1
Exhibit 10(a)
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of August 13, 1998
REGENT COMMUNICATIONS, INC. and BANK OF MONTREAL
have entered and/or anticipate entering into one or more transact) one (each a
"Transaction") that are or will be governed by this Master Agreement, which
includes the schedule (the "Schedule"), and the documents and other confirming
evidence (each a "Confirmation") exchanged between the parties confirming those
Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the 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
Copyright (C) 1992 by International Swap Dealers Association, Inc.
2
Transaction has occurred or been effectively designated and (3) each
other applicable condition precedent specified in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions from such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement win be made without any
deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that
party ("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to be
deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of
determining that such deduction or withholding is required or
receiving notice that such amount teas been assessed against
Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure
that the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will
equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be
required to pay any additional amount to Y to the extent that
it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure would
not have occurred but for (1) any action taken by a taxing
authority, or
2
3
brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of
whether such action is taken or brought with respect to a
party to this Agreement) or (11) a Change in Tax Law.
(ii)Liability. If:--
(1) X is required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, to make any deduction
or withholding in respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly against
X,
then, except to the extent Y has satisfied or then satisfies the liability
resulting from such Tax, Y will promptly pay to X the amount of such
liability (including any related liability for interest, but including any
related liability for penalties only if Y teas failed to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organized and validly existing under the
laws of the jurisdiction of its organization 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
teas under any Credit Support Document to which it is a party and teas
taken all necessary action to authorize such execution, delivery and
performance;
(iii) TO 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
3
4
(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 teas 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.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is accurate
and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party teas or may have
any obligation under this Agreement or under any Credit Support Document to
which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing in
order to allow such other party or its Credit Support Provider to make
a payment under this Agreement or any applicable Credit Support
Document without any deduction or withholding for or on account of any
Tax or with such deduction or withholding at a reduced rate (so long as
the completion, execution or submission of such form or document would
not materially prejudice the legal or commercial position of the party
in receipt of such demand), with any such form or document to be
accurate and completed in a manner reasonably satisfactory to such
other party and to be executed and to be delivered with any reasonably
required certification,
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain
in full force and effect all consents of any governmental or other authority
that are required to be obtained by it with respect to this Agreement or any
Credit Support Document to which it is a party and will use all reasonable
efforts to obtain any that may become necessary in the future.
4
5
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Document to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon learning of
such failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement' is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any of the following events constitutes an
event of default (an "Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make,
when due, any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) required to be made by it if such failure is not
remedied on or before the third Local Business Day after notice of such
failure is given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to make
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or
obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied
with or performed by the party in accordance with this Agreement if
such failure is not remedied on or before the thirtieth day after
notice of such failure is given to the party;
(iii) Credit Support Default.
(1) Failure by the party or any Credit Support Provider of
such party to comply with or perform any agreement or
obligation to be complied with or performed by it in
accordance with any Credit Support Document if such failure is
continuing after any applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support
Document or the failing or ceasing of such Credit Support
Document to be in full force and effect for the purpose of
this Agreement (in either case other than in accordance with
its terms) prior to the satisfaction of all obligations of
such party under each Transaction to which such Credit Support
Document relates without the written consent of the other
party; or
(3) (3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to
have been made or repeated by the party or any Credit Support Provider
of such party in this Agreement or any Credit Support Document proves
to have been incorrect or misleading in any material respect when made
or repeated or deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit
Support Provider of such party or any applicable Specified Entity of
such party (1) defaults under a Specified Transaction and after giving
effect to any applicable notice requirement or grace period, there
occurs a liquidation of, an acceleration of obligations under, or an
early termination of, that Specified Transaction, (2) defaults, after
giving effect to
5
6
any applicable notice requirement or grace period, in making any
payment or delivery due on the last payment, delivery or exchange date
of, or any payment on early termination of, a Specified Transaction (or
such default continues for at least three Local Business Days if there
is no applicable notice requirement or grace period) or (3) disaffirms,
disclaims, repudiates or rejects, in whole or in part, a Specified
Transaction (or such action is taken by any person or entity appointed
or empowered to operate it or act on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule
as applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however
described) in respect of such party, any Credit Support Provider of
such party or any applicable Specified Entity of such party under one
or more agreements or instruments relating to Specified Indebtedness of
any of them (individually or collectively) in an aggregate amount of
not less than the applicable Threshold Amount (as specified in the
Schedule) which has resulted in such Specified Indebtedness becoming,
or becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise have
been due and payable or (2) a default by such party, such Credit
Support Provider or such Specified Entity (individually or
collectively) in making one or more payments on the due date thereof in
an aggregate amount of not less than the applicable 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 HI 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, teas an analogous effect
to any of the events specified in clauses (1) to (7)
(inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in,
any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to
assume all the obligations of such party or such Credit
Support Provider under this Agreement or any Credit Support
Document to which it or its predecessor was a party by
operation of law or pursuant to an agreement reasonably
satisfactory to the other party to this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity
of its obligations under this Agreement.
6
7
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any Specified
Entity of such party of any event specified below constitutes an Illegality if
the event is specified in (i) below, a Tax Event if the event is specified in
(ii) below or a Tax Event Upon Merger if the event is specified in (iii) below,
and, if specified to be applicable, a Credit Event upon Merger if the is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:-- .
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered into,
or due to the promulgation of, or any change in, the interpretation by
any court, tribunal or regulatory authority with competent jurisdiction
of any applicable law after such date, it becomes unlawful (other than
as a result of a breach by the party of Section 4(b)) for such party
(which will be the Affected Party):--
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or delivery
in respect of such Transaction or to comply with any other
material provision of this Agreement relating to such
Transaction; or
(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) teas under any Credit
Support Document relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority,
or brought in a court of competent jurisdiction, on or after the date
on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this Agreement)
or (y) a Change in Tax Law, the party (which will be the Affected
Party) will, or there is a substantial likelihood that it will, on the
next succeeding Scheduled Payment Date (1) be required to pay to the
other party an additional amount in respect of an Indemnifiable Tax
under Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount
is required to be deducted or withheld for or on account of a Tax
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e))
and no additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A)
or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount teas
been deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in
either case as a result of a party consolidating or amalgamating with,
or merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the panty, 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 consulate an event described in Section 5(a)(viii)
but the creditworthiness of the resulting, surviving or transferee
entity is materially weaker than that of X, such Credit Support
Provider or such Specified Entity, as the case 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
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified, in the Schedule or any Confirmation as applying,
the occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
7
8
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also constitutes
an Illegality, it will be treated 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)(1), (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) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality
under Section 5(b)(i)(1) or a Tax Event occurs and there is only one
Affected Party, or if a Tax Event Upon Merger occurs and the Burdened
Party is the Affected Party, the Affected Party will, as a condition to
its right to designate an Early Termination Date under Section
6(b)(iv), use all reasonable efforts (which will not require such party
to incur a loss, excluding immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section 6(b)(i) all its
rights and obligations under this Agreement in respect of the Affected
Transactions to another of its Offices or Affiliates so that such
Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the other
party, which consent will not be withheld if such other party's
policies in effect at such time would permit it to enter into
transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1)
or a Tax Event occurs and there are two Affected Parties, each party
will use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. IF:--
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after
an Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event
Upon Merger or an Additional Termination Event occurs, or a
Tax Event Upon Merger occurs and the Burdened Party is not the
Affected Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a
Tax Event or an Additional Termination Event if there is more than one
8
9
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 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(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following
the occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving
details of the relevant account to which any amount payable to it is to
be paid. In the absence of written confirmation from the source of a
quotation obtained in determining a Market Quotation, the records of
the party obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of
any Early Termination Date under Section 6(e) will be payable on the
day that notice of the amount payable is effective (in the case of an
Early Termination Date which is designated or occurs as a result of an
Event of Default) and on the day which is two Local Business Days after
the day on which notice of the amount payable is effective (in the case
of an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including)
the relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual number of
days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from
an Event of Default:--
(1) First Method and Market Quotation. If the First Method
and Market Quotation apply, the Defaulting Party will pay to
the Non-defaulting Party the excess, if a positive number, of
(A) the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the-Defaulting Party will pay to the Non-defaulting
Party, if a positive number, the Non-defaulting Party's Loss
in respect of this Agreement.
9
10
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be payable
equal to (A) the sum of the Settlement Amount (determined by
the Non-defaulting Party) in respect of the Terminated
Transactions and the Terminated Currency Equivalent of the
Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Defaulting Party. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if
it is a negative number, the Non-defaulting Party will pay the
absolute value of that amount to the Defaulting Party.
(4) Second Method and Loss. If the Second Method and Loss
apply, an amount will be payable equal to the Non-defaulting
Party's Loss in respect of this Agreement. If that amount is a
positive number, the Defaulting Party will pay it to the
Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that
amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from
a Termination Event:--
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance with
Section 6(e)(i)(3), if Market Quotation applies, or Section
6(e)(i)(4), if Loss applies, except that, in either case,
references to the Defaulting Party and to the Non-defaulting
Party will be deemed to be references to the Affected Party
and the party which is not the Affected Party, respectively,
and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:--
(A) if Market Quotation applies, each party will
determine a Settlement Amount in respect of the
Terminated Transactions, and an amount will be
payable equal to (I) the sum of (a) one-half of the
difference between the Settlement Amount of the party
with the higher Settlement Amount ("X") and the
Settlement Amount of the party with the lower
Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent of the
Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine its
Loss in respect of this Agreement (or, if fewer than
all the Transactions are being terminated, in respect
of all Terminated Transactions) and an amount will be
payable equal to one-half of the difference between
the Loss of the party with the higher Loss ("X") and
the Loss of the party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to
X; if it is a negative number, X will pay the absolute value
of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies
in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one party to the
other under this Agreement (and retained by such other party) during
the period from the relevant Early Termination Date to the date for
payment determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the
loss of bargain and the loss of protection against future risks and
except as otherwise provided in this Agreement neither party will be
entitled to recover any additional damages as a consequence of such
losses.
10
11
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in
any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement
will be made in the relevant currency specified in this Agreement for that
payment (the "Contractual Currency"). To the extent permitted by applicable law,
any obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in convening the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The terra "rate of exchange" includes, without limitation, any premiums and
costs of exchange payable in connection with the purchase of or conversion into
the Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss bad an
actual exchange or purchase been made.
11
12
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidenced by
a facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of
each Transaction from the moment they agree to those terms (whether
orally or otherwise). A Confirmation shall be entered into as soon as
practicable and may be executed and delivered in counterparts
(including by facsimile transmission) or be created by an exchange of
telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all
purposes to evidence a binding supplement to this Agreement. The
parties will specify therein or through another effective means that
any such counterpart, telex or electronic message constitutes a
Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking of flee
or jurisdiction of incorporation or organization of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
12
13
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. Notices
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the date it
is delivered;
(ii) if sent by telex, on the date the recipient's answerback: is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received,
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ( Proceedings ), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in
New York City, if this Agreement is expressed to be governed by the
laws of the State of New York; and
(ii) waives any objection which it may have at any time to the laying
of venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being
13
14
in force) nor will the bringing of Proceedings in any one or more jurisdictions
preclude the bringing of Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable of
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW," means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or after the
date on which the relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, 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.
14
15
"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 PART" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or baying been a citizen or resident of such jurisdiction,
or being or having been organized, present or engaged in a made or business in
such jurisdiction, or having or having bad a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person baying executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"lawful" and "unlawful" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial center, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position (or any gain resulting from
any of them). Loss includes losses and costs (or gains) in respect of any
payment or delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early Termination Date
and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3)
or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section I 1. 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)
15
16
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 teas 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).
"OFFICE" means a branch or office of a party, which may be such party's bead or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers baying an of flee in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat. (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement.
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent Or 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 of 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
16
17
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.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
17
18
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
REGENT COMMUNICATIONS, INC. BANK OF MONTREAL
(Name of Party) (Name of Party)
By: /s/ Anthony A. Vasconcellos By: /s/ R.J. Mailloux
------------------------------------------------- ------------------------------------
Name: Anthony A. Vasconcellos Name: R.J. Mailloux
Title: Chief Financial Officer and Vice President Title: Senior Manager, Documentation
Date: November 5, 1998 Date: November 12, 1998
18
19
(Multicurrent- Cross Border)
ISDA
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of August 13, 1998
between REGENT COMMUNICATIONS, INC. ("Party A")
and
BANK OF MONTREAL ("Party B")
PART I
TERMINATION PROVISIONS
(a) "SPECIFIED ENTITY" means in relation to Party A for the purpose of:-
Section 5(a)(v), Affiliates
Section 5(a)(vi), Affiliates
Section 5(a)(vii), Affiliates
Section 5(b)(iv), Affiliates
and in relation to Party B for the purpose of:-
Section 5(a)(v), Not Applicable
Section 5(a)(vi), Not Applicable
Section 5(a)(vii), Not Applicable
Section 5(b)(iv), Not Applicable.
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14
of this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will apply to Party
A and Party B.
"SPECIFIED INDEBTEDNESS" will have the meaning specified in Section 14
but it will not include indebtedness in respect of deposits received or
any payment obligation not made because of any event similar to
Illegality.
"THRESHOLD AMOUNT" means 2% of stockholders' equity (including retained
earnings).
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will
apply to Party A and Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will not
apply to Party A or Party B.
(f) PAYMENTS ON EARLY TERMINATION. For the purpose of Section 6(e) of this
Agreement:-
(i) Market Quotation will apply.
(ii) The Second Method will apply.
Notwithstanding the above, with respect to FX Transactions and Currency
Options, Loss and Second Method shall apply.
(g) "TERMINATION CURRENCY" means the currency selected by the
Non-defaulting Party or the non-Affected Party, as the case may be,
provided that the Termination Currency shall be one of the currencies
in which
19
20
payments in respect of at least one Terminated Transaction are required
to be made pursuant to the related Confirmation if such specified
currency is freely transferable, failing which the Termination Currency
shall be U.S. Dollars. If there are two Affected Parties the
Termination Currency shall be U.S. Dollars.
(h) Additional Termination Event will not apply.
PART 2
TAX REPRESENTATIONS
(a) PAYER REPRESENTATION. For the purpose of Section 3(e) of this
Agreement, Party A and Party B will each make the following
representation:-
It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on:-
(i) the accuracy of any representations made by the other party
pursuant to Section 3(f) of this Agreement;
(ii) the satisfaction of the agreement contained in Section 4(a)(i) or
4(a)(iii) of this Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement; and
(iii) the satisfaction of the agreement of the other party contained in
Section 4(d) of this Agreement;
provided that it shall not be a breach of this representation where reliance is
placed on clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(b) PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f) of this
Agreement, Party A and Party B make the representations specified below, if
any:-
(i) The following representation will not apply to Party A and
will apply to Party B:-
Each payment received or to be received by it in connection
with this Agreement will be effectively connected with its
conduct of a trade or business in the Specified Jurisdiction.
If such representation applies, then:-
"SPECIFIED JURISDICTION" means with respect to Party A: Not Applicable
"SPECIFIED JURISDICTION" means with respect to Party B: United States
of America
(ii) The following representation will apply to Party A and will
not apply to Party B:-
It has been duly incorporated, created or organized under the
laws of the United States of America or of any State of the
United States of America, and that it is validly existing
under those laws.
(iii) Other Payee Representations:- None made.
PART 3
AGREEMENT TO DELIVER DOCUMENTS
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents, as applicable:-
20
21
(a) Each party shall, as soon as practicable after demand, deliver to the
other party any form or document reasonably requested by the other
party, including without limitation, any form or document required to
enable such other party to make payments hereunder without withholding
for or on account of Taxes or with such withholding at a reduced rate.
(b) Other documents to be delivered by each party concurrently with the
execution and delivery of this Agreement are:
PARTY FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY
- ----- -------------- ------------------- ----------
REQUIRED TO CERTIFICATE DELIVERED SECTION 3(d)
- ----------- ----------- --------- ------------
DELIVER REPRESEN-
- ------- ---------
DOCUMENT TATION
- -------- ------
Party A and Certificate of incumbency Upon execution of this Yes
Party B containing specimen signatures of Agreement, and if
each person executing the requested, each
Agreement. Confirmation
Party A Legal opinion substantially in the Upon execution of this No
form of Exhibit I attached herein Agreement
evidencing capacity and authority
to enter into and deliver this
Agreement.
Party B Certified copy of a resolution of Upon execution of this Yes
the directors authorizing the Agreement
execution and delivery of the
Agreement.
Party B Internal Revenue Service Form Upon execution of this N/A
4224, or any successor form, Agreement
completed fully, accurately and in
a manner reasonably satisfactory
to Party A
PART 4
MISCELLANEOUS
(a) ADDRESSES FOR NOTICES. For the purposes of Section 12(a) of this
Agreement:-
ADDRESS(ES) FOR NOTICES OR COMMUNICATIONS TO PARTY A:-
Address: Regent Communications, Inc.
50 East River Center Boulevard
Suite 180
Covington, Kentucky 41011
Attention: Tony Vasconcellos
Facsimile: 606-292-0352
Telephone: 606-292-0030
ADDRESS(ES) FOR NOTICES OR COMMUNICATIONS TO PARTY B:-
With respect to Transactions, excluding FX Transactions:
Address: EMFISYS - Derivatives Operations
130 Adelaide Street West
21
22
Suite 500
Toronto, Ontario M5H 4E1
Canada
Attention: Manager, Confirmations
Facsimile: (416) 867-4778/6827
Telephone: (416) 867-7173
Swift ID No.: BOFMCAM3
With respect to FX Transactions:
Address: FX/MM Operations
129 St. Jacques St. W.
11th Floor, H.O.
Montreal, Quebec H2Y 1L6 Canada
Attention: Manager, FX Operations
Facsimile: (514) 877-2223
Telephone: (514) 877-2203/9186
SWIFT ID Number: BOFMCAM3
Any notice sent to Party B in connection with Sections 5, 6 or 9(b)
shall be sent to the following address:
Address: Bank of Montreal
Treasury Credit
B-l Level
First Canadian Place
Toronto, Ontario M5X 1A1
Attention: Senior Manager, Documentation
Telephone: (416) 867-4178
(b) PROCESS AGENT. For purposes of Section 13(c) of this Agreement:-
Party A appoints as its Process Agent. Not Applicable.
Party B appoints as its Process Agent its Office at 430 Park Avenue,
New York, N.Y. 10022.
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement:-
Party A is not a Multibranch Party.
Party B is not a Multibranch Party and, for purposes of this Agreement
and each Transaction entered into pursuant hereto, will act through its
Chicago Office.
(e) CALCULATION AGENT. The Calculation Agent is Party B. unless otherwise
specified in a Confirmation in relation to the relevant Transaction.
(f) CREDIT SUPPORT DOCUMENT. Not Applicable.
(g) CREDIT SUPPORT PROVIDER. Not Applicable.
(h) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the laws of the State of New York (without reference to
choice of law doctrine).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this
Agreement will apply to all Transactions except for FX Transactions
entered into by the same pair of Netting Offices.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement.
22
23
PART 5
OTHER PROVISIONS
(a) 1991 ISDA DEFINITIONS. The provisions of the 1991 ISDA Definitions (the
"Definitions"), published by the International Swaps and Derivatives
Association, Inc., are incorporated by reference in, and will be deemed
to be part of, this Agreement and each Confirmation as if set forth in
full in this Agreement or in such Confirmation, without regard to any
revision or subsequent edition thereof. In the event of any
inconsistency between the provisions of this Agreement and the
Definitions, this Agreement will prevail. In the event of any
inconsistency between the provisions of any Confirmation and this
Agreement or the Definitions, such Confirmation will prevail for the
purpose of the relevant Transaction.
(b) SUPERVENING ILLEGALITY. Without prejudice to a party's right to
terminate in the event of Illegality, a party shall not be excused from
performance hereunder by supervening illegality (whether by reason of
passage or promulgation of a new law, regulation or interpretation or
of failure to obtain any required governmental consent or approval),
impossibility or frustration, with the effect that, while neither party
shall be obligated to violate any applicable law by reason of this
Section, each party shall retain its right to payment pursuant to
Section 6(e) if the other party does not perform because of supervening
illegality, impossibility or frustration.
(c) SET-OFF. Any amount (the "Early Termination Amount") payable to one
party (the "Payee") by the other party (the "Payer") under Section
6(e), in circumstances where there is a Defaulting Party or one
Affected Party in the case where a Termination Event under Section
5(b)(iv) or 5(b)(v) has occurred, will, at the option of the party
('X') other than the Defaulting Party or the Affected Party (and
without prior notice to the Defaulting Party or the Affected Party), be
reduced by its set-off against any amount(s) (the 'Other Agreement
Amount') payable (whether at such time or in the future or upon the
occurrence of a contingency) by the Payee to the Payer (irrespective of
the currency, place of payment or booking office of the obligation)
under any other agreement(s) between the Payee and the Payer or
instrument(s) or undertaking(s) issued or executed by one party to, or
in favour of, the other party (and the Other Agreement Amount will be
discharged promptly and in all respects to the extent it is so
set-off). X will give notice to the other party of any set-off effected
under this Section.
For this purpose, either the Early Termination Amount or the Other
Agreement Amount (or the relevant portion of such amounts) may be
converted by X into the currency in which the other is denominated at
the rate of exchange at which such party would be able, acting in a
reasonable manner and in good faith, to purchase the relevant amount of
such currency.
If an obligation is unascertained, X may in good faith estimate that
obligation and set-off in respect of the estimate, subject to the
relevant party accounting to the other when the obligation is
ascertained.
Nothing in this Section shall be effective to create a charge or other
security interest. This Section shall be without prejudice and in
addition to any right of set-off, combination of accounts, lien or
other right to which any party is at any time otherwise entitled
(whether by operation of law, contract or otherwise).
(d) CONDITIONS TO CERTAIN PAYMENTS. Notwithstanding the provisions of
Section 6(e)(i)(3) and (4), as applicable, if the amount referred to
therein is a positive number, the Defaulting Party will pay such amount
to the Non-defaulting Party, and if the amount referred to therein is a
negative number, the Non-defaulting Party shall have no obligation to
pay any amount thereunder to the Defaulting Party unless and until the
conditions set forth in (i) and (ii) below have been satisfied at which
time there shall arise an obligation of the Non-defaulting Party to pay
to the Defaulting Party an amount equal to the absolute value of such
negative number less any and all amounts which the Defaulting Party may
be obligated to pay under Section 11:
(i) the Non-defaulting Party shall have received confirmation
satisfactory to it h its sole discretion (which may include an
unqualified opinion of its counsel) that (i) no further payments under
Section 2(a)(i) or 2(e) in respect of Terminated Transactions will be
required to be made in accordance with Section 6(c)(ii) and (ii) each
Specified Transaction shall have terminated pursuant to its specified
termination date
23
24
or through the exercise by a party of a right to terminate and all
obligations owing under each such Specified Transaction shall have been
fully and finally performed; and
(ii) all obligations (contingent or absolute, matured or unmatured) of
the Defaulting Party and any Affiliate of the Defaulting Party to make
any payment to the Non-defaulting Party or any Affiliate of the
Non-defaulting Party shall have been fully and finally performed.
(e) RELATIONSHIP BETWEEN THE PARTIES. Each party will be deemed to
represent to the other party on the date on which it enters into a
Transaction that (absent a written agreement between the parties that
expressly imposes affirmative obligations to the contrary for that
Transaction):
NON-RELIANCE. It is acting for its own account, and it has made its own
independent decisions to enter into that Transaction and as to whether
that Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisors as it has deemed necessary.
It is not relying on any communication (written or oral) of the other
party as investment advice or as a recommendation to enter into that
Transaction; it being understood that information and explanations
related to the terms and conditions of a Transaction shall not be
considered investment advice or a recommendation to enter into that
Transaction. No communication (written or oral) received from the other
party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits of
and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms,
conditions and risks of that Transaction. It is also capable of
assuming, and assumes, the risks of that Transaction.
STATUS OF PARTIES. The other party is not acting as a fiduciary for or
an advisor to it in respect of that Transaction.
(f) BANKRUPTCY CODE REPRESENTATION. The parties hereto intend that this
Agreement shall be a "master agreement" for purposes of 11 U.S.C. ss.
101(53B) and 12 U.S.C. ss. 1821(e)(8)(D)(vii), or any successor
provisions.
(g) CFTC REPRESENTATION. (a) Each park represents and warrants that (i) it
is an "eligible swap participant" as that term is defined by the
Commodity Futures Trading Commission at 17 C.F.R. ss. 35.1(b)(2); and
(ii) this Agreement and the Transactions hereunder are entered into in
connection with its business or a line of business, and have been
individually tailored and negotiated.
(b) With respect to any Transaction that is a commodity option, each
party when it is the offered represents that (i) it is a producer,
processor, commercial user of or merchant handling the commodity; and
(ii) it is entering into such Transaction solely for purposes relating
to its business as such.
(h) (i) ADDITIONAL COVENANTS AND AGREEMENTS. In addition to the agreements
set forth in Section 4 of this Agreement, Party A agrees to observe,
perform and comply with all the covenants and agreements set forth in
the Credit Agreement whether or not the Credit Agreement remains in
effect, and such covenants and agreements will be deemed to continue in
effect for the benefit of Party B whether or not any commitment remains
in effect, or any sum remains payable, under the Credit Agreement
provided that any documentation to be delivered to any Lender under the
Credit Agreement shall be delivered to Party B. insofar as such
covenants and agreements of the Credit Agreement conflict or are
inconsistent with or affect any other terms, covenants or conditions in
this Agreement, such covenants and agreements of the Credit Agreement
shall prevail.
(ii) COLLATERAL SECURITY. Party A agrees that all of its obligations
under this Agreement (whether present or future, contingent or
otherwise) shall be secured by any collateral security from time to
time granted by Party A to Party B (whether before or after the date
hereof) including without limitation all security provided in respect
of Party A's obligations under the Credit Agreement.
"CREDIT AGREEMENT" means the Credit Agreement dated as of November 14,
1997 among Regent Communications, Inc., as Borrower, the lenders listed
therein, as Lenders, General Electric Capital Corporation, as
Documentation Agent, and Bank of Montreal, Chicago Branch, as Agent;
and as may be
24
25
amended from time to time (without giving effect to any amendments
thereto, or waivers or consents granted thereunder, not consented to by
Party B).
PART 6
ADDITIONAL TERMS FOR FX TRANSACTIONS AND CURRENCY OPTION TRANSACTIONS.
1. (a) STANDARD TERMS AND CONDITIONS APPLICABLE TO FX
TRANSACTIONS AND CURRENCY OPTION Transactions. Each FX
Transaction or Currency Option Transaction outstanding at or
entered into after the date hereof between the parties shall
be governed by this Agreement irrespective of any references
in a Confirmation to any other master agreements (e.g. IFEMA,
ICOM, any specified terms and conditions).
(b) INCORPORATION OF AND AMENDMENTS TO ISDA FX DEFINITIONS. The
1998 ISDA FX and Currency Option Definitions (the "FX and
Currency Option Definitions"), published by the International
Swaps and Derivatives Association, Inc., are hereby
incorporated by reference with respect to any "FX
Transactions" and "Currency Option Transactions" as defined by
the FX and Currency Option Definitions, except as otherwise
specifically provided herein.
The following amendments are to be made to the FX and Currency
Option Definitions:
(i) Article I of the FX and Currency Option Definitions
is amended by the addition of the following
definition with respect to FX Transactions:
"Currency Obligation" means the undertaking of a
party hereunder to receive or deliver an amount of
currency, including a netted Currency Obligation, and
including any Currency Obligation previously entered
into by the parties.
(ii) Section 3.6(a) of the FX and Currency Option
Definitions is hereby amended by deleting in its
entirety the final sentence thereof and adding the
following two sentences at the end thereof: "A
Currency Option Transaction may be exercised in whole
or in part. If a Currency Option Transaction is
exercised in part, the unexercised portion shall not
be extinguished thereby but shall remain a Currency
Option Transaction to the extent of such unexercised
portion until the earlier of (A) the expiration of
the Currency Option Transaction or (B) an exercise of
the Currency Option Transaction that leaves no
remaining unexercised portion thereof."
(iii) Section 3.7 of the FX and Currency Option Definitions
is hereby amended by adding the following subsection
(d):
"(d) POTENTIAL EVENT OF DEFAULT. If an Event of
Default or a Potential Event of Default has occurred
and is continuing and an Early Termination Date has
not been designated by the Non-defaulting Party, the
Non-defaulting Party may, by written notice, specify
that any or all Currency Option Transactions being
settled while such an Event of Default or Potential
Event of Default is continuing shall be settled in
accordance with Section 3.7(b) and upon such notice
becoming effective, the parties shall be deemed to
have elected to have the specified Currency Option
Transactions settled at the In-the-Money Amount
unless and until the Event of Default or Potential
Event of Default is no longer continuing."
(iv) Section 3.4 of the FX and Currency Option Definitions
is hereby amended by adding the following subsection
(c):
"(c) If a Premium is not received on the Premium
Payment Date, the Seller may elect: (i) to accept a
late payment of such Premium; (ii) to give written
notice of such non-payment and, if such payment shall
not be received within three Local Business Days of
such notice, treat the related Currency Option
Transaction as void; or (iii) to give written
25
26
notice of such non-payment and, if such payment shall
not be received within three Local Business Days of
such notice, treat such non-payment as an Event of
Default under Section 5(a)(i). If the Seller elects
to act under clause (i) of the preceding sentence,
the Buyer shall pay interest on such Premium in the
same currency as such Premium from the day such
Premium was due until the day paid at the Default
Rate, as determined in good faith by the Seller; if
the Seller elects to act under clause (ii) of the
preceding sentence, the Buyer shall pay all
out-of-pocket costs and actual damages incurred in
connection with such unpaid or late Premium or void
Currency Option Transaction, including without
limitation, interest on such Premium in the same
currency as such Premium at the then prevailing
market rate and any other costs or expenses incurred
by the Seller in covering its obligations (including,
without limitation, a delta hedge) with respect to
such Currency Option Transaction."
(c) CONFIRMATIONS. FX Transactions and Currency Option
Transactions shall be promptly confirmed by the parties by
Confirmations exchanged by mail, telex, facsimile or other
electronic means. Unless either party objects to the terms of
an FX Transaction or Currency Option Transaction contained in
any Confirmation within three Local Business Days of receipt
thereof, the terms of such Confirmation shall be deemed
correct and accepted absent manifest error, unless a corrected
Confirmation is sent by a party within such three day period,
in which case the party receiving such corrected Confirmation
shall have three Local Business Days after receipt thereof to
object to the terms contained in such corrected Confirmation.
Where an FX Transaction or Currency Option Transaction is
confirmed by means of mail or an electronic messaging system
that the parties have elected to use to confirm such
Transaction: (i) such confirmation will constitute a
"Confirmation" as referred to in this Agreement even where not
so specified in the confirmation, (ii) such Confirmation will
supplement, form part of, and be subject to this Agreement and
all provisions in this Agreement will govern the Confirmation,
and (iii) the definitions and provisions contained in the FX
and Currency Option Definitions will be incorporated into the
Confirmation. In the event of any inconsistency between the FX
and Currency Option Definitions or this Agreement and the
Confirmation, such Definitions and this Agreement will govern
for the purposes of the relevant FX Transaction or Currency
Option Transaction.
2. NETTING, OFFSET AND DISCHARGE WITH RESPECT TO CURRENCY OPTION
TRANSACTIONS. The provisions of Section 2(c) shall not apply to
Currency Option Transactions. The following provisions shall apply to
Currency Option Transactions:
(a) If, on any date, and unless otherwise mutually agreed by the
parties, a Premium would otherwise be payable hereunder in the
same currency between a pair of Offices of the parties, then,
on such date, each party's obligation to make payment of any
such Premium will be automatically satisfied and discharged
and, if the aggregate Premium(s) that would otherwise have
been payable by such Office of one party exceeds the aggregate
Premium(s) that would otherwise have been payable by such
Office of the other party, replaced by an obligation upon the
party by whom the larger aggregate Premium(s) would have been
payable to pay the other party the excess of the larger
aggregate Premium(s) over the smaller aggregate Premium(s).
(b) Unless otherwise agreed, any Call or any Put written by a
party will automatically be terminated and discharged, in
whole or in part, as applicable, against a Call or a Put,
respectively, written by the other party, such termination and
discharge to occur automatically upon the payment in full of
the last Premium payable in respect of such Currency Option
Transactions; provided that such termination and discharge may
only occur in respect of Currency Option Transactions:
(i) each being with respect to the same Put Currency and
the same Call Currency;
(ii) each having the same Expiration Date and Expiration
Time;
(iii) each being the same style, i.e. either both being
American or both being European;
(iv) each having the same Strike Price;
26
27
(v) neither of which shall have been exercised by
delivery of a Notice of Exercise; and
(vi) which are entered into by the same Offices of the
parties;
and upon the occurrence of such termination and discharge,
neither party shall have any further obligation to the other
party in respect of the relevant Currency Option Transactions
or, as the case may be, parts thereof so terminated and
discharged. In the case of a partial termination and discharge
(i.e. where the Currency Option Transactions are for different
amounts of the Currency Pair), the remaining portion of the
Currency Option Transaction which is partially discharged and
terminated shall continue to be a Currency Option Transaction
for all purposes of this Agreement.
3. NETTING, DISCHARGE AND TERMINATION OF FX TRANSACTIONS. The provisions
of Section 2(c) (ii) shall not apply to FX Transactions. The following
provisions shall apply to FX Transactions:
(i) NOVATION NETTING
(a) Unless otherwise agreed to by the parties hereto,
whenever an FX Transaction is entered into between a
pair of Netting Offices of the Parties which creates
a Currency Obligation in the same currency and for
the same Settlement Date as an existing Currency
Obligation between such Netting Offices, such
Currency Obligations shall automatically and without
funkier action be netted, individually cancelled and
simultaneously replaced through novation by a new
Currency Obligation determined as follows: (i) if the
cancelled Currency Obligations evidenced an
undertaking by the same party to deliver the
underlying currency, the new Currency Obligation
shall be equal to the aggregate of the cancelled
Currency Obligations, and (ii) if the cancelled
Currency Obligations evidence undertakings by each
party to deliver the underlying currency, the amount
of the underlying currency to be delivered by each
party under the cancelled Currency Obligations shall
be compared, and the new Currency Obligation shall
equal the amount by which the Currency Obligation of
the party having the greater obligation with respect
to each currency exceeded the Currency Obligation of
the party having the lesser obligation with respect
to such currency. Such new Currency Obligation shall
be considered a "Currency Obligation" under this
Agreement.
(b) The provisions of paragraph 3(i)(a) of this Part 6
above shall apply notwithstanding that either party
(i) may fail to send out a Confirmation, (ii) may not
on its books treat the Currency Obligations as
cancelled and simultaneously replaced by a new
Currency Obligation as provided herein, or (iii) may
send out a Confirmation that incorrectly states any
term of a Currency Obligation.
(ii) SETTLEMENT NETTING
If on any Settlement Date, and unless otherwise mutually
agreed by the parties, Currency Obligations for the delivery
of the same currency shall exist between a pair of Netting
Offices of the parties, then on such Settlement Date, each
party's Currency Obligation to deliver that currency will be
automatically satisfied and discharged and, if the aggregate
amount that should otherwise have been delivered by such
Office of one party exceeds the aggregate amount that would
otherwise have been delivered by such Office of the other
party, replaced by a Currency Obligation upon the party by
whom the larger aggregate amount would have been deliverable
to deliver to the other party the excess of the larger
aggregate amount over the smaller aggregate amount.
NETTING OFFICE.. For the purposes of this paragraph 3 of this Part 6,
"Netting Office" means,
with respect to Party A: Covington (Kentucky)
with respect to Party B: Chicago;
The Netting Office with respect to a Party may be modified from time to
time pursuant to notice given in accordance with the terms of Section
12 of the Agreement.
27
28
4. DEFINITIONS. Section 14 is hereby amended as follows:
The definition of "Terminated Transaction" shall be deemed to include
Currency Obligations.
REGENT COMMUNICATIONS, INC. BANK OF MONTREAL
By: By:
--------------------- -----------------------
Name: Name:
--------------------- -----------------------
Title: Title:
--------------------- -----------------------
Date: Date:
--------------------- -----------------------
28