(DEUTSCHE BANK AKTIENGESELLSCHAFT LOGO)
Exhibit 4.14
Date: January 8, 2004
To: ST Assembly Test Services Ltd
From: Deutsche Bank AG, London Branch
Our reference: 830928L
Re: Asset Swap and Bond Sale Transaction
Ladies and Gentlemen:
The purpose of this letter agreement is to set forth the terms and conditions of
the "Bond Transaction" and "Asset Swap Transaction" entered into between
Deutsche Bank AG, ("PARTY A") acting through it's London Branch and and ST
Assembly Test Services Ltd.("PARTY B") on the Trade Date specified below
(together the "TRANSACTION"). This constitutes a "CONFIRMATION" as referred to
in the Agreement specified below.
The definitions and provisions contained in the 2000 ISDA Definitions (the
"DEFINITIONS") as published by the International Swaps and Derivatives
Association, Inc. are incorporated by reference herein. In the event of any
inconsistency between the Definitions and this Confirmation, this Confirmation
will govern.
For the purposes of this Confirmation, all references in the Definitions and the
Agreement (as defined below) to a "SWAP TRANSACTION" shall be deemed to apply to
the Transaction referred to herein.
1. This Confirmation evidences a complete binding agreement between you and us
as to the terms of the Transaction. In addition, you and we agree to use
all reasonable efforts promptly to negotiate, execute and deliver an
agreement (the "Agreement") in the form of the ISDA Master Agreement
(Multicurrency-Cross Border) (the "ISDA Form"), with such modifications as
you and we will in good faith agree. Upon the execution by you and us of
such an agreement, this Confirmation will supplement, form a part of, and
be subject to that agreement. All provisions contained or incorporated by
reference in that agreement upon its execution will govern this
Confirmation except as expressly modified below, save that the
"Modifications to the ISDA Form" provisions detailed below and the terms
set out below in (i) to (iii) of this paragraph shall, upon the execution
and delivery of that agreement, be superseded by the provisions of the
agreement.
Until we execute and deliver that agreement, this Confirmation, together
with all other documents referring to the ISDA Form (each a "Confirmation")
confirming transactions (each a "Transaction") entered into between us
(notwithstanding anything to the contrary in a Confirmation) shall
supplement, form a part of, and be subject to an agreement in the form of
the ISDA Form as if we had executed an agreement on the Trade Date of the
first such Transaction between us in such form with the Schedule thereto
(i) specifying that (a) the governing law is English law and (b) the
Termination Currency is US Dollars, (ii) incorporating the addition to the
definition of "Indemnifiable Tax" contained in (page 48 of) the ISDA "Users
Guide to the 1992 ISDA Master Agreements" and (iii) incorporating any other
modifications to the ISDA Form specified herein."
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
X. Xxxx Transaction:
Buyer: Party B
Seller: Party A
Trade Date: 06 Jan 04
Value Date: 20 Jan 2004
Business Days: London, New York and Target
Business Day Convention: Modified Following
Notional Amount: As set out below.
"Bond Portfolio", with each bond constituting the Bond Portfolio being
a "Bond"
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TICKER ISSUER COUPON % MATURITY DATE CCY FACE AMOUNT ISIN
---------------------------------------------------------------------------------------------------------------
TXU Eastern Energy Ltd 6.75 1-Dec-06 USD 8,000,000 US27636PAE97
---------------------------------------------------------------------------------------------------------------
CAT Caterpillar Financial 2.59 15-Jul-06 USD 9,000,000 US14912LX637
Services Corp
---------------------------------------------------------------------------------------------------------------
SBC Pacific Xxxx 6.875 15-Aug-06 USD 10,000,000 US694032AZ68
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DRSDNR Dresdner Finance BV 4 19-Jan-07 EUR 3,920,000 DE0002798204
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HSBC Household Finance 4.375 17-Jan-06 EUR 6,270,000 XS0161020754
Corp
---------------------------------------------------------------------------------------------------------------
Portugal Telecom
PORTEL International 5.75 21-Feb-06 EUR 11,760,000 XS0124721027
Finance BV
---------------------------------------------------------------------------------------------------------------
CFC Countrywide Home 6.51 11-Feb-05 USD 8,000,000 US22237LEY48
Loans Inc
---------------------------------------------------------------------------------------------------------------
Landesbank
LBW Baden-Wuerttemberg 4.25 7-Mar-05 EUR 21,180,000 XS0143885241
Girozentrale
---------------------------------------------------------------------------------------------------------------
BAC Bank of America 5.25 27-Jun-06 EUR 7,840,000 XS0131695198
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Security Reference: Reference numbers as set out above.
Bond Purchase Price: USD 96,116,000.00
On the Value Date Party B shall pay
the Bond Purchase Price to Party A
and Party A shall deliver the Bond
Portfolio to Party B. For the
avoidance of doubt, the delivery
obligation of Party A shall be
netted and discharged against Party
B's obligation to deliver the Bond
Portfolio to Party A as per the
Securities Pledge Agreement dated
[**] between Party A as Pledgee and
Party B as Pledgor.
Party B acknowledges and agrees
that the Bond Portfolio has been
purchased by it on its own
assessment of the investment merits
thereof and that its obligations in
respect of the Asset Swap
Transaction detailed below are
independent of its purchase of the
Bonds; and, for the avoidance of
doubt, that its obligations shall
not be relieved or affected in the
event that the issuer of the Bonds
fails to make any payment due under
the Bonds or there is a
modification to any of the terms
thereof.
B. Asset Swap Transaction
Trade Date: 06 January 2004
Effective Date: 20 Jan 2004
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Termination Date: 01 February 2007
Business Days:
London, New York and Target
Business Day Convention: Modified Following
FIXED AMOUNT A:
Fixed Rate Payer A: Party A.
Fixed Amount A: USD 25,000,000.00
Fixed Rate Payer A 01 Oct 2004, 01 July 2005, 01 April 2006, and
Payment Dates: 01 February 2007, subject to adjustment in
each case in accordance with the Modified
Following Business Day Convention.
On each Fixed Rate Payer A Payment Date, Party
A shall pay to Party B the Fixed Amount A.
FIXED AMOUNT B:
Fixed Rate Payer B: Party B.
Fixed Amount B: An amount equal to all and any distributions,
coupons (whether in cash or in the form of
securities), and redemption proceeds in
respect of the Bond Portfolio (each a
"Distribution"),
Fixed Rate Payer B Each date on which a Distribution is paid
Payment Dates: or issued by the Issuer of any Bond
constituting the Bond Portfolio.
On each Fixed Rate Payer B Payment Date, Party
B shall pay or deliver to Party A the Fixed
Amount B.
Account Details Account Details for Party A: To be determined
Account Details for Party B: To be determined
and/or, in each case, such other accounts as
may from time to time be advised by one Party
to the other.
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3. MODIFICATIONS TO THE ISDA FORM
(a) Section 5(a)(vi); Cross Default will apply to both parties. If
applicable to Party A "Threshold Amount" means 1% of its shareholders'
equity (i.e. the sum of its capital and reserves). With regard to
Party B "Threshold Amount" means 1% of its shareholders' equity (as
calculated in accordance with generally accepted accountancy
principles applicable to Party B). Section 5(a)(vi) shall be amended
by adding the following words at the end thereof: "provided, however,
that, notwithstanding the foregoing, an Event of Default shall not
occur under either (1) or (2) above if (A) (I) the default, or other
similar event or condition referred to in (1) or the failure to pay
referred to in (2) is a failure to pay or deliver caused by an error
or omission of an administrative or operational nature, and (II) funds
or the asset to be delivered were available to such party to enable it
to make the relevant payment or delivery when due and (III) such
payment or delivery is made within three (3) Local Business Days
following receipt of written notice from an interested party of such
failure to pay, or (B) such party was precluded from paying, or was
unable to pay, using reasonable means, through the office of the party
through which it was acting for purposes of the relevant Specified
Indebtedness, by reason of force majeure, act of State, illegality or
impossibility."
(b) The definition of "Specified Transaction" in Section 14 of this
Agreement is hereby amended by: (A) deleting in the second through the
fourth lines thereof the words "between one party...which is a" and
replacing them with the words "(i) in the case of Party A, between
Party A (or any Credit Support Provider of such party or any
applicable Specified Entity of such party) and Party B (or any Credit
Support Provider of such party or any applicable Specified Entity of
such party), and (ii) in the case of Party B, between Party B (or any
Credit Support Provider of such party or any applicable Specified
Entity of such party) and any other person or entity, including
without limitation Party A (or any Credit Support Provider of such
party or any applicable Specified Entity of such party), including
without limitation any"; and (B) adding the text "commodity
transaction, credit derivative transaction, repurchase or reverse
repurchase transaction, securities lending transaction" after the text
"foreign exchange transaction" appearing in the sixth line thereof.
(c) Credit Support Document: The Securities Pledge Agreement between Party
B as pledgor and Party A as pledgee dated as of 16 January 2004 shall
be a Credit Support Document for purposes of this Transaction.
4. OFFICES
The Office of Party A for this Transaction is London.
The Office of Party B for this Transaction is Singapore.
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5. CALCULATION AGENT
Party A acting reasonably and in good faith according to its customary practices
and procedures, provided, however, that absent manifest error, the Calculation
Agent's computations hereunder shall be binding for all purposes.
6. ADDITIONAL REPRESENTATIONS
Each party represents to the other party (except for 6(C) where Party B
represents to Party A) on the date hereof that (absent a written agreement
between the parties that expressly imposes affirmative obligations to the
contrary for this Transaction):
(A) NON-RELIANCE
It has made its own independent decision to enter into this
Transaction, is acting at arm's length for its own account, and is not
relying on any communication (written or oral) of the other party as a
recommendation or investment advice regarding this Transaction.
(B) EVALUATION AND UNDERSTANDING
It has the capability to evaluate and understand (on its own behalf or
through independent professional advice), and does understand, the
terms, conditions and risks of this Transaction and is willing to
accept those terms and conditions and to assume (financially and
otherwise) those risks.
(C) TRANSACTIONS IN THE COLLATERAL
It understands that the other party and its affiliates may engage in
proprietary trading for its own account in the Collateral or similar
instruments and that such trading may affect the value of the
Collateral.
(D) CONCERNING THE CALCULATION AGENT
The Calculation Agent is not acting as a fiduciary for or as an
advisor to either party in respect of its duties as Calculation Agent
in respect of this Transaction and any determination by the
Calculation Agent in the course of such duties shall be conclusive and
binding on each party (in the absence of manifest error) and no
liability shall attach to the Calculation Agent in respect thereof.
7. OTHER TERMS
For the purposes of this Transaction the parties agree that the ISDA Form
shall be amended as follows:
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(a) Section 2(b) shall be amended by adding the words "(or place for
receipt of delivery as the case may be)" after the word "account" in
line 1.
(b) Section 2(e) shall be amended by adding the words "for any costs
losses or expenses reasonably incurred by the other party in
connection with such delivery default (including but not limited to
any costs of funding)" after the word "party" in line 9 and by the
deletion of the rest of such section from the word "if" after the word
"demand" in the same line.
(c) In addition to the representations made pursuant to Section 3,
each party represents that where it is required to make a delivery of
Bonds it will have the right to transfer such Bonds and it will convey
the full legal and beneficial title of the Bonds to be delivered free
and clear of any lien, charge, claim, encumbrance or security interest
whatsoever.
(d) Section 4(e) shall be amended by adding the following words at the
end thereof: "except in the case of any Stamp Tax payable in
connection with the delivery of the Bonds to be Delivered where
payment of the Stamp Tax shall be for the account of the party who
would bear such cost in respect of such Transaction in accordance with
the normal practice on the Clearance System".
(e) Section 5(a)(i) shall be amended by adding the words "(and in the
case of delivery, each being a Local Business Day on which a
Settlement Disruption Event has not occurred)" after the word "Day" in
line 3.
(f) The definition of Local Business Day in Section 14 shall be
amended by adding the words "and, in respect of those Transactions
which settle by physical delivery, the clearance system or exchange
specified in the relevant Confirmation" after the word "banks" in line
1 of the definition.
(g) Additional Termination Event. The following shall constitute an
Additional Termination Event with respect to Party B only, whereby
Party B shall be the sole Affected Party and the Asset Swap
Transaction herein shall be the Affected Transaction:
(i) If the parties are not able to negotiate, execute and deliver
an agreement in the form of the ISDA Master Agreement
(Multicurrency-Cross Border) (the "ISDA Form") with such
modifications as acceptable to Party A within 90 calendar days of
the Trade Date of this Transaction; or
(ii) If there is a default under the terms of any of the Bond(s)
constituting the Bond Portfolio such Bond(s) being the "Defaulted
Bond"; or
(iii) If the Xxxx to Market Value of the outstanding Bond
Portfolio held as collateral by Party A declines to less than 70%
of the Xxxx to Market Value of the Asset Swap Transaction herein,
where
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"Xxxx to Market Value of the outstanding Bond Portfolio" is the
market value of the outstanding Bond Portfolio held as collateral
by Party A, as determined by the Calculation Agent; and
"Xxxx to Market Value of the Asset Swap" shall be an amount in
USD determined by us to be our total aggregate gain or, expressed
as a negative number, losses and costs in connection with
termination of the Asset Swap Transaction on the relevant date,
including any loss of bargain, cost of funding or, at our
election but without duplication, loss or cost incurred as a
result of its terminating, liquidating, obtaining or
re-establishing any hedge or related trading position (or any
gain resulting from any of them).
Party A may (but shall not be obliged to) agree, at its sole
discretion, in the case of occurrence of sub clause (ii) above,
to accept substitute bonds acceptable to Party A as collateral
("Substitute Bond Collateral"), and return the Defaulted Bond to
Party B in lieu thereof so as to maintain the Xxxx to Market
Value of the outstanding Bond Portfolio at a value greater than
or equal to the Xxxx to Market Value of the Asset Swap
Transaction.
Party A may (but shall not be obliged to) agree, at its sole
discretion, in the case of occurrence of sub clause (iii) above,
to accept bonds acceptable to Party A as collateral ("Top up Bond
Collateral") which shall therefrom form part of the Bond
Portfolio, so as to maintain the Xxxx to Market Value of the
outstanding Bond Portfolio at a value greater than or equal to
the Xxxx to Market Value of the Asset Swap Transaction.
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Please confirm that the foregoing correctly sets forth the terms of our
agreement by having an authorised officer sign this fax copy and return it by
fax to:
Deutsche Bank AG London
Attention: ICT Documentation
Phone: (000) 0000 0000/ 0000 0000
Fax: (000) 0000 0000
This message will be the only form of Confirmation dispatched by us. If you wish
to exchange hard copy forms of this Confirmation, please contact us.
Yours sincerely,
Deutsche Bank AG
By: /s/ Xxxxx Xxxx
Name: Xxxxx Xxxx
Authorized Signatory
By: /s/ Xxxxxx Xxxxxxx
Name: Xxxxxx Xxxxxxx
Authorized Signatory
Confirmed as of the date first written above:
ST Assembly Test Services Ltd
By: /s/ Tan Lay Koon / /s/ Xxxxxxxx Xxxx
------------------------------------
Name: Tan Lay Koon/Xxxxxxxx Xxxx
Title: Chief Executive Officer/Vice President, Finance
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