ISDA Master Agreement
ISDA Master Agreement
ISDA Master Agreement
The International Swaps and Derivatives Association, Inc. ("ISDA") has published this 2002 Master
Agreement Protocol (this "Protocol") to enable parties to an ISDA 2002 Master Agreement (a "2002
Master") to confirm their intentions in respect of certain matters arising when that 2002 Master is
used with certain other documents published before 2002 by ISDA.
Accordingly, a party that has entered and/or anticipates entering into a 2002 Master may adhere to
this Protocol and be bound by its terms by completing and delivering a letter substantially in the form
of Exhibit 1 to this Protocol (an "Adherence Letter") to ISDA, as agent, as described below.
1. Amendments
(a) By adhering to this Protocol in the manner set forth in Section 2 below, a party (an "Adhering
Party") that has entered and/or anticipates entering into a 2002 Master agrees, in each case on the
terms and subject to the conditions set forth in this Protocol and the relevant Adherence Letter, that
certain amendments will be deemed to be made to one or more:
(i) sets of definitions and provisions published before 2002 by ISDA (each an "ISDA
Definitions Booklet"); and
(ii) documents containing credit support provisions published before 2002 by ISDA (each
called "Credit Support Provisions"),
in each case when used in connection with a 2002 Master between it and any other Adhering Party.
(b) The amendments provided for in this Protocol are set forth in Annexes 1 to 18, and each
Adhering Party may specify in its Adherence Letter its preference that one or more of these Annexes
are applicable.
(c) In respect of any 2002 Master between two Adhering Parties, where at least one Adhering
Party has specified a preference that less than all the Annexes are applicable, only those amendments
contained in the Annexes that both parties have specified will be applicable.
(a) Adherence to this Protocol will be evidenced by the execution and delivery, in accordance
with Section 5(f) below, to ISDA, as agent, of an Adherence Letter on or before 1st March, 2004 or
such later date designated by ISDA falling no later than 1st June, 2004 (in either case, the "Cut-off
Date"). ISDA may designate a date later than 1st March, 2004 as the Cut-off Date by notice given no
later than 1st March, 2004 on the "2002 Master Agreement Protocol" section of its website at
www.isda.org (or by other suitable means) if it determines in its absolute discretion that market
interest justifies such an extension to the adherence period.
(i) Each Adhering Party will deliver two copies of the Adherence Letter, one a manually
signed original and the other a conformed copy containing, in place of each signature, the
printed or typewritten name of each signatory.
(ii) Each Adhering Party agrees that, for evidentiary purposes, a conformed copy of an
Adherence Letter certified by the General Counsel or an appropriate officer of ISDA will be
deemed to be an original.
(b) The agreement to make the amendments contemplated by this Protocol, on the terms and
subject to the conditions set forth in this Protocol, will, as between any two Adhering Parties, be
effective on receipt by ISDA, as agent, of an Adherence Letter from the later of the Adhering Parties
to adhere. Any such amendments will apply to each 2002 Master between the Adhering Parties
(whether entered into before, on or after the Cut-off Date), any Transaction at any time governed by it
and any Credit Support Provisions at any time related to it.
(c) This Protocol is intended for use without negotiation, but without prejudice to any
amendment, modification or waiver in respect of a 2002 Master (including Transactions governed by
it and Credit Support Provisions related to it) that the parties may otherwise effect in accordance with
the terms of that 2002 Master.
(i) In adhering to this Protocol, an Adhering Party may not specify additional provisions,
conditions or limitations in its Adherence Letter or otherwise.
(ii) Any purported adherence that ISDA, as agent, determines in good faith is not in
compliance with this Section will be void.
3. Representations
Each Adhering Party represents to each other Adhering Party with which it has or may have a 2002
Master, on the date on which the later of them adheres to this Protocol in accordance with Section 2
above and, if then outstanding, in respect of each 2002 Master and any related Credit Support
Provisions between them, that:
(a) Status. It (i) is, if relevant, duly organised and validly existing under the laws of the
jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing or
(ii) if it otherwise represents its status in or pursuant to the 2002 Master, has such status;
(b) Powers. It has the power to execute and deliver the Adherence Letter and to perform its
obligations under the Adherence Letter and the 2002 Master (including Transactions governed by that
2002 Master) and any related Credit Support Provisions, in each case as amended by the Adherence
Letter and this Protocol, and has taken all necessary action to authorise such execution, delivery and
performance;
(c) No Violation or Conflict. Such execution, delivery and performance do not violate or
conflict with any law applicable to it, any provision of its constitutional documents, any order or
judgment of any court or other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;
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(d) Consents. All governmental and other consents that are required to have been obtained by it
with respect to the Adherence Letter and the 2002 Master (including Transactions governed by that
2002 Master) and any related Credit Support Provisions, in each case as amended by the Adherence
Letter and this Protocol, have been obtained and are in full force and effect and all conditions of any
such consents have been complied with;
(e) Obligations Binding. Its obligations under the Adherence Letter and the 2002 Master
(including Transactions governed by that 2002 Master) and any related Credit Support Provisions, in
each case as amended by the Adherence Letter and this Protocol, constitute its legal, valid and binding
obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy,
reorganisation, 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)); and
(f) Credit Support. Its adherence to this Protocol and any amendment contemplated by this
Protocol will not, in and of itself, adversely affect any obligations owed, whether by it or by any third
party, under any Credit Support Document relating to the 2002 Master.
Each Adhering Party agrees with each other Adhering Party with which it has or may have a 2002
Master that each of the foregoing representations will be deemed to be a representation for purposes
of Section 5(a)(iv) of each 2002 Master (then or in the future) between them.
Each Adhering Party may deliver to ISDA, as agent, such evidence as it deems appropriate to
evidence its capacity to adhere to this Protocol and the authority of anyone signing on its behalf.
5. Miscellaneous
(i) This Protocol constitutes the entire agreement and understanding of the Adhering
Parties with respect to its subject matter. Each Adhering Party acknowledges that in adhering
to this Protocol it has not relied on any oral or written representation, warranty or other
assurance (except as provided for or referred to in an Annex or elsewhere in this Protocol)
and waives all rights and remedies which might otherwise be available to it in respect thereof,
except that nothing in this Protocol will limit or exclude any liability of an Adhering Party for
fraud.
(ii) Except for any amendment deemed to be made pursuant to this Protocol in respect of
a 2002 Master (including any Transaction governed by it) or any related Credit Support
Provisions, all terms and conditions of each 2002 Master (including all outstanding
Transactions) and any related Credit Support Provisions will continue in full force and effect
in accordance with its provisions on the effective date of that amendment. As used in that
2002 Master, the terms "Agreement", "this Agreement" and words of similar import will,
unless the context otherwise requires, mean the 2002 Master as amended pursuant to this
Protocol in accordance with the relevant Adherence Letters. This Protocol will, with respect
to its subject matter, survive, and any amendments deemed to be made pursuant to it will
form a part of each 2002 Master between the Adhering Parties notwithstanding Section 9(a)
of that 2002 Master.
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Support Provisions will, unless the parties otherwise agree in writing with express reference to this
Section of this Protocol, mean that ISDA Definitions Booklet or those Credit Support Provisions as
deemed amended pursuant to this Protocol.
(c) Limited Right to Revoke. Adherence to this Protocol is irrevocable except that an Adhering
Party may, by subsequently delivering to ISDA, as agent, a notice substantially in the form of Exhibit
2 to this Protocol (a "Revocation Notice"), designate a date (an "Earlier Cut-off Date") as the last date
on which any counterparty may adhere to this Protocol in respect of any 2002 Master then or in the
future between them.
(i) If ISDA determines pursuant to Section 2(a) of this Protocol that the Cut-off Date will
be later than 1st March, 2004, an Adhering Party may, at any time on or before 12th March,
2004, deliver to ISDA a Revocation Notice designating 1st March, 2004 as an Earlier Cut-off
Date.
(ii) Other than in the circumstances described in clause (i) above, any designated Earlier
Cut-off Date (whether or not following 1st March, 2004) that would otherwise fall on a day
that is less than three days following the day on which the Revocation Notice is effectively
delivered will be deemed to occur on the day that is three days following the date of effective
delivery. Any designated Earlier Cut-off Date that would otherwise fall, after giving effect to
the preceding sentence (if applicable), on a day that is not a day on which the receiving ISDA
office is open will be deemed to occur on the next day that ISDA office is open.
(iii) Upon the effective designation of an Earlier Cut-off Date by an Adhering Party, this
Protocol will not amend or otherwise affect any 2002 Master (or any related Transactions or
Credit Support Provisions) between that Adhering Party and a party which adheres to this
Protocol after that Earlier Cut-off Date occurs or is deemed to occur. The foregoing is
without prejudice to (A) any amendment to any 2002 Master (including any Transaction
governed by it) or any Credit Support Provisions related to it between two Adhering Parties
effected pursuant to this Protocol on or before the day on which that Earlier Cut-off Date
occurs or is deemed to occur and (B) any amendment effected pursuant to this Protocol to any
2002 Master (including any Transaction governed by it) or any Credit Support Provisions
related to it entered into after the day on which that Earlier Cut-off Date occurs or is deemed
to occur between two Adhering Parties that each adhered to this Protocol on or before that
day, which in each case will be (or continue to be) effective.
(iv) Each Revocation Notice must be delivered in duplicate, one a manually signed
original and the other a conformed copy containing, in place of each signature, the printed or
typewritten name of each signatory.
(v) Each Adhering Party agrees that, for evidentiary purposes, a conformed copy of a
Revocation Notice certified by the General Counsel or an appropriate officer of ISDA will be
deemed to be an original.
(vi) Any purported revocation that ISDA, as agent, determines in good faith is not in
compliance with this Section will be void.
(d) Headings. The headings used in this Protocol and any Adherence Letter are for convenience
of reference only and are not to affect the construction of or to be taken into consideration in
interpreting this Protocol or any Adherence Letter.
(e) Governing Law. This Protocol and each Adherence Letter will, as between two Adhering
Parties and in respect of each 2002 Master between them, be governed by and construed in
accordance with the law specified to govern that 2002 Master (but if any related Credit Support
Provisions or any other provision related to a Transaction under that 2002 Master is governed by a
different law, it (including any amendment to it effected pursuant to this Protocol) will continue to be
governed by and construed in accordance with that law) and otherwise in accordance with applicable
choice of law doctrine.
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(f) Notices. Any Adherence Letter or Revocation Notice must be in writing and delivered in
person or by courier to ISDA at either 360 Madison Avenue, 16th Floor, New York, NY 10017 or
One New Change, London EC4M 9QQ and will be deemed effectively delivered on the date it is
delivered unless on the date of that delivery the receiving ISDA office is closed or that
communication is delivered after 3:00 p.m., local time in the city where delivery is made, in which
case that communication will be deemed effectively delivered on the next day the relevant ISDA
office is open.
6. Definitions
As used in this Protocol and the preambles to the Annexes, "Confirmation", "Credit Support
Document" and "Transaction" each has the meaning given that term in the related 2002 Master.
References in the Annexes to the following terms have the meaning indicated below:
Term Meaning
(each as published by ISDA or, in the case of the 1998 FX Definitions, by ISDA, the Emerging
Markets Traders Association and The Foreign Exchange Committee, in each case either in the same
form as originally published or as amended and supplemented on or before the date on which the
Adhering Parties enter into the relevant Transaction or Credit Support Provisions).
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EXHIBIT 1
to 2002 Master Agreement Protocol
Dear Sirs,
The purpose of this letter is to confirm our adherence to the 2002 Master Agreement Protocol as
published by the International Swaps and Derivatives Association, Inc. on 15th July, 2003 (the
"Protocol"). This letter constitutes an Adherence Letter as referred to in the Protocol.
The definitions and provisions contained in the Protocol are incorporated into this Adherence Letter,
which will supplement and form part of each ISDA 2002 Master Agreement (now or in the future)
between us and each other Adhering Party.
1. Specified Terms2
1 Include as applicable. The Adherence Letter can be lodged at either ISDA's New York or European office. See Sections 2(a)
and 5(f) of the Protocol.
2 An Adhering Party may specify its preference that one or more of the Annexes are applicable by circling or only specifying the
word "Applicable" for each Annex that it would like to see included.
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2. Appointment as Agent and Release
We hereby appoint ISDA as our agent for the limited purposes of the Protocol and
accordingly we waive, and hereby release ISDA from, any rights, claims, actions or causes of action
whatsoever (whether in contract, tort or otherwise) arising out of or in any way relating to this
Adherence Letter or our adherence to the Protocol or any actions contemplated as being required by
ISDA.
3. Payment
4. Contact Details
Name:
Address:
Telephone:
Fax:
E-mail:
We consent to the publication of the conformed copy of this letter by ISDA and to the
disclosure by ISDA of the contents of this letter.
Yours faithfully,
[ADHERING PARTY] 3
By:
Name:
Title:
Signature:
3 Specify legal name of Adhering Party. A separate Adherence Letter should be lodged for each legal entity that is or may become
a party to an ISDA 2002 Master Agreement and wishes to be bound by the terms of the Protocol.
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EXHIBIT 2
to 2002 Master Agreement Protocol
Dear Sirs,
2002 Master Agreement Protocol - Earlier Cut-off Date
The purpose of this letter is to notify you that we wish to designate as the last date on which any
counterparty may adhere to the 2002 Master Agreement Protocol as published by the International
Swaps and Derivatives Association, Inc. on 15th July, 2003 (the "Protocol") in respect of any ISDA
2002 Master Agreement (now or in the future) between us the following date (the "Earlier Cut-off
Date"):
We consent to the publication of the conformed copy of this notice by ISDA on and after the Earlier
Cut-off Date and to the disclosure by ISDA of the contents of this letter.
Yours faithfully,
[ADHERING PARTY] 5
By:
Name:
Title:
Signature:
4 Include as applicable. The Revocation Notice can be lodged at either ISDA's New York or European office. See Sections 5(c)
and 5(f) of the Protocol.
5 Specify legal name of Adhering Party.
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ANNEX 1
1991 Definitions
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1991 Definitions are deemed to be amended as follows:
(a) Confirmation. In Section 1.2, the words "or otherwise effective" are inserted after the words
"exchanged between the parties".
(b) Conditions Precedent. The references in Sections 4.1, 4.2, 4.3, 4.4, 8.5(a) and 8.6(a) to "any
applicable condition precedent" are replaced by references to "any other applicable provisions".
(c) International Swaps and Derivatives Association, Inc. Any reference in the paragraph
preceding Article 1 or in Exhibit I to "the International Swap Dealers Association, Inc." is replaced by
a reference to "the International Swaps and Derivatives Association, Inc. (formerly the International
Swap Dealers Association, Inc.)".
(d) Exhibit I. The references in Exhibit I to "the Interest Rate and Currency Exchange
Agreement" are replaced by references to "the ISDA 2002 Master Agreement".
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ANNEX 2
1998 Supplement
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1998 Supplement are deemed to be amended as follows:
(a) Conditions Precedent. The references in Sections 12.3(a), 15.1, 17.1(ii), 18.1(a) and 18.1(b)
to "any applicable condition precedent" and the reference in Section 18.6 to "any applicable
conditions precedent" are replaced by references to "any other applicable provisions".
(b) ISDA Master Agreement. The following definition replaces Section 18.2(h):
"(h) ISDA Master Agreement. "ISDA Master Agreement" means, for the
purpose of Sections 14, 17 and 18, the ISDA Master Agreement, if any, referred to in the
related Confirmation and otherwise the standard form 2002 Master Agreement published by
the International Swaps and Derivatives Association, Inc., and the terms "Terminated
Transaction", "Early Termination Date", "Affected Parties", "Close-out Amount", "Event of
Default" and "Potential Event of Default" have the respective meanings provided for in the
ISDA Master Agreement."
"(a) Cash Price. If "Cash Price" is specified in the related Confirmation to be the
Cash Settlement Method applicable to an Option Transaction, or Swap Transaction to which
Mandatory Early Termination is applicable, the Cash Settlement Amount will be an amount
determined with respect to the Relevant Swap Transaction as of the Cash Settlement
Valuation Time on the Cash Settlement Valuation Date as the amount which would be
payable in accordance with the provisions of Section 6(e)(ii)(1) of the ISDA Master
Agreement (but without reference to clause (3) of Section 6(e)(ii)), mutatis mutandis, as
though the Relevant Swap Transaction were a Terminated Transaction, the Cash Settlement
Payment Date were an Early Termination Date and the Cash Settlement Currency were the
Termination Currency. Notwithstanding the provisions of Section 6(e) of the ISDA Master
Agreement and the definition of "Close-out Amount", the Calculation Agent will determine
the Cash Settlement Amount on the basis of quotations (either firm or indicative) for a
replacement transaction supplied by Cash Settlement Reference Banks (but the Calculation
Agent may not take into account any loss or cost incurred by a party in connection with its
terminating, liquidating or re-establishing any hedge related to the Relevant Swap Transaction
(or any gain resulting from any of them)). The Calculation Agent will ask each Cash
Settlement Reference Bank to provide a quotation using the Quotation Rate specified in the
related Confirmation. Notwithstanding the provisions of Section 6(e) of the ISDA Master
Agreement and the definition of "Close-out Amount", if fewer than three quotations are
provided, the Cash Settlement Amount will be determined by the Calculation Agent in good
faith and using commercially reasonable procedures. If the parties specify "Cash Price -
Alternate Method" the Calculation Agent will determine the Cash Settlement Amount on the
basis of the quotations obtained by each party separately from the Cash Settlement Reference
Banks in accordance with Section 6(e)(ii)(2) of the ISDA Master Agreement (but without
reference to clause (3) of Section 6(e)(ii))."
(d) Termination Currency. The reference in Section 18.2(g)(ii) to "the currency specified as the
Termination Currency" and the references in footnotes 16, 30 and 32 in the Exhibits to "the
Termination Currency specified" are replaced by references to "the Termination Currency".
(e) Confirmation Before Agreement. The reference in footnote 2 in the Exhibits to "the ISDA
Master Agreement (Multicurrency-Cross Border)" is replaced by a reference to "the ISDA 2002
Master Agreement" and the reference to "and [specify currency] as the Termination Currency" is
deleted.
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ANNEX 3
2000 Definitions
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 2000 Definitions are deemed to be amended as follows:
(a) Confirmation. In Section 1.2, the words "or otherwise effective" are inserted after the words
"exchanged between the parties (including by means of an electronic messaging system or e-mail)".
(b) Conditions Precedent. The references in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 11.3(a), 14.1,
16.1(a), 17.1(a), 17.1(b) and 17.1(c) to "any applicable condition precedent" are replaced by
references to "any other applicable provisions".
(c) ISDA Master Agreement. The following definition replaces Section 17.2(i):
"(i) ISDA Master Agreement. "ISDA Master Agreement" means, for purposes
of Section 17.2(h) (Cash Settlement Currency) and Section 17.2(j) (Quotation Rate), the
ISDA Master Agreement, if any, referred to in the related Confirmation and otherwise (and,
in any event, for purposes of Section 17.3(a) (Cash Price) and Section 17.3(b) (Cash Price -
Alternate Method)) the standard form 2002 Master Agreement published by the International
Swaps and Derivatives Association, Inc., and the terms "Terminated Transaction", "Early
Termination Date", "Close-out Amount", "Credit Support Document", "Event of Default" and
"Potential Event of Default" have the respective meanings provided for in the ISDA Master
Agreement."
"(a) Cash Price. If "Cash Price" is specified in the related Confirmation to be the
Cash Settlement Method applicable to an Option Transaction or Swap Transaction to which
Mandatory Early Termination is applicable, the Cash Settlement Amount will be an amount
determined with respect to the Relevant Swap Transaction as of the Cash Settlement
Valuation Time on the Cash Settlement Valuation Date as the amount which would be
payable in accordance with the provisions of Section 6(e)(ii)(1) of the ISDA Master
Agreement (but without reference to clause (3) of Section 6(e)(ii)), the necessary changes
being made, as though (i) the Relevant Swap Transaction were a Terminated Transaction, (ii)
the Cash Settlement Payment Date, Optional Early Termination Date or Mandatory Early
Termination Date, as the case may be, were an Early Termination Date and (iii) the Cash
Settlement Currency were the Termination Currency. Notwithstanding the provisions of
Section 6(e) of the ISDA Master Agreement and the definition of "Close-out Amount", the
Calculation Agent will determine the Cash Settlement Amount on the basis of quotations
(either firm or indicative) for a replacement transaction supplied by Cash Settlement
Reference Banks (but the Calculation Agent may not take into account any loss or cost
incurred by a party in connection with its terminating, liquidating or re-establishing any hedge
related to the Relevant Swap Transaction (or any gain resulting from any of them)). The
Calculation Agent will ask each Cash Settlement Reference Bank to provide a quotation using
the Quotation Rate specified in the related Confirmation. In providing quotations, the Cash
Settlement Reference Banks will be asked to assume that the Calculation Agent is a dealer in
the relevant market of the highest credit standing which satisfies all the credit criteria which
such Cash Settlement Reference Banks apply generally at the time in deciding whether to
offer or make an extension of credit, and no account will be taken of any existing Credit
Support Document. Notwithstanding the provisions of Section 6(e) of the ISDA Master
Agreement and the definition of "Close-out Amount", if fewer than three quotations are
provided, the Cash Settlement Amount will be determined by the Calculation Agent in good
faith and using commercially reasonable procedures."
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(ii) Cash Price - Alternate Method. The following provision replaces Section 17.3(b):
(e) Termination Currency. The reference in Section 17.2(h)(ii) to "the currency specified as the
Termination Currency" and the references in footnotes 42, 58 and 62 in the Exhibits to "the
Termination Currency specified" are replaced by references to "the Termination Currency".
(f) Confirmation Before Agreement. The reference in footnote 2 in the Exhibits to "the ISDA
Master Agreement (Multicurrency-Cross Border)" is replaced by a reference to "the ISDA 2002
Master Agreement" and the reference to "and [specify currency] as the Termination Currency" is
deleted.
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ANNEX 4
1992 FX Definitions
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1992 FX Definitions are deemed to be amended as follows:
(a) Conditions Precedent. The references in Sections 1.3, 2.2(l), 2.4(a) and 2.4(b) to "any
applicable condition precedent" are replaced by references to "any other applicable provisions".
(b) International Swaps and Derivatives Association, Inc. Any reference in the paragraph
preceding Article 1 or in Exhibit I or Exhibit II to "the International Swap Dealers Association, Inc."
is replaced by a reference to "the International Swaps and Derivatives Association, Inc. (formerly the
International Swap Dealers Association, Inc.)".
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ANNEX 5
1998 FX Definitions
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1998 FX Definitions are deemed to be amended as follows:
(a) Confirmation. In Section 1.4, the words "or otherwise effective" are inserted after the words
"exchanged between the parties".
(b) Conditions Precedent. The references in Sections 2.2(a), 2.2(b)(i), 3.3(a), 3.3(b) and 3.7(b)
to "any applicable condition precedent and any applicable provisions of Article 5" are replaced by
references to "any other applicable provisions, including in Article 5". The reference in Section 3.4(a)
to "any applicable condition precedent" is replaced by a reference to "any other applicable
provisions". The reference in Section 3.7(a) to ", any other applicable condition precedent and any
applicable provisions of Article 5" is replaced by a reference to "and any other applicable provisions,
including in Article 5".
"(ix) "No Fault Termination" means that the Transaction will terminate in
accordance with the applicable provisions set forth in Section 6 of the ISDA Master
Agreement (which provisions, excluding Section 6(b)(iii), are hereby incorporated by
reference into these Definitions), as if: (A) an "Illegality" or a "Force Majeure Event" had
occurred, (B) any applicable grace periods or "Waiting Period" had lapsed, (C) any notice
was effective on the date No Fault Termination became the applicable Disruption Fallback,
(D) there were two "Affected Parties" and (E) the Transaction was the only "Affected
Transaction". On the date No Fault Termination becomes the applicable Disruption Fallback,
either Affected Party may, by notice to the other party, designate such date as an "Early
Termination Date". The Termination Currency will be deemed to be the Non-Event
Currency. The terms "Additional Termination Event", "Affected Parties", "Affected
Transaction", "Early Termination Date", "Force Majeure Event", "Illegality", "Termination
Currency Equivalent" and "Waiting Period" have the meanings provided for in the ISDA
Master Agreement."
(e) ISDA Master Agreement. The following definition replaces Section 5.4(l):
"(l) ISDA Master Agreement. "ISDA Master Agreement" means the standard
form 2002 Master Agreement published by the International Swaps and Derivatives
Association, Inc."
(f) 2000 ISDA Definitions. In footnote 2 in Exhibit I, references to "the 1991 ISDA Definitions"
are replaced by references to "the 2000 ISDA Definitions" and the reference to "(as amended by the
1997 Supplement)" is deleted.
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(g) Confirmation Before Agreement. The reference in footnote 3 in Exhibit I to "and [specify
currency] as the Termination Currency" is deleted.
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ANNEX 6
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1993 Commodity Definitions are deemed to be amended as follows:
(a) Confirmation. In Section 1.2, the words "or otherwise effective" are inserted after the words
"exchanged between the parties".
(b) Conditions Precedent. The references in Sections 4.1, 4.2, 8.3(e) and 8.6(a) to "any
applicable condition precedent" and the reference in Section 7.3 to "any applicable conditions
precedent" are replaced by references to "any other applicable provisions".
"(iii) "No Fault Termination" means that the Transaction will be terminated in
accordance with any applicable provisions set forth in the relevant agreement or Confirmation
as if a "Termination Event" that is an "Illegality" or a "Force Majeure Event" and an "Early
Termination Date" (each as defined in the relevant agreement or Confirmation) had occurred
on the day No Fault Termination became the applicable Disruption Fallback and there were
two "Affected Parties" (as defined in the relevant agreement or Confirmation)."
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ANNEX 7
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 2000 Commodity Supplement are deemed to be amended as follows:
(a) Conditions Precedent. The reference in Section 7.3 to "any applicable conditions precedent"
is replaced by a reference to "any other applicable provisions".
"(v) "No Fault Termination" means that the Transaction will be terminated in
accordance with any applicable provisions set forth in the relevant agreement or Confirmation
as if a "Termination Event" that is an "Illegality" or a "Force Majeure Event" and an "Early
Termination Date" (each as defined in the relevant agreement or Confirmation) had occurred
on the day No Fault Termination became the applicable Disruption Fallback and there were
two "Affected Parties" (as defined in the relevant agreement or Confirmation)."
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ANNEX 8
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1994 Equity Option Definitions are deemed to be amended as follows:
(a) Confirmation. In Section 1.2, the words "or otherwise effective" are inserted after the words
"exchanged between the parties".
(b) Conditions Precedent. The reference in Section 4.1 to "any applicable condition precedent"
is replaced by a reference to "any other applicable provisions" and the reference in Section 10.7(b) to
"assuming satisfaction of each applicable condition precedent" is replaced by a reference to
"assuming satisfaction of the conditions precedent in Section 2(a)(iii) of the ISDA Master Agreement
and any other condition specified for this purpose in the related Confirmation".
(c) Failure to Deliver; Default Interest. The following provision replaces Section 8.7(a):
(d) Confirmation Before Agreement. In footnote 2 in Exhibit I, the reference to "the ISDA
Master Agreement (Multicurrency-Cross Border)" is replaced by a reference to "the ISDA 2002
Master Agreement".
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ANNEX 9
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1996 Equity Definitions are deemed to be amended as follows:
(a) Confirmation. In Section 1.9, the words "or otherwise effective" are inserted after the words
"exchanged between the parties".
(b) ISDA Master Agreement. The following definition replaces Section 1.26:
(c) Conditions Precedent. The references in Sections 4.5(e) and 9.7(b) to "assuming satisfaction
of each applicable condition precedent" are replaced by references to "assuming satisfaction of the
conditions precedent in Section 2(a)(iii) of the ISDA Master Agreement and any other condition
specified for this purpose in the related Confirmation".
(e) Cancellation and Payment. The following provision replaces Section 9.3(b)(ii):
"(ii) "Cancellation and Payment", then (A) in the case of a Share Option
Transaction or Share Basket Option Transaction, the Option Transaction will be cancelled as
of the Merger Date and Seller will pay to Buyer the amount specified in Section 9.7
("Payment upon Certain Extraordinary Events") and (B) in the case of a Share Swap
Transaction or a Share Basket Swap Transaction, (X) the occurrence of a Share-for-Share
Merger Event will constitute an Additional Termination Event under the relevant ISDA
Master Agreement with the relevant Share Swap Transaction or Share Basket Swap
Transaction the sole Affected Transaction and the party who is not the Equity Amount Payer
the Affected Party; if there are two Equity Amount Payers, then the Equity Amount Payer in
relation to whom the Equity Amount is not calculated by reference to the affected Shares
19
shall be the Affected Party or, if the Equity Amount with respect to both parties is calculated
by reference to the affected Shares, then both parties will be Affected Parties and (Y)
notwithstanding the definition of "Close-out Amount" in the relevant ISDA Master
Agreement, any Determining Party will determine a Close-out Amount in respect of the
Affected Transaction on the basis of quotations (either firm or indicative) for a replacement
transaction supplied by one or more third parties that may take into account the
creditworthiness of the Determining Party at the time the quotation is provided and the terms
of any relevant documentation, including credit support documentation, between the
Determining Party and the third party providing the quotation (but the Determining Party may
not take into account any loss or cost incurred in connection with its terminating, liquidating
or re-establishing any hedge related to the Affected Transaction (or any gain resulting from
any of them)); or".
"(ii) "Cancellation and Payment", then (A) in the case of a Share Option
Transaction or Share Basket Option Transaction, the Option Transaction will be cancelled as
of the Merger Date and Seller will pay to Buyer the amount specified in Section 9.7
("Payment upon Certain Extraordinary Events") and (B) in the case of a Share Swap
Transaction or a Share Basket Swap Transaction, (X) the occurrence of a Share-for-Other
Merger Event will constitute an Additional Termination Event under the relevant ISDA
Master Agreement with the relevant Share Swap Transaction or Share Basket Swap
Transaction the sole Affected Transaction and the party who is not the Equity Amount Payer
the Affected Party; if there are two Equity Amount Payers, then the Equity Amount Payer in
relation to whom the Equity Amount is not calculated by reference to the affected Shares
shall be the Affected Party or, if the Equity Amount with respect to both parties is calculated
by reference to the affected Shares, then both parties will be Affected Parties and (Y)
notwithstanding the definition of "Close-out Amount" in the relevant ISDA Master
Agreement, any Determining Party will determine a Close-out Amount in respect of the
Affected Transaction on the basis of quotations (either firm or indicative) for a replacement
transaction supplied by one or more third parties that may take into account the
creditworthiness of the Determining Party at the time the quotation is provided and the terms
of any relevant documentation, including credit support documentation, between the
Determining Party and the third party providing the quotation (but the Determining Party may
not take into account any loss or cost incurred in connection with its terminating, liquidating
or re-establishing any hedge related to the Affected Transaction (or any gain resulting from
any of them)); or".
"(ii) "Cancellation and Payment", then (A) in the case of a Share Option
Transaction or Share Basket Option Transaction, the Option Transaction will be cancelled as
of the Merger Date, and Seller will pay to Buyer the amount specified in Section 9.7
("Payment upon Certain Extraordinary Events") and (B) in the case of a Share Swap
Transaction or a Share Basket Swap Transaction, (X) the occurrence of a Share-for-
Combined Merger Event will constitute an Additional Termination Event under the relevant
ISDA Master Agreement with the relevant Share Swap Transaction or Share Basket Swap
Transaction the sole Affected Transaction and the party who is not the Equity Amount Payer
the Affected Party; if there are two Equity Amount Payers, then the Equity Amount Payer in
relation to whom the Equity Amount is not calculated by reference to the affected Shares
shall be the Affected Party or, if the Equity Amount with respect to both parties is calculated
by reference to the affected Shares, then both parties will be Affected Parties and (Y)
notwithstanding the definition of "Close-out Amount" in the relevant ISDA Master
Agreement, any Determining Party will determine a Close-out Amount in respect of the
Affected Transaction on the basis of quotations (either firm or indicative) for a replacement
transaction supplied by one or more third parties that may take into account the
creditworthiness of the Determining Party at the time the quotation is provided and the terms
of any relevant documentation, including credit support documentation, between the
20
Determining Party and the third party providing the quotation (but the Determining Party may
not take into account any loss or cost incurred in connection with its terminating, liquidating
or re-establishing any hedge related to the Affected Transaction (or any gain resulting from
any of them)); or".
"(ii) "Cancellation and Payment" means that (A) in the case of a Share Option
Transaction or Share Basket Option Transaction, the Option Transaction will be cancelled as
of the Announcement Date and Seller will pay to Buyer the amount specified in Section 9.7
("Payment upon Certain Extraordinary Events") and (B) in the case of a Share Swap
Transaction or a Share Basket Swap Transaction, (X) the Nationalization or Insolvency will
constitute an Additional Termination Event under the relevant ISDA Master Agreement with
the relevant Share Swap Transaction or Share Basket Swap Transaction the sole Affected
Transaction and the party who is not the Equity Amount Payer the Affected Party; if there are
two Equity Amount Payers, then the Equity Amount Payer in relation to whom the Equity
Amount is not calculated by reference to the affected Shares shall be the Affected Party or, if
the Equity Amount with respect to both parties is calculated by reference to the affected
Shares, then both parties will be Affected Parties and (Y) notwithstanding the definition of
"Close-out Amount" in the relevant ISDA Master Agreement, any Determining Party will
determine a Close-out Amount in respect of the Affected Transaction on the basis of
quotations (either firm or indicative) for a replacement transaction supplied by one or more
third parties that may take into account the creditworthiness of the Determining Party at the
time the quotation is provided and the terms of any relevant documentation, including credit
support documentation, between the Determining Party and the third party providing the
quotation (but the Determining Party may not take into account any loss or cost incurred in
connection with its terminating, liquidating or re-establishing any hedge related to the
Affected Transaction (or any gain resulting from any of them))."
(f) Confirmation Before Agreement. In footnote 4 in Exhibit I, the reference to "the ISDA
Master Agreement (Multicurrency-Cross Border)" is replaced by a reference to "the ISDA 2002
Master Agreement".
21
ANNEX 10
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1997 Bond Option Definitions are deemed to be amended as follows:
(a) Conditions precedent. The references in Sections 2.4(a), 2.4(b), 2.5(b), 6.1 and 7.1 to "any
applicable condition precedent" and the reference in Section 7.3 to "any applicable conditions
precedent" are replaced by references to "any other applicable provisions".
(b) Confirmation. In Section 3.1, the words "or otherwise effective" are inserted after the words
"exchanged between the parties".
(c) Failure to Deliver and Buy-in Procedures. The following provision replaces Section 6.4(c):
"(c) In the event that a party's failure to deliver is due to the non-existence of the
Bonds to be Delivered or the other party is unable to exercise a buy-in, the Government Bond
Option Transaction will be terminated in accordance with any applicable provisions set forth
in the ISDA Master Agreement or the relevant Confirmation: (i) as if the failure to deliver
constituted a Termination Event that is not an Illegality or a Force Majeure Event under the
ISDA Master Agreement; (ii) as if the party that failed to deliver were the sole Affected
Party; (iii) as if the other party had the sole right to terminate under Section 6(b)(iv)(1) of the
ISDA Master Agreement and (iv) as if the relevant Government Bond Option Transaction
(after consideration of any partial delivery) were the sole Affected Transaction, or, in the case
of an American style Government Bond Option Transaction to which Multiple Exercise is
applicable, if less than all Options have been exercised (or deemed exercised) on the relevant
Exercise Date, a Government Bond Option Transaction (after consideration of any partial
delivery) consisting of the exercised Options only were the sole Affected Transaction."
(d) ISDA Master Agreement. The following definition replaces Section 6.4(d):
"(d) "ISDA Master Agreement" means, for purposes of this Section 6.4, the
Agreement, if any, referred to in the related Confirmation and otherwise the standard form
2002 Master Agreement published by the International Swaps and Derivatives Association,
Inc., and the terms "Event of Default", "Termination Event" and "Affected Transaction" have
the respective meanings provided for in the ISDA Master Agreement."
(e) Confirmation Before Agreement. In footnote 2 in Exhibit I, the reference to "the ISDA
Master Agreement (Multicurrency-Cross Border)" is replaced by a reference to "the ISDA 2002
Master Agreement" and the reference to "and [specify currency] as the Termination Currency" is
deleted.
22
ANNEX 11
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1997 Bullion Definitions are deemed to be amended as follows:
(a) ISDA Master Agreement. The following definition replaces Section 1.20:
"Section 1.20. ISDA Master Agreement. "ISDA Master Agreement" means the
2002 Master Agreement published by the International Swaps and Derivatives Association,
Inc. The terms "Affected Party", "Offices", "Early Termination Date", "Event of Default",
"Local Business Day", "Termination Event" and "Terminated Transaction" will have the
meanings given to those terms in the ISDA Master Agreement."
(b) 2000 ISDA Definitions. The following definition replaces Section 1.21:
"Section 1.21. 2000 ISDA Definitions. "2000 ISDA Definitions" means the 2000
ISDA Definitions (as published by the International Swaps and Derivatives Association, Inc.
("ISDA") or any successor thereto published by ISDA, in each case as amended and/or
supplemented from time to time). The terms "Banking Day", "Designated Maturity",
"Representative Amount", "Reset Date", "Reuters Screen", "Sterling", "U.S. Dollar" and
"USD-LIBOR-BBA" will have the meanings given to those terms in the 2000 ISDA
Definitions."
In addition, references to the "1991 ISDA Definitions" in the Table of Contents, the Introduction,
footnotes 2 and 3 in Exhibit I and the Index are replaced by references to the "2000 ISDA
Definitions".
(c) Bullion Settlement Netting. The reference in Section 5.1 to "any election which the parties
may have made in relation to Section 2(c)(ii) of the ISDA Master Agreement" is replaced by a
reference to "any election which the parties may have made to apply Multiple Transaction Payment
Netting for purposes of Section 2(c) of the ISDA Master Agreement".
(d) Conditions Precedent. The references in Sections 7.1 and 7.2 to "any applicable condition
precedent" are replaced by references to "any other applicable provisions".
(e) Confirmation Before Agreement. In footnote 4 in Exhibit I, the reference to "the ISDA
Master Agreement (Multicurrency-Cross Border)" is replaced by a reference to "the ISDA 2002
Master Agreement" and the reference to "and [specify currency] as the Termination Currency" is
deleted.
23
ANNEX 12
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1997 Short Form Bullion Definitions are deemed to be amended as follows:
(a) ISDA Master Agreement. The following definition replaces Section 1.16:
"Section 1.16. ISDA Master Agreement. "ISDA Master Agreement" means the
2002 Master Agreement published by the International Swaps and Derivatives Association,
Inc. The terms "Affected Party", "Offices", "Early Termination Date", "Event of Default",
"Local Business Day", "Termination Event" and "Terminated Transaction" will have the
meanings given to those terms in the ISDA Master Agreement."
(b) Bullion Settlement Netting. The reference in Section 4.1 to "any election which the parties
may have made in relation to Section 2(c)(ii) of the ISDA Master Agreement" is replaced by a
reference to "any election which the parties may have made to apply Multiple Transaction Payment
Netting for purposes of Section 2(c) of the ISDA Master Agreement".
(c) Confirmation Before Agreement. In footnote 2 in Exhibit I, the reference to "the ISDA
Master Agreement (Multicurrency-Cross Border)" is replaced by a reference to "the ISDA 2002
Master Agreement" and the reference to "and [specify currency] as the Termination Currency" is
deleted.
24
ANNEX 13
When incorporated into any Confirmation or otherwise used in connection with a 2002 Master, the
terms of the 1999 Credit Definitions are deemed to be amended as follows:
(a) Confirmation. In Section 1.2, the words "or otherwise effective" are inserted after the words
"exchanged between the parties".
(b) ISDA Master Agreement. The following definition replaces Section 1.17:
(c) Conditions Precedent. The reference in Section 2.5 to "any applicable condition precedent"
is replaced by a reference to "any other applicable provisions".
(d) Merger of Reference Entity and Seller. The following provision replaces Section 2.28:
"Section 2.28. Merger of Reference Entity and Seller. In the event that Seller or a
Reference Entity consolidates or amalgamates with, or merges into, or transfers all or
substantially all its assets to, the Reference Entity or the Seller, as applicable, or Seller and a
Reference Entity become Affiliates, an Additional Termination Event will be deemed to have
occurred with Seller as the sole Affected Party, with each Credit Derivative Transaction
involving such Reference Entity as an Affected Transaction. Notwithstanding the definition
of "Close-out Amount" in the relevant ISDA Master Agreement, the Determining Party will
determine a Close-out Amount in respect of each Affected Transaction or each group of
Affected Transactions on the basis of quotations (either firm or indicative) for a replacement
transaction or replacement transactions supplied by one or more third parties that may take
into account the creditworthiness of the Determining Party at the time the quotation is
provided and the terms of any relevant documentation, including credit support
documentation, between the Determining Party and the third party providing the quotation
(but the Determining Party may not take into account any loss or cost incurred in connection
with its terminating, liquidating or re-establishing any hedge related to the Affected
Transaction or group of Affected Transactions (or any gain resulting from any of them))."
(e) Physical Settlement - impossibility or illegality. In Section 9.3(c)(iii), the words "or a Force
Majeure Event" are inserted after the words "will not constitute an Illegality".
(f) Confirmation Before Agreement. In footnote 1 in the Exhibit, the reference to "the [ISDA
Master Agreement (Multicurrency-Cross Border)][ISDA Master Agreement (Local Currency-Single
Jurisdiction)]" is replaced by a reference to "the ISDA 2002 Master Agreement" and the reference to
"and [specify currency] as the Termination Currency" is deleted.
25
ANNEX 14
The terms of any New York Annex that supplements, forms part of, and is subject to, a 2002 Master
are deemed to be amended as follows:
(a) Swap Transactions. The references in Paragraphs 5(i)(A) and 8(b) to "(or Swap
Transactions)" are deleted.
"(B) calculating the Exposure for the Transactions in dispute by seeking four actual
quotations at mid-market from third parties for purposes of calculating the relevant Close-out
Amount, and taking the arithmetic average of those obtained; provided that if four quotations
are not available for a particular Transaction, then fewer than four quotations may be used for
that Transaction, and if no quotations are available for a particular Transaction, then the
Valuation Agent's original calculations will be used for that Transaction; and".
(c) Exposure. The following definition replaces the definition of "Exposure" in Paragraph 12:
""Exposure" means for any Valuation Date or other date for which Exposure is calculated
and subject to Paragraph 5 in the case of a dispute, the amount, if any, that would be payable
to a party that is the Secured Party by the other party (expressed as a positive number) or by a
party that is the Secured Party to the other party (expressed as a negative number) pursuant to
Section 6(e)(ii)(1) (but without reference to clause (3) of Section 6(e)(ii)) of this Agreement if
all Transactions were being terminated as of the relevant Valuation Time, on the basis that (i)
that party is not the Affected Party and (ii) United States Dollars is the Termination Currency;
provided that the Close-out Amount will be determined by the Valuation Agent on behalf of
that party using its estimates at mid-market of the amounts that would be paid for transactions
providing the economic equivalent of (x) the material terms of the Transactions, including the
payments and deliveries by the parties under Section 2(a)(i) in respect of the Transactions that
would, but for the occurrence of the relevant Early Termination Date, have been required
after that date (assuming satisfaction of the conditions precedent in Section 2(a)(iii) of this
Agreement); and (y) the option rights of the parties in respect of the Transactions."
(e) Specified Conditions. In Paragraph 13(d), the following is inserted below the reference to
"Illegality":
26
ANNEX 15
English Annex
The terms of any Confirmation that is constituted by the English Annex are deemed to be amended as
follows:
"(B) calculating that part of the Exposure attributable to the Transactions in dispute by
seeking four actual quotations at mid-market from third parties for purposes of calculating the
relevant Close-out Amount, and taking the arithmetic average of those obtained; provided that
if four quotations are not available for a particular Transaction, then fewer than four
quotations may be used for that Transaction, and if no quotations are available for a particular
Transaction, then the Valuation Agent's original calculations will be used for that
Transaction; and".
"Paragraph 6. Default
(c) Exposure. The following definition replaces the definition of "Exposure" in Paragraph 10:
""Exposure" means, with respect to a party on a Valuation Date and subject to Paragraph 4
in the case of a dispute, the amount, if any, that would be payable to that party by the other
party (expressed as a positive number) or by that party to the other party (expressed as a
negative number) pursuant to Section 6(e)(ii)(1) (but without reference to clause (3) of
Section 6(e)(ii)) of this Agreement if all Transactions (other than the Transaction constituted
by this Annex) were being terminated as of the relevant Valuation Time, on the basis that (i)
that party is not the Affected Party and (ii) the Base Currency is the Termination Currency;
provided that the Close-out Amount will be determined by the Valuation Agent on behalf of
that party using its estimates at mid-market of the amounts that would be paid for transactions
providing the economic equivalent of (x) the material terms of the Transactions, including the
payments and deliveries by the parties under Section 2(a)(i) in respect of the Transactions that
would, but for the occurrence of the relevant Early Termination Date, have been required
after that date (assuming satisfaction of the conditions precedent in Section 2(a)(iii) of this
Agreement); and (y) the option rights of the parties in respect of the Transactions."
27
ANNEX 16
English Deed
The terms of any Credit Support Document in relation to a 2002 Master that is constituted by the
English Deed are deemed to be amended as follows:
"(B) calculating that part of the Exposure attributable to the Transactions in dispute by
seeking four actual quotations at mid-market from third parties for purposes of calculating the
relevant Close-out Amount, and taking the arithmetic mean of those obtained; provided that if
four quotations are not available for a particular Transaction, then fewer than four quotations
may be used for that Transaction, and if no quotations are available for a particular
Transaction, then the Valuation Agent's original calculations will be used for that
Transaction; and".
(b) Exposure. The following definition replaces the definition of "Exposure" in Paragraph 12:
""Exposure" means, with respect to a party on a Valuation Date and subject to Paragraph 5
in the case of a dispute, the amount, if any, that would be payable to that party by the other
party (expressed as a positive number) or by that party to the other party (expressed as a
negative number) pursuant to Section 6(e)(ii)(1) (but without reference to clause (3) of
Section 6(e)(ii)) of the Agreement if all Transactions were being terminated as of the relevant
Valuation Time, on the basis that (i) that party is not the Affected Party and (ii) the Base
Currency is the Termination Currency; provided that the Close-out Amount will be
determined by the Valuation Agent on behalf of that party using its estimates at mid-market
of the amounts that would be paid for transactions providing the economic equivalent of (x)
the material terms of the Transactions, including the payments and deliveries by the parties
under Section 2(a)(i) of the Agreement in respect of the Transactions that would, but for the
occurrence of the relevant Early Termination Date, have been required after that date
(assuming satisfaction of the conditions precedent in Section 2(a)(iii) of the Agreement); and
(y) the option rights of the parties in respect of the Transactions."
(c) Specified Conditions. In Paragraph 13(e), the following is inserted below the reference to
"Illegality":
28
ANNEX 17
Japanese Annex
The terms of any Credit Support Document in relation to a 2002 Master that is constituted by the
Japanese Annex are deemed to be amended as follows:
(a) Swap Transactions. The references in Paragraphs 5(i)(A) and 8(b) to "(or Swap
Transactions)" are deleted.
"(B) calculating the Exposure for the Transactions in dispute by seeking four actual
quotations at mid-market from third parties for purposes of calculating the relevant Close-out
Amount, and taking the arithmetic average of those obtained; provided that if four quotations
are not available for a particular Transaction, then fewer than four quotations may be used for
that Transaction, and if no quotations are available for a particular Transaction, then the
Valuation Agent's original calculations will be used for that Transaction; and".
(c) Exposure. The following definition replaces the definition of "Exposure" in Paragraph 12:
""Exposure" means for any Valuation Date or other date for which Exposure is calculated
and subject to Paragraph 5 in the case of a dispute, the amount, if any, that would be payable
to a party that is the Obligee by the other party (expressed as a positive number) or by a party
that is the Obligee to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(1) (but without reference to clause (3) of Section 6(e)(ii)) of the Agreement if all
Transactions were being terminated as of the relevant Valuation Time, on the basis that (i)
that party is not the Affected Party and (ii) Japanese Yen is the Termination Currency;
provided that the Close-out Amount will be determined by the Valuation Agent on behalf of
that party using its estimates at mid-market of the amounts that would be paid for transactions
providing the economic equivalent of (x) the material terms of the Transactions, including the
payments and deliveries by the parties under Section 2(a)(i) of the Agreement in respect of
the Transactions that would, but for the occurrence of the relevant Early Termination Date,
have been required after that date (assuming satisfaction of the conditions precedent in
Section 2(a)(iii) of the Agreement); and (y) the option rights of the parties in respect of the
Transactions."
(e) Specified Conditions. In Paragraph 13(d), the following is inserted below the reference to
"Illegality":
29
ANNEX 18
When a 2001 Margin Supplement supplements, forms part of, and is subject to, a 2002 Master and the
2001 Margin Provisions, the terms of the 2001 Margin Provisions are deemed to be amended as
follows:
(a) Erratum dated March 28, 2002. For the avoidance of doubt, the 2001 Margin Provisions
apply as amended by the Erratum dated March 28, 2002.
(b) Set-off. The reference in Section 1.1(d) to "any set-off (as defined in Section 14 of the ISDA
Master Agreement)" is replaced by a reference to "any set-off, offset, combination of accounts, right
of retention or withholding or similar right or requirement (whether arising under the ISDA Master
Agreement, another contract, applicable law or otherwise)".
(c) Default. Section 3.2(a) is amended to delete clauses (i) and (ii), to re-number clause (iii) as
clause (ii) and to insert immediately before it the following new clause (i):
"(i) in the case of an ISDA Master Agreement, an amount equal to the Value of
the Margin Received held by the Taker will be an Unpaid Amount due from the Taker to the
Provider for purposes of Section 6(e) of the ISDA Master Agreement, for which purpose the
Value of the Margin Received shall be determined on the basis that the Valuation Percentage
applicable to each item of Eligible Margin is 100%."
(d) Dispute Termination Event. The reference in Section 5.11(b) to "Section 5(b)(v)" is replaced
by a reference to "Section 5(b)(vi)".
(e) ISDA Master Agreement. The following definition replaces Section 5.25:
"Section 5.25 ISDA Master Agreement. "ISDA Master Agreement" means the
published form of the ISDA 2002 Master Agreement; and if an agreement in that form
(together with any elections, amendments and/or supplemental provisions in the Schedule
agreed by the parties) is specified as the Agreement in the Supplement, that agreement."
30