Exhibit 10 (e)
(Local Currency-Single Jurisdiction)
ISDA (a)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of June 16, 1998
Richardson Electronics, Ltd. American National Bank and and
Trust Company of Chicago have entered and/or anticipate entering
into one or more transactions (each a "Transaction") that are or
will be governed by this Master Agreement, which includes the
schedule (the "Schedule"), and the documents and other
confirming evidence (each a "Confirmation") exchanged between
the parties confirming those Transactions.
Accordingly, the parties agree as follows: --
1. Interpretation
(a) Definitions. The terms defined in Section 12 and in the
Schedule will have the meanings therein specified for the
purpose of this Master Agreement.
(b) Inconsistency. In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this
Master Agreement, the Schedule will prevail. In the event of any
inconsistency between the provisions of any Confirmation and
this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant
Transaction.
(c) Single Agreement. All Transactions are entered into in
reliance on the fact that this Master Agreement and all
Confirmations form a single agreement between the parties
(collectively referred to as this" Agreement"), and the parties
would not otherwise enter into any Transactions.
2. Obligations
(a) General Conditions.
(i) Each party will make each payment or delivery specified
in each Confirmation to be made by it, subject to the other
provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due
date for value on that date in the place of the account
specified in the relevant Confirmation or otherwise pursuant to
this Agreement, in freely transferable funds and in the manner
customary for payments in the required currency. Where
settlement is by delivery (that is, other than by payment), such
delivery will be made for receipt on the due date in the manner
customary for the relevant obligation unless otherwise specified
in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i)
is subject to (1) the condition precedent that no
Event of Default or potential event of default with respect to
the other party has occurred and is continuing,
(2) the condition precedent that no Early Termination Date in
respect of the relevant Transaction has
occurred or been effectively designated and (3) each other
applicable condition precedent specified in this
Agreement.
Footnote (a) Copyright 1992 by International Swap Dealers
Association, Inc.
b) Change of Account. Either party may change its account for
receiving a payment or delivery by giving notice to the other
party at least five Local Business Days prior to the scheduled
date for the payment or delivery to which such change applies
unless such other party gives timely notice of a reasonable
objection to such change.
(c) Netting. If on any date amounts would otherwise be payable:
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's
obligation to make payment of any such amount will be
automatically satisfied and discharged and, if the aggregate
amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been
payable by the other party, replaced by an obligation upon the
party by whom the larger aggregate amount would have been
payable to pay to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions
that a net amount will be determined in respect of all amounts
payable on the same date in the same currency in respect of such
Transactions, regardless of whether such amounts are payable in
respect of the same Transaction. The election may be made in the
Schedule or a Confirmation by specifying that subparagraph (ii)
above will not apply to the Transactions identified as being
subject to the election, together with the starting date (in
which case subparagraph (ii) above will not, or will cease to,
apply to such Transactions from such date). This election may be
made separately for different groups of Transactions and will
apply separately to each pairing of branches or offices through
which the parties make and receive payments or deliveries-
(d) Default Interest; Other Amounts. Prior to the occurrence or
effective designation of an Early Termination Date in respect of
the relevant Transaction, a party that defaults in the
performance of any payment obligation will, to the extent
permitted by law and subject to Section 6( c ), be required to
pay interest (before as well as after judgment) on the overdue
amount to the other party on demand in the same currency as such
overdue amount, for the period from (and including) the original
due date for payment to (but excluding) the date of actual
payment, at the Default Rate. Such interest will be calculated
on the basis of daily compounding and the actual number of days
elapsed. If, prior to the occurrence or effective designation of
an Early Termination Date in respect of the relevant
Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will
compensate the other party on demand if and to the extent
provided for in the relevant Confmnation or elsewhere in this
Agreement.
3. Representations
Each party represents to the other party (which representations
will be deemed to be repeated by each party on each date on
which a Transaction is entered into) that: --
(a) Basic Representations.
(i) Status. It is duly organised and validly existing under
the laws of the jurisdiction of its organisation or
incorporation and, if relevant under such laws, in good
standing;
(ii) Powers. It has the power to execute this Agreement and
any other documentation relating to this Agreement to which it
is a party, to deliver this Agreement and any other
documentation relating to this Agreement that it is required by
this Agreement to deliver and to perform its obligations under
this Agreement and any obligations it has under any Credit
Support Document to which it is a party and has taken all
necessary action to authorize such execution, delivery and
performance;
(iii) No Violation or Conflict. Such execution, delivery
and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents,
any order or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) Consents. All governmental and other consents that are
required to have been obtained by it with respect to this
Agreement or any Credit Support Document to which it is a party
have been obtained and are in full force and effect and all
conditions of any such consents have been complied with; and
(v) Obligations Binding. Its obligations under this
Agreement and any Credit Support Document to which it is a party
constitute its legal, valid and binding obligations, enforceable
in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(b) Absence of Certain Events. No Event of Default or Potential
Event of Default or, to its knowledge, Termination Event with
respect to it has occurred and is continuing and no such event
or circumstance would occur as a result of its entering into or
performing its obligations under this Agreement or any Credit
Support Document to which it is a party .
(c) Absence of Litigation. There is not pending or, to its
knowledge, threatened against it or any of its Affiliates any
action, suit or proceeding at law or in equity or before any
court, tribunal, governmental body, agency or official or any
arbitrator that is likely to affect the legality, validity or
enforceability against it of this Agreement or any Credit
Support Document to which it is a party or its ability to
perform its obligations under this Agreement or such Credit
Support Document.
(d) Accuracy of Specified Information. All applicable
information that is furnished in writing by or on behalf
of it to the other party and is identified for the purpose of
this Section 3( d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material
respect.
4. Agreements
Each party agrees with the other that, so long as either party
has or may have any obligation under this Agreement or under any
Credit Support Document to which it is a party: --
(a) Furnish Specified Information. It will deliver to the other
party any forms, documents or certificates
specified in the Schedule or any Confirmation by the date
specified in the Schedule or such Confirmation or, if none
is specified, as soon as reasonably practicable.
(b) Maintain Authorizations. It will use all reasonable efforts
to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained
by it with respect to this Agreement or any Credit Support
Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
(c) Comply with Laws. It will comply in all material respects
with all applicable laws and orders to which it may be subject
if failure so to comply would materially impair its ability to
perform it obligations under this Agreement or any Credit
Support Document to which it is a party.
5. Events of Default and Termination Events
(a) Events of Default. The occurrence at any time with respect
to a party or, if applicable, any Credit Support Provider of
such party or any Specified Entity of such party of any of the
following events constitutes an event of default (an "Event of
Default") with respect to such party: --
(i) Failure to Payor Deliver. Failure by the party to make,
when due, any payment under this Agreement
or delivery under Section 2(a)(i) or 2(d) required to be made by
it if such failure is not remedied on or before the third Local
Business Day after notice of such failure is given to the party;
(ii) Breach of Agreement. Failure by the party to comply
with or perform any agreement or obligation (other than an
obligation to make any payment under this Agreement or delivery
under Section 2(a)(i) or 2( d) or to give notice of a
Termination Event) to be complied with or performed by the party
in accordance with this Agreement if such failure is not
remedied on or before the thirtieth day after notice of such
failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support
Provider of such party to comply with or perform any agreement
or obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit
Support Document or the failing or ceasing of such Credit
Support Document to be in full force and effect for the purpose
of this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support
Document relates without the written consent of the other
party;or
(3) the party of such Credit Support Provider
Disaff1rIns, disclaims, repudiates or rejects, in whole or in
part, or challenges the validity, of such Credit Support
Document;
(iv) Misrepresentation. A representation made or repeated or
deemed to have been made or repeated by the party or any Credit
Support Provider of such party in this Agreement or any Credit
Support Document proves to have been incorrect or misleading in
any material respect when made or repeated or deemed to have
been made or repeated;
(v) Default under Specified Transaction. The party, any Credit
Support Provider of such party or any applicable Specified
Entity of such party ( 1) defaults under a Specified Transaction
and, after giving effect to any applicable notice requirement or
grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified
Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date of,
or any payment on early termination of, a Specified Transaction
( or such default continues for at least three Local Business
Days if there is no applicable notice requirement or grace
period) or (3) disaff1rIns, disclaims, repudiates or rejects, in
whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate
it or act on its behalf);
(vi) Cross Default. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence
of ( 1) a default, event of default or other similar condition
or event (however described) in respect of such party, any
Credit Support Provider of such party or any applicable
Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not
less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness
becoming, or becoming capable at such time of being declared,
due and payable under such agreements or instruments, before it
would otherwise have been due and payable or (2) a default by
such party, such Credit Support Provider or such Specified
Entity (individually or collectively) in making one or more
payments on the due date thereof in an aggregate amount of not
less than the applicable Threshold Amount under such agreements
or instruments (after giving effect to any applicable notice
requirement or grace period);
(vii) Bankruptcy. The party, any Credit Support Provider of such
party or any applicable Specified Entity
of such party: --
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment of insolvency or
bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors' rights,
or a petition is presented for its winding-up or liquidation,
and, in the case of any such proceeding or petition instituted
or presented against it, such proceeding or petition (A) results
in a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding-up
or liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take
possession of all or substantially all its assets or has a
distress, execution, attachment, sequestration or other legal
process levied, enforced or sued on or against all or
substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged,
stayed or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to it which,
under the applicable laws of any jurisdiction, has an analogous
effect to any of the events specified in clauses (I) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any
of the foregoing acts; or
(viii) Merger Without Assumption. The party or any Credit
Support Provider of such party consolidates or amalgamates with,
or merges with or into, or transfers all or substantially all
its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer: --
(1)the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit Support
Provider under this Agreement or any Credit Support Document to
which it or its predecessor was a party by operation of law or
pursuant to an agreement reasonably satisfactory to the other
party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of
its obligations under this Agreement.
(b) Termination Events. The occurrence at any time with respect
to a party or, if applicable, any Credit Support Provider of
such party or any Specified Entity of such party of any event
specified below constitutes an Illegality if the event is
specified in (i) below, and if specified to be applicable, a
Credit Event Upon Merger if the event is specified pursuant to
(ii) below or an Additional Termination Event if the event is
specified pursuant to (iii) below: --
(i) illegality. Due to the adoption of, or any change in,
any applicable law after the date on which a Transaction is
entered into, or due to the promulgation of, or any change in,
the interpretation by any court, tribunal or regulatory
authority with competent jurisdiction of any applicable law
after such date, it becomes unlawful (other than as a result of
a breach by the party of Section 4(b) for such party (which will
be the Affected Party): --
(1) to perform any absolute or contingent obligation
to make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply with any
other material provision of this Agreement relating to such
Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other obligation which
the party (or such Credit Support Provider) has under any Credit
Support Document relating to such Transaction.
(ii) Credit Event Upon Merger. If "Credit Event Upon
Merger" is specified in the Schedule as applying to the party,
such party ("X"), any Credit Support Provider of X or any
applicable Specified Entity of X consolidates or amalgamates
with, or merges with or into, or transfers all or substantially
all its assets to, another entity and such action does not
constitute an event described in Section 5(a)(viii) but the
credit worthiness of the resulting, surviving or transferee
entity is materially weaker than that of X, such Credit Support
Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected
Party); or
(iii) Additional Termination Event. If any" Additional
Termination Event" is specified in the Schedule or any
Confirmation as applying, the occurrence of such event (and, in
such event, the Affected party or Affected Parties shall be as
specified for such Additional Termination Event in the Schedule
or such Confirmation).
(c) Event of Default and Rlegality .If an event or circumstance
which would otherwise constitute or give rise to an Event of
Default also constitutes an Illegality, it will be treated as an
Illegality and will not constitute an Event of Default.
6. Early Termination
(a) Right to Terminate Following Event of Default. If at any
time an Event of Default with respect to a party (the
"Defaulting Party") has occurred and is then continuing, the
other party (the "Non-defaulting Party") may, by not more than
20 days notice to the Defaulting Party specifying the relevant
Event of Default, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of
all outstanding Transactions. If, however, "Automatic Early
Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all
outstanding Transactions will occur immediately upon the
occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(I), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately
preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with
respect to such party of an Event of Default specified in
Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) Right to Terminate Following Termination Event.
(i) Notice. If a Termination Event occurs, an Affected
Party will, promptly upon becoming aware of it, notify the other
party, specifying the nature of that Termination Event and each
Affected Transaction and will also give such other information
about that Termination Event as the other party may reasonably
require.
(ii) Two Affected Parties. If an Illegality under Section
5(b)(i)(I) occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30
days after notice thereof is given under Section 6(b)(i) on
action to avoid that Termination Event.
(iii) Right to Terminate. If: --
(1) an agreement under Section 6(b)(ii) has not been
effected with respect to all Affected Transactions within 30
days after an Affected Party gives notice under Section 6(b)(i);
or
(2) an Illegality other than that referred to in
Section 6(b )(ii), a Credit Event Upon Merger or an
Additional Termination Event occurs, either party in the case of
an Illegality, any Affected Party in the case of an Additional
Termination Event if there is more than one Affected Party, or
the party which is not the Affected Party in the case of a
Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days
notice to the other party and provided that the relevant
Termination Event is then continuing, designate a day not
earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is
given under Section 6(a) or (b), the Early Termination Date will
occur on the date so designated, whether or not the relevant
Event of Default or Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an
Early Termination Date, no further payments or deliveries under
Section 2(a)(i) or 2(d) in respect of the Terminated
Transactions will be required to be made, but without prejudice
to the other provisions of this Agreement. The amount, if any,
payable in respect of an Early Termination Date shall be
detennined pursuant to Section 6( e ).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each
party will make the calculations on its part, if any,
contemplated by Section 6( e) and will provide to other party a
statement (1) showing, in reasonable detail, such calculations
(including all relevant quotations and specifying any amount
payable under Section 6(e)) and (2) giving details of the
relevant account to which any amount payable to it is to be
paid. In the absence of written Confirmation from the source of
a quotation obtained in determining a Market Quotation, the
records of the party obtaining such quotation will be conclusive
evidence of the existence and accuracy of such quotation.
(ii) Payment Date. An amount calculated as being due in
respect of any Early Termination Date under Section 6(e) will be
payable on the day that notice of the amount payable is
effective (in the case of an Early Termination Date which is
designated or occurs as a result of an Event of Default) and on
the day which is two Local Business Days after the day on which
notice of the amount payable is effective (in the case of an
Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to
the extent permitted under applicable law) interest thereon
(before as well as after judgment), from (and including) the
relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) Payments on Early Termination. If an Early Termination Date
occurs, the following provisions shall apply based on the
parties' election in the Schedule of a payment measure, either
"Market Quotation" or "Loss", and a payment method, either the
"First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule,
it will be deemed that "Market Quotation" or the "Second
Method", as the case may be, shall apply. The amount, if any,
payable in respect of an Early Termination Date and determined
pursuant to this Section will be subject to any Set-off.
(i) Events of Default. If the Early Termination Date
results from an Event of Default: --
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party will pay
to the Non-defaulting Party the excess, if a positive number, of
(A) the sum of the Settlement Amount (determined by the Non-
defaulting Party) in respect of the Terminated Transactions and
the Unpaid Amounts owing to the Non-defaulting Party over (B)
the Unpaid Amounts owing to the Defaulting Party .
(2) First Method and Loss. If the First Method and
Loss apply, the Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss in
respect of this Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (detennined by the
Non-defaulting Party) in respect to the Terminated Transactions
and the Unpaid Amounts owing to the Non-defaulting Party less
(B) the Unpaid Amounts owing to the Defaulting Party. If that
amount is a positive number, the Defaulting Party will pay it to
the Non-defaulting Party; if it is a negative number, the Non-
defaulting Party will pay the absolute value of that amount to
the Defaulting Party .
(4) Second Method and Loss. If the Second Method and
Loss apply, an amount will be payable equal to the Non-
defaulting Party's Loss in respect of this Agreement. If that
amount is a positive number, the Defaulting Party will pay it to
the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount
to the Defaulting Party.
(ii) Termination Events. If the Early Termination Date
results from Termination Event: --
(1) One Affected Party. If there is one Affected
Party, the amount payable will be determined in accordance with
Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party and
the party which is not the Affected Party , respectively, and,
if Loss applies and fewer than all the Transactions are being
terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties: --
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the Terminated
Transactions, and an amount will be payable equal to ( 1) the
sum of (a) one-half of the difference between the Settlement
Amount of the party with the higher Settlement Amount (IIX") and
the Settlement Amount of the party with the lower Settlement
Amount (IIY") and (b ) the Unpaid Amounts owing to X less (II)
the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine
its Loss in respect of this Agreement ( or, if
fewer than all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of the
party with the higher Loss (IIX") and the Loss of the party with
the lower
Loss ("Y").
If the amount payable is a positive number, y will pay it to X;
if it is a negative number, X will pay the absolute value of
that amount to Y.
(iii) Adjustment for Bankruptcy. In circumstances where an
Early Termination Date occurs because "Automatic Early
Termination" applies in respect of a party, the amount
determined under this Section 6( e ) will be subject to such
adjustments as are appropriate and permitted by law to reflect
any payments or deliveries made by one party to the other under
this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for
payment detennined under Section 6(d)(ii).
(iv) Pre-Estimate. The parties agree that if Market
Quotation applies an amount recoverable under this Section 6(e)
is a reasonable pre-estimate of loss and not a penalty. Such
amount is payable for the loss of bargain and the loss of
protection against future risks and except as otherwise provided
in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. Transfer
Neither this Agreement nor any interest or obligation in or
under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written
consent of the other party , except that: --
(a) party may make such a transfer of this Agreement pursuant to
a consolidation or amalgamation with, or merger with or into, or
transfer of all or substantially all its assets to, another
entity (but without prejudice to any other right or remedy under
this Agreement); an
(b) a party may make such a transfer of all or any part of its
interest in any amount payable to it from a Defaulting Party
under Section 6( e ).
Any purported transfer is not in compliance with this Section
will be void.
8. Miscellaneous
(a) Entire Agreement. This Agreement constitutes the entire
agreement and understanding of the parties with respect to its
subject matter and supersedes all oral communication and prior
writings with respect thereto.
(b) Amendments. No amendment, modification or waiver in respect
of this Agreement will be effective unless in writing (including
a writing evidenced by a facsimile transmission) and executed by
each of the parties or confirmed by an exchange of telexes or
electronic messages on an electronic messaging system.
(c) Survival of Obligations. Without prejudice to Sections
2(a)(iii) and 6(c)(ii), the obligations of the parties
under this Agreement will survive the termination of any
Transaction.
(d) Remedies Cumulative. Except as provided in this Agreement,
the rights, powers, remedies and privileges provided in this
Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges provided by law.
(e) Counterparts and Confirmations.
(i) This Agreement (and each amendment, modification and
waiver in respect of it) may be executed and delivered in
counterparts (including by facsimile transmission), each of
which will be deemed an original.
(ii) The parties intend that they are legally bound by the
terms of each Transaction from the moment they agree to those
terms (whether orally or otherwise). A Confirmation shall be
entered into as soon as practicable and may be executed and
delivered in counterparts (including by facsimile transmission)
or be created by an exchange of telexes or by an exchange of
electronic messages on an electronic messaging system, which in
each case will be sufficient for all purposes to evidence a
binding supplement to this Agreement. The parties will specify
therein or through another effective means that any such
counterpart, telex or electronic message constitutes a
Confirmation.
(f) No Waiver of Rights. A failure or delay in exercising any
right, power or privilege in respect of this Agreement will not
be presumed to operate as a waiver, and a single or partial
exercise of any right, power or privilege will not be presumed
to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or
privilege.
(g) Headings. The headings used in this Agreement are for
convenience of reference only and are not to affect the
construction of or to be taken into consideration in
interpreting this Agreement.
9. Expenses
A Defaulting party will, on demand, indemnify and hold harmless
the other party for and against all reasonable out-of-pocket
expenses, including legal fees, incurred by such other party by
reason of the enforcement and protection of its rights under
this Agreement or any Credit Support Document to which the
Defaulting Party is a party or by reason of the early
termination of any Transaction, including, but not limited to,
costs of collection.
10. Notices
(a) Effectiveness. Any notice or other communication in respect
of this Agreement may be given in any manner set forth below
(except that a notice or other communication under Section 5 or
6 may not be given by facsimile transmission or electronic
messaging system) to the address or number or in accordance with
the electronic messaging system details provided ( see the
Schedule) and will be deemed effective as indicated: --
(i) if in writing and delivered in person or by courier, on
the date it is delivered;
(ii) if sent by telex, on the date the recipient's
answerback is received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile
machine);
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the
date that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date
that electronic message is received, unless the date of that
delivery (or attempted delivery) or that receipt, as applicable,
is not a Local Business Day or that communication is delivered (
or attempted) or received, as applicable, after the close of
business on a Local Business Day, in which case that
communication shall be deemed given and effective on the fIrst
following day that is a Local Business Day.
(b) Change of Addresses. Either party may by notice to the other
change the address, telex or facsimile number or electronic
messaging system details at which notices or other
communications are to be given to it.
11. Governing Law and Jurisdiction
(a) Governing Law. This Agreement will be govemed by and
construed in accordance with the law specified in the Schedule.
(b) Jurisdiction. With respect to any suit, action or
proceedings relating to this Agreement ("Proceedings"),
each party irrevocably: --
(i) submits to the jurisdiction of the English courts, if
this Agreement is expressed to be governed by English law, or to
the non-exclusive jurisdiction of the courts of the State of New
York and the United States District Court located in the borough
of Manhattan in New York City, if this Agreement is expressed to
be governed by the laws of the State of New York; and
(ii) waives any objection which it may have at any time to
the laying of venue of any Proceedings brought in any such
court, waives any claim that such Proceedings have been brought
in an inconvenient forum and further waives the right to object,
with respect to such Proceedings, that such court does not have
any jurisdiction over such party .
Nothing in its Agreement precludes either party from bringing
proceedings in any other jurisdiction ( outside, if this
Agreement is expressed to be governed by English law, the
Contracting States, as defmed in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification,
extension or re-enactment thereof for the time being in force)
nor will the bringing of Proceedings in anyone or more
jurisdictions preclude the bringing of Proceedings in any other
jurisdiction.
(c) Waiver of Immunities. Each party irrevocably waives, to the
fullest extent permitted by applicable law, with respect to
itself and its revenues and assets (irrespective of their use or
intended use), all immunity on the grounds of sovereignty or
other similar grounds from (i) suit, (ii) jurisdictions of any
court, (iii) relief by way of injunction, order for specific
performance or for recovery of property, (iv) attachment of its
assets (whether before or after judgment) and (v) execution or
enforcement of any judgment to which it or its revenues or
assets might otherwise be entitled in any Proceedings in the
courts of any jurisdiction and irrevocably agrees, to the extent
permitted by applicable law, that it will not claim any such
immunity in any Proceedings.
12. Definitions
As used in this Agreement: --
"Additional Termination Event" has the meaning specified in
Section 5(b).
"Affected Party" has the meaning specified in Section 5(b ).
"Affected Transactions" means (a) with respect to any
Termination Event consisting of an Illegality, all Transactions
affected by the occurrence of such Termination Event and (b)
with respect to any other Termination Event, all Transactions.
"Affiliate" means, subject to the Schedule, in relation to any
person, any entity controlled, directly or indirectly, by
the person, any entity that controls, directly or indirectly,
the person or any entity directly or indirectly under common
control with the person. For this purpose, "control" of any
entity or person means ownership of a majority of the voting
power of the entity or person.
"Applicable Rate" means: --
(a) in respect of obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Defaulting
Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section
6(e) of either party from and after the date (determined in
accordance with Section 6(d)(ii) on which that amount is
payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (
or which would have been but for Section 2(a)(iii)) by a Non-
defaulting Party, the Non-default Rate; and
(d) in all other cases, the Termination Rate.
"consent" includes a consent, approval, action, authorization,
exemption, notice, filing, registration or exchange control
consent.
"Credit Event Upon Merger" has the meaning specified in Section
5(b).
"Credit Support Document" means any agreement or instrument that
is specified as such in this Agreement.
"Credit Support Provider" has the meaning specified in the
Schedule.
"Default Rate" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the relevant payee (as
certified by it) if it were to fund or of funding the relevant
amount plus 1% per annum.
"Defaulting Party" has the meanings specified in Section 6(a).
"Early Termination Date" means the date determined in accordance
with Section 6(a) or 6(b)(iii).
"Event of Default" has the meaning specified in Section 5(a)
and, if applicable, in the Schedule.
"Rlegality" has the meaning specified in Section 5(b).
"law" includes any treaty, law, rule or regulation and "Iawfur'
or "unlawfur' will be construed accordingly.
"Local Business Day" means, subject to the Schedule, a day on
which commercial banks are open for business (including dealings
in foreign exchange and foreign currency deposits) (a) in
relation to any obligation under Section 2(a)(i), in the
place(s) specified in the relevant Confirmation or, if not so
specified, as otherwise agreed by the parties in writing or
determined pursuant to provisions contained, or incorporated by
reference, in this Agreement, (b ) in relation to any other
payment, in the place where the relevant account is located, (
c) in relation to any notice or other communication, including
notice contemplated under Section 5(a)(i), in the city specified
in the address for notice provided by the recipient and, in the
case of a notice contemplated by Section 2(b ), in the place
where the relevant new account is to be located and (d) in
relation to Section 5(a)(v)(2), in the relevant locations for
performance with respect to such Specified Transaction.
"Loss" means, with respect to this Agreement or one or more
Terminated Transactions, as the case may be, and a party, an
amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that
Terminated Transaction or group of Terminated Transactions, as
the case may be, including any loss of bargain, cost of funding
or, at the election of such party but without duplication, loss
or cost incurred as a result of its terminating, liquidating,
obtaining or reestablishing any hedge or related trading
position ( or any gain resulting from any of them). Loss
includes losses and costs ( or gains) in respected of any
payment or delivery required to have been made ( assuming
satisfaction of each applicable condition precedent) on or
before the relevant Early Termination Date and not made, except,
so as to avoid duplication, if Section 6(e)(i)(I) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal
fees and out-of-pocket expenses referred to under Section 9. A
party will determine its Loss as of the relevant Early
Termination Date, or, if that is not reasonably practicable, as
of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to
quotations of relevant rates or prices from one or more leading
dealers in the relevant markets.
"Market Quotation" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount
determined on the basis of quotations from Reference Market-
makers. Each quotation will be for an amount, if any, that would
be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of
an agreement between such party (taking into account any
existing Credit Support Document with respect to the obligations
of such party) and the quoting Reference Market-maker to enter
into a transaction (the "Replacement Transaction") that would
have the effect of preserving for such party the economic
equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the
satisfaction of each applicable condition precedent) by the
parties under Section 2(a)(i) in respect of such Terminated
Transaction or group of Terminated Transactions that would, but
for the occurrence of the relevant Early Termination Date, have
been required after that date. For this purpose, Unpaid Amounts
in respect of the Terminated Transaction or group of Terminated
Transactions are to be excluded but, without limitation, any
payment or delivery that would, but for the relevant Early
Termination Date, have been required (assuming satisfaction of
each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction
would be subject to such documentation as such party and the
Reference Market-maker may, in good faith, agree. The party
making the determination (or its agent) will request each
Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without
regard to different time zones) on or as soon as reasonably
practicable after the relevant Early Termination Date. The day
and time as of which those quotations are to be obtained will be
selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so
obliged, after consultation with the other. If more than three
quotations are provided, the Market Quotation will be the
arithmetic mean of the quotations, without regard to the
quotations having the highest and lowest values. If exactly
three such quotations are provided, the Market Quotation will be
the quotation remaining after disregarding the highest and
lowest quotations. For this purpose, if more than one quotation
has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations
are provided, it will be deemed that the Market Quotation in
respect of such Terminated Transaction or group of Terminated
Transactions cannot be determined. "Non-default Rate" means a
rate per annum equal to the cost (without proof or evidence of
any actual cost) to the Non-defaulting Party (as certified by
it) if it were to fund the relevant amount. "Non-defaulting
Party" has the meaning specified in Section 6(a).
"Potential Event of Default" means any event which, with the
giving of notice or the lapse of time or both, would constitute
an Event of Default.
"Reference Market-makers" means four leading dealers in the
relevant market selected by the party determining a Market
Quotation in good faith (a) from among dealers of the highest
credit standing which satisfy all the criteria that such party
applies generally at the time in deciding where to offer or to
make an extension of credit and (b) to the extent practicable,
from among such dealers having an office in the same city .
"Scheduled Payment Date" means a date on which a payment or
delivery is to be made under Section 2(a)(i) with respect to a
Transaction.
"Set-off' means set-off, offset, combination of accounts, right
of retention or withholding or similar right or requirement to
which the payer of an amount under Section 6 is entitled or
subject (whether arising under this Agreement, another contract,
applicable law or otherwise) that is exercised by, or imposed
on, such payers.
"Settlement Amount" means, with respect to a party and any Early
Termination Date, the sum of: --
(a) the Market Quotations (whether positive or negative) for
each Terminated Transaction or group of Terminated Transactions
for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without
reference to any Unpaid Amounts) for each Terminated Transaction
or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of
the party making the determination) produce a commercially
reasonable result.
"Specified Entity" has the meaning specified in the Schedule.
"Specified Indebtedness" means, subject to the Schedule, any
obligation (whether present or future, contingent or
otherwise, as principal or surety or otherwise) in respect of
borrowed money.
"Specified Transaction" means, subject to the Schedule, (a) any
transaction (including an agreement with respect thereto) now
existing or hereafter entered into between one party to this
Agreement ( or any Credit Support Provider of such party or any
applicable Specified Entity of such party) and the other party
to this Agreement (or any Credit Support Provider of such other
party or any applicable Specified Entity of such other party)
which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity
index swap, equity or equity index option, bond option, interest
rate option, foreign exchange transaction, cap transaction,
floor transaction, collar transaction, currency swap
transaction, cross-currency rate swap transaction, currency
option or any other similar transaction (including any option
with respect to any of these transactions), (b) any combination
of these transactions and ( c ) any other transaction identified
as a Specified Transaction in this Agreement or the relevant
confirmation.
"Terminated Transactions" means with respect to any Early
Termination Date (a) if resulting from a Termination Event, all
Affected Transactions and (b) if resulting from an Event of
Default, all Transactions (in either case) in effect immediately
before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination applies,
immediately before that Early Termination Date). "Termination
Event" means an Illegality or, if specified to be applicable, a
Credit Event Upon Merger or an Additional Termination Event.
"Termination Rate" means a rate per annum equal to the
arithmetic mean of the cost (without proof or evidence of any
actual cost) to each party (as certified by such party) if it
were to fund or of funding such amounts.
"Unpaid Amounts" owing to any party means, with respect to an
Early Termination Date, the aggregate of (a) in respect of all
Terminated Transactions, the amounts that became payable ( or
that would have become payable but for Section 2(a)(iii)) to
such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early
Termination Date and (b) in respect of each Terminated
Transaction, for each obligation under Section 2(a)(i) which was
(or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early
Termination Date and which has not been so settled as at such
Early Termination Date, an amount equal to the fair market value
of that which was ( or would have been) required to be delivered
as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law)
interest, in the currency of such amounts, from (and including)
the date such amounts or obligations were or would have been
required to have been paid or performed to (but excluding) such
Early Termination Date, at the Applicable Rate. Such amounts of
interest will be calculated on the basis of daily compounding
and the actual number of days elapsed. The fair market value of
any obligation referred to in clause (b ) above shall be
reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so
obliged, it shall be the average of the fair market values
reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on
the respective date specified below with effect from the date
specified on the fIrst page of this document.
Richardson Electronics, Ltd. American National Bank and
Trust Company of Chicago
\s\ W.J.Garry \s\ Timothy J. Obenforf
Name: William Garry Name: Timothy J. Obendorf
Title: Chief Financial Officer Title: Vice President
Date: June 18, 1998 Date: June 16-1998