-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Lu+WdBwY+292Me370Cy3kKBCSlmPrIjsmKZt6DfsXIpCFfI6+0Le0Pe0qQM/3NTU HAbfQd0RfBDqZtCF39X3ZA== 0000950172-98-000055.txt : 19980123 0000950172-98-000055.hdr.sgml : 19980123 ACCESSION NUMBER: 0000950172-98-000055 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 19971119 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 19980122 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: PETRIE STORES LIQUIDATING TRUST CENTRAL INDEX KEY: 0000077808 STANDARD INDUSTRIAL CLASSIFICATION: RETAIL-WOMEN'S CLOTHING STORES [5621] IRS NUMBER: 226679945 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-06166 FILM NUMBER: 98511145 BUSINESS ADDRESS: STREET 1: 70 ENTERPRISE AVE CITY: SECAUCUS STATE: NJ ZIP: 07094 BUSINESS PHONE: 2018663600 FORMER COMPANY: FORMER CONFORMED NAME: PETRIE STORES CORP DATE OF NAME CHANGE: 19920703 8-K 1 FORM 8-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 November 19, 1997 ------------------------------------------------ Date of Report (Date of Earliest Event Reported) Petrie Stores Liquidating Trust ------------------------------------------------ (Exact Name of Registrant as Specified in Charter) New York 0-3777 22-6679945 ---------------------------- ---------------- ------------------- (State or Other Jurisdiction (Commission File (IRS Employer of Incorporation) Number) Identification No.) 150 Meadowlands Parkway Secaucus, New Jersey 07094 --------------------------------------------------- (Address of Principal Executive Offices and Zip Code) (212) 556-9600 --------------------------------------------------- (Registrant's Telephone Number, Including Area Code) N/A -------------------------------------------------------- (Former Name or Former Address, if Changed Since Last Report) Item 5. Other Events. Petrie Stores Liquidating Trust (the "Liquidating Trust") and Canadian Imperial Bank of Canada ("CIBC") have entered into a Master Agreement, dated as of November 19, 1997 and based upon the International Swaps and Derivatives Association, Inc. form (the "Master Agreement"), the purpose of which is to hedge certain investment risks associated with 2,000,000 shares of common stock of Toys "R" Us, Inc. ("Toys Common Stock") held by the Liquidating Trust. Pursuant to the terms of the Master Agreement, if on December 3, 1999 (the "Expiration Date") the price of Toys Common Stock is below $30.7264 (the "Put Price"), CIBC will be obligated to pay the Liquidating Trust the difference between the Put Price and the then prevailing price of Toys Common Stock multiplied by 2,000,000. The Master Agreement further provides that if on the Expiration Date the price of Toys Common Stock is above $47.1137 (the "Call Price"), the Liquidating Trust will be obligated to pay CIBC the difference between the Call Price and the then prevailing market price of Toys Common Stock multiplied by 2,000,000. Any required payments will be made in cash. A Secured Term Note, dated as of December 31, 1997, between the Liquidating Trust and CIBC (the "Secured Term Note"), also provides for CIBC to make available to the Liquidating Trust a non-purpose loan facility in the amount of approximately $55 million. This facility, if drawn upon, will bear interest at a floating rate equal to the three-month LIBOR rate plus thirty-five basis points. The Liquidating Trust does not presently anticipate that it will need to draw upon such facility. Any determination to draw upon the facility will be based upon the Liquidating Trust's then anticipated liquidity needs, including the status of its contingent liabilities. To secure the covenants made by the Liquidating Trust pursuant to the Master Agreement and the Secured Term Note, the Liquidating Trust has agreed pursuant to a Stock Pledge Agreement, dated as of December 31, 1997, and a Tri-Party Custody Agreement, dated as of December 31, 1997, among the United States Trust Company of New York, the Liquidating Trust and CIBC, to pledge for the benefit of CIBC 2,000,000 shares of Toys Common Stock. Although the Liquidating Trust does not presently expect to seek to terminate the transactions contemplated by the Master Agreement prior to the Expiration Date, should it determine to do so (including in order to provide additional liquidity for the payment of contingent liabilities or to permit the distribution of the shares of Toys Common Stock pledged to secure any amounts due under the Master Agreement and the Secured Term Note), the Liquidating Trust understands that, in accordance with industry practice, it would be able to do so upon terms to be agreed upon with CIBC based on then prevailing market conditions. Item 7. Financial Statements, Pro Forma Financial Information and Exhibits. (c) Exhibits. 99.1 Master Agreement, dated as of November 19, 1997, by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.2 Confirmation, dated as of December 31, 1997, of the Master Agreement by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.3 Secured Term Note, dated as of December 31, 1997, by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.4 Stock Pledge Agreement, dated as of December 31, 1997, by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.5 Tri-Party Custody Agreement, dated as of December 31, 1997, by and among the United States Trust Company of New York, Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. Date: January 22, 1998 PETRIE STORES LIQUIDATING TRUST By: /s/ Stephanie R. Joseph ___________________________________ Stephanie R. Joseph Manager and Chief Executive Officer Exhibit Index Exhibit Description - ------- ----------- 99.1 Master Agreement, dated as of November 19, 1997, by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.2 Confirmation, dated as of December 31, 1997, of the Master Agreement by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.3 Secured Term Note, dated as of December 31, 1997, by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.4 Stock Pledge Agreement, dated as of December 31, 1997, by and between Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. 99.5 Tri-Party Custody Agreement, dated as of December 31, 1997, by and among the United States Trust Company of New York, Petrie Stores Liquidating Trust and Canadian Imperial Bank of Commerce. EX-99 2 EXHIBIT 99.1 - MASTER AGREEMENT Exhibit 99.1 (MULTICURRENCY--CROSS BORDER) ISDA(R) International Swap Dealers Association, Inc. MASTER AGREEMENT dated as of November 19, 1997 PETRIE STORES LIQUIDATING TRUST and CANADIAN IMPERIAL BANK OF COMMERCE have entered and/or anticipate entering into one or more transactions (each a "Transaction") that are or will be governed by this Master Agreement, which includes the schedule (the "Schedule"), and the documents and other confirming evidence (each a "Confirmation") exchanged between the parties confirming those Transactions. Accordingly, the parties agree as follows:-- 1. INTERPRETATION (a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have the meanings therein specified for the purpose of this Master Agreement. (b) INCONSISTENCY. In the event of any inconsistency between the provisions of the Schedule and the other provisions of this Master Agreement, the Schedule will prevail. In the event of any inconsistency between the provisions of any Confirmation and this Master Agreement (including the Schedule), such Confirmation will prevail for the purpose of the relevant Transaction. (c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact that this Master Agreement and all Confirmations form a single agreement between the parties (collectively referred to as this "Agreement"), and the parties would not otherwise enter into any Transactions. 2. OBLIGATIONS (a) GENERAL CONDITIONS. (i) Each party will make each payment or delivery specified in each Confirmation to be made by it, subject to the other provisions of this Agreement. (ii) Payments under this Agreement will be made on the due date for value on that date in the place of the account specified in the relevant Confirmation or otherwise pursuant to this Agreement, in freely transferable funds and in the manner customary for payments in the required currency. Where settlement is by delivery (that is, other than by payment), such delivery will be made for receipt on the due date in the manner customary for the relevant obligation unless otherwise specified in the relevant Confirmation or elsewhere in this Agreement. (iii) Each obligation of each party under Section 2(a)(i) is subject to (1) the condition precedent that no Event of Default or Potential Event of Default with respect to the other party has occurred and is continuing, (2) the condition precedent that no Early Termination Date in respect of the relevant Transaction has occurred or been effectively designated and (3) each other applicable condition precedent specified in this Agreement. (b) CHANGE OF ACCOUNT. Either party may change its account for receiving a payment or delivery by giving notice to the other party at least five Local Business Days prior to the scheduled date for the payment or delivery to which such change applies unless such other party gives timely notice of a reasonable objection to such change. (c) NETTING. If on any date amounts would otherwise be payable:-- (i) in the same currency; and (ii) in respect of the same Transaction, by each party to the other, then, on such date, each party's obligation to make payment of any such amount will be automatically satisfied and discharged and, if the aggregate amount that would otherwise have been payable by one party exceeds the aggregate amount that would otherwise have been payable by the other party, replaced by an obligation upon the party by whom the larger aggregate amount would have been payable to pay to the other party the excess of the larger aggregate amount over the smaller aggregate amount. The parties may elect in respect of two or more Transactions that a net amount will be determined in respect of all amounts payable on the same date in the same currency in respect of such Transactions, regardless of whether such amounts are payable in respect of the same Transaction. The election may be made in the Schedule or a Confirmation by specifying that subparagraph (ii) above will not apply to the Transactions identified as being subject to the election, together with the starting date (in which case subparagraph (ii) above will not, or will cease to, apply to such Transactions from such date). This election may be made separately for different groups of Transactions and will apply separately to each pairing of Offices through which the parties make and receive payments or deliveries. (d) DEDUCTION OR WITHHOLDING FOR TAX. (i) GROSS-UP. All payments under this Agreement will be made without any deduction or withholding for or on account of any Tax unless such deduction or withholding is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, then in effect. If a party is so required to deduct or withhold, then that party ("X") will:-- (1) promptly notify the other party ("Y") of such requirement; (2) pay to the relevant authorities the full amount required to be deducted or withheld (including the full amount required to be deducted or withheld from any additional amount paid by X to Y under this Section 2(d)) promptly upon the earlier of determining that such deduction or withholding is required or receiving notice that such amount has been assessed against Y; (3) promptly forward to Y an official receipt (or a certified copy), or other documentation reasonably acceptable to Y, evidencing such payment to such authorities; and (4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to the payment to which Y is otherwise entitled under this Agreement, such additional amount as is necessary to ensure that the net amount actually received by Y (free and clear of Indemnifiable Taxes, whether assessed against X or Y) will equal the full amount Y would have received had no such deduction or withholding been required. However, X will not be required to pay any additional amount to Y to the extent that it would not be required to be paid but for:-- (A) the failure by Y to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d); or (B) the failure of a representation made by Y pursuant to Section 3(f) to be accurate and true unless such failure would not have occurred but for (I) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (II) a Change in Tax Law. (ii) LIABILITY. If:-- (1) X is required by any applicable law, as modified by the practice of any relevant governmental revenue authority, to make any deduction or withholding in respect of which X would not be required to pay an additional amount to Y under Section 2(d)(i)(4); (2) X does not so deduct or withhold; and (3) a liability resulting from such Tax is assessed directly against X, then, except to the extent Y has satisfied or then satisfies the liability resulting from such Tax, Y will promptly pay to X the amount of such liability (including any related liability for interest, but including any related liability for penalties only if Y has failed to comply with or perform any agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d)). (e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party that defaults in the performance of any payment obligation will, to the extent permitted by law and subject to Section 6(c), be required to pay interest (before as well as after judgment) on the overdue amount to the other party on demand in the same currency as such overdue amount, for the period from (and including) the original due date for payment to (but excluding) the date of actual payment, at the Default Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. If, prior to the occurrence or effective designation of an Early Termination Date in respect of the relevant Transaction, a party defaults in the performance of any obligation required to be settled by delivery, it will compensate the other party on demand if and to the extent provided for in the relevant Confirmation or elsewhere in this Agreement. 3. REPRESENTATIONS Each party represents to the other party (which representations will be deemed to be repeated by each party on each date on which a Transaction is entered into and, in the case of the representations in Section 3(f), at all times until the termination of this Agreement) that:-- (a) BASIC REPRESENTATIONS. (i) STATUS. It is duly organised and validly existing under the laws of the jurisdiction of its organisation or incorporation and, if relevant under such laws, in good standing; (ii) POWERS. It has the power to execute this Agreement and any other documentation relating to this Agreement to which it is a party, to deliver this Agreement and any other documentation relating to this Agreement that it is required by this Agreement to deliver and to perform its obligations under this Agreement and any obligations it has under any Credit Support Document to which it is a party and has taken all necessary action to authorise such execution, delivery and performance; (iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance do not violate or conflict with any law applicable to it, any provision of its constitutional documents, any order or judgment of any court or other agency of government applicable to it or any of its assets or any contractual restriction binding on or affecting it or any of its assets; (iv) CONSENTS. All governmental and other consents that are required to have been obtained by it with respect to this Agreement or any Credit Support Document to which it is a party have been obtained and are in full force and effect and all conditions of any such consents have been complied with; and (v) OBLIGATIONS BINDING. Its obligations under this Agreement and any Credit Support Document to which it is a party constitute its legal, valid and binding obligations, enforceable in accordance with their respective terms (subject to applicable bankruptcy, reorganization, insolvency, moratorium or similar laws affecting creditors' rights generally and subject, as to enforceability, to equitable principles of general application (regardless of whether enforcement is sought in a proceeding in equity or at law)). (b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of Default or, to its knowledge, Termination Event with respect to it has occurred and is continuing and no such event or circumstance would occur as a result of its entering into or performing its obligations under this Agreement or any Credit Support Document to which it is a party. (c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened against it or any of its Affiliates any action, suit or proceeding at law or in equity or before any court, tribunal, governmental body, agency or official or any arbitrator that is likely to affect the legality, validity or enforceability against it of this Agreement or any Credit Support Document to which it is a party or its ability to perform its obligations under this Agreement or such Credit Support Document. (d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is furnished in writing by or on behalf of it to the other party and is identified for the purpose of this Section 3(d) in the Schedule is, as of the date of the information, true, accurate and complete in every material respect. (e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(e) is accurate and true. (f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule as being made by it for the purpose of this Section 3(f) is accurate and true. 4. AGREEMENTS Each party agrees with the other that, so long as either party has or may have any obligation under this Agreement or under any Credit Support Document to which it is a party:-- (a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or, in certain cases under subparagraph (iii) below, to such government or taxing authority as the other party reasonably directs:-- (i) any forms, documents or certificates relating to taxation specified in the Schedule or any Confirmation; (ii) any other documents specified in the Schedule or any Confirmation; and (iii) upon reasonable demand by such other party, any form or document that may be required or reasonably requested in writing in order to allow such other party or its Credit Support Provider to make a payment under this Agreement or any applicable Credit Support Document without any deduction or withholding for or on account of any Tax or with such deduction or withholding at a reduced rate (so long as the completion, execution or submission of such form or document would not materially prejudice the legal or commercial position of the party in receipt of such demand), with any such form or document to be accurate and completed in a manner reasonably satisfactory to such other party and to be executed and to be delivered with any reasonably required certification, in each case by the date specified in the Schedule or such Confirmation or, if none is specified. as soon as reasonably practicable. (b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in full force and effect all consents of any governmental or other authority that are required to be obtained by it with respect to this Agreement or any Credit Support Document to which it is a party and will use all reasonable efforts to obtain any that may become necessary in the future. (c) COMPLY WITH LAWS. It will comply in all material respects with all applicable laws and orders to which it may be subject if failure so to comply would materially impair its ability to perform its obligations under this Agreement or any Credit Support Document to which it is a party. (d) TAX AGREEMENT. It will give notice of any failure of a representation made by it under Section 3(f) to be accurate and true promptly upon learning of such failure. (e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax levied or imposed upon it or in respect of its execution or performance of this Agreement by a jurisdiction in which it is incorporated, organised, managed and controlled, or considered to have its seat, or in which a branch or office through which it is acting for the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and will indemnify the other party against any Stamp Tax levied or imposed upon the other party or in respect of the other party's execution or performance of this Agreement by any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to the other party. 5. EVENTS OF DEFAULT AND TERMINATION EVENTS (a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any of the following events constitutes an event of default (an "Event of Default") with respect to such party:-- (i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due, any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required to be made by it if such failure is not remedied on or before the third Local Business Day after notice of such failure is given to the party; (ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform any agreement or obligation (other than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or 2(e) or to give notice of a Termination Event or any agreement or obligation under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in accordance with this Agreement if such failure is not remedied on or before the thirtieth day after notice of such failure is given to the party; (iii) CREDIT SUPPORT DEFAULT. (1) Failure by the party or any Credit Support Provider of such party to comply with or perform any agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure is continuing after any applicable grace period has elapsed; (2) the expiration or termination of such Credit Support Document or the failing or ceasing of such Credit Support Document to be in full force and effect for the purpose of this Agreement (in either case other than in accordance with its terms) prior to the satisfaction of all obligations of such party under each Transaction to which such Credit Support Document relates without the written consent of the other party; or (3) the party or such Credit Support Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or challenges the validity of, such Credit Support Document; (iv) MISREPRESENTATION. A representation (other than a representation under Section 3(e) or (f)) made or repeated or deemed to have been made or repeated by the party or any Credit Support Provider of such party in this Agreement or any Credit Support Document proves to have been incorrect or misleading in any material respect when made or repeated or deemed to have been made or repeated; (v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party (1) defaults under a Specified Transaction and, after giving effect to any applicable notice requirement or grace period, there occurs a liquidation of, an acceleration of obligations under, or an early termination of, that Specified Transaction, (2) defaults, after giving effect to any applicable notice requirement or grace period, in making any payment or delivery due on the last payment, delivery or exchange date of, or any payment on early termination of, a Specified Transaction (or such default continues for at least three Local Business Days if there is no applicable notice requirement or grace period) or (3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a Specified Transaction (or such action is taken by any person or entity appointed or empowered to operate it or act on its behalf); (vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as applying to the party, the occurrence or existence of (1) a default, event of default or other similar condition or event (however described) in respect of such party, any Credit Support Provider of such party or any applicable Specified Entity of such party under one or more agreements or instruments relating to Specified Indebtedness of any of them (individually or collectively) in an aggregate amount of not less than the applicable Threshold Amount (as specified in the Schedule) which has resulted in such Specified Indebtedness becoming, or becoming capable at such time of being declared, due and payable under such agreements or instruments, before it would otherwise have been due and payable or (2) a default by such party, such Credit Support Provider or such Specified Entity (individually or collectively) in making one or more payments on the due date thereof in an aggregate amount of not less than the applicable Threshold Amount under such agreements or instruments (after giving effect to any applicable notice requirement or grace period); (vii) BANKRUPTCY. The party, any Credit Support Provider of such party or any applicable Specified Entity of such party:-- (1) is dissolved (other than pursuant to a consolidation, amalgamation or merger); (2) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due; (3) makes a general assignment, arrangement or composition with or for the benefit of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors' rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition (A) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation or (B) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof; (5) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger); (6) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets; (7) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter; (8) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in clauses (1) to (7) (inclusive); or (9) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts; or (viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support Provider of such party consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and, at the time of such consolidation, amalgamation, merger or transfer:-- (1) the resulting, surviving or transferee entity fails to assume all the obligations of such party or such Credit Support Provider under this Agreement or any Credit Support Document to which it or its predecessor was a party by operation of law or pursuant to an agreement reasonably satisfactory to the other party to this Agreement; or (2) the benefits of any Credit Support Document fail to extend (without the consent of the other party) to the performance by such resulting, surviving or transferee entity of its obligations under this Agreement. (b) TERMINATION EVENTS. The occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of such party or any Specified Entity of such party of any event specified below constitutes an Illegality if the event is specified in (i) below, a Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if the event is specified in (iii) below, and, if specified to be applicable, a Credit Event Upon Merger if the event is specified pursuant to (iv) below or an Additional Termination Event if the event is specified pursuant to (v) below:-- (i) ILLEGALITY. Due to the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with competent jurisdiction of any applicable law after such date, it becomes unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party):-- (1) to perform any absolute or contingent obligation to make a payment or delivery or to receive a payment or delivery in respect of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or (2) to perform, or for any Credit Support Provider of such party to perform, any contingent or other obligation which the party (or such Credit Support Provider) has under any Credit Support Document relating to such Transaction; (ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or brought in a court of competent jurisdiction, on or after the date on which a Transaction is entered into (regardless of whether such action is taken or brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which will be the Affected Party) will, or there is a substantial likelihood that it will, on the next succeeding Scheduled Payment Date (1) be required to pay to the other party an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or withheld for or on account of a Tax (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount is required to be paid in respect of such Tax under Section 2(d)(i)(4) (other than by reason of Section 2(d)(i)(4)(A) or (B)); (iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the next succeeding Scheduled Payment Date will either (1) be required to pay an additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been deducted or withheld for or on account of any Indemnifiable Tax in respect of which the other party is not required to pay an additional amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case as a result of a party consolidating or amalgamating with, or merging with or into, or transferring all or substantially all its assets to, another entity (which will be the Affected Party) where such action does not constitute an event described in Section 5(a)(viii); (iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is specified in the Schedule as applying to the party, such party ("X"), any Credit Support Provider of X or any applicable Specified Entity of X consolidates or amalgamates with, or merges with or into, or transfers all or substantially all its assets to, another entity and such action does not constitute an event described in Section 5(a)(viii) but the creditworthiness of the resulting, surviving or transferee entity is materially weaker than that of X, such Credit Support Provider or such Specified Entity, as the case may be, immediately prior to such action (and, in such event, X or its successor or transferee, as appropriate, will be the Affected Party); or (v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event" is specified in the Schedule or any Confirmation as applying, the occurrence of such event (and, in such event, the Affected Party or Affected Parties shall be as specified for such Additional Termination Event in the Schedule or such Confirmation). (c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which would otherwise constitute or give rise to an Event of Default also constitutes an Illegality, it will be treated as an Illegality and will not constitute an Event of Default. 6. EARLY TERMINATION (a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of Default with respect to a party (the "Defaulting Party") has occurred and is then continuing, the other party (the "Non-defaulting Party") may, by not more than 20 days notice to the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, "Automatic Early Termination" is specified in the Schedule as applying to a party, then an Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the extent analogous thereto, (8), and as of the time immediately preceding the institution of the relevant proceeding or the presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8). (b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT. (i) NOTICE. If a Termination Event occurs, an Affected Party will, promptly upon becoming aware of it, notify the other party, specifying the nature of that Termination Event and each Affected Transaction and will also give such other information about that Termination Event as the other party may reasonably require. (ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected Party, or if a Tax Event Upon Merger occurs and the Burdened Party is the Affected Party, the Affected Party will, as a condition to its right to designate an Early Termination Date under Section 6(b)(iv), use all reasonable efforts (which will not require such party to incur a loss, excluding immaterial, incidental expenses) to transfer within 20 days after it gives notice under Section 6(b)(i) all its rights and obligations under this Agreement in respect of the Affected Transactions to another of its Offices or Affiliates so that such Termination Event ceases to exist. If the Affected Party is not able to make such a transfer it will give notice to the other party to that effect within such 20 day period, whereupon the other party may effect such a transfer within 30 days after the notice is given under Section 6(b)(i). Any such transfer by a party under this Section 6(b)(ii) will be subject to and conditional upon the prior written consent of the other party, which consent will not be withheld if such other party's policies in effect at such time would permit it to enter into transactions with the transferee on the terms proposed. (iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two Affected Parties, each party will use all reasonable efforts to reach agreement within 30 days after notice thereof is given under Section 6(b)(i) on action to avoid that Termination Event. (iv) RIGHT TO TERMINATE. If:-- (1) a transfer under Section 6(b)(ii) or an agreement under Section 6(b)(iii), as the case may be, has not been effected with respect to all Affected Transactions within 30 days after an Affected Party gives notice under Section 6(b)(i); or (2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax Event Upon Merger occurs and the Burdened Party is not the Affected Party, either party in the case of an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any Affected Party in the case of a Tax Event or an Additional Termination Event if there is more than one Affected Party, or the party which is not the Affected Party in the case of a Credit Event Upon Merger or an Additional Termination Event if there is only one Affected Party may, by not more than 20 days notice to the other party and provided that the relevant Termination Event is then continuing, designate a day not earlier than the day such notice is effective as an Early Termination Date in respect of all Affected Transactions. (c) EFFECT OF DESIGNATION. (i) If notice designating an Early Termination Date is given under Section 6(a) or (b), the Early Termination Date will occur on the date so designated, whether or not the relevant Event of Default or Termination Event is then continuing. (ii) Upon the occurrence or effective designation of an Early Termination Date, no further payments or deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated Transactions will be required to be made, but without prejudice to the other provisions of this Agreement. The amount, if any, payable in respect of an Early Termination Date shall be determined pursuant to Section 6(e). (d) CALCULATIONS. (i) STATEMENT. On or as soon as reasonably practicable following the occurrence of an Early Termination Date, each party will make the calculations on its part, if any, contemplated by Section 6(e) and will provide to the other party a statement (1) showing, in reasonable detail, such calculations (including all relevant quotations and specifying any amount payable under Section 6(e)) and (2) giving details of the relevant account to which any amount payable to it is to be paid. In the absence of written confirmation from the source of a quotation obtained in determining a Market Quotation, the records of the party obtaining such quotation will be conclusive evidence of the existence and accuracy of such quotation. (ii) PAYMENT DATE. An amount calculated as being due in respect of any Early Termination Date under Section 6(e) will be payable on the day that notice of the amount payable is effective (in the case of an Early Termination Date which is designated or occurs as a result of an Event of Default) and on the day which is two Local Business Days after the day on which notice of the amount payable is effective (in the case of an Early Termination Date which is designated as a result of a Termination Event). Such amount will be paid together with (to the extent permitted under applicable law) interest thereon (before as well as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily compounding and the actual number of days elapsed. (e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the following provisions shall apply based on the parties' election in the Schedule of a payment measure, either "Market Quotation" or "Loss," and a payment method, either the "First Method" or the "Second Method." If the parties fail to designate a payment measure or payment method in the Schedule, it will be deemed that "Market Quotation" or the "Second Method," as the case may be, shall apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this Section will be subject to any Set-off. (i) EVENTS OF DEFAULT. If the Early Termination Date results from an Event of Default:-- (1) First Method and Market Quotation. If the First Method and Market Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the excess, if a positive number, of (A) the sum of the Settlement Amount (determined by the Non-defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party over (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. (2) First Method and Loss. If the First Method and Loss apply, the Defaulting Party will pay to the Non-defaulting Party, if a positive number, the Non-defaulting Party's Loss in respect of this Agreement. (3) Second Method and Market Quotation. If the Second Method and Market Quotation apply, an amount will be payable equal to (A) the sum of the Settlement Amount (determined by the Non- defaulting Party) in respect of the Terminated Transactions and the Termination Currency Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the Termination Currency Equivalent of the Unpaid Amounts owing to the Defaulting Party. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (4) Second Method and Loss. If the Second Method and Loss apply, an amount will be payable equal to the Non-defaulting Party's Loss in respect of this Agreement. If that amount is a positive number, the Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the Non-defaulting Party will pay the absolute value of that amount to the Defaulting Party. (ii) TERMINATION EVENTS. If the Early Termination Date results from a Termination Event:-- (1) One Affected Party. If there is one Affected Party, the amount payable will be determined in accordance with Section 6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either case, references to the Defaulting Party and to the Non-defaulting Party will be deemed to be references to the Affected Party and the party which is not the Affected Party, respectively, and, if Loss applies and fewer than all the Transactions are being terminated, Loss shall be calculated in respect of all Terminated Transactions. (2) Two Affected Parties. If there are two Affected Parties:-- (A) if Market Quotation applies, each party will determine a Settlement Amount in respect of the Terminated Transactions, and an amount will be payable equal to (I) the sum of (a) one-half of the difference between the Settlement Amount of the party with the higher Settlement Amount ("X") and the Settlement Amount of the party with the lower Settlement Amount ("Y") and (b) the Termination Currency Equivalent of the Unpaid Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid Amounts owing to Y; and (B) if Loss applies, each party will determine its Loss in respect of this Agreement (or, if fewer than all the Transactions are being terminated, in respect of all Terminated Transactions) and an amount will be payable equal to one-half of the difference between the Loss of the party with the higher Loss ("X") and the Loss of the party with the lower Loss ("Y"). If the amount payable is a positive number, Y will pay it to X; if it is a negative number, X will pay the absolute value of that amount to Y. (iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early Termination Date occurs because "Automatic Early Termination" applies in respect of a party, the amount determined under this Section 6(e) will be subject to such adjustments as are appropriate and permitted by law to reflect any payments or deliveries made by one party to the other under this Agreement (and retained by such other party) during the period from the relevant Early Termination Date to the date for payment determined under Section 6(d)(ii). (iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies an amount recoverable under this Section 6(e) is a reasonable pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain and the loss of protection against future risks and except as otherwise provided in this Agreement neither party will be entitled to recover any additional damages as a consequence of such losses. 7. TRANSFER Subject to Section 6(b)(ii), neither this Agreement nor any interest or obligation in or under this Agreement may be transferred (whether by way of security or otherwise) by either party without the prior written consent of the other party, except that:-- (a) a party may make such a transfer of this Agreement pursuant to a consolidation or amalgamation with, or merger with or into, or transfer of all or substantially all its assets to, another entity (but without prejudice to any other right or remedy under this Agreement); and (b) a party may make such a transfer of all or any part of its interest in any amount payable to it from a Defaulting Party under Section 6(e). Any purported transfer that is not in compliance with this Section will be void. 8. CONTRACTUAL CURRENCY (a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will be made in the relevant currency specified in this Agreement for that payment (the "Contractual Currency"). To the extent permitted by applicable law, any obligation to make payments under this Agreement in the Contractual Currency will not be discharged or satisfied by any tender in any currency other than the Contractual Currency, except to the extent such tender results in the actual receipt by the party to which payment is owed, acting in a reasonable manner and in good faith in converting the currency so tendered into the Contractual Currency, of the full amount in the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason the amount in the Contractual Currency so received falls short of the amount in the Contractual Currency payable in respect of this Agreement, the party required to make the payment will, to the extent permitted by applicable law, immediately pay such additional amount in the Contractual Currency as may be necessary to compensate for the shortfall. If for any reason the amount in the Contractual Currency so received exceeds the amount in the Contractual Currency payable in respect of this Agreement, the party receiving the payment will refund promptly the amount of such excess. (b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or order expressed in a currency other than the Contractual Currency is rendered (i) for the payment of any amount owing in respect of this Agreement, (ii) for the payment of any amount relating to any early termination in respect of this Agreement or (iii) in respect of a judgment or order of another court for the payment of any amount described in (i) or (ii) above, the party seeking recovery, after recovery in full of the aggregate amount to which such party is entitled pursuant to the judgment or order, will be entitled to receive immediately from the other party the amount of any shortfall of the Contractual Currency received by such party as a consequence of sums paid in such other currency and will refund promptly to the other party any excess of the Contractual Currency received by such party as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any variation between the rate of exchange at which the Contractual Currency is converted into the currency of the judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is able, acting in a reasonable manner and in good faith in converting the currency received into the Contractual Currency, to purchase the Contractual Currency with the amount of the currency of the judgment or order actually received by such party. The term "rate of exchange" includes, without limitation, any premiums and costs of exchange payable in connection with the purchase of or conversion into the Contractual Currency. (c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these indemnities constitute separate and independent obligations from the other obligations in this Agreement, will be enforceable as separate and independent causes of action, will apply notwithstanding any indulgence granted by the party to which any payment is owed and will not be affected by judgment being obtained or claim or proof being made for any other sums payable in respect of this Agreement. (d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient for a party to demonstrate that it would have suffered a loss had an actual exchange or purchase been made. 9. MISCELLANEOUS (a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and understanding of the parties with respect to its subject matter and supersedes all oral communication and prior writings with respect thereto. (b) AMENDMENTS. No amendment, modification or waiver in respect of this Agreement will be effective unless in writing (including a writing evidenced by a facsimile transmission) and executed by each of the parties or confirmed by an exchange of telexes or electronic messages on an electronic messaging system. (c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will survive the termination of any Transaction. (d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights, powers, remedies and privileges provided in this Agreement are cumulative and not exclusive of any rights, powers, remedies and privileges provided by law. (e) COUNTERPARTS AND CONFIRMATIONS. (i) This Agreement (and each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including by facsimile transmission), each of which will be deemed an original. (ii) The parties intend that they are legally bound by the terms of each Transaction from the moment they agree to those terms (whether orally or otherwise). A Confirmation shall be entered into as soon as practicable and may be executed and delivered in counterparts (including by facsimile transmission) or be created by an exchange of telexes or by an exchange of electronic messages on an electronic messaging system, which in each case will be sufficient for all purposes to evidence a binding supplement to this Agreement. The parties will specify therein or through another effective means that any such counterpart, telex or electronic message constitutes a Confirmation. (f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or privilege in respect of this Agreement will not be presumed to operate as a waiver, and a single or partial exercise of any right, power or privilege will not be presumed to preclude any subsequent or further exercise, of that right, power or privilege or the exercise of any other right, power or privilege. (g) HEADINGS. The headings used in this Agreement are for convenience of reference only and are not to affect the construction of or to be taken into consideration in interpreting this Agreement. 10. OFFICES; MULTIBRANCH PARTIES (a) If Section 10(a) is specified in the Schedule as applying, each party that enters into a Transaction through an Office other than its head or home office represents to the other party that, notwithstanding the place of booking office or jurisdiction of incorporation or organisation of such party, the obligations of such party are the same as if it had entered into the Transaction through its head or home office. This representation will be deemed to be repeated by such party on each date on which a Transaction is entered into. (b) Neither party may change the Office through which it makes and receives payments or deliveries for the purpose of a Transaction without the prior written consent of the other party. (c) If a party is specified as a Multibranch Party in the Schedule, such Multibranch Party may make and receive payments or deliveries under any Transaction through any Office listed in the Schedule, and the Office through which it makes and receives payments or deliveries with respect to a Transaction will be specified in the relevant Confirmation. 11. EXPENSES A Defaulting Party will, on demand, indemnify and hold harmless the other party for and against all reasonable out-of-pocket expenses, including legal fees and Stamp Tax, incurred by such other party by reason of the enforcement and protection of its rights under this Agreement or any Credit Support Document to which the Defaulting Party is a party or by reason of the early termination of any Transaction, including, but not limited to, costs of collection. 12. NOTICES (a) EFFECTIVENESS. Any notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging system) to the address or number or in accordance with the electronic messaging system details provided (see the Schedule) and will be deemed effective as indicated:-- (i) if in writing and delivered in person or by courier, on the date it is delivered; (ii) if sent by telex, on the date the recipient's answerback is received; (iii) if sent by facsimile transmission, on the date that transmission is received by a responsible employee of the recipient in legible form (it being agreed that the burden of proving receipt will be on the sender and will not be met by a transmission report generated by the sender's facsimile machine); (iv) if sent by certified or registered mail (airmail, if overseas) or the equivalent (return receipt requested), on the date that mail is delivered or its delivery is attempted; or (v) if sent by electronic messaging system, on the date that electronic message is received, unless the date of that delivery (or attempted delivery) or that receipt, as applicable, is not a Local Business Day or that communication is delivered (or attempted) or received, as applicable, after the close of business on a Local Business Day, in which case that communication shall be deemed given and effective on the first following day that is a Local Business Day. (b) CHANGE OF ADDRESSES. Either party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at which notices or other communications are to be given to it. 13. GOVERNING LAW AND JURISDICTION (a) GOVERNING LAW. This Agreement will be governed by and construed in accordance with the law specified in the Schedule. (b) JURISDICTION. With respect to any suit, action or proceedings relating to this Agreement ("Proceedings"), each party irrevocably:-- (i) submits to the jurisdiction of the English courts, if this Agreement is expressed to be governed by English law, or to the non-exclusive jurisdiction of the courts of the State of New York and the United States District Court located in the Borough of Manhattan in New York City, if this Agreement is expressed to be governed by the laws of the State of New York; and (ii) waives any objection which it may have at any time to the laying of venue of any Proceedings brought in any such court, waives any claim that such Proceedings have been brought in an inconvenient forum and further waives the right to object, with respect to such Proceedings, that such court does not have any jurisdiction over such party. Nothing in this Agreement precludes either party from bringing Proceedings in any other jurisdiction (outside, if this Agreement is expressed to be governed by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing of Proceedings in any one or more jurisdictions preclude the bringing of Proceedings in any other jurisdiction. (c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if any) specified opposite its name in the Schedule to receive, for it and on its behalf, service of process in any Proceedings. If for any reason any party's Process Agent is unable to act as such, such party will promptly notify the other party and within 30 days appoint a substitute process agent acceptable to the other party. The parties irrevocably consent to service of process given in the manner provided for notices in Section 12. Nothing in this Agreement will affect the right of either party to serve process in any other manner permitted by law. (d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent permitted by applicable law, with respect to itself and its revenues and assets (irrespective of their use or intended use), all immunity on the grounds of sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any court, (iii) relief by way of injunction, order for specific performance or for recovery of property, (iv) attachment of its assets (whether before or after judgment) and (v) execution or enforcement of any judgment to which it or its revenues or assets might otherwise be entitled in any Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent permitted by applicable law, that it will not claim any such immunity in any Proceedings. 14. DEFINITIONS As used in this Agreement:-- "ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b). "AFFECTED PARTY" has the meaning specified in Section 5(b). "AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event consisting of an Illegality, Tax Event or Tax Event Upon Merger, all Transactions affected by the occurrence of such Termination Event and (b) with respect to any other Termination Event, all Transactions. "AFFILIATE" means, subject to the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the person, any entity that controls, directly or indirectly, the person or any entity directly or indirectly under common control with the person. For this purpose, "control" of any entity or person means ownership of a majority of the voting power of the entity or person. "APPLICABLE RATE" means:-- (a) in respect of obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate; (b) in respect of an obligation to pay an amount under Section 6(e) of either party from and after the date (determined in accordance with Section 6(d)(ii)) on which that amount is payable, the Default Rate; (c) is respect of all other obligations payable or deliverable (or which would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default Rate; and (d) in all other cases, the Termination Rate. "BURDENED PARTY" has the meaning specified in Section 5(b). "CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification of, or any change in or amendment to, any law (or in the application or official interpretation of any law) that occurs on or after the date on which the relevant Transaction is entered into. "CONSENT" includes a consent, approval, action, authorisation, exemption, notice, filing, registration or exchange control consent. "CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b). "CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as such in this Agreement. "CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule. "DEFAULT RATE" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee (as certified by it) if it were to fund or of funding the relevant amount plus 1% per annum. "DEFAULTING PARTY" has the meaning specified in Section 6(a). "EARLY TERMINATION DATE" means the date determined in accordance with Section 6(a) or 6(b)(iv). "EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable, in the Schedule. "ILLEGALITY" has the meaning specified in Section 5(b). "INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in respect of a payment under this Agreement but for a present or former connection between the jurisdiction of the government or taxation authority imposing such Tax and the recipient of such payment or a person related to such recipient (including, without limitation, a connection arising from such recipient or related person being or having been a citizen or resident of such jurisdiction, or being or having been organized, present or engaged in a trade or business in such jurisdiction, or having or having had a permanent establishment or fixed place of business in such jurisdiction, but excluding a connection arising solely from such recipient or related person having executed, delivered, performed its obligations or received a payment under, or enforced, this Agreement or a Credit Support Document). "LAW" includes any treaty, law, rule or regulation (as modified, in the case of tax matters, by the practice of any relevant governmental revenue authority) and "LAWFUL" and "UNLAWFUL" will be construed accordingly. "LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial banks are open for business (including dealings in foreign exchange and foreign currency deposits) (a) in relation to any obligation under Section 2(a)(i), in the place(s) specified in the relevant Confirmation or, if not so specified, as otherwise agreed by the parties in writing or determined pursuant to provisions contained, or incorporated by reference, in this Agreement, (b) in relation to any other payment, in the place where the relevant account is located and, if different, in the principal financial centre, if any, of the currency of such payment, (c) in relation to any notice or other communication, including notice contemplated under Section 5(a)(i), in the city specified in the address for notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in the place where the relevant new account is to be located and (d) in relation to Section 5(a)(v)(2), in the relevant locations for performance with respect to such Specified Transaction. "LOSS" means, with respect to this Agreement or one or more Terminated Transactions, as the case may be, and a party, the Termination Currency Equivalent of an amount that party reasonably determines in good faith to be its total losses and costs (or gain, in which case expressed as a negative number) in connection with this Agreement or that Terminated Transaction or group of Terminated Transactions, as the case may be, including any loss of bargain, cost of funding or, at the election of such party but without duplication, loss or cost incurred as a result of its terminating, liquidating, obtaining or reestablishing any hedge or related trading position (or any gain resulting from any of them). Loss includes losses and costs (or gains) in respect of any payment or delivery required to have been made (assuming satisfaction of each applicable condition precedent) on or before the relevant Early Termination Date and not made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and out-of-pocket expenses referred to under Section 11. A party will determine its Loss as of the relevant Early Termination Date or, if that is not reasonably practicable, as of the earliest date thereafter as is reasonably practicable. A party may (but need not) determine its Loss by reference to quotations of relevant rates or prices from one or more leading dealers in the relevant markets. "MARKET QUOTATION" means, with respect to one or more Terminated Transactions and a party making the determination, an amount determined on the basis of quotations from Reference Market-makers. Each quotation will be for an amount, if any, that would be paid to such party (expressed as a negative number) or by such party (expressed as a positive number) in consideration of an agreement between such party (taking into account any existing Credit Support Document with respect to the obligations of such party) and the quoting Reference Market-maker to enter into a transaction (the "Replacement Transaction") that would have the effect of preserving for such party the economic equivalent of any payment or delivery (whether the underlying obligation was absolute or contingent and assuming the satisfaction of each applicable condition precedent) by the parties under Section 2(a)(i) in respect of such Terminated Transaction or group of Terminated Transactions that would, but for the occurrence of the relevant Early Termination Date, have been required after that date. For this purpose, Unpaid Amounts in respect of the Terminated Transaction or group of Terminated Transactions are to be excluded but, without limitation, any payment or delivery that would, but for the relevant Early Termination Date, have been required (assuming satisfaction of each applicable condition precedent) after that Early Termination Date is to be included. The Replacement Transaction would be subject to such documentation as such party and the Reference Market-maker may, in good faith, agree. The party making the determination (or its agent) will request each Reference Market-maker to provide its quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as soon as reasonably practicable after the relevant Early Termination Date. The day and time as of which those quotations are to be obtained will be selected in good faith by the party obliged to make a determination under Section 6(e), and, if each party is so obliged, after consultation with the other. If more than three quotations are provided, the Market Quotation will be the arithmetic mean of the quotations, without regard to the quotations having the highest and lowest values. If exactly three such quotations are provided, the Market Quotation will be the quotation remaining after disregarding the highest and lowest quotations. For this purpose, if more than one quotation has the same highest value or lowest value, then one of such quotations shall be disregarded. If fewer than three quotations are provided, it will be deemed that the Market Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined. "NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or evidence of any actual cost) to the Non-defaulting Party (as certified by it) if it were to fund the relevant amount. "NON-DEFAULTING PARTY" has the meaning specified in Section 6(a). "OFFICE" means a branch or office of a party, which may be such party's head or home office. "POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or the lapse of time or both, would constitute an Event of Default. "REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market selected by the party determining a Market Quotation in good faith (a) from among dealers of the highest credit standing which satisfy all the criteria that such party applies generally at the time in deciding whether to offer or to make an extension of credit and (b) to the extent practicable, from among such dealers having an office in the same city. "RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in which the party is incorporated organized, managed and controlled or considered to have its seat, (b) where an Office through which the party is acting for purposes of this Agreement is located, (c) in which the party executes this Agreement and (d) in relation to any payment, from or through which such payment is made. "SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be made under Section 2(a)(i) with respect to a Transaction. "SET-OFF" means set-off, offset, combination of accounts, right of retention or withholding or similar right or requirement to which the payer of an amount under Section 6 is entitled or subject (whether arising under this Agreement, another contract, applicable law or otherwise) that is exercised by, or imposed on, such payer. "SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination Date, the sum of:-- (a) the Termination Currency Equivalent of the Market Quotations (whether positive or negative) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation is determined; and (b) such party's Loss (whether positive or negative and without reference to any Unpaid Amounts) for each Terminated Transaction or group of Terminated Transactions for which a Market Quotation cannot be determined or would not (in the reasonable belief of the party making the determination) produce a commercially reasonable result. "SPECIFIED ENTITY" has the meaning specified in the Schedule. "SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether present or future, contingent or otherwise, as principal or surety or otherwise) in respect of borrowed money. "SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction (including an agreement with respect thereto) now existing or hereafter entered into between one party to this Agreement (or any Credit Support Provider of such party or any applicable Specified Entity of such party) and the other party to this Agreement (or any Credit Support Provider of such other party or any applicable Specified Entity of such other party) which is a rate swap transaction, basis swap, forward rate transaction, commodity swap, commodity option, equity or equity index swap, equity or equity index option, bond option, interest rate option, foreign exchange transaction, cap transaction, floor transaction, collar transaction, currency swap transaction, cross-currency rate swap transaction, currency option or any other similar transaction (including any option with respect to any of these transactions), (b) any combination of these transactions and (c) any other transaction identified as a Specified Transaction in this Agreement or the relevant confirmation. "STAMP TAX" means any stamp, registration, documentation or similar tax. "TAX" means any present or future tax, levy, impost, duty, charge, assessment or fee of any nature (including interest, penalties and additions thereto) that is imposed by any government or other taxing authority in respect of any payment under this Agreement other than a stamp, registration, documentation or similar tax. "TAX EVENT" has the meaning specified in Section 5(b). "TAX EVENT UPON MERGER" has the meaning specified in Section 5(b). "TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a) if resulting from a Termination Event, all Affected Transactions and (b) if resulting from an Event of Default, all Transactions (in either case) in effect immediately before the effectiveness of the notice designating that Early Termination Date (or, if "Automatic Early Termination" applies, immediately before that Early Termination Date). "TERMINATION CURRENCY" has the meaning specified in the Schedule. "TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in the Termination Currency, such Termination Currency amount and, in respect of any amount denominated in a currency other than the Termination Currency (the "Other Currency"), the amount in the Termination Currency determined by the party making the relevant determination as being required to purchase such amount of such Other Currency as at the relevant Early Termination Date, or, if the relevant Market Quotation or Loss (as the case may be), is determined as of a later date, that later date, with the Termination Currency at the rate equal to the spot exchange rate of the foreign exchange agent (selected as provided below) for the purchase of such Other Currency with the Termination Currency at or about 11:00 a.m. (in the city in which such foreign exchange agent is located) on such date as would be customary for the determination of such a rate for the purchase of such Other Currency for value on the relevant Early Termination Date or that later date. The foreign exchange agent will, if only one party is obliged to make a determination under Section 6(e), be selected in good faith by that party and otherwise will be agreed by the parties. "TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a Credit Event Upon Merger or an Additional Termination Event. "TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the cost (without proof or evidence of any actual cost) to each party (as certified by such party) if it were to fund or of funding such amounts. "UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination Date, the aggregate of (a) in respect of all Terminated Transactions, the amounts that became payable (or that would have become payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early Termination Date and which remain unpaid as at such Early Termination Date and (b) in respect of each Terminated Transaction, for each obligation under Section 2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be settled by delivery to such party on or prior to such Early Termination Date and which has not been so settled as at such Early Termination Date, an amount equal to the fair market value of that which was (or would have been) required to be delivered as of the originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law) interest, in the currency of such amounts, from (and including) the date such amounts or obligations were or would have been required to have been paid or performed to (but excluding) such Early Termination Date, at the Applicable Rate. Such amounts of interest will be calculated on the basis of daily compounding and the actual number of days elapsed. The fair market value of any obligation referred to in clause (b) above shall be reasonably determined by the party obliged to make the determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency Equivalents of the fair market values reasonably determined by both parties. IN WITNESS WHEREOF the parties have executed this document on the respective dates specified below with effect from the date specified on the first page of this document. PETRIE STORES LIQUIDATING TRUST (Name of Party) By: /s/ Stephanie R. Joseph Name: Stephanie R. Joseph Title: Manager and Chief Executive Officer CANADIAN IMPERIAL BANK OF COMMERCE (Name of Party) By: /s/ Wayne J. Halenda Name: Wayne J. Halenda Title: Vice President By: /s/ Antonia Lobo Name: Antonia Lobo Title: Vice President EXECUTION COPY SCHEDULE TO THE MASTER AGREEMENT DATED AS OF NOVEMBER 19, 1997 BETWEEN CANADIAN IMPERIAL BANK OF COMMERCE ("PARTY A") AND PETRIE STORES LIQUIDATING TRUST ("COUNTERPARTY") Part 1 Termination Provisions In this Agreement: - (1) "Specified Entity" shall not apply to Party A or the Counterparty. (2) "Specified Transaction" will have the meaning specified in Section 14. (3) The "Cross Default" provisions of Section 5(a)(vi) will apply to Party A and to the Counterparty, and for such purpose: (a) "Specified Indebtedness" will have the meaning specified in Section 14; (b) "Threshold Amount" means 3% of the net assets of Party A, in the case of Party A, and 3% of the net assets of the Counterparty, in the case of the Counterparty; and (c) Section 5(a)(vi) will be deemed to be amended to include the following: "or (3) a default or event of default (however described) occurs and is continuing which entitles any person or entity to terminate its commitment under any agreement to lend or advance or make available funds to a party in respect of an aggregate amount in excess of the Threshold Amount." (4) "Termination Currency" means United States Dollars. (5) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will not apply to Party A or the Counterparty. (6) The "Automatic Early Termination" provisions of Section 6(a) will not apply to Party A or the Counterparty. (7) For the purpose of the "PAYMENTS ON EARLY TERMINATION" provisions of Section 6(e), the Second Method and Loss will apply. Counterparty agrees that if an Early Termination Date occurs and Party A is the party calculating Loss in connection therewith, and if at the time of such Early Termination Date any Shares of Stock pledged to Party A pursuant to a Collateral Pledge Agreement executed by Counterparty are subject to any restrictions on their transferability (including any restriction arising under the securities laws) or if for any other reason Party A is unable at such time to liquidate any Collateral pledged by Counterparty to secure Counterparty's obligations to Party A, Party A may, in order to more accurately determine and minimize its Loss with respect to any Terminated Transaction, calculate and determine such Loss as of the date or dates following such Early Termination Date on which Party A, in its reasonable good faith judgment, is able to sell such Collateral at such price or prices it deems reasonable under the circumstances and terminate any hedge it may have in connection with such Terminated Transaction. Part 2 Tax Representations None. Part 3 Agreements to Deliver Documents For the purpose of Section 4(a)(i) or 4(a)(ii) of the Agreement, each party (as specified below) agrees to deliver the following documents:
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION DELIVER DOCUMENT CERTIFICATE DELIVERED 3(D) REPRESENTATION Counterparty Collateral Pledge Upon execution of the YES Agreement transaction Counterparty Enforceability Opinion Upon execution of the NO transaction Party A Enforceability Opinion Upon execution of the NO transaction
all of such documents to be in form and substance satisfactory to Party A or Counterparty, as applicable. Part 4 Miscellaneous (1) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REFERENCE TO CHOICE OF LAW DOCTRINE. (2) Notices. (a) In connection with Section 12(a), all notices to Party A shall, with respect to any particular Transaction, be sent to the address, telex number or facsimile number specified in the relevant Confirmation and any notice for purposes of Sections 5 or 6 shall be sent to the address or telex number specified below: Addresses for notices or communications to Party A: Office: Toronto, Canada Address: Head Office - Commerce Court, Toronto, Ontario, Canada M5L I A2 Attention: Manager, Swap Operations Telex No: 065-24116 Answerback: CANBANK TOR Facsimile No: 416-594-7343 Telephone: 416-594-8566 (Only with respect to Transactions through that Office) Office: London, England Address: Cottons Centre, Cottons Lane, London SE1 2QL, England Attention: Executive Vice President Telex No: 889342 Answerback: CIBC G Facsimile No: 71-234-6423 Telephone: 71-234-6963 (Only with respect to Transactions through that Office) Office: New York, U.S.A. Address: 425 Lexington Avenue, New York, New York, U.S.A. 10017 Attention: Manager, Swaps Operations Telex No: Answerback: Facsimile No: 212-856-6699 Telephone: 212-856-4000 (Only with respect to Transactions through that Office) (b) In connection with Section 12(a), all notices to the Counterparty shall, with respect to any particular Transaction, be sent to the address, telex number or purposes of Sections 5 or 6 shall be sent to the address or telex number specified below: Address: c/o The Director's Network, Inc. 685 Fifth Avenue, Suite 601 New York, New York 10022 Attention: Stephanie R. Joseph Facsimile No: 212-754-3087 Telephone: 212-754-3086 (3) Netting of Payments. Subparagraph (ii) of Section 2(c) of this Agreement will not apply for the purpose of Section 2(c) with respect to all Transactions under this Agreement with effect from the date of this Agreement. (4) Offices; Multibranch Party. (a) Section 10(a) shall apply to this Agreement. (b) For the purpose of Section 10(c): (i) Party A is a Multibranch Party and may act through its Toronto, New York and London Offices; and (ii) The Counterparty is not a Multibranch Party. (5) Credit Support Documents. The Collateral Pledge Agreement dated of even date herewith shall be a Credit Support Document for purposes of this Agreement. (6) Credit Support Provider. None. Part 5 Other Provisions (1) ISDA Definitions. Reference is hereby made to the 1991 ISDA Definitions (the "1991 Definitions"), the 1992 ISDA FX and Currency Option Definitions (the "FX Definitions") and the 1994 ISDA Equity Option Definitions (the "Equity Definitions") each as published by the International Swap Dealers Association Inc., which are hereby incorporated by reference herein. Any terms used and not otherwise defined herein which are contained in the 1991 Definitions, FX Definitions or the Equity Definitions shall have the meaning set forth therein. (2) Scope of Agreement. Notwithstanding anything contained in the Agreement to the contrary, if the parties enter into any Specified Transaction, such Specified Transaction shall be subject to, governed by and construed in accordance with the terms of this Agreement unless the Confirmation relating thereto shall specifically state to the contrary. Each such Specified Transaction shall be a Transaction for the purposes of this Agreement. (3) Inconsistency. In the event of any inconsistency between any of the following documents, the relevant document first listed below shall govern: (i) a Confirmation; (ii) the Schedule; (iii) the 1991 Definitions, the Equity Definitions or the FX Definitions; and (iv) the printed form of ISDA Master Agreement. (4) Right of Set-Off. (A) Party A has committed to providing a loan (the "Loan") to Counterparty, as evidenced by a Secured Term Note dated as of December 31, 1997 (the "Note"), and Counterparty has agreed to repay the Loan in accordance with the terms of the Note if Counterparty exercised its right to receive such Loan. Counterparty agrees that Party A's obligation to make any payment due Counterparty in connection with this Agreement (including any Transaction executed hereunder) shall be conditioned upon Counterparty's payment in full of all amounts, if any, due and payable to Party A (acting through its New York agency, or any permitted transferee thereof) under the Note and any and all other agreements Counterparty may have with Party A (regardless of the Office or agency through which it is acting) at the time such payment is due. (B) Upon any termination of a Transaction, Party A will have the right to set-off or withhold any payment it (including any of its branches or agencies) may owe Counterparty hereunder in satisfaction of any obligation of the Counterparty to Party A under the Note and any and all other agreements Counterparty may have executed with Party A (including any branch or agency thereof), irrespective of whether such obligations are at such time matured or unmatured. Party A's obligations to Counterparty in connection with such Transaction shall be deemed satisfied and discharged to the extent of any such set off or withholding. (5) Affiliate. "Affiliate" will have the meaning specified in Section 14. (6) Calculation Agent. The Calculation Agent will be Party A unless Party A is the Defaulting Party in which case the Calculation Agent will be the Counterparty. All determinations by the Calculation Agent shall be made in good faith and after consultation with the other party and shall be binding and conclusive on the parties absent manifest error. (7) 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 AGREEMENT OR ANY CREDIT SUPPORT DOCUMENT. EACH PARTY (i) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER PARTY OR ANY CREDIT SUPPORT PROVIDER HAS 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 AGREEMENT AND PROVIDE FOR ANY CREDIT SUPPORT DOCUMENT, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION. (8) Additional Representations. (i) Section 3 is amended by adding the following subsections thereto: "(g) Line of Business. This Agreement has been, and each Transaction hereunder will be, entered into for purposes of managing its borrowings or investments or in connection with a line of business. (h) Net Worth. The Counterparty hereby represents and warrants that the Counterparty (i) has individual net worth that exceeds USD 5,000,000 and (ii) has such knowledge and experience in financial and business matters that the Counterparty is capable of evaluating the merits and risks of any Transactions under this Agreement." (9) Consent to Tape Recording. Each of Party A and the Counterparty hereby consents to the tape recording of all conversations between the Counterparty and the Counterparty's representatives and Party A. (10) No Reliance, etc. In connection with the negotiation of, the entering into, and the confirming of the execution of this Agreement, any Credit Support Document, each Transaction and any other documentation relating to this Agreement to which it is a party or that it is required by this Agreement to deliver, each party hereby represents and warrants to the other that: (i) the other party hereto or thereto is entering into this Agreement and each Transaction as principal (and not as agent or in any other capacity) and is not acting as fiduciary for it; (ii) it is not relying (for purposes of making any investment decision or otherwise) upon any representations (whether written or oral) of the other party hereto or thereto other than the representations expressly set forth in this Agreement, in such Credit Support Document and in any Confirmation; (iii) the other party hereto or thereto has not given to it (directly or indirectly through any other person) any assurance or guaranty as to the success, profitability, return, performance, result, effect, consequence, or benefit (either legal, regulatory, tax, financial, accounting, or otherwise) of this Agreement, such Credit Support Document, such Transaction or other documentation; (iv) it has consulted with its own legal, regulatory, tax, business, investment, financial and accounting advisors to the extent it has deemed necessary, and it has made its own investment, hedging and trading decisions (including decisions regarding the appropriateness or suitability of any Transaction pursuant to this Agreement) based upon its own judgment and upon any advice from such advisors as it has deemed necessary; (v) it has determined that the rates, prices or amounts and other terms of each Transaction and the indicative quotations (if any) provided by the other party hereto or thereto reflect those in the relevant market for similar transactions, and all trading decisions have been the result of arm's-length negotiations between the parties; and (vi) it is entering into this Agreement, such Credit Support Document, each Transaction and any other documentation relating to this Agreement with a full understanding of all of the terms, conditions and risks hereof and thereof (economic and otherwise), and it is capable of assuming and willing to assume (financially and otherwise) those risks. (11) Generic Risk Disclosure Statement. Counterparty represents to Party A that it has read and understands the Generic Risk Disclosure Statement provided to the Counterparty by Party A. (12) Illegality. The "Illegality" provisions Section 5(b)(i) shall be expanded to include the obligation of a party to comply with any directive, direction or similar order issued or given by any government agency or authority with competent jurisdiction (whether or not having the force of law) which prohibits its performance under this Agreement, and in that event such party will be the Affected Party for the purpose of that Section. (13) Transfer. In addition to the permitted transfers set out in Section 7 of this Agreement, this Agreement or any interest or obligation of Party A in or under this Agreement may be transferred to and assumed by any Affiliate of Party A, provided that: (i) the liabilities of such Affiliate (including such assumed obligations) are unconditionally guaranteed by Party A on terms reasonably satisfactory to the Counterparty; and (ii) such transfer and assumption will only be effective upon the Counterparty receiving notice of such transfer and assumption signed by Party A and acknowledged by such Affiliate. Upon the effective date of a transfer and assumption: (i) each of Party A and the Counterparty shall have no further rights against or obligations to the other in connection with this Agreement or any Transaction (other than Counterparty's rights and Party A's obligations in connection with such guarantee); and (ii) each of such Affiliate and the Counterparty shall have the same rights against, and shall owe the same obligations to, the other in connection with each Transaction as if such Affiliate had been named as a party to that Transaction and was a party to this Agreement instead of Party A. (14) U.S. Provisions. (i) Master Agreement. The parties hereto intend that this Agreement shall be a master agreement (as described in 11 U.S.C. 101 and 12 U.S.C. 1821(e)(8)(D)(vii)) for a "swap agreement" (as defined in 11 U.S.C. 101 and 12 U.S.C. 1821(e)(8)(D)(vi)). Please confirm your agreement to the terms of the foregoing Schedule by signing below. CANADIAN IMPERIAL BANK OF COMMERCE PETRIE STORES LIQUIDATING TRUST /s/ Wayne J. Halenda /s/ Stephanie R. Joseph Wayne J. Halenda Stephanie R. Joseph Vice President Manager and Chief Executive Officer /s/ Antonia Lobo Antonia Lobo Vice President EX-99 3 EXHIBIT 99.2 - CONFIRMATION Exhibit 99.2 DATE: December 31, 1997 TO: Petrie Stores Liquidating Trust FROM: Canadian Imperial Bank of Commerce ATTENTION: Stephanie R. Josep CONTACT: Gina S. Ghent PHONE NUMBER: 212-754-3086 PHONE NUMBER: 212-856-6538 FACSIMILE NUMBER: 212-754-3087 FACSIMILE NUMBER: 212-885-4378 RE: Equity Collar Confirmation CIBC Reference Number: NY EQT 0522
THIS CONFIRMATION SUPERSEDES AND REPLACES ANY PREVIOUSLY EXECUTED CONFIRMATION OF THIS TRANSACTION. FOR EASE OF REFERENCE, ALL CHANGES ARE IN BOLD TYPE. The purpose of this letter agreement (this "Confirmation") is to confirm the terms and conditions of the Transaction entered into between Canadian Imperial Bank of Commerce ("CIBC") and Petrie Stores Liquidating Trust ("Counterparty") on the Trade Date specified below (the "Transaction"). This Confirmation constitutes a "Confirmation" as referred to in the Master Agreement specified below. 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 will govern. 1. This Confirmation supplements, forms part of, and is subject to, the Master Agreement dated as of November 19, 1997, as amended and supplemented from time to time (the "Agreement"), between CIBC and Counterparty. All provisions contained in the Agreement shall govern this Confirmation except as expressly modified below. This Transaction shall be subject to all laws, rules and regulations applicable thereto, including, but not by way of limitation, the provisions of the Securities Act of 1933 (the "Act"), and the Securities Exchange Act of 1934 (the "Exchange Act"), as amended and all rules and regulations, promulgated or to be promulgated thereunder. The parties hereto each acknowledges that the options acquired under this Transaction will not be registered under the Act and are being sold in reliance upon the exemption for private placements pursuant to Section 4(2) of the Act. 2. The terms of the particular Transaction to which this Confirmation relates are as follows: GENERAL TERMS: AGENT: CIBC, New York Agency, has acted as agent in confirming this Transaction. TRANSACTION I: ------------- Trade Date: November 26, 1997 Effective Date: November 26, 1997 Option Style: European Option Type: Call Seller: Counterparty Buyer: CIBC Shares: The common shares of stock issued by Toys "R" Us, Inc. (New York Stock Exchange Ticker Symbol = "TOY"). Number of Options: 2,000,000 Option Entitlement: 1 Share per Option Multiple Exercise: Inapplicable Strike Price: 47.1137 Exchange: The New York Stock Exchange or any successor to such exchange or quotation system. Related Exchange: Chicago Board Options Exchange Calculation Agent: CIBC. Whenever the Calculation Agent is required to act, it will do so in good faith, and its determinations and calculations will be binding in the absence of manifest error. TRANSACTION II: -------------- Trade Date: November 26, 1997 Effective Date: November 26, 1997 Option Style: European Option Type: Put Seller: CIBC Buyer: Counterparty Shares: The common shares of stock issued by Toys "R" Us, Inc. (New York Stock Exchange Ticker Symbol = "TOY"). Number of Options: 2,000,000 Option Entitlement: 1 Share per Option Multiple Exercise: Inapplicable Strike Price: 30.7264 Exchange: The New York Stock Exchange or any successor to such exchange or quotation system. Related Exchange: Chicago Board Options Exchange Calculation Agent: CIBC. Whenever the Calculation Agent is required to act, it will do so in good faith, and its determinations and calculations will be binding in the absence of manifest error. PROCEDURE FOR EXERCISE: Expiration Time: 4:00 p.m. (local time in New York). Expiration Date: December 3, 1999 Automatic Exercise: Applicable Settlement Price: The actual average price per share of the Shares purchased by CIBC to close out its hedging position during the period extending from the fifth (5th) Exchange Business Day immediately preceding the Exercise Date through the Exercise Date, such period subject to modification upon mutual agreement of CIBC and Counterparty. Put Seller's Telephone Number and Telex and/or Facsimile Number and Contact Details for Purpose of Giving Notice: Mr. Eamon McCooey (P) 212-885-4361 (F) 212-856-4266 SETTLEMENT TERMS: Cash Settlement: Applicable Cash Settlement Amount: An amount, as calculated by the Calculation Agent in the Settlement Currency, equal to the number of Options exercised on the Expiration Date multiplied by (i) the Strike Price Differential, and (ii) any Option Entitlement specified above Strike Price Differential (Put): An amount equal to the greater of (i) the excess of the Strike Price over the Settlement Price, and (ii) zero Strike Price Differential (Call): An amount equal to the greater of (i) the excess of the Settlement Price over the Strike Price, and (ii) zero Cash Settlement Payment Date: Three (3) Currency Business Days after the Valuation Date ADJUSTMENTS: Method of Adjustment: Options Exchange Adjustment Additional Potential Adjustment Event: The issuer of the Shares distributes a cash dividend greater than $0.00 to shareholders of record during the term of the Transaction. EXTRAORDINARY EVENTS: SHARE FOR SHARE: ALTERNATIVE OBLIGATION, PROVIDED HOWEVER, THAT IF THE TRADING VOLATILITY OF THE NEW SHARES DIFFERS SUCH THAT CIBC IS UNABLE TO MAINTAIN A HEDGING POSITION THEN CIBC SHALL HAVE THE RIGHT TO TERMINATE THE TRANSACTION IN ACCORDANCE WITH THE PROVISIONS OF CANCELLATION AND PAYMENT. SHARE FOR OTHER: CANCELLATION AND PAYMENT. Please confirm that the foregoing correctly sets forth the terms of our agreement by executing the copy of this Confirmation enclosed for that purpose and returning it to us or by sending to us a letter or telex substantially similar to this letter, which letter or telex sets forth the material terms of the Transaction to which this Confirmation relates and indicates your agreement to those terms. Yours Sincerely, CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ Gina S. Ghent ------------------------------- Name: Gina S. Ghent Title: Director Confirmed as of the date first written: PETRIE STORES LIQUIDATING TRUST By: /s/ Stephanie R. Joseph ---------------------------- Name: Stephanie R. Joseph Title: Manager and Chief Executive Officer EX-99 4 EXHIBIT 99.3 - SECURED TERM NOTE Exhibit 99.3 EXECUTION COPY December 31, 1997 SECURED TERM NOTE Reference is made to the ISDA Master Agreement (as modified by the Schedule thereto) executed by Borrower and Lender (the "Master Agreement") and dated as of November 19, 1997. Capitalized terms used and not defined herein shall have the meanings specified therefor in the Master Agreement. Canadian Imperial Bank of Commerce (the "Lender"), New York Agency, hereby agrees to lend to Petrie Stores Liquidating Trust ("Borrower") an amount not exceeding $55,300,000 (the "Maximum Loan Commitment Amount") on any Business Day (the "Draw Date") occurring during the period (the "Commitment Period") beginning on the date hereof (the "Commitment Start Date") and ending September 3, 1999 (the "Commitment Termination Date"), or if the Commitment Termination Date is not a Business Day, the next succeeding Business Day. The Borrower may elect to borrow an amount (the "Principal") up to the Maximum Loan Commitment Amount by providing the Lender with a notice substantially in the form of Exhibit A hereto (the "Draw Notice") not later than three (3) Business Days prior to the Draw Date. The Lender is only required to lend monies hereunder during the Commitment Period and the Draw Date shall be the later of the Draw Date specified on the Draw Notice or the date that is three (3) Business Days after the Lender's actual receipt of the Draw Notice. Upon receipt of the Principal from the Lender, the Borrower shall pay to the order of the Lender the Principal on December 3, 1999 (the "Maturity Date") and accrued and unpaid interest on the Principal ("Interest," and together with the Principal, the "Loan") on the Maturity Date and each 3rd day of each March, June, September and December after the Draw Date and prior to the Maturity Date (each such day, an "Interest Payment Date"), beginning on the first Interest Payment Date immediately following the Draw Date. Interest shall accrue on the outstanding principal amount of the Loan from the date hereof through and including the date the Loan is paid in full (whether by acceleration, at stated maturity or otherwise) at a floating rate per annum equal to three month USD-LIBOR-BBA plus 0.35%, which rate shall be reset quarterly on the relevant principal amount of the Loan on the basis of the actual number of days elapsed during the relevant quarterly period divided by 360. Accrued interest shall be compounded quarterly and is payable quarterly on each Interest Payment Date and on the Maturity Date in lawful money of the United States of America, in same day funds, to Lender at the following account or other such address as Lender may designate to Borrower in writing: Chase Manhattan Bank N.Y. for the account of Canadian Imperial Bank of Commerce, Toronto, Account Number 544-708-234, ABA Number 021-000-021, Attention: Financial Products. Principal shall be due and payable, not later than 12:00 noon Eastern Time on the Maturity Date and shall be payable in lawful money of the United States of America, in same day funds, to Lender at the following account or other such address as Lender may designate to Borrower in writing: Chase Manhattan Bank N.Y. for the account of Canadian Imperial Bank of Commerce, Toronto, Account Number 544-708-234, ABA Number 021-000-021, Attention: Financial Products. Whenever any payment to be made under this Note would be due on a day which is not a Business Day such payment shall be made on the next succeeding Business Day and such extension of time shall in such case be included in the computation of interest. As used herein "Business Day" means a day other than a Saturday or Sunday or a day which is a public holiday or other day on which banks in New York are required or authorized to remain closed. This Note is secured by the pledge of stock and the rights of the Borrower under the Master Agreement, each as provided in the Collateral Pledge Agreement dated as of December 31, 1997 between Borrower and Lender (the "Pledge Agreement"). This Note may not be prepaid. Borrower represents and warrants as follows: (a) Borrower is authorized and has the capacity to execute, deliver and perform this Note. (b) Borrower's execution, delivery and performance of this Note and the Pledge Agreement do not conflict with, or constitute a breach of or default under, any provision of any material agreement to which Borrower is a party or by which Borrower is bound. Borrower is not in default under any agreement to which it is a party or by which it is bound, which default could have a material adverse effect on Borrower. (c) This Note and the Pledge Agreement constitute the legal, valid and binding obligations of Borrower, enforceable against Borrower in accordance with their respective terms. (d) There are no actions or proceedings pending by or against Borrower before any court or administrative agency in which an adverse decision could have a material adverse effect on Borrower, its ability to perform its obligations hereunder or under the Pledge Agreement or on the stock pledged as collateral pursuant to the Pledge Agreement. Borrower does not have any knowledge that any such actions or proceedings are threatened. (e) No representation, warranty or other statement made by Borrower in any certificate or written statement furnished to Lender (including with respect to any financial information) contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained in such certificates or statements not misleading. (f) None of the proceeds of the Loan will be used for the purpose of purchasing or carrying "margin stock" within the meaning of Regulation U of the Board of Governors of the Federal Reserve Board. Any one or more of the following events shall constitute an "Acceleration Event" hereunder: (a) Borrower shall fail to pay any amount when due hereunder; (b) Borrower shall fail to perform any obligation under this Note or the Pledge Agreement or there is a Pledgor Default under (and as defined in) the Pledge Agreement; (c) An Event of Default or a Termination Event shall occur under the Master Agreement or an Early Termination Date shall be designated for any other reason under any Confirmation executed by Borrower and Lender under the Master Agreement; (d) Borrower shall become insolvent, or generally fail to pay its debts as such debts become due, or Borrower shall admit in writing its inability to pay its debts generally, or make a general assignment for the benefit of creditors, or any proceeding shall be instituted by or against Borrower seeking an order for relief or to adjudicate Borrower a bankrupt or insolvent, or any other proceeding shall be instituted with respect to Borrower under any law relating to bankruptcy, insolvency or relief of debtors, or seeking the appointment of a receiver, trustee or other similar official for Borrower or any substantial part of Borrower's property; or (e) Any material misrepresentation or material misstatement exists now or hereafter in any warranty or representation set forth herein or in any certificate delivered to Lender by Borrower. Upon the occurrence of an Acceleration Event described in paragraph (d) above, the Loan and all interest and other amounts payable hereunder shall be forthwith due and payable and upon the occurrence of any other Acceleration Event the Lender may, without notice to Borrower, declare the Loan and all interest and other amounts payable hereunder to be forthwith due and payable, whereupon the Loan, all such interest and all such amounts shall become and be due and payable. Borrower waives presentment, demand, protest, notice of protest, notice of dishonor, notice of nonpayment, and any and all other notices and demands in connection with the delivery, acceptance, performance, default or enforcement of this Note. No delay by the Lender in exercising any power or right hereunder shall operate as a waiver of any power or right. Borrower promises to pay on demand all costs and expenses, including reasonable attorney's fees, incurred in the preparation, collection and enforcement of this Note and the Pledge Agreement. Borrower acknowledges and agrees that Lender may apply and Set-Off against any amounts which Borrower may owe Lender hereunder (whether in respect of principal, interest or otherwise), any amounts that Lender may owe Borrower under the Master Agreement (including any Transaction executed thereunder). Lender acknowledges and agrees that Borrower may apply and Set- Off against any amounts which Lender may owe Borrower under the Master Agreement (including any Transaction executed thereunder) any amounts that Borrower may owe Lender hereunder (whether in respect of principal, interest or otherwise). This Note shall be governed by and construed in accordance with the laws of the State of New York. PETRIE STORES LIQUIDATING TRUST By: /s/ Stephanie R. Joseph Name: Stephanie R. Joseph Title: Manager and Chief Executive Officer RECEIVED AND AGREED BY: CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ Wayne J. Halenda Name: Wayne J. Halenda Title: Vice President CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ Antonio Lobo Name: Antonio Lobo Title: Vice President EXHIBIT A Reference is made to the Secured Term Note (the "Note") executed by Petrie Stores Liquidating Trust ("Borrower") and received and agreed to by Canadian Imperial Bank of Commerce, New York Agency (the "Lender"), on December 31, 1997. Pursuant to the terms of the Note, the Borrower hereby exercises its right to receive from the Lender a loan in the amount of $_____________________ (the "Principal") [Note: Amount may not exceed the Maximum Loan Commitment Amount] on ________________________ (the "Draw Date"). We acknowledge and agree that, upon receipt of the Principal, we will be required to make the payments of principal and interest on the Loan (as defined in the Note) in accordance with the terms of the Note. We understand that the actual Draw Date shall be the later of (i) the Draw Date requested above and (ii) the date which is three (3) Business Days after the Lender's actual receipt of this Draw Notice. PETRIE STORES LIQUIDATING TRUST By: Title: EX-99 5 EXHIBIT 99.4 - STOCK PLEDGE AGREEMENT Exhibit 99.4 EXECUTION COPY STOCK PLEDGE AGREEMENT THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made this 31st day of December, 1997 (the "Closing Date") by and between Petrie Stores Liquidating Trust ("Pledgor") and Canadian Imperial Bank of Commerce ("Pledgee"). Recitals Pledgee and Pledgor propose to enter into one or more transactions pursuant to the ISDA Master Agreement (as modified by the Schedule thereto) dated as of November 19, 1997 between Pledgee and Pledgor (the "Master Agreement"). In addition, Pledgor may exercise its right to borrow monies from Pledgee and Pledgee has committed to lend such monies to Pledgor on or after the Closing Date pursuant to the terms of a Secured Term Note executed by Pledgor (the "Note") on the Closing Date. To secure payment and performance of its obligations under the Note and the Master Agreement, Pledgor has agreed to pledge to Pledgee the shares of stock listed on Exhibit A hereto (the "Shares") and may from time to time, in accordance with the terms hereof, pledge additional stock (the "Additional Shares"), which, upon such pledge, shall also constitute "Shares." Capitalized terms used and not otherwise defined herein shall have the meaning specified in the Master Agreement. NOW, THEREFORE, Pledgor and Pledgee agree as follows: 1. Pledge of Securities. (a) Pledgor hereby pledges and assigns to Pledgee, and grants to Pledgee a security interest in, the Shares and any Additional Shares delivered hereunder, together with all proceeds and substitutions thereof, all cash, dividends, stock and other moneys and property paid thereon, all rights to subscribe for securities declared or granted in connection therewith, and all other cash and noncash proceeds of the foregoing (all hereinafter called the "Collateral"), as security for the prompt payment and performance of all of Pledgor's obligations under the Note and the Master Agreement, including any obligations arising out of any Transactions entered into between Pledgor and Pledgee after the date hereof under the Master Agreement (all such obligations of Pledgor, collectively, the "Obligations"). If any Additional Shares are at any time pledged to Pledgee, Exhibit A shall be amended to reflect the addition of such Additional Shares. (b) The term "Collateral" shall also include any securities, instruments or distributions of any kind issuable, issued or received by Pledgor upon conversion of, in respect of, or in exchange for any other Collateral, including, but not limited to, those arising from a stock dividend, stock split, reclassification, reorganization, merger, consolidation, sale of assets or other exchange of securities or any dividends or other distributions of any kind upon or with respect to the Collateral. (c) The certificate or certificates for any securities included in the Collateral, accompanied by an instrument of assignment duly executed in blank by Pledgor, have been, or will be immediately upon the subsequent receipt thereof by Pledgor, delivered by Pledgor to United States Trust Company of New York (the "Custodian") for the benefit of Pledgee, pursuant to a Tri- Party Custody Agreement dated as of the Closing Date (the "Custodial Agreement"), by and among the Custodian, Pledgee and Pledgor. Pledgor shall cause the books of each corporation whose stock is part of the Collateral to reflect the pledge of the Shares. Pledgee may, at any time, effect the transfer of any securities included in the Collateral into the name of Pledgee and cause new certificates representing such securities to be issued in the name of Pledgee, subject to Pledgee's obligation hereunder to return the Collateral to Pledgor. 2. Power of Attorney. Pledgor hereby constitutes and irrevocably appoints Pledgee, with full power of substitution and revocation by Pledgee, as Pledgor's true and lawful attorney-in-fact, to the full extent permitted by law, for the purpose of carrying out the provisions of this Agreement and taking any action and executing any instrument that Pledgee deems necessary or advisable to accomplish the purposes of this Agreement, including, without limitation, (a) to affix to certificates and documents representing the Collateral the endorsements or other instruments of transfer or assignment delivered with respect thereto and to transfer or cause the transfer of the Collateral, or any part thereof, on the books of the issuer thereof; (b) to give such orders and instructions to the issuer of any Shares or its transfer agent as the Pledgee in its sole discretion shall determine, with respect to the transfer on the books of the issuer of the Shares to be transferred to the Custodian in order to effect such transfer (including giving the names in which new certificates for such Shares are to be issued and the denominations thereof) and the delivery to or for the account of the Custodian of certificates for such Shares; and (c) to endorse (in blank or otherwise) on behalf of Pledgor the certificate(s) representing any Shares, and one or more stock powers attached to such certificate(s). The power of attorney granted pursuant to this Agreement and all authority hereby conferred are granted and conferred solely to protect Pledgee's interest in the Collateral and shall not impose any duty upon Pledgee to exercise any power. This power of attorney shall be irrevocable as one coupled with an interest. 3. Representations and Warranties. Pledgor represents and warrants to Pledgee (which representations shall be deemed to be repeated as of each date on which it delivers any Additional Shares) that: (a) Pledgor is the sole legal and beneficial owner of the Collateral and has the right to pledge and transfer such Collateral free and clear of any security interests, liens or encumbrances. (b) Pledgor has full power and authority to create a first lien on the Collateral in favor of Pledgee and no disability or contractual obligation exists which would prohibit Pledgor from pledging the Collateral pursuant to this Agreement. (c) The Shares have been duly authorized and validly issued, are fully paid and non-assessable, and have been registered under the Securities Act of 1933, as amended, and are freely tradeable on the public markets. (d) The Collateral is not the subject of any present or threatened suit, action, arbitration, administrative or other proceeding, and Pledgor knows of no reasonable grounds for the institution of any such proceedings. All the above representations and warranties shall survive the making of this Agreement. 4. Covenants. Pledgor covenants to Pledgee that: (a) Pledgor will not assign, create or permit to exist any other claim to, lien or encumbrance upon, or security interest in any of the Collateral other than the security interest granted to Pledgee herein. (b) If any restrictive legends appear on the certificates evidencing the Shares, Pledgor will exercise its right to have such legends removed. (c) Pledgor will execute and deliver such documents, and take or cause to be taken such actions, as Pledgee may reasonably request to create, preserve, perfect, enforce or validate the Pledgee's security interest in and rights with respect to the Collateral. (d) Pledgor will promptly give notice to Pledgee of, and defend against, any suit, action, proceeding or lien that involves any Collateral or that could adversely affect the security interest in the Collateral granted by Pledgor hereunder. 5. Care and Maintenance of Collateral. The Collateral shall be maintained by the Custodian pursuant to the Custodial Agreement. 6. Credit Support Document. This Agreement shall constitute a Credit Support Document for all purposes of the Master Agreement, including, without limitation, for purposes of Sections 3 and 5 thereof. 7. Pledgor Defaults. Each of the following shall constitute an event of default hereunder (each a "Pledgor Default"): (a) An Acceleration Event shall occur under the Note; (b) An Event of Default or a Termination Event shall occur under the Master Agreement; (c) Pledgor shall fail to pay any amounts due Pledgee under the Master Agreement following an Event of Default or a Termination Event thereunder; or (d) Pledgor shall breach or fail to observe or perform any provision of this Agreement. 8. Remedies Upon Default. (a) Upon the occurrence and during the continuance of a Pledgor Default, Pledgee shall have the right to exercise all such rights as a secured party under the Uniform Commercial Code of the State of New York as it, in its sole judgment, shall deem necessary or appropriate, including the right to cause the Custodian to sell, pursuant to the Custodial Agreement, all or any part of the Collateral at one or more public or private sales upon two days' written notice to Pledgor, and any such sale or sales may be made for cash, upon credit, or for future delivery, and in connection therewith, Pledgee may grant options, provided that any such terms or options shall, in the best judgment of Pledgee, be extended only in order to obtain a better price. Further Pledgee may Set-Off any Obligations against any Collateral. Pledgee hereby waives, to the extent permitted by applicable law, any equity or right of redemption, in the Collateral. (b) Pledgor recognizes that Pledgee may be unable to effect a public sale of all or a part of the Collateral by reason of certain prohibitions contained in the Securities Act of 1933, as amended ("Act"), so that Pledgee may be compelled to resort to one or more private sales to a restricted group of purchasers who will be obliged to agree, among other things, to acquire the Collateral for their own account, for investment and without a view to the distribution or resale thereof. Pledgor understands that private sales so made any be at prices and on other terms less favorable to the seller than if the Collateral were sold at public sales, and agrees that Pledgee has no obligation to delay the sale of any of the Collateral for the period of time necessary (even if Pledgee would agree), to register such securities for sale under the Act. Pledgor agrees that private sales made under the foregoing circumstances shall be deemed to have been made in a commercially reasonable manner. (c) Pledgee may elect to obtain the advice of any independent investment banking firm with respect to the method and manner of sale or other disposition of any of the Collateral, the best price reasonably obtainable therefor, the consideration of cash and/or credit terms, or any other details concerning such sale or disposition. (d) All of Pledgee's rights and remedies under this Agreement and under applicable law, including but not limited to the foregoing, shall be cumulative and not exclusive and shall be enforceable alternatively, successively or concurrently as Pledgee may deem expedient. (e) If any consent, approval or authorization of, or filing with, any governmental authority or any other person or entity should be necessary to effectuate any sale or other disposition of the Collateral, or any partial disposition of the Collateral, Pledgor agrees to execute all such applications and other instruments as may be required in connection with securing any such consent, approval or authorization, and will otherwise use its best efforts to secure the same. Pledgor agrees to do or cause to be done all such acts and things as may be necessary to make the sale of the Collateral or any part thereof valid and binding and in compliance with applicable law, including, without limitation, the Securities Act of 1933, as amended. (f) After the sale of the Collateral following a Pledgor Default, Pledgee may deduct all reasonable legal and other expenses and attorney's fees for preserving, collecting, selling and delivering the Collateral and for enforcing its rights with respect to the Obligations, and shall apply the residue of the proceeds to the Obligations in such manner as Pledgee in its reasonable discretion shall determine, and shall pay the balance, if any to Pledgor. (g) Notwithstanding anything herein to the contrary, the Pledgee may exercise its remedies hereunder only upon the termination of the Master Agreement and the Note. 9. Release of Collateral. The pledge of a grant of a security interest in the Collateral pursuant to this Agreement shall be of no further force or effect and the Collateral shall be returned to Pledgor within five business days of payment and performance in full of the Obligations to Pledgee. 10. Miscellaneous. (a) All notices, consents, approvals and other communications required or permitted hereunder shall be addressed to the receiving party at the address set forth below its signature. All such communications shall be delivered personally or by facsimile or by courier or sent by first class mail, postage prepaid. Communications by mail shall be deemed delivered upon receipt. (b) This Agreement shall be construed in accordance with, and the rights of the parties shall be governed by, the law of the State of New York. (c) This Agreement may not be amended or modified except by a written instrument signed by Pledgee and Pledgor. (d) This Agreement and the agreements and instruments executed in connection herewith constitute the entire agreement between Pledgee and Pledgor with respect to the subject matter hereof and supersede all prior agreements, understandings, offers and negotiations, oral or written. (e) This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which shall together constitute one and the same document. IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. Pledgor: Petrie Stores Liquidating Trust By: /s/ Stephanie R. Joseph Name: Stephanie R. Joseph Title: Manager and Chief Executive Officer Pledgee: Canadian Imperial Bank of Commerce By: /s/ Wayne J. Halenda Name: Wayne J. Halenda Title: Vice President By: /s/ Antonio Lobo Name: Antonio Lobo Title: Vice President EXHIBIT A TO STOCK PLEDGE AGREEMENT Corporation Shares Class of Stock Certif. No(s) Number of Shares Toys "R" Us, Inc. ("TOY") common 2,000,000 EX-99 6 EXHIBIT 99.5 - TRI-PARTY CUSTODY AGREEMENT Exhibit 99.5 EXECUTION COPY TRI-PARTY CUSTODY AGREEMENT BY AND AMONG PETRIE STORES LIQUIDATING TRUST (Pledgor) AND CANADIAN IMPERIAL BANK OF COMMERCE (Pledgee) AND UNITED STATES TRUST COMPANY OF NEW YORK (Custodian) TRI-PARTY CUSTODY AGREEMENT THIS AGREEMENT (this "Agreement") is made and entered into as of the date written below by and among Pledgor, Pledgee, and Custodian as identified upon the signature page hereof. R E C I T A L S WHEREAS, Pledgor has executed a Master Pledge Agreement dated as of December __, 1997 in favor of Pledgee (the "Pledge Agreement") providing for the pledge and delivery of collateral for security for the obligations of Pledgor under a certain Master Agreement (the "Master Agreement"); and WHEREAS, Custodian is authorized to hold securities and properties and to utilize agents, correspondent banks or affiliates where appropriate for the custody, retention, safekeeping and processing of securities and properties, and to use other means available to it for the custody, retention, safekeeping and processing of securities and properties; and WHEREAS, Custodian has agreed to act as custodian of certain monies and securities on behalf of Pledgee as described herein, NOW THEREFORE, in consideration of the mutual promises set forth herein and intending to be legally bound hereby, it is agreed as follows: 1. DEFINITIONS Unless otherwise defined herein, terms defined in the Master Agreement or the Master Pledge Agreement will have such defined meanings when used herein. In addition, as used in this Agreement, the following terms will have the following meanings: "Authorized Person". A person described on Exhibit C hereto. "Business Day" or "New York Banking Day". Any day on which commercial banks are open for business in New York, New York. "Collateral". All securities, obligations and other property (including cash) and all additions and substitutions therefor, all of a type agreed to in writing (which may include a Confirmation) by Pledgor and Pledgee, which are pledged to and received by Pledgee under the Pledge Agreement, together with all collections, income, distributions and claims in respect thereof, all proceeds of any of the foregoing and all powers and rights of the Pledgor now or hereafter acquired by the Pledgor, including rights of enforcement, under any or all of the foregoing. "Collateral Account". The account or accounts described in Paragraph 4a. hereof as the Collateral Account. "Collateral Securities". All securities comprising the Collateral. "UCC". The Uniform Commercial Code as in effect from time to time in the State of New York. 2. SERVICES OF CUSTODIAN a. Appointment of Custodian. Pledgor and Pledgee hereby jointly appoint Custodian as custodian to hold in custody all Collateral at any time transferred by Pledgor to Pledgee as security for Pledgor's obligations to Pledgee under the Master Agreement to the extent that such Collateral shall be delivered by Pledgor or Pledgee to the Custodian. Custodian shall act as agent of Pledgee with respect to such Collateral. b. Acceptance of Custodian. Custodian accepts the appointment and, subject to the terms and conditions of this Agreement, agrees to receive Collateral in the manner specified herein to be held hereunder, and to hold, release, or otherwise dispose of such Collateral as hereinafter provided. Custodian will act solely on the instructions of Pledgor and Pledgee as specifically set forth under this Agreement. c. Scope of Custodian's Duties. Custodian's duties hereunder shall continue until altered in writing by the parties hereto or until the termination of this Agreement. Custodian undertakes to perform only those duties which are expressly set forth in this Agreement and no covenant or obligation shall be implied in this Agreement against Custodian. If Collateral shall not be held or disposed of as required by the Pledge Agreement or a collateral transaction shall not be completed for any reason whatsoever (other than Custodian's failure to perform its obligations hereunder) and Custodian shall request further instructions as hereinafter provided, Custodian's duties to Pledgor and Pledgee shall be limited to accepting new instructions with respect to any transaction, holding Collateral or transferring or delivering Collateral as hereinafter provided. d. Authorization: Agents, Subcustodians, and Securities Custody. Pledgor and Pledgee authorize Custodian to utilize agents, subcustodians, depositories, correspondent banks and affiliates (collectively, "Agents") to process deliveries in and out of the Collateral Account and to hold Collateral and to use any other means legally available to it for the retention, processing or maintenance of Collateral; provided that the representations and warranties of the Custodian would be true and correct for such Agent and such Agent is able and does maintain the Collateral in compliance with Paragraph 4 hereof. References to "Custodian" hereunder shall be deemed to include other agents of Custodian to the extent that such entities perform Custodian's duties under this Agreement. Neither the appointment of any other agent, subcustodian, depository, correspondent bank or affiliate nor any other action taken pursuant to this Paragraph 2d. shall relieve Custodian of any of its obligations under this Agreement. Pledgor further authorizes Custodian to hold securities constituting part of the Collateral in bulk or to hold such securities registered in street name, or in the name of Custodian's nominee or the nominee of its agents or affiliates, in each case in negotiable form. 3. REPRESENTATIONS AND WARRANTIES a. Representations of Pledgor and Pledgee. Pledgor and Pledgee each represents and warrants to Custodian as of the date hereof, as of each Purchase Date, and as of each Repurchase Date, the following: (i) It is duly organized and existing under the laws of the jurisdiction of its organization with full power and authority to execute and deliver this Agreement and to perform all the duties and obligations to be performed by it hereunder. (ii) This Agreement has been duly authorized, executed, and delivered, and the performance of all transactions contemplated hereunder has been duly authorized, in accordance with all requisite corporate action, and this Agreement constitutes a valid, legal and binding obligation enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors rights generally. (iii) The execution, delivery, and performance of this Agreement, and the performance of the transactions contemplated hereunder, will not violate any agreement by which it is bound or by which any of its assets are affected, or its charter, by-laws, or any statute, regulation, rule, order or judgment applicable to it. (iv) It has the power and authority to enter into the Master Agreement and the Pledge Agreement and to deliver and transfer the Collateral to be delivered or transferred by it hereunder. (v) It is acting as principal in executing this Agreement and will act as principal in all transactions hereunder. b. Representations of Custodian. Custodian represents and warrants to Pledgor and Pledgee as of the date hereof and as of each date on which any Collateral is held, delivered to the Custodian or delivered out by the Custodian the following: (i) It is duly organized and existing under the laws of the jurisdiction of its organization with full power and authority to execute and deliver this Agreement and to perform all the duties and obligations to be performed by it hereunder. (ii) This Agreement has been duly authorized, executed, and delivered, and the performance of all transactions contemplated hereunder has been duly authorized, in accordance with all requisite corporate action, and this Agreement constitutes a valid, legal and binding obligation enforceable in accordance with its terms, except as may be limited by bankruptcy, insolvency or similar laws, or by equitable principles relating to or limiting creditors' rights generally. (iii) The execution, delivery, and performance of this Agreement, and the performance of the transactions contemplated hereunder, will not violate any agreement by which it is bound or by which any of its assets are affected, or its charter, by-laws, or any statute, regulation, rule, order or judgment applicable to it. (iv) It will maintain the Collateral Account as a custody account and shall administer the Collateral Account in the same manner it administers similar accounts established for the same purpose, and it shall create and maintain the books and records created in connection with the Collateral Account in the State of New York. Custodian in the ordinary course of its business maintains custody accounts for customers with respect to cash and securities (including those securities and instruments of the types constituting Collateral as defined herein) and with respect to securities held by it hereunder will be acting in that capacity. (v) It is a bank and trust company chartered under the laws of the State of New York with its principal office at 114 West 47th Street, New York, New York 10036. Custodian in the ordinary course of its business maintains securities custody accounts for its customers and when performing services pursuant to this Agreement, Custodian shall be acting in that capacity. Custodian regularly accepts in the course of its business securities such as Collateral Securities as a custodial service for customers and maintains accounts in the names of such customers reflecting ownership of or interest in such securities. Custodian shall administer the Collateral Account in the same manner in which it administers similar accounts of other customers established for the same purpose. c. Continuing Warranties of Custodian. Custodian shall promptly notify Pledgee and Pledgor if any of Custodian's representations hereunder shall be or become untrue or misleading in any material respect. 4. MAINTENANCE OF THE COLLATERAL ACCOUNT a. The Collateral Account. Custodian shall maintain such records and establish such accounts on its books as may be required from time to time to receive, hold and account for all cash and securities to be held as Collateral pursuant to this Agreement. b. Transfer of Collateral Securities to the Collateral Account. Each security constituting part of the Collateral shall be continuously maintained by Custodian in the Collateral Account. Custodian shall continuously identify such Collateral Securities as belonging to the Pledgee and identified to the Collateral Account on Custodian's books and records. Whenever any security constituting part of the Collateral is transferred to the Custodian, the Custodian shall send to the Pledgee a confirmation of such transfer and a certificate with respect to such securities in the form of Exhibit E hereto. Upon receipt of any securities by the Custodian from the Pledgor for the benefit of the Pledgee, the Custodian shall immediately notify the Pledgee of such receipt and the Custodian shall by identify such securities as subject to Pledgee's interest. On the first Business Day of each month on which Collateral is held, Custodian shall forward to Pledgor and Pledgee a statement identifying the securities held in the Collateral Account. Custodian shall maintain cash in the Collateral Account in immediately available funds. c. Segregation of Assets. Custodian shall segregate and separately account on its books and records for all cash and securities held for customers, including the Collateral Account from assets it holds in its individual capacity. Custodian shall maintain and hold in custody cash and securities held in the Collateral Account until: (i) it shall receive Pledgee's instructions to deliver or transfer to Pledgee cash and Collateral Securities, as provided in Paragraph 16 hereof; or (ii) this Agreement is terminated. d. Pledge by Custodian. The Collateral Account shall not be subject to any security interest, lien or any right of set-off by Custodian. Custodian shall not pledge, encumber, hypothecate, transfer, dispose of, or otherwise grant any party other than Pledgor and Pledgee an interest in, any cash or securities held by Custodian as collateral pursuant to this Agreement. 5. RECEIPT OF INSTRUCTIONS; PAYMENT OF MONIES; DELIVERY OF SECURITIES a. Terms of Instructions. If at any time, the terms of Pledgor's instructions and Pledgee's instructions are not identical, Custodian shall notify Pledgor and Pledgee, who shall use their best efforts to provide new instructions as quickly as possible. Except as provided in this Agreement with respect to a Notice of Collection, in the event of such a conflict Custodian shall take no action and shall wait for further instructions from Pledgor and Pledgee for three (3) Business Days, after which time the Custodian shall follow the instructions of Pledgee. b. Cash Transfers. All payments of cash shall be maintained in the Collateral Account or be credited to Pledgee, as instructed by Pledgee, in immediately available funds and effected by wire transfer to the appropriate account designated in Exhibit B hereto. c. Securities Transfers. All transfers of securities to be transferred to the Collateral Account shall be effected by Pledgee's transfer of the same to the account and at the location and within the time periods designated in Exhibit A hereto. All securities transferred to Custodian shall be in negotiable form. d. Effect of Notice of Levy etc. Notwithstanding anything in this Agreement to the contrary, Custodian shall not be required to deliver or transfer cash or securities in contravention of any notice of levy, seizure or similar notice or order, or judgment, issued or directed by a governmental agency or court, or officer thereof, having jurisdiction over Custodian or its agent or affiliates, which on its face affects such cash or securities. Custodian shall give Pledgor and Pledgee prompt notice of any such notice or order. e. Collateral Securities. Upon the transfer of securities or cash to the Collateral Account, it is agreed by Pledgee and Pledgor that the securities or cash held by Custodian in the Collateral Account shall be subject to the pledge, lien, and security interest granted by Pledgor to Pledgee. 6. [RESERVED] 7. CUSTODIAN STATEMENTS Custodian shall provide Pledgor and Pledgee with semi- monthly information statements reflecting cash and securities positions in the Collateral Account as of the 1st and 15th day of each month. Pledgor and Pledgee shall promptly review all such information statements and shall promptly advise Custodian of any error, omission, or inaccuracy in the cash transactions, cash balances, securities deposits and withdrawals or securities positions reported. Custodian shall undertake to correct any errors, failures, or omissions that are reported to Custodian by Pledgor or Pledgee. Any such corrections shall be reflected on subsequent information statements. 8. CUSTODIAN FEES AND EXPENSES Pledgor shall pay Custodian's fees and expenses including reasonable legal fees incurred in connection with the execution and delivery of this Agreement and thereafter for services provided pursuant to this Agreement. 9. NO GUARANTY BY CUSTODIAN PLEDGOR AND PLEDGEE SPECIFICALLY ACKNOWLEDGE THAT CUSTODIAN IS NOT GUARANTEEING PERFORMANCE OF THE OBLIGATIONS OF PLEDGOR OR PLEDGEE HEREUNDER, UNDER THE PLEDGE AGREEMENT OR MASTER AGREEMENT OR WITH RESPECT TO ANY TRANSACTION OR ASSUMING ANY LIABILITY WITH RESPECT TO THE PERFORMANCE OF PLEDGOR OR PLEDGEE, NOR IS CUSTODIAN UNDERTAKING ANY CREDIT RISK ASSOCIATED WITH THE TRANSACTIONS, WHICH LIABILITIES ARE THE RESPONSIBILITY OF PLEDGOR AND PLEDGEE. FURTHER, EXCEPT AS MAY BE ARRANGED BY A SEPARATE AGREEMENT, CUSTODIAN IS UNDER NO OBLIGATION TO UNDERTAKE TO MAKE ANY CREDIT AVAILABLE TO EITHER PLEDGOR OR PLEDGEE TO ENABLE EITHER OF THEM TO COMPLETE TRANSACTIONS. 10. FORCE MAJEURE Any party to this Agreement (the "Obligor") shall not be liable for any expense, loss, claim or damage (including counsel fees) suffered by any other party to this Agreement arising out of or caused by any delay in, or failure of, performance by the Obligor, in whole or in part, arising out of, or caused by, acts of God; interruption of, delay in, or loss (partial or complete) of electrical power or communication services provided to the Obligor by unaffiliated parties; act of civil or military authority; sabotage; natural emergency; epidemic; war or other government action; civil disturbance; flood, earthquake, drought, fires or other catastrophe; strike or other labor disturbance by employees or personnel of unaffiliated Parties; government, judicial, or self regulatory organization order, rule, or regulation adopted or entered after the date hereof; or riot; provided, however, that such expenses, losses, claims or damages do not arise from circumstances within the Obligor's control. For purposes of this Paragraph 10, Obligor, with respect to Custodian, shall be deemed to include affiliates. Nothing in this Paragraph 10 shall be read to affect the indemnity provided in Paragraph 12 hereof. 11. CONCERNING THE CUSTODIAN a. Intermediary. With respect to all securities delivered or transferred by Custodian hereunder, Custodian shall be deemed an "intermediary" within the meaning of Section 8- 306(3) of the UCC and, except as expressly provided in Paragraph 3b. hereof, the only warranty given by Custodian shall be the warranty provided in Section 8-306(3) of the UCC. b. Delay in Receiving Cash or Securities. Custodian shall not be liable for any expense, loss, claim or damage (including counsel fees) that Pledgor, Pledgee or any other third-party may suffer by reason of any delay Pledgor, Pledgee or Custodian may experience in obtaining cash or securities from, or by reason of any action or omission to act on the part of, any depository, clearing agent, transfer agent, issuer, securities broker or dealer, any other party, or the FRBNY securities wire transfer system, or in obtaining cash from any bank, including the FRBNY, clearing agent, or other party, unless such expense, loss, claim or damage arose by reason of a delay in obtaining cash, or securities from, or by reason of gross negligence or willful misconduct on the part of, Custodian. c. Forgery; False Data. Custodian shall not be liable for any expense, loss, claim or damage (including counsel fees) Pledgor, Pledgee or any other third-party may suffer by reason of any failure of signature by an Authorized Person on or inaccuracy, incompleteness or falsity of any notice or instruction or any other written instrument or inaccuracy, incompleteness or falsity of data transmitted by computer tape or terminal or other computer facilities, if Custodian shall have reasonably believed that such instructions, instrument or data was for the account or benefit of Pledgor or Pledgee or that the writing was signed by, or the data was transmitted by, an Authorized Person. d. No Duty of Inquiry. Without limiting the generality of the foregoing, Custodian shall be under no obligation to inquire into, and shall not be liable for: (i) the title, validity or genuineness of any security; (ii) the legality of the purchase or delivery or transfer of any security or the propriety of the price at which the same are acquired or sold; (iii) the due authority of any Authorized Person to act on behalf of Pledgor or Pledgee with respect to cash or securities held in the Collateral Account; or (iv) the due authority of Pledgor to deliver cash or any security delivered to Pledgee or Custodian pursuant to this Agreement. e. Price Data. Custodian shall not be liable for any expense, loss, claim or damage (including counsel fees) Pledgor, Pledgee or any third person may suffer by reason of any error in, or any inaccuracy of, any price received from the Pledgor or any other pricing source. Custodian shall have no duty to inquire into the appropriateness or relative change of any price nor shall Custodian be required to determine volatility factors with respect to any price. f. Limitation of Liability. Custodian shall use reasonable care in performing its obligations hereunder. Custodian shall be liable to Pledgor and Pledgee as their interests may appear for the negligent loss of securities and cash from the Collateral Account by reason of robbery, burglary or theft by it or its employees, agents or delegates. Notwithstanding any other provision of this Agreement, Pledgor and Pledgee agree that Custodian's liability hereunder shall be limited to the direct damages resulting from Custodian's breach of this Agreement, and in no event shall Custodian be liable for special, consequential or incidental damages incurred or suffered by Pledgor or Pledgee. 12. INDEMNIFICATION Pledgor agrees to release, indemnify and hold harmless, Custodian, its directors, officers, employees or agents (the "Indemnified Parties") for all costs, losses, expenses, damages, liabilities or claims, including reasonable fees and expenses of counsel, which any of them may sustain or incur or which may be asserted against any of them (i) relating to those areas of liability expressly disclaimed or restricted in this Agreement or (ii) by reason of or as a result of any action taken or omitted by them in connection with operating under this Agreement or resulting from any actual or alleged breach of this Agreement by Pledgor or Pledgee (including costs and expenses of the Indemnified Parties' defense of or participation in regulatory investigations, administrative proceedings or other legal proceedings), except those losses and damages, including counsel's fees and expenses, arising out of the gross negligence or willful misconduct of the Indemnified Party. Any Indemnified Party that is made a defending party in an action, claim or administration proceeding, the expense of the defense of which is covered by this Paragraph 12, shall so notify Pledgor immediately. Pledgor shall have the right at its election to take over the defense or settlement of such action, claim or administrative proceeding by giving prompt notice to the Indemnified Party that it will do so. If Pledgor makes such election, it may conduct the defense of such action, claim or administrative proceeding through counsel of its choice and the Indemnified Party shall be bound by the result of Pledgor's defense or settlement of the action, claim or administrative proceeding. 13. CONTINUING DISPUTES In the event of any dispute between or conflicting claims by Pledgor and Pledgee and any other party, except Custodian, with respect to securities or cash in the Collateral Account, Custodian may decline to comply with any and all claims, demands or instructions with respect to such Collateral Securities or cash so long as such dispute or conflict shall continue, and Custodian shall not be liable for failure to act or to comply with such claims, demands or instructions. Custodian shall be entitled to refuse to act or comply until either (i) such conflicting or adverse claims or demands shall have been determined in a court of competent jurisdiction or settled by agreement between the conflicting parties and Custodian shall have received evidence satisfactory to it of the same, or (ii) Custodian shall have received security or an indemnity satisfactory to it sufficient to hold it harmless from and against any and all losses or damages, including counsel's fees and expenses, which it may incur by reason of taking any action. 14. FORM OF INSTRUCTIONS Instructions shall be in writing and effective from the time they are actually received by an Authorized Person of Custodian from an Authorized Person of the instructing party or from a person reasonably believed by Custodian to be an Authorized Person of the instructing party by mail, by telecopy or other facsimile machine, or any other means designated by the Custodian. 15. TERMINATION Any of the parties hereto may terminate this Agreement by giving to the other parties a notice in writing specifying the date of such termination, which shall be not less than ninety days after the date of giving of such notice, except that if any of the representations made by Custodian hereunder have become untrue or misleading in any material respect, Pledgor and Pledgee may terminate this Agreement immediately; provided, however, that no termination of this Agreement shall be effective until a successor custodian (reasonably acceptable to Pledgee) has accepted the duties of Custodian. Custodian shall remain liable for its representations and warranties hereunder after termination of this Agreement. Custodian shall deliver any securities or cash remaining in the Collateral Account on termination of this Agreement to a successor custodian designated in written instructions from Pledgor and Pledgee. 16. NOTICE OF COLLECTION a. Delivery of Notice of Collection. If Pledgee shall elect to demand collection of all or any part of the Collateral, it shall deliver a Notice of Collection to Custodian and the Pledgor. Such notice of Collection shall only be given to the Custodian after three New York Banking Days' written notice to Pledgor as required by Section 7 of the Pledge Agreement and shall recite the satisfaction such notice requirement. Custodian shall notify the Pledgor of the receipt of a Notice of Collection but shall have no further obligation or duty to inquire into the nature or validity of the failure to pay any Obligation or portion thereof by Pledgee set forth in the Notice of Collection. b. Effect of Pledgee's Notice of Collection. From and after receipt of a Notice of Collection from Pledgee hereunder, Custodian shall continue to hold all securities and cash in the Collateral Account unless it shall receive instructions from Pledgee to transfer all or any part of the Collateral Securities and cash in the Collateral Account. c. Further Assurances. If Custodian receives a Notice of Collection from the Pledgee, Custodian shall continue to provide custody services with respect to securities and cash held in the Collateral Account for a period not to exceed 90 days but shall not be required to provide additional services unless Pledgee gives Custodian assurances that Pledgee shall pay Custodian's fees or Pledgor undertakes to pay Custodian's fees for such additional services. 17. MISCELLANEOUS a. Authorized Personnel. Exhibit C hereto contains the names, titles and specimen signatures of those individuals authorized to act on behalf of Pledgor and Pledgee and the purposes for which each is authorized. It is understood that certain designated persons may be Authorized Persons for limited purposes set forth in Exhibit C hereto. Pledgor and Pledgee agree to furnish to all parties a written notice if any such individual authorized by either of them ceases to be authorized or if other or additional authorized individuals are appointed and authorized. Upon receipt and acknowledgment of a notice from Pledgor or Pledgee that an individual is no longer an Authorized Person, Custodian shall cease accepting instructions from such person as soon as practicable thereafter. b. Notices. Any notice authorized or required by this Agreement shall be sufficiently given if addressed to the receiving party and hand delivered or sent by mail, telecopy or other facsimile machine to the receiving party, to the other party to this Agreement. Any such notice shall be addressed to the individuals at the addresses set forth on Exhibit D hereto or to such other person or persons as the receiving party may from time to time designate to the other parties in writing and shall become effective upon receipt. c. Amendments. Except as otherwise expressly provided in this Agreement, this Agreement may not be amended or modified in any manner except by a written agreement executed by all the parties by an Authorized Person of each party. No waiver or acceptance of performance other than as provided herein on the part of any party shall constitute a waiver or acceptance of such performance in the future. d. Binding Agreement. This Agreement shall extend to and shall be binding upon the parties hereto, and their respective successors and assigns (including any trustees, conservators or other officers of the court in any bankruptcy or insolvency proceeding); provided, however, that this Agreement shall not be assignable by any party without the written consent of the other parties hereto and any such assignment shall be null and void. If any provision of this Agreement shall be inconsistent or conflict with any provision of the Master Agreement or the Master Pledge Agreement, the provisions of this Agreement shall control. e. Survival. All releases and indemnifications provided in this Agreement shall survive the termination of this Agreement. f. Applicable Law. This Agreement shall be construed in accordance with the laws of the State of New York without giving effect to the conflict of law principals thereof. g. Headings and References. The headings and captions in this Agreement are for reference only and shall not affect the construction or interpretation of any of its provisions. Except as expressly provided herein, all references to Paragraphs, Subparagraphs and Exhibits refer to the Paragraphs, Subparagraphs and Exhibits of this Agreement. h. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but such counterparts shall, together, constitute only one Agreement. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their respective corporate officers, thereunto duly authorized, as of the 31st day of December, 1997. Pledgor: PETRIE STORES LIQUIDATING TRUST By: /s/ Stephanie R. Joseph Name: Stephanie R. Joseph Title: Manager and Chief Executive Officer Pledgee: CANADIAN IMPERIAL BANK OF COMMERCE By: /s/ Wayne J. Halenda Name: Wayne J. Halenda Title: Vice President By: /s/ Antonia Lobo Name: Antonia Lobo Title: Vice President Custodian: UNITED STATES TRUST COMPANY OF NEW YORK By: /s/ Patricia Stermer Name: Patricia Stermer Title: Assistant Vice President EXHIBIT A TRANSFER OR DELIVERY OF SECURITIES - Procedures CUSTODIAN'S ACCOUNT Location: Account Designation: Timing for deliveries: The foregoing may be amended from time to time by agreement of Pledgee and Custodian. PLEDGOR'S ACCOUNT Location: Account Designation: Timing for deliveries: The foregoing may be amended from time to time by agreement of Pledgor and Custodian. EXHIBIT B DESCRIPTION OF ACCOUNTS CASH A. The Collateral Account ABA: Name: A/C: A/C Name: B. Pledgor's Delivery Instructions ABA: Name: A/C: A/C Name: C. Pledgee's Delivery Instruction ABA: Name: For Credit of: DDA Account No.: Reference: Trust A/C: Branch: Attention: EXHIBIT C AUTHORIZED PERSONS PLEDGOR [SEE ATTACHED] I, , a Secretary of _______________ (the "Corporation"), a corporation duly incorporated under the laws of the State of _________, do hereby certify that the titles and specimen signatures of the persons listed below are true and correct: NAME SIGNATURE IN WITNESS WHEREOF, I set my hand and placed the seal of the Corporation this day of , 1993 [PLEDGOR] [Secretary] EXHIBIT C (Continued) AUTHORIZED PERSONS PLEDGEE Signature Name Official Title EXHIBIT C (continued) AUTHORIZED PERSONS CUSTODIAN Name, Title, Purpose Specimen 1. Corporate Trust Officer 2. Assistant Vice President 3. Assistant Vice President 4. Vice President The information hereon may be amended or deleted unilaterally by the party designating the Authorized Persons by notice in writing to the other parties hereto. EXHIBIT D NOTICES TO PLEDGEE: Name: Title: Address: Telephone: Fax No.: TO PLEDGOR: Name: Title: Address: Telephone: Fax No.: TO CUSTODIAN: Name: Title: Address: Telephone: Fax No.: EXHIBIT E CERTIFICATE OF THE CUSTODIAN This Certificate is submitted by _______________ (the "Custodian") in connection with the securities listed in the attached Exhibit 1 (the "Securities"). The Custodian by its duly authorized officer hereby certifies and confirms to ________________ (the "Pledgee") that: (1) The Securities are being and will be held in the [COLLATERAL ACCOUNT] of the Custodian (or its nominee). (2) The Custodian has by book entry or otherwise identified on its records that the Securities are being held, and will continuously be held, in a segregated non-fungible account at the Custodian in favor of the Pledgee, and has confirmed to the Pledgee that it has made such identification. (3) The Custodian in the ordinary course of its business maintains security accounts for its customers, regularly accepts [Describe Collateral Securities] as a custodial service for customers and maintains accounts in the names of such customers reflecting ownership of or interest in such securities. (4) The Custodian has credited the Collateral Securities to the account of the Pledgee in good faith and without notice of any adverse claim to the Collateral Securities. DATE: ________________________ [CUSTODIAN] By: Title: -----END PRIVACY-ENHANCED MESSAGE-----