Exhibit 10.14


(Multicurrency - Cross Border)


 


ISDA®


International Swap Dealers
Association, Inc.


 


MASTER AGREEMENT


 


dated as of June 6, 2006


	
  MERRILL LYNCH CAPITAL

  	
   

  	
  NPC INTERNATIONAL, INC.

  
	
  SERVICES, INC.

  	
   

  	
  (“Party B”)

  
	
  (“Party A”)

  	
   

  	
   

  



 


have entered and/or anticipate entering into one or more
transactions (each a “Transaction”) that are or will be governed by this Master
Agreement, which includes the schedule (the “Schedule”), and the documents and
other confirming evidence (each a “Confirmation”) exchanged between the parties
confirming those Transactions.


 


Accordingly, the parties agree as follows:-


 


1.         Interpretation


 


(a)      Definitions. The terms defined in Section 14 and in the Schedule will have the
meanings therein specified for the purpose of this Master Agreement.


 


(b)      Inconsistency. In the event of any inconsistency between the provisions of the Schedule
and the other provisions of this Master
Agreement, the Schedule will prevail. In the event of any inconsistency between
the provisions of any Confirmation and this Master Agreement (including the
Schedule), such Confirmation will prevail for the purpose of the relevant
Transaction.


 


(c)      Single Agreement All Transactions are entered into in reliance on the fact that this
Master Agreement and all Confirmations form a
single agreement between the parties (collectively referred to as this “Agreement”),
and the parties would not otherwise enter into any Transactions.


 


2.        Obligations


 


(a)       General Conditions.


 


(i)            Each party will make
each payment or delivery specified in each Confirmation to be made by it,
subject to the other provisions of this
Agreement.


 


(ii)         Payments under this
Agreement will be made on the due date for value on that date in the place of
the account specified in the
relevant Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner
customary for payments in the required currency. Where settlement is by
delivery (that is, other than by payment), such delivery will be made
for receipt on the due date in the manner customary for the relevant obligation
unless otherwise specified in the relevant
Confirmation or elsewhere in this Agreement.


 


(iii)        Each obligation of each
party under Section 2(a)(i) is subject to (1) the condition precedent that no
Event of Default or Potential Event
of Default with respect to the other party has occurred and is continuing, (2)
the condition precedent that no Early
Termination Date in respect of the relevant Transaction has occurred or been
effectively designated and (3) each other
applicable condition precedent specified in this Agreement.


 


Copyright © 1992 by International
Swap Dealers Association, Inc.


 












 


(b)          Change of Account. Either party may change its account for receiving
a payment or delivery by giving
notice to the other party at least five Local Business Days prior to the
scheduled date for the payment or
delivery to which such change applies unless such other party gives timely
notice of a reasonable objection to
such change.


 


(c)                             Netting. If on any date
amounts would otherwise be payable:—


 


              (i)    in the same currency; and


 


(ii)   in respect of the same Transaction,


 


by
each party to the other, then, on such date, each party’s obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one
party exceeds the aggregate amount that would otherwise have been payable by
the other party, replaced by an obligation upon the party by whom the larger
aggregate amount would have been payable to pay to the other party
the excess of the larger aggregate amount over the smaller aggregate amount.


 


The
parties may elect in respect of two or more Transactions that a net amount will
be determined in respect of all amounts payable on the same date in the same
currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be
made in the Schedule or a Confirmation by specifying that
subparagraph (ii) above will not apply to the Transactions identified as being
subject to the election, together with the starting date (in which case
subparagraph (ii) above will not, or will cease to, apply to such Transactions
from such date). This election may be made separately for different groups
of Transactions and will apply separately to each pairing of Offices through which the parties
make and receive payments or deliveries.


 


(d)         Deduction or Withholding for Tax.


 


(i)     Gross-Up. All
payments under this Agreement will be made without any deduction or withholding for or
on account of any Tax unless such deduction or withholding is required by any applicable law, as
modified by the practice of any relevant governmental revenue authority, then
in effect. If a party is so required to deduct or withhold, then that party
(“X”) will:—


 


(1)     promptly notify the other party (“Y”) of
such requirement;


 


(2)     pay to the relevant authorities the full
amount required to be deducted or withheld (including the full amount required
to be deducted or withheld from any additional amount paid by X to Y under this
Section 2(d)) promptly upon the earlier of determining that such deduction or
withholding is required or receiving notice that such amount has been assessed
against Y;


 


(3)     promptly forward to Y an official receipt
(or a certified copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and


 


(4)     if such Tax is an Indemnifiable Tax, pay to
Y, in addition to the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that the net amount
actually received by Y (free and clear of Indemnifiable Taxes, whether assessed
against X or Y) will equal the full amount Y would have received had no such
deduction or withholding been required. However, X will not be required to pay
any additional amount to Y to the extent that it would not be required to be
paid but for:—


 


(A)    the failure by Y to comply with or
perform any agreement contained in Section 4(a)(i), 4(a)(iii) or
4(d); or


 


(B)    the failure of a representation
made by Y pursuant to Section 3(f) to be accurate and true unless such
failure would not have occurred but for (I) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of whether such
action is taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.


 


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(ii)   Liability. If: —


 


(1)    X is required by any applicable
law, as modified by the practice of any relevant governmental revenue authority,
to make any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section 2(d)(i)(4);


 


(2)    X does not so deduct or withhold;
and


 


(3)    a liability resulting from such
Tax is assessed directly against X,


 


then,
except to the extent Y has satisfied or then satisfies the liability resulting
from such Tax, Y will promptly pay to X the amount of such liability
(including any related liability for interest, but including any related liability
for penalties only if Y has failed to comply with or perform any agreement contained
in Section 4(a)(i), 4(a)(iii) or 4(d)).


 


(e)           Default Interest; Other Amounts. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay
interest (before as well as after judgment) on the overdue amount to the other
party on demand in the same currency as such overdue amount, for the
period from (and including) the original due date for payment to (but excluding) the date
of actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in
respect of the relevant Transaction, a party defaults in the performance of any obligation
required to be settled by delivery, it will compensate the other party on
demand if and to the extent provided for in the relevant Confirmation or
elsewhere in this Agreement.


 


3.            Representations


 


Each
party represents to the other party (which representations will be deemed to be
repeated by each party on each date on which a Transaction is entered into and,
in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:—


 


(a)         Basic
Representations.


 


(i)     Status. It is duly organised and validly existing
under the laws of the jurisdiction of its organisation
or incorporation and, if relevant under such laws, in good standing;


 


(ii)     Powers. It has the power to execute this
Agreement and any other documentation relating to this Agreement to which it is a
party, to deliver this Agreement and any other documentation relating to this Agreement
that it is required by this Agreement to deliver and to perform its obligations
under
this Agreement and any obligations it has under any Credit Support Document to
which it is a party and has taken all necessary action to authorise
such execution, delivery and performance;


 


(iii)    No
Violation or Conflict. Such
execution, delivery and performance do not violate or conflict with any law
applicable to it, any provision of its constitutional documents, any order or
judgment of any court or other agency of government applicable to it or any of
its assets or any contractual restriction binding on or
affecting it or any of its assets;


 


(iv)    Consents. All governmental and other consents that
are required to have been obtained by it with respect to this Agreement or
any Credit Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and


 


(v)     Obligations
Binding. Its
obligations under this Agreement and any Credit Support Document to which it is a
party constitute its legal, valid and binding obligations, enforceable in
accordance with their respective terms (subject to applicable bankruptcy,
reorganisation, insolvency, moratorium or similar laws affecting creditors’
rights generally and subject, as to enforceability, to equitable principles of general
application (regardless of whether enforcement is sought in a proceeding in equity or at law)).


 


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(b)           Absence of
Certain Events. No Event of Default
or Potential Event of Default or, to its knowledge, Termination Event with respect
to it has occurred and is continuing and no such event or circumstance would occur as a result of
its entering into or performing its obligations under this Agreement or any
Credit Support Document to which it is a party.


 


(c)                  Absence of Litigation. There is not pending
or, to its knowledge, threatened against it or any of its Affiliates any
action, suit or proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to
affect the legality, validity or enforceability against it of this Agreement or
any Credit Support Document to which it is a party or its ability to perform
its obligations under this Agreement or such Credit Support Document.


 


(d)           Accuracy of
Specified Information. All applicable
information that is furnished in writing by or on behalf of it to the other party
and is identified for the purpose of this Section 3(d) in the Schedule is, as
of the date of the information, true, accurate and complete in every material
respect.


 


(e)           Payer Tax
Representation. Each representation
specified in the Schedule as being made by it for the purpose of this Section 3(e)
is accurate and true.


 


(f)            Payee Tax
Representations. Each representation
specified in the Schedule as being made by it for the purpose of this Section
3(f) is accurate and true.


 


4.             Agreements


 


Each
party agrees with the other that, so long as either party has or may have any
obligation under this Agreement or under any Credit Support Document to which
it is a party:—


 


(a)           Furnish
Specified Information. It will
deliver to the other party or, in certain cases under subparagraph (iii) below, to such government
or taxing authority as the other party reasonably directs:—


 


(i)
any forms, documents or certificates relating to taxation specified in the
Schedule or any Confirmation;


 


(ii)
any other documents specified in the Schedule or any Confirmation; and


 


(iii)
upon reasonable demand by such other party, any form or document that may be
required or reasonably requested in writing in order to allow such
other party or its Credit Support Provider to make a payment under this
Agreement or any applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such deduction or withholding
at a reduced rate (so long as the completion, execution or submission of such
form or document would not materially prejudice the legal or commercial position
of the party in receipt of such demand), with any such form or document
to be accurate and completed in a manner reasonably satisfactory to such other party
and to be executed and to be delivered with any reasonably required
certification,


 


in
each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.


 


(b)         Maintain
Authorisations. It will use all
reasonable efforts to maintain in full force and effect all consents of any
governmental or other authority that are required to be obtained by it with
respect to this Agreement or any Credit Support Document to which it is
a party and will use all reasonable efforts to obtain any that may become
necessary in the future.


 


(c)         Comply with
Laws. It will comply in all material respects
with all applicable laws and orders to which it may be subject if
failure so to comply would materially impair its ability to perform its
obligations under this Agreement or any Credit Support Document to
which it is a party.


 


(d)         Tax
Agreement. It will
give notice of any failure of a representation made by it under Section 3(f) to be accurate and
true promptly upon learning of such failure.


 


(e)         Payment of
Stamp Tax. Subject to Section 11, it will
pay any Stamp Tax levied or imposed upon it or in respect of its execution
or performance of this Agreement by a jurisdiction in which it is incorporated,


 


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organised,
managed and controlled, or considered to have its seat, or in which a branch or
office through which it is acting for the purpose of this Agreement is
located (“Stamp Tax Jurisdiction”) and will indemnify the other party
against any Stamp Tax levied or imposed upon the other party or in respect of
the other party’s execution or performance of this Agreement by any such
Stamp Tax Jurisdiction which is not also a Stamp Tax Jurisdiction with respect to
the other party.


 


5.         Events
of Default and Termination Events


 


(a)       Events
of Default. The
occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of
such party or any Specified Entity of such party of any of the following events
constitutes an event of default (an “Event of Default”) with respect
to such party:—


 


(i)     Failure
to Pay or Deliver. Failure by the party to make, when due, any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e) required
to be made by it if such failure is not remedied on or before the third
Local Business Day after notice of such failure is given to the party;


 


(ii)    Breach
of Agreement. Failure
by the party to comply with or perform any agreement or obligation (other
than an obligation to make any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) or to give notice of a Termination Event or any agreement or obligation under Section
4(a)(i), 4(a)(iii) or 4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied on or before the
thirtieth day after notice of such failure is given to the
party;


 


(iii)   Credit
Support Default.


 


(1)   Failure by the party or any Credit Support Provider of
such party to comply with or perform any
agreement or obligation to be complied with or performed by it in accordance with any Credit Support Document if such failure
is continuing after any applicable grace period has elapsed;


 


(2)   the expiration or termination of
such Credit Support Document or the failing or ceasing of such Credit
Support Document to be in full force and effect for the purpose of this
Agreement (in either case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without the written
consent of the other party; or


 


(3)   the party or such Credit Support
Provider disaffirms, disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;


 


(iv)    Misrepresentation. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or deemed to
have been made or repeated by the party or any Credit Support Provider of such
party in this Agreement or any Credit Support Document proves to have been incorrect or
misleading in any material respect when made or repeated or deemed to have been
made or repeated;


 


(v)     Default
under Specified Transaction. The
party, any Credit Support Provider of such party or any applicable Specified Entity
of such party (1) defaults under a Specified Transaction and, after giving
effect to any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving effect
to any applicable notice requirement or grace period, in making any payment or delivery due on the
last payment, delivery or exchange date of, or any payment on early termination
of,
a Specified Transaction (or such default continues for at least three Local
Business Days if there is no applicable notice requirement or grace period) or
(3) disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);


 


(vi)    Cross
Default. If “Cross
Default” is specified in the Schedule as applying to the party, the occurrence or
existence of (1) a default, event of default or other similar condition or
event (however


 


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described)
in respect of such party, any Credit Support Provider of such party or any
applicable Specified Entity of such party under one or more agreements or
instruments relating to Specified Indebtedness of any of them
(individually or collectively) in an aggregate amount of not less than the applicable
Threshold Amount (as specified in the Schedule) which has resulted in such
Specified Indebtedness becoming, or becoming capable at such time of being
declared, due and payable under such agreements or instruments,
before it would otherwise have been due and payable or (2) a default by such party, such
Credit Support Provider or such Specified Entity (individually or collectively)
in
making one or more payments on the due date thereof in an aggregate amount of
not less than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or grace
period);


 


(vii)  Bankruptcy. The party, any Credit Support Provider of
such party or any applicable Specified Entity of such party: —


 


(1)
is dissolved (other than pursuant to a consolidation, amalgamation or merger);
(2) becomes insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its debts as they become due; (3)
makes a general assignment, arrangement or composition with or for the benefit
of its creditors; (4) institutes or has instituted against it a proceeding seeking a judgment
of insolvency or bankruptcy or any other relief under any bankruptcy or
insolvency law or other similar law affecting creditors’ rights, or a petition
is presented for its winding-up or liquidation, and, in the case of any such
proceeding or petition instituted or presented against it, such proceeding or
petition (A) results in a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its winding-up or liquidation or (B)
is not dismissed, discharged, stayed or restrained in each case within 30 days
of the institution or presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or becomes subject to
the appointment of an administrator, provisional liquidator, conservator,
receiver, trustee, custodian or other similar official for it or for all or
substantially all its assets; (7) has a secured party take possession
of all or substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or
restrained, in each case within 30 days thereafter; (8) causes or is
subject to any event with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events specified in clauses
(1) to (7) (inclusive); or (9) takes any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of
the foregoing acts; or


 


(viii) Merger Without Assumption. The party or any Credit Support Provider
of such party consolidates or amalgamates
with, or merges with or into, or transfers all or substantially all its assets
to, another entity and, at the time of such consolidation, amalgamation, merger
or transfer: —


 


(1)   the resulting,
surviving or transferee entity fails to assume all the obligations of such
party or such Credit Support Provider under this Agreement or any Credit
Support Document to which it or its predecessor was a party by operation of
law or pursuant to an agreement reasonably satisfactory to the
other party to this Agreement; or


 


(2)   the benefits of any
Credit Support Document fail to extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee entity of its obligations under
this Agreement.


 


(b)       Termination
Events. The
occurrence at any time with respect to a party or, if applicable, any Credit Support Provider of
such party or any Specified Entity of such party of any event specified below
constitutes an Illegality if the event is specified in (i) below, a
Tax Event if the event is specified in (ii) below or a Tax Event Upon Merger if
the event is specified in (iii) below, and, if specified to be applicable, a
Credit Event


 


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Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the
event is specified pursuant to (v) below:—


 


(i)        Illegality. Due to
the adoption of, or any change in, any applicable law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court, tribunal or regulatory authority with
competent jurisdiction of any applicable law after such date, it becomes
unlawful (other than as a result of a breach by the party of Section 4(b)) for such party (which will be the Affected Party): —


 


(1)   to perform any absolute or
contingent obligation to make a payment or delivery or to receive a payment or delivery in respect
of such Transaction or to comply with any other material provision of this Agreement relating to such Transaction; or


 


(2)   to perform, or for any Credit
Support Provider of such party to perform, any contingent or other obligation
which the party (or such Credit Support Provider) has under any Credit Support Document
relating to such Transaction;


 


(ii)        Tax Event. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on or after the
date on which a Transaction is entered into (regardless of whether such action is taken or
brought with respect to a party to this Agreement) or (y) a Change in Tax Law, the party (which
will be the Affected Party) will, or there is a substantial likelihood that it
will, on the next succeeding Scheduled Payment Date (1) be required to pay to
the other party an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount is required to be deducted or
withheld for or on account of a Tax (except in respect of interest under
Section 2(e), 6(d)(ii)
or 6(e)) and no additional amount is required to be paid in respect of such Tax
under Section 2(d)(i)(4) (other than by
reason of Section 2(d)(i)(4)(A) or (B));


 


(iii)        Tax Event Upon Merger. The party (the “Burdened Party”) on the
next succeeding Scheduled Payment Date will either (1) be required to pay an
additional amount in respect of an Indemnifiable Tax under Section 2(d)(i)(4)
(except in respect of interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a payment
from which an amount has been deducted or withheld for or on account of any Indemnifiable
Tax in respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either case
as a result of a party consolidating or amalgamating with, or merging with or
into, or transferring all or substantially all its assets to, another entity
(which will be the Affected Party) where such action does not constitute an event described
in Section 5(a)(viii);


 


(iv)        Credit Event Upon Merger. If “Credit Event Upon Merger” is
specified in the Schedule as applying to the party, such party (“X”), any
Credit Support Provider of X or any applicable Specified Entity of X consolidates or
amalgamates with, or merges with or into, or transfers all or substantially all
its assets to, another entity and such action does not constitute an event
described in Section 5(a)(viii) but the creditworthiness of the
resulting, surviving or transferee entity is materially weaker than that of X,
such Credit Support Provider or such Specified Entity, as the case may be,
immediately prior to such action (and, in such event, X or its
successor or transferee, as appropriate, will be the Affected Party); or


 


(v)          Additional Termination Event. If
any “Additional Termination Event” is specified in the Schedule or any Confirmation
as applying, the occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination Event in
the
Schedule or such Confirmation).


 


(c)       Event of Default and Illegality. If an event
or circumstance which would otherwise constitute or give rise to an Event of Default
also constitutes an Illegality, it will be treated as an Illegality and will
not constitute an
Event of Default.


 


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6.        Early Termination


 


(a)        Right to Terminate Following
Event of Default. If at any time an Event of Default with respect to a party (the “Defaulting Party”) has occurred and
is then continuing, the other party (the “Non-defaulting Party”) may, by not more than 20 days notice to
the Defaulting Party specifying the relevant Event of Default, designate a day not earlier than the day such
notice is effective as an Early Termination Date in respect of all outstanding Transactions. If, however, “Automatic
Early Termination” is specified in the Schedule as applying to a party, then an
Early Termination Date in respect of all outstanding Transactions will occur immediately upon the occurrence with respect to
such party of an Event of Default specified in Section 5(a)(vii)(1),
(3), (5), (6) or, to the extent analogous thereto, (8), and as of the time
immediately preceding the institution of the relevant proceeding or the
presentation of the relevant petition upon the occurrence with respect to such party of an Event of Default specified
in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).


 


(b)        Right to Terminate Following Termination Event.


 


(i)       Notice. If a Termination Event occurs, an
Affected Party will, promptly upon becoming aware of it, notify the other
party, specifying the nature of that Termination Event and each Affected
Transaction and will also give such other information about that Termination
Event as the other party may reasonably require.


 


(ii)      Transfer
to Avoid Termination Event. If
either an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there
is only one Affected Party, or if a Tax Event Upon Merger occurs and the
Burdened Party is the Affected Party, the Affected Party will, as a condition
to its right to designate an Early Termination Date under Section 6(b)(iv), use
all reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days after it
gives notice under Section 6(b)(i) all its rights and obligations under this
Agreement in respect of the Affected Transactions to another of its Offices or
Affiliates so that such Termination Event ceases to exist.


 


If the Affected Party is
not able to make such a transfer it will give notice to the other party to that
effect within such 20 day period, whereupon the other party may effect such a
transfer within 30 days after the notice is given under Section 6(b)(i).


 


Any such transfer by a
party under this Section 6(b)(ii) will be subject to and conditional upon the
prior written consent of the other party, which consent will not be withheld if
such other party’s policies in effect at such time would permit it to enter
into transactions with the transferee on the terms proposed.


 


(iii)      Two
Affected Parties. If
an Illegality under Section 5(b)(i)(1) or a Tax Event occurs and there are two
Affected Parties, each party will use all reasonable efforts to reach agreement
within 30 days after notice thereof is given under Section 6(b)(i) on action to
avoid that Termination Event.


 


(iv)     Right to
Terminate. If: —


 


(1)      a transfer under Section 6(b)(ii) or an
agreement under Section 6(b)(iii), as the case may be, has not been effected
with respect to all Affected Transactions within 30 days after an Affected
Party gives notice under Section 6(b)(i); or


 


(2)      an Illegality under Section 5(b)(i)(2), a
Credit Event Upon Merger or an Additional Termination Event occurs, or a Tax
Event Upon Merger occurs and the Burdened Party is not the Affected Party,


 


either party in the case of
an Illegality, the Burdened Party in the case of a Tax Event Upon Merger, any
Affected Party in the case of a Tax Event or an Additional Termination Event if
there is more than one Affected Party, or the party which is not the Affected
Party in the case of a Credit Event Upon Merger or an Additional Termination
Event if there is only one Affected Party may, by not more than 20 days notice
to the other party and provided that the relevant Termination Event is then


 


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continuing,
designate a day not earlier than the day such notice is effective as an Early
Termination Date in respect of all Affected Transactions.


 


(c)        Effect of
Designation.


 


(i)       If notice designating an Early
Termination Date is given under Section 6(a) or (b), the Early Termination Date
will occur on the date so designated, whether or not the relevant Event of
Default or Termination Event is then continuing.


 


(ii)      Upon the occurrence or effective
designation of an Early Termination Date, no further payments or
deliveries under Section 2(a)(i) or 2(e) in respect of the Terminated
Transactions will be required to be made, but without prejudice to the
other provisions of this Agreement. The amount, if any, payable in respect of
an Early Termination Date shall be determined pursuant to Section 6(e).


 


(d)       Calculations.


 


(i)        Statement. On or as soon as reasonably practicable
following the occurrence of an Early Termination Date, each party will
make the calculations on its part, if any, contemplated by Section 6(e) and will provide to
the other party a statement (1) showing, in reasonable detail, such
calculations (including all relevant quotations and specifying any
amount payable under Section 6(e)) and (2) giving details of the relevant
account to which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in determining a
Market Quotation, the records of the party obtaining such
quotation will be conclusive evidence of the existence and accuracy of such quotation.


 


(ii)       Payment
Date. An amount
calculated as being due in respect of any Early Termination Date under Section 6(e)
will be payable on the day that notice of the amount payable is effective (in
the case of an Early Termination Date which is designated or occurs as a
result of an Event of Default) and on the day which is two Local
Business Days after the day on which notice of the amount payable is effective
(in the case of an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including) the relevant Early Termination Date to (but
excluding) the date such amount is paid, at the Applicable Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed.


 


(e)      Payments on Early Termination. If an Early Termination Date occurs, the
following provisions shall apply based on
the parties’ election in the Schedule of a payment measure, either “Market
Quotation” or “Loss”, and a payment
method, either the “First Method” or the “Second Method”. If the parties fail
to designate a payment measure or
payment method in the Schedule, it will be deemed that “Market Quotation” or the “Second Method”, as the case may be, shall
apply. The amount, if any, payable in respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off.


 


(i)      Events of Default. If the Early Termination Date results from an Event of
Default: —


 


(1)  First
Method and Market Quotation. If the First Method and Market
Quotation apply, the Defaulting Party will pay to the Non-defaulting Party the
excess, if a positive number, of (A) the sum of the Settlement Amount
(determined by the Non-defaulting Party) in respect of the Terminated
Transactions and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the Termination Currency Equivalent
of the Unpaid Amounts owing to the Defaulting Party.


 


(2)  First
Method and Loss. If the First Method and Loss apply, the Defaulting
Party will pay to the Non-defaulting Party, if a positive number, the
Non-defaulting Party’s Loss in respect of this Agreement.


 


(3)  Second
Method and Market Quotation. If the Second Method and Market
Quotation apply, an amount will be payable equal to (A) the sum of the
Settlement Amount (determined by the


 


9

















 


Non-defaulting
Party) in respect of the Terminated Transactions and the Termination Currency
Equivalent of the Unpaid Amounts owing to the Non-defaulting Party less (B) the
Termination Currency Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number, the Defaulting
Party will pay it to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to the
Defaulting Party.


 


(4) Second Method and Loss. If the Second
Method and Loss apply, an amount will be payable equal to the Non-defaulting
Party’s Loss in respect of this Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting Party; if it is a negative number, the
Non-defaulting Party will pay the absolute value of that amount to the
Defaulting Party.


 


(ii)       Termination
Events. If the
Early Termination Date results from a Termination Event: —


 


(1)      One
Affected Party. If there is one Affected Party, the amount payable will
be determined in accordance with Section 6(e)(i)(3), if Market
Quotation applies, or Section 6(e)(i)(4), if Loss applies, except that, in either
case, references to the Defaulting Party and to the Non-defaulting Party will be
deemed to be references to the Affected Party and the party which is not the Affected Party,
respectively, and, if Loss applies and fewer than all the Transactions are
being terminated, Loss shall be calculated in respect of all Terminated
Transactions.


 


(2)      Two
Affected Parties. If there are two Affected Parties: —


 


(A) if Market Quotation applies, each
party will determine a Settlement Amount in respect of the Terminated
Transactions, and an amount will be payable equal to (I) the sum of (a)
one-half of the difference between the Settlement Amount of the party with the higher
Settlement Amount (“X”) and the Settlement Amount of the party with the lower Settlement Amount (“Y”) and (b) the
Termination Currency Equivalent of the Unpaid
Amounts owing to X less (II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and


 


(B)  if Loss applies, each party will
determine its Loss in respect of this Agreement (or, if fewer than all
the Transactions are being terminated, in respect of all Terminated Transactions) and an
amount will be payable equal to one-half of the difference between the Loss of the
party with the higher Loss (“X”) and the Loss of the party with the lower Loss (“Y”).


 


If
the amount payable is a positive number, Y will pay it to X; if it is a
negative number, X will pay the absolute value of that amount to Y.


 


(iii)      Adjustment
for Bankruptcy. In
circumstances where an Early Termination Date occurs because “Automatic
Early Termination” applies in respect of a party, the amount determined under this Section 6(e)
will be subject to such adjustments as are appropriate and permitted by law to reflect any
payments or deliveries made by one party to the other under this Agreement (and
retained by such other party) during the period from the relevant Early
Termination Date to the date for payment determined under Section
6(d)(ii).


 


(iv)      Pre-Estimate. The parties agree that if Market
Quotation applies an amount recoverable under this Section 6(e) is a reasonable
pre-estimate of loss and not a penalty. Such amount is payable for the loss of bargain
and the loss of protection against future risks and except as otherwise
provided in this Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.


 


10

















 


7.              Transfer


 


Subject to Section 6(b)(ii),
neither this Agreement nor any interest or obligation in or under this
Agreement may be transferred (whether by way of security or otherwise) by either
party without the prior written consent of the other party, except that:
—


 


(a)            a party may make such a transfer
of this Agreement pursuant to a consolidation or amalgamation with, or merger with
or into, or transfer of all or substantially all its assets to, another entity
(but without prejudice to any other right or remedy under this
Agreement); and


 


(b)            a party may make such a transfer
of all or any part of its interest in any amount payable to it from a Defaulting Party
under Section 6(e).


 


Any purported transfer that is
not in compliance with this Section will be void.


 


8.              Contractual Currency


 


(a)          Payment in the
Contractual Currency. Each payment under
this Agreement will be made in the relevant currency specified in
this Agreement for that payment (the “Contractual Currency”). To the extent permitted by
applicable law, any obligation to make payments under this Agreement in the
Contractual Currency will not be discharged or satisfied by any
tender in any currency other than the Contractual Currency, except to the extent
such tender results in the actual receipt by the party to which payment is
owed, acting in a reasonable manner and in good faith in converting the
currency so tendered into the Contractual Currency, of the full amount in
the Contractual Currency of all amounts payable in respect of this Agreement. If for any reason
the amount in the Contractual Currency so received falls short of the amount in
the Contractual Currency payable in respect of this Agreement, the party
required to make the payment will, to the extent permitted by
applicable law, immediately pay such additional amount in the Contractual
Currency as may be necessary to compensate for the shortfall. If for any reason
the amount in the Contractual Currency so received exceeds the amount
in the Contractual Currency payable in respect of this Agreement, the party receiving the
payment will refund promptly the amount of such excess.


 


(b)          Judgments. To the extent
permitted by applicable law, if any judgment or order expressed in a currency other than
the Contractual Currency is rendered (i) for the payment of any amount owing in
respect of this Agreement, (ii) for the payment of any amount relating to any
early termination in respect of this Agreement or (iii) in respect of
a judgment or order of another court for the payment of any amount described in (i) or (ii)
above, the party seeking recovery, after recovery in full of the aggregate
amount to which such party is entitled pursuant to the judgment or order, will
be entitled to receive immediately from the other party the amount of any
shortfall of the Contractual Currency received by such party as a consequence
of sums paid in such other currency and will refund promptly to the other
party any excess of the Contractual Currency received by such party
as a consequence of sums paid in such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is converted into the currency of the
judgment or order for the purposes of such judgment or order and the rate of exchange at which such party is
able, acting in a reasonable manner and in good faith in converting the currency received into the
Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term “rate of exchange”
includes, without limitation, any premiums and costs of exchange payable in
connection with the purchase of or
conversion into the Contractual Currency.


 


(c)          Separate Indemnities. To the extent permitted by applicable
law, these indemnities constitute separate
and independent obligations from the other obligations in this Agreement, will
be enforceable as separate and
independent causes of action, will apply notwithstanding any indulgence granted
by the party to which any payment is owed and will not be affected by judgment
being obtained or claim or proof being made for any other sums payable in
respect of this Agreement.


 


(d)                Evidence of Loss. For the purpose of
this Section 8, it will be sufficient for a party to demonstrate that it would have
suffered a loss had an actual exchange or purchase been made.


 


11

















 


9.              Miscellaneous


 


(a)           Entire
Agreement. This
Agreement constitutes the entire agreement and understanding of the parties with respect to its
subject matter and supersedes  all oral
communication and prior writings with respect thereto.


 


(b)          Amendments. No amendment, modification or waiver in
respect of this Agreement will be effective unless in writing (including a
writing evidenced by a facsimile transmission) and executed by each of the parties or
confirmed by an exchange of telexes or electronic messages on an electronic
messaging system.


 


(c)           Survival of
Obligations. Without prejudice to Sections
2(a)(iii) and 6(c)(ii), the obligations of the parties under this Agreement will
survive the termination of any Transaction.


 


(d)          Remedies Cumulative. Except as provided in this Agreement, the
rights, powers, remedies and privileges
provided in this Agreement are cumulative and not exclusive of any rights,
powers, remedies and privileges
provided by law.


 


(e)           Counterparts
and Confirmations.


 


(i) This Agreement (and
each amendment, modification and waiver in respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.


 


(ii)
The parties intend that they are legally bound by the terms of each Transaction
from the moment they agree to those terms (whether orally or otherwise).
A Confirmation shall he entered into as soon as practicable and may he
executed and delivered in counterparts (including by facsimile transmission) or be
created by an exchange of telexes or by an exchange of electronic messages on an electronic
messaging system, which in each case will be sufficient for all purposes to
evidence a binding supplement to this Agreement. The parties will specify therein
or through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.


 


(f)           No Waiver of Rights. A failure or delay
in exercising any right, power or privilege in respect of this Agreement will not
be presumed to operate as a waiver, and a single or partial exercise of any right,
power or privilege will not be presumed to preclude any subsequent or further
exercise, of that right, power or privilege or the exercise of any
other right, power or privilege.


 


(g)                Headings. The headings used
in this Agreement are for convenience of reference only and are not to affect the
construction of or to be taken into consideration in interpreting this
Agreement.


 


10.          Offices; Multibranch Parties


 


(a)                 If Section 10(a) is
specified in the Schedule as applying, each party that enters into a Transaction
through an Office other than its head or home office represents to the other
party that, notwithstanding the place of booking office or
jurisdiction of incorporation or organisation of such party, the obligations of
such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by
such party on each date on which a Transaction is entered into.


 


(b)          Neither party may
change the Office through which it makes and receives payments or deliveries for the purpose of a
Transaction without the prior written consent of the other party.


 


(c)          If a party is
specified as a Multibranch Party in the Schedule, such Multibranch Party may
make and receive payments or deliveries under any Transaction through any
Office listed in the Schedule, and the Office through which it makes
and receives payments or deliveries with respect to a Transaction will be specified in the
relevant Confirmation.


 


11.          Expenses


 


A
Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees
and Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document


 


12

















 


to which the Defaulting Party is a party or by reason of the
early termination of any Transaction, including, but not limited to, costs of
collection.


 


12.   Notices


 


(a)          Effectiveness. Any
notice or other communication in respect of this Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile transmission or electronic messaging
system) to the address or number or in accordance with the electronic messaging system details provided
(see the Schedule) and will be deemed effective as indicated:—


 


(i)    if in writing and delivered
in person or by courier, on the date it is delivered;


 


(ii)   if
sent by telex, on the date the recipient’s answerback is received;


 


(iii)  if sent by
facsimile transmission, on the date that transmission is received by a
responsible employee of the recipient in legible form (it being agreed that the
burden of proving receipt will be on the sender and will not be
met by a transmission report generated by the sender’s facsimile machine);


 


(iv)  if sent by
certified or registered mail (airmail, if overseas) or the equivalent (return
receipt requested), on the date that mail is delivered or its delivery is
attempted; or


 


(v)
if sent by electronic messaging system, on the date that electronic message is
received,


 


unless
the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local Business
Day, in which case that communication shall be deemed given and effective on
the first following day that is a Local Business Day.


 


(b)          Change of Addresses. Either
party may by notice to the other change the address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.


 


13.     Governing Law and
Jurisdiction


 


(a)         Governing Law. This Agreement will
be governed by and construed in accordance with the law specified in the
Schedule.


 


(b)         Jurisdiction. With respect to any
suit, action or proceedings relating to this Agreement (“Proceedings”),
each party irrevocably:—


 


(i)    submits to the jurisdiction of the English
courts, if this Agreement is expressed to be governed by English law, or
to the non-exclusive jurisdiction of the courts of the State of New York and
the United States District Court located in the Borough of Manhattan in New
York City, if this Agreement is expressed to be governed by the laws of the
State of New York; and


 


(ii)   waives any objection which it may have at any
time to the laying of venue of any Proceedings brought in any such court, waives
any claim that such Proceedings have been brought in an inconvenient forum
and further waives the right to object, with respect to such Proceedings, that such court does not
have any jurisdiction over such party.


 


Nothing
in this Agreement precludes either party from bringing Proceedings in any other
jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil Jurisdiction and
Judgments Act 1982 or any modification, extension or re-enactment thereof for the time being in force) nor will the bringing
of Proceedings in any one or more jurisdictions
preclude the bringing of Proceedings in any other jurisdiction.


 


(c)          Service of Process. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name
in the Schedule to receive, for it and on its behalf, service of process in any
Proceedings. If for any


 


13

















 


reason any party’s Process Agent
is unable to act as such, such party will promptly notify the other party and within 30 days
appoint a substitute process agent acceptable to the other party. The parties
irrevocably consent to service of process given in the manner
provided for notices in Section 12. Nothing in this Agreement will affect the right
of either party to serve process in any other manner permitted by law.


 


(d)       Waiver
of Immunities. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and
its revenues and assets (irrespective of their use or intended use), all
immunity on the grounds of sovereignty or other similar grounds from (i) suit,
(ii) jurisdiction of any court, (iii) relief by way of injunction, order for
specific performance or for recovery of property, (iv) attachment of its assets
(whether
before or after judgment) and (v) execution or enforcement of any judgment to
which it or its revenues or assets might otherwise be entitled in any
Proceedings in the courts of any jurisdiction and irrevocably agrees, to the extent
permitted by applicable law, that it will not claim any such immunity in any Proceedings.


 


14.      Definitions


 


As used in this Agreement:—


 


“Additional Termination Event” has the meaning
specified in Section 5(b).


 


“Affected Party” has the meaning
specified in Section 5(b).


 


“Affected Transactions” means (a) with
respect to any Termination Event consisting of an Illegality, Tax Event or Tax
Event Upon Merger, all Transactions affected by the occurrence of such
Termination Event and (b) with respect to any other Termination Event, all
Transactions.


 


“Affiliate” means, subject to
the Schedule, in relation to any person, any entity controlled, directly or indirectly, by the
person, any entity that controls, directly or indirectly, the person or any
entity directly or indirectly under common control with the person. For
this purpose, “control” of any entity or person means ownership of a
majority of the voting power of the entity or person.


 


“Applicable Rate” means:—


 


(a)       in respect of obligations payable
or deliverable (or which would have been but for Section 2(a)(iii)) by a Defaulting
Party, the Default Rate;


 


(b)       in respect of an obligation to
pay an amount under Section 6(e) of either party from and after the date (determined in
accordance with Section 6(d)(ii)) on which that amount is payable, the Default
Rate;


 


(c)       in respect of all other
obligations payable or deliverable (or which would have been but for Section 2(a)(iii))
by a Non-defaulting Party, the Non-default Rate; and


 


(d)       in all
other cases, the Termination Rate.


 


“Burdened Party” has the meaning
specified in Section 5(b).


 


“Change in Tax Law” means the enactment,
promulgation, execution or ratification of, or any change in or amendment to, any
law (or in the application or official interpretation of any law) that occurs
on or after the date on which the relevant Transaction is entered into.


 


“consent” includes a consent,
approval, action, authorisation, exemption, notice, filing, registration or exchange control
consent.


 


“Credit Event Upon Merger” has the meaning
specified in Section 5(b).


 


“Credit Support Document” means
any agreement or instrument that is specified as such in this
Agreement.


 


“Credit Support Provider” has the meaning
specified in the Schedule.


 


“Default Rate” means a rate per
annum equal to the cost (without proof or evidence of any actual cost) to the relevant payee
(as certified by it) if it were to fund or of funding the relevant amount plus
1% per annum.


 


14

















 


“Defaulting Party” has the meaning
specified in Section 6(a).


 


“Early Termination Date” means the date determined in
accordance with Section 6(a) or 6(b)(iv).


 


“Event of Default” has the meaning
specified in Section 5(a) and, if applicable, in the Schedule.


 


“Illegality” has the meaning
specified in Section 5(b).


 


“Indemnifiable Tax” means any Tax other
than a Tax that would not be imposed in respect of a payment under this
Agreement but for a present or former connection between the jurisdiction of
the government or taxation authority imposing such Tax and the recipient of
such payment or a person related to such recipient (including, without limitation, a
connection arising from such recipient or related person being or having been a
citizen or resident of such jurisdiction, or being or having been organised,
present or engaged in a trade or business in such jurisdiction, or having or
having had a permanent establishment or fixed place of business in such
jurisdiction, but excluding a connection arising solely from such recipient or
related person having executed, delivered, performed its obligations or
received a payment under, or enforced, this Agreement or a Credit Support
Document).


 


“law” includes any treaty, law, rule
or regulation (as modified, in the case of tax matters, by the practice of any relevant
governmental revenue authority) and “lawful” and “unlawful” will be construed accordingly.


 


“Local Business Day” means, subject to
the Schedule, a day on which commercial banks are open for business (including
dealings in foreign exchange and foreign currency deposits) (a) in relation to
any obligation under Section 2(a)(i), in the place(s) specified in the
relevant Confirmation or, if not so specified, as otherwise agreed by the
parties in writing or determined pursuant to provisions contained, or
incorporated by reference, in this Agreement, (b) in relation to any other
payment, in the place where the relevant account is located and, if different,
in the principal financial centre, if any, of the currency of such payment, (c)
in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by Section 2(b), in
the place where the relevant new account is to be located and (d) in relation
to Section 5(a)(v)(2), in the relevant locations for performance with
respect to such Specified Transaction.


 


“Loss” means, with respect to this
Agreement or one or more Terminated Transactions, as the case may be, and a
party, the Termination Currency Equivalent of an amount that party reasonably
determines in good faith to be its total losses and costs (or
gain, in which case expressed as a negative number) in connection with this
Agreement or that Terminated Transaction or group of Terminated Transactions, as
the case may be, including any loss of bargain, cost of funding or, at the
election of such party but without duplication, loss or cost incurred as a
result of its terminating, liquidating, obtaining or reestablishing any hedge
or related trading position (or any gain resulting from any of them). Loss
includes losses and costs (or gains) in respect of any payment or delivery
required to have been made (assuming satisfaction of each applicable condition
precedent) on or before the relevant Early Termination Date and not made,
except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party’s legal fees and out-of-pocket
expenses referred to under Section 11. A party will determine its Loss as of
the relevant Early Termination Date, or, if that is not reasonably practicable, as of
the earliest date thereafter as is reasonably practicable. A party may (but
need not) determine its Loss by reference to quotations of relevant rates or
prices from one or more leading dealers in the relevant markets.


 


“Market Quotation” means, with respect
to one or more Terminated Transactions and a party making the determination, an
amount determined on the basis of quotations from Reference Market-makers. Each
quotation will be for an amount, if any, that would be paid to such party
(expressed as a negative number) or by such party (expressed as a
positive number) in consideration of an agreement between such party (taking into account any
existing Credit Support Document with respect to the obligations of such party)
and the quoting Reference Market-maker to enter into a transaction (the “Replacement
Transaction”) that would have the effect of preserving for such party the
economic equivalent of any payment or delivery (whether the underlying
obligation was absolute or contingent and assuming the satisfaction of each
applicable condition precedent) by the parties under Section 2(a)(i) in respect of
such Terminated Transaction or group of Terminated Transactions that would, but
for the occurrence of the relevant Early Termination Date, have


 


15

















 


been required after that date.
For this purpose, Unpaid Amounts in respect of the Terminated Transaction or
group of Terminated Transactions are to be excluded but, without limitation,
any payment or delivery that would, but for the relevant Early Termination
Date, have been required (assuming satisfaction of each applicable condition
precedent) after that Early Termination Date is to be included. The Replacement
Transaction
would be subject to such documentation as such party and the Reference
Market-maker may, in good
faith, agree. The party making the determination (or its agent) will request
each Reference Market-maker to provide its
quotation to the extent reasonably practicable as of the same day and time (without regard to different time zones) on or as
soon as reasonably practicable after the relevant Early Termination Date. The
day and time as of which those quotations are to be obtained will be selected
in good faith by the party obliged to make a determination under Section 6(e),
and, if each party is so obliged, after consultation with the other. If more
than three quotations are provided, the Market Quotation will be the arithmetic
mean of the quotations, without regard to the quotations having the highest and
lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest
value or lowest value, then one of such quotations shall be disregarded. If
fewer than three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of Terminated Transactions cannot be determined.


 


“Non-default Rate” means a rate per
annum equal to the cost (without proof or evidence of any actual cost) to the
Non-defaulting Party (as certified by it) if it were to fund the relevant
amount.


 


“Non-defaulting Party” has the meaning
specified in Section 6(a).


 


“Office” means a branch or
office of a party, which may be such party’s head or home office.


 


“Potential Event of Default” means any event
which, with the giving of notice or the lapse of time or both, would constitute an
Event of Default.


 


“Reference Market-makers” means four leading
dealers in the relevant market selected by the party determining a
Market Quotation in good faith (a) from among dealers of the highest credit
standing which satisfy all the criteria that such party applies
generally at the time in deciding whether to offer or to make an extension of
credit and (b) to the extent practicable, from among such dealers having an
office in the same city.


 


“Relevant Jurisdiction” means, with respect
to a party, the jurisdictions (a) in which the party is incorporated,
organised, managed and controlled or considered to have its seat, (b) where an
Office through which the party is acting for purposes of this Agreement
is located, (c) in which the party executes this Agreement and (d) in relation to
any payment, from or through which such payment is made.


 


“Scheduled Payment Date” means a date on
which a payment or delivery is to be made under Section 2(a)(i) with respect to a
Transaction.


 


“Set-off” means set-off,
offset, combination of accounts, right of retention or withholding or similar
right or requirement to which the payer of an amount under Section 6 is
entitled or subject (whether arising under this Agreement, another
contract, applicable law or otherwise) that is exercised by, or imposed on,
such payer.


 


“Settlement Amount” means, with respect to a party
and any Early Termination Date, the sum of: —


 


(a)     the Termination Currency
Equivalent of the Market Quotations (whether positive or negative) for each Terminated
Transaction or group of Terminated Transactions for which a Market Quotation is
determined; and


 


(b)    such party’s Loss (whether
positive or negative and without reference to any Unpaid Amounts) for each Terminated
Transaction or group of Terminated Transactions for which a Market Quotation
cannot be determined or would not (in the reasonable belief of the party making the
determination) produce a commercially reasonable result.


 


“Specified Entity” has the meanings
specified in the Schedule.


 


16

















 


“Specified Indebtedness” means, subject to
the Schedule, any obligation (whether present or future, contingent or
otherwise, as principal or surety or otherwise) in respect of borrowed money.


 


“Specified Transaction” means, subject to
the Schedule, (a) any transaction (including an agreement with respect thereto) now
existing or hereafter entered into between one party to this Agreement (or any
Credit Support Provider of such party or any applicable Specified Entity
of such party) and the other party to this Agreement (or any Credit Support
Provider of such other party or any applicable Specified Entity of such other
party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index swap,
equity or equity index option, bond option, interest rate option, foreign
exchange transaction, cap transaction, floor transaction, collar transaction,
currency swap transaction, cross-currency rate swap transaction, currency option or
any other similar transaction (including any option with respect to any of
these transactions), (b) any combination of these transactions and (c) any
other transaction identified as a Specified Transaction in this Agreement or
the relevant confirmation.


 


“Stamp Tax” means any stamp,
registration, documentation or similar tax.


 


“Tax” means any present or future tax, levy, impost,
duty, charge, assessment or fee of any nature (including interest, penalties
and additions thereto) that is imposed by any government or other taxing
authority in respect of any payment under this Agreement other than a
stamp, registration, documentation or similar tax.


 


“Tax Event” has the
meaning specified in Section 5(b).


 


“Tax Event Upon Merger” has the meaning
specified in Section 5(b).


 


“Terminated Transactions” means with respect
to any Early Termination Date (a) if resulting from a Termination Event,
all Affected Transactions and (b) if resulting from an Event of Default, all
Transactions (in either case) in effect immediately before the
effectiveness of the notice designating that Early Termination Date (or, if “Automatic
Early Termination” applies, immediately before that Early Termination Date).


 


“Termination Currency” has the meaning specified in the
Schedule.


 


“Termination Currency Equivalent” means, in respect
of any amount denominated in the Termination Currency, such Termination
Currency amount and, in respect of any amount denominated in a currency other than the
Termination Currency (the “Other Currency”), the amount in the Termination
Currency determined by the party making the relevant determination as being
required to purchase such amount of such Other Currency as at the relevant
Early Termination Date, or, if the relevant Market Quotation or Loss (as the
case may be), is determined as of a later date, that later date, with the
Termination Currency at the rate equal to the spot exchange rate of the
foreign exchange agent (selected as provided below) for the purchase of such
Other Currency with the Termination Currency at or about 11:00 a.m. (in the
city in which such foreign exchange agent is located) on such date as would be
customary for the determination of such a rate for the purchase of such
Other Currency for value on the relevant Early Termination Date or that later
date. The foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party and
otherwise will be agreed by the parties.


 


“Termination Event” means an Illegality,
a Tax Event or a Tax Event Upon Merger or, if specified to be applicable, a
Credit Event Upon Merger or an Additional Termination Event.


 


“Termination Rate” means a rate per
annum equal to the arithmetic mean of the cost (without proof or evidence of any
actual cost) to each party (as certified by such party) if it were to fund or
of funding such amounts.


 


“Unpaid Amounts” owing to any party
means, with respect to an Early Termination Date, the aggregate of (a) in respect of
all Terminated Transactions, the amounts that became payable (or that would
have become payable but for Section 2(a)(iii)) to such party under
Section 2(a)(i) on or prior to such Early Termination Date and which
remain unpaid as at such Early Termination Date and (b) in respect of each
Terminated Transaction, for each obligation under Section 2(a)(i) which was (or
would have been but for Section 2(a)(iii)) required to be settled by delivery to
such party on or prior to such Early Termination Date and which has not
been so settled as at such Early Termination Date, an amount equal to the fair
market


 


17

















 


value
of that which was (or would have been) required to be delivered as of the
originally scheduled date for delivery, in each case together with (to the extent permitted under applicable law)
interest, in the currency of such amounts, from (and including) the date such
amounts or obligations were or would have been required to have been paid or
performed to (but excluding) such Early Termination Date, at the
Applicable Rate. Such amounts of interest will be calculated on the basis of
daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in clause (b)
above shall be reasonably determined by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it shall be the average of the Termination Currency
Equivalents of the fair market values reasonably determined by both parties.


 


IN WITNESS WHEREOF the parties have executed
this document on the respective dates specified below with effect from the date specified on the first page of this
document.


 


	
  MERRILL LYNCH CAPITAL SERVICES, INC.

  	
   

  	
   

  	
  NPC INTERNATIONAL, INC.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  By:

  	
  /s/ Troy D. Cook

  
	
   

  	
  Name:

  	
   

  	
   

  	
  Name:

  	
  Troy D. Cook

  
	
   

  	
  Title:

  	
   

  	
   

  	
  Title:

  	
  Senior Vice President

  
	
   

  	
  Date:

  	
   

  	
   

  	
  Date:

  	
  9/21/2006

  



 


18

















 


SCHEDULE


 


to the


 


Master Agreement


 


dated as of June 6, 2006


 


between


 


MERRILL LYNCH CAPITAL SERVICES, INC., a corporation


organized under the laws of the State of Delaware


 


(“Party A”)


 


and


 


NPC INTERNATIONAL, INC., a corporation organized under


the laws of the State of Kansas


 


(“Party B”)


 


Part 1


 


Termination Provisions


 


In
this Agreement:-


 


(a)          “Specified Entity” means in relation to Party A for the purpose of:-


 


Section 5(a)(v),                 Not Applicable


Section
5(a)(vi),                Not Applicable


Section
5(a)(vii),               Not
Applicable


Section 5(b)(iv),                Not Applicable


 


in
relation to Party B for the purpose of:-


 


Section 5(a)(v),                 Not Applicable


Section 5(a)(vi),                Not Applicable


Section 5(a)(vii),               Not
Applicable


Section 5(b)(iv),                Not Applicable


 


(b)          “Specified
Transaction” will have the meaning specified in Section 14 of this
Agreement.


 


(c)          The “Cross Default” provisions of Section 5(a)(vi) will apply to
Party A and to Party B.


 


19

















 


If
such provisions apply:-


 


“Specified Indebtedness” will have the meaning specified in
Section 14 of this Agreement, and, in addition, “Specified Indebtedness”
as applied to Party B shall also include any obligation of Party B under or relating to
that certain Credit Agreement dated as of May 3, 2006, among Party B, the Guarantors party
thereto, as such term is defined therein, Merrill Lynch, Pierce, Fenner &
Smith Incorporated as Syndication Agent as such term is defined therein, Bank
of America, N.A. and Suntrust Bank as Co-Documentation Agents as such term
is defined therein, JP Morgan Chase Bank, N.A., as Administrative Agent,
Collateral Agent and Issuing Bank as such terms are defined therein, the
Lenders signatory thereto, as such term is defined therein, J.P. Morgan Securities
Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as Joint Lead
Arrangers and Joint Bookrunners as such terms are defined therein (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”).


 


“Threshold Amount” means, in respect of Party A, USD
100,000,000 or its equivalent in other currencies, and in respect of
Party B, USD 5,000,000.


 


(d)          The
“Credit Event Upon Merger” provisions
of Section 5(b)(iv) will apply to Party A and Party B.


 


(e)          The
“Automatic Early Termination” provision
of Section 6(a) will not apply to either Party A or to Party B.


 


(f)                                 Payments
on Early Termination. For the purpose of Section 6(e) of this Agreement:-


 


(i)          Market
Quotation will apply.


 


(ii)         The
Second Method will apply.


 


(g)                              “Termination
Currency” means United States Dollars.


 


(h)          Additional Termination Event will apply.


 


The
occurrence of any of the events set out in clauses (i) and (ii) immediately
below shall constitute the occurrence of an Additional Termination
Event pursuant to Section 5(b)(v), and Party B shall be the sole Affected
Party.


 


	
  (i)

  	
   

  	
  (x)

  	
   

  	
  the lending and other credit
  extension commitment of each lender andother credit
  extension provider under the Credit Agreement have been terminated in full and each loan and other extension
  of credit made pursuant to the
  Credit Agreement have been repaid in full; or

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (y)

  	
   

  	
  all
  or substantially all of the collateral (if any) securing the obligations of Party B under the
  Credit Agreement is released prior to the date on which no Transaction is
  outstanding under this Agreement and no amount is owing to Party A under
  this Agreement;

  



 


(ii)         Merrill Lynch Capital
Corporation, a division of Merrill Lynch Business Financial Services Inc., ceases
to be a lender under the Credit Agreement.


 


20

















 


Part 2


 


Tax
Representations


 


(a)           Payer Representations. For the purpose of
Section 3(e) of this Agreement, Party A will make the following representation and
Party B will make the following representation:-


 


It
is not required by any applicable law, as modified by the practice of any
relevant governmental revenue authority, of any Relevant Jurisdiction to make
any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this Agreement) to be
made by it to the other party under this Agreement. In making this representation, it
may rely on (i) the accuracy of any representations made by the other party pursuant to Section
3(f) of this Agreement, (ii) the satisfaction of the agreement contained
in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and
effectiveness of any document provided by the other party pursuant to Section
4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the
agreement of the other party contained in Section 4(d) of this Agreement, provided that it
shall not be a breach of this representation where reliance is placed on clause
(ii) and the other party does not deliver a form or document under Section
4(a)(iii) by reason of material prejudice to its legal or commercial position.


 


(b)          Payee Representations. For the purpose of Section 3(f) of this Agreement,
Party A and Party B make the
representations specified below:-


 


(i)           The
following representation applies to Party A:-


 


Party
A is a corporation organized under the laws of the State of Delaware.


 


(ii)         The
following representation applies to Party B:-


 


Party
B is a corporation organized under the laws of the State of Kansas.


 


21

















 


Part
3


 


Agreement to
Deliver Documents


 


For
the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees to
deliver the following documents as applicable:-


 


(a)   Tax forms, documents or certificates to be
delivered are:-


 


 


	
  Party Required to

  	
   

  	
   

  	
   

  	
   

  
	
  Deliver Document

  	
   

  	
  Form/Document/Certificate

  	
   

  	
  Date by Which to be Delivered

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party A/Party B 

  	
   

  	
  A correct, complete and executed U.S. Internal
  Revenue Service Form W-9 (or any successor thereto), including appropriate
  attachments, that eliminates U.S. federal backup withholding tax on payments
  under this Agreement. 

  	
   

  	
  (i) Before the first Payment Date under this
  Agreement, (ii) promptly upon reasonable demand by the other party, and (iii)
  promptly upon learning that any such form previously provided by such party
  has become obsolete or incorrect. 

  



 


(b)   Other Documents to be delivered are:-


 


	
  Party
  Required

  	
   

  	
  Covered
  by

  	
   

  	
   

  	
   

  	
   

  
	
  to
  Deliver

  	
   

  	
  Form/Document/

  	
   

  	
  Date
  by which

  	
   

  	
  Section
  3(d)

  
	
  Document

  	
   

  	
  Certificate

  	
   

  	
  to be
  Delivered

  	
   

  	
  Representation

  
	
  Party A/Party B. 

  	
   

  	
  Annual audited financial statements (or, in the case
  of Party A, of its Credit Support Provider) prepared in accordance with
  generally accepted accounting principles in the country in which the party
  (or, in the case of Party A, its Credit Support Provider) is organized. 

  	
   

  	
  Promptly after request. 

  	
   

  	
  Yes. 

  
	
  Party A/Party B. 

  	
   

  	
  Quarterly unaudited financial statements (or, in the
  case of Party A, of its Credit Support Provider) prepared in accordance with
  generally accepted accounting principles in the country in which the party
  (or, in the case of Party A, its Credit Support Provider) is organized. 

  	
   

  	
  Promptly after request. 

  	
   

  	
  Yes. 

  
	
  Party A/Party B. 

  	
   

  	
  Credit Support Document, if any, specified in Part 4
  of the Schedule, such Credit Support Document being duly executed if
  required. 

  	
   

  	
  Concurrently with the execution of this Agreement. 

  	
   

  	
  No. 

  



 


22

















 


	
  Party
  Required

  	
   

  	
  Covered
  by

  	
   

  	
   

  	
   

  	
   

  
	
  to
  Deliver

  	
   

  	
  Form/Document/

  	
   

  	
  Date by
  which

  	
   

  	
  Section
  3(d)

  
	
  Document

  	
   

  	
  Certificate

  	
   

  	
  to be
  Delivered

  	
   

  	
  Representation

  
	
  Party A/Party B. 

  	
   

  	
  Certified copies of the resolution(s) of its board
  of directors or other documents authorizing the execution and delivery of
  this Agreement. 

  	
   

  	
  Concurrently with the execution of this Agreement. 

  	
   

  	
  Yes. 

  
	
  Party A/Party B. 

  	
   

  	
  Incumbency certificate or other documents evidencing
  the authority of the party entering into this Agreement or any other document
  executed in connection with this Agreement.

  	
   

  	
  Concurrently with the execution of this Agreement or
  of any other documents executed in connection with this Agreement. 

  	
   

  	
  Yes. 

  



 


23

















 


Part 4


 


Miscellaneous


 


(a)           Addresses for Notices: For the purpose of
Section 12(a) of this Agreement:- 


 


Address for notices or communications to Party A:-


 


	
  Address:

  	
   

  	
  Merrill Lynch
  World Headquarters

  	
   

  	
   

  
	
   

  	
   

  	
  4 World Financial Center, 18th
  Floor

  	
   

  	
   

  
	
   

  	
   

  	
  New York, New
  York 10080

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  Swap Group

  	
   

  	
   

  
	
  Facsimile No.:

  	
   

  	
  917-778-0836 

  	
  Telephone No.:

  	
  212 449-2467

  	
   

  
							



 


 


(For
all purposes)


 


Additionally,
a copy of all notices pursuant to Sections 5, 6, and 7 as well as any changes
to counterparty’s address, telephone number or facsimile number should be
sent to:


 


	
   

  	
   

  	
  GMI Counsel

  	
   

  	
   

  
	
   

  	
   

  	
  Merrill Lynch
  World Headquarters

  	
   

  	
   

  
	
   

  	
   

  	
  4 World
  Financial Center, 12th Floor

  	
   

  	
   

  
	
   

  	
   

  	
  New York, New
  York 10080

  	
   

  	
   

  
	
   

  	
   

  	
  Attention:

  	
  Swaps Legal

  	
   

  	
   

  
	
   

  	
   

  	
  Facsimile No.: 212 449-6993

  	
   

  	
   

  
						



 


Address
for notices or communications to Party B:-


 


	
  Address:

  	
   

  	
  NPC International, Inc.

  
	
   

  	
   

  	
  14400 College
  Boulevard, Suite 201

  
	
   

  	
   

  	
  Lenexa, Kansas 66215

  
	
  Attention:

  	
   

  	
  Troy Cook

  
	
  Facsimile No.:

  	
   

  	
  (913) 327-5849

  



 


(For
all purposes)


 


(b)          Process
Agent. For the purpose of Section 13(c):- 
                              




Party A appoints as its Process Agent:    Not Applicable.




Party B appoints as its Process Agent:    Not Applicable.


 


(c)           Offices. The
provisions of Section 10(a) will apply to this Agreement.


 


(d)          Multibranch Party. For the purpose of Section 10(c) of this Agreement:


 


Party A is not a Multibranch Party.


 


Party B is not a Multibranch
Party.


 


24

















 


(e)          Calculation
Agent.  The Calculation
Agent is Party A, unless (and only for so long as) an Event of Default has
occurred and is continuing with respect to Party A, in which event the
Calculation Agent shall be a recognized dealer in the relevant
derivatives market designated by Party B and reasonably acceptable to Party A.


 


(f)           Credit
Support Document. Details of any Credit Support Document:-


 


Party
A: Guarantee of Merrill Lynch & Co., Inc. (“ML&Co.”) in the form
attached hereto as Exhibit A.


 


Party B: (i) The
guarantee set forth in Article XIII of the Credit Agreement and (ii) each of
the Security Instruments (as defined in the
Credit Agreement) delivered pursuant to the Credit Agreement shall each constitute a Credit Support Document hereunder.


 


(g)          Credit Support Provider.


 


Credit
Support Provider means in relation to Party A, ML & Co.


 


Credit
Support Provider means in relation to Party B, each Guarantor (as defined in
the Credit Agreement).


 


(h)       Governing Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York
without reference to choice of law doctrine except Section 5-1401 and Section 5-1402 of the
New York General Obligations Law.


 


(i)            Netting of Payments. Subparagraph (ii) of
Section 2(c) of this Agreement will apply.


 


(j)            “Affiliate” will have the meaning specified
in Section 14 of this Agreement.


 


25

















 


Part 5


 


Other Provisions


 


(1)            Financial Statements. Section 3(d) is hereby amended by adding in the
third line thereof after the word “respect”
and before the period:


 


“or,
in the case of financial statements, a fair presentation of the financial
condition of the relevant party”.


 


(2)            Additional
Representations. For purposes of Section 3, the following shall be
added, immediately following paragraph (f) thereto:


 


(g)         It is an “eligible
contract participant” as defined in Sectionla(12)of the United States Commodity Exchange
Act, as amended.


 


(h)         It has entered into
this Agreement (including each Transaction evidenced hereby) in conjunction with its
line of business (including financial intermediation services) or the financing
of
its business.


 


(i)       It is entering into this
Agreement, any Credit Support Document to which it is a party, each Transaction and
any other documentation relating to this Agreement or any Transaction as principal (and not as
agent or in any other capacity, fiduciary or otherwise).


 


(j)        Non-Reliance. Each party represents to the
other party (which representation will be deemed to be repeated by each
party on each date on which a Transaction is entered into or amended, extended or
otherwise modified) that it is acting for its own account, and has made its own
independent decisions to enter into this Agreement and any Transaction
hereunder and as to whether this Agreement and any Transaction hereunder is
appropriate or proper for it based on its own judgment and upon advice from
such advisors as it has deemed necessary. It is not relying on any communication
(written or oral) of the other party as investment advice or as a recommendation to
enter into this Agreement or any Transaction hereunder, it being understood that information and
explanations related to the terms and conditions of this Agreement and any Transaction hereunder
shall not be considered investment advice or a recommendation to enter into this Agreement
or any Transaction hereunder. No communication (written or oral) received from
the other party shall be deemed to be an assurance or guarantee as to the
expected results of any Transaction hereunder.


 


(3)           Transfer. Notwithstanding
the provisions of Section 7, Party A may assign and delegate its rights and obligations under this Agreement
and  all Transactions hereunder (the “Transferred
Obligations”) to any subsidiary of ML
& Co. (the “Assignee”) by notice specifying the effective date of such transfer (“Effective Date”) and including an
executed acceptance and assumption by the Assignee of the Transferred Obligations; provided that (i)
Party B is not, as a result of such transfer, required to pay to the Assignee an amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii), or 6(e))
greater than the amount in respect of which Party B would have been required to pay to Party A in the
absence of such transfer; and (ii) the Assignee is not, as a result of such transfer, required to withhold or
deduct on account of a Tax under Section 2(d)(i) (except in respect of interest under Section 2(e), 6(d)(ii),
or 6(e)) an amount in excess of that which Party A would have been required to withhold or deduct in the
absence of such transfer, unless the Assignee would be required to make additional payments pursuant to
Section 2(d)(i)(4) corresponding to such excess.


 


26

















 


On
the Effective Date, (a) Party A shall be released from all obligations and
liabilities arising under the Transferred Obligations; and (b)
if Party A has not assigned and delegated its rights and obligations under this Agreement and
all Transactions hereunder, the Transferred Obligations shall cease to be Transaction(s) under
this Agreement and shall be deemed to be Transaction(s) under the master agreement, if any,
between Assignee and Party B, provided that, if at such time Assignee and Party
B have
not entered into a master agreement, Assignee and Party B shall be deemed to
have entered into an ISDA form of Master Agreement (Multicurrency-Cross Border)
with a Schedule substantially in the form hereof but amended to reflect the
name of the Assignee and the address for notices and any amended representations under
Part 2 hereof as may be specified in the notice of transfer. NB: The Guarantee
of ML & Co is for the benefit of Merrill Lynch Capital Services, Inc.
and any of its successors or permitted assigns to the extent such successors or
permitted assigns are direct or indirect subsidiaries of ML & Co. To the extent Merrill
Lynch Capital Services, Inc. transfers its obligations under the ISDA to
another Merrill Lynch entity, the guarantee will continue to be in effect


 


(4)           Method of Notice. Section 12(a)(ii) of the
Master Agreement is deleted in its entirety.


 


(5)           Jurisdiction.


 


(a)          Section
13(b)(i) of the Agreement is amended to read in its entirety as follows:


 


“(i)
submits to the jurisdiction of the courts of the State of New York and the
United States District Court located in the Borough of Manhattan in New
York City, which submission shall be exclusive unless none of such
courts has lawful jurisdiction over such Proceedings;” and


 


(b)          the
final paragraph of Section 13(b) of the Agreement is hereby deleted.


 


(6)           Set-off. Any
amount (the “Early Termination Amount”) payable to one party (the “Payee”) by
the other party (the “Payer”) under
Section 6(e), in circumstances where there is a Defaulting Party or one Affected Party in the case where either a Credit
Event Upon Merger has occurred or any other Termination Event in respect of
which all outstanding Transactions are Affected Transactions has occurred,
will, at the option of the party (“X”)
other than the Defaulting Party or the Affected Party (and without prior notice
to the Defaulting Party or the
Affected Party), be reduced by its set-off against any amount(s) (the “Other Agreement Amount”) payable (whether at such time
or in the future or upon the occurrence of a contingency) by the Payee to the Payer (irrespective of the
currency, place of payment or booking office of the obligation) under any other agreement(s) between the Payee and
the Payer or instrument(s) or undertaking(s) issued or executed by one party to, or in favor of, the
other party (and the Other Agreement Amount will be discharged promptly and in all respects to the extent it is
so set-off). X will give notice to the other party of any set-off effected under this section.


 


For
this purpose, either the Early Termination Amount or the Other Agreement Amount
(or the relevant portion
of such amounts) may be converted by X into the currency in which the other is
denominated at the rate of exchange at which
such party would be able, acting in a reasonable manner and in good faith, to purchase the relevant amount of such currency.


 


If
an obligation is unascertained, X 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.


 


27

















 


Nothing in this section
shall be effective to create a charge or other security interest. This section
shall be without prejudice and in addition
to any right of set-off, combination of accounts, lien or other right to which any
party is at any time otherwise entitled (whether by operation of law, contract
or otherwise).


 


(7)           Escrow. If by reason of the
time difference between the cities in which payments are to be made, it is not
possible for simultaneous payments to be made on any date on which both parties
are required to make payments hereunder, either party may, at its option
and in its sole discretion, notify the other party that payments on that date are to
be made in escrow. In this case, deposit of the payment due earlier on that date shall be
made by 2:00 p.m. (local time at the place for the earlier payment) on that
date with an escrow agent selected by the notifying party, accompanied
by irrevocable payment instruction (i) to release the deposited payment to
the intended recipient upon receipt by the escrow agent of the required deposit
of the corresponding payment from the other party on the same date accompanied
by irrevocable payment instructions to the same effect or (ii) if the
required deposit of the corresponding payment is not made on that same date, to
return the payment deposited to the party that paid it in escrow. The party
that elects to have payments made in escrow shall pay the costs of the escrow
arrangements and shall cause those arrangements to provide that the intended
recipient of the payment due to be deposited first shall be entitled to interest
on that deposited payment for each day in the period of its deposit at the rate
offered by the escrow agent for that day for overnight deposits in the relevant
currency in the office where it holds that deposited payment (at 11:00
a.m. local time on that day) if that payment is not released by 5:00 p.m. local time on the
date it is deposited for any reason, other than the intended recipient’s
failure to make the escrow deposit it is required to make hereunder in a timely
fashion.


 


(8)           Consent to
Recording. The parties agree that each may electronically record all
telephonic conversations between marketing and trading personnel in connection with
this Agreement.


 


(9)           Waiver of Jury
Trial. Each party hereby irrevocably waives any and all right to trial by jury with respect to any
legal proceeding arising out of or relating to this Agreement or any
Transaction contemplated hereunder.


 


(10)         Further
Representation of Party B. Party B represents and warrants to
Party A (which representation will be deemed to be repeated by Party B
on each date on which a Transaction is entered into) that each of the
representations and warranties made by Party B in Article VII of the Credit
Agreement is true and correct and no Event of Default under the Credit
Agreement has occurred and is continuing.


 


(11)         “Credit
Agreement” means the Credit Agreement dated as of May 3, 2006, among
Party B, the Guarantors party thereto, as such term is defined therein,
Merrill Lynch, Pierce, Fenner & Smith Incorporated as Syndication Agent
as such term is defined therein, Bank of America, N.A. and Suntrust Bank as
Co-Documentation Agents as such term is defined therein,  JPMorgan Chase Bank, N.A., as Administrative
Agent, Collateral Agent and Issuing Bank as such terms are defined therein, the
Lenders signatory thereto, as such term is defined therein, J.P. Morgan
Securities Inc. and Merrill Lynch, Pierce, Fenner & Smith Incorporated as
Joint Lead Arrangers and Joint Bookrunners as such terms are defined therein as amended,
supplemented or otherwise modified from time to time.


 


(12)         Additional Event of Default. With respect to Party B, it shall constitute an
Event of Default under this Agreement if there shall occur any Event of Default
under the Credit Agreement, provided, however, that if the Event of Default
shall be waived or cured under the Credit Agreement, it shall automatically be
deemed to be waived or cured hereunder without further action (provided that
Party A is at the time of such waiver a party to the Credit Agreement).


 


28

















 


EXHIBIT A


 


GUARANTEE OF MERRILL LYNCH & CO., INC.


 


FOR VALUE RECEIVED, receipt of which is hereby
acknowledged, MERRILL LYNCH & CO., INC., a corporation duly organized
and existing under the laws of the State of Delaware (“ML & CO.”), hereby
unconditionally guarantees to NPC INTERNATIONAL, INC. (the “Company”), the due
and punctual payment of any and all amounts payable by Merrill Lynch Capital
Services, Inc., a corporation organized under the laws of the
State of Delaware (“MLCS”), its successors and permitted assigns, to the extent
such successors or permitted assigns are direct or indirect subsidiaries of ML
& Co., under the terms of the Master Agreement between the
Company and MLCS, dated as of ___________ (the “Agreement”), including, in case of default, interest on any amount due,
when and as the same shall become due and payable, whether on the scheduled
payment dates, at maturity, upon declaration of termination or otherwise, according to the terms thereof. In case
of the failure of MLCS punctually to make any such payment, ML & Co. hereby agrees to make such
payment, or cause such payment to be made, promptly upon demand made by the Company to ML & Co.;
provided, however that delay by the Company in giving such demand shall in no event affect ML & Co.’s
obligations under this Guarantee. This Guarantee shall remain in full force and effect or shall be
reinstated (as the case may be) if at any time any payment guaranteed hereunder, in whole or in part, is
rescinded or must otherwise be returned by the Company upon the insolvency, bankruptcy or reorganization of
MLCS or otherwise, all as though such payment had not been made.


 


This
Guarantee shall be one of payment and not collection. ML & Co. hereby
agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Agreement; the
absence of any action to enforce the same; any waiver or consent by the Company
concerning
any provisions thereof; the rendering of any judgment against MLCS or any
action to enforce the same; or any other circumstances that might otherwise
constitute a legal or equitable discharge of a guarantor or a defense of a
guarantor. ML & Co. covenants that this guarantee will not be discharged
except by complete payment of the amounts payable under the Agreement. This
Guarantee shall continue to be effective if MLCS merges or
consolidates with or into another entity, loses its separate legal identity or ceases to exist.


 


ML
& Co. hereby waives diligence; presentment; protest; notice of protest,
acceleration, and dishonor; filing of claims with a court in the event of
insolvency or bankruptcy of MLCS; all demands whatsoever, except as noted in the
first paragraph hereof; and any right to require a proceeding first against MLCS.


 


ML
& Co. hereby certifies and warrants that this Guarantee constitutes the
valid obligation of ML & Co. and complies with all applicable laws.


 


This
Guarantee shall be governed by, and construed in accordance with, the laws of
the State of New York.


 


This
Guarantee may be terminated at any time by notice by ML & Co. to the
Company given in accordance with the notice provisions of the Agreement,
effective upon receipt of such notice by the Company or such later date as may
be specified in such notice; provided, however, that this Guarantee shall continue in full
force and effect, and shall be irrevocable, with respect to any payment
obligation of MLCS under the Agreement entered into prior to the
effectiveness of such notice of termination.


 


1

















 


EXHIBIT A


 


This Guarantee becomes effective concurrent with the effectiveness of
the Agreement, according to its terms.


 


IN
WITNESS WHEREOF, ML & Co. has caused this Guarantee to be executed in its
corporate name by its duly authorized representative.


 


	
   

  	
  MERRILL LYNCH & CO., INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  



 


2

















 





COVER STATEMENT

CLIENT/COUNTERPARTY RELATIONSHIP


 


Dear Client/Counterparty:


 


Merrill Lynch is pleased to
provide the attached statement of Generic Risks Associated with
Over-the-Counter FX and Derivative Transactions (“OTC
Transactions”) under this Cover Statement that concerns, among other things, the nature of our relationship with you in the context of such
transactions. This statement was developed for our new and our ongoing client/counterparties in response to suggestions that
over-the-counter FX and derivative dealers consider
taking steps to ensure that market participants utilizing OTC Transactions
understand their risk exposures and the
nature of their relationships with dealers before they enter into OTC
Transactions,


 


Merrill Lynch (“we”) are providing to you and your
organization (“you”) the attached statement of Generic Risks Associated with OTC Transactions in order to identify, in general
terms, certain of the principal risks associated with
individually negotiated OTC Transactions. The attached statement does not
purport to identify the nature of the specific market or other risks associated
with a particular transaction.


 


Before entering into an OTC Transaction, you should
ensure that you fully understand the terms of the transaction,
relevant risk factors, the nature and extent of your risk of loss and the
nature of the contractual relationship into
which you are entering. You should also carefully evaluate whether the
transaction is appropriate for you in light of your
experience, objectives, financial resources, and other relevant circumstances
and whether you have the operational resources in
place to monitor the associated risks and contractual obligations over the term
of the transaction. If you are acting as a financial
adviser or agent, you should evaluate these considerations in light of the
circumstances applicable to your principal and the scope of your authority.


 


If you believe you need assistance in evaluating and
understanding the terms or risks of a particular OTC Transaction, you should consult appropriate advisers before entering
into the transaction.


 


Unless we have expressly agreed in writing to act as
your adviser with respect to a particular OTC Transaction pursuant to terms and conditions specifying the nature and scope of our
advisory relationship, we are acting in the capacity
of an arm’s length contractual counterparty to you in connection with the
transaction and not as your financial adviser or fiduciary. Accordingly, unless
we have so agreed to act as your adviser, you should not regard transaction
proposals, suggestions or other written or oral communications from us as
recommendations or advice or as expressing our view
as to whether a particular transaction is appropriate for you or meets your
financial objectives.


 


Finally, we and/or our affiliates
may from time to time take proprietary positions and/or make a market in
instruments identical or economically related to OTC Transactions entered into
with you, or may have an investment banking
or other commercial relationship with and access to information from the
issuer(s) of securities, financial instruments,
or other interests underlying OTC Transactions entered into with you. We may
also undertake proprietary activities, including
hedging transactions related to the initiation or termination of an OTC
Transaction with you, that may adversely affect the
market price, rate index or other market factor(s) underlying an OTC
Transaction entered into with you and consequently the value of the
transaction.


 

















 





 


GENERIC RISKS ASSOCIATED WITH

OVER-THE-COUNTER FX AND DERIVATIVE TRANSACTIONS


 


Over-the-counter FX and derivative
transactions (“OTC Transactions”), like other financial transactions, involve a variety of
significant risks. The specific risks presented by a particular OTC Transaction
necessarily
depend upon the terms of the transaction and your circumstances. In general,
however, all OTC Transactions involve some combination of market risk,
credit risk, funding risk and operational risk.


 


Market risk is the risk that the
value of a transaction will be adversely affected by fluctuations in the
level or volatility of or correlation or relationship between one or more
market prices, rates or indices or other market factors or by illiquidity in
the market for the relevant transaction or in a related market.


 


Credit risk is the risk that a
counterparty will fail to perform its obligations to you when due.


 


Funding risk is the risk that, as
a result of mismatches or delays in the timing of cash flows due from or to your
counterparties in OTC Transactions or related hedging, trading, collateral or other
transactions, you or your counterparty will not have adequate cash available to fund
current obligations.


 


Operational risk is the risk of loss
to you arising from inadequacies in or failures of your internal systems and
controls for monitoring and quantifying the risks and contractual obligations
associated with OTC Transactions, for recording and valuing OTC and related
Transactions, or for detecting human error, systems failure or management failure.


 


There may be other significant
risks that you should consider based on the terms of a specific transaction. Highly customized
OTC Transactions in particular may increase liquidity risk and introduce other significant risk
factors of a complex character. Highly leveraged transactions may experience
substantial gains or losses in value as a result of relatively small
changes in the value or level of an underlying or related market factor.


 


Because the price and other terms
on which you may enter into or terminate an OTC Transaction are individually
negotiated, these may not represent the best price or terms available to you
from other sources.


 


In evaluating the risks and
contractual obligations associated with a particular OTC Transaction, you
should also consider that an OTC Transaction may be modified or terminated only
by mutual consent of the original parties and subject to agreement
on individually negotiated terms. Accordingly, it may not be possible for you to modify,
terminate or offset your obligations or your exposure to the risks associated
with a transaction prior to its scheduled termination date.


 

















 


Similarly, while market makers
and dealers generally quote prices or terms for entering into or terminating OTC Transactions and
provide indicative or mid-market quotations with respect to outstanding OTC Transactions, they
are generally not contractually obligated to do so. In addition, it may not be
possible to obtain indicative or mid-market quotations for an OTC
Transaction from a market maker or dealer that is not a counterparty to
the transaction. Consequently, it may also be difficult for you to establish an
independent value for an outstanding OTC Transaction. You should not
regard your counterparty’s provision of a valuation or indicative price at
your request as an offer to enter into or terminate the relevant transaction at
that
value or price, unless the value or price is identified by the counterparty as
firm or binding.


 


This brief statement does not purport to disclose all of the risks
and other material considerations associated with
OTC Transactions. You should not construe this generic disclosure statement as business,
legal, tax or accounting advice or as modifying applicable law. You should
consult your own business, legal, tax and accounting
advisers with respect to proposed OTC Transactions and you should
refrain from entering into any OTC Transaction unless you have fully understood
the terms and risks of the transaction, including
the extent of your potential risk of loss.