bid Quote”) from
five leading banks or dealers that deal in
obligations of the type of the Bonds on the
Value Date; provided, however, that if none
of such banks or dealers provide such a Bid
Quote as of the Value Date, then the Final
Price shall be the first Bid Quote that the
Calculation Agent is able to obtain on any of
the three Business Days following the Value
Date, failing which the Final Price shall be
determined by the Calculation Agent, acting
in good faith and in a commercially
reasonable manner.]
[The price of the Bonds, expressed as a
percentage of par, at or about the Valuation
Time, or such other time as may be agreed
by the parties, on the relevant Value Date, as
determined by the Calculation Agent in a
commercially reasonable manner, taking into
account factors that the Calculation Agent
deems relevant, that may include, without
limitation, quotations, other price source
information or other market data.]
GTC: BOND-3
The Final Price as of the relevant Value Date
will be determined inclusive of accrued
interest as of such date, unless the
Calculation Agent determines that the Bonds
are trading exclusive of accrued interest as
of the relevant Value Date, in which case
such Final Price will be exclusive of accrued
interest.
Valuation Time:
As specified in the relevant Transaction
Supplement.
Value Date(s):
(A) As specified in the relevant Transaction
Supplement, or if any such day is not a
Business Day, the next Business Day
(subject to the Optional Termination and
Full Redemption provisions of this Bond
TRS General Terms Confirmation) and (B)
the date that falls three Business Days prior
to the Termination Date, which date will be
the final Value Date.
FX Provisions:
If, with respect to a Transaction, the
currency in which any amount (including,
without limitation, a Total Return Amount, a
Distribution Amount, a Reference Amount
or a Floating Amount) is calculated or
determined is different from the Settlement
Currency, the Calculation Agent shall
determine the value of that amount or price
in the Settlement Currency, taking into
consideration all available information that it
considers relevant, which information shall
include the rate(s) of exchange at which the
payer (if any) of such amount would be able,
in good faith and using commercially
reasonable procedures, to convert the
relevant amount into the Settlement
Currency.
Distribution Amounts:
Distribution Amounts Payer:
The Total Return Amount Payer
Distribution Amounts Period:
The period that commences on, and
includes the Effective Date and ends on, but
excludes, the Termination Date.
Distribution Amount:
Any and all payments or distributions,
including, without limitation, interest and
coupon payments and consent fees, but
GTC: BOND-4
excluding Partial Redemption Amounts or
Full Redemption Amounts, that are actually
made by the Issuer to holders of the Bonds
in the Relevant Jurisdiction in respect of an
outstanding principal amount of the Bonds
equal to the Transaction Face Amount as of
the relevant Record Date and for which the
Record Date occurs during the Distribution
Amounts Period.
Cash Distribution Amount:
The portion of a Distribution Amount, if
any, that consists of cash.
Non-Cash Distribution Amount:
That portion of a Distribution Amount, if
any, that consists of property other than
cash, including, without limitation,
securities or other non-cash assets.
Consequences of Cash Distribution
Amounts:
The Distribution Amounts Payer shall pay
the Floating Amount Payer the Cash
Distribution Amount within one Business
Day of the relevant Issuer Distribution
Date, notwithstanding the occurrence of the
Termination Date (unless the Issuer
Distribution Date occurs more than six
months following the Termination Date, in
which case the Cash Distribution Amount
will not be paid).
Consequences of Non-Cash Distribution
Amounts:
The Calculation Agent shall adjust the
terms of the Transaction, effective as of the
relevant Issuer Distribution Date, to
account for any Non-Cash Distribution
Amount, subject to the “Non-Cash
Distributions and Redemptions Declared
Following the Final Value Date” provision
of this Bond TRS General Terms
Confirmation.
Issuer Distribution Date:
The date on which the Issuer makes any
payments or distributions of Distribution
Amounts to holders of the Bonds in the
Relevant Jurisdiction.
Total Return Amount(s):
Total Return Amount Payer:
As specified in the relevant Transaction
Supplement.
GTC: BOND-5
Payment of the Total Return
Amount:
If the Total Return Amount for the relevant
Total Return Amount Payment Date is
positive, the Total Return Amount Payer
shall pay such Total Return Amount to the
Floating Amount Payer on such Total
Return Amount Payment Date.
If the Total Return Amount for the relevant
Total Return Amount Payment Date is
negative, the Floating Amount Payer shall
pay the absolute value of such Total Return
Amount to the Total Return Amount Payer
on such Total Return Amount Payment
Date.
Total Return Amount Payment
Date(s):
Total Return Amount:
Three Business Days following the relevant
Value Date.
Except as provided below, the Total Return
Amount for the relevant Total Return
Amount Payment Date shall be an amount
equal to the product of:
(a) the Notional Amount as of the relevant
Value Date; and
(b) the quotient of (1) the Final Price
minus the Initial Price; divided by (2)
the Initial Price.
If the relevant Total Return Amount
Payment Date is the Full Redemption Date
or the Scheduled Maturity Date for the
Bonds, such Total Return Amount shall be
an amount equal to:
(i) any amounts of principal actually
paid by the Issuer in cash to holders of
the Bonds in the Relevant Jurisdiction
on the Full Redemption Date, or
Scheduled Maturity Date, as applicable,
in respect of the Bonds with an
outstanding principal amount equal to
the Transaction Face Amount as of the
Record Date relating to the Full
Redemption Date or as of the
Scheduled Maturity Date for the Bonds
GTC: BOND-6
(prior to giving effect to such principal
payment), as applicable, minus
(ii) the Initial Price multiplied by the
Transaction Face Amount as of the
Record Date relating to the Full
Redemption Date or as of the
Scheduled Maturity Date of the Bonds
(prior to giving effect to such principal
payment), as applicable.
Reference Amounts:
Reference Amounts Payer:
As specified in the Consequences of Cash
Partial Redemptions provision below.
Reference Amounts Period:
The period which commences on, and
includes, the Effective Date and ends on,
but excludes, the Termination Date.
Reference Amount:
In respect of any Partial Redemption that
consists of cash (in whole or in part), the
Reference Amount shall be an amount
equal to:
Reference Amounts Payment
Dates:
(i)
the Cash Partial
Amount, minus
Redemption
(ii)
the Initial Price as of the Value
Date immediately preceding the
Record Date for such Partial
Redemption multiplied by the
amount of the Transaction Face
Amount to which such Cash Partial
Redemption Amount relates (e.g.,
the portion of such Transaction
Face Amount being repaid in cash
by the Issuer).
The Reference Amounts Payer shall pay
any Reference Amount to the other party
hereto on the Business Day following the
related
Partial
Redemption
Date,
notwithstanding the occurrence of the
Termination Date (unless the Partial
Redemption Date occurs more than six
months following the Termination Date, in
which case the Reference Amount will not
be paid).
GTC: BOND-7
Partial Redemption:
Any repayment of principal on the Bonds or
redemption of the Bonds that corresponds
to an outstanding principal amount of the
Bonds equal to the Transaction Face
Amount as of the Record Date for the
Partial Redemption, where (i) the Record
Date occurs during the Reference Amounts
Period, (ii) such repayment or redemption is
expected to be made by the Issuer to
holders of the Bonds in the Relevant
Jurisdiction, and (iii) such repayment or
redemption (a) is all in cash, but is in
respect of less than the entire principal
amount of the Bonds then outstanding; (b)
is comprised partially of cash and partially
of securities or assets other than cash, and is
in respect of all or any portion of, the
principal amount of the Bonds then
outstanding; or (c) is comprised solely of
securities or assets other than cash, and is in
respect of all or any portion of, the principal
amount of the Bonds then outstanding,
Cash Partial Redemption Amount:
The portion (if any) of a Partial Redemption
that consists of cash.
Non-Cash Partial Redemption
Amount:
Partial Redemption Date:
Consequences of Cash Partial
Redemptions:
Consequences of Non-Cash Partial
Redemptions:
The portion (if any) of a Partial Redemption
that consists of securities or assets other
than cash.
The date on which the Issuer makes any
Partial Redemption.
If the Reference Amount is positive, the
Total Return Amount Payer shall pay the
related Reference Amount to the Floating
Amount Payer on the relevant Reference
Amounts Payment Date. If the Reference
Amount is negative, the Floating Amount
Payer shall pay the absolute value of the
Reference Amount to the Total Return
Amount Payer on the relevant Reference
Amounts Payment Date.
The Calculation Agent shall adjust the
terms of the Transaction, as it deems
appropriate, to account for any Non-Cash
GTC: BOND-8
Partial Redemption(s), subject to the “NonCash Distributions and Redemptions
Declared Following the Final Value Date”
provision of this Bond TRS General Terms
Confirmation.
Floating Amounts:
Floating Amount Payer:
As specified in the relevant Transaction
Supplement.
Calculation Amount:
In respect of any Calculation Period, the
Notional Amount as of the first day of such
Calculation Period, subject to adjustment to
account for any Optional Termination that
occurs during the Calculation Period.
Floating Amount Payer Payment
Dates:
First Floating Amount
Payer Payment Date:
(i) As specified in the relevant Transaction
Supplement (or, if any such day is not a
Business Day, the following Business Day)
and (ii) each Reference Amounts Payment
Date, if any.
As specified in the relevant Transaction
Supplement.
Floating Rate Option:
As specified in the relevant Transaction
Supplement.
Designated Maturity:
As specified in the relevant Transaction
Supplement.
Spread:
As specified in the relevant Transaction
Supplement.
Floating Rate for the initial Calculation
Period (inclusive of Spread):
As specified in the relevant Transaction
Supplement.
Floating Rate Day Count Fraction:
As specified in the relevant Transaction
Supplement.
Reset Dates:
The first day of each Calculation Period
that commences on a Floating Amount
Payer Payment Date other than a Reference
Amounts Payment Date.
Relevant Rate:
For any Reset Date, the rate determined in
accordance with Section 6.2(c)(i) of the
GTC: BOND-9
Swap Definitions; and for any Calculation
Period that commences on a Reference
Amounts Payment Date, the Relevant Rate
in effect for the immediately preceding
Calculation Period that commences on a
Reset Date.
Compounding:
[Applicable][Not Applicable]
Compounding Dates:
If Compounding is Applicable, as specified
in the relevant Transaction Supplement;
otherwise, none.
[Additional Representations, Agreements and Acknowledgments.
Eligible Contract Participant:
2. Calculation Agent: [
Each party represents to the other party that
it is an “eligible contract participant” as
defined in the U.S. Commodity Exchange
Act (as amended).]*
]
3. Notice and Account Details:
Unless otherwise specified in the relevant Transaction Supplement, Notice and Account Details for
Party A: [ ]
Unless otherwise specified in the relevant Transaction Supplement, Notice and Account Details for
Party B: [ ]
4. Additional Provisions:
(a) Optional Early Termination. If Optional Early Termination is specified as applicable in a
Transaction Supplement, a party that is specified as an OET Electing Party in the Transaction
Supplement may elect to terminate a Transaction, in whole or in part, by giving notice orally or in
writing (an “Optional Termination Notice”) (such termination, an “Optional Termination”). If an
Optional Termination Notice is given less than 30 minutes prior to the Valuation Time on any Notice
Date (as defined below), then that Optional Termination Notice will be deemed delivered on the
following Notice Date. Any Optional Termination Notice shall specify the Optional Termination
Terms applicable to the relevant Optional Termination. The “Optional Termination Terms” are: (i)
the Transaction subject to such Optional Termination (the “Terminated Transaction”); (ii) the Value
Date for the Optional Termination (which must fall within the parameters set forth below); and (iii)
whether the subject Transaction is to be terminated in whole or in part and, in the case of a partial
termination, the portion of the Transaction Face Amount that is subject to such Optional Termination
(the portion of the Transaction so terminated, whether in whole or in part, the “Optional Termination
Amount”).
*
To be included if a party is a U.S. entity.
GTC: BOND-10
The Value Date for the Optional Termination may be any Business Day from and including the
applicable Notice Date to but excluding the final Value Date for the relevant Transaction.
With respect to any Optional Termination: (i) the Value Date for the Optional Termination shall be
deemed to be the final Value Date for such Optional Termination Amount; (ii) the third Business Day
following such Value Date shall be the Payment Date for the Optional Termination Amount (the
“Optional Termination Payment Date”); (iii) the Calculation Agent shall determine the Distribution
Amount(s), the Total Return Amount, the Reference Amount(s) and the Floating Amount payable on
the Optional Termination Payment Date (the net amount of such amounts being the “Optional
Termination Payment”) in accordance with the terms of this Bond TRS General Terms Confirmation;
and (iv) the party owing the Optional Termination Payment shall pay such amount to the other party
on the Optional Termination Payment Date.
For the avoidance of doubt, (i) in respect of any Transaction, until the Transaction Face Amount is
reduced to zero, more than one Optional Termination may be designated in respect of the same
Transaction and (ii) if an Optional Termination is designated in respect of any Transaction, such
designation shall be solely in respect of such Transaction.
“Notice Date” means, any Business Day during the period extending from, but excluding, the
Effective Date for the relevant Transaction to, and including, the Business Day preceding the final
Value Date for the relevant Transaction.
In the case of an Optional Termination of only part of a Transaction, the Calculation Agent will make
such adjustments to the Notional Amount, Transaction Face Amount or any other variable relevant to
the terms of such Transaction as are reasonably appropriate to take account of such partial Optional
Termination.
(b) Limited Optional Early Termination. If Limited Optional Early Termination is specified as
applicable in a Transaction Supplement, a party that is specified as a Limited OET Electing Party in
the Transaction Supplement may effect an Optional Termination in respect of a Transaction entered
into under this Master Confirmation Agreement as if it were an OET Electing Party solely upon or
after the occurrence of any of the following in respect of such Transaction:
(i) the Issuer or any agent thereof announces or publishes information stating that the Issuer will
redeem any of the Bonds for cash, securities or any other assets, or any combination of the
foregoing (regardless of whether the Issuer does in fact, so redeem such Bonds);
(ii) the tenth Business Day preceding the date, if any, on which the Issuer can redeem the Bonds,
in whole or in part, by their terms for cash, securities or any other assets, or any combination of
the foregoing (regardless of whether the Issuer does in fact, so redeem such Bonds);
(iii) the tenth Business Day preceding the date, if any, on which holders of the Bonds in the
Relevant Jurisdiction can redeem the Bonds, in whole or in part, by their terms for cash, securities
or any other assets, or any combination of the foregoing (regardless of whether any such holder
does in fact, so redeem such Bonds); or
(iv) any other event specified in the Transaction Supplement in respect of the Limited Optional
Early Termination occurs.
(c) Non-Cash Distributions and Redemptions Declared Following the Final Value Date.
Notwithstanding anything to the contrary herein, if the Record Date for a Non-Cash Distribution
Amount or Non-Cash Partial Redemption occurs during the period from and including the final Value
Date to but excluding the Termination Date for a Transaction, then, in lieu of making adjustments
described under the headings “Consequences of Non-Cash Distribution Amounts” and
“Consequences of Non-Cash Partial Redemptions”, (i) the Calculation Agent shall determine a cash
GTC: BOND-11
value of the proceeds in the Settlement Currency of the proceeds (the “Proceeds Value”) that would
be received by a holder in the Relevant Jurisdiction of a face amount of the Bonds equal to the
Transaction Face Amount, as of the date that such proceeds are distributed to holders of the Bonds in
the Relevant Jurisdiction (the “Proceeds Distribution Date”), and (ii) the Total Return Amount Payer
shall pay the Proceeds Value to the Floating Amount Payer on the third Business Day following the
Proceeds Distribution Date, unless the Proceeds Distribution Date occurs more than six months
following the Termination Date, in which case the Proceeds Value will not be paid.
(d) Additional Representations and Agreements:
[Party A][Party B][The Floating Amount Payer] represents, warrants and covenants to [Party
A][Party B][The Total Return Amount Payer] at all times during the term of each Transaction that:
1. [Party A][Party B][The Floating Amount Payer] is not and has not been an “affiliate” of the
Issuer (as such term is defined in Rule 405 and Rule 144 under the Securities Act of 1933, as
amended) for at least three months prior to the Trade Date and through the Termination Date
will not be an affiliate of the Issuer; (ii) [Party A][Party B][The Floating Amount Payer] was
not, on the Trade Date and will not be on the date that any Optional Termination Notice is
delivered to the other party hereto (regardless of the time of such delivery) in possession of
material non-public information regarding the Issuer. “Material” for these purposes means any
information to which an investor would reasonably attach importance in reaching a decision to
buy, sell or hold Bonds of the Issuer.
2. So long as either party has or may have any obligation under the relevant Transaction, each
party and its affiliates and the Calculation Agent, if a third party, may deal in the Bonds and
may, where permitted, accept deposits from, make loans or otherwise extend credit to, and
generally engage in any kind of commercial or investment banking or other business with the
Issuer, any affiliate of the Issuer or any other person or entity having obligations relating to the
Issuer, and may act with respect to such business in the same manner as each of them would if
the Transaction did not exist, regardless of whether any such action might have an adverse
effect on the Issuer or the position of the other party to the Transaction or otherwise.
(e) Acknowledgements. [Party A][Party B][The Floating Amount Payer] acknowledges that entering
into a Transaction does not constitute Floating Amount Payer’s ownership of any Bonds.
(f) Preparation of Transaction Supplements. Unless otherwise agreed by the parties, the
preparation of a Transaction Supplement shall be the responsibility of [Party A][Party B][the Total
Return Amount Payer].
GTC: BOND-12
ANNEX CB
(Corporate Convertible or Exchangeable Bond Total
Return Swap)
[Date]
Re:
Corporate Convertible or Exchangeable Bond Total Return Swap General Terms
Confirmation
Dear Sir or Madam,
The purpose of this Corporate Convertible or Exchangeable Bond Total Return Swap General Terms
Confirmation (this “Convertible Bond TRS General Terms Confirmation”) is to confirm certain general
terms and conditions of convertible and exchangeable bond total return swap transactions (each, a
“Transaction”) entered into between us under the 2007 Master Corporate Bond Total Return Swap
Confirmation Agreement dated as of [insert date] (the “Master Confirmation Agreement”).
This Convertible Bond TRS General Terms Confirmation hereby incorporates by reference the 2002
ISDA Equity Derivatives Definitions (the “Equity Definitions”) and the 2006 ISDA Definitions (the
“Swap Definitions”), each as published by the International Swaps and Derivatives Association, Inc. In
the event of any inconsistency between the Equity Definitions and the Swap Definitions, the Equity
Definitions will govern. In the event of any inconsistency between the Equity Definitions or the Swap
Definitions and this Convertible Bond TRS General Terms Confirmation, this Convertible Bond TRS
General Terms Confirmation will govern.
All provisions contained in the Master Agreement govern each Confirmation (each as defined in the
Master Confirmation Agreement) except as expressly modified below or in the relevant Transaction
Supplement.
1. The general terms of each Transaction to which this Convertible Bond TRS General Terms
Confirmation relates are as follows (unless otherwise specified in the relevant Transaction
Supplement), as supplemented by the Transaction Supplement related to such Transaction:
General Terms:
Trade Date:
As specified in the relevant Transaction
Supplement.
Effective Date:
As specified in the relevant Transaction
Supplement.
Termination Date:
The earliest of (a) the final Total Return
Amount Payment Date, (b) the Scheduled
Maturity Date of Bonds, (c) the Full
Redemption Date, if any, (d) the Optional
GTC: CB-1
Termination Payment Date, if any, on which
the Transaction is terminated in whole.
Settlement Currency:
As specified in the relevant Transaction
Supplement.
Relevant Jurisdiction:
As specified in the relevant Transaction
Supplement.
Bonds:
As specified in the relevant Transaction
Supplement.
Underlying Shares:
The shares, if any, into which the Bonds
are or may be convertible at a specified
time, or from time to time, whether at the
option of the Issuer or any holders thereof
or on a mandatory basis.
Issuer:
The issuer of the Bonds.
Scheduled Maturity Date of Bonds:
As specified in the relevant Transaction
Supplement.
Notional Amount:
(A) With respect to the initial Value Date,
an amount equal to the Transaction Face
Amount multiplied by the Initial Price and
(B) with respect to each subsequent Value
Date, the sum of (i) the Notional Amount in
respect of the prior Value Date and (ii) the
Total Return Amount, whether positive or
negative, determined as of the prior Value
Date.
Transaction Face Amount:
As specified in the relevant Transaction
Supplement, subject to reduction(s) in the
event of any Optional Termination and/or
any Partial Redemptions.
Full Redemption Date:
The date, if any, on which the Issuer pays all
holders of the Bonds in the Relevant
Jurisdiction in respect of the entire then
outstanding principal amount of the Bonds
held by such holders in cash (a “Full
Redemption”) in respect of a record date (as
specified by the Issuer or in the indenture or
other legal instrument governing the Bonds
or as otherwise determined by the
Calculation Agent) (the “Record Date”) that
occurs during the period extending from and
including the Effective Date to but excluding
the Termination Date.
GTC: CB-2
Full Redemption Amount:
The amount of principal actually paid by the
Issuer in cash on the Full Redemption Date
to holders of the Bonds in the Relevant
Jurisdiction in respect of Bonds with an
outstanding principal amount equal to the
Transaction Face Amount as of the Record
Date relating to the Full Redemption Date.
Initial Price:
In respect of the initial Value Date or any
date that occurs prior to the initial Value
Date, the Initial Price per Bond specified in
the relevant Transaction Supplement
expressed as a percentage of par and
inclusive of accrued interest through the
Effective Date, unless the parties otherwise
agree or the Calculation Agent determines
that on the Effective Date the Bonds trade
exclusive of accrued interest; and
in respect of each subsequent Value Date
and any other date that occurs after the initial
Value Date, the Final Price determined for
the immediately preceding Value Date.
Final Price:
Select one of the following:
[The price of the Bonds, expressed as a
percentage of par, at or about the Valuation
Time (or such other time as may be agreed
by the parties) on the relevant Value Date,
as mutually agreed by Party A and Party B.
If Party A and Party B do not agree on the
price of the Bonds, the Final Price will be
the [highest firm bid price][average of the
firm bid prices], expressed as a percentage
of par, as the Calculation Agent is able to
obtain for the sale of the Transaction Face
Amount of the Bonds (a “Bid Quote”) from
five leading banks or dealers that deal in
obligations of the type of the Bonds on the
Value Date; provided, however, that if none
of such banks or dealers provide such a Bid
Quote as of the Value Date, then the Final
Price shall be the first Bid Quote that the
Calculation Agent is able to obtain on any
of the three Business Days following the
Value Date, failing which the Final Price
shall be determined by the Calculation
Agent, acting in good faith and in a
commercially reasonable manner.]
GTC: CB-3
[The price of the Bonds, expressed as a
percentage of par, at or about the Valuation
Time, or such other time as may be agreed
by the parties, on the relevant Value Date, as
determined by the Calculation Agent in a
commercially reasonable manner, taking into
account factors that the Calculation Agent
deems relevant, that may include, without
limitation, quotations, other price source
information or other market data.]
The Final Price as of the relevant Value Date
will be determined inclusive of accrued
interest as of such date, unless the
Calculation Agent determines that the Bonds
are trading exclusive of accrued interest as
of the relevant Value Date, in which case
such Final Price will be exclusive of accrued
interest.
Valuation Time:
As specified in the relevant Transaction
Supplement.
Value Date(s):
(1) As specified in the relevant Transaction
Supplement, or if any such day is not a Bond
Business Day, the next Bond Business Day
(subject to the Optional Termination, Full
Redemption and Disrupted Day provisions
of this Convertible Bond TRS General
Terms Confirmation) and (2) the date that
falls three Bond Business Days prior to the
Termination Date, which date will be the
final Value Date.
Bond Business Day:
A day which is both a Scheduled Trading
Day and a Business Day.
Scheduled Trading Day:
Shall be determined in accordance with
Section 1.31 of the Equity Definitions.
Exchange:
Select one:
[Means the exchange or quotation system on
which the largest volume of Underlying
Shares normally trade.]
[As specified in the relevant Transaction
Supplement.]
GTC: CB-4
Disrupted Day:
Means any Scheduled Trading Day on which
the Exchange fails to open for trading during
its regular trading session or on which any
event that disrupts or impairs (as determined
by the Calculation Agent) the ability of
market participants in general to effect
transactions in or obtain market values for
the Bonds or any Underlying Shares has
occurred. The Calculation Agent shall as
soon as reasonably practicable under the
circumstances notify the parties or other
party, as the case may be, of the occurrence
of a Disrupted Day on any day that, but for
the occurrence of a Disrupted Day, would
have been a Value Date. Without limiting
the obligation of the Calculation Agent to
notify the parties as set forth in the preceding
sentence, failure by the Calculation Agent to
notify the parties of the occurrence of a
Disrupted Day shall not affect the validity of
the occurrence and effect of such Disrupted
Day on any Transaction.
Consequence of a Disrupted Day:
If any Value Date is a Disrupted Day, then
such Value Date shall be the first succeeding
Bond Business Day that is not a Disrupted
Day; provided that if such Value Date has
not occurred as of the Valuation Time on the
eighth Bond Business Day immediately
following the date which, but for the
occurrence of the event causing the
Disrupted Day, would have been such Value
Date, then (1) that eighth Bond Business
Day shall be deemed to be such Value Date,
and (2) the Calculation Agent shall
determine its good faith estimate of the value
of the Bonds, expressed as a percentage of
par (inclusive of accrued interest through
such eighth Bond Business Day, unless the
Calculation Agent determines that on such
day the Bonds then trade exclusive of
accrued interest), on that eighth Bond
Business Day (and such value shall be the
Final Price for such Value Date).
FX Provisions:
If, with respect to a Transaction, the
currency in which any amount (including,
without limitation, a Total Return Amount, a
Distribution Amount, a Reference Amount
or a Floating Amount) is calculated or
determined is different from the Settlement
GTC: CB-5
Currency, the Calculation Agent shall
determine the value of that amount or price
in the Settlement Currency, taking into
consideration all available information that it
considers relevant, which information shall
include the rate(s) of exchange at which the
payer (if any) of such amount would be able,
in good faith and using commercially
reasonable procedures, to convert the
relevant amount into the Settlement
Currency.
Distribution Amounts:
Distribution Amounts Payer:
The Total Return Amount Payer
Distribution Amounts Period:
The period that commences on, and
includes the Effective Date and ends on, but
excludes, the Termination Date.
Distribution Amount:
Any and all payments or distributions,
including, without limitation, interest and
coupon payments and consent fees, but
excluding Partial Redemption Amounts or
Full Redemption Amounts, that are actually
made by the Issuer to holders of the Bonds
in the Relevant Jurisdiction in respect of an
outstanding principal amount of the Bonds
equal to the Transaction Face Amount as of
the relevant Record Date and for which the
Record Date occurs during the Distribution
Amounts Period.
Cash Distribution Amount:
The portion of a Distribution Amount, if
any, that consists of cash.
Non-Cash Distribution Amount:
That portion of a Distribution Amount, if
any, that consists of property other than
cash
including,
without
limitation,
securities or other non-cash assets.
Consequences of Cash
Distribution Amounts:
The Distribution Amounts Payer shall pay
the Floating Amount Payer the Cash
Distribution Amount within one Business
Day of the relevant Issuer Distribution
Date, notwithstanding the occurrence of the
Termination Date (unless the Issuer
Distribution Date occurs more than six (6)
months following the Termination Date, in
GTC: CB-6
which case the Cash Distribution Amount
will not be paid).
Consequences of Non-Cash
Distribution Amounts:
Issuer Distribution Date:
The Calculation Agent shall adjust the
terms of the Transaction, effective as of the
relevant Issuer Distribution Date, to
account for any Non-Cash Distribution
Amount(s), subject to the “Non-Cash
Distributions and Redemptions Declared
Following the Final Value Date” provision
of this Convertible Bond TRS General
Terms Confirmation.
The date on which the Issuer makes any
payments or distributions of Distribution
Amounts to holders of the Bonds in the
Relevant Jurisdiction.
Total Return Amount:
Total Return Amount Payer:
Payment of the Total Return
Amount:
As specified in the relevant Transaction
Supplement.
If the Total Return Amount for the relevant
Total Return Amount Payment Date is
positive, the Total Return Amount Payer
shall pay the Total Return Amount to the
Floating Amount Payer on the Total Return
Amount Payment Date.
If the Total Return Amount for the relevant
Total Return Amount Payment Date is
negative, the Floating Amount Payer shall
pay the absolute value of the Total Return
Amount to the Total Return Amount Payer
on the Total Return Amount Payment Date.
Total Return Amount Payment
Date(s):
Total Return Amount:
Three Business Days following the relevant
Value Date.
Except as provided below, the Total Return
Amount for the relevant Total Return
Amount Payment Date shall be equal to the
product of:
GTC: CB-7
(a) the Notional Amount as of the relevant
Value Date; and
(b) the quotient of (1) the Final Price minus
the Initial Price; divided by (2) the Initial
Price.
If the relevant Total Return Amount
Payment Date is the Full Redemption Date
or the Scheduled Maturity Date for the
Bonds, such Total Return Amount shall be
an amount equal to:
(i) any amounts of principal actually
paid by the Issuer in cash to holders of
the Bonds in the Relevant Jurisdiction
on the Full Redemption Date or
Scheduled Maturity Date, as applicable,
in respect of the Bonds with an
outstanding principal amount equal to
the Transaction Face Amount as of the
Record Date relating to the Full
Redemption Date or as of the
Scheduled Maturity Date of the Bonds
(prior to giving effect to such principal
payment), as applicable, minus
(ii) the Initial Price multiplied by the
Transaction Face Amount as of the
Record Date relating to the Full
Redemption Date or as of the
Scheduled Maturity Date of the Bonds
(prior to giving effect to such principal
payment), as applicable.
Reference Amounts:
Reference Amounts Payer:
As specified in the Consequences of Cash
Partial Redemptions provision below.
Reference Amounts Period:
The period which commences on, and
includes, the Effective Date and ends on,
but excludes, the Termination Date.
Reference Amount:
In respect of any Partial Redemption that
consists of cash (in whole or in part), the
Reference Amount shall be an amount
equal to:
(i)
the Cash Partial
Amount, minus
GTC: CB-8
Redemption
(ii)
Reference Amounts Payment
Dates:
the Initial Price as of the Value
Date immediately preceding the
Record Date for such Cash Partial
Redemption multiplied by the
amount of the Transaction Face
Amount to which such Cash Partial
Redemption Amount relates (e.g.,
the portion of such Transaction
Face Amount being repaid in cash
by the Issuer).
The Reference Amounts Payer shall pay to
the other party hereto any Reference
Amount on the Business Day following the
related
Partial
Redemption
Date,
notwithstanding the occurrence of the
Termination Date (unless the Partial
Redemption Date occurs more than six
months following the Termination Date, in
which case the Reference Amount will not
be paid).
Partial Redemption:
Any repayments of principal on the Bonds
or redemption of the Bonds that
corresponds to an outstanding principal
amount of the Bonds equal to the
Transaction Face Amount as of the Record
Date for the Partial Redemption, where (i)
the Record Date occurs during the
Reference Amounts Period, (ii) such
repayment or redemption is expected to be
made by the Issuer to holders of the Bonds
in the Relevant Jurisdiction, and (iii) such
repayment or redemption (a) is all in cash,
but is in respect of less than the entire
principal amount of the Bonds then
outstanding; (b) is comprised partially of
cash and partially of securities or assets
other than cash, and is in respect of all or
any portion of, the principal amount of the
Bonds then outstanding; or (c) is comprised
solely of securities or assets other than
cash, and is in respect of all or any portion
of, the principal amount of the Bonds then
outstanding,
Cash Partial Redemption Amount:
The portion, if any, of a Partial Redemption
that consists of cash.
GTC: CB-9
Non-Cash Partial Redemption
Amount:
Partial Redemption Date:
Consequences of Cash Partial
Redemptions:
The portion, if any, of a Partial Redemption
that consists of securities or assets other
than cash for which the Record Date occurs
during the Reference Amounts Period, in
respect of an outstanding principal amount
of the Bonds equal to the Transaction Face
Amount as of the Record Date relating to
the Partial Redemption Date.
The date on which the Issuer makes a
Partial Redemption.
If the Reference Amount is positive, the
Total Return Amount Payer shall pay the
related Reference Amount to the Floating
Amount Payer on the relevant Reference
Amounts Payment Date.
If the Reference Amount is negative, the
Floating Amount Payer shall pay the
absolute value of the related Reference
Amount to the Total Return Amount Payer
on the relevant Reference Amounts
Payment Date.
Consequences of Non-Cash
Partial Redemption:
The Calculation Agent shall adjust the
terms of the Transaction, as it deems
appropriate, to account for any Non-Cash
Partial Redemption(s), subject to the “NonCash Distributions and Redemptions
Declared Following the Final Value Date”
provision of this Convertible Bond TRS
General Terms Confirmation.
Floating Amounts:
Floating Amount Payer:
As specified in the relevant Transaction
Supplement.
Calculation Amount:
In respect of any Calculation Period, the
Notional Amount as of the first day of such
Calculation Period, subject to adjustment to
account for any Optional Termination that
occurs during the Calculation Period.
Floating Amount Payer Payment
Dates:
(i) As specified in the relevant Transaction
Supplement (or if any such day is not a
GTC: CB-10
Business Day, the following Business Day),
and (ii) each Reference Amounts Payment
Date, if any.
First Floating Amount
Payer Payment Date:
As specified in the relevant Transaction
Supplement.
Floating Rate Option:
As specified in the relevant Transaction
Supplement.
Designated Maturity:
As specified in the relevant Transaction
Supplement.
Spread:
As specified in the relevant Transaction
Supplement.
Floating Rate for initial Calculation
Period (inclusive of Spread):
As specified in the relevant Transaction
Supplement.
Floating Rate Day Count Fraction:
As specified in the relevant Transaction
Supplement.
Reset Dates:
The first day of each Calculation Period
that commences on a Floating Amount
Payer Payment Date other than a Reference
Amounts Payment Date.
Relevant Rate:
For any Reset Date, the rate determined in
accordance with Section 6.2(c)(i) of the
Swap Definitions; and for any Calculation
Period that commences on a Reference
Amounts Payment Date, the Relevant Rate
in effect for the immediately preceding
Calculation Period that commences on a
Reset Date.
Compounding:
[Applicable][Not Applicable]
Compounding Dates:
If Compounding is Applicable, as specified
in the relevant Transaction Supplement;
otherwise, none.
Additional Representations, Agreements and Acknowledgments:
Non-Reliance:
[Applicable][Not Applicable]
Agreements and Acknowledgments
Regarding Hedging Activities:
[Applicable][Not Applicable]
GTC: CB-11
Additional Acknowledgments:
[Applicable][Not Applicable]
[Eligible Contract Participant:
Each party represents to the other party that
it is an “eligible contract participant” as
defined in the U.S. Commodity Exchange
Act (as amended).]*
2. Calculation Agent: [
]
3. Notice and Account Details:
Unless otherwise specified in the relevant Transaction Supplement, Notice and Account Details for
Party A: [ ]
Unless otherwise specified in the relevant Transaction Supplement, Notice and Account Details for
Party B: [ ]
4. Additional Provisions:
(a) Optional Early Termination. If Optional Early Termination is specified as applicable in a
Transaction Supplement, a party that is specified as an OET Electing Party in the Transaction
Supplement may elect to terminate a Transaction, in whole or in part, by giving notice orally or in
writing (an “Optional Termination Notice”) (such termination, an “Optional Termination”). If an
Optional Termination Notice is given less than 30 minutes prior to the Scheduled Closing Time on
any Notice Date (as defined below), then that Optional Termination Notice will be deemed delivered
on the following Notice Date. Any Optional Termination Notice shall specify the Optional
Termination Terms applicable to the relevant Optional Termination. The “Optional Termination
Terms” are: (i) the Transaction subject to such Optional Termination (the “Terminated Transaction”);
(ii) the Value Date for the Optional Termination (which must fall within the parameters set forth
below); and (iii) whether the subject Transaction is to be terminated in whole or in part and, in the
case of a partial termination, the portion of the Transaction Face Amount that is subject to such
Optional Termination (the portion of the Transaction so terminated, whether in whole or in part, the
“Optional Termination Amount”).
The Value Date for the Optional Termination may be any Business Day from and including the
applicable Notice Date to but excluding the final Value Date for the relevant Transaction.
With respect to any Optional Termination: (i) the Value Date for the Optional Termination shall be
deemed to be the final Value Date for such Optional Termination Amount; (ii) the third Business Day
following such Value Date shall be the Payment Date for the Optional Termination Amount (the
“Optional Termination Payment Date”); (iii) the Calculation Agent shall determine the Distribution
Amount(s), the Total Return Amount, the Reference Amount(s) and the Floating Amount payable on
the Optional Termination Payment Date (the net amount of such amounts being the “Optional
Termination Payment”) in accordance with the terms of this Bond TRS General Terms Confirmation;
and (iv) the party owing the Optional Termination Payment shall pay such amount to the other party
on the Optional Termination Payment Date.
For the avoidance of doubt, (i) in respect of any Transaction, until the Transaction Face Amount is
reduced to zero, more than one Optional Termination may be designated in respect of the same
*
To be included if a party is a U.S. entity.
GTC: CB-12
Transaction; and (ii) if an Optional Termination is designated in respect of any Transaction, such
designation shall be solely in respect of such Transaction.
“Notice Date” means any Bond Business Day during the period extending from but excluding the
Effective Date for the relevant Transaction to, and including, the Bond Business Day preceding the
final Value Date for the relevant Transaction.
In the case of an Optional Termination of only part of a Transaction, the Calculation Agent will make
such adjustments to the Notional Amount, Transaction Face Amount or any other variable relevant to
the terms of such Transaction as are reasonably appropriate to take account of such partial Optional
Termination.
(b) Limited Optional Early Termination. If Limited Optional Early Termination is specified as
applicable in a Transaction Supplement, a party that is specified as a Limited OET Electing Party in
the Transaction Supplement may effect an Optional Termination in respect of any Transaction entered
into under this Master Confirmation Agreement as if it were an OET Electing Party solely upon or
after the occurrence of any of the following in respect of such Transaction:
(i) the Issuer or any agent thereof announces or publishes information stating that the Issuer will
redeem any of the Bonds for cash, securities or any other assets, or any combination of the
foregoing (regardless of whether the Issuer does in fact, so redeem such Bonds);
(ii) the tenth Business Day preceding the date, if any, on which the Issuer can redeem the Bonds,
in whole or in part, by their terms for cash, securities or any other assets, or any combination of
the foregoing (regardless of whether the Issuer does in fact, so redeem such Bonds);
(iii) the tenth Business Day preceding the date, if any, on which holders of the Bonds in the
Relevant Jurisdiction can redeem the Bonds, in whole or in part, by their terms for cash, securities
or any other assets, or any combination of the foregoing (regardless of whether any such holder
does in fact, so redeem such Bonds);
[(iv) an Announcement Date of a Merger Event, Tender Offer, Nationalization, Insolvency or
Delisting occurs or an Insolvency Filing occurs (the defined terms in this clause having the
meanings given to them in the 2002 ISDA Equity Derivatives Definitions, except that all
references in such definitions (a) to “Shares” shall mean “Bonds” or “Underlying Shares”, as
applicable; and (b) to “Issuer” shall mean, with respect to the Bonds, the Issuer of the Bonds and
with respect to the Underlying Shares, the issuer of the Underlying Shares;] or
(v) any other event specified in the Transaction Supplement in respect of the Limited Optional
Termination occurs.
(c) Conversions.
In respect of any Transaction, if the Issuer converts the Bonds of holders in the
Relevant Jurisdiction, whether pursuant to mandatory or optional conversion rights, in whole or in
part, into any securities or assets other than cash (including, without limitation, any Underlying
Shares) (a “Conversion”), as of any Record Date that occurs during the period from and including the
Effective Date to but excluding the Termination Date, then, subject to the “Non-Cash Distributions
and Redemptions Declared Following the Final Value Date” provision of this Convertible Bond TRS
General Terms Confirmation, (i) if such conversion is in respect of less than all of the Bonds then
outstanding, then such Transaction shall become a Transaction on the Bonds and such other securities
or such other assets, or any combination of the foregoing, as applicable, and the Calculation Agent
shall adjust the terms of such Transaction as it deems appropriate to account for such conversion; and
(ii) if such conversion is in respect of all of the Bonds then outstanding, then such Transaction shall
become a Transaction on such other securities or such other assets, or any combination of the
foregoing, as applicable, and the Calculation Agent shall adjust the terms of such Transaction, as it
deems appropriate to account for such conversion.
GTC: CB-13
If the Issuer converts the Bonds, in whole or in part, into Shares, then the following consequences
shall apply:
Consequences of Merger Events:
Share-for-Share:
[Cancellation
and
Payment][Options
Exchange
Adjustment][Calculation Agent Adjustment] [Modified
Calculation Agent Adjustment]
Share-for-Other:
[Cancellation
and
Payment][Options
Exchange
Adjustment][Calculation Agent Adjustment] [Modified
Calculation Agent Adjustment]
Share-for-Combined:
[Cancellation
and
Payment][Options
Exchange Adjustment][Calculation Agent
Adjustment] [Modified Calculation Agent
Adjustment] [Component Adjustment]
Tender Offer:
[Applicable][Not Applicable]
Consequences of Tender Offers:
Share-for-Share:
[Cancellation and Payment][Options
Exchange Adjustment][Calculation Agent
Adjustment] [Modified Calculation Agent
Adjustment]
Share-for-Other:
[Cancellation and Payment][Options
Exchange Adjustment][Calculation Agent
Adjustment] [Modified Calculation Agent
Adjustment]
Share-for-Combined:
[Cancellation and Payment][Options
Exchange Adjustment][Calculation Agent
Adjustment] [Modified Calculation Agent
Adjustment] [Component Adjustment]
[Options Exchange:
[
Determining Party:
]]
[Party A][Party B][Total Return Amount
Payer][Floating Amount Payer][Both
Parties
Composition of Combined Consideration:
[Applicable][Not Applicable]
Nationalization, Insolvency and Delisting:
[Applicable][Not Applicable]
Consequences of Nationalization:
[Negotiated Close-out][Cancellation and
Payment]
GTC: CB-14
Consequences of Insolvency:
[Negotiated Close-out][Cancellation and
Payment]
Consequences of Delisting:
[Negotiated Close-out][Cancellation and
Payment]
Determining Party:
[Party A][Party B] [Total Return Amount
Payer][Floating Amount Payer][Both
Parties]
Additional Disruption Events:
Change in Law:
[Applicable][Not Applicable]
Failure to Deliver:
[Applicable][Not Applicable]
Insolvency Filing:
[Applicable][Not Applicable]]
Hedging Disruption:
[Applicable][Not Applicable]
Hedging Party:
[
Increased Cost of Hedging:
[Applicable][Not Applicable]
Hedging Party:
[
Loss of Stock Borrow:
[Applicable][Not Applicable]
Maximum Stock Loan Rate:
[
]
Hedging Party:
[
]
Increased Cost of
Stock Borrow:
[Applicable][Not Applicable]
Initial Stock Loan Rate:
[
]
Hedging Party:
[
]
Determining Party:
]
]]
[Party A][Party B] [Total Return Amount
Payer][Floating Amount Payer][Both
Parties]
(d) Non-Cash Distributions, Redemptions and Conversions Declared Following the Final Value
Date. Notwithstanding anything to the contrary herein, if the Record Date for any Non-Cash
Distribution Amount, Non-Cash Partial Redemption or Conversion occurs during the period from and
including the Value Date to but excluding the Termination Date for a Transaction, then in lieu of
making adjustments described under the headings “Consequences of Non-Cash Distribution
Amounts”, “Consequences of Non-Cash Partial Redemptions” and “Conversions”, (i) the Calculation
Agent shall determine a cash value of the proceeds (the “Proceeds Value”) that would be received by
a holder in the Relevant Jurisdiction of a face amount of the Bonds equal to the Transaction Face
GTC: CB-15
Amount, as of the date that such proceeds are distributed to holders of the Bonds in the Relevant
Jurisdiction (the “Proceeds Distribution Date”), and (ii) the Total Return Amount Payer shall pay the
Proceeds Value to the Floating Amount Payer on the third Business Day following the Proceeds
Distribution Date, unless the Proceeds Receipt Date occurs more than six months following the
Termination Date, in which case the Proceeds Value will not be paid.
(e) Additional Representations and Agreements:
[Party A][Party B][The Floating Amount Payer] represents, warrants and covenants to [Party
A][Party B][The Total Return Amount Payer] at all times during the term of each Transaction that:
1. [Party A][Party B][The Floating Amount Payer] is not and has not been an “affiliate” of the
Issuer (as such term is defined in Rule 405 and Rule 144 under the Securities Act of 1933, as
amended) or the Underlying Shares for at least three months prior to the Trade Date and
through the Termination Date will not be an affiliate of the Issuer; (ii) [Party A][Party B][The
Floating Amount Payer] was not, on the Trade Date and will not be on the date that any
Optional Termination Notice is delivered to the other party hereto (regardless of the time of
such delivery) in possession of material non-public information regarding the Issuer or the
Underlying Shares. “Material” for these purposes means any information to which an investor
would reasonably attach importance in reaching a decision to buy, sell or hold securities of the
Issuer.
2. So long as either party has or may have any obligation under the relevant Transaction, each
party and its affiliates and the Calculation Agent, if a third party, may deal in the Bonds or any
Underlying Shares and may, where permitted, accept deposits from, make loans or otherwise
extend credit to, and generally engage in any kind of commercial or investment banking or
other business with the Issuer , any affiliate of the Issuer or any other person or entity having
obligations relating to the Issuer , and may act with respect to such business in the same manner
as each of them would if the relevant Transaction did not exist, regardless of whether any such
action might have an adverse effect on the Issuer or the position of the other party to the
relevant Transaction or otherwise.
(f) Acknowledgements. [Party A][Party B][The Floating Amount Payer] acknowledges that entering
into a Transaction does not constitute Floating Amount Payer’s ownership of any Bonds or
Underlying Shares, including without limitation, voting rights.
(g) Preparation of Transaction Supplements. Unless otherwise agreed by the parties,
the preparation of a Transaction Supplement shall be the responsibility of [Party
A][Party B][the Total Return Amount Payer].
GTC: CB-16
TRANSACTION SUPPLEMENT BOND
(Corporate Bond (Non-Convertible/Exchangeable)
Total Return Swap)
BOND TOTAL RETURN SWAP TRANSACTION SUPPLEMENT
This Transaction Supplement is entered into between [Insert full legal name of Party A] (“Party A”) and
[Insert full legal name of Party B] (“Party B”) on the Trade Date specified below.
The purpose of this communication is to confirm the terms and conditions of the Bond Total Return Swap
Transaction entered into between Party A and Party B on the Trade Date specified below (the
“Transaction”). This Transaction Supplement is entered into under the 2007 Master Corporate Bond
Total Return Swap Confirmation Agreement dated as of [insert date] between us, as may be amended
from time to time, and, together with the 2007 Master Corporate Bond Total Return Swap Confirmation
Agreement and the Bond TRS General Terms Confirmation attached thereto, constitutes a
“Confirmation” as referred to in the Master Agreement between the parties. Notwithstanding the
foregoing, if the Bonds referenced below become convertible, then the Convertible Bond TRS General
Terms Confirmation will apply.
The terms of the Transaction to which this Transaction Supplement relates are as follows:
General Terms:
Trade Date:
[]
Effective Date:
[]
Settlement Currency:
[]
Bonds:
[]
Scheduled Maturity Date of Bonds:
[]
Transaction Face Amount:
[]
Initial Price:
[ ]%
Valuation Time:
[]
Value Date(s):
[]
Total Return Amount Payer:
[]
Floating Amount Payer:
Floating Amount Payer Payment Date
[]
First Floating Amount Payer Payment Date:
[]
Floating Rate Option:
[]
TS: 1
Designated Maturity:
[]
Spread:
[]
Floating Rate for the initial
Calculation Period (inclusive of Spread):
[]
Floating Rate Day Count Fraction:
[]
Relevant Jurisdiction:
[]
Optional Termination Provisions:
Optional Early Termination:
[Applicable][Not Applicable]
OET Electing Party:
[Party A][Party B][Total Return
Amount Payer][Floating Amount
Payer][Both Parties]
Limited Optional Early Termination:
Applicable]
[Applicable][Not
Limited OET Electing Party:
[Party A][Party B][Total Return
Amount Payer][Floating Amount
Payer][Both Parties]
TS: 2
Please confirm your agreement to be bound by the terms of the foregoing by executing a copy of this
Transaction Supplement and returning it to us at [
].
[Insert full legal name of Party A]
[Insert full legal name of Party B]
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
TS: 3
TRANSACTION SUPPLEMENT BOND
(Corporate Convertible/Exchangeable Bond Total
Return Swap)
BOND TOTAL RETURN SWAP TRANSACTION SUPPLEMENT
This Transaction Supplement is entered into between [Insert full legal name of Party A] (“Party A”) and
[Insert full legal name of Party B] (“Party B”) on the Trade Date specified below.
The purpose of this communication is to confirm the terms and conditions of the Bond Total Return Swap
Transaction entered into between Party A and Party B on the Trade Date specified below (the
“Transaction”). This Transaction Supplement is entered into under the 2007 Master Corporate Bond
Total Return Swap Confirmation Agreement dated as of [insert date] between us, as may be amended
from time to time, and, together with the 2007 Master Corporate Bond Total Return Swap Confirmation
Agreement and the Convertible Bond TRS General Terms Confirmation attached thereto, constitutes a
“Confirmation” as referred to in the Master Agreement between the parties.
The terms of the Transaction to which this Transaction Supplement relates are as follows:
General Terms:
Trade Date:
[]
Effective Date:
[]
Settlement Currency:
[]
Bonds:
[]
Scheduled Maturity Date of Bonds:
[]
Transaction Face Amount:
[]
Initial Price:
[ ]%
Valuation Time:
[]
Value Date(s):
[]
Exchange:
[]
Total Return Amount Payer:
[]
Floating Amount Payer:
Floating Amount Payer Payment Date
[]
First Floating Amount Payer Payment Date:
[]
Floating Rate Option:
[]
Designated Maturity:
[]
TS: 4
Spread:
[]
Floating Rate for the initial
Calculation Period (inclusive of Spread):
[]
Floating Rate Day Count Fraction:
[]
Relevant Jurisdiction:
[]
Optional Termination Provisions:
Optional Early Termination:
[Applicable][Not Applicable]
OET Electing Party:
[Party A][Party B][Total Return
Amount Payer][Floating Amount
Payer][Both Parties]
Limited Optional Early Termination:
Applicable]
[Applicable][Not
Limited OET Electing Party:
[Party A][Party B][Total Return
Amount Payer][Floating Amount
Payer][Both Parties]
TS: 5
Please confirm your agreement to be bound by the terms of the foregoing by executing a copy of this
Transaction Supplement and returning it to us at [
].
[Insert full legal name of Party A]
[Insert full legal name of Party B]
By: ______________________________
Name:
Title:
By: ______________________________
Name:
Title:
TS: 6