Document:

Exhibit 10.1

EXECUTION VERSION 

September 7, 2012 

MTS Systems Corporation 

14000 Technology Drive 

Eden Prairie, MN 55344 

Ladies and Gentlemen: 

          The
purpose of this letter agreement (this “Confirmation”)
is to confirm the terms and conditions of the Transaction entered into between
J.P. Morgan Securities LLC, as agent for JPMorgan Chase Bank, National
Association, London Branch (the “Seller”),
and MTS Systems Corporation, a Minnesota corporation (the “Purchaser”), on the Trade Date specified
below (the “Transaction”). This
Confirmation constitutes a “Confirmation” as referred to in the Agreement
specified below. 

          This
Confirmation evidences a complete and binding agreement between the Seller and
the Purchaser as to the terms of the Transaction to which this Confirmation
relates. This Confirmation shall supplement, form a part of, and be subject to
an agreement in the form of the ISDA 2002 Master Agreement (the “Agreement”) as if the Seller and the
Purchaser had executed an agreement in such form (but without any Schedule
except for the election of the laws of the State of New York as the governing
law but without regard to its choice of law provisions), on the Trade Date. In
the event of any inconsistency between provisions of the Agreement and this
Confirmation, this Confirmation will prevail for the purpose of the Transaction
to which this Confirmation relates. The parties hereby agree that no
Transaction other than the Transaction to which this Confirmation relates shall
be governed by the Agreement. 

ARTICLE 1 

Definitions

          Section
1.01. Definitions. (a) As used in
this Confirmation, the following terms shall have the following meanings: 

          “10b-18 VWAP” means, (A) for any Trading Day
described in clause (x) of the definition of Trading Day hereunder, the
volume-weighted average price at which the Common Stock trades as reported in
the composite transactions for United States exchanges and quotation systems,
during the regular trading session for the Exchange (or, if applicable, the
Successor Exchange on which the Common Stock has been listed in accordance with
Section 7.01(c)) on such Trading Day, excluding (i) trades that do not settle
regular way, (ii) opening (regular way) reported trades in the consolidated
system on such Trading Day, (iii) trades that occur in the last ten minutes
before the scheduled close of trading on the Exchange on such Trading Day and
ten minutes before the scheduled close of the primary trading in the market
where the trade is effected, and (iv) trades on such Trading Day that do not
satisfy the requirements of Rule 10b-18(b)(3), as determined in good faith by
the Calculation Agent, or (B) for any Trading Day that is described in clause
(y) of the definition of Trading Day hereunder, an amount determined in good
faith by the Calculation Agent as 10b-18 VWAP. The Purchaser acknowledges that
the Calculation Agent may refer to the Bloomberg Page “MTSC US <Equity>
AQR SEC” (or any successor thereto), in its judgment, for such Trading Day to
determine the 10b-18 VWAP. 

          “Additional Termination Event” has the
meaning set forth in Section 7.01. 

JPMorgan
Chase Bank, National Association 

Organised under the laws of the United States as a National Banking
Association. 

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271 

Registered as a branch in England & Wales branch No. BR000746. 

Registered Branch Office 125 London Wall, London EC2Y 5AJ 

Authorised and regulated by the Financial Services Authority

          “Affected Party” has the meaning set forth
in Section 14 of the Agreement. 

          “Affected Transaction” has the meaning set
forth in Section 14 of the Agreement. 

          “Affiliated Purchaser” means any “affiliated
purchaser” (as such term is defined in Rule 10b-18) of the Purchaser. 

          “Agreement” has the meaning set forth in the
second paragraph of this Confirmation. 

          “Alternative Termination Delivery Unit”
means (i) in the case of a Termination Event (other than following consummation
of a Merger Event or Nationalization) or Event of Default (as defined in the
Agreement), one share of Common Stock and (ii) in the case of consummation of a
Merger Event or Nationalization, a unit consisting of the number or amount of
each type of property received by a holder of one share of Common Stock in such
Merger Event or Nationalization; provided
that if such Merger Event involves a choice of consideration to be received by
holders of the Common Stock, an Alternative Termination Delivery Unit shall be
deemed to include the amount of cash received by a holder who had elected to
receive the maximum possible amount of cash as consideration for his shares. 

          “Bankruptcy Code” has the meaning set forth
in Section 9.07. 

          “Business Day” means any day on which the
Exchange is open for trading. 

          “Calculation Agent” means JPMorgan Chase
Bank, National Association. 

          “Capped Delivery Shares” means, for any
date, (i) 8,054,585 shares of Common Stock minus
(ii) the number of shares of Common Stock delivered by the Seller to the
Purchaser in respect of this Transaction on or prior to such date, subject to
appropriate adjustments pursuant to Section 8.02. 

          “Cash Distribution” has the meaning set
forth in Section 7.01(f). 

          “Cash Distribution Amount” means, for any “Reference Period” set forth in the Pricing
Supplement, the amount specified in the Pricing Supplement for such Reference
Period. 

          “Cash Settlement Amount” has the meaning set
forth in Section 3.01(d). 

          “Cash Settlement Fee” means the amount
specified as such in the Pricing Supplement. 

          “Cash Settlement Purchase Period” means the
period during which the Seller purchases shares of Common Stock to unwind its
hedge position following the Valuation Completion Date. 

          “Common Stock” has the meaning set forth in
Section 2.01. 

          “Communications Procedures” has the meaning
set forth in Annex C hereto. 

          “Confirmation” has the meaning set forth in
the first paragraph of this letter agreement. 

          “Contract Fee” means the amount specified as
such in the Pricing Supplement. 

          “Contract Period” means the period
commencing on and including the Trade Date and ending on and including the date
all payments or deliveries of shares of Common Stock pursuant to Section 3.01
or Section 7.03 have been made. 

          “Default Notice Day” has the meaning set
forth in Section 7.02(a). 

          “De-Listing” has the meaning set forth in
Section 7.01(c). 

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          “Discount” means the amount specified as
such in the Pricing Supplement.

          “Distribution Termination Event” has the
meaning set forth in Section 7.01(f). 

          “Early Termination Date” has the meaning set
forth in Section 14 of the Agreement. 

          “Event of Default” has the meaning set forth
in Section 14 of the Agreement. 

          “Exchange” means the NASDAQ Global Select
Market

          “ “Exchange Act” means the
Securities Exchange Act of 1934, as amended. 

          “Expiration Date” means the 172nd
Trading Day following the Trade Date. 

          “Extraordinary Cash Dividend” means the per
share cash dividend or distribution, or a portion thereof, declared by the
Purchaser on shares of Common Stock that is classified by the board of
directors of the Purchaser as an “extraordinary” dividend. 

          “Floor Price” has the meaning specified as
such in the Pricing Supplement. 

          “Indemnified Person” has the meaning set
forth in Section 9.02. 

          “Indemnifying Party” has the meaning set
forth in Section 9.02. 

          “Initial Delivery Percentage” means the
percentage specified as such in the Pricing Supplement. 

          “Initial Number of Shares” means the number
of shares of Common Stock, rounded down to the nearest integer, equal to the product
of (i) the Initial Delivery Percentage and (ii) the Purchase Price divided by the Initial Share Price. 

          “Initial Payment Date” means the first
Business Day immediately following the Trade Date. 

          “Initial Settlement Date” has the meaning
set forth in Section 2.02. 

          “Initial Share Price” means $52.53. 

          “Maximum Delivery Shares” means, for any
date, (i) 2,039,000 shares of Common Stock, minus
(ii) the net number of shares of Common Stock delivered by the Purchaser to the
Seller in respect of this Transaction on or prior to such date, plus (iii) the net number of shares of
Common Stock delivered by the Seller to the Purchaser in respect of this
Transaction on or prior to such date, subject to appropriate adjustments
pursuant to Section 8.02(x). 

          “Merger Event” has the meaning set forth in
Section 7.01(d). 

          “Nationalization” has the meaning set forth
in Section 7.01(e). 

          “Number of Shares” has the meaning set forth
in Section 2.01. 

          “Obligations” has the meaning set forth in
Section 9.02. 

          “Ordinary Cash Dividend” has the meaning set
forth in Section 8.01(b). 

          “Pricing Supplement” means the Pricing
Supplement attached hereto as Annex D. 

          “Private Placement Agreement” has the
meaning set forth in Annex A hereto. 

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          “Private Placement Price” means the private
placement value of a share of Common Stock as determined in accordance with
Annex A hereto. 

          “Private Placement Shares” has the meaning
set forth in Section 3.01(b). 

          “Private Placement Procedures” has the
meaning set forth in Annex A hereto. 

          “Private Securities” has the meaning set
forth in Annex A hereto. 

          “Purchase Price” has the meaning set forth
in Section 2.01. 

          “Purchaser” has the meaning set forth in the
first paragraph of this Confirmation. 

          “Reference Period” means, for any
corresponding “Cash Distribution Amount”
specified in the Pricing Supplement, the period specified in the Pricing
Supplement for such Cash Distribution Amount. 

          “Registered Shares” has the meaning set
forth in Section 3.01(b). 

          “Registered Shares Fee” means the amount
specified as such in the Pricing Supplement. 

          “Registration Procedures” has the meaning
set forth in Annex B hereto. 

          “Regulation M” means Regulation M under the
Exchange Act. 

          “Rule 10b-18” means Rule 10b-18 promulgated
under the Exchange Act (or any successor rule thereto). 

          “SEC” means the Securities and Exchange
Commission. 

          “Securities Act” means the Securities Act of
1933, as amended. 

          “Seller” has the meaning set forth in the
first paragraph hereto. 

          
“Seller Termination Share Purchase Period”
has the meaning set forth in Section 7.03. 

          “Settlement Date” means (i) if Section
3.01(a)(i) is applicable, the fourth Business Day following the Valuation
Completion Date; (ii) if settlement in cash is applicable pursuant to Section
3.01(d), the date of such cash payment determined in accordance with Section
3.01(d)(ii); (iii) if Section 3.01(e) is applicable, the Business Day
immediately following the day on which the Seller informs the Purchaser,
pursuant to Annex A hereto, of the number of Private Placement Shares required
to be delivered; and (iv) if Section 3.01(f) is applicable, each of the dates
so advised by the Seller pursuant to Annex B hereto. 

          “Settlement Number” means a number of shares
of Common Stock, rounded down to the nearest integer and which number may be
negative, equal to (i) the Valuation Number minus
(ii) the Initial Number of Shares. 

          “Settlement Purchase Amount” means an amount
in cash equal to (i) the absolute value of the Settlement Number multiplied by (ii) (x) the arithmetic
average of 10b-18 VWAP for each of the Trading Days in the Cash Settlement
Purchase Period plus (y) $0.05. 

          “Settlement Shares” has the meaning set
forth in Section 3.01(b). 

          “Share De-listing Event” has the meaning set
forth in Section 7.01(c). 

          “Successor Exchange” has the meaning set
forth in Section 7.01(c). 

          “Termination Amount” has the meaning set
forth in Section 7.02(a). 

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          “Termination Event” has the meaning set
forth in Section 14 of the Agreement. 

          “Termination Price” means the value of an
Alternative Termination Delivery Unit to the Seller (determined as provided in
Annex A hereto). 

          “Termination Settlement Date” has the
meaning set forth in Section 7.03(a). 

          “Trade Date” has the meaning set forth in
Section 2.01. 

          “Trading Day” means (x) any day (i) other
than a Saturday, a Sunday or a day on which the Exchange is not open for
business, (ii) during which trading of any securities of the Purchaser on any
national securities exchange has not been suspended, (iii) during which there
has not been, in the Seller’s judgment, a material limitation in the trading of
Common Stock or any options contract or futures contract related to the Common
Stock, and (iv) during which there has been no suspension pursuant to Section
4.02 of this Confirmation, or (y) any day that, notwithstanding the occurrence
of events contemplated in clauses (ii), (iii) and (iv) of this definition, the
Seller determines to be a Trading Day. 

          “Transaction” has the meaning set forth in
the first paragraph of this Confirmation. 

          “Valuation Completion Date” has the meaning
set forth in the Pricing Supplement. 

          “Valuation Number” means (i) the Purchase
Price divided by (ii) the
arithmetic average of the 10b-18 VWAPs for all of the Trading Days in the
Valuation Period minus the
Discount, as determined by the Calculation Agent in its sole judgment; provided that if the result of the
calculation in clause (ii) is equal to or less than the Floor Price, then the
Valuation Number shall be the Purchase Price divided
by the Floor Price. For the avoidance of doubt, if the Discount is a
negative number, the difference in clause (ii) of the immediately preceding
sentence shall be equal to the arithmetic average of the 10b-18 VWAPs for all
of the Trading Days in the Valuation Period plus
the absolute value of the Discount. 

          “Valuation Period” means the period of
consecutive Trading Days commencing on and including the first Trading Day
following the Trade Date and ending on and including the Valuation Completion
Date. 

ARTICLE 2 

Purchase of the Stock

          Section
2.01. Purchase of the Stock. Subject
to the terms and conditions of this Confirmation, the Purchaser agrees to
purchase from the Seller, and the Seller agrees to sell to the Purchaser, on
September 7, 2012 or on such other Business Day as the Purchaser and the Seller
shall otherwise agree (the “Trade Date”),
a number of shares (the “Number of Shares”)
of the Purchaser’s common stock, par value $0.25 per share (“Common Stock”), for a purchase price equal
to $35,000,000 (the “Purchase Price”).
The Number of Shares purchased by the Purchaser hereunder shall be determined
in accordance with the terms of this Confirmation. 

          Section
2.02. Delivery and Payments. On
the second Business Day immediately following the Trade Date (such day, the “Initial Settlement Date”), the Seller shall
deliver the Initial Number of Shares to the Purchaser, following payment by the
Purchaser on the Initial Payment Date of (i) an amount equal to the Purchase
Price to the Seller and (ii) the Contract Fee to J.P. Morgan Securities LLC; provided that if the Seller is unable to
borrow or otherwise acquire a number of shares of Common Stock equal to the
Initial Number of Shares for delivery to the Purchaser on the Initial
Settlement Date, the Initial Number of Shares shall be reduced to such number
of shares of Common Stock as the Seller is able to borrow or otherwise acquire
and any amounts payable by the Purchaser pursuant to this Article 2 shall be
reduced correspondingly. Such delivery and payment shall be effected in
accordance with the Seller’s customary procedures. 

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          Section
2.03. Conditions to Seller’s Obligations. The
Seller’s obligation to deliver the Initial Number of Shares to the Purchaser on
the Initial Settlement Date is subject to the condition that the
representations and warranties made by the Purchaser in the Agreement shall be true
and correct as of the date hereof and the Initial Settlement Date. 

ARTICLE 3 

Subsequent Payments
or Share Deliveries

          Section
3.01. Subsequent Payments or Share
Deliveries. (a) (i) If the Settlement Number is greater than zero,
the Seller shall deliver to the Purchaser a number of shares of Common Stock
equal to the Settlement Number on the Settlement Date in accordance with the
Seller’s customary procedures; and 

	
  

 	
  

 
	
  

 	
           (ii)      
 if the Settlement Number is less than zero, the Purchaser shall make a
 payment of cash or delivery of shares of Common Stock to the Seller in
 respect of the absolute value of the Settlement Number, as provided in this
 Section 3.01. 

 

        (b)      Subject
to Section 3.01(c), payment of the absolute value of the Settlement Number by
the Purchaser to the Seller shall be in cash or validly issued shares of Common
Stock (“Settlement Shares”), and
if in shares of Common Stock, then in shares to be sold in a private placement
(“Private Placement Shares”) or
registered shares (“Registered Shares”),
as the Purchaser shall elect in its sole discretion, which binding election
shall be made by written notice to the Seller no later than the close of
business on the second Business Day following the Valuation Completion Date; provided that by making an election to
deliver Settlement Shares pursuant to this Section 3.01(b), the Purchaser shall
be deemed to make the representations and warranties in Section 5.01 as if made
on the date of the Purchaser’s election; and provided
further that if the Purchaser fails to make such election by such
date, the Purchaser shall be deemed to have elected settlement in cash. 

        (c)      (i)        Any
election by the Purchaser to deliver the absolute value of the Settlement
Number in Settlement Shares pursuant to clause (b) of this Section 3.01 shall
not be valid, and settlement in cash shall apply, if the representations and
warranties made by the Purchaser to the Seller in Section 5.01 are not true and
correct in all material respects as of the date the Purchaser makes such
election. 

	
  

 	
  

 
	
  

 	
           (ii)        Notwithstanding
 any election by the Purchaser to make payment of the absolute value of the
 Settlement Number in Settlement Shares, at any time prior to the time the
 Seller (or any affiliate of the Seller) has contracted to resell all or any
 portion of such Settlement Shares, the Purchaser may elect to deliver in lieu
 of such Settlement Shares an amount in cash equal to the absolute value of
 the Settlement Number with respect to any Settlement Shares not yet
 contracted to be sold, in which case the provisions of Section 3.01(d) shall
 apply with respect to such amount; provided
 that any such election by the Purchaser pursuant to this clause (ii) shall
 not be valid and settlement in Settlement Shares shall continue to apply if
 the representations and warranties made by the Purchaser to the Seller in
 Section 5.01(a) are not true and correct in all material respects as of the
 date the Purchaser makes such election. 

 
	
  

 	
  

 
	
  

 	
           (iii)      If
 the Purchaser elects to make payment of the absolute value of the Settlement
 Number (A) in Private Placement Shares and fails to comply with the requirements
 set forth in Section 3.01(e) or Annex A hereto or takes any action that would
 make unavailable either (1) the exemption set forth in Section 4(2) of the
 Securities Act for the sale of any Private Placement Shares by the Purchaser
 to the Seller or (2) an exemption from the registration requirements of the
 Securities Act reasonably acceptable to the Seller for resales of Private
 Placement Shares by the Seller, or (B) in Registered Shares and fails to
 comply with the requirements set forth in Section 3.01(f) or Annex B hereto;
 then in the case of either (A) or (B), the Purchaser shall deliver in lieu of
 any Private Placement Shares or Registered Shares an amount in cash equal to
 the absolute value of the Settlement Number with respect to any Settlement
 Shares not yet sold, in which case the provisions of Section 3.01(d) shall apply
 with respect to such amount. 

 

        (d)
     (i)       If
the Purchaser elects to pay the absolute value of the Settlement Number in
cash, if settlement in cash is otherwise applicable in accordance with this
Section 3.01, or if the Purchaser elects to make payment of the absolute value
of the Settlement Number in Private Placement Shares pursuant to Section
3.01(e), then the Calculation Agent shall determine an amount in cash (the “Cash Settlement Amount”) equal to (i) the
Settlement Purchase Amount plus
(ii) the Cash Settlement Fee. 

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                (ii)        If
 cash settlement is applicable, payment of the Cash Settlement Amount shall be
 made by wire transfer of immediately available U.S. dollar funds on the first
 Business Day immediately following the date of notification by the Seller to
 the Purchaser of the Cash Settlement Amount or such later Business Day as
 determined by the Seller in its sole discretion. 

 

          (e)
        If the Purchaser
elects to make payment of the absolute value of the Settlement Number in
Private Placement Shares, then on the Settlement Date, the Purchaser shall
deliver to the Seller a number of Settlement Shares equal to (A) the Cash
Settlement Amount divided by (B)
the Private Placement Price (determined by the Calculation Agent in accordance
with the Private Placement Procedures contained in Annex A hereto). 

          (f)        If
the Purchaser elects to make payment of the absolute value of the Settlement
Number in Registered Shares, then the Purchaser shall deliver to the Seller a
number of Settlement Shares equal to (A) the absolute value of the Settlement
Number plus (B) an additional
number of Settlement Shares to take into account the Registered Shares Fee on
the absolute value of the Settlement Number. Such Settlement Shares shall be
delivered in such numbers and on such dates on or following the Valuation
Completion Date as are specified by the Seller in accordance with the
Registration Procedures contained in Annex B hereto. 

          Section
3.02. Private Placement Procedures and
Registration Procedures. If the Purchaser elects to deliver Private
Placement Shares pursuant to Section 3.01(b) or elects to deliver Alternative
Termination Delivery Units pursuant to Section 7.02(a), the Private Placement
Procedures contained in Annex A hereto shall apply, and if the Purchaser elects
to deliver Registered Shares pursuant to Section 3.01(b), the Registration
Procedures contained in Annex B hereto shall apply. 

          Section
3.03. Continuing Obligation to Deliver
Shares. (a) If at any time, as a result of provisions limiting
deliveries of shares of Common Stock to the number of Maximum Delivery Shares,
the Purchaser fails to deliver to the Seller any shares of Common Stock, the
Purchaser shall, to the extent that the Purchaser has at such time authorized
but unissued shares of Common Stock not reserved for other purposes, promptly
notify the Seller thereof and deliver to the Seller a number of shares of
Common Stock not previously delivered as a result of such provisions. 

          (b)        The
Purchaser agrees to use its best efforts to cause the number of authorized but
unissued shares of Common Stock to be increased, if necessary, to an amount
sufficient to permit the Purchaser to fulfill its obligations under this
Section 3.03. 

ARTICLE 4 

Market Transactions

	
  

 	
  

 
	
  

 	
 Section 4.01. Transactions by the Seller. (a) The
 parties agree and acknowledge that: 

 
	
  

 	
  

 
	
  

 	
              (i)          During
 any Cash Settlement Purchase Period and any Seller Termination Share Purchase
 Period, the Seller (or its agent or affiliate) may purchase shares of Common
 Stock in connection with this Confirmation. The timing of such purchases by
 the Seller, the price paid per share of Common Stock pursuant to such purchases
 and the manner in which such purchases are made, including without limitation
 whether such purchases are made on any securities exchange or privately,
 shall be within the sole judgment of the Seller; provided that the Seller shall use good faith efforts to
 make all purchases of Common Stock in a manner that would comply with the
 limitations set forth in clauses (b)(2), (b)(3), (b)(4) and (c) of Rule
 10b-18 (but without regard to clause (a)(13)(iv) of Rule 10b-18) as if such
 rule were applicable to such purchases. 

 
	
  

 	
  

 
	
  

 	
              (ii)        During
 the Valuation Period, the Seller (or its agent or affiliate) may effect
 transactions in shares of Common Stock in connection with this Confirmation.
 The timing of such transactions by the Seller, the price paid or received per
 share of Common Stock pursuant to such transactions and the manner in which
 such transactions are made, including without limitation whether such
 transactions are made on any securities exchange or privately, shall be
 within the sole judgment of the Seller. 

 

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                (iii)       The
 Purchaser shall, at least one day prior to the first day of the Valuation
 Period, any Cash Settlement Purchase Period and any Seller Termination Share
 Purchase Period, notify the Seller of the total number of shares of Common
 Stock purchased in Rule 10b-18 purchases of blocks pursuant to the
 once-a-week block exception set forth in Rule 10b-18(b)(4) by or for the
 Purchaser or any of its Affiliated Purchasers during each of the four
 calendar weeks preceding such day and during the calendar week in which such
 day occurs (“Rule 10b-18 purchase”
 and “blocks” each being used as
 defined in Rule 10b-18), which notice shall be substantially in the form set
 forth as Exhibit A hereto. 

 

          (b)        
The Purchaser acknowledges and agrees that (i) all transactions effected
pursuant to Section 4.01 hereunder shall be made in the Seller’s sole judgment
and for the Seller’s own account and (ii) the Purchaser does not have, and
shall not attempt to exercise, any influence over how, when or whether to
effect such transactions, including, without limitation, the price paid or
received per share of Common Stock pursuant to such transactions whether such
transactions are made on any securities exchange or privately. It is the intent
of the Seller and the Purchaser that this Transaction comply with the
requirements of Rule 10b5-1(c) of the Exchange Act and that this Confirmation
shall be interpreted to comply with the requirements of Rule 10b5-1(c)(1)(i)(B)
and the Seller shall take no action that results in the Transaction not so
complying with such requirements. 

          (c)        Notwithstanding
anything to the contrary in this Confirmation, the Purchaser acknowledges and
agrees that, on any day, the Seller shall not be obligated to deliver or
receive any shares of Common Stock to or from the Purchaser and the Purchaser
shall not be entitled to receive any shares of Common Stock from the Seller on
such day, to the extent (but only to the extent) that after such transactions
the Seller’s ultimate parent entity would directly or indirectly beneficially
own (as such term is defined for purposes of Section 13(d) of the Exchange Act)
at any time on such day in excess of 8.0% of the outstanding shares of Common
Stock. Any purported receipt or delivery of shares of Common Stock shall be
void and have no effect to the extent (but only to the extent) that after any
receipt or delivery of such shares of Common Stock the Seller’s ultimate parent
entity would directly or indirectly so beneficially own in excess of 8.0% of
the outstanding shares of Common Stock. If, on any day, any delivery or receipt
of shares of Common Stock by the Seller is not effected, in whole or in part,
as a result of this provision, the Seller’s and Purchaser’s respective
obligations to make or accept such receipt or delivery shall not be
extinguished and such receipt or delivery shall be effected over time as
promptly as the Seller determines, in the reasonable determination of the
Seller, that after such receipt or delivery its ultimate parent entity would
not directly or indirectly beneficially own in excess of 8.0% of the
outstanding shares of Common Stock. 

          Section
4.02. Adjustment of Transaction for
Securities Laws. (a) Notwithstanding anything to the contrary in
Section 4.01(a), if, based on the advice of counsel, the Seller reasonably
determines that on any Trading Day, the Seller’s trading activity in order to
manage its economic hedge in respect of the Transaction would not be advisable in
respect of applicable securities laws, then the Seller may extend the
Expiration Date, modify the Valuation Period or otherwise adjust the terms of
the Transaction in its good faith reasonable discretion to ensure Seller’s
compliance with such laws and to preserve the fair value of the Transaction to
the Seller. The Seller shall notify the Purchaser of the exercise of the
Seller’s rights pursuant to this Section 4.02(a) upon such exercise. 

          (b)        The
Purchaser agrees that, during the Contract Period, neither the Purchaser nor
any of its affiliates or agents shall make any distribution (as defined in
Regulation M) of Common Stock, or any security for which the Common Stock is a
reference security (as defined in Regulation M) or take any other action that
would, in the view of the Seller, preclude purchases by the Seller of the
Common Stock or cause the Seller to violate any law, rule or regulation with
respect to such purchases. 

          Section
4.03. Purchases of Common Stock by the Purchaser.
Without the prior written consent of the Seller, the Purchaser shall
not, and shall cause its affiliates and affiliated purchasers (each as defined
in Rule 10b-18) not to, directly or indirectly (including, without limitation,
by means of a derivative instrument) purchase, offer to purchase, place any bid
or limit order that would effect a purchase of, or commence any tender offer
relating to, any shares of Common Stock (or equivalent interest, including a
unit of beneficial interest in a trust or limited partnership or a depository
share) or any security convertible into or exchangeable for shares of Common
Stock during the Contract Period; provided,
however, that the foregoing shall not prohibit (i) the Purchaser’s
ability (or the ability of any “agent independent of the issuer” (as defined in
Rule 10b-18)), pursuant to any plan (as defined in Rule 10b-18) of the
Purchaser, to re-acquire shares of Common Stock in connection with any equity
transaction related to such plan or to limit the Purchaser’s ability to
withhold shares of Common Stock to cover tax liabilities associated with such equity
transactions, so long as any re-acquisition, withholding or repurchase does not
constitute a “Rule 10b-18 purchase” (as defined in Rule 10b-18) or (ii) delivery
of shares of Common Stock of or to the Purchaser’s affiliates or affiliated
purchasers pursuant to the terms of convertible securities, warrants, options
or other similar securities outstanding as of the Trade Date. 

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ARTICLE 5 

Representations, Warranties and Agreements

          Section
5.01. Repeated Representations, Warranties
and Agreements of the Purchaser. The Purchaser represents and
warrants to, and agrees with, the Seller, on the date hereof and on any date
pursuant to which the Purchaser makes an election to deliver Settlement Shares
pursuant to Section 3.01, to pay cash in lieu of Settlement Shares pursuant to
Section 3.01(c)(ii) or to receive or deliver Alternative Termination Delivery
Units pursuant to Section 7.03, that: 

          (a)          Disclosure; Compliance with Laws. The
reports and other documents filed by the Purchaser with the SEC pursuant to the
Exchange Act when considered as a whole (with the more recent such reports and
documents deemed to amend inconsistent statements contained in any earlier such
reports and documents), do not contain any untrue statement of a material fact
or any omission of a material fact required to be stated therein or necessary
to make the statements therein, in the light of the circumstances in which they
were made, not misleading. The Purchaser is not in possession of any material
nonpublic information regarding the Purchaser or the Common Stock. 

          (b)          Rule 10b5-1. The Purchaser acknowledges
that (i) the Purchaser does not have, and shall not attempt to exercise, any
influence over how, when or whether to effect purchases of Common Stock by the
Seller (or its agent or affiliate) in connection with this Confirmation and
(ii) the Purchaser is entering into the Agreement and this Confirmation in good
faith and not as part of a plan or scheme to evade compliance with federal
securities laws including, without limitation, Rule 10b-5 promulgated under the
Exchange Act. The Purchaser also acknowledges and agrees that any amendment,
modification, waiver or termination of this Confirmation must be effected in
accordance with the requirements for the amendment or termination of a “plan”
as defined in Rule 10b5-1(c) under the Exchange Act. Without limiting the
generality of the foregoing, any such amendment, modification, waiver or
termination shall be made in good faith and not as part of a plan or scheme to
evade the prohibitions of Rule 10b-5 under the Exchange Act, and no amendment,
modification or waiver shall be made at any time at which the Purchaser or any
officer or director of the Purchaser is aware of any material nonpublic
information regarding the Purchaser or the Common Stock. 

          (c)          Nature of Shares Delivered. Any shares of
Common Stock or Alternative Termination Delivery Units delivered to the Seller
pursuant to this Confirmation, when delivered, shall have been duly authorized
and shall be duly and validly issued, fully paid and nonassessable and free of
preemptive or similar rights, and such delivery shall pass title thereto free
and clear of any liens or encumbrances. 

          (d)          No Manipulation. The Purchaser is not
entering into this Confirmation to create actual or apparent trading activity
in the Common Stock (or any security convertible into or exchangeable for
Common Stock) or to manipulate the price of the Common Stock (or any security
convertible into or exchangeable for Common Stock). 

          (e)          Regulation M. The Purchaser is not engaged
in a distribution, as such term is used in Regulation M, that would preclude
purchases by the Purchaser or the Seller of the Common Stock or cause the
Seller to violate any law, rule or regulation with respect to such purchases. 

          (f)          Board Authorization. The Purchaser is
entering into this Transaction in connection with its share repurchase program,
which was approved by its board of directors and publicly disclosed, solely for
the purposes stated in such board resolution and public disclosure. There is no
internal policy of the Purchaser, whether written or oral, that would prohibit
the Purchaser from entering into any aspect of this Transaction, including, but
not limited to, the purchases of shares of Common Stock to be made pursuant
hereto. 

9

          (g)          Due Authorization and Good Standing. The
Purchaser is a corporation duly organized, validly existing and in good
standing under the laws of the State of Minnesota. This Confirmation has been
duly authorized, executed and delivered by the Purchaser and (assuming due
authorization, execution and delivery thereof by the Seller) constitutes a
valid and legally binding obligation of the Purchaser. The Purchaser has all
corporate power to enter into this Confirmation and to consummate the
transactions contemplated hereby and to purchase the Common Stock and deliver
any Settlement Shares in accordance with the terms hereof. 

          (h)          Certain Transactions. There has not been
any public announcement (as defined in Rule 165(f) under the Securities Act) of
any merger, acquisition, or similar transaction involving a recapitalization
relating to the Purchaser that would fall within the scope of Rule
10b-18(a)(13)(iv), where such announcement was within the Purchaser’s control. 

          Section
5.02. Initial Representations, Warranties
and Agreements of the Purchaser. The Purchaser represents and
warrants to, and agrees with the Seller, as of the date hereof, that: 

          (a)          Solvency. The assets of the Purchaser at
their fair valuation exceed the liabilities of the Purchaser, including
contingent liabilities; the capital of the Purchaser is adequate to conduct the
business of the Purchaser and the Purchaser has the ability to pay its debts
and obligations as such debts mature and does not intend to, or does not
believe that it will, incur debt beyond its ability to pay as such debts
mature. 

          (b)          Required Filings. The Purchaser has made,
and will use its best efforts to make, all filings required to be made by it
with the SEC, any securities exchange or any other regulatory body with respect
to the Transaction contemplated hereby. 

          (c)          No Conflict. The execution and delivery by
the Purchaser of, and the performance by the Purchaser of its obligations
under, this Confirmation and the consummation of the transactions herein
contemplated do not conflict with or violate (i) any provision of the articles
of incorporation, by-laws or other constitutive documents of the Purchaser,
(ii) any statute or order, rule, regulation or judgment of any court or
governmental agency or body having jurisdiction over the Purchaser or any of
its subsidiaries or any of their respective assets or (iii) any contractual
restriction binding on or affecting the Purchaser or any of its subsidiaries or
any of its assets. 

          (d)          Consents. All governmental and other
consents that are required to have been obtained by the Purchaser with respect
to performance, execution and delivery of this Confirmation have been obtained
and are in full force and effect and all conditions of any such consents have
been complied with. 

          (e)          Investment Company Act. The Purchaser is
not and, after giving effect to the transactions contemplated in this
Confirmation, will not be required to register as an “investment company” as
such term is defined in the Investment Company Act of 1940, as amended. 

          (f)          Commodity Exchange Act. The Purchaser is an
“eligible contract participant”, as such term is defined in Section 1a(12) of
the Commodity Exchange Act, as amended. 

          (g)          Suitability. The Purchaser (A) is capable
of evaluating investment risks independently, both in general and with regard
to all transactions and investment strategies involving a security or securities;
(B) will exercise independent judgment in evaluating the recommendations of any
broker-dealer or its associated persons, unless it has otherwise notified the
broker-dealer in writing; and (C) has total assets of at least $50 million as
of the date hereof. 

          Section
5.03. Additional Representations, Warranties
and Agreements. The Purchaser and the Seller represent and warrant
to, and agree with, each other that: 

          (a)          Agency. Each party agrees and acknowledges
that (i) J.P. Morgan Securities LLC, an affiliate of the Seller (“JPMS”), has acted solely as agent and not
as principal with respect to this Transaction and (ii) JPMS has no obligation
or liability, by way of guaranty, endorsement or otherwise, in any manner in
respect of this Transaction (including, if applicable, in respect of the
settlement thereof). Each party agrees it will look solely to the other party (or any
guarantor in respect thereof) for performance of such other party’s obligations
under this Transaction. JPMS is authorized to act as agent for the Seller. 

10

          (b)          Non-Reliance. Each party has entered into
this Transaction solely in reliance on its own judgment. Neither party has any
fiduciary obligation to the other party relating to this Transaction. In
addition, neither party has held itself out as advising, or has held out any of
its employees or agents as having the authority to advise, the other party as
to whether or not the other party should enter into this Transaction, any subsequent
actions relating to this Transaction or any other matters relating to this
Transaction. Neither party shall have any responsibility or liability
whatsoever in respect of any advice of this nature given, or views expressed,
by it or any such persons to the other party relating to this Transaction,
whether or not such advice is given or such views are expressed at the request
of the other party. The Purchaser has conducted its own analysis of the legal,
accounting, tax and other implications of this Transaction and consulted such
advisors, accountants and counsel as it has deemed necessary. 

          Section
5.04. Representations and Warranties of the
Seller. The Seller represents and warrants to the Purchaser that: 

          (a)          Due Authorization. This Confirmation has
been duly authorized, executed and delivered by the Seller and (assuming due
authorization, execution and delivery thereof by the Purchaser) constitutes a
valid and legally binding obligation of the Seller. The Seller has all
corporate power to enter into this Confirmation and to consummate the
transactions contemplated hereby and to deliver the Common Stock in accordance
with the terms hereof. 

          (b)          Right to Transfer. The Seller will, at the
Initial Settlement Date and on any other day on which it is required to deliver
shares of Common Stock to the Purchaser hereunder, have the free and
unqualified right to transfer the Number of Shares of Common Stock to be
delivered by the Seller pursuant to Sections 2.01 and 3.01 hereof, free and
clear of any security interest, mortgage, pledge, lien, charge, claim, equity
or encumbrance of any kind. 

          (c)          Commodity Exchange Act. The Seller is an
“eligible contract participant”, as such term is defined in Section 1a(12) of
the Commodity Exchange Act, as amended. 

ARTICLE 6 

Additional Covenants

          Section
6.01. Purchaser’s Further Assurances. The
Purchaser hereby agrees with the Seller that the Purchaser shall cooperate with
the Seller, and execute and deliver, or use its best efforts to cause to be
executed and delivered, all such other instruments, and to obtain all consents,
approvals or authorizations of any person, and take all such other actions as
the Seller may reasonably request from time to time, consistent with the terms
of this Confirmation, in order to effectuate the purposes of this Confirmation
and the Transaction contemplated hereby. 

          Section
6.02. Purchaser’s Hedging Transactions. The
Purchaser hereby agrees with the Seller that the Purchaser shall not, during
the Contract Period, enter into or alter any corresponding or hedging
transaction or position with respect to the Common Stock (including, without
limitation, with respect to any securities convertible or exchangeable into the
Common Stock) and agrees not to alter or deviate from the terms of this
Confirmation. 

          Section
6.03. No Communications. The
Purchaser hereby agrees with the Seller that the Purchaser shall not, directly
or indirectly, communicate any information relating to the Common Stock or this
Transaction (including any notices required by Section 6.05) to any employee of
the Seller or J.P. Morgan Securities LLC, other than as set forth in the
Communications Procedures attached as Annex C hereto. 

          Section
6.04. Maximum Deliverable Number of Shares
of Common Stock. (a) Notwithstanding
any other provision of this Confirmation, the Purchaser shall not be required
to deliver Settlement Shares, or shares of Common Stock or other securities
comprising the aggregate Alternative Termination Delivery Units, in excess of
the number of Maximum Delivery Shares, in each case except to the extent that
the Purchaser has available at such time authorized but unissued shares of such
Common Stock or other securities not expressly reserved for any other uses (including, without
limitation, shares of Common Stock reserved for issuance upon the exercise of
options or convertible debt). The Purchaser shall not permit the sum of (i) the
number of Maximum Delivery Shares plus
(ii) the aggregate number of shares expressly reserved for any such other uses,
in each case whether expressed as caps or as numbers of shares reserved or
otherwise, to exceed at any time the number of authorized but unissued shares
of Common Stock. 

11

          (b)          Notwithstanding
any other provision of this Confirmation, the Seller shall not be required to
deliver Settlement Shares, or shares of Common Stock or other securities
comprising the aggregate Alternative Termination Delivery Units, in excess of
the number of Capped Delivery Shares. 

          Section
6.05. Notice of Certain Transactions. If
at any time during the Contract Period, the Purchaser makes, or expects to be
made, or has made, any public announcement (as defined in Rule 165(f) under the
Securities Act) of any merger, acquisition, or similar transaction involving a
recapitalization relating to the Purchaser (other than any such transaction in
which the consideration consists solely of cash and there is no valuation period,
or as to which the completion of such transaction or the completion of the vote
by target shareholders has occurred), then the Purchaser shall (i) notify the
Seller prior to the opening of trading in the Common Stock on any day on which
the Purchaser makes, or expects to be made, or has made any such public
announcement, (ii) notify the Seller promptly following any such announcement
(or, if later, prior to the opening of trading in the Common Stock on the first
day of any Seller Termination Share Payment Period) that such announcement has
been made and (iii) promptly deliver to the Seller following the making of any
such announcement (or, if later, prior to the opening of trading in the Common
Stock on the first day of any Seller Termination Share Payment Period) a
certificate indicating (A) the Purchaser’s average daily Rule 10b-18 purchases
(as defined in Rule 10b-18) during the three full calendar months preceding the
date of such announcement and (B) the Purchaser’s block purchases (as defined in
Rule 10b-18) effected pursuant to paragraph (b)(4) of Rule 10b-18 during the
three full calendar months preceding the date of such announcement. In
addition, the Purchaser shall promptly notify the Seller of the earlier to
occur of the completion of such transaction and the completion of the vote by
target shareholders. Accordingly, the Purchaser acknowledges that its actions
in relation to any such announcement or transaction must comply with the
standards set forth in Section 6.03. 

ARTICLE 7 

Termination

          Section
7.01. Additional Termination Events. (a)
An Additional Termination Event shall occur in respect of which the Purchaser
is the sole Affected Party and this Transaction is the sole Affected
Transaction if, on any day, the Seller determines, in its sole reasonable
judgment, that it is unable to establish, re-establish or maintain any hedging
transactions reasonably necessary in the normal course of such party’s business
of hedging the price and market risk of entering into and performing under this
Transaction, due to market illiquidity, illegality or lack of availability of
hedging transaction market participants. 

          (b)          An
Additional Termination Event shall occur in respect of which the Purchaser is
the sole Affected Party and this Transaction is the sole Affected Transaction
if (i) a Share De-listing Event occurs; (ii) a Merger Event occurs; (iii) a
Nationalization occurs, (iv) a Distribution Termination Event occurs or (v) an
event described in paragraph III of Annex C occurs. 

          (c)          A
“Share De-listing Event” means
that at any time during the Contract Period, the Common Stock ceases to be
listed, traded or publicly quoted on the Exchange for any reason (other than a
Merger Event, a “De-Listing”) and
is not immediately re-listed, traded or quoted as of the date of such
de-listing, on another U.S. national securities exchange or a U.S. automated
interdealer quotation system (a “Successor
Exchange”); provided
that it shall not constitute an Additional Termination Event if the Common
Stock is immediately re-listed on a Successor Exchange upon its De-Listing from
the Exchange, and the Successor Exchange shall be deemed to be the Exchange for
all purposes. In addition, in such event, the Seller shall make any commercially
reasonable adjustments to the terms of the Transaction that the Seller
determines appropriate in its reasonable good faith judgment to preserve the
fair value of the Transaction to the Seller. 

12

          (d)          A
“Merger Event” means the public
announcement, including any public announcement as defined in Rule 165(f) of
the Securities Act (by the Purchaser or otherwise) at any time during the
Contract Period of any (i) planned recapitalization, reclassification or change
of the Common Stock that will, if consummated, result in a transfer of more
than 20% of the outstanding shares of Common Stock, (ii) planned consolidation,
amalgamation, merger or similar transaction of the Purchaser with or into
another entity (other than a consolidation, amalgamation or merger in which the
Purchaser will be the continuing entity and which does not result in any such
recapitalization, reclassification or change of more than 20% of such shares
outstanding), (iii) other takeover offer for the shares of Common Stock that is
aimed at resulting in a transfer of more than 20% of such shares of Common
Stock (other than such shares owned or controlled by the offeror), (iv)
intention to solicit or enter into, or to explore strategic alternatives or
other similar undertaking that may include, any of the foregoing or (v)
irrevocable commitment to any of the foregoing. 

          (e)          A
“Nationalization” means that all
or substantially all of the outstanding shares of Common Stock or assets of the
Purchaser are nationalized, expropriated or are otherwise required to be
transferred to any governmental agency, authority or entity. 

          (f)          A
“Distribution Termination Event”
means a declaration by the Purchaser of any cash dividend or distribution on
shares of Common Stock, other than an Extraordinary Cash Dividend (a “Cash Distribution”), that has a record date
during the Contract Period, the amount of which, together with all prior
declared Cash Distributions that have a record date during the same Reference
Period of the Purchaser, exceeds the Cash Distribution Amount specified in the
Pricing Supplement for such Reference Period, and in respect of which the
Calculation Agent has not made an adjustment pursuant to Section 8.01(b). 

          Section
7.02. Consequences of Additional Termination
Events. (a) In the event of the occurrence or effective designation
of an Early Termination Date under the Agreement, cash settlement, as set forth
in Section 7.02(b), shall apply unless (i) the Purchaser elects (which election
shall be binding), in lieu of payment or receipt, as applicable, of the amount
payable in respect of this Transaction pursuant to Section 6(d)(ii) of the
Agreement (the “Termination Amount”),
to deliver or to receive Alternative Termination Delivery Units pursuant to
Section 7.03, and (ii) notifies the Seller of such election by delivery of
written notice to the Seller on the Business Day immediately following the
Purchaser’s receipt of a notice (as required by Section 6(d) of the Agreement
following the designation of an Early Termination Date in respect of this
Transaction) setting forth the amounts payable by the Purchaser or by the
Seller with respect to such Early Termination Date (the date of such delivery,
the “Default Notice Day”); provided that the Purchaser shall not have
the right to elect the delivery or receipt of the Alternative Termination
Delivery Units pursuant to Section 7.03 if: 

	
  

 	
  

 
	
  

 	
                 (i)         the
 representations and warranties made by the Purchaser to the Seller in Section
 5.01 are not true and correct as of the date the Purchaser makes such
 election, as if made on such date, or 

 
	
  

 	
  

 
	
  

 	
                 (ii)        in
 the event that the Termination Amount is payable by the Purchaser to the
 Seller, (A) the Purchaser has taken any action that would make unavailable
 (x) the exemption set forth in Section 4(2) of the Securities Act, for the
 sale of any Alternative Termination Delivery Units by the Purchaser to the
 Seller or (y) an exemption from the registration requirements of the
 Securities Act reasonably acceptable to the Seller for resales of Alternative
 Termination Delivery Units by the Seller, and (B) such Early Termination Date
 is in respect of an Event of Default which is within Purchaser’s control
 (including, without limitation, failure to execute a Private Placement
 Agreement or otherwise comply with the requirements applicable to Purchaser
 set forth in Annex A hereto). 

 

          For
the avoidance of doubt, upon the Purchaser’s making an election to deliver
Alternative Termination Delivery Units pursuant to this Section 7.02(a), the
Purchaser shall be deemed to make the representations and warranties in Section
5.01 hereof as if made on the date of the Purchaser’s election. Notwithstanding
the foregoing, at any time prior to the time the Seller (or any affiliate of
the Seller) has contracted to resell the property to be delivered upon
alternative termination settlement, the Purchaser may deliver in lieu of such
property an amount in cash equal to the Termination Amount in the manner set
forth in Section 6(d) of the Agreement. 

          (b)          If
cash settlement applies in respect of an Early Termination Date, Section 6 of
the Agreement shall apply. 

13

          Section
7.03. Alternative Termination Settlement. (a)
Subject to Section 7.02(a), if the Termination Amount shall be payable by the
Purchaser to the Seller and the Purchaser elects to deliver the Alternative
Termination Delivery Units to the Seller, the Purchaser shall, as soon as
directed by the Seller after the Default Notice Day (such date, the “Termination Settlement Date”), deliver to
the Seller a number of Alternative Termination Delivery Units equal to the
quotient of (A) the Termination Amount divided
by (B) the Termination Price. 

          (b)          Subject
to Section 7.02(a), if the Termination Amount shall be payable by the Seller to
the Purchaser and the Purchaser elects to receive the Alternative Termination
Delivery Units from the Seller, (i) the Seller shall, beginning on the first
Trading Day following the Default Notice Day and ending when the Seller shall
have satisfied its obligations under this clause (the “Seller Termination Share Purchase Period”),
purchase (subject to the provisions of Section 4.01 and Section 4.02 hereof) a
number of Alternative Termination Delivery Units equal to the quotient of (A)
the Termination Amount divided by
(B) the Termination Price; and (ii) the Seller shall deliver such Alternative
Termination Delivery Units to the Purchaser on the settlement dates relating to
such purchases. 

          Section
7.04. Notice of Default. If an
Event of Default occurs in respect of the Purchaser, the Purchaser will,
promptly upon becoming aware of it, notify the Seller specifying the nature of
such Event of Default. 

ARTICLE 8 

Adjustments

          Section
8.01. Cash Dividends. (a) If the
Purchaser declares any Extraordinary Cash Dividend that has a record date
during the Contract Period, then prior to or on the date on which such
Extraordinary Cash Dividend is paid by the Purchaser to holders of record, the
Purchaser shall pay to the Seller an amount in cash equal to the product of (i)
the amount of such Extraordinary Cash Dividend and (ii) the theoretical short
delta number of shares as of the opening of business on the related ex-dividend
date, as determined by the Calculation Agent, required for the Seller to hedge
its exposure to the Transaction. 

          (b)          If
the Purchaser declares any cash dividend on shares of Common Stock that is not
an Extraordinary Cash Dividend (an “Ordinary
Cash Dividend”) and that has a record date during the Contract
Period, and the amount of such Ordinary Cash Dividend, together with all prior
declared Ordinary Cash Dividends that have a record date during the same
Reference Period, exceeds the Cash Distribution Amount specified in the Pricing
Supplement for such Reference Period, the Calculation Agent may make
corresponding adjustments with respect to the Floor Price as the Calculation
Agent determines appropriate to preserve the fair value of the Transaction to
the Seller, and shall determine the effective date of such adjustment. 

          Section
8.02. Other Dilution Adjustments. If (x) any corporate event occurs having a dilutive or concentrative effect on the
theoretical value of the Common Stock (other than any cash dividend but
including, without limitation, a spin-off, a stock split, stock or other
dividend or distribution, reorganization, rights offering or recapitalization),
or (y) as a result of the definition of Trading Day (whether because of a
suspension of transactions pursuant to Section 4.02 or otherwise), any day that
would otherwise be a Trading Day during the Contract Period is not a Trading
Day or on such Trading Day, pursuant to Section 4.02, the Seller effects
transactions with respect to shares of Common Stock at a volume lower than
originally anticipated with respect to this Transaction, or (z) as a result of
market conditions, the Seller incurs additional costs in connection with
maintaining its hedge position with respect to this Transaction resulting from
the insufficient availability of stock lenders willing and able to lend shares
of Common Stock with a borrow cost not significantly greater than the cost as
of the date hereof and otherwise on terms consistent with those as of the date
hereof, then in any such case, the Calculation Agent shall make corresponding
adjustments with respect to any variable relevant to the terms of the
Transaction, as the Calculation Agent determines appropriate in its reasonable
good faith judgment to preserve the fair value of the Transaction to the
Seller, and shall determine the effective date of such adjustment. 

14

ARTICLE 9 

Miscellaneous

          Section
9.01. Successors and Assigns. All
covenants and agreements in this Confirmation made by or on behalf of either of
the parties hereto shall bind and inure to the benefit of the respective
successors and assigns of the parties hereto whether so expressed or not. 

          Section
9.02. Purchaser Indemnification. The
Purchaser (the “Indemnifying Party”)
agrees to indemnify and hold harmless the Seller and its officers, directors,
employees, affiliates, advisors, agents and controlling persons (each, an “Indemnified Person”) from and against any
and all losses, claims, damages and liabilities, joint or several
(collectively, “Obligations”),
resulting from a breach by Purchaser of this Confirmation or any claim,
litigation, investigation or proceeding relating thereto, and to reimburse,
within 30 days, upon written request, each such Indemnified Person for any
reasonable legal or other expenses incurred in connection with investigating,
preparation for, providing evidence for or defending any of the foregoing, provided, however, that the Indemnifying
Party shall not have any liability to any Indemnified Person to the extent that
such Obligations (i) are finally determined by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of such Indemnified Person (and in such case, such Indemnified Person shall
promptly return to the Indemnifying Party any amounts previously expended by
the Indemnifying Party hereunder) or (ii) are trading losses incurred by the
Seller as part of its purchases or sales of shares of Common Stock pursuant to
this Confirmation (unless the Purchaser has breached any agreement, term or
covenant herein). 

          Section
9.03. Assignment and Transfer. Notwithstanding
the Agreement, the Seller may assign any of its rights or duties hereunder to
any one or more of its affiliates without the prior written consent of the
Purchaser. Notwithstanding any other provision in this Confirmation to the
contrary requiring or allowing Seller to purchase, sell, receive or deliver any
shares of Common Stock or other securities to or from the Purchaser, Seller may
designate any of its affiliates to purchase, sell, receive or deliver such
shares of Common Stock or other securities and otherwise to perform the
Seller’s obligations in respect of this Transaction and any such designee may
assume such obligations. The Seller may assign the right to receive Settlement
Shares to any third party who may legally receive Settlement Shares. The Seller
shall be discharged of its obligations to the Purchaser only to the extent of
any such performance. For the avoidance of doubt, Seller hereby acknowledges
that notwithstanding any such designation hereunder, to the extent any of
Seller’s obligations in respect of this Transaction are not completed by its
designee, Seller shall be obligated to continue to perform or to cause any
other of its designees to perform in respect of such obligations. 

          Section
9.04. Calculation Agent. Whenever
the Calculation Agent is required to act or to exercise judgment in any way
with respect to this Transaction, it will do so in good faith and in a
commercially reasonable manner. 

          Section
9.05. Non-confidentiality. The
Seller and the Purchaser hereby acknowledge and agree that, subject to Section
6.03, each is authorized to disclose every aspect of this Confirmation and the
transactions contemplated hereby to any and all persons, without limitation of
any kind, and there are no express or implied agreements, arrangements or
understandings to the contrary. 

          Section
9.06. Unenforceability and Invalidity. To
the extent permitted by law, the unenforceability or invalidity of any
provision or provisions of this Confirmation shall not render any other
provision or provisions herein contained unenforceable or invalid. 

          Section
9.07. Securities Contract. The
parties hereto agree and acknowledge as of the date hereof that (i) the Seller
is a “financial institution” within the meaning of Section 101(22) of Title 11
of the United States Code (the “Bankruptcy
Code”) and (ii) this Confirmation is a “securities contract,” as
such term is defined in Section 741(7) of the Bankruptcy Code, entitled to the
protection of Sections 362(b)(6) and 555 of the Bankruptcy Code. 

15

          Section
9.08. No Collateral, Netting or Setoff. Notwithstanding
any provision of the Agreement, or any other agreement between the parties, to
the contrary, the obligations of the Purchaser hereunder are not secured by any
collateral. Obligations under this Transaction shall not be netted, recouped or
set off (including pursuant to Section 6 of the Agreement) against any other
obligations of the parties, whether arising under the Agreement, this Confirmation, under any
other agreement between the parties hereto, by operation of law or otherwise,
and no other obligations of the parties shall be netted, recouped or set off
(including pursuant to Section 6 of the Agreement) against obligations under
this Transaction, whether arising under the Agreement, this Confirmation, under
any other agreement between the parties hereto, by operation of law or
otherwise, and each party hereby waives any such right of setoff, netting or
recoupment. 

          Section
9.09. Equity Rights. The Seller
acknowledges and agrees that this Confirmation is not intended to convey to it
rights with respect to the Transaction that are senior to the claims of holders
of Common Stock in the event of the Purchaser’s bankruptcy. 

          Section
9.10. Notices. Unless otherwise
specified herein, any notice, the delivery of which is expressly provided for in
this Confirmation, may be made by telephone, to be confirmed in writing to the
address below. Changes to the information below must be made in writing. 

	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 If to the Purchaser:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 MTS Systems Corporation 

 
	
  

 	
  

 	
 14000 Technology Drive 

 
	
  

 	
  

 	
 Eden Prairie, MN 55344 

 
	
  

 	
  

 	
 Attention: Tim Radermacher
 

 
	
  

 	
  

 	
 Title: Treasurer and
 Director of Tax 

 
	
  

 	
  

 	
 Telephone No: (952)
 937-4004 

 
	
  

 	
  

 	
 Facsimile No: (952)
 937-4515 

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 If to the Seller:

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 JPMorgan Chase Bank,
 National Association 

 
	
  

 	
  

 	
 c/o J.P. Morgan Securities
 LLC 

 
	
  

 	
  

 	
 EDG Marketing Support 

 
	
  

 	
  

 	
 Email:
 EDG_OTC_HEDGING_MS@jpmorgan.com 

 
	
  

 	
  

 	
 Fax: 1-866-886-4506 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 With a copy to: 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Sudheer Tegulapalle 

 
	
  

 	
  

 	
 Executive Director 

 
	
  

 	
  

 	
 383 Madison Avenue, Floor
 05 

 
	
  

 	
  

 	
 New York, NY, 10179,
 United States 

 
	
  

 	
  

 	
 Telephone No: (212)
 622-2100 

 
	
  

 	
  

 	
 Facsimile No: (212)
 622-0398 

 
	
  

 	
  

 	
 Email:
 sudheer.r.tegulapalle@jpmorgan.com 

 

16

          Please
confirm that the foregoing correctly sets forth the terms of our agreement by
executing the copy of this Confirmation enclosed for that purpose and returning
it to us. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 Yours sincerely,

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 J.P. MORGAN SECURITIES
 LLC, as agent for JPMorgan 

 Chase Bank, National Association, London Branch

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
  

 	
  

 	
 Title:

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Confirmed as of the date
 first

 above written:

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 
	
 MTS SYSTEMS CORPORATION

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 By: 

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
 Name:

 	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 	
  

 	
  

 

JPMorgan
Chase Bank, National Association 

Organised under the laws of the United States as a National Banking
Association. 

Main Office 1111 Polaris Parkway, Columbus, Ohio 43271 

Registered as a branch in England & Wales branch No. BR000746. 

Registered Branch Office 125 London Wall, London EC2Y 5AJ 

Authorised and regulated by the Financial Services Authority

ANNEX A 

PRIVATE PLACEMENT PROCEDURES

          I.          Introduction

          MTS
Systems Corporation, a Minnesota corporation (the “Purchaser”) and J.P. Morgan Securities LLC, as agent for
JPMorgan Chase Bank, National Association, London Branch (the “Seller”) have agreed to these procedures (the
“Private Placement Procedures”) in
connection with entering into the Confirmation (the “Confirmation”) dated as of September 7, 2012 between JPMorgan
and the Purchaser relating to the sale by JPMorgan to the Purchaser of common
stock, par value $0.25 per share, or security entitlements in respect thereof
(the “Common Stock”) of the
Purchaser. These Private Placement Procedures supplement, form part of, and are
subject to the Confirmation and all terms used and not otherwise defined herein
shall have the meanings assigned to them in the Confirmation. 

          II.
          Procedures 

          If
the Purchaser elects to deliver Private Placement Shares pursuant to Section
3.01(b) of the Confirmation or elects to deliver Alternative Termination
Delivery Units pursuant to Section 7.02(a) of the Confirmation, the Purchaser
shall effect such delivery in compliance with the private placement procedures
provided herein. 

         (a)          The
Purchaser shall afford the Seller, and any potential buyers of the Private
Placement Shares (or, in the case of alternative termination settlement,
Alternative Termination Delivery Units) (collectively, the “Private Securities”)
designated by the Seller a reasonable opportunity to conduct a due diligence
investigation with respect to the Purchaser customary in scope for private
offerings of such type of securities (including, without limitation, the
availability of senior management to respond to questions regarding the
business and financial condition of the Purchaser and the right to have made
available to them for inspection all financial and other records, pertinent
corporate documents and other information reasonably requested by them), and
the Seller (or any such potential buyer) shall be satisfied in all material
respects with such opportunity and with the resolution of any disclosure issues
arising from such due diligence investigation of the Purchaser. 

         (b)          Prior
to or contemporaneously with the determination of the Private Placement Price (as
described below), the Purchaser shall enter into an agreement (a “Private Placement Agreement”) with the
Seller (or any affiliate of the Seller designated by the Seller) providing for
the purchase and resale by the Seller (or such affiliate) in a private
placement (or other transaction exempt from registration under the Securities
Act) of the Private Securities, which agreement shall be on commercially
reasonable terms and in form and substance reasonably satisfactory to the
Seller (or such affiliate) and (without limitation of the foregoing) shall: 

	
  

 	
  

 
	
  

 	
                (i)         contain
 customary conditions, and customary undertakings, representations and
 warranties (to the Seller or such affiliate, and if requested by the Seller
 or such affiliate, to potential purchasers of the Private Securities); 

 
	
  

 	
  

 
	
  

 	
                (ii)        contain
 indemnification and contribution provisions in connection with the potential
 liability of the Seller and its affiliates relating to the resale by the
 Seller (or such affiliate) of the Private Securities; 

 
	
  

 	
  

 
	
  

 	
                (iii)       provide
 for all reasonable steps within the Purchaser’s control to be taken to
 provide for the delivery of related certificates and representations,
 warranties and agreements of the Purchaser, including those necessary or
 advisable to establish and maintain the availability of an exemption from the
 registration requirements of the Securities Act for the Seller and resales of
 the Private Securities by the Seller (or such affiliate); and 

 

A-1

	
  

 	
  

 
	
  

 	
                (iv)       provide
 for all reasonable steps within the Purchaser’s control to be taken to
 provide for the delivery to the Seller (or such affiliate) of customary
 opinions (including, without limitation, opinions relating to the due
 authorization, valid issuance and fully paid and non-assessable nature of the
 Private Securities, the availability of an exemption from the Securities Act
 for the Seller and resales of the Private Securities by the Seller (or such
 affiliate), and the lack of material misstatements and omissions in the
 Purchaser’s filings under the Exchange Act). 

 

         (c)          The
Seller shall determine the Private Placement Price (or, in the case of
alternative termination settlement, the Termination Price) in its judgment by
commercially reasonable means, which may include (without limitation): 

	
  

 	
  

 
	
  

 	
                (i)         basing
 such price on indicative bids from investors; 

 
	
  

 	
  

 
	
  

 	
                (ii)        taking
 into account any factors that are customary in pricing private sales for similarly
 situated issuers or securities, including, without limitation, a reasonable
 placement fee or spread to be retained by the Seller (or such affiliate); and
 

 
	
  

 	
  

 
	
  

 	
                (iii)       providing
 for the payment by the Purchaser of all reasonable fees and expenses in
 connection with such sale and resale, including all fees and expenses of
 counsel for the Seller or such affiliate. 

 

         (d)          The
Seller shall notify the Purchaser of the number of Private Securities required
to be delivered by the Purchaser and the Private Placement Price (or, in the
case of alternative termination settlement, the Termination Price) by 6:00 p.m.
on the day such price is determined. 

         (e)          The
Purchaser agrees not to take or cause to be taken any action that would make
unavailable either (i) the exemption set forth in Section 4(2) of the
Securities Act, for the sale of any Private Securities by the Purchaser to the
Seller or (ii) an exemption from the registration requirements of the Securities
Act reasonably acceptable to the Seller for resales of Private Securities by
the Seller. 

         (f)          The
Purchaser expressly agrees and acknowledges that the public disclosure of all
material information relating to the Purchaser is within the Purchaser’s
control and that the Purchaser shall promptly so disclose all such material
information during the period from the Valuation Completion Date to and
including the Settlement Date. 

The Purchaser agrees to use
its best efforts to make any filings required to be made by it with the SEC,
any securities exchange or any other regulatory body with respect to the
Transaction contemplated hereby and the issuance of the Private Securities. 

A-2

ANNEX B 

REGISTRATION PROCEDURES

          I.           Introduction

          MTS
Systems Corporation, a Minnesota corporation (the “Purchaser”) and J.P. Morgan Securities LLC, as agent for
JPMorgan Chase Bank, National Association, London Branch (the “Seller”) have agreed to these procedures
(the “Registration Procedures”) in
connection with entering into the Confirmation (the “Confirmation”) dated as of September 7, 2012 between JPMorgan
and the Purchaser relating to the sale by JPMorgan to the Purchaser of common
stock, par value $0.25 per share, or security entitlements in respect thereof
(the “Common Stock”) of the
Purchaser. These Registration Procedures supplement, form part of, and are
subject to the Confirmation and all terms used and not otherwise defined herein
shall have the meanings assigned to them in the Confirmation. 

          II.          Procedures

          If
the Purchaser elects to deliver Registered Shares pursuant to Section 3.01(b)
of the Confirmation, the Purchaser shall effect such delivery in compliance
with the registration procedures provided herein. 

         (a)          The
Purchaser shall take all actions within its control to make available to the
Seller and its affiliates an effective primary registration statement under the
Securities Act and one or more prospectuses as necessary or advisable to allow
the Seller and its affiliates to comply with the applicable prospectus delivery
requirements (the “Prospectus”)
for the sale by Seller or its affiliates of the Registered Shares to be
delivered by the Purchaser pursuant to the Confirmation (the “Registration Statement”), such Registration
Statement to be effective and Prospectus to be current until all such sales by
the Seller (or its affiliates) have been settled. The Purchaser shall take all
actions reasonably requested by the Seller to facilitate the disposition of any
Registered Shares to be sold pursuant to such Registration Statement. 

         (b)          The
Purchaser shall use commercially reasonable efforts to prevent the issuance of
any stop order suspending the effectiveness of the Registration Statement or of
any order preventing or suspending the use of any Prospectus and, if any such
order is issued, to obtain the lifting thereof as soon thereafter as is
reasonably possible. If the Registration Statement, the Prospectus or any
document incorporated therein by reference contains a misstatement of a
material fact or omits to state a material fact required to be stated therein
or necessary to make any statement therein not misleading, the Purchaser shall
as promptly as reasonably practicable file any required document and prepare
and furnish to the Seller a reasonable number of copies of such supplement or
amendment thereto as may be necessary so that the Prospectus, as thereafter
delivered to the purchasers in connection with sales of Registered Shares
thereunder, will not contain any misstatement of a material fact or omit to
state a material fact required to be stated therein or necessary to make any
statement therein not misleading. 

         (c)          The
Purchaser shall afford the Seller (and its agents and affiliates) a reasonable
opportunity to conduct a due diligence investigation with respect to the
Purchaser customary in scope for registered offerings of such type of
securities (including, without limitation, the availability of senior
management and external advisors to respond to questions regarding the business
and financial condition of the Purchaser and the right to have made available
to them for inspection all financial and other records, pertinent corporate
documents and other information reasonably requested by them), and such
opportunity and the resolution of any disclosure issues arising from such due
diligence investigation of the Purchaser shall be satisfactory to Seller in all
material respects. The Purchaser shall reimburse the Seller for all reasonable
out-of-pocket expenses it incurs in connection with such diligence and
otherwise in connection with the preparation of the Registration Statement and
Prospectus, including, without limitation, the reasonable fees and expenses of
outside counsel to the Seller incurred in connection therewith. 

B-1

         (d)          The
Purchaser shall enter into an agreement (a “Registration
Agreement”) with the Seller (or any affiliate of the Seller
designated by the Seller) providing for the registration of the Registered
Shares, which agreement shall be on commercially reasonable terms and in form
and substance reasonably satisfactory to the Seller (or such affiliate) and
(without limitation of the foregoing) shall: 

	
  

 	
  

 
	
  

 	
                (i)          contain
 customary conditions, and customary undertakings, representations and
 warranties (to the Seller or such affiliate); 

 
	
  

 	
  

 
	
  

 	
                (ii)        contain
 indemnification and contribution provisions in connection with the potential
 liability of the Seller and its affiliates relating to the sale by the Seller
 (or such affiliate) of the Registered Shares; 

 
	
  

 	
  

 
	
  

 	
                (iii)       provide
 for the delivery of related certificates and representations, warranties and
 agreements of the Purchaser; 

 
	
  

 	
  

 
	
  

 	
                (iv)       provide
 for the delivery of accountants’ “comfort letters” to the Seller in form and
 substance satisfactory to the Seller, containing statements and information
 of the type customarily included in such letters to “underwriters” with
 respect to the financial statements and certain financial information
 contained, or incorporated by reference, in the Registration Statement and
 the Prospectus; and 

 
	
  

 	
  

 
	
  

 	
                (v)        provide
 for the delivery to the Seller (or such affiliate) of customary opinions,
 including, without limitation, opinions relating to the due authorization,
 valid issuance and fully paid and non-assessable nature of the Registered
 Shares and the lack of material misstatements and omissions in the
 Registration Statement (including any documents incorporated by reference
 therein). 

 

         (e)          The
Seller shall notify the Purchaser of the numbers of Registered Shares to be
delivered by the Purchaser on the Settlement Dates, as necessary in light of
the Seller’s unwinding of its hedge positions in connection with the
Transaction and sales of Registered Shares in accordance with these
Registration Procedures, and the Purchaser shall deliver such Shares to the
Seller on such Settlement Dates in accordance with the Seller’s customary
procedures. The parties understand and acknowledge that (i) the Seller or its
affiliates expect to make contemporaneous or nearly contemporaneous (A)
purchases of Common Stock to unwind its hedge and (B) sales of Registered
Shares in accordance with these Registration Procedures, (ii) the Seller or its
affiliates intend to make such sales of Registered Shares in a manner that is
not a distribution for purposes of Regulation M, and (iii) accordingly, the
length of the period during which the Seller or its affiliates make such
purchases and sales will depend in part on prevailing trading volumes for the
Common Stock. 

         (f)          In
the event that (i) the Purchaser fails to comply with the requirements set
forth in this Annex B, (ii) the Registration Statement is not effective on or
prior to the date that is 30 days after the Valuation Completion Date, or fails
to remain effective until all Registered Shares have been sold hereunder, (ii)
the opportunity to conduct a due diligence investigation with respect to the
Purchaser and the resolution of any issues arising therefrom is not
satisfactory to Seller and its affiliates in all material respects, or does not
continue to be satisfactory to the Seller and its affiliates in all material
respects until all Registered Shares have been sold hereunder, (iv) the Seller
or its affiliates are not able to make sales of Registered Shares in a manner
that permits the contemporaneous or nearly contemporaneous purchase by the
Seller or its affiliates of Common Stock in accordance with Regulation M or (v)
the Registration Procedures otherwise become unavailable for the sale by the
Seller and its affiliates of the Registered Shares delivered by the Purchaser hereunder
prior to the completion of the sale thereof, then in any such event, the
provisions of Section 3.01(d) of the Confirmation providing for cash settlement
with respect to any unsold Registered Shares shall apply, appropriately
modified to take into account any Registered Shares theretofore delivered and
sold pursuant to these Registration Procedures. 

B-2

ANNEX C 

COMMUNICATIONS PROCEDURES

September 7, 2012 

          I.           Introduction

          MTS
Systems Corporation, a Minnesota corporation (“Counterparty”) and J.P. Morgan Securities LLC, as agent for
JPMorgan Chase Bank, National Association, London Branch (“JPMorgan”) have adopted these
communications procedures (the “Communications
Procedures”) in connection with
entering into the Confirmation (the “Confirmation”)
dated as of September 7, 2012 between JPMorgan and Counterparty relating to the
sale by JPMorgan to Counterparty of common stock, par value $0.25 per share, or
security entitlements in respect thereof (the “Common Stock”) of
the Counterparty. These Communications Procedures supplement, form part of, and
are subject to the Confirmation. 

          II.          Communications
Rules 

          From
the date hereof until the end of the Contract Period, Counterparty and its
Employees and Designees shall not engage in any Program-Related Communication
with, or disclose any Material Non-Public Information to, any EDG Trading
Personnel. Except as set forth in the preceding sentence, the Confirmation
shall not limit Counterparty and its Employees and Designees in their
communication with Affiliates and Employees of JPMorgan, including without
limitation Employees who are EDG Permitted Contacts. 

          III.          Termination

          If,
in the sole judgment of any EDG Trading Personnel or any affiliate or Employee
of JPMorgan participating in any Communication with Counterparty or any
Employee or Designee of Counterparty, such Communication would not be permitted
by these Communications Procedures, such EDG Trading Personnel or affiliate or
Employee of JPMorgan shall immediately terminate such Communication. In such
case, or if such EDG Trading Personnel or affiliate or Employee of JPMorgan
determines following completion of any Communication with Counterparty or any Employee
or Designee of Counterparty that such Communication was not permitted by these
Communications Procedures, such EDG Trading Personnel or such affiliate or
Employee of JPMorgan shall promptly consult with his or her supervisors and
with counsel for JPMorgan regarding such Communication. If, in the reasonable
judgment of JPMorgan’s counsel following such consultation, there is more than
an insignificant risk that such Communication could materially jeopardize the
availability of the affirmative defenses provided in Rule 10b5-1 under the
Exchange Act with respect to any ongoing or contemplated activities of JPMorgan
or its affiliates in respect of the Confirmation, it shall be an Additional
Termination Event with respect to the Confirmation. 

          IV.          Definitions

          Capitalized
terms used and not otherwise defined herein shall have the meanings ascribed to
them in the Confirmation. As used herein, the following words and phrases shall
have the following meanings: 

          “Communication” means any contact or
communication (whether written, electronic, oral or otherwise) between
Counterparty or any of its Employees or Designees, on the one hand, and
JPMorgan or any of its affiliates or Employees, on the other hand. 

          “Designee” means a person designated, in
writing or orally, by Counterparty to communicate with JPMorgan on behalf of
Counterparty. 

C-1

          “EDG Permitted Contact” means any of Mr.
David Aidelson, Mr. Gregory Batista, Mr. Elliot Chalom, Mr. James Rothschild,
Mr. David Seaman, Mr. Steven Seltzer, Mr. James F. Smith, Mr. Sudheer
Tegulapalle and Mr. Jason M. Wood or any of their designees; provided that JPMorgan may amend the list
of EDG Permitted Contacts by delivering a revised list of EDG Permitted
Contacts to Counterparty. 

          “EDG Trading Personnel” means Graham Orton,
Michael Tatro and any other Employee of the public side of the Equity
Derivatives Group or the Special Equities Group of J.P. Morgan Chase & Co.;
provided that JPMorgan may amend
the list of EDG Trading Personnel by delivering a revised list of EDG Trading
Personnel to Counterparty; and provided
further that, for the avoidance of doubt, the persons listed as EDG
Permitted Contacts are not EDG Trading Personnel. 

          “Employee” means, with respect to any
entity, any owner, principal, officer, director, employee or other agent or
representative of such entity, and any affiliate of any of such owner,
principal, officer, director, employee, agent or representative. 

          “Material Non-Public Information” means
information relating to the Counterparty or the Common Stock that (a) has not
been widely disseminated by wire service, in one or more newspapers of general
circulation, by communication from the Counterparty to its shareholders or in a
press release, or contained in a public filing made by the Counterparty with
the Securities and Exchange Commission and (b) a reasonable investor might
consider to be of importance in making an investment decision to buy, sell or
hold shares of Common Stock. For the avoidance of doubt and solely by way of
illustration, information should be presumed “material” if it relates to such
matters as dividend increases or decreases, earnings estimates, changes in
previously released earnings estimates, significant expansion or curtailment of
operations, a significant increase or decline of orders, significant merger or
acquisition proposals or agreements, significant new products or discoveries,
extraordinary borrowing, major litigation, liquidity problems, extraordinary
management developments, purchase or sale of substantial assets and similar
matters. 

          “Program-Related Communication” means any
Communication the subject matter of which relates to the Confirmation or any
Transaction under the Confirmation or any activities of JPMorgan (or any of its
affiliates) in respect of the Confirmation or any Transaction under the
Confirmation.

C-2

ANNEX D 

PRICING SUPPLEMENT

          This
Pricing Supplement is subject to the Confirmation dated as of September 7, 2012
(the “Confirmation”) between J.P.
Morgan Securities LLC, as agent for JPMorgan Chase Bank, National Association,
London Branch (the “Seller”), and
MTS Systems Corporation, a Minnesota corporation (the “Purchaser”). Capitalized terms used herein
have the meanings set forth in the Confirmation. 

	
  

 	
  

 	
  

 	
  

 
	
 1

 	
 Discount:

 	
  

 	
 $0.58

 
	
  

 	
  

 	
  

 	
  

 
	
 2

 	
 Initial
 Delivery Percentage

 	
  

 	
  80%

 
	
  

 	
  

 	
  

 	
  

 
	
 3

 	
 Contract
 Fee:

 	
  

 	
 $0.00

 
	
  

 	
  

 	
  

 	
  

 
	
 4

 	
 Floor
 Price:

 	
  

 	
 $0.01

 
	
  

 	
  

 	
  

 	
  

 
	
 5

 	
 Registered
 Shares Fee:

 	
  

 	
 $0.05

 
	
  

 	
  

 	
  

 	
  

 
	
 6

 	
 Valuation
 Completion Date:

 	
  

 	
 The Trading Day, occurring
 during the period commencing on and including the 115th Trading
 Day following the Trade Date and ending on and including the Expiration Date,
 specified as such by the Seller, in its sole judgment, by delivering a notice
 designating such Trading Day as a Valuation Completion Date by the close of
 business on the Business Day immediately following such Trading Day; provided that if the Seller fails to
 validly designate the Valuation Completion Date prior to the Expiration Date,
 the Valuation Completion Date shall be the Expiration Date.

 
	
  

 	
  

 	
  

 	
  

 
	
 7

 	
 Cash
 Settlement Fee:

 	
  

 	
 $0.00

 
	
  

 	
  

 	
  

 	
  

 
	
 8

 	
 Cash
 Distribution Amount:

 	
  

 	
  

 

	
  

 	
  

 
	
 Cash Distribution Amount

 	
 Reference Period

 
	
  

 	
  

 
	
 $0.00
 per share of Common Stock

 	
 Trade
 Date – December 16, 2012

 
	
  

 	
  

 
	
 $0.30
 per share of Common Stock

 	
 December
 17, 2012 – March 10, 2013

 
	
  

 	
  

 
	
 $0.30
 per share of Common Stock

 	
 Any
 period after March 11, 2013

 

D-1

EXHIBIT A 

[Letterhead of Purchaser]

JPMorgan Chase Bank,
National Association 

c/o J.P. Morgan Securities LLC 

383 Madison Avenue 

5th Floor 

New York, New York 10172 

Re:          Accelerated
Purchase of Equity Securities 

Ladies and Gentlemen: 

          In
connection with our entry into the Confirmation dated as of September 7, 2012
(the “Confirmation”), we hereby
represent that set forth below is the total number of shares of our common
stock purchased by or for us or any of our affiliated purchasers in Rule 10b-18
purchases of blocks (all defined in Rule 10b-18 under the Securities Exchange
Act of 1934) pursuant to the once-a-week block exception set forth in Rule
10b-18(b)(4) during the four full calendar weeks immediately preceding the
first day of the [Valuation Period] [Cash Settlement Purchase Period] [Seller
Termination Share Purchase Period] (as defined in the Confirmation) and the
week during which the first day of the Valuation Period occurs. 

          Number
of Shares: __________________ 

          We
understand that you will use this information in calculating trading volume for
purposes of Rule 10b-18. 

	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 Very truly yours,

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 MTS SYSTEMS CORPORATION

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 By: 

 	
  

 
	
  

 	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
  

 	
 Title:

 

Exh-A-1

Protected by Federal Copyright-Not To
Be Reproduced or Distributed Without 
Permission of ISDA

ISDA®

International Swaps and Derivatives
Association, Inc.

2002 MASTER AGREEMENT

dated as of______________________________________

____________________________________________
and ____________________________________________

have entered and/or anticipate entering into one or more transactions (each a
“Transaction”) that are or will be governed by this 2002 Master Agreement,
which includes the schedule (the “Schedule”), and the documents and other
confirming evidence (each a “Confirmation”) exchanged between the parties or
otherwise effective for the purpose of confirming or evidencing those
Transactions. This 2002 Master Agreement and the Schedule are together referred
to as this “Master Agreement”. 

Accordingly, the parties agree as follows:― 

1.          Interpretation

(a)        Definitions. The
terms defined in Section 14 and elsewhere in this Master Agreement 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, 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. 

 

Copyright © 2002 by
International Swaps and Derivatives Association, Inc. 

dms.us.52076424.02

Protected by Federal Copyright-Not To
Be Reproduced or Distributed Without 
Permission of ISDA

	
  

 	
  

 
	
  

 	
 (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
 condition specified in this Agreement to be a condition precedent for the purpose
 of this Section 2(a)(iii). 

 

(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 Settlement 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 of Payments. 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 which
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 and payment obligation will be determined in respect of all amounts
payable on the same date in the same currency in respect of those Transactions,
regardless of whether such amounts are payable in respect of the same
Transaction. The election may be made in the Schedule or any Confirmation by
specifying that “Multiple Transaction Payment Netting” applies to the
Transactions identified as being subject to the election (in which case clause
(ii) above will not apply to such Transactions). If Multiple Transaction
Payment Netting is applicable to Transactions, it will apply to those
Transactions with effect from the starting date specified in the Schedule or
such Confirmation, or, if a starting date is not specified in the Schedule or
such Confirmation, the starting date otherwise agreed by the parties in
writing. 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. 

	
  

 	
  

 
	
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(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,
 after a Transaction is entered into (regardless of whether such action is
 taken or brought with respect to a party to this Agreement) or (II) a Change
 in Tax Law. 

 

	
  

 	
  

 
	
 (ii)

 	
 Liability. If:―
 

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 
	
  

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

 

	
  

 	
  

 
	
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 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)). 

 
	
  

 	
  

 
	
 3. 

 	
 Representations
 

 
	
  

 	
  

 
	
 Each party makes the representations contained in Sections 3(a),
 3(b), 3(c), 3(d), 3(e) and 3(f) and, if specified in the Schedule as
 applying, 3(g) 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). If any “Additional Representation” is
 specified in the Schedule or any Confirmation as applying, the party or
 parties specified for such Additional Representation will make and, if
 applicable, be deemed to repeat such Additional Representation at the time or
 times specified for such Additional Representation. 

 
	
  

 	
  

 
	
 (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, any of its Credit
 Support Providers or any of its applicable Specified Entities 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. 

 
	
  

 
	
 (g)        No Agency. It is
 entering into this Agreement, including each Transaction, as principal and
 not as agent of any person or entity. 

 

	
  

 	
  

 	
  

 
	
 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 clause (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 

 

	
  

 	
  

 
	
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 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, organised, managed and controlled or considered
 to have its seat, or where an 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 (subject to Sections 5(c) and 6(e)(iv))
 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 9(h)(i)(2) or (4) required to be made by it if such
 failure is not remedied on or before the first Local Business Day in the case
 of any such payment or the first Local Delivery Day in the case of any such
 delivery after, in each case, notice of such failure is given to the party; 

 
	
  

 	
  

 
	
  

 	
 (ii)      Breach of Agreement; Repudiation
 of Agreement.

 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1) 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 9(h)(i)(2) or (4) 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 within 30 days
 after notice of such failure is given to the party; or 

 

	
  

 	
  

 
	
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 (2)          the
 party disaffirms, disclaims, repudiates or rejects, in whole or in part, or
 challenges the validity of, this Master Agreement, any Confirmation executed
 and delivered by that party or any Transaction evidenced by such a
 Confirmation (or such action is taken by any person or entity appointed or empowered
 to operate it or act on its behalf); 

 
	
  

 	
  

 	
  

 
	
  

 	
  (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, or any security interest granted by
 such party or such Credit Support Provider to the other party pursuant to any
 such Credit Support Document, to be in full force and effect for the purpose
 of this Agreement (in each 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 (or such action is taken by any person or entity appointed
 or empowered to operate it or act on its behalf); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)      Misrepresentation. A
 representation (other than a representation under Section 3(e) or 3(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
 (other than by failing to make a delivery) under a Specified Transaction or
 any credit support arrangement relating to a Specified Transaction and, after
 giving effect to any applicable notice requirement or grace period, such
 default results in 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 due on the last payment or exchange date of, or any
 payment on early termination of, a Specified Transaction (or, if there is no
 applicable notice requirement or grace period, such default continues for at
 least one Local Business Day); 

 

	
  

 	
  

 
	
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 (3)          defaults
 in making any delivery due under (including any delivery due on the last delivery
 or exchange date of) a Specified Transaction or any credit support
 arrangement relating to a Specified Transaction and, after giving effect to
 any applicable notice requirement or grace period, such default results in a
 liquidation of, an acceleration of obligations under, or an early termination
 of, all transactions outstanding under the documentation applicable to that
 Specified Transaction; or 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)          disaffirms,
 disclaims, repudiates or rejects, in whole or in part, or challenges the validity
 of, a Specified Transaction or any credit support arrangement relating to a
 Specified Transaction that is, in either case, confirmed or evidenced by a
 document or other confirming evidence executed and delivered by that party,
 Credit Support Provider or Specified Entity (or such action is taken by any
 person or entity appointed or empowered to operate it or act on its behalf); 

 
	
  

 	
  

 	
  

 
	
  

 	
 (vi)      Cross-Default. If
 “Cross-Default” is specified in the Schedule as applying to the party, the
 occurrence or existence of:― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          a
 default, event of default or other similar condition or event (however
 described) in respect of such party, any Credit Support Provider of such
 party or any applicable Specified Entity of such party under one or more
 agreements or instruments relating to Specified Indebtedness of any of them
 (individually or collectively) where the aggregate principal amount of such
 agreements or instruments, either alone or together with the amount, if any,
 referred to in clause (2) below, is 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 under such
 agreements or instruments on the due date for payment (after giving effect to
 any applicable notice requirement or grace period) in an aggregate amount,
 either alone or together with the amount, if any, referred to in clause (1)
 above, of not less than the applicable Threshold Amount; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (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)(A) institutes or has instituted against it, by
 a regulator, supervisor or any similar official with primary insolvency,
 rehabilitative or regulatory jurisdiction over it in the jurisdiction of its
 incorporation or organisation or the jurisdiction of its head or home office,
 a proceeding seeking a judgment of insolvency or bankruptcy or any 

 

	
  

 	
  

 
	
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 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 by it or such regulator, supervisor or similar
 official, or (B) 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 such proceeding
 or petition is instituted or presented by a person or entity not described in
 clause (A) above and either (I) 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 (II) is not dismissed, discharged, stayed or
 restrained in each case within 15 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 15 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 (l) to (7) above (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, or reorganises, reincorporates or reconstitutes into or
 as, another entity and, at the time of such consolidation, amalgamation,
 merger, transfer, reorganisation, reincorporation or reconstitution: ― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (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; 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 (subject to Section 5(c)) an Illegality if
 the event is specified in clause (i) below, a Force Majeure Event if the
 event is specified in clause (ii) below, a Tax Event if the event is
 specified in clause (iii) below, a Tax Event Upon Merger if the event is
 specified in clause (iv) below, and, if specified to be applicable, a Credit
 Event Upon Merger if the event is specified pursuant to 

 

	
  

 	
  

 
	
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clause (v)
below or an Additional Termination Event if the event is specified pursuant to
clause (vi) below:― 

	
  

 	
  

 	
  

 
	
  

 	
 (i)        Illegality. After
 giving effect to any applicable provision, disruption fallback or remedy
 specified in, or pursuant to, the relevant Confirmation or elsewhere in this
 Agreement, due to an event or circumstance (other than any action taken by a
 party or, if applicable, any Credit Support Provider of such party) occurring
 after a Transaction is entered into, it becomes unlawful under any applicable
 law (including without limitation the laws of any country in which payment,
 delivery or compliance is required by either party or any Credit Support
 Provider, as the case may be), on any day, or it would be unlawful if the
 relevant payment, delivery or compliance were required on that day (in each
 case, other than as a result of a breach by the party of Section 4(b)):―
 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          for
 the Office through which such party (which will be the Affected Party) makes
 and receives payments or deliveries with respect to such Transaction to perform
 any absolute or contingent obligation to make a payment or delivery in
 respect of such Transaction, 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)          for
 such party or any Credit Support Provider of such party (which will be the
 Affected Party) to perform any absolute or contingent obligation to make a
 payment or delivery which such party or Credit Support Provider has under any
 Credit Support Document relating to such Transaction, to receive a payment or
 delivery under such Credit Support Document or to comply with any other
 material provision of such Credit Support Document; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)       Force Majeure Event. After
 giving effect to any applicable provision, disruption fallback or remedy
 specified in, or pursuant to, the relevant Confirmation or elsewhere in this
 Agreement, by reason of force majeure or act of state occurring after a
 Transaction is entered into, on any day: ― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          the
 Office through which such party (which will be the Affected Party) makes and
 receives payments or deliveries with respect to such Transaction is prevented
 from performing any absolute or contingent obligation to make a payment or
 delivery in respect of such Transaction, from receiving a payment or delivery
 in respect of such Transaction or from complying with any other material
 provision of this Agreement relating to such Transaction (or would be so
 prevented if such payment, delivery or compliance were required on that day),
 or it becomes impossible or impracticable for such Office so to perform,
 receive or comply (or it would be impossible or impracticable for such Office
 so to perform, receive or comply if such payment, delivery or compliance were
 required on that day); or 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)          such
 party or any Credit Support Provider of such party (which will be the
 Affected Party) is prevented from performing any absolute or contingent
 obligation to make a payment or delivery which such party or Credit Support
 Provider has under 

 

	
  

 	
  

 
	
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 any Credit Support Document relating to such Transaction, from
 receiving a payment or delivery under such Credit Support Document or from
 complying with any other material provision of such Credit Support Document
 (or would be so prevented if such payment, delivery or compliance were
 required on that day), or it becomes impossible or impracticable for such
 party or Credit Support Provider so to perform, receive or comply (or it
 would be impossible or impracticable for such party or Credit Support
 Provider so to perform, receive or comply if such payment, delivery or
 compliance were required on that day), 

 
	
  

 	
  

 
	
  

 	
 so long as the force majeure or act of state is beyond the control of
 such Office, such party or such Credit Support Provider, as appropriate, and
 such Office, party or Credit Support Provider could not, after using all reasonable
 efforts (which will not require such party or Credit Support Provider to
 incur a loss, other than immaterial, incidental expenses), overcome such
 prevention, impossibility or impracticability; 

 
	
  

 	
  

 
	
  

 	
 (iii)       Tax Event. Due to
 (1) any action taken by a taxing authority, or brought in a court of
 competent jurisdiction, after a Transaction is entered into (regardless of
 whether such action is taken or brought with respect to a party to this
 Agreement) or (2) 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 Settlement Date (A) 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 9(h)) or (B) 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 9(h)) 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)); 

 
	
  

 	
  

 
	
  

 	
 (iv)        Tax Event Upon Merger. The
 party (the “Burdened Party”) on the next succeeding Scheduled Settlement 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 9(h)) or (2) receive a payment from which an amount has been
 deducted or withheld for or on account of any 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 (or any substantial part of the assets
 comprising the business conducted by it as of the date of this Master
 Agreement) to, or reorganising, reincorporating or reconstituting into or as,
 another entity (which will be the Affected Party) where such action does not
 constitute a Merger Without Assumption; 

 
	
  

 	
  

 
	
  

 	
 (v)        Credit Event Upon Merger. If
 “Credit Event Upon Merger” is specified in the Schedule as applying to the
 party, a Designated Event (as defined below) occurs with respect to such
 party, any Credit Support Provider of such party or any applicable Specified
 Entity of such party (in each case, “X”) and such Designated Event does not
 constitute a Merger Without Assumption, and the creditworthiness of X or, if
 applicable, the successor, surviving or transferee entity of X, after taking
 into account any applicable Credit Support Document, is materially weaker
 immediately after the occurrence of such Designated Event than that of X
 immediately prior to the occurrence of such Designated Event (and, in any
 such event, such 

 

	
  

 	
  

 
	
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 party or its successor, surviving or transferee entity, as
 appropriate, will be the Affected Party). A “Designated Event” with respect
 to X means that:― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          X
 consolidates or amalgamates with, or merges with or into, or transfers all or
 substantially all its assets (or any substantial part of the assets
 comprising the business conducted by X as of the date of this Master
 Agreement) to, or reorganises, reincorporates or reconstitutes into or as,
 another entity; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)          any
 person, related group of persons or entity acquires directly or indirectly
 the beneficial ownership of (A) equity securities having the power to elect a
 majority of the board of directors (or its equivalent) of X or (B) any other
 ownership interest enabling it to exercise control of X; or 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)          X
 effects any substantial change in its capital structure by means of the
 issuance, incurrence or guarantee of debt or the issuance of (A) preferred
 stock or other securities convertible into or exchangeable for debt or
 preferred stock or (B) in the case of entities other than corporations, any
 other form of ownership interest; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (vi)      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 will be as specified for such
 Additional Termination Event in the Schedule or such Confirmation). 

 
	
  

 	
  

 	
  

 
	
 (c)

 	
 Hierarchy of
 Events. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)          An
 event or circumstance that constitutes or gives rise to an Illegality or a
 Force Majeure Event will not, for so long as that is the case, also constitute
 or give rise to an Event of Default under Section 5(a)(i), 5(a)(ii)(1) or
 5(a)(iii)(1) insofar as such event or circumstance relates to the failure to
 make any payment or delivery or a failure to comply with any other material
 provision of this Agreement or a Credit Support Document, as the case may be.
 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)        Except in
 circumstances contemplated by clause (i) above, if an event or circumstance
 which would otherwise constitute or give rise to an Illegality or a Force
 Majeure Event also constitutes an Event of Default or any other Termination
 Event, it will be treated as an Event of Default or such other Termination
 Event, as the case may be, and will not constitute or give rise to an
 Illegality or a Force Majeure Event. 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)       If an event or
 circumstance which would otherwise constitute or give rise to a Force Majeure
 Event also constitutes an Illegality, it will be treated as an Illegality,
 except as described in clause (ii) above, and not a Force Majeure Event. 

 
	
  

 	
  

 	
  

 
	
 (d)        Deferral of Payments and
 Deliveries During Waiting Period. If an Illegality or a Force
 Majeure Event has occurred and is continuing with respect to a Transaction,
 each payment or delivery which would otherwise be required to be made under
 that Transaction will be deferred to, and will not be due until: ― 

 

	
  

 	
  

 
	
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 (i)          the
 first Local Business Day or, in the case of a delivery, the first Local
 Delivery Day (or the first day that would have been a Local Business Day or
 Local Delivery Day, as appropriate, but for the occurrence of the event or
 circumstance constituting or giving rise to that Illegality or Force Majeure
 Event) following the end of any applicable Waiting Period in respect of that
 Illegality or Force Majeure Event, as the case may be; or 

 
	
  

 	
  

 
	
  

 	
 (ii)          if
 earlier, the date on which the event or circumstance constituting or giving
 rise to that Illegality or Force Majeure Event ceases to exist or, if such
 date is not a Local Business Day or, in the case of a delivery, a Local
 Delivery Day, the first following day that is a Local Business Day or Local
 Delivery Day, as appropriate. 

 

(e)        Inability of Head or Home Office to
Perform Obligations of Branch. If (i) an Illegality or a Force
Majeure Event occurs under Section 5(b)(i)(1) or 5(b)(ii)(1) and the relevant
Office is not the Affected Party’s head or home office, (ii) Section 10(a)
applies, (iii) the other party seeks performance of the relevant obligation or
compliance with the relevant provision by the Affected Party’s head or home
office and (iv) the Affected Party’s head or home office fails so to perform or
comply due to the occurrence of an event or circumstance which would, if that
head or home office were the Office through which the Affected Party makes and
receives payments and deliveries with respect to the relevant Transaction,
constitute or give rise to an Illegality or a Force Majeure Event, and such
failure would otherwise constitute an Event of Default under Section 5(a)(i) or
5(a)(iii)(1) with respect to such party, then, for so long as the relevant
event or circumstance continues to exist with respect to both the Office
referred to in Section 5(b)(i)(1) or 5(b)(ii)(1), as the case may be, and the
Affected Party’s head or home office, such failure will not constitute an Event
of Default under Section 5(a)(i) or 5(a)(iii)(1). 

6.         Early Termination; Close-Out Netting 

(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 other than a Force Majeure 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 the other party such other information about that Termination Event
 as the other party may reasonably require. If a Force Majeure Event occurs,
 each party will, promptly upon becoming aware of it, use all 

 

	
  

 	
  

 
	
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 reasonable efforts to notify the other party, specifying the nature
 of that Force Majeure Event, and will also give the other party such other
 information about that Force Majeure Event as the other party may reasonably
 require. 

 
	
  

 	
  

 
	
  

 	
 (ii)         Transfer to Avoid Termination
 Event. If 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, other
 than 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
 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 of such
 occurrence is given under Section 6(b)(i) to avoid that Termination Event. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (iv)        Right to Terminate.

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)

 	
 If:― 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)          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 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)          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, 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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
 are two Affected Parties, or the Non- affected Party in the case of a Credit
 Event Upon Merger or an Additional Termination Event if there is only one
 Affected Party may, if the relevant Termination Event is then continuing, by
 not more than 20 days notice to the other party, designate a day not earlier
 than the day such notice is effective as an 

 

	
  

 	
  

 
	
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 Early Termination Date in respect of all Affected Transactions. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)        If at
 any time an Illegality or a Force Majeure Event has occurred and is then
 continuing and any applicable Waiting Period has expired:―

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)          Subject
 to clause (B) below, either party may, by not more than 20 days notice to the
 other party, designate (I) a day not earlier than the day on which such
 notice becomes effective as an Early Termination Date in respect of all
 Affected Transactions or (II) by specifying in that notice the Affected
 Transactions in respect of which it is designating the relevant day as an
 Early Termination Date, a day not earlier than two Local Business Days
 following the day on which such notice becomes effective as an Early
 Termination Date in respect of less than all Affected Transactions. Upon
 receipt of a notice designating an Early Termination Date in respect of less
 than all Affected Transactions, the other party may, by notice to the
 designating party, if such notice is effective on or before the day so
 designated, designate that same day as an Early Termination Date in respect
 of any or all other Affected Transactions. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)          An
 Affected Party (if the Illegality or Force Majeure Event relates to
 performance by such party or any Credit Support Provider of such party of an
 obligation to make any payment or delivery under, or to compliance with any
 other material provision of, the relevant Credit Support Document) will only
 have the right to designate an Early Termination Date under Section
 6(b)(iv)(2)(A) as a result of an Illegality under Section 5(b)(i)(2) or a
 Force Majeure Event under Section 5(b)(ii)(2) following the prior designation
 by the other party of an Early Termination Date, pursuant to Section
 6(b)(iv)(2)(A), in respect of less than all Affected Transactions. 

 
	
  

 	
  

 	
  

 	
  

 
	
 (c)

 	
 Effect of
 Designation. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (i)          If
 notice designating an Early Termination Date is given under Section 6(a) or
 6(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 9(h)(i) 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 will be determined pursuant to Sections
 6(e) and 9(h)(ii). 

 
	
  

 	
  

 	
  

 	
  

 
	
 (d)

 	
 Calculations;
 Payment Date. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (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
 (l) showing, in reasonable detail, 

 

	
  

 	
  

 
	
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 such calculations (including any quotations, market data or
 information from internal sources used in making such calculations), (2)
 specifying (except where there are two Affected Parties) any Early
 Termination Amount payable and (3) 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 or market data obtained in
 determining a Close-out Amount, the records of the party obtaining such
 quotation or market data will be conclusive evidence of the existence and
 accuracy of such quotation or market data. 

 
	
  

 	
  

 
	
  

 	
 (ii)        Payment Date. An
 Early Termination Amount due in respect of any Early Termination Date will,
 together with any amount of interest payable pursuant to Section 9(h)(ii)(2),
 be payable (1) on the day on which 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 (2) on the day which is two Local Business
 Days after the day on which notice of the amount payable is effective (or, if
 there are two Affected Parties, after the day on which the statement provided
 pursuant to clause (i) above by the second party to provide such a statement
 is effective) in the case of an Early Termination Date which is designated as
 a result of a Termination Event. 

 
	
  

 	
  

 
	
 (e)         Payments on Early Termination. If
 an Early Termination Date occurs, the amount, if any, payable in respect of
 that Early Termination Date (the “Early Termination Amount”) will be
 determined pursuant to this Section 6(e) and will be subject to Section 6(f).
 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)          Events of Default. If
 the Early Termination Date results from an Event of Default, the Early
 Termination Amount will be an amount equal to (1) the sum of (A) the
 Termination Currency Equivalent of the Close-out Amount or Close-out Amounts
 (whether positive or negative) determined by the Non- defaulting Party for
 each Terminated Transaction or group of Terminated Transactions, as the case
 may be, and (B) the Termination Currency Equivalent of the Unpaid Amounts
 owing to the Non-defaulting Party less (2) the Termination Currency
 Equivalent of the Unpaid Amounts owing to the Defaulting Party. If the Early
 Termination 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 the Early Termination Amount to the
 Defaulting Party. 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          One Affected Party. Subject to clause
 (3) below, if there is one Affected Party, the Early Termination Amount will
 be determined in accordance with Section 6(e)(i), except that references to
 the Defaulting Party and to the Non-defaulting Party will be deemed to be
 references to the Affected Party and to the Non-affected Party, respectively.
 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)          Two Affected Parties. Subject to clause
 (3) below, if there are two Affected Parties, each party will determine an
 amount equal to the Termination Currency Equivalent of the sum of the
 Close-out Amount or Close-out Amounts (whether positive or negative) for each
 Terminated Transaction or group of Terminated 

 

	
  

 	
  

 
	
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 Transactions, as the case may be, and the Early Termination Amount
 will be an amount equal to (A) the sum of (I) one-half of the difference
 between the higher amount so determined (by party “X”) and the lower amount
 so determined (by party “Y”) and (II) the Termination Currency Equivalent of
 the Unpaid Amounts owing to X less (B) the Termination Currency Equivalent of
 the Unpaid Amounts owing to Y. If the Early Termination Amount is a positive
 number, Y will pay it to X; if it is a negative number, X will pay the
 absolute value of the Early Termination Amount to Y. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)         Mid-Market Events. If that Termination
 Event is an Illegality or a Force Majeure Event, then the Early Termination
 Amount will be determined in accordance with clause (1) or (2) above, as
 appropriate, except that, for the purpose of determining a Close-out Amount
 or Close-out Amounts, the Determining Party will:― 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)          if
 obtaining quotations from one or more third parties (or from any of the
 Determining Party’s Affiliates), ask each third party or Affiliate (I) not to
 take account of the current creditworthiness of the Determining Party or any existing
 Credit Support Document and (II) to provide mid-market quotations; and 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)          in any
 other case, use mid-market values without regard to the creditworthiness of
 the Determining Party. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
 (iii)       Adjustment for Bankruptcy. In
 circumstances where an Early Termination Date occurs because Automatic Early
 Termination applies in respect of a party, the Early Termination Amount will
 be subject to such adjustments as are appropriate and permitted by applicable
 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)       Adjustment for Illegality or Force
 Majeure Event. The failure by a party or any Credit Support
 Provider of such party to pay, when due, any Early Termination Amount will
 not constitute an Event of Default under Section 5(a)(i) or 5(a)(iii)(1) if
 such failure is due to the occurrence of an event or circumstance which
 would, if it occurred with respect to payment, delivery or compliance related
 to a Transaction, constitute or give rise to an Illegality or a Force Majeure
 Event. Such amount will (1) accrue interest and otherwise be treated as an
 Unpaid Amount owing to the other party if subsequently an Early Termination
 Date results from an Event of Default, a Credit Event Upon Merger or an
 Additional Termination Event in respect of which all outstanding Transactions
 are Affected Transactions and (2) otherwise accrue interest in accordance
 with Section 9(h)(ii)(2). 

 
	
  

 	
  

 
	
  

 	
 (v)       Pre-Estimate. The
 parties agree that 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 the
 termination of the Terminated Transactions. 

 

	
  

 	
  

 
	
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(f)          Set-Off. Any Early
Termination Amount payable to one party (the “Payee”) by the other party (the
“Payer”), in circumstances where there is a Defaulting Party or where there is
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
Non-defaulting Party or the Non- affected Party, as the case may be (“X”) (and
without prior notice to the Defaulting Party or the Affected Party, as the case
may be), be reduced by its set-off against any other amounts (“Other Amounts”)
payable by the Payee to the Payer (whether or not arising under this Agreement,
matured or contingent and irrespective of the currency, place of payment or
place of booking of the obligation). To the extent that any Other Amounts are
so set off, those Other Amounts will be discharged promptly and in all
respects. X will give notice to the other party of any set-off effected under
this Section 6(f). 

For this purpose, either the Early Termination Amount or the Other
Amounts (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, in good faith and using commercially reasonable
procedures, 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. 

Nothing in this Section 6(f) will be effective to create a charge or
other security interest. This Section 6(f) will be without prejudice and in
addition to any right of set-off, offset, combination of accounts, lien, right
of retention or withholding or similar right or requirement to which any party
is at any time otherwise entitled or subject (whether by operation of law,
contract or otherwise). 

7.           Transfer

Subject to Section 6(b)(ii) and to the extent permitted by applicable
law, 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 Early
Termination Amount payable to it by a Defaulting Party, together with any
amounts payable on or with respect to that interest and any other rights
associated with that interest pursuant to Sections 8, 9(h) and 11. 

Any purported transfer that is not in compliance with this Section 7
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
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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 good faith and using commercially reasonable procedures 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 clause (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 purpose of such judgment or order and
the rate of exchange at which such party is able, acting in good faith and
using commercially reasonable procedures 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. 

(c)          Separate Indemnities. To
the extent permitted by applicable law, the indemnities in this Section 8
constitute separate and independent obligations from the other obligations in
this Agreement, will be enforceable as separate and independent causes of
action, will apply notwithstanding any indulgence granted by the party to which
any payment is owed and will not be affected by judgment being obtained or
claim or proof being made for any other sums payable in respect of this
Agreement. 

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

9.           Miscellaneous 

(a)         Entire Agreement. This
Agreement constitutes the entire agreement and understanding of the parties
with respect to its subject matter. Each of the parties acknowledges that in
entering into this Agreement it has not relied on any oral or written
representation, warranty or other assurance (except as provided for or referred
to in this Agreement) and waives all rights and remedies which might 

	
  

 	
  

 
	
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otherwise be available to it in respect thereof, except that nothing in
this Agreement will limit or exclude any liability of a party for fraud. 

(b)         Amendments. An
amendment, modification or waiver in respect of this Agreement will only be
effective if 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 by an exchange of 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 and by electronic messaging system), 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 will be entered into as soon as practicable and may be executed
 and delivered in counterparts (including by facsimile transmission) or be
 created by an exchange of telexes, by an exchange of electronic messages on
 an electronic messaging system or by an exchange of e-mails, 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, electronic message or e-mail
 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. 

 
	
  

 
	
 (h)         Interest and Compensation. 

 
	
  

 
	
  

 	
 (i)          Prior to Early Termination. Prior
 to the occurrence or effective designation of an Early Termination Date in
 respect of the relevant Transaction:― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          Interest on Defaulted Payments. If a
 party defaults in the performance of any payment obligation, it will, to the
 extent permitted by applicable law and subject to Section 6(c), pay interest
 (before as well as after judgment) on the overdue amount to the other party
 on demand in the same currency as the overdue amount, for the period 

 

	
  

 	
  

 
	
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 from (and including) the original due date for payment to (but
 excluding) the date of actual payment (and excluding any period in respect of
 which interest or compensation in respect of the overdue amount is due
 pursuant to clause (3)(B) or (C) below), at the Default Rate. 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)           Compensation for Defaulted Deliveries. If
 a party defaults in the performance of any obligation required to be settled
 by delivery, it will on demand (A) compensate the other party to the extent
 provided for in the relevant Confirmation or elsewhere in this Agreement and
 (B) unless otherwise provided in the relevant Confirmation or elsewhere in
 this Agreement, to the extent permitted by applicable law and subject to
 Section 6(c), pay to the other party interest (before as well as after judgment)
 on an amount equal to the fair market value of that which was required to be
 delivered in the same currency as that amount, for the period from (and
 including) the originally scheduled date for delivery to (but excluding) the
 date of actual delivery (and excluding any period in respect of which
 interest or compensation in respect of that amount is due pursuant to clause
 (4) below), at the Default Rate. The fair market value of any obligation
 referred to above will be determined as of the originally scheduled date for
 delivery, in good faith and using commercially reasonable procedures, by the
 party that was entitled to take delivery. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)           Interest on Deferred Payments. If:―
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)          a
 party does not pay any amount that, but for Section 2(a)(iii), would have
 been payable, it will, to the extent permitted by applicable law and subject
 to Section 6(c) and clauses (B) and (C) below, pay interest (before as well
 as after judgment) on that amount to the other party on demand (after such
 amount becomes payable) in the same currency as that amount, for the period
 from (and including) the date the amount would, but for Section 2(a)(iii),
 have been payable to (but excluding) the date the amount actually becomes
 payable, at the Applicable Deferral Rate; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)          a
 payment is deferred pursuant to Section 5(d), the party which would otherwise
 have been required to make that payment will, to the extent permitted by
 applicable law, subject to Section 6(c) and for so long as no Event of
 Default or Potential Event of Default with respect to that party has occurred
 and is continuing, pay interest (before as well as after judgment) on the
 amount of the deferred payment to the other party on demand (after such
 amount becomes payable) in the same currency as the deferred payment, for the
 period from (and including) the date the amount would, but for Section 5(d),
 have been payable to (but excluding) the earlier of the date the payment is
 no longer deferred pursuant to Section 5(d) and the date during the deferral
 period upon which an Event of Default or Potential Event of Default with
 respect to that party occurs, at the Applicable Deferral Rate; or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (C)          a
 party fails to make any payment due to the occurrence of an Illegality or a
 Force Majeure Event (after giving effect to any deferral period 

 

	
  

 	
  

 
	
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 contemplated by clause (B) above), it will, to the extent permitted
 by applicable law, subject to Section 6(c) and for so long as the event or
 circumstance giving rise to that Illegality or Force Majeure Event continues
 and no Event of Default or Potential Event of Default with respect to that
 party has occurred and is continuing, pay interest (before as well as after
 judgment) on the overdue amount to the other party on demand in the same
 currency as the overdue amount, for the period from (and including) the date
 the party fails to make the payment due to the occurrence of the relevant
 Illegality or Force Majeure Event (or, if later, the date the payment is no
 longer deferred pursuant to Section 5(d)) to (but excluding) the earlier of
 the date the event or circumstance giving rise to that Illegality or Force
 Majeure Event ceases to exist and the date during the period upon which an
 Event of Default or Potential Event of Default with respect to that party
 occurs (and excluding any period in respect of which interest or compensation
 in respect of the overdue amount is due pursuant to clause (B) above), at the
 Applicable Deferral Rate. 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (4)

 	
 Compensation for Deferred Deliveries.
 If:― 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (A)          a
 party does not perform any obligation that, but for Section 2(a)(iii), would
 have been required to be settled by delivery; 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (B)          a
 delivery is deferred pursuant to Section 5(d); or 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 	
 (C)          a
 party fails to make a delivery due to the occurrence of an Illegality or a
 Force Majeure Event at a time when any applicable Waiting Period has expired,
 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 the party required (or that would otherwise have been required) to
 make the delivery will, to the extent permitted by applicable law and subject
 to Section 6(c), compensate and pay interest to the other party on demand
 (after, in the case of clauses (A) and (B) above, such delivery is required)
 if and to the extent provided for in the relevant Confirmation or elsewhere
 in this Agreement. 

 
	
  

 	
  

 
	
  

 	
 (ii)       Early Termination. Upon
 the occurrence or effective designation of an Early Termination Date in
 respect of a Transaction:― 

 
	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)         Unpaid Amounts. For the purpose of
 determining an Unpaid Amount in respect of the relevant Transaction, and to
 the extent permitted by applicable law, interest will accrue on the amount of
 any payment obligation or the amount equal to the fair market value of any
 obligation required to be settled by delivery included in such determination
 in the same currency as that amount, for the period from (and including) the
 date the relevant obligation was (or would have been but for Section
 2(a)(iii) or 5(d)) required to have been performed to (but excluding) the
 relevant Early Termination Date, at the Applicable Close-out Rate. 

 

	
  

 	
  

 
	
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 (2)        Interest on Early Termination Amounts. If
 an Early Termination Amount is due in respect of such Early Termination Date,
 that amount will, to the extent permitted by applicable law, be paid together
 with interest (before as well as after judgment) on that amount in the
 Termination Currency, for the period from (and including) such Early
 Termination Date to (but excluding) the date the amount is paid, at the
 Applicable Close-out Rate.

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)       Interest Calculation. Any
 interest pursuant to this Section 9(h) will be calculated on the basis of
 daily compounding and the actual number of days elapsed.

 

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 and
agrees with the other party that, notwithstanding the place of booking or its
jurisdiction of incorporation or organisation, its obligations are the same in
terms of recourse against it as if it had entered into the Transaction through
its head or home office, except that a party will not have recourse to the head
or home office of the other party in respect of any payment or delivery
deferred pursuant to Section 5(d) for so long as the payment or delivery is so
deferred. This representation and agreement will be deemed to be repeated by
each party on each date on which the parties enter into a Transaction. 

(b)        If a party is
specified as a Multibranch Party in the Schedule, such party may, subject to
clause (c) below, enter into a Transaction through, book a Transaction in and
make and receive payments and deliveries with respect to a Transaction through
any Office listed in respect of that party in the Schedule (but not any other
Office unless otherwise agreed by the parties in writing). 

(c)        The Office through
which a party enters into a Transaction will be the Office specified for that
party in the relevant Confirmation or as otherwise agreed by the parties in
writing, and, if an Office for that party is not specified in the Confirmation or
otherwise agreed by the parties in writing, its head or home office. Unless the
parties otherwise agree in writing, the Office through which a party enters
into a Transaction will also be the Office in which it books the Transaction
and the Office through which it makes and receives payments and deliveries with
respect to the Transaction. Subject to Section 6(b)(ii), neither party may
change the Office in which it books the Transaction or the Office through which
it makes and receives payments or deliveries with respect to a Transaction
without the prior written consent of the other party. 

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, execution fees and Stamp Tax, incurred by such other party by reason of
the enforcement and protection of its rights under this Agreement or any Credit
Support Document to which the Defaulting Party is a party or by reason of the
early termination of any Transaction, including, but not limited to, costs of
collection. 

12.        Notices

	
  

 	
  

 
	
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 (a)        Effectiveness. Any
 notice or other communication in respect of this Agreement may be given in
 any manner described below (except that a notice or other communication under
 Section 5 or 6 may not be given by electronic messaging system or e-mail) to
 the address or number or in accordance with the electronic messaging system
 or e-mail 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 it 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 it is delivered or its delivery is attempted;
 

 
	
  

 	
  

 	
  

 
	
  

 	
 (v)        if sent by
 electronic messaging system, on the date it is received; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 (vi)       if sent by e-mail, on
 the date it is delivered, 

 
	
  

 	
  

 	
  

 
	
 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 will be
 deemed given and effective on the first following day that is a Local
 Business Day. 

 
	
  

 	
  

 	
  

 
	
 (b)        Change of Details. Either
 party may by notice to the other change the address, telex or facsimile
 number or electronic messaging system or e-mail 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 any dispute arising
 out of or in connection with this Agreement (“Proceedings”), each party
 irrevocably:― 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 submits:― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          if
 this Agreement is expressed to be governed by English law, to (A) the
 non-exclusive jurisdiction of the English courts if the Proceedings do not
 involve a Convention Court and (B) the exclusive jurisdiction of the English
 courts if the Proceedings do involve a Convention Court; or 

 

	
  

 	
  

 
	
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 (2)          if
 this Agreement is expressed to be governed by the laws of the State of New
 York, 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; 

 
	
  

 	
  

 	
  

 
	
  

 	
 (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; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)        agrees, to the
 extent permitted by applicable law, that the bringing of Proceedings in any
 one or more jurisdictions will not preclude the bringing of Proceedings in
 any other jurisdiction. 

 
	
  

 	
  

 	
  

 
	
 (c)          Service of Process. Each
 party irrevocably appoints the Process Agent, if any, specified opposite its
 name in the Schedule to receive, for it and on its behalf, service of process
 in any Proceedings. If for any reason any party’s Process Agent is unable to
 act as such, such party will promptly notify the other party and within 30
 days appoint a substitute process agent acceptable to the other party. The
 parties irrevocably consent to service of process given in the manner
 provided for notices in Section 12(a)(i), 12(a)(iii) or 12(a)(iv). Nothing in
 this Agreement will affect the right of either party to serve process in any
 other manner permitted by applicable law. 

 
	
  

 	
  

 	
  

 
	
 (d)          Waiver of Immunities. Each
 party irrevocably waives, to the 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 or order for specific performance or 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
Representation” has the meaning specified in
Section 3.

 “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, Force Majeure Event, Tax Event or Tax Event Upon
Merger, all Transactions affected by the occurrence of such Termination Event
(which, in the case of an Illegality under Section 5(b)(i)(2) or a Force
Majeure Event under Section 5(b)(ii)(2), means all Transactions unless the
relevant Credit Support Document references only certain Transactions, in which
case those Transactions and, if the 

	
  

 	
  

 
	
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relevant Credit Support Document constitutes a Confirmation for a
Transaction, that Transaction) 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. 

 “Agreement” has
the meaning specified in Section 1(c). 

 “Applicable
Close-out Rate” means:― 

	
  

 	
  

 	
  

 
	
 (a)

 	
 in respect of the determination of an Unpaid Amount:― 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)         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; 

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 (iii)       in respect of
 obligations deferred pursuant to Section 5(d), if there is no Defaulting
 Party and for so long as the deferral period continues, the Applicable
 Deferral Rate; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (iv)       in all other cases
 following the occurrence of a Termination Event (except where interest
 accrues pursuant to clause (iii) above), the Applicable Deferral Rate; and 

 
	
  

 	
  

 	
  

 
	
 (b)

 	
 in respect of an Early Termination Amount:― 

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)        for the period
 from (and including) the relevant Early Termination Date to (but excluding)
 the date (determined in accordance with Section 6(d)(ii)) on which that
 amount is payable: ― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          if the
 Early Termination Amount is payable by a Defaulting Party, the Default Rate; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)          if the
 Early Termination Amount is payable by a Non-defaulting Party, the
 Non-default Rate; and 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)          in all
 other cases, the Applicable Deferral Rate; and 

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)        for the period
 from (and including) the date (determined in accordance with Section
 6(d)(ii)) on which that amount is payable to (but excluding) the date of
 actual payment:― 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          if a
 party fails to pay the Early Termination Amount due to the occurrence of an
 event or circumstance which would, if it occurred with respect to a payment
 or delivery under a Transaction, constitute or give rise to an Illegality or
 a Force Majeure 

 

	
  

 	
  

 
	
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 Event, and for so long as the Early Termination Amount remains unpaid
 due to the continuing existence of such event or circumstance, the Applicable
 Deferral Rate; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)          if the
 Early Termination Amount is payable by a Defaulting Party (but excluding any
 period in respect of which clause (1) above applies), the Default Rate; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (3)          if the
 Early Termination Amount is payable by a Non-defaulting Party (but excluding
 any period in respect of which clause (1) above applies), the Non-default
 Rate; and 

 
	
  

 	
  

 	
  

 
	
  

 	
  

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

 

 “Applicable Deferral
Rate” means:― 

(a)          for the
purpose of Section 9(h)(i)(3)(A), the rate certified by the relevant payer to
be a rate offered to the payer by a major bank in a relevant interbank market
for overnight deposits in the applicable currency, such bank to be selected in
good faith by the payer for the purpose of obtaining a representative rate that
will reasonably reflect conditions prevailing at the time in that relevant
market; 

(b)          for
purposes of Section 9(h)(i)(3)(B) and clause (a)(iii) of the definition of
Applicable Close-out Rate, the rate certified by the relevant payer to be a
rate offered to prime banks by a major bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be selected in good
faith by the payer after consultation with the other party, if practicable, for
the purpose of obtaining a representative rate that will reasonably reflect
conditions prevailing at the time in that relevant market; and 

(c)          for
purposes of Section 9(h)(i)(3)(C) and clauses (a)(iv), (b)(i)(3) and (b)(ii)(1)
of the definition of Applicable Close-out Rate, a rate equal to the arithmetic
mean of the rate determined pursuant to clause (a) above and 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. 

 “Automatic Early
Termination” has the meaning specified in Section
6(a). 

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

 “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 after the parties enter into the relevant Transaction. 

 “Close-out Amount” means,
with respect to each Terminated Transaction or each group of Terminated
Transactions and a Determining Party, the amount of the losses or costs of the
Determining Party that are or would be incurred under then prevailing
circumstances (expressed as a positive number) or gains of the Determining
Party that are or would be realised under then prevailing circumstances
(expressed as a negative number) in replacing, or in providing for the
Determining Party the economic equivalent of, (a) the material terms of that
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Terminated Transactions, including the payments and deliveries by the
parties under Section 2(a)(i) in respect of that Terminated Transaction or
group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date (assuming
satisfaction of the conditions precedent in Section 2(a)(iii)) and (b) the
option rights of the parties in respect of that Terminated Transaction or group
of Terminated Transactions. 

Any Close-out Amount will be determined by the Determining Party (or
its agent), which will act in good faith and use commercially reasonable
procedures in order to produce a commercially reasonable result. The
Determining Party may determine a Close-out Amount for any group of Terminated
Transactions or any individual Terminated Transaction but, in the aggregate, for
not less than all Terminated Transactions. Each Close-out Amount will be
determined as of the Early Termination Date or, if that would not be
commercially reasonable, as of the date or dates following the Early
Termination Date as would be commercially reasonable. 

Unpaid Amounts in respect of a Terminated Transaction or group of
Terminated Transactions and legal fees and out- of-pocket expenses referred to
in Section 11 are to be excluded in all determinations of Close-out Amounts. 

In determining a Close-out Amount, the Determining Party may consider
any relevant information, including, without limitation, one or more of the
following types of information:― 

	
  

 	
  

 
	
  

 	
 (i)          quotations
 (either firm or indicative) for replacement transactions supplied by one or
 more third parties that may take into account the creditworthiness of the
 Determining Party at the time the quotation is provided and the terms of any
 relevant documentation, including credit support documentation, between the
 Determining Party and the third party providing the quotation; 

 
	
  

 	
  

 
	
  

 	
 (ii)         information
 consisting of relevant market data in the relevant market supplied by one or
 more third parties including, without limitation, relevant rates, prices,
 yields, yield curves, volatilities, spreads, correlations or other relevant
 market data in the relevant market; or 

 
	
  

 	
  

 
	
  

 	
 (iii)        information of
 the types described in clause (i) or (ii) above from internal sources
 (including any of the Determining Party’s Affiliates) if that information is
 of the same type used by the Determining Party in the regular course of its
 business for the valuation of similar transactions. 

 

The Determining Party will consider, taking into account the standards
and procedures described in this definition, quotations pursuant to clause (i)
above or relevant market data pursuant to clause (ii) above unless the
Determining Party reasonably believes in good faith that such quotations or
relevant market data are not readily available or would produce a result that would
not satisfy those standards. When considering information described in clause
(i), (ii) or (iii) above, the Determining Party may include costs of funding,
to the extent costs of funding are not and would not be a component of the
other information being utilised. Third parties supplying quotations pursuant
to clause (i) above or market data pursuant to clause (ii) above may include,
without limitation, dealers in the relevant markets, end-users of the relevant
product, information vendors, brokers and other sources of market information. 

	
  

 	
  

 
	
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Without duplication of amounts calculated based on information
described in clause (i), (ii) or (iii) above, or other relevant information,
and when it is commercially reasonable to do so, the Determining Party may in
addition consider in calculating a Close-out Amount any loss or cost incurred
in connection with its terminating, liquidating or re-establishing any hedge
related to a Terminated Transaction or group of Terminated Transactions (or any
gain resulting from any of them). 

Commercially reasonable procedures used in determining a Close-out
Amount may include the following:― 

	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (1)          application
 to relevant market data from third parties pursuant to clause (ii) above or
 information from internal sources pursuant to clause (iii) above of pricing
 or other valuation models that are, at the time of the determination of the
 Close-out Amount, used by the Determining Party in the regular course of its
 business in pricing or valuing transactions between the Determining Party and
 unrelated third parties that are similar to the Terminated Transaction or
 group of Terminated Transactions; and 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (2)          application
 of different valuation methods to Terminated Transactions or groups of
 Terminated Transactions depending on the type, complexity, size or number of
 the Terminated Transactions or group of Terminated Transactions. 

 

 “Confirmation” has
the meaning specified in the preamble. 

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

 “Contractual
Currency” has the meaning specified in Section
8(a). 

 “Convention Court” means
any court which is bound to apply to the Proceedings either Article 17 of the
1968 Brussels Convention on Jurisdiction and the Enforcement of Judgments in
Civil and Commercial Matters or Article 17 of the 1988 Lugano Convention on
Jurisdiction and the Enforcement of Judgments in Civil and Commercial Matters. 

 “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. 

 “Cross-Default” means
the event specified in Section 5(a)(vi). 

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

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

	
  

 	
  

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

 “Determining Party” means
the party determining a Close-out Amount. 

 “Early Termination
Amount” has the meaning specified in Section 6(e).

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

 “electronic
messages” does not include e-mails but does
include documents expressed in markup languages, and 

 “electronic
messaging system” will be construed accordingly. 

 “English law” means
the law of England and Wales, and “English” will be construed accordingly. 

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

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

 “General Business
Day” means a day on which commercial banks are
open for general business (including dealings in foreign exchange and foreign
currency deposits). 

 “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 “unlawful” will be
construed accordingly. 

 “Local Business Day”
means (a) in relation to any obligation under
Section 2(a)(i), a General Business Day in the place or places specified in the
relevant Confirmation and a day on which a relevant settlement system is open
or operating as specified in the relevant Confirmation or, if a place or a
settlement system is 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) for the purpose of determining when a Waiting
Period expires, a General Business Day in the place where the event or
circumstance that constitutes or gives rise to the Illegality or Force Majeure
Event, as the case may be, occurs, (c) in relation to any other payment, a
General Business Day in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of 

	
  

 	
  

 
	
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such payment and, if that currency does not have a single recognised
principal financial centre, a day on which the settlement system necessary to
accomplish such payment is open, (d) in relation to any notice or other
communication, including notice contemplated under Section 5(a)(i), a General
Business Day (or a day that would have been a General Business Day but for the
occurrence of an event or circumstance which would, if it occurred with respect
to payment, delivery or compliance related to a Transaction, constitute or give
rise to an Illegality or a Force Majeure Event) in the place 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 (e) in relation to Section 5(a)(v)(2), a General Business Day in
the relevant locations for performance with respect to such Specified
Transaction. 

 “Local Delivery Day”
means, for purposes of Sections 5(a)(i) and 5(d),
a day on which settlement systems necessary to accomplish the relevant delivery
are generally open for business so that the delivery is capable of being
accomplished in accordance with customary market practice, in the place specified
in the relevant Confirmation or, if not so specified, in a location as
determined in accordance with customary market practice for the relevant
delivery. 

 “Master Agreement” has
the meaning specified in the preamble. 

 “Merger Without
Assumption” means the event specified in Section
5(a)(viii). 

 “Multiple
Transaction Payment Netting” has the meaning
specified in Section 2(c). 

 “Non-affected Party”
means, so long as there is only one Affected
Party, the other party. 

 “Non-default Rate” means
the rate certified by the Non-defaulting Party to be a rate offered to the
Non-defaulting Party by a major bank in a relevant interbank market for
overnight deposits in the applicable currency, such bank to be selected in good
faith by the Non-defaulting Party for the purpose of obtaining a representative
rate that will reasonably reflect conditions prevailing at the time in that
relevant market. 

 “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. 

 “Other Amounts” has
the meaning specified in Section 6(f). 

 “Payee” has
the meaning specified in Section 6(f). 

 “Payer” has
the meaning specified in Section 6(f). 

 “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. 

 “Proceedings” has
the meaning specified in Section 13(b). 

 “Process Agent” has
the meaning specified in the Schedule. 

	
  

 	
  

 
	
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 “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. 

 “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. 

 “Schedule” has
the meaning specified in the preamble. 

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

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

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

 “Specified
Transaction” means, subject to the Schedule, (a)
any transaction (including an agreement with respect to any such transaction)
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 not a Transaction under this Agreement but (i) which is a rate
swap transaction, swap option, 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, credit protection
transaction, credit swap, credit default swap, credit default option, total
return swap, credit spread transaction, repurchase transaction, reverse
repurchase transaction, buy/sell-back transaction, securities lending
transaction, weather index transaction or forward purchase or sale of a security,
commodity or other financial instrument or interest (including any option with
respect to any of these transactions) or (ii) which is a type of transaction
that is similar to any transaction referred to in clause (i) above that is
currently, or in the future becomes, recurrently entered into in the financial
markets (including terms and conditions incorporated by reference in such
agreement) and which is a forward, swap, future, option or other derivative on
one or more rates, currencies, commodities, equity securities or other equity
instruments, debt securities or other debt instruments, economic indices or
measures of economic risk or value, or other benchmarks against which payments
or deliveries are to be made, (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. 

 “Stamp Tax
Jurisdiction” has the meaning specified in Section
4(e). 

 “Tax” means
any present or future tax, levy, impost, duty, charge, assessment or fee of any
nature 

	
  

 	
  

 
	
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(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 an Illegality or a Force Majeure Event,
all Affected Transactions specified in the notice given pursuant to Section
6(b)(iv), (b) if resulting from any other Termination Event, all Affected
Transactions and (c) if resulting from an Event of Default, all Transactions in
effect either 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” means (a) if a Termination Currency is
specified in the Schedule and that currency is freely available, that currency,
and (b) otherwise, euro if this Agreement is expressed to be governed by
English law or United States Dollars if this Agreement is expressed to be
governed by the laws of the State of New York. 

 “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 Close-out Amount 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 Force Majeure Event, a Tax Event, 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. 

 “Threshold Amount” means
the amount, if any, specified as such in the Schedule. 

 “Transaction” has
the meaning specified in the preamble. 

	
  

 	
  

 
	
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 “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) or due but for
Section 5(d)) to such party under Section 2(a)(i) or 2(d)(i)(4) on or prior to
such Early Termination Date and which remain unpaid as at such Early
Termination Date, (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) or 5(d)) required to be settled by delivery to such party on or prior
to such Early Termination Date and which has not been so settled as at such
Early Termination Date, an amount equal to the fair market value of that which
was (or would have been) required to be delivered and (c) if the Early
Termination Date results from an Event of Default, a Credit Event Upon Merger
or an Additional Termination Event in respect of which all outstanding
Transactions are Affected Transactions, any Early Termination Amount due prior
to such Early Termination Date and which remains unpaid as of such Early
Termination Date, in each case together with any amount of interest accrued or
other compensation in respect of that obligation or deferred obligation, as the
case may be, pursuant to Section 9(h)(ii)(1) or (2), as appropriate. The fair
market value of any obligation referred to in clause (b) above will be
determined as of the originally scheduled date for delivery, in good faith and
using commercially reasonable procedures, by the party obliged to make the
determination under Section 6(e) or, if each party is so obliged, it will be
the average of the Termination Currency Equivalents of the fair market values
so determined by both parties. 

 “Waiting Period” means:―

(a)          in
respect of an event or circumstance under Section 5(b)(i), other than in the
case of Section 5(b)(i)(2) where the relevant payment, delivery or compliance
is actually required on the relevant day (in which case no Waiting Period will
apply), a period of three Local Business Days (or days that would have been
Local Business Days but for the occurrence of that event or circumstance)
following the occurrence of that event or circumstance; and 

(b)          in
respect of an event or circumstance under Section 5(b)(ii), other than in the
case of Section 5(b)(ii)(2) where the relevant payment, delivery or compliance
is actually required on the relevant day (in which case no Waiting Period will
apply), a period of eight Local Business Days (or days that would have been
Local Business Days but for the occurrence of that event or circumstance)
following the occurrence of that event or circumstance. 

	
  

 	
  

 
	
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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. 

	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
  

 	
  

 
	
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 Name:

 	
  

 	
  

 	
 Name:

 
	
  

 	
  

 	
  

 
	
  

 	
 Title:

 	
  

 	
  

 	
 Title: 

 
	
  

 	
  

 	
  

 
	
  

 	
 Date:

 	
  

 	
  

 	
 Date:

 

	
  

 	
  

 
	
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dms.us.52076424.02Ex 10.23.3 Second Amendment

EXHIBIT 10.23.3

EXECUTION COPY

WAIVER AND SECOND AMENDMENT TO
THIRD AMENDED AND RESTATED CREDIT AGREEMENT
THIS WAIVER AND SECOND AMENDMENT TO THIRD AMENDED AND RESTATED CREDIT AGREEMENT (this “Waiver and Amendment”) is made and entered into as of the 30th day of July, 2013, by and among CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter referred to as the “Borrower”), CBL & ASSOCIATES PROPERTIES, INC., a Delaware corporation (hereinafter referred to as the “Parent”), the Lenders party hereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as contractual representative of the Lenders (in such capacity, the “Administrative Agent”).  
W I T N E S S E T H:
WHEREAS, Borrower, Parent, Lenders and Administrative Agent entered into that certain Third Amended and Restated Credit Agreement dated as of November 13, 2012 (as amended by the First Amendment to Third Amended and Restated Credit Agreement, dated as of January 31, 2013 and as may be further amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”), pursuant to which the Lenders agreed to extend to Borrower a revolving credit facility (the “Credit Facility”) in the aggregate principal amount of up to Six Hundred Million and No/100 Dollars ($600,000,000.00) at any one time outstanding.  Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to such terms in the Credit Agreement; and
WHEREAS, (i) at Borrower's request, the Lenders have agreed to waive certain notice requirements set forth in the Credit Agreement with respect to the acquisition, incorporation or other creation of Subsidiaries, and (ii) Borrower, Parent, Lenders and Administrative Agent desire to modify and amend the Credit Agreement, in each case, on the terms and conditions set forth herein.
NOW THEREFORE, for and in consideration of the premises, for Ten and No/100 Dollars ($10.00) in hand paid by the parties to each other, and for other good and valuable consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged by Borrower, Parent, Lenders, and Administrative Agent, Borrower, Parent, Lenders and Administrative Agent do hereby covenant and agree as follows:
1.Waiver.  Subject to the satisfaction of the conditions precedent set forth in Section 3 below, the Lenders hereby waive (a) any noncompliance with Section 9.4.(j) of the Credit Agreement as a result of the Borrower failing to provide notice of the acquisition, incorporation or other creation of any Subsidiary and related information with respect thereto and (b) any Default or Event of Default arising therefrom pursuant to Section 11.1.(b)(ii) of the Credit Agreement (collectively, the “Specified Breach”).  This specific waiver applies only to the Specified Breach and only for the express circumstances described above.  This specific waiver shall not be construed to constitute (i) a waiver of any other event, circumstance or condition or of any other right or remedy available to the Administrative Agent or any Lender pursuant to the 

1

Credit Agreement or any other Loan Document or (ii) a course of dealing or a consent to any depature by any Loan Party from any other term or requirement of the Credit Agreement.

2.Amendments to Credit Agreement.  Subject to the satisfaction of the conditions precedent set forth in Section 3 below: 

(a)    The Table of Contents to the Credit Agreement is hereby amended to insert “Exhibit L Forms of U.S. Tax Compliance Certificates” at the end thereof.
(b)    The Exhibits to the Credit Agreement are hereby amended to insert new Exhibits L-1, L-2, L-3 and L-4 pursuant to Annex I attached hereto.
(c)    The second half of the definition of “Applicable Margin” now appearing in Section 1.1. of the Credit Agreement after the sentence stating “The provisions of this definition shall be subject to Section 2.4.(d)” is hereby amended and restated in its entirety as follows:
“Upon the occurrence of a Credit Rating Election Event and thereafter, the Applicable Margin shall mean the percentage rate set forth in the table below corresponding to the level (each, a “Level”) into which the Borrower's Credit Rating then falls:
	
			
	Level
	Credit Rating
	Applicable 
Margin

	1
	A-/A3/A- or better
	1.000%

	2
	BBB+/Baa1/BBB+
	1.075%

	3
	BBB/Baa2/BBB
	1.175%

	4
	BBB-/Baa3 /BBB-
	1.400%

	5
	Lower than BBB-
/Baa3/BBB-
	1.750%

Any change in the Borrower's Credit Rating which would cause it to move to a different Level shall be effective as of the first day of the first calendar month immediately following receipt by the Administrative Agent of written notice delivered by the Borrower in accordance with Section 9.4.(l) that the Borrower's Credit Rating has changed; provided, however, if the Borrower has not delivered the notice required by such Section but the Administrative Agent becomes aware that the Borrower's Credit Rating has changed, then the Administrative Agent may, in its sole discretion, adjust the Level effective as of the first day of the first calendar month following the date the Administrative Agent becomes aware that the Borrower's Credit Rating has changed.  During any period for which the Borrower has received three Credit Ratings which are not equivalent,

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the Applicable Margin will be determined by (a) the highest Credit Rating if the highest Credit Rating and the second highest Credit Rating differ by only one Level or (b) the average of the two highest Credit Ratings if they differ by two or more Levels (unless the average is not a recognized Level, in which case the Applicable Margin will be based on the Credit Rating one Level below the Level corresponding to the highest Credit Rating).  During any period for which the Borrower has received only two Credit Ratings and such Credit Ratings are not equivalent, the Applicable Margin will be determined by (i) the highest Credit Rating if they differ by only one Level or (ii) the median of the two Credit Ratings if they differ by two or more Levels (unless the median is not a recognized Level, in which case the Applicable Margin will be based on the Credit Rating one Level below the Level corresponding to the higher Credit Rating).  During any period for which the Borrower has received no Credit Rating from Fitch, if the Borrower also ceases to have a Credit Rating from one of S&P or Moody's, then the Applicable Margin shall be determined based on the remaining such Credit Rating.  Notwithstanding any Credit Rating from Fitch, during any period in which neither S&P nor Moody's has provided a Credit Rating corresponding to Level 4 or better to the Borrower, the Applicable Margin shall be determined based on Level 5.”
(d)    The definition of “Capitalization Rate” now appearing in Section 1.1. of the Credit Agreement is hereby amended and restated in its entirety as follows:
““Capitalization Rate” means (a) 6.50% for a Property having average sales per square foot of more than $500 for the period of 12 consecutive months most recently ending and (b) 7.50% for any other Property.”
(e)    The definition of “Foreign Lender” now appearing in Section 1.1. of the Credit Agreement is hereby amended and restated in its entirety as follows:
““Foreign Lender” means (a) if the Borrower is a U.S. Person, a Lender that is not a U.S. Person, and (b) if the Borrower is not a U.S. Person, a Lender that is resident or organized under the laws of a jurisdiction other than that in which the Borrower is resident for tax purposes.”
(f)    The definition of “LIBOR” now appearing in Section 1.1. of the Credit Agreement is hereby amended and restated in its entirety as follows:
““LIBOR” means, with respect to any LIBOR Loan for any Interest Period, the rate of interest obtained by dividing (i) the rate appearing on the Reuters Screen LIBOR01 page (or on any successor or substitute page of such service, or any successor to or substitute for such service, providing rate quotations comparable to those currently provided on such page, as determined by the Administrative Agent from time to time for purposes of providing quotations of interest rates applicable to Dollar deposits in the London interbank market) at approximately

3

11:00 a.m., London time, on the date that is two Business Days prior to the first day of such Interest Period and having a maturity equal to such Interest Period by (ii) a percentage equal to 1 minus the stated maximum rate (stated as a decimal) of all reserves, if any, required to be maintained with respect to Eurocurrency funding (currently referred to as “Eurocurrency liabilities”) as specified in Regulation D of the Board of Governors of the Federal Reserve System (or against any other category of liabilities which includes deposits by reference to which the interest rate on LIBOR Loans is determined or any applicable category of extensions of credit or other assets which includes loans by an office of any Lender outside of the United States of America).  Any change in such maximum rate shall result in a change in LIBOR on the date on which such change in such maximum rate becomes effective.”
(g)    The definition of “LIBOR Market Index Rate” now appearing in Section 1.1 of the Credit Agreement is hereby amended to delete the phrase “11:00 a.m. Central time” and to insert the following in place thereof: “11:00 a.m. London time”.
(h)    The definition of “Permitted Liens” now appearing in Section 1.1. of the Credit Agreement is hereby amended to (1) delete the word “and” immediately following clause (f) thereof; (2) delete the period at the end of clause (g) thereof and insert “and” in the place thereof and (3) insert the following new clause (h) immediately after (g) thereof: “(h) Liens in favor of the Borrower.”
(i)    The definition of “Principals” now appearing in Section 1.1. of the Credit Agreement is hereby amended to delete “John N. Foy,” therefrom.
(j)    The definition of “Property Management Agreements” now appearing in Section 1.1. of the Credit Agreement is hereby amended and restated in its entirety as follows:
““Property Management Agreements” means, collectively, all agreements entered into by the Borrower, any other Loan Party or any Subsidiary pursuant to which the Borrower, such other Loan Party or such Subsidiary engages a Person to advise it with respect to the management of a given Property and/or to manage a given Property.”
(k)    The definition of “Rating Agency” now appearing in Section 1.1. of the Credit Agreement is hereby amended to insert the following immediately before “S&P or Moody's”: “Fitch,”.
(l)    The definition of “Senior Officer” now appearing in Section 1.1. of the Credit Agreement is hereby amended and restated in its entirety as follows:
““Senior Officer” means the Chairman, CEO and President, an Executive Vice President, Vice President - Finance, Vice President - Accounting, the Chief Operating Officer, the Chief Legal Officer or the Chief Financial Officer of the Borrower, the General Partner or the Parent.”

4

(m)    The definition of “Taxes” now appearing in Section 1.1. of the Credit Agreement is hereby amended and restated in its entirety as follows:
““Taxes” means all present or future taxes, levies, imposts, duties, deductions, withholdings (including backup withholding), assessments, fees or other charges imposed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.”
(n)    The definition of “Unencumbered Asset Value” now appearing in Section 1.1. of the Credit Agreement is hereby amended and restated in its entirety as follows:
““Unencumbered Asset Value” means the sum, without duplication, of (1) (a) (i) the sum of (x) the NOI (excluding NOI attributable to Development Properties) for Eligible Properties owned for four (4) or more quarters for the immediately preceding period of four (4) consecutive fiscal quarters plus (y) the NOI (excluding NOI attributable to Development Properties) for Eligible Properties owned for less than four (4) quarters that have achieved an Occupancy Rate of eighty-five percent (85%) or more, calculated on an annualized basis, divided by (ii) the Capitalization Rate, plus (b) the undepreciated GAAP book value of all Eligible Properties acquired during the four (4) fiscal quarters most recently ended, plus (c) cash and Cash Equivalents (other than tenant deposits and other cash and Cash Equivalents that are subject to a Lien or a Negative Pledge or the disposition of which is restricted in any way), plus (d) the GAAP book value of Unimproved Land (which meets the requirements for Eligible Property) that is not subject to any Lien (other than Permitted Liens (but not Permitted Liens described in clause (g) of the definition of that term)) or any Negative Pledge, plus (e) the GAAP book value of Mortgage Receivables owned by the Borrower or any wholly-owned Subsidiary that are not subject to any Lien (other than Permitted Liens (but not Permitted Liens described in clause (g) of the definition of that term)) or any Negative Pledge, plus (f) the GAAP book value of Purchase Money Advances owned by the Borrower or any wholly-owned Subsidiary that are not subject to any Lien (other than Permitted Liens (but not Permitted Liens described in clause (g) of the definition of that term)) or any Negative Pledge, plus (g) the undepreciated GAAP book value of Development Properties (which meets the requirements for Eligible Property) that are not subject to any Lien (other than Permitted Liens (but not Permitted Liens described in clause (g) of the definition of that term)) or any Negative Pledge, plus (h) Equity Interests that are not subject to any Lien (other than Permitted Liens described in clause (f) of the definition of that term) or any Negative Pledge, plus (2) with respect to Properties that would constitute Eligible Properties but that are owned or leased by non-wholly-owned Subsidiaries or Unconsolidated Affiliates, Borrower's Ownership Share of the sum of (a) value, calculated as in clause (1)(a) above, of such Properties that are not subject to any Lien or Negative Pledge, plus (b) the undepreciated GAAP book value of all such Properties acquired during the four (4) fiscal

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quarters most recently ended, plus (c) the GAAP book value of Unimproved Land that is not subject to any Lien (other than Permitted Liens (but not Permitted Liens described in clause (g) of the definition of that term)) or any Negative Pledge, plus (d) the undepreciated GAAP book value of Development Properties that are not subject to any Lien (other than Permitted Liens (but not Permitted Liens described in clause (g) of the definition of that term)) or any Negative Pledge.  Notwithstanding the above, the percentage of Unencumbered Asset Value attributable to Properties subject to a Ground Lease will not exceed ten percent (10%) of the Unencumbered Asset Value.  For purposes of this definition, (i) to the extent the Unencumbered Asset Value attributable to clause (1)(d) and 2(c) in the aggregate would exceed five percent (5%) of the Unencumbered Asset Value, such excess shall be excluded, (ii) to the extent the Unencumbered Asset Value attributable to clause (1)(e) would exceed five percent (5%) of the Unencumbered Asset Value, such excess shall be excluded, (iii) to the extent the Unencumbered Asset Value attributable to clause (1)(f) would exceed five percent (5%) of the Unencumbered Asset Value, such excess shall be excluded, (iv) to the extent the Unencumbered Asset Value attributable to clause (1)(g) and (2)(d) in the aggregate would exceed ten percent (10%) of the Unencumbered Asset Value, such excess shall be excluded, (v) to the extent the Unencumbered Asset Value attributable to clause (1)(h) would exceed five percent (5%) of the Unencumbered Asset Value, such excess shall be excluded, (vi) to the extent the Unencumbered Asset Value attributable to clause (2) would exceed fifteen percent (15%) of the Unencumbered Asset Value, such excess shall be excluded, (vii) to the extent the Unencumbered Asset Value attributable to the sum of (d), (e), (f), (g) and (h) of clause (1) and clause (2) in the aggregate would exceed twenty percent (20%) of the Unencumbered Asset Value, such excess shall be excluded and (vii) to the extent the Unencumbered Asset Value attributable to hotel and office properties would exceed five percent (5%) of the Unencumbered Asset Value, such excess shall be excluded.”
(o)    Section 1.1. of the Credit Agreement is hereby amended to insert the following new definitions of “Excluded Taxes”, “FATCA”, “Fitch”, “Indemnified Taxes”, “Other Connection Taxes”, “Other Taxes”, “Recipient”, “U.S. Person” and “Withholding Agent” therein in the appropriate alphabetical order:
““Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on or measured by net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable Lending Office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, U.S. federal withholding Taxes imposed on amounts payable to or for the account of

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such Lender with respect to an applicable interest in a Loan or Commitment pursuant to an Applicable Law in effect on the date on which (i) such Lender acquires such interest in the Loan or Commitment (other than pursuant to an assignment request by the Borrower under Section 5.6.) or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 3.10., amounts with respect to such Taxes were payable either to such Lender's assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office, (c) Taxes attributable to such Recipient's failure to comply with Section 3.10.(g) and (d) any U.S. federal withholding Taxes imposed under FATCA.
“FATCA” means Sections 1471 through 1474 of the Internal Revenue Code, as of the date of this Agreement (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any current or future regulations or official interpretations thereof and any agreements entered into pursuant to Section 1471(b)(i) of the Internal Revenue Code.
“Fitch” means Fitch Ratings, a majority-owned Subsidiary of Fimalac, S.A. and its successors.
“Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of the Borrower or any other Loan Party under any Loan Document and (b) to the extent not otherwise described in the immediately preceding clause (a), Other Taxes.
“Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
“Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, or otherwise with respect to, any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.6.).
“Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, as applicable.
“U.S. Person” means any Person that is a “United States Person”

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as defined in Section 7701(a)(30) of the Internal Revenue Code.
“Withholding Agent” means (a) the Borrower, (b) any other Loan Party and (c) the Administrative Agent, as applicable.”
(p)    Section 3.10. of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(a)    Issuing Bank.  For purposes of this Section, the term “Lender” includes the Issuing Bank and the term “Applicable Law” includes FATCA.
(b)    Payments Free of Taxes.  Any and all payments by or on account of any obligation of the Borrower or any other Loan Party under any Loan Document shall be made without deduction or withholding for any Taxes, except as required by Applicable Law.  If any Applicable Law (as determined in the good faith discretion of an applicable Withholding Agent) requires the deduction or withholding of any Tax from any such payment by a Withholding Agent, then the applicable Withholding Agent shall be entitled to make such deduction or withholding and shall timely pay the full amount deducted or withheld to the relevant Governmental Authority in accordance with Applicable Law and, if such Tax is an Indemnified Tax, then the sum payable by the Borrower or other applicable Loan Party shall be increased as necessary so that after such deduction or withholding has been made (including such deductions and withholdings applicable to additional sums payable under this Section) the applicable Recipient receives an amount equal to the sum it would have received had no such deduction or withholding been made.
(c)    Payment of Other Taxes by the Borrower.  The Borrower and the other Loan Parties (other than the Parent and the General Partner) shall timely pay to the relevant Governmental Authority in accordance with Applicable Law, or at the option of the Administrative Agent timely reimburse it for the payment of, any Other Taxes.
(d)    Indemnification by the Borrower.  The Borrower and the other Loan Parties (other than the Parent and the General Partner) shall jointly and severally indemnify each Recipient, within 10 days after demand therefor, for the full amount of any Indemnified Taxes (including Indemnified Taxes imposed or asserted on or attributable to amounts payable under this Section) payable or paid by such Recipient or required to be withheld or deducted from a payment to such Recipient and any reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to the Borrower by a Lender (with a copy to the Administrative Agent), or by the Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

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(e)    Indemnification by the Lenders.  Each Lender shall severally indemnify the Administrative Agent, within 10 days after demand therefor, for (i) any Indemnified Taxes attributable to such Lender (but only to the extent that the Borrower or another Loan Party has not already indemnified the Administrative Agent for such Indemnified Taxes and without limiting the obligation of the Borrower and the other Loan Parties to do so), (ii) any Taxes attributable to such Lender's failure to comply with the provisions of Section 13.6. relating to the maintenance of a Participant Register and (iii) any Excluded Taxes attributable to such Lender, in each case, that are payable or paid by the Administrative Agent in connection with any Loan Document, and any reasonable expenses arising therefrom or with respect thereto, whether or not such Taxes were correctly or legally imposed or asserted by the relevant Governmental Authority.  A certificate as to the amount of such payment or liability delivered to any Lender by the Administrative Agent shall be conclusive absent manifest error.  Each Lender hereby authorizes the Administrative Agent to set off and apply any and all amounts at any time owing to such Lender under any Loan Document or otherwise payable by the Administrative Agent to the Lender from any other source against any amount due to the Administrative Agent under this subsection.
(f)    Evidence of Payments.  As soon as practicable after any payment of Taxes by the Borrower or any other Loan Party to a Governmental Authority pursuant to this Section, the Borrower or such other Loan Party shall deliver to the Administrative Agent the original or a certified copy of a receipt issued by such Governmental Authority evidencing such payment, a copy of the return reporting such payment or other evidence of such payment reasonably satisfactory to the Administrative Agent.
(g)    Status of Lenders.  
(i)    Any Lender that is entitled to an exemption from or reduction of withholding Tax with respect to payments made under any Loan Document shall deliver to the Borrower and the Administrative Agent, at the time or times reasonably requested by the Borrower or the Administrative Agent, such properly completed and executed documentation reasonably requested by the Borrower or the Administrative Agent as will permit such payments to be made without withholding or at a reduced rate of withholding.  In addition, any Lender, if reasonably requested by the Borrower or the Administrative Agent, shall deliver such other documentation prescribed by Applicable Law or reasonably requested by the Borrower or the Administrative Agent as will enable the Borrower or the Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements.  Notwithstanding anything to the contrary in the preceding two sentences, the completion,

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execution and submission of such documentation (other than such documentation set forth in the immediately following clauses (ii)(A), (ii)(B) and (ii)(D)) shall not be required if in the Lender's reasonable judgment such completion, execution or submission would subject such Lender to any material unreimbursed cost or expense or would materially prejudice the legal or commercial position of such Lender.
(ii)    Without limiting the generality of the foregoing, in the event that the Borrower is a U.S. Person:
(A)    any Lender that is a U.S. Person shall deliver to the Borrower and the Administrative Agent on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), 2 executed originals of IRS Form W-9 (or any successor form) certifying that such Lender is exempt from U.S. federal backup withholding tax;
(B)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), whichever of the following is applicable:
(I)    in the case of a Foreign Lender claiming the benefits of an income tax treaty to which the United States is a party (x) with respect to payments of interest under any Loan Document, executed originals of IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “interest” article of such tax treaty and (y) with respect to any other applicable payments under any Loan Document, IRS Form W-8BEN establishing an exemption from, or reduction of, U.S. federal withholding Tax pursuant to the “business profits” or “other income” article of such tax treaty;
(II)    executed originals of IRS Form W-8ECI;
(III)    in the case of a Foreign Lender claiming the benefits of the exemption for portfolio interest under Section 881(c) of the Internal

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Revenue Code, (x) a certificate substantially in the form of Exhibit L-1 to the effect that such Foreign Lender is not a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, a “10 percent shareholder” of the Borrower within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code, or a “controlled foreign corporation” described in Section 881(c)(3)(C) of the Internal Revenue Code (a “U.S. Tax Compliance Certificate”) and (y) executed originals of IRS Form W-8BEN; or
(IV)    to the extent a Foreign Lender is not the beneficial owner, executed originals of IRS Form W-8IMY, accompanied by IRS Form W-8ECI, IRS Form W-8BEN, a U.S. Tax Compliance Certificate substantially in the form of Exhibit L-2 or Exhibit L-3, IRS Form W-9, and/or other certification documents from each beneficial owner, as applicable; provided that if the Foreign Lender is a partnership and one or more direct or indirect partners of such Foreign Lender are claiming the portfolio interest exemption, such Foreign Lender may provide a U.S. Tax Compliance Certificate substantially in the form of Exhibit L-4 on behalf of each such direct and indirect partner;
(C)    any Foreign Lender shall, to the extent it is legally entitled to do so, deliver to the Borrower and the Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter upon the reasonable request of the Borrower or the Administrative Agent), executed originals of any other form prescribed by Applicable Law as a basis for claiming exemption from or a reduction in U.S. federal withholding Tax, duly completed, together with such supplementary documentation as may be prescribed by Applicable Law to permit the Borrower or the Administrative Agent to determine the withholding or deduction required to be made; and
(D)    if a payment made to a Lender under any Loan Document would be subject to U.S. federal withholding Tax imposed by FATCA if such Lender were to fail to comply with the applicable reporting requirements of FATCA (including those contained in Section 1471(b) or

11

1472(b) of the Internal Revenue Code, as applicable), such Lender shall deliver to the Borrower and the Administrative Agent at the time or times prescribed by Applicable Law and at such time or times reasonably requested by the Borrower or the Administrative Agent such documentation prescribed by Applicable Law (including as prescribed by Section 1471(b)(3)(C)(i) of the Internal Revenue Code) and such additional documentation reasonably requested by the Borrower or the Administrative Agent as may be necessary for the Borrower and the Administrative Agent to comply with their obligations under FATCA and to determine that such Lender has complied with such Lender's obligations under FATCA or to determine the amount to deduct and withhold from such payment.  Solely for purposes of this clause (D), “FATCA” shall include any amendments made to FATCA after the date of this Agreement.
Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification or promptly notify the Borrower and the Administrative Agent in writing of its legal inability to do so.
(h)    Treatment of Certain Refunds.  If any party determines, in its sole discretion exercised in good faith, that it has received a refund of any Taxes as to which it has been indemnified pursuant to this Section (including by the payment of additional amounts pursuant to this Section), it shall pay to the indemnifying party an amount equal to such refund (but only to the extent of indemnity payments made under this Section with respect to the Taxes giving rise to such refund), net of all out-of-pocket expenses (including Taxes) of such indemnified party and without interest (other than any interest paid by the relevant Governmental Authority with respect to such refund).  Such indemnifying party, upon the request of such indemnified party, shall repay to such indemnified party the amount paid over pursuant to this paragraph (h) (plus any penalties, interest or other charges imposed by the relevant Governmental Authority) in the event that such indemnified party is required to repay such refund to such Governmental Authority.  Notwithstanding anything to the contrary in this paragraph (h), in no event will the indemnified party be required to pay any amount to an indemnifying party pursuant to this paragraph (h) the payment of which would place the indemnified party in a less favorable net after-Tax position than the indemnified party would have been in if the Tax subject to indemnification and giving rise to such refund had not been deducted, withheld or otherwise imposed and the indemnification payments or additional amounts with respect to such Tax had never been paid.  This paragraph shall not be construed to require any indemnified party to make available its Tax returns (or any other information relating to its Taxes that it deems confidential) to the indemnifying party or any other Person.

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(i)    Survival.  Each party's obligations under this Section shall survive the resignation or replacement of the Administrative Agent or any assignment of rights by, or the replacement of, a Lender, the termination of the Commitments and the repayment, satisfaction or discharge of all obligations under any Loan Document.”
(q)    Section 7.1.(b) of the Credit Agreement is hereby amended to (1) delete the word “and” now appearing immediately after the phrase “a complete and correct list of each Loan Party” and insert a comma “,” in place thereof and (2) insert the phrase “and each Wholly Owned Subsidiary,” immediately after “each other Limited Subsidiary” now appearing therein.
(r)    The first sentence of Section 7.1.(f) of the Credit Agreement is hereby amended to (1) delete the word “and” now appearing immediately after the phrase “each other Loan Party” and insert a comma “,” in place thereof and (2) insert the phrase “and each Wholly Owned Subsidiary” immediately after “each other Limited Subsidiary” now appearing therein.
(s)    The second sentence of Section 7.1.(f) of the Credit Agreement is hereby amended to (1) delete the word “and” now appearing immediately after the phrase “Each of the Loan Parties” and insert a comma “,” in place thereof and (2) insert the phrase “and each Wholly Owned Subsidiary” immediately after “each other Limited Subsidiary” now appearing therein.
(t)    The first sentence of Section 7.1.(j) of the Credit Agreement is hereby amended to insert the word “material” immediatley after each instance of “federal, state and other” now appearing therein.
(u)    The last sentence of Section 7.1.(l) of the Credit Agreement is hereby amended to insert the phrase “, the Wholly Owned Subsidiaries” immediately before “and the other Limited Subsidiaries is Solvent” now appearing therein.
(v)    Section 7.1.(t) of the Credit Agreement is hereby amended to (1) delete the word “and” now appearing immediately after the phrase “the Loan Parties” and insert a comma “,” in place thereof and (2) insert the phrase “and the Wholly Owned Subsidiaries,” immediately after “the other Limited Subsidiaries” now appearing therein.
(w)    Section 8.4. of the Credit Agreement is hereby amended to (1) delete the word “and” now appearing immediately after the phrase “the other Loan Parties” and insert a comma “,” in place thereof and (2) insert the phrase “and each Wholly Owned Subsidiary,” immediately after “each other Limited Subsidiary” now appearing therein.
(x)    Section 9.4.(j) of the Credit Agreement is hereby amended and restated in its entirety as follows:
“(j)    [Reserved]”
(y)    Section 11.1.(b)(iii)(x) of the Credit Agreement is hereby amended to delete the phrase “of the Borrower” therefrom.
(z)    Section 13.1. of the Credit Agreement is hereby amended to insert the following immediately before “If to any other Lender” now appearing therein:

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“With an informational copy to:
Wells Fargo Bank, National Association
2859 Paces Ferry Rd., Suite 1200
Atlanta, GA 30339
Attn:  Sandra Wheeler, Shared Credit Manager
Telecopier Number:  866/600-0942
Telephone Number:  770/319-7495”
(aa)    The first sentence of Section 13.6.(c) of the Credit Agreement is hereby amended to (1) delete the word “an” now appearing immediately before the phrase “agent of the Borrower” and insert the following in place thereof: “a non-fiduciary” and (2) insert the phrase “(and stated interest)” immediately after “and principal amounts” now appearing therein.
(bb)    The second sentence of Section 13.6.(c) of the Credit Agreement is hereby amended to (1) insert the phrase “absent manifest error” immediately after “The entries in the Register shall be conclusive” now appearing therein and (2) delete the word “may” now appearing immediately before the phrase “treat each Person” and insert the word “shall” in place thereof.
(cc)    The last sentence of Section 13.6.(e) of the Credit Agreement is hereby amended to (1) delete the phrase “Section 3.10.(c)” now appearing immediately before the phrase “as though it were a Lender” and (2) insert the following in place thereof: “Section 3.10.(g)”.
(dd)    Section 13.6. of the Credit Agreement is hereby amend to insert the following new clause (h) immediately after clause (g) thereof:
“(h)    USA Patriot Act Notice; Compliance.  In order for the Administrative Agent to comply with “know your customer” and anti-money laundering rules and regulations, including without limitation, the Patriot Act, prior to any Lender that is organized under the laws of a jurisdiction outside of the United States of America becoming a party hereto, the Administrative Agent may request, and such Lender shall provide to the Administrative Agent, its name, address, tax identification number and/or such other identification information as shall be necessary for the Administrative Agent to comply with federal law.”
3.Conditions Precedent.  Subject to the other terms and conditions hereof, this Waiver and Amendment shall not become effective until the Administrative Agent shall have received each of the following instruments, documents or agreements, each in form and substance satisfactory to the Administrative Agent:

(a)    counterparts of this Waiver and Amendment duly executed and delivered by Borrower, Parent, Administrative Agent and the Lenders; 
(b)    counterparts of the Consent and Reaffirmation attached as Annex II hereto duly executed by the Guarantor, consenting to this Waiver and Amendment and the transactions contemplated hereby; and

14

(c)    counterparts of the Term Loan Agreement dated as of July 30, 2013 duly executed and delivered by the Borrower, the Parent, each of the financial institutions initially a signatory thereto, the Administrative Agent, JPMorgan Chase Bank, N.A., as syndication agent and Royal Bank of Canada, PNC Bank, National Association and U.S. Bank National Association, each as documentation agent.
Upon fulfillment of the foregoing conditions precedent, this Waiver and Amendment shall become effective as of the date hereof.
4.Representations and Warranties; No Default.  Borrower hereby represents and warrants to the Administrative Agent and the Lenders that:
(a)    all of Borrower's representations and warranties contained in the Credit Agreement and the other Loan Documents are true and correct in all material respects on and as of the date of Borrower's execution of this Waiver and Amendment except to the extent that such representations and warranties expressly relate solely to an earlier date (in which case such representations and warranties shall have been true and accurate on and as of such earlier date) and except for changes in factual circumstances specifically and expressly permitted hereunder;
(b)    no Default or Event of Default has occurred and is continuing as of the date of Borrower's execution of this Waiver and Amendment under any Loan Document;
(c)    Borrower and Parent have the power and authority to enter into this Waiver and Amendment and to perform all of their respective obligations hereunder;
(d)    the execution, delivery and performance of this Waiver and Amendment by Borrower and Parent have been duly authorized by all necessary corporate, partnership or other action;
(e)    the execution and delivery of this Waiver and Amendment and performance thereof by Borrower and Parent does not and will not violate the organizational documents of Borrower or Parent or the Certificate of Incorporation, By-laws or other organizational documents of CBL Holdings I, Inc. and does not and will not violate or conflict with any law, order, writ, injunction, or decree of any court, administrative agency or other governmental authority applicable to Borrower, Parent, CBL Holdings I, Inc., or their respective properties; and
(f)    this Waiver and Amendment and the Consent and Reaffirmation attached as Annex II hereto, constitute legal, valid and binding obligations of the parties thereto, in accordance with the respective terms thereof, subject to bankruptcy, insolvency and similar laws of general application affecting the rights and remedies of creditors and, with respect to the availability of the remedies of specific enforcement, subject to the discretion of the court before which any proceeding therefor may be brought.
5.Expenses.  Borrower agrees to pay, promptly following demand by the Administrative Agent, all reasonable costs, expenses, fees and other charges and expenses actually incurred by the Administrative Agent in connection with the negotiation, preparation, execution and delivery of this Waiver and Amendment.

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6.Defaults Hereunder.  The breach of any representation, warranty or covenant contained herein or in any document executed in connection herewith, or the failure to observe or comply with any term or agreement contained herein shall constitute a Default or Event of Default under the Credit Agreement (subject to any applicable cure period set forth in the Credit Agreement) and the Administrative Agent and the Lenders shall be entitled to exercise all rights and remedies they may have under the Credit Agreement, any other documents executed in connection therewith and applicable law.
7.References.  All references in the Credit Agreement and the Loan Documents to the Credit Agreement shall hereafter be deemed to be references to the Credit Agreement as amended hereby and as the same may hereafter be amended from time to time.
8.Limitation of Agreement.  Except as especially set forth herein, this Waiver and Amendment shall not be deemed to waive, amend or modify any term or condition of the Credit Agreement, each of which is hereby ratified and reaffirmed and which shall remain in full force and effect, nor to serve as a consent to any matter prohibited by the terms and conditions thereof.
9.Counterparts.  To facilitate execution, this Waiver and Amendment may be executed in as many counterparts as may be convenient or required.  It shall not be necessary that the signature of, or on behalf of, each party, or that the signature of all persons required to bind any party, appear on each counterpart.  All counterparts shall collectively constitute a single document.  It shall not be necessary in making proof of this document to produce or account for more than a single counterpart containing the respective signatures of, or on behalf of, each of the parties hereto.  Any signature page to any counterpart may be detached from such counterpart without impairing the legal effect of the signature thereon and thereafter attached to another counterpart identical thereto having attached to it additional signature pages.
10.Further Assurances.  Borrower agrees to take such further action as the Administrative Agent or the Lenders shall reasonably request in connection herewith to evidence the amendments herein contained to the Credit Agreement.
11.Successors and Assigns.  This Waiver and Amendment shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties hereto.
12.Governing Law.  This Waiver and Amendment shall be governed by, and construed in accordance with, the laws of the State of New York.

[Signatures Begin on Following Page]

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver and Second Amendment to Third Amended and Restated Credit Agreement to be executed by their authorized officers all as of the day and year first above written.

	
				
	BORROWER:
	 

	 
	 
	 
	 

	CBL & ASSOCIATES LIMITED PARTNERSHIP, a 
Delaware limited partnership

	 
	 

	By:
	CBL Holdings I, Inc., a Delaware corporation, its
sole general partner

	 
	 
	 
	 

	 
	By:
	/s/ Farzana K. Mitchell
	 

	 
	 
	Farzana K. Mitchell
	 

	 
	 
	Executive Vice President -
Chief Financial Officer

	
			
	PARENT:

	 
	 
	 

	CBL & ASSOCIATES PROPERTIES, INC., a Delaware 
corporation, solely for the limited purpose set forth in 
Section 13.22 of the Credit Agreement.

	 

	 
	 
	 

	By:
	/s/ Farzana K. Mitchell

	 
	Farzana K. Mitchell
	 

	 
	Executive Vice President -
Chief Financial Officer

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

WELLS FARGO BANK, NATIONAL ASSOCIATION, as Administrative Agent and as a Lender

By:    /s/ Sam Supple                    
Name:     Sam Supple
Title:    Senior Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

U.S. BANK NATIONAL ASSOCIATION

		
	By:
	/s/ Michael Raarup                    

		
	Name:
	  Michael Raarup

Title:    Senior Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

BANK OF AMERICA, NATIONAL ASSOCIATION

By:    /s/ Lissette Rivera-Pauley                
Name:    Lissette Rivera-Pauley
Title:     Senior Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

KEYBANK NATIONAL ASSOCIATION

By:    /s/ Michael P. Szuba                    
Name:     Michael P. Szuba
Title:       Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

JPMORGAN CHASE BANK, N.A.

By:     /s/ Elizabeth R. Johnson                
Name:  Elizabeth R. Johnson
Title:   Senior Credit Banker

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

PNC BANK, NATIONAL ASSOCIATION

		
	By:
	/s/ Andrew T. White                

Name:   Andrew T. White
Title:    Senior Vice President

 [Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

REGIONS BANK

By:    /s/ Lori Chambers                
Name:    Lori Chambers
Title:     Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

ROYAL BANK OF CANADA

By:    /s/ Joshua Freedman                
Name:     Joshua Freedman
Title:       Authorized Signatory

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

UNION BANK, N.A.

By:    /s/ Gregory A. Conner                
Name:    Gregory A. Conner
Title:    Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

BRANCH BANKING AND TRUST COMPANY

By:    /s/ Ahaz A. Armstrong                
Name:     Ahaz A. Armstrong    
Title:      Assistant Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

FIFTH THIRD BANK
as a Lender

By:    /s/ John H. Reynolds                
Name:     John H. Reynolds
Title:      Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

RAYMOND JAMES BANK, N.A.

By:    /s/ James M. Armstrong            
Name:     James M. Armstrong
Title:      Senior Vice President

[Signatures Continued on Following Page]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

[Signature Page to Waiver and Second Amendment to Third Amended and Restated Credit Agreement]

MIDFIRST BANK

By:    /s/ Darrin Rigler                    
Name:     Darrin Rigler
Title:       First Vice President

 [End of Signatures]

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

ANNEX I

EXHIBIT L-1
[FORM OF] 
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Third Amended and Restated Credit Agreement dated as of November 13, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), by and among CBL & Associates Limited Partnership (the "Borrower"), CBL & Associates Properties, Inc. (the "Parent"), the financial institutions party thereto and their assignees under Section 13.6. thereof (the "Lenders"), Wells Fargo Bank, National Association, as Administrative Agent (the "Administrative Agent"), and the other parties thereto.  
Pursuant to the provisions of Section 3.10. of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments. 

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	
		
	[NAME OF LENDER]

	By:
	 

	 
	Name:

	 
	Title:

Date: ________ __, 20[  ]

ANNEX I
EXHIBIT L-2
[FORM OF] 
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Third Amended and Restated Credit Agreement dated as of November 13, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), by and among CBL & Associates Limited Partnership (the "Borrower"), CBL & Associates Properties, Inc. (the "Parent"), the financial institutions party thereto and their assignees under Section 13.6. thereof (the "Lenders"), Wells Fargo Bank, National Association, as Administrative Agent (the "Administrative Agent"), and the other parties thereto.  
Pursuant to the provisions of Section 3.10. of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record and beneficial owner of the participation in respect of which it is providing this certificate, (ii) it is not a bank within the meaning of Section 881(c)(3)(A) of the Code, (iii) it is not a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code, and (iv) it is not a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished its participating Lender with a certificate of its non-U.S. Person status on IRS Form W-8BEN.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender in writing, and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	
		
	[NAME OF PARTICIPANT]

	By:
	 

	 
	Name:

	 
	Title:

Date: ________ __, 20[  ]

ANNEX I
EXHIBIT L-3
[FORM OF] 
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Participants That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Third Amended and Restated Credit Agreement dated as of November 13, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), by and among CBL & Associates Limited Partnership (the "Borrower"), CBL & Associates Properties, Inc. (the "Parent"), the financial institutions party thereto and their assignees under Section 13.6. thereof (the "Lenders"), Wells Fargo Bank, National Association, as Administrative Agent (the "Administrative Agent"), and the other parties thereto.  
Pursuant to the provisions of Section 3.10. of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the participation in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such participation, (iii) with respect such participation, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code. 
The undersigned has furnished its participating Lender with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform such Lender and (2) the undersigned shall have at all times furnished such Lender with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	
		
	[NAME OF PARTICIPANT]

	By:
	 

	 
	Name:

	 
	Title:

Date: ________ __, 20[  ]

ANNEX I
EXHIBIT L-4
[FORM OF] 
U.S. TAX COMPLIANCE CERTIFICATE
(For Foreign Lenders That Are Partnerships For U.S. Federal Income Tax Purposes)

Reference is hereby made to the Third Amended and Restated Credit Agreement dated as of November 13, 2012 (as amended, restated, supplemented or otherwise modified from time to time, the "Credit Agreement"), by and among CBL & Associates Limited Partnership (the "Borrower"), CBL & Associates Properties, Inc. (the "Parent"), the financial institutions party thereto and their assignees under Section 13.6. thereof (the "Lenders"), Wells Fargo Bank, National Association, as Administrative Agent (the "Administrative Agent"), and the other parties thereto.  
Pursuant to the provisions of Section 3.10. of the Credit Agreement, the undersigned hereby certifies that (i) it is the sole record owner of the Loan(s) (as well as any Note(s) evidencing such Loan(s)) in respect of which it is providing this certificate, (ii) its direct or indirect partners/members are the sole beneficial owners of such Loan(s) (as well as any Note(s) evidencing such Loan(s)), (iii) with respect to the extension of credit pursuant to this Credit Agreement or any other Loan Document, neither the undersigned nor any of its direct or indirect partners/members is a bank extending credit pursuant to a loan agreement entered into in the ordinary course of its trade or business within the meaning of Section 881(c)(3)(A) of the Code, (iv) none of its direct or indirect partners/members is a ten percent shareholder of the Borrower within the meaning of Section 871(h)(3)(B) of the Code and (v) none of its direct or indirect partners/members is a controlled foreign corporation related to the Borrower as described in Section 881(c)(3)(C) of the Code.
The undersigned has furnished the Administrative Agent and the Borrower with IRS Form W-8IMY accompanied by one of the following forms from each of its partners/members that is claiming the portfolio interest exemption: (i) an IRS Form W-8BEN or (ii) an IRS Form W-8IMY accompanied by an IRS Form W-8BEN from each of such partner's/member's beneficial owners that is claiming the portfolio interest exemption.  By executing this certificate, the undersigned agrees that (1) if the information provided on this certificate changes, the undersigned shall promptly so inform the Borrower and the Administrative Agent, and (2) the undersigned shall have at all times furnished the Borrower and the Administrative Agent with a properly completed and currently effective certificate in either the calendar year in which each payment is to be made to the undersigned, or in either of the two calendar years preceding such payments.

Unless otherwise defined herein, terms defined in the Credit Agreement and used herein shall have the meanings given to them in the Credit Agreement.

	
		
	[NAME OF LENDER]

	By:
	 

	 
	Name:

	 
	Title:

Date: ________ __, 20[  ]

ANNEX II
CONSENT AND REAFFIRMATION
The undersigned hereby acknowledges receipt of a copy of the foregoing Waiver and Second Amendment to the Third Amended and Restated Credit Agreement dated as of November 13, 2012 (as amended by the First Amendment to Third Amended and Restated Credit Agreement, dated as of January 31, 2013 and as may be amended, restated, supplemented or otherwise modified from time to time, the “Credit Agreement”) by and among CBL & ASSOCIATES LIMITED PARTNERSHIP, a Delaware limited partnership (hereinafter referred to as the “Borrower”), CBL & ASSOCIATES PROPERTIES, INC., a Delaware corporation (hereinafter referred to as the “Parent”), the Lenders party thereto and WELLS FARGO BANK, NATIONAL ASSOCIATION, a national banking association, as contractual representative of the Lenders (in such capacity, the “Administrative Agent”), which Waiver and Second Amendment is dated as of July 30, 2013 (the “Amendment”).  Capitalized terms used in this Consent and Reaffirmation and not defined herein shall have the meanings given to them in the Credit Agreement.
Without in any way establishing a course of dealing by the Administrative Agent or any Lender, the undersigned consents to the Amendment and reaffirms the terms and conditions of the Parent Guaranty and any other Loan Document executed by it and acknowledges and agrees that the Parent Guaranty and each and every such Loan Document executed by the undersigned in connection with the Credit Agreement remains in full force and effect and is hereby reaffirmed, ratified and confirmed.  All references to the Credit Agreement contained in the above‐referenced documents shall be a reference to the Credit Agreement as so modified by the Amendment and as the same may from time to time hereafter be amended, modified or restated.
Dated:  July 30, 2013
[Signature Pages Follow]

CBL & Associates Properties, Inc.

By:______________________________
Name:
Title:

Signature Page to Waiver and Second Amendment to
Eighth Amended and Restated Credit Agreement dated as of November 13, 2012
CBL & Associates Limited Partnership et al

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