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CONFORMED VERSION
CONFIRMATION FOR EQUITY SWAP TRANSACTION
AMONG TRANSMISSION FUTURE NETWORKS B.V. , FRANCE TELECOM S.A.
AND SALOMON BROTHERS INTERNATIONAL LIMITED
The purpose of this confirmation, dated as of July 5, 2000 (this
"Confirmation"), is to set forth the terms and conditions of the equity swap
transaction (the "Transaction") that Transmission Future Networks B.V.
("Counterparty") and France Telecom S.A. ("FT", and FT together with
Counterparty, the "FT Parties") entered into with Salomon Brothers International
Limited ("Salomon") on the Trade Date specified below. This Confirmation
evidences a complete binding agreement between the FT Parties and Salomon as to
the terms of the Transaction to which this Confirmation relates.
This Confirmation will be governed by and construed in accordance
with the laws of the State of New York (without reference to choice of law
doctrine). The parties hereby irrevocably submit to the exclusive jurisdiction
of the courts of the State of New York in the Borough of Manhattan in New York
City and the United States District Court for the Southern District of New York
in connection with all matters relating hereto and waive any objection to the
laying of venue in, and any claim of inconvenient forum with respect to, these
courts.
1. Each party will make each payment specified in this Confirmation
as being payable by it, not later than the due date for value on that date in
the place of the account specified below or otherwise specified in writing. This
Confirmation shall constitute the written agreement between the FT Parties and
Salomon with respect to this Transaction.
2. Each obligation of the FT Parties, on the one hand, and Salomon,
on the other hand, under Sections 5, 6, 7 and 11(h) of this Confirmation is
subject to (i) the condition precedent that no Event of Default or Potential
Event of Default with respect to the other has occurred and is continuing, (ii)
the condition precedent that no Early Termination Date has occurred or been
effectively designated and (iii) each other applicable condition precedent
specified in this Confirmation.
3. The Transaction to which this Confirmation relates is an equity
swap transaction, the terms of which are as follows:
4. CERTAIN DEFINITIONS:
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Business Day: means a day (other than a Saturday or a
Sunday) on which commercial banks
generally are open for business in London
and New York.
Calculation Period: means the period from and including each
Floating Amount Payment Date (or, in the
case of the first Calculation Period,
June 5, 2001) to but excluding the next
succeeding Floating Amount Payment Date.
Cash Dividends: means the amount of all cash dividends or
other cash distributions (net of any
withholding taxes that are required to be
withheld from such dividends or
distributions) received by or on behalf
of Salomon with respect to the Covered
Securities with an "ex-dividend" date
after the Trade Date and on or prior to
the final Sale Date (other than dividends
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<TABLE>
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resulting in an adjustment pursuant to
Section 8).
Commission: means (i) if the Covered Securities are
sold in an Underwritten Offering (as
defined in Section 7), 3% of the
aggregate offering price of such Covered
Securities; (ii) if the Covered
Securities are sold in a Gradual Market
Distribution or Block Sale, $0.03125 per
Common Share; and (iii) if the Covered
Securities are sold in an Alternative
Distribution, an amount to be agreed by
the parties.
Common Shares: means shares of the common stock of Crown
Castle, par value $0.01 per share.
Covered Securities: means the 17,713,536 Common Shares
constituting "Residual Shares" (as
defined in the Disposition Agreement)
acquired by Salomon pursuant to the
Purchase Agreement.
Credit Event: shall occur if (i) an "FT Credit Event"
(as defined in the Disposition Agreement)
has occurred or (ii) on or following the
Unwind Start Date, (A) FT's unsecured and
unsubordinated long-term debt rating is
at or below BBB- by Standard and Poor's
Ratings Services (or its successor) and
Baa3 by Moody's Investors Service, Inc.
(or its successor) (or either such rating
is suspended or withdrawn) and (B) the
government of France shall cease to own,
directly or indirectly, at least 51% of
the outstanding equity securities of FT.
Crown Castle: means Crown Castle International Corp.
Disposition Agreement: means the Disposition Agreement, dated as
of May 17, 2000, among Crown Castle,
Crown Castle UK Holdings Limited, FT,
Telediffusion de France International
S.A., Counterparty, and the financial
institutions party thereto, as amended
and supplemented on June 5, 2000 and from
time to time.
Exchange Act: means the U.S. Securities Exchange Act of
1934, as amended.
Floating Amount: means, for any Calculation Period, the
product of (i) the Outstanding Notional
Amount as of the end of such Calculation
Period, (ii) the applicable Floating Rate
for such Calculation Period, (iii) the
number of days in such Calculation Period
and (iv) 1/360.
Floating Amount Payment Date: means March 5, June 5, September 5 and
December 5 in each year commencing with
September 5, 2001 (or, if any such date
is not a Business Day, the next Business
Day).
Floating Rate: means, for any relevant period, LIBOR for
such period plus the Spread.
Initial Notional Amount: means $504,835,776.
Initial Price: means $28.50 per Covered Security.
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LIBOR: means, for any relevant period, the rate
per annum for U.S. dollar LIBOR for the
appropriate designated maturity, as
determined by Salomon, appearing (except
as provided in the following sentence) on
Telerate Page 3750 or any replacement of
that page at 11:00 a.m., London time, two
London business days prior to the start
of such period, provided that if the rate
does not appear on such page at that
time, it shall be determined as if
USD-LIBOR-Reference Banks (as defined in
the 1991 ISDA Definitions (with
appropriate modifications)) had been
specified for purposes of determining the
rate. If the relevant period is one week
or less, the designated maturity shall be
one week, and the rate shall be
determined as if USD-LIBOR-LIBO (as
defined in the 1991 ISDA Definitions
(with appropriate modifications)) had
been specified for purposes of
determining the rate. LIBOR shall
otherwise be determined by linear
interpolation if the relevant period does
not correspond exactly to a designated
maturity for which rates appear on
Telerate Page 3750 or its replacement.
Except as otherwise provided herein or
unless the parties otherwise agree, the
designated maturity for determining LIBOR
shall be three months.
Maturity Date: means the "Final Disposition Date" (as
defined in the Disposition Agreement)
(or, if such date is not a Trading Day,
the next Trading Day).
Net Settlement Amount: means, for any Settlement Date, (i) the
Sale Proceeds for such Settlement Date
minus (ii) the aggregate Commission for
the sale of all Covered Securities on the
related Sale Date minus (iii) the
aggregate Initial Price for the Covered
Securities sold on the related Sale Date.
Outstanding Notional Amount: means, as of any date, the Initial
Notional Amount minus the aggregate
Initial Price of all Covered Securities
sold pursuant to Section 7 with
Settlement Dates on or prior to such
date.
Principal Market: means the NASDAQ National Market System
or the principal national securities
exchange or quotation system on which the
Common Shares may be listed or otherwise
included in the future should they cease
to be quoted on such exchange or
quotation system.
Purchase Agreement: means the Purchase Agreement, dated as of
July 5, 2000, among Counterparty, FT and
Salomon.
Remaining Securities: means, as of any Trading Day, all Covered
Securities other than those Covered
Securities sold or caused to be sold by
Salomon hereunder on or prior to such
Trading Day.
Sale Date: means each date in the Unwind Period (as
defined in Section 7) on which Covered
Securities are sold pursuant to Section
7.
Sale Proceeds: means, for any Settlement Date, the
aggregate proceeds from the sale of
Covered Securities (net of any
withholding taxes that are required to be
withheld from such sales proceeds)
pursuant to Section 7 on the related
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<TABLE>
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Sale Date.
Securities Act: means the U.S. Securities Act of 1933, as
amended.
Settlement Floating Amount: means, for any Settlement Date, an amount
equal to the product of (i) the aggregate
Initial Price for all Covered Securities
sold on the related Sale Date, (ii) the
Floating Rate for the Calculation Period
in which such Settlement Date occurs,
(iii) the number of days in the period
from and including the immediately
preceding Floating Amount Payment Date
(or, prior to the first Floating Amount
Payment Date, from and including June 5,
2001) to but excluding such Settlement
Date, and (iv) 1/360.
Settlement Date: means, in respect of a Sale Date, the day
on which Salomon receives the aggregate
proceeds from the sale of Covered
Securities pursuant to Section 7 on such
Sale Date.
Spread: means 0.40% per annum.
Trade Date: means July 5, 2000.
Trading Day: means each day on which the Principal
Market is open for trading.
Unwind Start Date: means June 5, 2001 (or, if such date is
not a Trading Day, the next Trading Day)
or such earlier date as may be agreed by
the parties.
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5. FLOATING AMOUNT PAYMENTS:
(a) On the Trade Date, Counterparty shall pay to Salomon
$32,277,072.14.
(b) On the Trade Date, Counterparty shall pay to Salomon a
non-refundable prepaid spread of $1,766,925.22, and on June 5, 2001 (or, if such
date is not a Business Day, the next Business Day), Counterparty shall pay to
Salomon a non-refundable prepaid spread of 0.10% multiplied by the Outstanding
Notional Amount on such date.
(c) On each Floating Amount Payment Date, Counterparty shall pay to
Salomon an amount equal to (i) the Floating Amount for the Calculation Period
ending on such Floating Amount Payment Date minus (ii) an amount equal to the
amount of all Cash Dividends received in respect of the Covered Securities
during such Calculation Period.
(d) On each Settlement Date, Counterparty shall pay to Salomon the
Settlement Floating Amount for such Settlement Date.
(e) If the parties agree to an Unwind Start Date that is prior to June
5, 2001, Salomon will refund a portion of the payment made pursuant to Section
5(a), which portion shall be determined based on (i) the period remaining until
June 5, 2001 as compared to the period from the Trade Date until June 5, 2001,
(ii) the pace at which the Remaining Securities are sold, and (iii) the number
of Remaining Securities so sold as compared to the total number of Covered
Securities. Counterparty shall, on the
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same date as such refund is made, pay to Salomon an amount equal to the breakage
costs incurred by Salomon as a result of such early Unwind Start Date,
calculated in a manner consistent with Section 11(d).
6. SETTLEMENT OBLIGATIONS; DIVIDENDS; FEES:
(a) Settlement Obligations. On each Settlement Date, (i) if the Net
Settlement Amount for such Settlement Date is positive, Salomon shall pay to
Counterparty an amount equal to such Net Settlement Amount or (ii) if such Net
Settlement Amount is negative, Counterparty shall pay to Salomon an amount equal
to the absolute value of such Net Settlement Amount.
(b) Dividends. Salomon shall transfer or cause the transfer to
Counterparty of any non-cash dividend or other non-cash distribution with
respect to the Covered Securities with an "ex-dividend date" after the Trade
Date and on or prior to the final Sale Date (other than dividends resulting in
an adjustment pursuant to Section 8), in the same form in which such dividend or
distribution was made, promptly following receipt by Salomon of such dividend or
distribution.
(c) Fees. In addition to any amounts to which Salomon or its affiliates
are entitled as Commissions, the FT Parties shall, jointly and severally, fund
or reimburse Salomon, promptly upon demand, for, all fees and expenses required
to be paid by Salomon and its affiliates pursuant to the terms of the
Disposition Agreement in connection with the disposition of the Covered
Securities.
7. UNWIND PERIOD:
(a) Unwind Period. The "Unwind Period" shall be the period commencing
on and including the Unwind Start Date and ending on and including the Trading
Day as of which Salomon has sold or caused to be sold all of the Remaining
Securities.
(b) Counterparty-Directed Unwind. Counterparty shall be entitled to
direct Salomon to sell or cause to be sold the Covered Securities on any Trading
Day or Trading Days in the Unwind Period and to designate the Manner of Sale (as
defined below) in connection with each such sale; provided that Counterparty
shall direct Covered Securities to be sold such that the Unwind Period ends no
later than the Maturity Date. If Counterparty elects a Gradual Market
Distribution or a Block Sale in respect of a Trading Day in the Unwind Period,
Counterparty shall direct the amount, timing and other terms of the sale of
Covered Securities by or on behalf of Salomon on such Trading Day. Salomon shall
use reasonable efforts to follow such directions from Counterparty. If Salomon
does not sell or cause the sale of all the Covered Securities directed by
Counterparty in respect of any Trading Day, Salomon shall notify Counterparty
thereof and use reasonable efforts to follow Counterparty's direction with
respect to such unsold Covered Securities. Notwithstanding the foregoing,
Salomon and its affiliates shall not be required to follow any direction of
Counterparty pursuant to this subsection (b) if, in Salomon's reasonable
judgment, such direction would violate or be inconsistent with any law, treaty,
rule, regulation or determination of any governmental authority, court or
arbitrator (or any related internal policy of Salomon or its affiliates)
applicable to Salomon or any of its affiliates or Salomon's or its affiliates'
obligations under the Disposition Agreement. On any date in respect of which
Counterparty directs the sale of Covered Securities pursuant to this Section 7,
each of the FT Parties represents and warrants to Counterparty that neither it
nor any of its Affiliates is in possession of any material nonpublic information
concerning Crown Castle or its Affiliates.
(c) Required Dispositions. Notwithstanding anything to the contrary
herein, (i) if Salomon receives a "Required Disposition Notice" from Crown
Castle pursuant to Section 4.02(d) of the
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Disposition Agreement or not all Covered Securities have been sold by the
Maturity Date, Salomon shall be entitled to sell or cause the sale of all
Remaining Securities on subsequent Trading Days in such amounts, at such prices
and at such times as it determines in its sole discretion and to designate in
its sole discretion the Manner of Sale in connection therewith; and (ii) if
Crown Castle appoints an investment banking firm to conduct a sale of Covered
Securities pursuant to Section 4.02(e) of the Disposition Agreement, Salomon
shall sell or cause the sale of the Remaining Securities as provided in Section
4.02(e) of the Disposition Agreement.
(d) Manner of Sale. "Manner of Sale" means, with respect to any sale of
Covered Securities on a Trading Day during the Unwind Period:
(i) an underwritten fixed price or "at the market" marketed
bookbuild public offering of the Covered Securities, with
respect to which Salomon shall be entitled to designate
Salomon Smith Barney Inc. ("SSB") or one or more other
affiliates of Salomon as the sole book running manager (an
"Underwritten Offering");
(ii) a sale of Covered Securities into the existing trading market
for outstanding shares of the same class at other than a fixed
price on the Principal Market or to or through a market maker
or broker or dealer, with respect to which Salomon shall be
entitled to designate SSB or one or more other affiliates of
Salomon as the sole agent, executing dealer or other
intermediary (a "Gradual Market Distribution");
(iii) a privately negotiated agency sale (other than a private
placement) involving at least a block of the Covered
Securities, with respect to which Salomon shall be entitled to
designate SSB or one or more other affiliates of Salomon as
the sole agent, executing dealer or other intermediary (a
"Block Sale"); or
(iv) a sale of Covered Securities other than pursuant to clauses
(i) through (iii) (including without limitation a sale of
Covered Securities on a private placement basis or a sale
otherwise covered by clause (i) but for which SSB or one or
more other affiliates of Salomon is not the sole book running
manager) in such manner and on such terms and conditions as
are agreed by the parties (an "Alternative Distribution").
Notwithstanding anything to the contrary herein, (A) Counterparty may
not designate an Underwritten Offering as the Manner of Sale for any sale of
Covered Securities hereunder unless the conditions set forth in Annex I hereto
with respect to such Covered Securities are satisfied or waived by Salomon, and
(B) Counterparty may not designate a Gradual Market Distribution or Block Sale
as the Manner of Sale for any sale of Covered Securities hereunder unless (i)
the conditions set forth in Annex I hereto with respect to such Covered
Securities are satisfied or waived by Salomon or (ii) such sale is entitled to
be made and is made in accordance with Rule 144 under the Securities Act and
Counterparty shall have furnished to Salomon and, if required, Crown Castle an
opinion of counsel reasonably satisfactory to Salomon to such effect and such
other certificates and documents required by Crown Castle or reasonably
requested by Salomon in connection therewith. If at any time during an
Underwritten Offering, Gradual Market Distribution or Block Sale any of the
applicable requirements specified in this paragraph or in Annex I hereto are not
satisfied, (x) Counterparty shall immediately notify Salomon upon obtaining
knowledge thereof and (y) Salomon shall be entitled to stop selling Covered
Securities pursuant to such Underwritten Offering, Gradual Market Distribution
or Block Sale, in which case such unsold Covered Securities shall be treated for
all purposes as Remaining Securities.
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8. ADJUSTMENT EVENTS:
In the event of (i) a subdivision, consolidation or reclassification of
any class of Covered Securities into a different number or kind of shares of
stock, (ii) a dividend on the Common Shares paid in Common Shares, (iii) a
merger or other transaction whereby the outstanding Common Shares are exchanged
for another class of securities, securities of another issuer and/or other
property, or (iv) any other similar event with respect to the Covered Securities
(an "Adjustment Event"), then in each case, Salomon shall make appropriate
adjustments to the terms of this Transaction such that the fundamental economic
terms of this Transaction are equivalent to those in effect immediately prior to
the Adjustment Event.
9. 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 of any of the
following events constitutes an event of default (an "Event of Default") with
respect to such party (provided that an Event of Default with respect to FT
shall be deemed an Event of Default with respect to Counterparty):
(i) Failure to Pay or Deliver. Failure by the party to make, when
due, any payment or delivery under this Confirmation required to be
made by it if such failure is not remedied on or before the third
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 or delivery under this Confirmation or to give
notice of a Termination Event) to be complied with or performed by
the party in accordance with this Confirmation 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 Confirmation prior to the satisfaction of all obligations
of such party under this Transaction without the written
consent of the beneficiary under such Credit Support Document;
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 made by the party or any
Credit Support Provider of such party in this Confirmation or any
Credit Support Document proves to have been incorrect or misleading
in any material respect when made;
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(v) Bankruptcy. The party or any Credit Support Provider 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
(vi) 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 Confirmation 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 Salomon, if such party is Counterparty or FT,
or Counterparty, if such party is Salomon; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the beneficiary thereof) to the
performance by such resulting, surviving or transferee entity
of its obligations under this Confirmation.
(b) Termination Events. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider 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, a Tax Event Upon
Merger if the event is specified in (iii) below, or an Additional Termination
Event if the event is specified in (iv) below (provided that with respect to any
Termination Event for which FT would otherwise be deemed an Affected Party or
Burdened Party, Counterparty shall be deemed the Affected Party or Burdened
Party for such Termination Event):
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(i) Illegality. Due to the adoption of, or any change in, any
applicable law after the date on which this 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 11(k)) 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 this Transaction or to comply with any other material provision
of this Confirmation 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 this 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
Trade Date (regardless of whether such action is taken or brought
with respect to a party to this Confirmation) 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 date on which a payment is to be made under this
Transaction (1) be required to pay to Salomon or Counterparty, as
the case may be, an additional amount in respect of an
Indemnifiable Tax under Section 13(b)(i)(4) (except in respect of
interest under Section 10(d)(ii), 10(e) or 11(h)), 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 10(d)(ii), 10(e) or 11(h)) and no additional amount is
required to be paid in respect of such Tax under Section
13(b)(i)(4) (other than by reason of the last sentence thereof);
provided that the imposition of a U.S. withholding tax on any
payment from Salomon to Counterparty pursuant to sections 882, 897,
1441 or 1445 of the Internal Revenue Code of 1986, as amended (the
"Code"), or the Treasury regulations thereunder, shall not
constitute a Termination Event;
(iii) Tax Event Upon Merger. The party (the "Burdened Party") on
the next succeeding date on which a payment is to be made under
this Transaction will either (1) be required to pay an additional
amount in respect of an Indemnifiable Tax under Section 13(b)(i)(4)
(except in respect of interest under Section 10(d)(ii), 10(e) or
11(h)) 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 Salomon or an FT Party, as the case may be, is
not required to pay an additional amount (other than by reason of
the last sentence of Section 13(b)(i)(4)), 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 9(a)(vi);
or
(iv) Additional Termination Event. (1) A Credit Event shall occur,
(2) Counterparty shall cease to be wholly owned, directly or
indirectly, by FT or (3) Counterparty shall not have posted
collateral as required by Section 11(c) (in each case, Counterparty
will be the Affected Party).
(c) 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.
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10. EARLY TERMINATION:
(a) Right to Terminate Following Event of Default. If at any time an
Event of Default with respect to Salomon or Counterparty (the "Defaulting
Party") has occurred and is then continuing, the other (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. Notwithstanding the foregoing,
an Early Termination Date will occur immediately upon the occurrence with
respect to such party of an Event of Default specified in Section 9(a)(v)(l),
(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 9(a)(v)(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 Salomon or Counterparty,
as the case may be, specifying the nature of that Termination Event
and will also give such other information about that Termination
Event as such other party may reasonably require.
(ii) Transfer to Avoid Termination Event. If either an Illegality
under Section 9(b)(i)(l) 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 10(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 10(b)(i) all its rights and obligations under
this Confirmation in respect of this Transaction to another of its
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 whichever of Salomon or Counterparty is not the
Affected Party (the "Non-Affected Party"), to that effect within
such 20 day period, whereupon the Non-Affected Party may effect
such a transfer within 30 days after the notice is given under
Section 10(b)(i). In addition, each party will use all reasonable
efforts to explore additional alternatives to avoid the Termination
Event.
Any such transfer by Salomon or Counterparty under this Section
10(b)(ii) will be subject to and conditional upon the prior written
consent of the other, 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
9(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 10(b)(i) on action to avoid that Termination Event.
(iv) Right to Terminate. If:
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(1) a transfer under Section 10(b)(ii) or an agreement under
Section 10(b)(iii), as the case may be, has not been effected
with respect to this Transaction within 30 days after an
Affected Party gives notice under Section 10(b)(i); or
(2) an Illegality under Section 9(b)(i)(2) or an Additional
Termination Event occurs, or a Tax Event Upon Merger occurs
and the Burdened Party is not the Affected Party,
either Salomon or Counterparty 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 the Non-Affected Party in the
case of an Additional Termination Event may, by not more than 20
days notice to Salomon or Counterparty, as appropriate, 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 this Transaction.
(c) Effect of Designation.
(i) If notice designating an Early Termination Date is given under
Section 10(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 Sections
5, 6 or 11(h) will be required to be made, but without prejudice to
the other provisions of this Confirmation. The amount, if any,
payable in respect of an Early Termination Date shall be determined
pursuant to Section 10(e).
(d) Calculations.
(i) Statement. On or as soon as reasonably practicable following
the occurrence of an Early Termination Date, each of Salomon and
Counterparty will make the calculations on its part, if any,
contemplated by Section 10(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 10(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid.
(ii) Payment Date. An amount calculated as being due in respect of
any Early Termination Date under Section 10(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 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.
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(e) Payments on Early Termination. If an Early Termination Date occurs,
the following provisions shall apply. The amount, if any, payable in respect of
an Early Termination Date and determined pursuant to this Section will be
subject to Set-off.
(i) Events of Default. If the Early Termination Date results from
an Event of Default, an amount will be payable equal to the
Non-defaulting Party's Loss in respect of this Confirmation. 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
10(e)(i), 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
Non-Affected Party, respectively.
(2) Two Affected Parties. If there are two Affected Parties,
each of Salomon and Counterparty will determine its Loss in
respect of this Confirmation 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) Adjustments for Bankruptcy. In circumstances where an Early
Termination Date occurs as a result of the second sentence of
Section 10(a), the amount determined under this Section 10(e) will
be subject to such adjustments as are appropriate and permitted by
law to reflect any payments or deliveries made by one of Salomon or
Counterparty to the other under this Confirmation (and retained by
such other party) during the period from the relevant Early
Termination Date to the date for payment determined under Section
10(d)(ii).
(iv) Determination of Loss. The parties agree that for purposes of
calculating Salomon's Loss under Section 10(d) and (e) in
connection with this Transaction, (i) if the disposition of the
Covered Securities (other than to an affiliate or to a Permitted
Transferee (as defined in the Disposition Agreement)) at the time
of an Early Termination Date would be permitted under the terms of
the Disposition Agreement, Salomon and its affiliates shall be
entitled to dispose of any such Covered Securities over any number
of Trading Days in a commercially reasonable manner as Salomon may
determine; and (ii) if such a disposition would not be permitted
under the terms of the Disposition Agreement, the value of such
Covered Securities shall be deemed to be zero. In the case of
clause (ii), provided that the FT Parties have paid to Salomon all
amounts owing in respect of this Transaction, Salomon will use
reasonable efforts to transfer the Covered Securities as directed
by Counterparty once such Covered Securities may be transferred in
accordance with the Disposition Agreement and will promptly remit
to Counterparty the proceeds of such transfer (net of any
withholding taxes that are required to be withheld from such sales
proceeds), if any, received by Salomon.
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(f) Set-off. In addition to any rights of Set-off a party may have as a
matter of law or otherwise, upon the occurrence of an Event of Default with
respect to Salomon or Counterparty (Counterparty being deemed for this purpose
to include FT) ("X"), the other party ("Y") will have the right (but will not be
obliged) without prior notice to X or any other person to set-off any obligation
of X owing to Y (whether or not arising under this Confirmation, whether or not
matured, whether or not contingent and regardless of the currency, place of
payment or booking office of the obligation) against any obligation of Y owing
to X (whether or not arising under this Confirmation, whether or not matured,
whether or not contingent and regardless of the currency, place of payment or
booking office of the obligation). For the purpose of cross-currency set-off, Y
may convert any obligation to another currency at a market rate reasonably
determined by Y. If an obligation is unascertained, Y may in good faith estimate
that obligation and set-off in respect of the estimate, subject to the relevant
party accounting to the other when the obligation is ascertained.
11. MISCELLANEOUS:
(a) Non-Affiliate Status. Each of the FT Parties represents and
warrants to Salomon that neither it nor any of its Affiliates is as of the Trade
Date, and agrees that none of them will during the term of this Transaction
become, (i) an "affiliate" of Crown Castle within the meaning of the Securities
Act or (ii) an officer, director or, individually or in the aggregate, a
beneficial owner of more than 10% of any class of equity securities of Crown
Castle required to file reports pursuant to Section 16(a) of the Exchange Act.
(b) Conditions Precedent. It shall be a condition precedent to the
obligations of the parties hereunder that (i) each of the FT Parties shall have
executed and delivered the Purchase Agreement and (ii) the purchase and sale of
the Covered Securities shall have occurred in accordance with the terms thereof.
It shall be a condition precedent to the obligations of Salomon hereunder that
FT (the "Guarantor") shall have executed on or prior to the Trade Date a
guaranty of Counterparty's obligations hereunder (together with any successor
guaranty issued pursuant to subsection (c) below, the "Guaranty") in form and
substance satisfactory to Salomon.
(c) Guaranty. (i) FT agrees to use its best efforts to request its
board of directors to approve no later than March 21, 2002 the extension of the
duration of the Guaranty during which claims must be filed to a term of three
years from the date hereof, subject to reinstatement as provided in the
Guaranty, and to increase the maximum amount authorized to be paid thereunder to
an amount (calculated, if necessary, using applicable U.S. dollar/French franc
spot exchange rates (or any replacement for such rates) prevailing at the time
of the board action) at least equal to 150% multiplied by the Initial Notional
Amount. Upon receipt of such authorization, FT shall within 3 Business Days
execute and deliver a substitute Guaranty in favor of Salomon reflecting such
new duration and maximum amount in form and substance satisfactory to Salomon
and shall deliver to Salomon an opinion of counsel satisfactory to Salomon
covering such matters relating to such substitute Guaranty as Salomon shall
reasonably request. If FT has not obtained such authorization and executed and
delivered such substitute Guaranty by March 21, 2002, unless otherwise agreed by
Salomon, Counterparty shall be required to post U.S. dollar cash collateral to
Salomon or Salomon's nominee within 3 Business Days in an amount equal to the
Initial Notional Amount, pursuant to a pledge agreement satisfactory to Salomon,
which pledge agreement shall provide for the payment of interest by Salomon to
Counterparty on any such posted collateral at a market rate as agreed by the
parties.
(ii) If (A) at any time prior to March 21, 2002 or (B) at any time on
or following such date, if Counterparty has not posted collateral in accordance
with subparagraph (i) above, the maximum amount payable by FT under the Guaranty
is less than 125% multiplied by the sum of (1) all accrued and unpaid
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amounts payable by Counterparty pursuant to Section 5 and (2) the greater of (x)
one-half of the Outstanding Notional Amount and (y) the difference between the
Outstanding Notional Amount and one-half of the value of the Remaining
Securities as determined by Salomon in a commercially reasonable manner
(calculated, if necessary, using applicable U.S. dollar/French franc spot
exchange rates (or any replacement for such rates) prevailing at such time),
unless otherwise agreed by Salomon, Counterparty shall be required to post U.S.
dollar cash collateral to Salomon or Salomon's nominee within 4 Business Days in
an amount at least equal to the amount of such shortfall, pursuant to a pledge
agreement satisfactory to Salomon, which pledge agreement shall provide for the
payment of interest by Salomon to Counterparty on any such posted collateral at
a market rate as agreed by the parties.
(d) Funding Cost Adjustment. If a Settlement Date occurs on a date that
is not a Floating Amount Payment Date, and the Breakage Amount for such
Settlement Date is positive, Counterparty shall pay such amount to Salomon on
such Settlement Date. The "Breakage Amount" shall mean, for any Settlement Date,
an amount equal to the product of (i) (A) the LIBOR rate in effect for the
Calculation Period in which the Settlement Date occurs minus (B) LIBOR with a
designated maturity equal to the period from and including such Settlement Date
to but excluding the next Floating Amount Payment Date, calculated as of the
start of such period, (ii) the number of days in such period, (iii) the
aggregate Initial Price for all Covered Securities sold on the related Sale
Date, and (iv) 1/360.
(e) Netting. The respective cash payment obligations on any day of the
FT Parties, on the one hand, and Salomon, on the other, with respect to this
Transaction and the Purchase Agreement (but no other transactions) shall be
netted. Salomon will provide Counterparty a schedule of payments being netted
with respect to any such day.
(f) Increased Costs. If Salomon determines that from the Trade Date (i)
due to either (x) the introduction of or any change in or in the interpretation
of any law or regulation or (y) the compliance with any guideline or request
from any central bank or other governmental authority (whether or not having the
force of law), there shall be any increase in the cost to Salomon or its
affiliates of engaging in this Transaction or related transactions, or (ii)
compliance with any law or regulation or any guideline or request from any
central bank or other governmental authority (whether or not having the force of
law) increases or would increase the amount of any capital required or expected
to be maintained by Salomon or any affiliate of Salomon as a direct or indirect
consequence of this Transaction ("Increased Costs"), then the FT Parties,
jointly and severally, shall from time to time until this Transaction is no
longer outstanding, promptly upon demand by Salomon, convey to Salomon
additional amounts sufficient to compensate Salomon for such Increased Costs as
are incurred. A certificate as to the amount of Increased Costs, submitted to
the FT Parties by Salomon, shall be conclusive and binding for all purposes
absent manifest error.
(g) Credit Support Document. The Guaranty shall be a "Credit Support
Document" with respect to Counterparty, and the Guarantor shall be a "Credit
Support Provider" with respect to Counterparty.
(h) Default Interest. Prior to the occurrence or effective designation
of an Early Termination Date, a party that defaults in the performance of any
payment obligation will, to the extent permitted by law and subject to Section
10(c), be required to pay interest (before as well as after judgment) on the
overdue amount to the party entitled to receive such defaulted payment 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.
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(i) Calculation Agent. Salomon shall make all calculations, adjustments
and determinations required pursuant to this Transaction. Salomon's
calculations, adjustments and determinations shall be made in good faith and
shall be binding absent manifest error; provided that if Counterparty disputes
any calculation of a Floating Amount, Settlement Floating Amount or Breakage
Amount (or any component thereof) or an adjustment pursuant to Section 8,
Counterparty and Salomon agree to jointly appoint an independent third party
equity derivatives dealer with experience in transactions similar to this
transaction to make such calculation or adjustment (or if Counterparty and
Salomon do not agree on such a third party, each of Counterparty and Salomon
shall choose such a third party, and such third parties shall appoint another
such third party to make such calculation or adjustment). The calculation or
adjustment by such third party shall be binding on the FT Parties and Salomon.
The expenses of such third party shall be borne equally by the FT Parties
(jointly and severally), on the one hand, and Salomon, on the other.
(j) Expenses. A Defaulting Party will, on demand, indemnify and hold
harmless the Non-defaulting 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 Confirmation
or any Credit Support Document to which the Defaulting Party is a party or by
reason of the early termination of this Transaction, including, but not limited
to, costs of collection; provided that if Counterparty is the Defaulting Party,
FT shall be jointly and severally liable for its obligations under this
subsection.
(k) Maintain Authorizations. Each party agrees that 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 Confirmation and will use all reasonable efforts to obtain any
that may become necessary in the future.
(l) Comply with Laws. Each party agrees that 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 Confirmation.
(m) Payment of Stamp Tax. Each party agrees that, subject to subsection
(j) above, it will pay any Stamp Tax levied or imposed upon it or in respect of
its execution or performance of this Confirmation by a jurisdiction in which it
is incorporated, organized, managed and controlled, or considered to have its
seat, or in which a branch or office through which it is acting for the purpose
of this Confirmation is located ("Stamp Tax Jurisdiction") and will indemnify
Salomon, if such party is FT or Counterparty, or Counterparty, if such party is
Salomon, against any Stamp Tax levied or imposed upon such other party or in
respect of such other party's execution or performance of this Confirmation by
any such Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with
respect to the other party.
(n) Transfer. Subject to Section 10(b)(ii), neither this Confirmation
nor any interest or obligation in or under this Confirmation may be transferred
(whether by way of security or otherwise) by either of the FT Parties, on the
one hand, or by Salomon, on the other, without the prior written consent of the
other, except that:
(i) a party may make such a transfer of this Confirmation 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
Confirmation); and
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(ii) 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 10(e).
Any purported transfer that is not in compliance with this subsection
will be void.
(o) Entire Agreement. This Confirmation, together with the Purchase
Agreement, Disposition Agreement and Guaranty, 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.
(p) Amendments. No amendment, modification or waiver in respect of this
Confirmation 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.
(q) Survival of Obligations. Without prejudice to Sections 2 and
10(c)(ii), the obligations of the parties under this Confirmation will survive
the termination of this Transaction.
(r) Remedies Cumulative. Except as provided in this Confirmation, the
rights, powers, remedies and privileges provided in this Confirmation are
cumulative and not exclusive of any rights, powers, remedies and privileges
provided by law. A failure or delay in exercising any right, power or privilege
in respect of this Confirmation 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.
(s) Counterparts. This Confirmation (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.
(t) Service of Process. The parties irrevocably consent to service of
process given in the manner provided for notices in Section 17. In addition,
each of FT and Counterparty shall irrevocably appoint and maintain so long as it
has any obligation under this Agreement an agent in New York City to receive,
for it and on its behalf, service of process in any action, suit or proceedings
relating to this Confirmation ("Proceedings"), and shall promptly notify Salomon
of the name and address of such agent and of any change thereof. Nothing in this
Confirmation will affect the right of a party to serve process in any other
manner permitted by law.
(u) 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;
provided that such waiver shall not apply to the assets of FT that are allocated
to its public service mission, in accordance with the provisions of Article 23-1
of Act No. 90-568, dated July 2, 1990, as amended by Act No. 96-660, dated July
26, 1996, to the extent required by such provisions.
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(v) Consent to Recording. Each party (i) consents to the recording of
the telephone conversations of trading and marketing personnel of the parties
and their affiliates in connection with this Transaction and (ii) agrees to
obtain any necessary consent of, and give notice of such recording to, such
personnel of it and its affiliates.
(w) Severability; Illegality. If compliance by a party with any
provision of this Transaction would be unenforceable or illegal, (i) the parties
shall negotiate in good faith to resolve such unenforceability or illegality in
a manner that preserves the economic benefits of the transactions contemplated
hereby and (ii) the other provisions of this Transaction shall not be
invalidated, but shall remain in full force and effect.
(x) Cash Payments. All references herein to "dollars" or "$" are to
U.S. dollars. All amounts payable in cash shall be payable in dollars in
immediately available funds.
(y) Waiver of Trial by Jury. EACH PARTY HEREBY IRREVOCABLY WAIVES (ON
ITS OWN BEHALF AND, TO THE EXTENT PERMITTED BY APPLICABLE LAW, ON BEHALF OF ITS
STOCKHOLDERS) ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR
RELATING TO THIS TRANSACTION OR THE ACTIONS OF SALOMON OR ITS AFFILIATES IN THE
NEGOTIATION, PERFORMANCE OR ENFORCEMENT HEREOF.
(z) Trading Activity. Each of the FT Parties acknowledges that the
proprietary trading and other activities and transactions of Salomon and its
affiliates may adversely affect the price at which Covered Securities are sold
pursuant to Section 7.
(aa) Delivery of Opinion. On the date hereof, Counterparty and FT will
provide to Salomon opinions of counsel regarding this Transaction in form and
substance reasonably satisfactory to Salomon.
12. INDEMNIFICATION BY FT PARTIES AND CONTRIBUTION:
(a) Each of the FT Parties agrees, jointly and severally (each, in
such capacity, an "Indemnifying Party"), to indemnify and hold harmless Salomon,
its affiliates, their respective directors, officers and employees and each
person who controls Salomon or its affiliates within the meaning of either the
Securities Act or the Exchange Act (each, an "Indemnified Party") against, and
each Indemnifying Party agrees that no Indemnified Party shall have any
liability to the Indemnifying Parties or any of their affiliates, officers,
directors, or employees for, any liability (whether direct or indirect, in
contract, tort or otherwise) for, any losses, claims, damages, liabilities or
expenses, joint or several, to which they or any of them may become subject
under the Securities Act, the Exchange Act or other federal or state statutory
law or regulation, at common law or otherwise, insofar as such losses, claims,
damages, liabilities or expenses (or actions, claims, investigations or
proceedings in respect thereof, whether commenced or threatened) (A) arise out
of or relate to the breach by an Indemnifying Party of any provision hereunder
or the failure of any representation by an Indemnifying Party to have been true
and correct when made, or from an allegation by a third party (other than an
Indemnified Party) that an Indemnifying Party acted or failed to act in a manner
that, as alleged, would have constituted such a breach or failure, (B) arise out
of or relate to actions or failures to act by an Indemnified Party with the
consent of, at the direction of or in reliance on an Indemnifying Party, or (C)
otherwise arise out of or relate to this Transaction, the Purchase Agreement or
any related transactions; provided that clause (A) shall not apply to the
extent, but only to the extent, that a false allegation regarding the breach or
failure by an Indemnifying Party resulted primarily from the gross negligence or
willful misconduct of an Indemnified Party; provided, further, that clauses (B)
and (C) shall not apply to the extent, but only to the
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extent, that any losses, claims, damages, liabilities or expenses of an
Indemnified Party have resulted from the gross negligence or willful misconduct
of an Indemnified Party. Each Indemnifying Party jointly and severally agrees,
promptly on demand, to reimburse each such Indemnified Party for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, expense or action. This
indemnity agreement shall be in addition to any liability which the Indemnifying
Parties may otherwise have.
(b) Promptly after receipt by an Indemnified Party of notice of the
commencement of any action, such Indemnified Party will, if a claim in respect
thereof is to be made against an Indemnifying Party under subsection (a) above,
notify such Indemnifying Party in writing of the commencement thereof, but the
omission so to notify an Indemnifying Party will not relieve such Indemnifying
Party from any liability which it may have to any Indemnified Party otherwise
than under subsection (a) or, in respect of subsection (a), to the extent that
such Indemnifying Party was not materially prejudiced by such failure to notify.
In case any such action is brought against any Indemnified Party, and it
notifies an Indemnifying Party of the commencement thereof, such Indemnifying
Party will be entitled to participate therein, and to the extent that it may
elect by written notice delivered to the Indemnified Party promptly after
receiving the aforesaid notice from such Indemnified Party to assume the defense
thereof, with counsel satisfactory to such Indemnified Party; provided that if
the defendants in any such action include both the Indemnified Party and an
Indemnifying Party and the Indemnified Party shall have reasonably concluded
that there may be legal defenses available to it and/or other Indemnified
Parties which are different from or additional to those available to such
Indemnifying Party, the Indemnified Party or Parties shall have the right to
select separate counsel to represent such Indemnified Party or parties. Upon
receipt of notice from an Indemnifying Party to such Indemnified Party of its
election so to assume the defense of such action and approval by the Indemnified
Party of counsel, such Indemnifying Party will not be liable to such Indemnified
Party under subsection (a) above for any legal or other expenses subsequently
incurred by such Indemnified Party in connection with the defense thereof unless
(A) the Indemnified Party shall have employed separate counsel in accordance
with the proviso to the next preceding sentence (it being understood, however,
that the Indemnifying Parties shall not be liable for the expenses of more than
one separate counsel (in addition to local counsel), representing the
Indemnified Parties who are parties to such action), (B) an Indemnifying Party
shall not have employed counsel satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time after notice of
commencement of the action or (C) an Indemnifying Party has authorized the
employment of counsel for the Indemnified Party at the expense of such
Indemnifying Party; and except that, if clause (A) or (C) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (A)
or (C). An Indemnifying Party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there shall be a final judgment for the plaintiff, the
Indemnifying Parties agree, jointly and severally, to indemnify the Indemnified
Party from and against any loss or liability by reason of such settlement or
judgment. An Indemnifying Party shall not, without the prior written consent of
the Indemnified Party, effect any settlement of any pending or threatened
proceeding in respect of which any Indemnified Party is or could have been a
party and indemnity could have been sought hereunder by such Indemnified Party,
unless such settlement includes an unconditional release of such Indemnified
Party from all liability arising from such proceeding.
(c) If for any reason the indemnification pursuant to subsection (a)
above is unavailable to any Indemnified Party or insufficient to hold it
harmless, then the Indemnifying Parties shall contribute, jointly and severally,
to the amount paid or payable by such Indemnified Party as a result of such
losses, claims, damages, liabilities or expenses in such proportion as is
appropriate to reflect the relative benefits received by Counterparty, on the
one hand, and such Indemnified Party, on the other, pursuant to this Transaction
or any related transactions or, to the extent such allocation is unavailable for
any reason, in
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such proportion as is appropriate to reflect not only such relative benefits but
also the relative fault of the Indemnifying Parties and such Indemnified Party
with respect to such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations. The relative benefits received
by Counterparty, on the one hand, and such Indemnified Party, on the other,
shall be in the same proportion as the aggregate Initial Price for all Covered
Securities bears to the market value of the Transaction to Salomon on the date
hereof (as reasonably determined by the Calculation Agent).
13. TAX MATTERS.
(a) Certain Information. Each of the FT Parties, on the one hand, and
Salomon, on the other, agrees that, so long as it has or may have any obligation
under this Confirmation, it will, upon reasonable demand by the other, deliver
to the other, or to such government or taxing authority as the other reasonably
directs, any form or document that may be required or reasonably requested in
writing in order to allow such party or its Credit Support Provider to make a
payment under this Confirmation 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 as soon as reasonably practicable following
such demand.
(b) Deduction or Withholding of Tax. Except as otherwise provided in
subsection (c) below:
(i) All payments under this Confirmation 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; provided that this Section 13(b)(i)
shall not apply to any amounts required to be withheld with respect
to dividends paid on or the proceeds of the sale of Covered
Securities pursuant to sections 882, 897, 1441 or 1445 of the Code
or the Treasury regulations thereunder. If a party is so required
to deduct or withhold, then that party ("X") will:
(1) promptly notify the party entitled to receive such payment
("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 13(b)) 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
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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 the failure by Y to comply with
or perform its obligations under subsection (a) above.
(ii) 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
13(b)(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 its obligations under
subsection (a)).
(c) Notwithstanding anything to the contrary herein:
(i) Characterization of the Transaction. Counterparty, FT and
Salomon each agree to treat the transactions contemplated by this
Transaction and the Purchase Agreement for U.S. federal, state and
local income tax purposes only as a single integrated transaction
(the "Integrated Transaction") constituting a loan by Salomon to
Counterparty secured by the Covered Securities (but for all other
purposes as a sale and an equity swap and not, for the avoidance of
doubt, as a transaction by which beneficial ownership of the
Covered Securities shall rest in Counterparty or FT). Counterparty,
FT and Salomon each agree to report the Integrated Transaction as a
loan on any U.S. federal, state and local tax return or filing it
may submit, and agree not to take any position on such return or
filing, or take any other U.S. federal, state or local tax
reporting position, inconsistent with the treatment of the
Integrated Transaction as a loan.
(ii) Tax Payments. The FT Parties agree, jointly and severally, to
satisfy any and all of its tax payment obligations that may arise
in connection with the payments made by Salomon to Counterparty
under this Transaction and will make all of the required tax
payments directly to the relevant tax authorities; provided,
however, that Salomon shall withhold from any payment to
Counterparty under this Confirmation any U.S. federal tax that it
may be required to withhold pursuant to sections 881 and 1441 of
the Code and the Treasury regulations thereunder.
(iii) Indemnity for Certain Taxes. The FT Parties agree, jointly
and severally, to indemnify and save Salomon harmless from any and
all taxes, however denominated, including any interest or penalties
that may become payable in respect thereof, imposed on Salomon, and
any costs or expenses that Salomon may incur, in respect of U.S.
taxes due on any payments from Salomon to Counterparty under this
Transaction, other than
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any U.S. withholding tax payable by Salomon pursuant to sections
881 and 1441 of the Code.
(iv) Notice of Claims. Upon receipt by Salomon of notice of any
claim by or dispute with the U.S. taxing authority relating to
taxes covered by this Section 13(c), Salomon will notify
Counterparty of such notice or claim promptly but in any event
within fifteen (15) days; provided, however, that Salomon's failure
to notify Counterparty of such notice or claim shall not relieve
Counterparty or FT from any liability under this Section 13(c)
except to the extent Counterparty or FT, as the case may be, has
been materially prejudiced by such failure.
(v) Contests. Salomon will have the right to determine, in its sole
discretion but in consultation with Counterparty, whether to
contest any claim for which it would be indemnified pursuant to
this Section 13(c); provided that Salomon will not unreasonably
reject a request by Counterparty to contest such claim or dispute.
Salomon retains the right to conduct in its sole discretion the
defense of any claim or dispute for which it would be indemnified
pursuant to this Section 13(c), although Salomon hereby agrees to
consult with Counterparty in connection therewith while making
Salomon's best efforts to take into account both the interest of
Citigroup Inc. and the interest of Counterparty in such contest
(although, as described above, any decisions relating to the
conduct of the defense will be made by Salomon in its sole
discretion). Salomon and Counterparty hereby stipulate that a
decision not to contest a claim would be unreasonable if the
specific issue to be contested is whether the Common Shares are
"regularly traded" within the meaning of Regulation Section 1.897-
9T(d), and, Salomon will consult with Counterparty in all material
aspects of the planning of the defense strategy and in all material
decisions relating to the conduct of the defense while making
Salomon's best efforts to take into account both the interest of
Citigroup Inc. and the interest of Counterparty in such contest
(although, as described above, any decisions relating to the
conduct of the defense will be made by Salomon in its sole
discretion).
(vi) Records and Information. Upon a reasonable request by the
other, Salomon, on the one hand, and the FT Parties, on the other,
each will make available to the other and to any U.S. federal tax
authority, all information, records or documents relating to any
taxes covered by this Section 13(c). Each of Salomon, Counterparty
and FT will preserve such information, records or documents until
the expiration of any applicable statute of limitations or
extensions thereof.
(vii) Survival. Notwithstanding anything to the contrary in this
Confirmation, all obligations under this Section 13(c) shall
survive and continue until 30 days following the expiration of the
applicable statute of limitations or extensions thereof.
14. CONTRACTUAL CURRENCY:
(a) Payment in the Contractual Currency. Each payment under this
Confirmation will be made in the relevant currency specified in this
Confirmation for that payment (the "Contractual Currency"). To the extent
permitted by applicable law, any obligation to make payments under this
Confirmation 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
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<PAGE> 22
amounts payable in respect of this Confirmation. 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 Confirmation, 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 Confirmation, 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
Confirmation, (ii) for the payment of any amount relating to any early
termination in respect of this Confirmation 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 payor 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 payor 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 Confirmation, 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 Confirmation.
(d) Evidence of Loss. For the purpose of this Section 14, it will be
sufficient for a party to demonstrate that it would have suffered a loss had an
actual exchange or purchase been made.
15. REPRESENTATIONS:
(a) Each party represents to each other party as of the Trade Date
that:
(i) It is duly organized and validly existing under the laws of
the jurisdiction of its organization or incorporation and, if
relevant under such laws, in good standing;
(ii) It has the power to execute this Confirmation and any other
documentation relating to this Confirmation to which it is a
party, to deliver this Confirmation and any other
documentation relating to this Confirmation that it is
required by this Confirmation to deliver and to perform its
obligations under this Confirmation and has taken all
necessary action to authorize such execution, delivery and
performance;
(iii) 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
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<PAGE> 23
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) All governmental and other consents that are required to have
been obtained by it with respect to this Confirmation have
been obtained and are in full force and effect and all
conditions of any such consents have been complied with; and
(v) Its obligations under this Confirmation 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)).
(vi) 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 Confirmation.
(vii) 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 Confirmation or its ability to perform its obligations
under this Confirmation.
(viii) It is acting as principal for its own account and not as agent
when entering into this Transaction;
(ix) It has sufficient knowledge and expertise to enter into this
Transaction and it is entering into this Transaction in
reliance upon such tax, accounting, regulatory, legal, and
financial advice as its deems necessary and not upon any view
expressed by the other. It has made its own independent
decision to enter into this Transaction, is acting at arm's
length and is not relying on any communication (written or
oral) of the other party as a recommendation or investment
advice regarding this Transaction. It has the capability to
evaluate and understand (on its own behalf or through
independent professional advice), and does understand, the
terms, conditions and risks of this Transaction and is willing
to accept those terms and conditions and to assume
(financially and otherwise) those risks. It acknowledges and
agrees that the other party is not acting as a fiduciary or
advisor to it in connection with this Transaction. It is
entering into this Transaction in connection with a line of
business and not for purposes of speculation; and
(x) It is an "accredited investor" as defined in Section
2(a)(15)(ii) of the Securities Act and an "eligible swap
participant" as such term is defined in 17 C.F.R. Section
35.1(b)(2).
(b) Each of the FT Parties represents as of the Trade Date to
Salomon that:
(i) It understands that no obligations of Salomon to it hereunder
will be entitled to the benefit of deposit insurance and that
such obligations will not be guaranteed by any affiliate of
Salomon or any governmental agency;
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<PAGE> 24
(ii) Its investments in and liabilities in respect of this
Transaction, which it understands is not readily marketable,
are not disproportionate to its net worth, and it is able to
bear any loss in connection with this Transaction, including
the loss of its entire investment in this Transaction;
(iii) It understands that this Transaction and, except as provided
in Section 7 and Annex I, the transactions contemplated herein
will not be registered under the Securities Act or any state
securities law or other applicable federal securities law;
(iv) Counterparty is wholly owned, directly or indirectly, by FT;
(v) No part of the amounts received by Counterparty under this
Transaction or the Purchase Agreement will be used for the
purpose, whether immediate, incidental or ultimate, of
purchasing or carrying margin stock (as such terms are used in
Regulations U or X of the Board of Governors of the Federal
Reserve System); and
(vi) IT UNDERSTANDS THAT THIS TRANSACTION IS SUBJECT TO COMPLEX
RISKS WHICH MAY ARISE WITHOUT WARNING AND MAY AT TIMES BE
VOLATILE AND THAT LOSSES MAY OCCUR QUICKLY AND IN
UNANTICIPATED MAGNITUDE AND IS WILLING TO ACCEPT SUCH TERMS
AND CONDITIONS AND ASSUME (FINANCIALLY AND OTHERWISE) SUCH
RISKS.
16. ACCOUNTS FOR PAYMENT:
<TABLE>
<S> <C>
To Salomon: To be advised.
To Counterparty: To be advised.
</TABLE>
17. NOTICES:
(a) Effectiveness. Any notice or other communication in respect of this
Confirmation may be given in any manner set forth below (except that a notice or
other communication under Section 9 or 10 may not be given by facsimile
transmission or electronic messaging system) to the address or number provided
in subsection (b) 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); or
(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,
unless the date of that delivery (or attempted delivery) or that
receipt, as applicable, is not a Business Day or that communication is delivered
(or attempted) or received, as applicable, after the close
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<PAGE> 25
of business on a Business Day, in which case that communication shall be deemed
given and effective on the first following day that is a Business Day.
(b) Addresses. All notices or communications to Counterparty, FT or
Salomon shall be delivered to the following addresses (or such other address as
such party shall specify by notice to the other):
<TABLE>
<S> <C>
To Salomon: Salomon Brothers International Limited
Victoria Plaza
111 Buckingham Palace Road
London SW1W 0SB
England
Attention: Jason Shrednick
Facsimile: 44-20-7721-4363
Telephone: 44-20-7721-4292
with a copy to: Donald A. Bendernagel, Esq.
Salomon Brothers Holding Company Inc
388 Greenwich Street - 20th Floor
New York, New York 10013
Facsimile: (212) 816-4223
Telephone: (212) 816-2747
To FT: France Telecom S.A.
Direction Juridique et Fiscale
6 place d'Alleray
75505 Paris Cedex 15
Attention: Jean-Philippe Roulet
Facsimile: 33-1-44-44-03-67
Telephone: 33-1-44-44-94-38
with a copy to: Olivier Froissart
Direction des Operations de Fusions et Acquisitions
France Telecom S.A.
6 place d'Alleray
75505 Paris Cedex 15
Facsimile: 33-1-44-44-11-61
Telephone: 33-1-44-44-24-36
To Counterparty: Transmission Future Networks B.V.
Strawinskylaan 3501
1077ZX Amsterdam
Netherlands
Attention: Gregory Richardson
Facsimile: 31-2-07-10-50-01
Telephone: To be advised
with a copy to FT
</TABLE>
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<PAGE> 26
18. ADDITIONAL DEFINITIONS:
As used in this Confirmation,
"Affiliate" means, 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 (i) in respect of obligations payable or
deliverable (or which would have been but for Section 2) by a Defaulting Party,
the Default Rate, (ii) in respect of an obligation to pay an amount under
Section 10(e) of a party from and after the date (determined in accordance with
Section 10(d)(ii)) on which that amount is payable, the Default Rate, (iii) in
respect of all other obligations payable or deliverable (or which would have
been but for Section 2) by a Non-defaulting Party, the Non-default Rate; and
(iv) in all other cases, the Termination Rate.
"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 this Transaction is entered into.
"consent" includes a consent, approval, action, authorization,
exemption, notice, filing, registration or exchange control consent.
"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.
"Early Termination Date" means the date determined in accordance with
Section 10(a) or 10(b)(iv).
"Indemnifiable Tax" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Confirmation 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 Confirmation).
"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.
"Loss" means, with respect to this Confirmation 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 Confirmation, 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
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<PAGE> 27
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. Loss does not include a party's legal fees and out-of-pocket
expenses referred to under Section 11(j). 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.
"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.
"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.
"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 10 is entitled or subject (whether arising under this
Confirmation, another contract, applicable law or otherwise) that is exercised
by, or imposed on, such payer.
"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 Confirmation other than a stamp, registration,
documentation or similar tax.
"Termination Currency" meaning U.S. dollars.
"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 Loss 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 10(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, a Tax 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.
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<PAGE> 28
Yours sincerely,
SALOMON BROTHERS INTERNATIONAL
LIMITED
By:/s/ THOMAS PETRONE
-----------------------------
Name: Thomas Petrone
Authorized Representative
Confirmed as of the date first above written:
TRANSMISSION FUTURE NETWORKS B.V.
By: /s/ GIDEON JOHANNES VAN DER PLOEG
-----------------------------------------
Name: Gideon Johannes van der Ploeg
Title: Managing Director
FRANCE TELECOM S.A.
By: /s/ ERIC BOUVIER
-----------------------------------------
Name: Eric Bouvier
Title: Senior Vice President
<PAGE> 29
Annex I
Conditions for Underwritten Offerings and
Certain Gradual Market Distributions and Block Sales
The following conditions shall apply to the sale of Covered Securities
pursuant to Underwritten Offerings, Gradual Market Distributions and Block Sales
to the extent set forth in Section 7(d) of the Confirmation of which this Annex
I forms a part.
1. The registration rights provided in the Disposition Agreement (the
"Registration Provisions") shall be in full force and effect, and Salomon (or
its "Permitted Transferee" (as defined in the Disposition Agreement)) shall be
entitled to the benefit of such Registration Provisions in connection with the
sale of all such Covered Securities.
2. (i) Crown Castle shall have made available pursuant to the
Registration Provisions an effective registration statement and one or more
prospectuses as necessary to allow Salomon (or any such Permitted Transferee) to
comply with the applicable prospectus delivery requirements for the resale by
Salomon (or such Permitted Transferee) of all such Covered Securities; (ii) such
registration statement shall be effective and such prospectuses shall be current
on any Trading Day on which any Covered Securities are to be sold pursuant to an
Underwritten Offering, Gradual Market Distribution or Block Sale; (iii) Crown
Castle shall not have notified Counterparty, Salomon or any underwriter,
pursuant to Section 1.04(f) of the Registration Provisions or otherwise, of the
happening of any event as a result of which such prospectuses include an untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements therein not misleading; and
(iv) Crown Castle shall not have exercised its rights under Section 1.09(a) of
the Registration Provisions to suspend its obligation to cause such registration
statement to become or remain effective in respect of any such Trading Day.
3. Crown Castle shall have provided to Salomon and its affiliates and
any underwriter (i) the opportunity to perform such due diligence as requested
by Salomon and its affiliates or the underwriter, including, without limitation,
the opportunity to review financial and other records and corporate documents of
Crown Castle and to make inquiries of officers of Crown Castle, as provided in
Section 1.04(h) of the Registration Provisions, and (ii) the opinions of counsel
and comfort letter described in Section 1.04(g) of the Registration Provisions.
The results of such due diligence and such opinion of counsel and comfort letter
shall be satisfactory to Salomon.
4. Crown Castle shall have caused all such Covered Securities to be
listed on the Principal Market and each other exchange or quotation system on
which the Covered Securities are then traded or quoted.
5. Crown Castle shall have complied with all of its other obligations
pursuant to the Registration Provisions.
6. In the case of an Underwritten Offering, all conditions precedent to
the underwriter's obligations under the underwriting agreement shall have been
satisfied or waived.
7. Counterparty and/or FT shall have paid all costs and expenses
(including, without limitation, fees, expenses and disbursements of counsel)
incurred by Salomon and its affiliates in connection with the Underwritten
Offering, Gradual Market Distribution or Block Sale, as the case may be.
I-1
