EXHIBIT 99.1
(XX XXXXXX LOGO)
JPMorgan Chase Bank, National Association
X.X. Xxx 000
60 Victoria Embankment
Xxxxxx XX0X 0XX
England
July 29, 2005
To: CSK AUTO CORPORATION
000 X. Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Re: Warrants
The purpose of this letter agreement is to confirm the terms and
conditions of the Warrants issued by CSK AUTO CORPORATION, a Delaware
corporation (the "COMPANY"), to JPMorgan Chase Bank, National Association,
London Branch ("JPMORGAN") on the Trade Date specified below (the
"TRANSACTION"). This letter agreement constitutes a "Confirmation" as referred
to in the ISDA Master Agreement specified below. This Confirmation shall replace
any previous letter and serve as the final documentation for this Transaction.
The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "EQUITY DEFINITIONS"), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This
Transaction shall be deemed to be a Share Option Transaction within the meaning
set forth in the Equity Definitions.
Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in, or refrained from engaging in, substantial
financial transactions and has taken other material actions in reliance upon the
parties' entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.
1. This Confirmation evidences a complete and binding agreement between JPMorgan
and the Company as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and be subject to
an agreement in the form of the 2002 ISDA Master Agreement (the "AGREEMENT") as
if JPMorgan and the Company had executed an agreement in such form (but without
any Schedule except for (i) the election of the laws of the State of New York as
the governing law, (ii) with respect to the Company, the inclusion of CSK Auto,
Inc., an Arizona corporation (the "SUBSIDIARY"), and any other existing or
future subsidiaries (direct or indirect) of the Company as a "Specified
Entities" and any transaction of the Specified Entities in excess, individually
or in aggregate, of $20 million as a "Specified Transaction" and (iii) the
election of United States dollars as the Termination Currency) on the Trade
Date. In the event of any inconsistency between provisions of that Agreement and
this Confirmation, this Confirmation will prevail for the purpose of the
Transaction to which this Confirmation relates. The parties hereby agree that no
Transaction other than the Transaction to which this Confirmation relates shall
be governed by the Agreement.
2. The terms of the particular Transaction to which this Confirmation relates
are as follows:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
General Terms:
Trade Date: July 29, 2005
Warrants: Equity call warrants, each giving the holder
the right to purchase one Share at the
Strike Price, subject to the Settlement
Terms set forth below. For the purposes of
the Equity Definitions, each reference to a
Warrant shall be deemed to be a reference to
a Call Option.
Warrant Style: American
Buyer: JPMorgan
Seller: Company
Shares: The common stock of Company, par value USD
0.01 per Share (Exchange symbol "CAO")
Number of Warrants: 4,764,375
Daily Number of Warrants: For any day, the Number of Warrants on such
day, divided by the remaining number of
Expiration Dates (including such day) and
rounded up to the nearest number to account
for any fractional Daily Number of Warrants.
Warrant Entitlement: One Share per Warrant, subject to
adjustments hereunder
Multiple Exercise: Applicable
Minimum Number of Warrants: 1
Maximum Number of Warrants: 4,764,375
Strike Price: USD 26.40
Premium: USD 15,850,000
Premium Payment Date: July 29, 2005
Exchange: The New York Stock Exchange
Related Exchange(s): The principal exchange(s) for options
contracts or futures contracts, if any, with
respect to the Shares
Exercise and Valuation:
Expiration Time: The Valuation Time
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
2
Expiration Dates: Each Exchange Business Day in the period
beginning on and including the First
Expiration Date and ending on and including
the 60th Exchange Business Day following the
First Expiration Date shall be an
"Expiration Date" for a number of Warrants
equal to the Daily Number of Warrants.
First Expiration Date: July 2, 2010, subject to Market Disruption
Event below.
Automatic Exercise: Applicable; and means that a number of
Warrants for each Expiration Date equal to
the Daily Number of Warrants (as adjusted
pursuant to the terms hereof) for such
Expiration Date will be deemed to be
automatically exercised. For the avoidance
of doubt, Automatic Exercise shall apply
separately to each Expiration Date.
Market Disruption Event: Modified Postponement (as if each Expiration
Date were an "Averaging Date" for the
purposes of Section 4.4(d)(iii)(A) of the
Equity Definitions and for the purposes of
the definition of "Valid Date"; provided
that references in Section 4.4(d)(iii)(A) to
"fifth Exchange Business Day" shall be
replaced by "eighth Exchange Business Day").
Valuation applicable to each Warrant:
Valuation Time: At the close of trading of the regular
trading session on the Exchange; provided
that if the principal trading session is
extended, the Calculation Agent shall
determine the Valuation Time in its
reasonable discretion.
Valuation Date: Each Exercise Date.
Settlement Terms applicable to the Transaction:
Method of Settlement: Net Share Settlement; and means that,
without any cash payments by either party,
on each Settlement Date, the Company shall
deliver to JPMorgan the Share Delivery
Quantity of Shares for such Settlement Date
to the account specified hereto free of
payment through the Clearance System.
Share Delivery Quantity: For any Settlement Date, a number of Shares,
as determined by the Calculation Agent,
equal to the Net Share Settlement Amount for
such Settlement Date divided by the
Settlement Price on the Valuation Date in
respect of such Settlement Date, plus cash
in lieu of any fractional shares (based on
such Settlement Price) on such Settlement
Date; provided that in no event shall the
Company be obligated to deliver on such
Settlement Date a number of Shares, as
determined by the Calculation Agent, greater
than the Maximum Delivery Threshold as of
such date.
Maximum Delivery Threshold: Subject to adjustments contemplated herein
and, for the avoidance of doubt, taking into
account any Shares deliverable by the
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
3
Company as a result of issuance of
additional Exchangeable Notes (as defined
below) as contemplated by Section 9(b), for
any date, a number of Shares equal to (i)
two million Shares, plus (ii) a number of
Shares repurchased, acquired or otherwise
received by the Company or any of its
subsidiaries after the Trade Date and on or
prior to such date (whether or not in
exchange for cash, fair value or any other
consideration), plus (iii) a number of
authorized and unissued Shares reserved for
issuance in respect of other transactions
prior to such date which prior to such
Settlement Date become no longer so
reserved, plus (iv) the number of Shares
additionally authorized and unissued by the
Company and not reserved for other
transactions prior to such date, minus (v)
the aggregate Share Delivery Quantities for
all Settlement Dates occurring prior to such
date (after giving effect to the proviso set
forth under "Share Delivery Quantity"
above), minus (vi) the aggregate Deficit
Delivery Shares (as defined below) delivered
by the Company prior to such date. For the
avoidance of doubt, the Maximum Delivery
Threshold shall only apply on any Settlement
Date if it is less than the Share Delivery
Quantity on such date (without giving effect
to the proviso under "Share Delivery
Quantity" above).
Net Share Settlement
Amount: For any Settlement Date, an amount equal to
the product of (i) the Number of Warrants
being exercised on the relevant Exercise
Date, (ii) the Strike Price Differential for
such Settlement Date and (iii) the Warrant
Entitlement.
Strike Price Differential: (a) If the Settlement Price for any
Valuation Date is greater than the Strike
Price, an amount equal to the excess of such
Settlement Price over the Strike Price; or
(b) If such Settlement Price is less than or
equal to the Strike Price, zero.
Settlement Price: For any Valuation Date, the closing sale
price per Share quoted by the Exchange (or,
if no closing sale price is so quoted, the
last reported sale price) as of the
Valuation Time on the Valuation Date.
Settlement Date: For any Exercise Date, the date defined as
such in Section 6.2 of the Equity
Definitions, subject to Section 9(p)(i)
hereof.
Failure to Deliver: Inapplicable
Continuing Delivery
Obligations: The Calculation Agent shall calculate an
amount, for any date, equal to (i) the
aggregate sum of Share Delivery Quantities
(without giving effect to the proviso set
forth in "Share Delivery Quantity" above)
for all Settlement Dates occurring prior to
such date, minus (ii) the number of Shares
actually delivered by the Company on any
Settlement Date (after application of the
proviso set forth in "Share Delivery
Quantity" above) occurring prior to such
date, minus (iii) any Deficit Delivery
Shares (as defined below) actually delivered
by
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
4
the Company prior to such date pursuant to
this "Continuing Delivery Obligation", which
such amount (the "SHARE DEFICIT QUANTITY")
shall never be less than zero. If on any
date, the Share Deficit Quantity is greater
than zero and the Maximum Delivery Threshold
on such date is greater than zero, then
Company shall promptly (and in no event
later than the earlier of (A) the date one
Exchange Business Day following such date or
(B) the date 60 Business Days following the
First Expiration Date hereunder) deliver a
number of Shares to JPMorgan (the "DEFICIT
DELIVERY SHARES") equal to the lesser of the
Share Deficit Quantity as of such date and
the Maximum Delivery Threshold as of such
date, and the Calculation Agent shall reduce
the Share Deficit Quantity by the number of
Deficit Delivery Shares as set forth in the
previous sentence.
Failure to Deliver: Inapplicable
Other Applicable
Provisions: The provisions of Sections 6.6, 6.7, 6.8,
6.9 and 6.10 of the Equity Definitions will
be applicable, except that all references in
such provisions to "Physically-Settled"
shall be read as references to "Net Share
Settled". "Net Share Settled" in relation to
any Warrant means that Net Share Settlement
is applicable to that Warrant.
3. Additional Terms applicable to the Transaction:
Adjustments applicable to the Warrants:
Method of Adjustment: Calculation Agent Adjustment. For avoidance
of doubt, in making any adjustments under
the Equity Definitions, the Calculation
Agent may adjust the Daily Number of
Warrants, the Warrant Entitlement and the
Maximum Delivery Threshold. Notwithstanding
the foregoing, any cash dividends or
distributions, whether or not extraordinary,
shall be governed by Section 9(k) of this
Confirmation and not by Section 9.1(c) of
the Equity Definitions.
Extraordinary Events applicable to the Transaction:
Consequence of Merger Events
(a) Share-for-Share: Alternative Obligation; provided that the
Calculation Agent will determine if the
Merger Event affects the theoretical value
of the Transaction and if so JPMorgan in its
reasonable discretion may elect to make
adjustments to the Strike Price and any
other term necessary to reflect the
characteristics (including volatility,
dividend practice, borrow cost, policy and
liquidity) of the New Shares.
Notwithstanding the foregoing, Cancellation
and Payment shall apply in the event the New
Shares are not publicly traded on a United
States national securities exchange or
quoted on the NASDAQ National Market.
(b) Share-for-Other: Cancellation and Payment
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
5
(c) Share-for-Combined: Cancellation and Payment
Nationalization or Insolvency: Cancellation and Payment
4. Calculation Agent: JPMorgan. Whenever the
Calculation Agent is required to
act or to exercise judgment in
any way with respect to this
Transaction, it will do so in
good faith and in a commercially
reasonable manner.
5. Account Details:
(a) Account for payments to Company:
JPMorgan Chase Bank
ABA: 000000000
Acct: CSK Auto Corporation
Acct No.: 304250066
Account for delivery of Shares to Company:
DTC: (CUSIP 125965-10-3 in DWAC system)
(b) Account for payments to JPMorgan:
JPMorgan Chase Bank, N.A., New York
ABA: 021 000 021
Favour: JPMorgan Chase Bank N.A., - London
A/C: 0010962009
XXXXXX00
Account for delivery of Shares from JPMorgan:
DTC 060
6. Offices:
The Office of Company for the Transaction is: Inapplicable, Company is not a
Multibranch Party.
The Office of JPMorgan for the Transaction is: New York
JPMorgan Chase Bank, N.A.
London Branch
P.O. Box 161
60 Victoria Embankment
London EC4Y 0JP
England
7. Notices: For purposes of this Confirmation:
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
6
(a) Address for notices or communications to Company:
CSK Auto Corporation
000 X. Xxxxxxxx Xxx., Xxxxx 000
Xxxxxxx, Xxxxxxx 00000
Attention: Treasurer
Telephone No.: 000-000-0000
Facsimile No.: 000-000-0000
Address for notices or communications to JPMorgan:
JPMorgan Chase Bank, N.A.
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
EDG Corporate Marketing
Telephone No: (000) 000-0000
Facsimile No: (000) 000-0000
8. Representations and Warranties of the Company
The representations and warranties of the Company set forth in Section 4 of the
Purchase Agreement (the "PURCHASE AGREEMENT") dated as of July 25, 2005 relating
to 3 3/8% Senior Exchangeable Notes of the Company due 2025 (the "EXCHANGEABLE
NOTES") among the Company, the Subsidiary, certain other subsidiaries of the
Company and X.X. Xxxxxx Securities Inc. as representative of the Initial
Purchasers party thereto are true and correct and are hereby deemed to be
repeated to JPMorgan as of the date hereof as if set forth herein. The Company
hereby further represents and warrants to JPMorgan as of the date hereof that:
(a) The Company has all necessary corporate power and authority to
execute, deliver and perform its obligations in respect of
this Transaction; such execution, delivery and performance
have been duly authorized by all necessary corporate action on
the Company's part; and this Confirmation has been duly and
validly executed and delivered by the Company and constitutes
its valid and binding obligation, enforceable against the
Company in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws affecting creditors' rights and
remedies generally, and subject, as to enforceability, to
general principles of equity, including principles of
commercial reasonableness, good faith and fair dealing
(regardless of whether enforcement is sought in a proceeding
at law or in equity) and except that rights to indemnification
and contribution thereunder may be limited by federal or state
securities laws or public policy relating thereto.
(b) Neither the execution and delivery of this Confirmation nor
the incurrence or performance of obligations of the Company
hereunder will conflict with or result in a breach of (i) the
certificate of incorporation or by-laws (or any equivalent
documents) of the Company, or (ii) any applicable law or
regulation, or any order, writ, injunction or decree of any
court or governmental authority or agency, or (iii) any
agreement or instrument to which the Company or any of its
Significant Subsidiaries (within the meaning of Regulation S-X
promulgated under the Securities Act of 1933, as amended (the
"SECURITIES ACT")) is a party or by which the Company or any
of its Significant Subsidiaries is bound or to which the
Company or any of its Significant Subsidiaries is subject, or
constitute a default under, or result in the creation of any
lien under, any such agreement or instrument, except, in the
cases of clauses (ii) and (iii), for such conflicts, breaches,
defaults and liens that would not reasonably be expected to
have a material adverse effect on the financial
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
7
condition, business, properties or results of operations of
the Company and its subsidiaries taken as a whole.
(c) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required
on the part of the Company in connection with the execution,
delivery or performance by the Company of this Confirmation,
except such as have been obtained or made and such as may be
required under the Securities Act or state securities or Blue
Sky laws.
(d) The maximum number of Shares of the Company issuable pursuant
to the terms of this Confirmation upon exercise of the
Warrants by the net share settlement method (the "WARRANT
SHARES") (which, subject to adjustments in accordance with the
terms of the Equity Definitions and Section 3 of this
Confirmation as a result of events or circumstances occurring
after the date hereof, does not exceed the Number of Warrants)
have been (to the extent of the Maximum Delivery Threshold as
of the date hereof) and will be (to the extent of any such
Shares in excess of the Maximum Delivery Threshold as of the
date hereof) reserved for issuance by all required corporate
action of the Company. The Warrant Shares have been or will be
duly authorized and, when delivered against payment therefor
(which may include Net Share Settlement in lieu of cash) and
otherwise as contemplated by the terms of the Warrant
following the exercise of the Warrant in accordance with the
terms and conditions of the Warrant, will be validly issued,
fully-paid and non-assessable, and the issuance of the Warrant
Shares will not be subject to any pre-emptive or similar
rights.
(e) The Company is an "eligible contract participant" (as such
term is defined in Section 1(a)(12) of the Commodity Exchange
Act, as amended (the "CEA") because one or more of the
following is true:
The Company is a corporation, partnership, proprietorship,
organization, trust or other entity and:
(A) the Company has total assets in excess of USD
10,000,000;
(B) the obligations of Company hereunder are guaranteed,
or otherwise supported by a letter of credit or
keepwell, support or other agreement, by an entity of
the type described in Section 1a(12)(A)(i) through
(iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or 1a(12)(C) of
the CEA; or
(C) the Company has a net worth in excess of USD
1,000,000 and has entered into this Agreement in
connection with the conduct of Company's business or
to manage the risk associated with an asset or
liability owned or incurred or reasonably likely to
be owned or incurred by Company in the conduct of
Company's business.
(f) The Company and each of its affiliates is not, on the date
hereof, in possession of any material non-public information
with respect to Company.
9. Other Provisions:
(a) Opinions. The Company shall deliver an opinion of counsel,
dated as of the Trade Date, to JPMorgan with respect to the
matters set forth in Sections 8(a) through (d) of this
Confirmation, with modifications and qualifications as agreed
by the parties.
(b) Amendment. If the Initial Purchasers party to the Purchase
Agreement exercise their right to receive additional
Exchangeable Notes pursuant to the Initial Purchasers' option
to purchase
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
8
additional Exchangeable Notes, then, at the discretion of the
Company, JPMorgan and the Company will either enter into a new
confirmation or amend this Confirmation to provide for such
increase in Exchangeable Notes (but on pricing terms
acceptable to JPMorgan and the Company) (such additional
confirmation or amendment to this Confirmation to provide for
the payment by JPMorgan to the Company of the additional
premium related thereto).
(c) No Reliance, etc. Each party represents that (i) it is
entering into the Transaction evidenced hereby as principal
(and not as agent or in any other capacity); (ii) neither the
other party or parties nor any of its or their agents are
acting as a fiduciary for it; (iii) it is not relying upon any
representations except those expressly set forth in the
Agreement or this Confirmation; (iv) it has not relied on the
other party or parties for any legal, regulatory, tax,
business, investment, financial, and accounting advice, and it
has made its own investment, hedging, and trading decisions
based upon its own judgment and not upon any view expressed by
the other party or parties or any of its or their agents; and
(v) it is entering into this Transaction with a full
understanding of the terms, conditions and risks thereof and
it is capable of and willing to assume those risks.
(d) Share De-listing Event. If at any time during the period from
and including the Trade Date, to and including the final
Valuation Date or any final delivery date for Deficit Delivery
Shares, if any, the Shares cease to be listed or quoted on the
Exchange for any reason (other than a Merger Event as a result
of which all of the property underlying the Options consists
of shares of common stock that are listed or quoted on The New
York Stock Exchange, The American Stock Exchange or the NASDAQ
National Market (or their respective successors) (the
"SUCCESSOR EXCHANGE")) and are not immediately re-listed or
quoted as of the date of such de-listing on the Successor
Exchange (a "SHARE DE-LISTING"), then Cancellation and Payment
(as defined in Section 9.6 of the Equity Definitions treating
the "ANNOUNCEMENT DATE" as the date of first public
announcement that the Share De-Listing will occur and the
"MERGER DATE" as the date of the Share De-Listing) shall
apply, and the date of the de-listing shall be deemed the date
of termination for purposes of calculating any payment due
from one party to any of the others in connection with the
cancellation of this Transaction; provided that, for the
avoidance of doubt, settlement of such payment obligation
shall be subject to clause (o) hereof. If the Shares are
immediately re-listed on a Successor Exchange upon their
de-listing from the Exchange, this Transaction shall continue
in full force and effect, provided that the Successor Exchange
shall be deemed to be the Exchange for all purposes hereunder.
In addition, the Calculation Agent shall make any adjustments
it reasonably deems necessary to the terms of the Transaction
to reflect the effect of such re-listing (including, without
limitation, the liquidity and volatility of the Shares upon
re-listing) in accordance with Calculation Agent Adjustment
method as defined under Section 9.1(c) of the Equity
Definitions.
(e) Repurchases. The Company shall, three Business Days prior to
any day on which it intends to effect any repurchase of
Shares, give JPMorgan a written notice of such intended
repurchase (a "REPURCHASE NOTICE") if following such
repurchase, the Warrants Equity Percentage as determined on
such day is greater by 0.25% than the Warrants Equity
Percentage included in the immediately preceding Repurchase
Notice (or, in the case of the first such Repurchase Notice,
greater than the Options Equity Percentage as of the date
hereof). The "WARRANTS EQUITY PERCENTAGE" as of any day is the
fraction (A) the numerator of which is the product of the
Number of Warrants and the Warrant Entitlement and (B) the
denominator of which is the number of Shares outstanding on
such day. Company agrees to indemnify and hold harmless
JPMorgan and its affiliates and their respective officers,
directors, employees, affiliates, advisors, agents and
controlling persons (each, an "INDEMNIFIED PERSON") from and
against any and all losses (including losses relating to
JPMorgan's hedging activities as a consequence of becoming, or
of
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
9
the risk of becoming, a Section 16 "insider", including
without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection
therewith with respect to this Transaction), claims, damages,
judgments, liabilities and expenses (including reasonable
attorney's fees), joint or several, which an Indemnified
Person actually may become subject to, a result of Company's
failure to comply with the first sentence of this paragraph,
and to reimburse, within 30 days, upon written request, each
of such Indemnified Persons for any reasonable legal or other
expenses incurred in connection with investigating, preparing
for, providing testimony or other evidence in connection with
or defending any of the foregoing. If any suit, action,
proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted
against the Indemnified Person, such Indemnified Person shall
promptly notify the Company in writing, and the Company, upon
request of the Indemnified Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person and any others the Company may
designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. Company
shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff,
Company agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or
judgment. Company shall not, without the prior written consent
of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are
the subject matter of such proceeding on terms reasonably
satisfactory to such Indemnified Person. If the
indemnification provided for in this paragraph (c) is
unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred
to therein, then Company under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or
liabilities. The remedies provided for in this paragraph (c)
are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any Indemnified Person at
law or in equity. The indemnity and contribution agreements
contained in this paragraph (c) shall remain operative and in
full force and effect regardless of the termination of this
Transaction.
(f) Regulation M. Neither the Company nor any of its subsidiaries
was on the Trade Date or is on the date hereof engaged in a
distribution, as such term is used in Regulation M under the
Securities Exchange Act of 1934, as amended ("EXCHANGE ACT"),
of any securities of Company, other than a distribution
meeting the requirements of the exception set forth in
sections 101(b)(10) and 102(b)(7) of Regulation M. The Company
shall not, until the fifth Exchange Business Day immediately
following the Trade Date, engage in any such distribution.
(g) No Manipulation. The Company is not entering into this
Transaction to create actual or apparent trading activity in
the Shares (or any security convertible into or exchangeable
for the Shares) or to raise or depress or otherwise manipulate
the price of the Shares (or any security convertible into or
exchangeable for the Shares).
(h) Board Authorization. Company represents that it is entering
into the Transaction, solely for the purposes stated in the
board resolution authorizing this Transaction and in its
public disclosure. Company further represents that there is no
internal policy, whether written or oral, of Company that
would prohibit Company from entering into any aspect of this
Transaction, including, but not limited to, the purchases of
Shares to be made pursuant hereto.
(i) Transfer or Assignment. Company may not transfer any of its
rights or obligations under this Transaction without the prior
written consent of JPMorgan. JPMorgan may transfer or assign
all
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
10
or any portion of its rights or obligations under this
Transaction without consent of the Company. If JPMorgan, in
its sole discretion, determines that its "beneficial
ownership" (within the meaning of Section 16 of the Exchange
Act and rules promulgated thereunder) exceeds 8% or more of
the Company's outstanding Shares and, in its sole discretion,
JPMorgan is unable after its commercially reasonable efforts
to effect a transfer or assignment on pricing terms and in a
time period reasonably acceptable to JPMorgan that would
reduce its "beneficial ownership" to 7.5%, JPMorgan may
designate any Exchange Business Day as an Early Termination
Date with respect to a portion (the "TERMINATED PORTION") of
this Transaction, such that the its "beneficial ownership"
following such partial termination will be equal to or less
than 8%. In the event that JPMorgan so designates an Early
Termination Date with respect to a portion of this
Transaction, a payment shall be made pursuant to Section 6 of
the Agreement as if (i) an Early Termination Date had been
designated in respect of a Transaction having terms identical
to this Transaction and a Number of Warrants equal to the
Terminated Portion, (ii) the Company shall be the sole
Affected Party with respect to such partial termination and
(iii) such Transaction shall be the only Terminated
Transaction. For the avoidance of doubt, if JPMorgan assigns
or terminates any Warrants hereunder, each Daily Number of
Warrants not previously settled as set forth in Annex A hereto
shall be reduced proportionally, as calculated by the
Calculation Agent.
Notwithstanding any other provision in this Confirmation to
the contrary requiring or allowing JPMorgan to purchase, sell,
receive or deliver any shares or other securities to or from
Company, JPMorgan may designate any of its affiliates to
purchase, sell, receive or deliver such shares or other
securities and otherwise to perform JPMorgan's obligations in
respect of this Transaction and any such designee may assume
such obligations. JPMorgan shall be discharged of its
obligations to Company to the extent of any such performance.
(j) Damages. Neither party shall be liable under Section 6.10 of
the Equity Definitions for special, indirect or consequential
damages, even if informed of the possibility thereof.
(k) Dividends. If at any time during the period from and including
the Trade Date, to but excluding the Expiration Date, an
ex-dividend date for a cash dividend occurs with respect to
the Shares (an "EX-DIVIDEND DATE"), and that dividend is
greater than the Regular Dividend on a per Share basis then
the Calculation Agent will adjust the Strike Price to preserve
the fair value of the Warrant to JPMorgan after taking into
account such dividend. "REGULAR DIVIDEND" shall mean USD 0.00
per Share per quarter.
(l) Role of Agent. Each party agrees and acknowledges that (i)
X.X. Xxxxxx Securities Inc., an affiliate of JPMorgan
("JPMSI"), has acted solely as agent and not as principal with
respect to this Transaction and (ii) JPMSI has no obligation
or liability, by way of guaranty, endorsement or otherwise, in
any manner in respect of this Transaction (including, if
applicable, in respect of the settlement thereof). Each party
agrees it will look solely to the other party (or any
guarantor in respect thereof) for performance of such other
party's obligations under this Transaction.
(m) Additional Provisions.
(i) The first paragraph of Section 9.1(c) of the Equity
Definitions is hereby amended to read as follows: (c) `If
"Calculation Agent Adjustment" is specified as the method of
adjustment in the Confirmation of a Share Option Transaction,
then following the declaration by the Issuer of the terms of
any Potential Adjustment Event, the Calculation Agent will
determine whether such Potential Adjustment Event has a
material effect on the theoretical value of the relevant
Shares or Warrants and, if so, will (i) make appropriate
adjustment(s), if any, to any one or more of:' and the
sentence immediately preceding Section 9.1(c)(ii) is hereby
amended by deleting the words "diluting or concentrative".
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
11
(ii) Section 9.1(e)(vi) of the Equity Definitions is hereby
amended by deleting the words "other similar" between "any"
and "event"; deleting the words "diluting or concentrative"
and replacing them with "material"; and adding the following
words at the end of the sentence "or Warrants".
(iii) Section 9.6(a)(ii) of the Equity Definitions is hereby
amended by (1) deleting from the third line thereof the word
"or" after the word "official" and inserting a comma therefor,
and (2) deleting the period at the end of subsection (ii)
thereof and inserting the following words in place thereof: "
or (C) at JPMorgan's option, the occurrence of any of the
events specified in Section 5(a)(vii) (1) through (9) of the
ISDA Master Agreement with respect to that Issuer."
(n) No Collateral or Setoff. Notwithstanding any provision of the
Agreement or any other agreement between the parties to the
contrary, the obligations of the Company hereunder are not
secured by any collateral. Obligations under this Transaction
shall not be set off by the Company against any other
obligations of the parties, whether arising under the
Agreement, this Confirmation, under any other agreement
between the parties hereto, by operation of law or otherwise.
Any provision in the Agreement with respect to the
satisfaction of the Company's obligations to the extent of
JPMorgan's obligations to the Company in the same currency and
in the same Transaction (including, without limitation Section
2(c) thereof) shall not apply to the Company and, for the
avoidance of doubt, the Company shall fully satisfy such
obligations notwithstanding any obligation to the Company by
JPMorgan in the same currency and in the same Transaction. In
calculating any amounts under Section 6(e) of the Agreement,
notwithstanding anything to the contrary in the Agreement, (1)
separate amounts shall be calculated as set forth in such
Section 6(e) with respect to (a) this Transaction and (b) all
other Transactions, and (2) such separate amounts shall be
payable pursuant to Section 6(d)(ii) of the Agreement.
(o) Alternative Calculations and Payment on Early Termination and
on Certain Extraordinary Events. If, in respect of this
Transaction, an amount is payable by the Company to JPMorgan,
(i) pursuant to Section 9.7 of the Equity Definitions (except
in the event of a Nationalization or Insolvency or a Merger
Event, in each case, in which the consideration to be paid to
holders of Shares consists solely of cash) or (ii) pursuant to
Section 6(d)(ii) of the Agreement (except in the event of an
Event of Default in which Company is the Defaulting Party or a
Termination Event in which Company is the Affected Party,
other than an Event of Default of the type described in
Section 5(a)(iii), (v), (vi), (vii) or (viii) of the Agreement
or a Termination Event of the type described in Section
5(b)(i), (ii), (iii), (iv), (v) or (vi) of the Agreement in
each case that resulted from an event or events outside
Company's control) (a "PAYMENT OBLIGATION"), Company may, in
its sole discretion, satisfy any such Payment Obligation by
the Share Termination Alternative (as defined below) and shall
give irrevocable telephonic notice to JPMorgan, confirmed in
writing within one Currency Business Day, no later than 12:00
p.m. New York local time on the Merger Date, the date of the
occurrence of the Nationalization or Insolvency, or Early
Termination Date, as applicable; provided that if the Company
does not validly elect to satisfy its Payment Obligation by
the Share Termination Alternative, JPMorgan shall have the
right to require the Company to satisfy its Payment Obligation
by the Share Termination Alternative, notwithstanding
Counterparty's election to the contrary. Notwithstanding the
foregoing, Company's or JPMorgan's right to elect satisfaction
of a Payment Obligation in the Share Termination Alternative
as set forth in this clause shall only apply to Transactions
under this Confirmation and, notwithstanding anything to the
contrary in the Agreement, (1) separate amounts shall be
calculated with respect to (a) Transactions hereunder and (b)
all other Transactions under the Agreement, and (2) such
separate amounts shall be payable pursuant to Section 6(d)(ii)
of the Agreement, subject to, in the case of clause (a),
Company's Share Termination Alternative right hereunder.
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
12
Share Termination Alternative: Applicable and means that
Company shall deliver to
JPMorgan the Share Termination
Delivery Property on the date
(the "SHARE TERMINATION DELIVERY
DATE") when the Payment
Obligation would otherwise be
due, subject to paragraph (p)(i)
below, in satisfaction, subject
to paragraph (p)(ii) below, of
the Payment Obligation in the
manner reasonably requested by
JPMorgan free of payment.
Share Termination Delivery Property: A number of Share Termination
Delivery Units, as calculated by
the Calculation Agent, equal to
the Payment Obligation divided
by the Share Termination Unit
Price. The Calculation Agent
shall adjust the Share
Termination Delivery Property by
replacing any fractional portion
of a security therein with an
amount of cash equal to the
value of such fractional
security based on the values
used to calculate the Share
Termination Unit Price.
Share Termination Unit Price: The value to JPMorgan of
property contained in one Share
Termination Delivery Unit on the
date such Share Termination
Delivery Units are to be
delivered as Share Termination
Delivery Property, as determined
by the Calculation Agent in its
reasonable discretion by
commercially reasonable means
and notified by the Calculation
Agent to Company at the time of
notification of the Payment
Obligation. In the case of a
Private Placement of Share
Termination Delivery Units that
are Restricted Shares (as
defined below) as set forth in
paragraph (p)(i) below, the
Share Termination Unit Price
shall be determined by the
discounted price applicable to
such Share Termination Delivery
Units. In the case of a
Registered Settlement of Share
Termination Delivery Units that
are Restricted Shares (as
defined below) as set forth in
paragraph (p)(ii) below, the
Share Termination Unit Price
shall be the Settlement Price on
the Merger Date, the date of the
occurrence of the
Nationalization or Insolvency,
or Early Termination Date, as
applicable.
Share Termination Delivery Unit: In the case of a Termination
Event or Event of Default, one
Share or, in the case of
Nationalization or Insolvency or
a Merger Event, a unit
consisting of the number or
amount of each type of property
received by a holder of one
Share (without consideration of
any requirement to pay cash or
other consideration in lieu of
fractional amounts of any
securities) in such
Nationalization or Insolvency or
such Merger Event. If such
Merger Event involves a choice
of consideration to be received
by holders,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
13
such holder shall be deemed to
have elected to receive the
maximum possible amount of cash.
Failure to Deliver: Inapplicable
Other applicable provisions: If this Transaction is to be
Share Termination Settled, the
provisions of Sections 6.6, 6.7,
6.8, 6.9 and 6.10 (as modified
above) of the Equity Definitions
will be applicable, except that
all references in such
provisions to
"Physically-Settled" shall be
read as references to "Share
Termination Settled" and all
references to "Shares" shall be
read as references to "Share
Termination Delivery Units".
"Share Termination Settled" in
relation to this Transaction
means that Share Termination
Settlement is applicable to this
Transaction.
Maximum Delivery Threshold and
Continuing Delivery Obligations: Notwithstanding the foregoing,
the Company shall not be
obligated on any Share
Termination Delivery Date to
deliver Share Termination
Delivery Property in excess of
the Maximum Delivery Threshold
as of such date, with
adjustments by the Calculation
Agent to the Maximum Delivery
Threshold to reflect the nature
and amount of the Share
Termination Delivery Units and
any other variable relating to
the exercise, delivery and
settlement of this Transaction.
In addition, to the extent the
Company has not delivered any
Share Termination Delivery
Property as a result of the
preceding sentence, the Company
shall be obligated to deliver
any such deficit as set forth
under Continuing Delivery
Obligations with appropriate
adjustments by the Calculation
Agent to such provision to
reflect the nature and amount of
the Share Termination Delivery
Units and any other variable
relating to the exercise,
delivery and settlement of this
Transaction.
(p) Registration or Private Placement Procedures. If, in the
reasonable opinion of JPMorgan, following any delivery of
Shares or Share Termination Delivery Property to JPMorgan
hereunder, such Shares or Share Termination Delivery Property
would be in the hands of JPMorgan subject to any applicable
restrictions with respect to any registration or qualification
requirement or prospectus delivery requirement for such Shares
or Share Termination Delivery Property pursuant to any
applicable federal or state securities law (including, without
limitation, any such requirement arising under Section 5 of
the Securities Act as a result of such Shares or Share
Termination Delivery Property being "restricted securities",
as such term is defined in Rule 144 under the Securities Act,
or as a result of the sale of such Shares or Share Termination
Delivery Property being subject to paragraph (c) of Rule 145
under the Securities Act) (such Shares or Share Termination
Delivery Property, "RESTRICTED SHARES"), then delivery of such
Restricted Shares shall be effected pursuant to either clause
(i) or (ii) below at the election of Company,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
14
unless waived by JPMorgan. Notwithstanding the foregoing,
solely in respect of any Daily Number of Warrants exercised or
deemed exercised on any Expiration Date, the Company shall
elect, prior to the first Settlement Date for the first
Expiration Date, a Private Placement Settlement or Registered
Settlement for all deliveries of Restricted Shares for all
such Expiration Dates or any delivery date for Deficit
Delivery Shares, which election shall be applicable to all
Settlement Dates or any delivery date for Deficit Delivery
Shares, if applicable, for such Daily Number of Warrants and
the procedures in clause (i) or clause (ii) below shall apply
for all such delivered Restricted Shares on an aggregate basis
commencing after the final Settlement Date or any delivery
date for Deficit Delivery Shares, if applicable, for such
Daily Number of Warrants. The Calculation Agent shall make
reasonable adjustments to settlement terms and provisions
under this Confirmation to reflect a single Private Placement
or Registered Settlement for such aggregate Restricted Shares
delivered hereunder.
(i) If the Company elects to settle the Transaction
pursuant to this clause (i) (a "PRIVATE PLACEMENT
SETTLEMENT"), then delivery of Restricted Shares by
the Company shall be effected in customary private
placement procedures with respect to such Restricted
Shares reasonably acceptable to JPMorgan; provided
that the Company may not elect a Private Placement
Settlement if, on the date of its election, it has
taken, or caused to be taken, any action that would
make unavailable either the exemption pursuant to
Section 4(2) of the Securities Act for the sale by
the Company to JPMorgan (or any affiliate designated
by JPMorgan) of the Restricted Shares or the
exemption pursuant to Section 4(1) or Section 4(3) of
the Securities Act for resales of the Restricted
Shares by JPMorgan (or any such affiliate of
JPMorgan). The Private Placement Settlement of such
Restricted Shares shall include customary
representations, covenants, blue sky and other
governmental filings and/or registrations,
indemnities to JPMorgan, due diligence rights (for
JPMorgan or any designated buyer of the Restricted
Shares by JPMorgan), opinions and certificates, and
such other documentation as is customary for private
placement agreements. In the case of a Private
Placement Settlement, JPMorgan shall determine the
appropriate discount to the Share Termination Unit
Price (in the case of settlement of Share Termination
Delivery Units pursuant to paragraph (o) above) or
any Settlement Price (in the case of settlement of
Shares pursuant to Section 2 above) applicable to
such Restricted Shares in a commercially reasonable
manner and appropriately adjust the amount of such
Restricted Shares to be delivered to JPMorgan
hereunder; provided that in no event such number
shall be greater than the Maximum Delivery Threshold
as of the date of required delivery. Notwithstanding
the Agreement or this Confirmation, the date of
delivery of such Restricted Shares shall be the
Exchange Business Day following notice by JPMorgan to
the Company, of such applicable discount and the
number of Restricted Shares to be delivered pursuant
to this clause (i). For the avoidance of doubt,
delivery of Restricted Shares shall be due as set
forth in the previous sentence and not be due on the
Share Termination Delivery Date (in the case of
settlement of Share Termination Delivery Units
pursuant to paragraph (o) above) or on the Settlement
Date for such Restricted Shares (in the case of
settlement of Shares pursuant to Section 2 above).
In the event of a Private Placement, the Net Share
Settlement Amount or the Payment Obligation,
respectively, shall be deemed to be the Net Share
Settlement Amount or the Payment Obligation,
respectively, plus an additional amount (determined
from time to time by the Calculation Agent in its
commercially reasonable judgment) attributable to
interest that would be earned on such Net Share
Settlement Amount or the Payment Obligation,
respectively, (increased on a daily basis to reflect
the accrual of such interest and reduced from time to
time by the amount of net proceeds received by
JPMorgan as provided herein) at a rate equal to the
open Federal Funds Rate plus the Spread for the
period from, and including, such Settlement Date or
the date on which the Payment
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
15
Obligation is due, respectively, to, but excluding,
the related date on which all the Restricted Shares
have been sold and calculated on an Actual/360 basis.
The foregoing provision shall be without prejudice to
JPMorgan's rights under the Agreement (including,
without limitation, Sections 5 and 6 thereof).
As used in this Section 9(p)(i), "SPREAD" means, with
respect to any Net Share Settlement Amount or Payment
Obligation, respectively, the credit spread over the
applicable overnight rate that would be imposed if
JPMorgan were to extend credit to Company in an
amount equal to such Net Share Settlement Amount, all
as determined by the Calculation Agent using its
commercially reasonable judgment as of the related
Settlement Date or the date on which the Payment
Obligation is due, respectively. Commercial
reasonableness shall take into consideration all
factors deemed relevant by the Calculation Agent,
which are expected to include, among other things,
the credit quality of the Company (and any relevant
affiliates) in the then-prevailing market and the
credit spread of similar companies in the relevant
industry and other companies having a substantially
similar credit quality.
(ii) If the Company elects to settle the Transaction
pursuant to this clause (ii) (a "REGISTRATION
SETTLEMENT"), then the Company shall promptly (but in
any event no later than the beginning of the Resale
Period) file and use its reasonable best efforts to
make effective under the Securities Act a
registration statement or supplement or amend an
outstanding registration statement in form and
substance reasonably satisfactory to JPMorgan, to
cover the resale of such Restricted Shares in
accordance with customary resale registration
procedures, including covenants, conditions,
representations, underwriting discounts (if
applicable), commissions (if applicable), indemnities
due diligence rights, opinions and certificates, and
such other documentation as is customary for equity
resale underwriting agreements, all reasonably
acceptable to JPMorgan. If JPMorgan, in its sole
reasonable discretion, is not satisfied with such
procedures and documentation Private Placement
Settlement shall apply. If JPMorgan is satisfied with
such procedures and documentation, it shall sell the
Restricted Shares pursuant to such registration
statement during a period (the "RESALE PERIOD")
commencing on the Exchange Business Day following
delivery of such Restricted Shares (which, for the
avoidance of doubt, shall be (x) any Settlement Date
in the case of an exercise of Warrants prior to the
first Expiration Date pursuant to Section 2 above,
(y) the Share Termination Delivery Date in case of
settlement of Share Termination Delivery Units
pursuant to Section (o) above or (z) the Settlement
Date or any delivery date for Deficit Delivery
Shares, if any, in respect of the final Expiration
Date for all Daily Number of Warrants) and ending on
the earliest of (i) the Exchange Business Day on
which JPMorgan completes the sale of all Restricted
Shares or, in the case of settlement of Share
Termination Delivery Units, a sufficient number of
Restricted Shares so that the realized net proceeds
of such sales exceed the Payment Obligation (as
defined above), (ii) the date upon which all
Restricted Shares have been sold or transferred
pursuant to Rule 144 (or similar provisions then in
force) or Rule 145(d)(1) or (2) (or any similar
provision then in force) under the Securities Act and
(iii) the date upon which all Restricted Shares may
be sold or transferred by a non-affiliate pursuant to
Rule 144(k) (or any similar provision then in force)
or Rule 145(d)(3) (or any similar provision then in
force) under the Securities Act. If the Payment
Obligation exceeds the realized net proceeds from
such resale, Company shall transfer to JPMorgan by
the open of the regular trading session on the
Exchange on the Exchange Trading Day immediately
following the last day of the Resale Period the
amount of such excess (the "ADDITIONAL AMOUNT") in
cash or in a number of Shares ("MAKE-WHOLE SHARES")
in an amount that,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
16
based on the Settlement Price on the last day of the
Resale Period (as if such day was the "Valuation
Date" for purposes of computing such Settlement
Price), has a dollar value equal to the Additional
Amount. The Resale Period shall continue to enable
the sale of the Make-whole Shares. If Company elects
to pay the Additional Amount in Shares, the
requirements and provisions for Registration
Settlement shall apply. This provision shall be
applied successively until the Additional Amount is
equal to zero. In no event shall the Company deliver
a number of Restricted Shares greater than the
Maximum Delivery Threshold.
(iii) Without limiting the generality of the foregoing,
Company agrees that any Restricted Shares delivered
to JPMorgan, as purchaser of such Restricted Shares,
(i) may be transferred by and among JPMorgan Chase
Bank and its affiliates and Company shall effect such
transfer without any further action by JPMorgan and
(ii) after the minimum "holding period" within the
meaning of Rule 144(d) under the Securities Act has
elapsed after any Settlement Date for such Restricted
Shares, Company shall promptly remove, or cause the
transfer agent for such Restricted Shares to remove,
any legends referring to any such restrictions or
requirements from such Restricted Shares upon
delivery by JPMorgan (or such affiliate of JPMorgan)
to Company or such transfer agent of seller's and
broker's representation letters customarily delivered
by JPMorgan in connection with resales of restricted
securities pursuant to Rule 144 under the Securities
Act, without any further requirement for the delivery
of any certificate, consent, agreement, opinion of
counsel, notice or any other document, any transfer
tax stamps or payment of any other amount or any
other action by JPMorgan (or such affiliate of
JPMorgan).
If the Private Placement Settlement or the Registration
Settlement shall not be effected as set forth in clauses (i)
or (ii), as applicable, then failure to effect such Private
Placement Settlement or such Registration Settlement shall
constitute an Event of Default with respect to which Company
shall be the Defaulting Party.
(q) Limit on Beneficial Ownership. Notwithstanding any other
provisions hereof, JPMorgan may not exercise any Warrant
hereunder, and Automatic Exercise shall not apply with respect
thereto, to the extent (but only to the extent) that such
receipt would result in JPMorgan directly or indirectly
beneficially owning (as such term is defined for purposes of
Section 13(d) of the Exchange Act) at any time in excess of
9.0% of the outstanding Shares. Any purported delivery
hereunder shall be void and have no effect to the extent (but
only to the extent) that such delivery would result in
JPMorgan directly or indirectly so beneficially owning in
excess of 9.0% of the outstanding Shares. If any delivery owed
to JPMorgan hereunder is not made, in whole or in part, as a
result of this provision, the Company's obligation to make
such delivery shall not be extinguished and the Company shall
make such delivery as promptly as practicable after, but in no
event later than one Business Day after, JPMorgan gives notice
to the Company that such delivery would not result in JPMorgan
directly or indirectly so beneficially owning in excess of
9.0% of the outstanding Shares.
(r) Share Deliveries. The Company acknowledges and agrees that, to
the extent the holder of this Warrant is not then an affiliate
of the Company and has not been an affiliate of the Company
for 90 days (it being understood that JPMorgan will not be
considered an affiliate of the Company under this Section 9(r)
solely by reason of its receipt of Shares pursuant to this
Transaction), and otherwise satisfies all holding period and
other requirements of Rule 144 of the Securities Act
applicable to it, any delivery of Shares or Share Termination
Property hereunder at any time after 2 years from the Trade
Date shall be eligible for resale under Rule 144(k) of the
Securities Act and the Company agrees to promptly remove, or
cause the transfer agent for such Shares or Share Termination
Property, to remove, any legends referring to any restrictions
on resale under the
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
17
Securities Act from the Shares or Share Termination Property.
The Company further agrees, for any delivery of Shares or
Share Termination Property hereunder at any time after 1 year
from the Trade Date but within 2 years of the Trade Date, to
the to the extent the holder of this Warrant then satisfies
the holding period and other requirements of Rule 144 of the
Securities Act, to promptly remove, or cause the transfer
agent for such Restricted Share to remove, any legends
referring to any such restrictions or requirements from such
Restricted Shares. Such Restricted Shares will be de-legended
upon delivery by JPMorgan (or such affiliate of JPMorgan) to
the Company or such transfer agent of customary seller's and
broker's representation letters in connection with resales of
restricted securities pursuant to Rule 144 of the Securities
Act, without any further requirement for the delivery of any
certificate, consent, agreement, opinion of counsel, notice or
any other document, any transfer tax stamps or payment of any
other amount or any other action by JPMorgan (or such
affiliate of JPMorgan). The Company further agrees that any
delivery of Shares or Share Termination Delivery Property
prior to the date that is 1 year from the Trade Date, may be
transferred by and among JPMorgan and its affiliates and the
Company shall effect such transfer without any further action
by JPMorgan. Notwithstanding anything to the contrary herein,
the Company agrees that any delivery of Shares or Share
Termination Delivery Property shall be effected by book-entry
transfer through the facilities of DTC, or any successor
depositary, if at the time of delivery, such class of Shares
or class of Share Termination Delivery Property is in
book-entry form at DTC or such successor depositary.
Notwithstanding anything to the contrary herein, to the extent
the provisions of Rule 144 of the Securities Act or any
successor rule are amended, or the applicable interpretation
thereof by the Securities and Exchange Commission or any court
change after the Trade Date, the agreements of the Company
herein shall be deemed modified to the extent necessary, in
the opinion of outside counsel of the Company, to comply with
Rule 144 of the Securities Act, including Rule 144(k) as in
effect at the time of delivery of the relevant Shares or Share
Termination Property.
(s) Hedging Disruption Event. The occurrence of a Hedging
Disruption Event will constitute an Additional Termination
Event under the Agreement permitting JPMorgan to terminate the
Transaction, with the Counterparty as the sole Affected Party
and the Transaction as the sole Affected Transaction.
"HEDGING DISRUPTION EVENT" means with respect to JPMorgan, as
determined in its reasonable discretion, the inability or
impracticality, due to market illiquidity, illegality, lack of
hedging transactions or credit worthy market participants or
other similar events, to establish, re-establish or maintain
any transactions necessary or advisable to hedge, directly or
indirectly, the equity price risk of entering into and
performing under the Transaction on terms including costs
reasonable to JPMorgan or an affiliate in its reasonable
discretion, including the event that at any time JPMorgan
reasonably concludes that it or any of its affiliates are
unable to establish, re-establish or maintain a full hedge of
its position in respect of the Transaction through share
borrowing arrangements on terms including costs deemed
reasonable to JPMorgan in its reasonable discretion. For the
avoidance of doubt, the parties hereto agree that if (i)
JPMorgan reasonably determines that it is unable to borrow
Shares to hedge its exposure with respect to the Transaction
at a stock loan rebate rate equal to or in excess of zero; or
(ii) the prevailing stock loan rebate rate for the Shares, as
determined by the Calculation Agent, is less than zero, an
Additional Termination Event under the Agreement shall occur
with the Company as the sole Affected Party and the
Transaction as the sole Affected Transaction.
(t) Governing Law. New York law (without reference to choice of
law doctrine).
(u) Waiver of Jury Trial. Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial
by jury in respect of any suit, action or proceeding relating
to this Transaction. Each party (i) certifies that no
representative, agent or attorney of the other party has
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
18
represented, expressly or otherwise, that such other party
would not, in the event of such a suit, action or proceeding,
seek to enforce the foregoing waiver and (ii) acknowledges
that it and the other party have been induced to enter into
this Transaction, as applicable, by, among other things, the
mutual waivers and certifications provided herein.
(v) Tax Disclosure. Company acknowledges and understands that, in
connection with certain disclosure and list maintenance
regulations promulgated by the Internal Revenue Service (the
"IRS"), JPMorgan will retain documents related to this
Transaction and other information. The relevant regulations
cover many transactions, including certain transactions that
create book-tax differences. Upon request from the IRS,
JPMorgan expects to provide such documents and information to
the IRS. In addition, Company shall consult with its tax
advisors with respect to any disclosure obligations that
Company may have.
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
19
(XX XXXXXX LOGO)
Please confirm that the foregoing correctly sets forth the terms of
our agreement by executing this Confirmation and returning it to EDG
Confirmation Group, X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx,
Xxx Xxxx, XX 00000-0000, or by fax on 000 000 0000.
Very truly yours,
X.X. XXXXXX SECURITIES INC., AS AGENT FOR
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
/s/ Xxxxxxx Xxxxxxxxxxx
By: _________________________
Authorized Signatory
Name: Xxxxxxx Xxxxxxxxxxx
Title: Vice President
Accepted and confirmed
as of the Trade Date:
CSK AUTO CORPORATION
/s/ Xxxxxx Xxxxxx
By:____________________________
Authorized Signatory
Name: Xxxxxx Xxxxxx
Title: President and Chief Operating Officer
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION
ORGANISED UNDER THE LAWS OF THE UNITED STATES AS A NATIONAL BANKING ASSOCIATION.
MAIN XXXXXX 0000 XXXXXXX XXXXXXX, XXXXXXXX, XXXX 00000
REGISTERED AS A XXXXXX XX XXXXXXX & XXXXX XXXXXX XX. XX000000. REGISTERED
BRANCH OFFICE 000 XXXXXX XXXX, XXXXXX XX0X 0XX
AUTHORISED AND REGULATED BY THE FINANCIAL SERVICES AUTHORITY
