Document:

exv10w2

 

Exhibit 10.2

Confirmation of OTC Convertible Note Hedge

	 	 	 
	Date:

	 	February 12, 2007
	 
	 	 
	To:

	 	Anixter International Inc. (“Counterparty”)
	 
	 	 
	 

	 	Attention: Treasurer
	 

	 	Telephone No.: (224) 521-8000
	 

	 	Facsimile No.: (224) 521-8990
	 
	 	 
	From:

	 	Merrill Lynch International (“MLI”)

MLI Reference: 0781830

Dear Sir / Madam:

     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the above-referenced transaction entered into among Counterparty, MLI and Merrill
Lynch, Pierce, Fenner & Smith Incorporated (the “Agent” or “MLPFS”) on the Trade
Date specified below (the “Transaction”). This Confirmation constitutes a “Confirmation”
as referred to in the Agreement specified below.

     The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap
Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “Equity
Definitions” and, together with the Swap Definitions, the “Definitions”), in each case
as published by the International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern, and in the event of any inconsistency between the
Definitions and this Confirmation, this Confirmation will govern. References herein to a
“Transaction” shall be deemed to be references to a “Share Option Transaction” for purposes of the
Equity Definitions and a “Swap Transaction” for the purposes of the Swap Definitions.

     This Confirmation evidences a complete binding agreement between you and us as to the terms of
the Transaction to which this Confirmation relates. This Confirmation (notwithstanding anything to
the contrary herein), shall be subject to an agreement in the 1992 form of the ISDA Master
Agreement (Multicurrency Cross Border) (the “Master Agreement” or “Agreement”) as
if we had executed an agreement in such form (but without any Schedule and with elections specified
in the “ISDA Master Agreement” Section of this Confirmation) on the Trade Date. In the event of
any inconsistency between the provisions of that agreement and this Confirmation, this Confirmation
will prevail for the purpose of this Transaction. The parties hereby agree that the Transaction
evidenced by this Confirmation shall be the only Transaction subject to and governed by the
Agreement.

     The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 
	General Terms:
	 	 
	 
	 	 
	Trade Date:

	 	February 12, 2007
	 
	 	 
	Effective Date:

	 	The date of issuance of the Reference Notes.
	 
	 	 
	Option Style:

	 	Modified American, as described under “Settlement Terms” below.
	 
	 	 

 

 

	 	 	 
	Option Type:

	 	Call
	 
	 	 
	Seller:

	 	MLI
	 
	 	 
	Buyer:

	 	Counterparty
	 
	 	 
	Shares:

	 	The shares of common stock, $1.00 par value, of Counterparty (Security Symbol:
	 

	 	“AXE”) or such other securities or property into which the Reference Notes are
convertible on the date of determination.
	 
	 	 
	Premium:

	 	$88,800,000
	 
	 	 
	Premium Payment Date:

	 	The fourth Exchange Business Date following the Trade Date.
	 
	 	 
	Exchange:

	 	NYSE
	 
	 	 
	Related Exchange(s):

	 	All Exchanges
	 
	 	 
	Reference Notes:

	 	1% Senior Convertible Notes due 2013 in the original amount of $300,000,000.
	 
	 	 
	Applicable Portion of the
Reference Notes:

	 	100%. For the avoidance of doubt, the Calculation Agent shall, as it deems
necessary, take into account the Applicable Portion of the Reference Notes in
determining or calculating any delivery or payment obligations hereunder, whether
upon a Conversion Date (as defined below) or otherwise.
	 
	 	 
	Note Indenture:

	 	The indenture, dated as of closing of the issuance of the Reference Notes,
between Counterparty and The Bank of New York Trust Company, N.A., as trustee
relating to the Reference Notes, as the same may be amended, modified or
supplemented, subject to the “Additional Termination Events” provisions of this
Confirmation. Certain defined terms used herein have the meanings assigned to
them in the Note Indenture.
	 
	 	 
	Procedures for Exercise:
	 	 
	 
	 	 
	Potential Exercise Dates:

	 	Each Conversion Date.
	 
	 	 
	Conversion Date:

	 	Each “conversion date” for any Reference Note pursuant to the terms of the Note
Indenture (the principal amount of Reference Notes so converted, the
“Conversion
Amount” with respect to such Conversion Date) occurring before the Expiration
Date.
	 
	 	 
	 

	 	If the Conversion Amount for any Conversion Date is less than the aggregate
principal amount of Reference Notes then outstanding, then the terms of this
Transaction shall continue to apply, subject to the terms and conditions set
forth herein, with respect to the remaining outstanding principal amount of the
Reference Notes multiplied by the Applicable Portion of the Reference Notes.
	 
	 	 
	Expiration Period:

	 	The period from and excluding the Trade Date to and including the Expiration Date.
	 
	 	 
	Expiration Date:

	 	The earliest of (i) the maturity date of the Reference Notes, (ii) the first day
on which none of such Reference Notes remain outstanding, whether by virtue of
conversion, issuer repurchase or otherwise and (iii) the occurrence of an

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	 	Additional Termination Event hereunder in respect of the termination of the Transaction in whole but not in part.
	 
	 	 
	Exercise Notice:

	 	Notwithstanding anything to the contrary in the Equity Definitions, in order to
exercise any Options hereunder, Buyer shall provide Seller with written notice
prior to 5:00 p.m. New York City time on the Exchange Business Day prior to the
first Trading Day in the Conversion Reference Period (both as defined in the Note
Indenture) relating to the Reference Notes converted on the relevant Conversion
Date of (i) the number of Reference Notes being converted on the relevant
Conversion Date, (ii) the first Trading Day in the relevant Conversion Reference
Period for the Reference Notes and (iii) if any, the applicable Cash Percentage
(as defined in the Note Indenture); provided that with respect to Reference Notes
converted during the one-month period ending on the business day immediately
preceding the Final Maturity Date (as defined in the Note Indenture) of the
Reference Notes, the related Exercise Notice shall be delivered prior to 5:00
p.m. New York City time on such Final Maturity Date (as defined in the Note
Indenture); and provided further that the delivery by Buyer of an Exercise Notice
after the Conversion Reference Period has commenced but prior to the close of
business on the fifth Trading Day of such Conversion Reference Period shall be
effective, in which case the Settlement Method shall be Net Share Settlement but
without regard to subsection (ii) of the definition of Net Share Settlement and
subject to adjustments to the Net Share Settlement Amount as specified below.
Notwithstanding the foregoing, in the event of delivery by Buyer of an Exercise
Notice after the commencement of the Conversion Reference Period but prior to the
close of business on the fifth Trading Day of such Conversion Reference Period,
if Counterparty notifies MLI of its desire for the Settlement Method to be Net
Cash Settlement, MLI agrees to undertake commercially reasonable efforts to
modify the terms of the Transaction to enable a Net Cash Settlement to be
effected on commercially reasonable terms.
	 
	 	 
	Seller’s Telephone Number
	 	 
	and Telex and/or Facsimile
	 	 
	Number and Contact Details
	 	 
	for purpose of Giving Notice:

	 	Address: Merrill Lynch International
	 

	 	Merrill Lynch Financial Centre
	 

	 	2 King Edward Street
	 

	 	London EC1A 1HQ
	 

	 	Attention: Manager, Fixed Income Settlements
	 

	 	Facsimile No.: +44 207 995 2004
	 

	 	Telephone No.: +44 207 995 3769
	 
	 	 
	Settlement Terms:
	 	 
	 
	 	 
	Settlement Method:

	 	Net Share Settlement or Net Cash Settlement
consistent with Buyer’s election with respect to the
Reference Notes converted on the applicable
Conversion Date, provided that Net Share Settlement
shall apply in the event that Buyer elects to
deliver any Shares in connection with the applicable
Conversion Date.
	 
	 	 
	Settlement Date:

	 	Subject to the delivery of an Exercise Notice to the
Seller, the third (3rd) Exchange Business
Day following the final Trading Day in the
applicable Conversion Reference Period in respect of
the relevant Conversion Date.
	 
	 	 
	Net Share Settlement:

	 	In lieu of the obligations set forth in Sections 8.1
and 9.1 of the Equity Definitions, Seller shall
deliver to Buyer on the related Settlement Date (i)
a number of Shares equal to the related Net Share
Settlement Amount, provided

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	 	that in the event that the number of Shares calculated comprises any fractional
Share, only whole Shares shall be delivered and an amount equal to the value of
such fractional Share shall be payable by Seller to Buyer in cash and (ii) (x)
an amount in cash equal to the cash amount, if any, paid by Buyer in excess of
the principal amount of the applicable Reference Notes for such Conversion Date
under the Note Indenture multiplied by (y) the Applicable Portion of the
Reference Notes, provided that the delivery obligation set forth in clause (i)
and (ii) of this paragraph shall be determined excluding any Shares or cash
that Counterparty is obligated to deliver to holders of the applicable
Reference Notes as a result of any adjustments to the Conversion Rate resulting
from (i) a discretionary adjustment to the Conversion Rate by Counterparty or
(ii) an adjustment to the Conversion Rate as a result of a “Make Whole Premium”
in connection with a fundamental change or change of control as described in
the Note Indenture. The provisions of Sections 9.1(c), 9.8, 9.9, 9.10, 9.11
and 9.12 of the Equity Definitions shall apply to any delivery of Shares
hereunder, provided that the Representation and Agreement in Section 9.11 of
the Equity Definitions shall be modified by excluding any representations
therein relating to restrictions, obligations, limitations or requirements
under applicable securities laws as a result of the fact that Buyer is the
issuer of the Shares.
	 
	 	 
	Net Cash Settlement:

	 	In lieu of the obligations set forth in
Section 8.1 of the Equity Definitions, on the
Settlement Date Seller shall deliver to Buyer
an amount in cash equal to the related Net
Cash Settlement Amount.
	 
	 	 
	Net Share Settlement Amount:

	 	For each Conversion Date, the number of
Shares equal to the Shares delivered by Buyer
for such Conversion Date under the Note
Indenture multiplied by the Applicable
Portion of the Reference Notes, provided that
if an Exercise Notice with respect to such
Conversion Date has not been delivered to the
Seller prior to the first Trading Day of the
Conversion Reference Period applicable to
such Conversion Date, the Net Share
Settlement Amount for such Conversion Date
shall be adjusted by the Calculation Agent to
account for the reduced number of Trading
Days from the delivery of the Exercise Notice
to the end of the applicable Conversion
Reference Period with respect to such
Conversion Date. No reduction of the Net
Share Settlement Amount shall reduce the Net
Share Settlement Amount below zero.
	 
	 	 
	Net Cash Settlement Amount:

	 	For each Conversion Date, an amount equal to
the cash delivered by the Buyer in excess of
the principal amount of the applicable
Reference Notes for such Conversion Date
under the Note Indenture multiplied by the
Applicable Portion of the Reference Notes,
provided that such cash amount shall be
determined excluding any cash that
Counterparty is obligated to deliver to
holders of the applicable Reference Notes as
a result of any adjustments to the Conversion
Rate resulting from (i) a discretionary
adjustment to the Conversion Rate by
Counterparty or (ii) an adjustment to the
Conversion Rate as a result of a fundamental
change or change of control as described in
the Note Indenture.
	 
	 	 
	Adjustments:
	 	 
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment; provided that
the terms of this Transaction shall be
adjusted in a manner consistent with
adjustments of the Conversion Rate of the
Reference Notes as provided in the Note
Indenture; provided further (without
limitation of the provisions set forth above
under “Net Share Settlement” and “Net Cash
Settlement Amount”) that no adjustment in
respect of any Potential Adjustment Event or
Extraordinary Event shall be made hereunder
as a result of any adjustments to the
Conversion Rate resulting from (i) a
discretionary adjustment to the Conversion
Rate by Counterparty or (ii) an

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	 	adjustment to the Conversion Rate as a result of a “Make Whole
Premium” in connection with a fundamental change or change of control
as described in the Note Indenture.
	 
	 	 
	Extraordinary Events:
	 	 
	 
	 	 
	Consequences for Merger Events:
	 	 
	 
	 	 
	     Share-for-Share:

	 	The Transaction will be adjusted consistent with the Reference Notes as
provided in the Note Indenture.
	 
	 	 
	     Share-for-Other:

	 	The Transaction will be adjusted consistent with the Reference Notes as
provided in the Note Indenture.
	 
	 	 
	     Share-for-Combined:

	 	The Transaction will be adjusted consistent with the Reference Notes as
provided in the Note Indenture.
	 
	 	 
	Tender Offer:

	 	Applicable
	 
	 	 
	Consequences of Tender Offers:

	 	The Transaction will be adjusted consistent
with the Reference Notes as provided in the
Note Indenture.
	 
	 	 
	Nationalization, Insolvency
and Delisting:

	 	Cancellation and Payment (Calculation Agent
Determination), provided Buyer shall
determine whether payment shall be settled
in cash or Shares. In addition to the
provisions of Section 12.6(a)(iii) of the
Equity Definitions, it will also constitute
a Delisting if the Exchange is located in
the United States and the Shares are not
immediately re-listed, re-traded or
re-quoted on any of the New York Stock
Exchange, the American Stock Exchange or
the NASDAQ National Market System (or their
respective successors, including without
limitation the NASDAQ Global Market and
NASDAQ Global Select Market); if the Shares
are immediately re-listed, re-traded or
re-quoted on any such exchange or quotation
system, such exchange or quotation system
shall thereafter be deemed to be the
Exchange.
	Additional Disruption Events:
	 	 
	 
	 	 
	     Change in Law:

	 	Applicable
	 
	 	 
	     Failure to Deliver:

	 	Applicable. If there is inability in the market to deliver Shares due
to illiquidity on a day that would have been a Settlement Date, then the Settlement
Date shall be the first succeeding Exchange Business Day on which there is no such
inability to deliver, but in no such event shall the Settlement Date be later than the
date that is two (2) Exchange Business Days immediately following what would have been
the Settlement Date but for such inability to deliver.
	 
	 	 
	     Insolvency Filing:

	 	Applicable
	 
	 	 
	     Hedging Disruption Event:

	 	Applicable
	 
	 	 
	     Increased Cost of Hedging:

	 	Not Applicable
	 
	 	 
	     Loss of Stock Borrow:

	 	Not Applicable

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	     Increased Cost of Stock Borrow:

	 	 Not Applicable
	 
	 	 
	     Hedging Party:

	 	Seller
	 
	 	 
	     Determining Party:

	 	Seller
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and Acknowledgments

Regarding Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable

Additional Agreements, Representations and Covenants of Buyer, Etc.:

	1.	 	Buyer hereby represents and warrants to Seller, on each day from the Trade Date to and
including the earlier of (i) February 16, 2007 and (ii) the date by which Seller is able to
initially complete a hedge of its position relating to this Transaction, that:

	 	a.	 	it will effect (and cause any “affiliated purchaser” (as defined in Rule 10b-18
promulgated under the Securities Exchange Act of 1934, as amended (the “Exchange
Act”)) to effect) any purchases, direct or indirect (including by means of any
cash-settled or other derivative instrument), of Shares or any security convertible
into or exchangeable or exercisable for Shares solely through Agent in a manner that
would not cause any purchases by Seller of its hedge in connection with this
Transaction not to comply applicable securities laws;
	 
	 	b.	 	it will not engage in, or be engaged in, any “distribution,” as such term is
defined in Regulation M promulgated under the Exchange Act, other than a distribution
meeting the requirements of the exceptions set forth in sections 101(b)(10) and
102(b)(7) of Regulation M (it being understood that Buyer makes no representation
pursuant to this clause in respect of any action or inaction taken by Seller or any
initial purchaser of the Reference Notes); and
	 
	 	c.	 	Buyer has publicly disclosed all material information necessary for Buyer to be
able to purchase or sell Shares in compliance with applicable federal securities laws
and that it has publicly disclosed all material information with respect to its
condition (financial or otherwise).

	2.	 	If Buyer would be obligated to receive or pay cash from or to Seller pursuant to the terms of
this Agreement for any reason without having had the right (other than pursuant to this
paragraph (2)) to elect to receive or deliver Shares in satisfaction of such payment
obligation, then Buyer may elect that Seller deliver to or receive from Buyer (as the case may
be) a number of Shares (or, if the Shares have been converted into other securities or
property in connection with an Extraordinary Event, a number or amount of such other
securities or property as a holder of Shares would be entitled to receive upon the
consummation or closing of such Extraordinary Event) having a cash value equal to the amount
of such payment obligation (such number or amount of Shares or other securities or property to
be delivered to be determined by the Calculation Agent acting in a commercially reasonable
manner to determine the number of Shares or number or amount of such other securities or
property that could be purchased over a reasonable period of time with the cash equivalent of
such payment obligation or that must be sold (into the public markets or in private
transactions, depending on the status of the Shares) to obtain the cash equivalent of such
payment obligation). Settlement relating to any delivery of Shares or other securities or
property pursuant to this paragraph (2) shall occur within a reasonable period of time.
	 
	 	 	Buyer hereby agrees that with respect to any Shares delivered to Seller pursuant to this
paragraph (2): (i) in order to allow Seller to sell the Shares in a registered offering,
make available to Seller an effective registration statement under the Securities Act to
cover the resale of such Shares and (a) enter into an agreement, in form and substance
satisfactory to Seller, substantially in the form of an underwriting

6

 

	 	 	agreement for a registered offering, (b) provide accountant’s “comfort” letters in customary
form for registered offerings of equity securities, (c) provide disclosure opinions of
nationally recognized outside counsel to Buyer reasonably acceptable to Seller, (d) provide
other customary opinions, certificates and closing documents customary in form for
registered offerings of equity securities and (e) afford Seller a reasonable opportunity to
conduct a “due diligence” investigation with respect to Buyer customary in scope for
underwritten offerings of equity securities; provided, however, that if Seller, in its sole
reasonable discretion, is not satisfied with access to due diligence materials, the results
of its due diligence investigation, or the procedures and documentation for the registered
offering referred to above, then clause (ii) of this paragraph shall apply: (ii) in order to
allow Seller to sell the Shares in a private placement, enter into a private placement
agreement substantially similar to private placement purchase agreements customary for
private placements of equity securities, in form and substance satisfactory to Seller,
including customary representations, covenants, blue sky and other governmental filings
and/or registrations, indemnities to Seller, due diligence rights (for Seller or any
designated buyer of the Shares from Seller), opinions and certificates and such other
documentation as is customary for private placements agreements, all reasonably acceptable
to Seller (in which case, the Calculation Agent shall make any adjustments to the terms of
the Transaction that are necessary, by commercially reasonable means, to compensate Seller
for any discount from the public market price of the Shares incurred on the sale of Shares
in a private placement), provided, however, that Counterparty shall always have the right to
deliver unregistered Shares.
	 
	 	 	Notwithstanding anything herein or in the Agreement to the contrary, the number of Shares
that may be delivered at settlement by Counterparty shall not exceed 8,400,000 at any time
(“Maximum Deliverable Share Amount”), as adjusted by MLI to account for any
subdivision, stock-split, stock combination, reclassification or similar dilutive or
anti-dilutive event with respect to the Shares.
	 
	 	 	Counterparty represents and warrants that the number of Available Shares as of the Trade
Date is greater than the Maximum Deliverable Share Amount. Counterparty covenants and
agrees that Counterparty shall not take any action of corporate governance or otherwise to
reduce the number of Available Shares below the Maximum Deliverable Share Amount.
	 
	 	 	For this purpose, “Available Shares” means the number of Shares Counterparty
currently has authorized (but not issued and outstanding) less the maximum number of Shares
that may be required to be issued by Counterparty in connection with stock options,
convertibles, and other commitments of Counterparty that may require the issuance or
delivery of Shares in connection therewith.
	 
	3.	 	Notwithstanding any provision in the Note Indenture, this Confirmation or the Agreement to
the contrary, each of the applicable Conversion Rate (as such term is used in the Note
Indenture), the Net Share Settlement Amount and the Net Cash Settlement Amount shall be
determined without regard to any provisions in the Note Indenture allowing Counterparty to
unilaterally increase the applicable Conversion Rate.
	 
	4.	 	Counterparty is not, and after giving effect to the Transaction contemplated hereby, will not
be, an “investment company” as such term is defined in the Investment Company Act of 1940, as
amended.
	 
	5.	 	As of the Trade Date and each date on which a payment or delivery is made by Counterparty
hereunder, (i) the assets of Counterparty at their fair valuation exceed the liabilities of
Counterparty, including contingent liabilities; (ii) the capital of Counterparty is adequate
to conduct its business; and (iii) Counterparty has the ability to pay its debts and other
obligations as such obligations mature and does not intend to, or believe that it will, incur
debt or other obligations beyond its ability to pay as such obligations mature.

Additional Termination Events:

The occurrence of any of the following shall be an Additional Termination Event for purposes of
this Transaction:

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	1.	 	Amendment Event. If an Amendment Event (as defined below) occurs, this Transaction shall
terminate in its entirety and, notwithstanding anything to the contrary herein, no payments
shall be required hereunder in connection with such Amendment Event. Notwithstanding the
foregoing, if Counterparty so requests, MLI agrees to consider waiving such consequences of an
Amendment Event and modifying the terms of the Transaction in a commercially reasonable manner
in order to enable the Transaction to continue after the occurrence of such Amendment Event.
	 
	 	 	“Amendment Event” means that the Counterparty amends, modifies, supplements or
obtains a waiver of (a) any term of the Note Indenture or the Reference Notes relating to
the principal amount, coupon, maturity, repurchase obligation of the Counterparty or
redemption right of the Counterparty, (b) any material term relating to conversion of the
Reference Notes (including changes to the conversion price, conversion settlement dates or
conversion conditions) or (c) any term that would require consent of the holders of 100% of
the principal amount of the Reference Notes to amend;
	 
	2.	 	Repayment Event. If a Repayment Event (as defined below) occurs, this Transaction shall
terminate only to the extent of the principal amount of Reference Notes that cease to be
outstanding as a result of such Repayment Event and, notwithstanding anything to the contrary
herein, no payments shall be required hereunder in connection with such Repayment Event.
	 
	 	 	“Repayment Event” means that (a) any Reference Notes are repurchased (whether in
connection with or as a result of a change of control, howsoever defined, or for any other
reason) by the Counterparty, (b) any Reference Notes are delivered to the Counterparty in
exchange for delivery of any property or assets of the Counterparty or any of its
subsidiaries (howsoever described), other than as a result of and in connection with a
Conversion Date, (c) any principal of any of the Reference Notes is repaid prior to the
Final Maturity Date (as defined in the Note Indenture) (whether following acceleration of
the Reference Notes or otherwise), provided that no payments of cash made in respect of the
conversion of a Reference Note shall be deemed a payment of principal under this clause (c),
(d) any Reference Notes are exchanged by or for the benefit of the holders thereof for any
other securities of the Counterparty or any of its Affiliates (or any other property, or any
combination thereof) pursuant to any exchange offer or similar transaction or (e) any of the
Reference Notes is surrendered by Counterparty to the trustee for cancellation, other than
registration of a transfer of such Reference Notes or as a result of and in connection with
a Conversion Date; or
	 
	3.	 	Initial Purchase Event. If an Initial Purchase Event (as defined below) occurs, this
Transaction shall terminate automatically in its entirety and, notwithstanding anything to the
contrary herein, only the payments specified below shall be required hereunder in connection
with such Initial Purchase Event.
	 
	 	 	“Initial Purchase Event” means that the transactions contemplated by the Purchase
Agreement shall fail to close for any reason.
	 
	 	 	If an Initial Purchase Event occurs for any reason other than a breach of the Purchase
Agreement by the Initial Purchasers, then all payments previously made hereunder shall be
returned to the person making such payment, including the Premium, less an amount equal to
the product of (a) 4,725,900 Shares, (b) 0.50 per Share and (c) an amount equal to the
excess, if any, of the closing price of the Shares on the Trade Date over the closing price
of the Shares on the date of the Termination Event (the “Break Expense”); provided
that any negative amount shall be replaced by zero and provided further that to the extent
the Premium has not been paid, Buyer shall promptly pay Seller the Break Expense. Seller
and Buyer agree that actual damages would be difficult to ascertain under these
circumstances and that the amount of liquidated damages resulting from the determination in
the preceding sentence is a good faith estimate of such damages and not a penalty.
	 
	 	 	If an Initial Purchase Event occurs due to a breach of the Purchase Agreement by the Initial
Purchaser, then all payments previously made hereunder, including the Premium, promptly
shall be returned to the person making such payment and no payments shall be required
hereunder in connection with such Initial Purchase Event.

8

 

Staggered Settlement:

If Seller determines reasonably and in good faith that the number of Shares required to be
delivered to Buyer hereunder on any Settlement Date would exceed 8.0% of all outstanding Shares,
then Seller may, by notice to Buyer on or prior to such Settlement Date (a “Nominal Settlement
Date”), elect to deliver the Shares comprising the related Net Share Settlement Amount on two
or more dates (each, a “Staggered Settlement Date”) or at two or more times on the Nominal
Settlement Date as follows:

	1.	 	in such notice, Seller will specify to Buyer the related Staggered Settlement Dates (the
first of which will be such Nominal Settlement Date and the last of which will be no later
than twenty (20) Trading Days following such Nominal Settlement Date) or delivery times and
how it will allocate the Shares it is required to deliver hereunder among the Staggered
Settlement Dates or delivery times;

	2.	 	the aggregate number of Shares that Seller will deliver to Buyer hereunder on all such
Staggered Settlement Dates or delivery times will equal the number of Shares that Seller would
otherwise be required to deliver on such Nominal Settlement Date; and

	3.	 	the Net Share Settlement terms will apply on each Staggered Settlement Date, except that the
Shares comprising the Net Share Settlement Amount will be allocated among such Staggered
Settlement Dates or delivery times as specified by Seller in the notice referred to in clause
(1) above.

Notwithstanding anything herein to the contrary, solely in connection with a Staggered Settlement
Date, Seller shall be entitled to deliver Shares to Buyer from time to time prior to the date on
which Seller would be obligated to deliver them to Buyer pursuant to Net Share Settlement terms set
forth above, and Buyer agrees to credit all such early deliveries against Seller’s obligations
hereunder in the direct order in which such obligations arise. No such early delivery of Shares
will accelerate or otherwise affect any of Buyer’s obligations to Seller hereunder.

Disposition of Hedge Shares:

Seller intends to conduct its hedging activities in connection with the Transaction in a manner
that it believes, based on its reasonable judgment, will not require Counterparty to register under
the Securities Act or any state securities laws the Shares (the “Hedge Shares”) acquired by
Seller for the purpose of hedging its obligations pursuant to the Transaction. In addition,
Counterparty hereby agrees that if, in the reasonable judgment of Seller based on advice of
counsel, the Hedge Shares cannot be sold in the U.S. public market by Seller without registration
under the Securities Act, Counterparty shall, at its election: (i) in order to allow Seller to sell
the Hedge Shares in a registered offering, make available to Seller an effective registration
statement under the Securities Act to cover the resale of such Hedge Shares and (a) enter into an
agreement, in form and substance satisfactory to Seller, substantially in the form of an
underwriting agreement for a registered offering, (b) provide accountant’s “comfort” letters in
customary form for registered offerings of equity securities, (c) provide disclosure opinions of
nationally recognized outside counsel to Counterparty reasonably acceptable to Seller, (d) provide
other customary opinions, certificates and closing documents customary in form for registered
offerings of equity securities and (e) afford Seller a reasonable opportunity to conduct a “due
diligence” investigation with respect to Counterparty customary in scope for underwritten offerings
of equity securities; provided, however, that if Seller, in its sole reasonable discretion, is not
satisfied with access to due diligence materials, the results of its due diligence investigation,
or the procedures and documentation for the registered offering referred to above, then clause (ii)
or clause (iii) of this Section shall apply at the election of Counterparty; (ii) in order to allow
Seller to sell the Hedge Shares in a private placement, enter into a private placement agreement
substantially similar to private placement purchase agreements customary for private placements of
equity securities, in form and substance satisfactory to Seller, including customary
representations, covenants, blue sky and other governmental filings and/or registrations,
indemnities to Seller, due diligence rights (for Seller or any designated buyer of the Hedge Shares
from Seller), opinions and certificates and such other documentation as is customary for private
placements agreements, all reasonably acceptable to Seller (in which case, the Calculation Agent
shall make any adjustments to the terms of the Transaction that are necessary, by commercially
reasonable means, to compensate Seller for any discount from the public market price of the Shares
incurred on the sale of Hedge Shares in a private placement); or (iii) purchase the Hedge Shares
from Seller at the VWAP Price on such Exchange Business Days, and in the amounts, requested by
Seller. “VWAP Price” means, on any Exchange Business Day, the per Share volume-weighted
average price as displayed under the heading

9

 

“Bloomberg VWAP” on Bloomberg page AXE.N <equity> VAP (or any successor thereto) in respect
of the period from 9:45 a.m. to 3:45 p.m. (New York City time) on such Exchange Business Day (or if
such volume-weighted average price is unavailable, the market value of one Share on such Exchange
Business Day, as determined by the Calculation Agent using a volume-weighted method).

Repurchase Notices:

Counterparty shall, on any day on which Counterparty effects any repurchase of Shares, promptly
give Seller a written notice of such repurchase (a “Repurchase Notice”) on such day if
following such repurchase, the Notice Percentage as determined on such day is (i) greater than 6%
and (ii) greater by 0.5% than the Notice Percentage included in the immediately preceding
Repurchase Notice (or, in the case of the first such Repurchase Notice, greater than the Notice
Percentage as of the date hereof). In the event that Counterparty fails to provide Seller with a
Repurchase Notice on the day and in the manner specified in this section, then Counterparty agrees
to indemnify and hold harmless Seller, its affiliates and their respective directors, officers,
employees, agents and controlling persons (Seller and each such person being an “Indemnified
Party”) from and against any and all losses, claims, damages and liabilities (or actions in
respect thereof), joint or several, to which such Indemnified Party may become subject under
applicable securities laws, including without limitation, Section 16 of the Exchange Act, relating
to or arising out of such failure. If for any reason the foregoing indemnification is unavailable
to any Indemnified Party or insufficient to hold harmless any Indemnified Party, then Counterparty
shall contribute, to the maximum extent permitted by law, to the amount paid or payable by the
Indemnified Party as a result of such loss, claim, damage or liability. In addition, Counterparty
will reimburse any Indemnified Party for all reasonable and documented expenses (including
reasonable counsel fees and expenses) as they are incurred (after notice to Counterparty) in
connection with the investigation of, preparation for or defense or settlement of any pending or
threatened claim or any action, suit or proceeding arising therefrom, whether or not such
Indemnified Party is a party thereto and whether or not such claim, action, suit or proceeding is
initiated or brought by or on behalf of Counterparty. This indemnity shall survive the completion
of the Transaction contemplated by this Confirmation and any assignment and delegation of the
Transaction made pursuant to this Confirmation or the Agreement shall inure to the benefit of any
permitted assignee of Seller. Counterparty will not be liable under this Indemnity provision to
the extent that any loss, claim, damage, liability or expense is found in a final judgment by a
court to have resulted from MLI’s gross negligence or willful misconduct. The “Notice
Percentage” as of any day is the fraction, expressed as a percentage, (i) the numerator of
which is the product of the number of outstanding Reference Notes and the number of Shares per
Reference Note equal to the Conversion Rate (as defined in the Note Indenture) and (ii) the
denominator of which is the number of Shares outstanding on such day.

	 	 	 
	Compliance with Securities Laws:

	 	Each party represents and agrees that,
in connection with this Transaction
and all related or contemporaneous
sales and purchases of Shares by
either party, Buyer, or in the case of
Seller, the person(s) that directly
influences the specific trading
decisions of Seller, has complied and
will comply with the applicable
provisions of the Securities Act of
1933, as amended (the “Securities
Act”), and the Exchange Act, and the
rules and regulations each thereunder,
including, without limitation, Rules
10b-5, 10b-18 and 13e and Regulation M
under the Exchange Act; provided that
each party shall be entitled to rely
conclusively on any information
communicated by the other party
concerning such other party’s market
activities.
	 
	 	 
	 

	 	Each party acknowledges that the offer
and sale of the Transaction to it is
intended to be exempt from
registration under the Securities Act
by virtue of Section 4(2) thereof.
Accordingly, Buyer represents and
warrants to Seller that (i) it has the
financial ability to bear the economic
risk of its investment in the
Transaction and is able to bear a
total loss of its investment, (ii) it
is an “accredited investor” as that
term is defined in Regulation D as
promulgated under the Securities Act
and (iii) the disposition of the
Transaction is restricted under this
Confirmation, the Securities Act and
state securities laws.
	 
	 	 
	 

	 	Buyer further represents:

10

 

	 	 	 
	 

	 	(a) Buyer is not entering into this
Transaction to create actual or
apparent trading activity in the
Shares (or any security convertible
into or exchangeable for Shares) or to
raise or depress or otherwise
manipulate the price of the Shares (or
any security convertible into or
exchangeable for Shares);
	 
	 	 
	 

	 	(b) Buyer acknowledges that as of the
date hereof and without limiting the
generality of Section 13.1 of the
Equity Definitions, Seller is not
making any representations or
warranties with respect to the
treatment of the Transaction under
FASB Statements 149 or 150, EITF Issue
No. 00-19 (or any successor issue
statements) or under FASB’s
Liabilities & Equity Project.

	 	 	 	 	 	 	 
	Account Details:	 	Account for payments and

deliveries to Buyer:	 	 Name:	 	Anixter International Inc.
	 
	 	 	 	Bank:	 	Bank of America
	 
	 	 	 	ABA#:	 	026-009-593
	 
	 	 	 	Swift:	 	BOFAUS3N
	 
	 	 	 	A/C:	 	8666100213
	 
	 	 	 	 	 	 
	 	 	Account for payment to Seller:	 	Chase Manhattan Bank, New York
	 
	 	 	 	 	 	ABA#: 021-000-021
	 
	 	 	 	 	 	FAO: ML Equity Derivatives
	 
	 	 	 	 	 	A/C: 066213118

	 	 	 
	Bankruptcy Rights:

	 	In the event of Buyer’s bankruptcy, Seller’s rights in connection with this Transaction shall not exceed
those rights held by common shareholders. For the avoidance of doubt, the parties acknowledge and agree
that Seller’s rights with respect to any other claim arising from this Transaction prior to Buyer’s
bankruptcy shall remain in full force and effect and shall not be otherwise abridged or modified in
connection herewith.
	 
	 	 
	Set-Off:

	 	Each party waives any and all rights it may have to set-off, whether arising under any agreement, applicable
law or otherwise.
	 
	 	 
	Collateral:

	 	None.
	 
	 	 
	Transfer:

	 	Buyer shall have the right to assign its rights and delegate its obligations hereunder with respect to any
portion of this Transaction, subject to Seller’s consent, such consent not to be unreasonably withheld;
provided that such assignment or transfer shall be subject to receipt by Seller of opinions and documents
reasonably satisfactory to Seller and effected on terms reasonably satisfactory to the Seller with respect
to any legal and regulatory requirements relevant to the Seller; provided further that Buyer shall not be
released from its obligation to deliver a Exercise Notice. Seller may transfer any of its rights or
delegate its obligations under this Transaction with the prior written consent of Buyer, which consent shall
not be unreasonably withheld.
	 
	 	 
	Regulation:

	 	Seller is regulated by The Securities and Futures Authority Limited.

Matters Relating to Agent:

	1.	 	MLPFS will be responsible for the operational aspects of the Transactions effected through
it, such as record keeping, reporting, and confirming Transactions to Buyer and Seller;

	2.	 	Unless Seller is a “major U.S. institutional investor,” as defined in Rule 15a-6 of the
Exchange Act, neither Buyer nor Seller will contact the other without the direct involvement
of MLPFS;

	3.	 	MLPFS’s sole role under this Agreement and with respect to any Transaction is as an agent of
Buyer and Seller on a disclosed basis and MLPFS shall have no responsibility or liability to
Buyer or Seller hereunder

11

 

	 	 	except for gross negligence or willful misconduct in the performance of its duties as agent.
MLPFS is authorized to act as agent for Buyer, but only to the extent expressly required to
satisfy the requirements of Rule 15a-6 under the Exchange Act in respect of the Options
described hereunder. MLPFS shall have no authority to act as agent for Buyer generally or
with respect to transactions or other matters governed by this Agreement, except to the
extent expressly required to satisfy the requirements of Rule 15a-6 or in accordance with
express instructions from Buyer.

ISDA Master Agreement:

With respect to the Agreement, Seller and Counterparty each agree as follows:

“Specified Entity” means in relation to Seller and in relation to Counterparty for purposes of this
Transaction: Not applicable.

The definition of “Specified Transaction” in Section 14 of this Agreement is hereby amended by
adding the text “commodity transaction, credit derivative transaction, repurchase or reverse
purchase transaction, securities lending transaction, futures transaction, prime brokerage or
margin lending transaction” after the words “foreign exchange transaction” in the sixth line
thereof and by replacing the words “any other similar transaction” in the eighth line thereof with
the text “any other transaction between the parties”. “Specified Transaction” shall exclude any
default under a Specified Transaction if caused solely by the general unavailability of the
currency in which payments under such Specified Transaction are denominated due to exchange
controls or other governmental action. “Specified Transaction” shall also exclude equity
transactions in which Shares represent the underlying equity.

The “Cross Default” provisions of Section 5(a)(vi) of the Agreement will not apply to
Seller and will not apply to Counterparty.

The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Agreement will not
apply to Seller and Counterparty.

The “Automatic Early Termination” provision of Section 6(a) of the Agreement will not apply
to Seller or to Counterparty.

Payments on Early Termination. For the purpose of Section 6(e) of the Agreement: (i) Loss
shall apply; and (ii) the Second Method shall apply.

“Termination Currency” means USD.

Tax Representations.

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

	(b)	 	Payee Representations. For the purpose of Section 3(f) of the Agreement, each party makes
the following representations to the other party:

	 	(i)	 	Seller represents that it is a corporation organized under the laws of England
and Wales.

12

 

	 	(ii)	 	Counterparty represents that it is a corporation incorporated in Delaware.

Delivery Requirements. For the purpose of Sections 4(a)(i) and (ii) of the
Agreement, each party agrees to deliver the following documents:

	(a)	 	Tax forms, documents or certificates to be delivered are:
	 
	 	 	Each party agrees to complete (accurately and in a manner reasonably satisfactory to the
other party), execute, and deliver to the other party, United States Internal Revenue
Service Form W-9 or W-8 BEN, or any successor of such form(s): (i) before the first payment
date under this agreement; (ii) promptly upon reasonable demand by the other party; and
(iii) promptly upon learning that any such form(s) previously provided by the other party
has become obsolete or incorrect.

	(b)	 	Other documents to be delivered:

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Covered by
	Party Required to	 	 	 	 	 	Section 3(d)
	Deliver Document	 	Document Required to be Delivered	 	When Required	 	Representation
	Counterparty

	 	Evidence of the authority and
true signatures of each official
or representative signing this
Confirmation
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes
	 
	 	 	 	 	 	 
	Counterparty

	 	Certified copy of the resolution
of the Board of Directors or
equivalent document authorizing
the execution and delivery of
this Confirmation and such other
certificates as Seller shall
reasonably request
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes
	 
	 	 	 	 	 	 
	Seller

	 	Guarantee of its Credit Support
Provider, substantially in the
form of Exhibit A attached
hereto, together with evidence
of the authority and true
signatures of the signatories,
if applicable
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes

Additional Notice Requirements. Counterparty hereby agrees to promptly deliver to Seller a copy of
all notices and other communications required or permitted to be given to the holders of any
Reference Notes pursuant to the terms of the Note Indenture on the dates so required or permitted
in the Note Indenture and all other notices given and other communications made by Counterparty in
respect of the Reference Notes to holders of any Reference Notes. Counterparty further covenants
to Seller that it shall promptly notify Seller of each Conversion Date, Amendment Event (including
in such notice a detailed description of any such amendment) and Repayment Event (identifying in
such notice the nature of such Repayment Event and the principal amount at maturity of Reference
Notes being paid).

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

Address for notices or communications to Seller for all purposes:

	 	 	 
	Address:

	 	Merrill Lynch International
	 

	 	Merrill Lynch Financial Centre
	 

	 	2 King Edward Street
	 

	 	London EC1A 1HQ
	Attention:

	 	Manager, Fixed Income Settlements

13

 

	 	 	 
	Facsimile No.:

	 	44 207 995 2004
	Telephone No.:

	 	44 207 995 3769

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

	 	 	 
	Address:

	 	GMI Counsel
	 

	 	Merrill Lynch World Headquarters
	 

	 	4 World Financial Center
	 

	 	New York, New York 10080
	Attention:

	 	Global Equity Derivatives
	Facsimile No.:

	 	(212) 449-6576
	Telephone No.:

	 	(212) 449-6309

Address for notices or communications to Counterparty for all purposes:

	 	 	 
	Address:

	 	Anixter International Inc.
	 

	 	2301 Patriot Blvd.
	 

	 	Glenview, Illinois 60026
	Attention:

	 	Treasurer
	Telephone No.:

	 	(224) 521-8000
	Facsimile No.:

	 	(224) 521-8990

Process Agent. For the purpose of Section 13(c) of the Agreement, Seller appoints as its Process Agent:

	 	 	 
	Address:

	 	Merrill Lynch, Pierce, Fenner & Smith Incorporated
	 

	 	222 Broadway, 16th Floor
	 

	 	New York, New York 10038
	Attention:

	 	Litigation Department

     Counterparty does not appoint a Process Agent.

Multibranch Party. For the purpose of Section 10(c) of the Agreement: Neither Seller nor
Counterparty is a Multibranch Party.

Calculation Agent. The Calculation Agent is Seller, whose judgments, determinations and
calculations in this Transaction and any related hedging transaction between the parties shall be
made in good faith and in a commercially reasonable manner. The Calculation Agent shall, no later
than the 5th Business Day following any calculation, adjustment or other determination made by it
hereunder, provide the parties with a statement showing, in reasonable detail, the computations
(including any relevant quotations) by which it has determined any amount payable or deliverable
under, or any adjustment to the terms of, this Transaction.

Credit Support Document.

Seller: Guarantee of ML & Co. in the form attached hereto as Exhibit A.

Counterparty: Not Applicable

Credit Support Provider.

With respect to Seller: ML & Co.

With respect to Counterparty: Not Applicable.

14

 

Governing Law. This Confirmation will be governed by, and construed in accordance with, the laws
of the State of New York.

Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any suit, action or proceeding relating to this
Transaction. Each party (i) certifies that no representative, agent or attorney of the other party
has represented, expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and
the other party have been induced to enter into this Transaction, as applicable, by, among other
things, the mutual waivers and certifications provided herein.

Netting of Payments. The provisions of Section 2(c) of the Agreement shall not be
applicable to this Transaction.

Basic Representations. Section 3(a) of the Agreement is hereby amended by the deletion of
“and” at the end of Section 3(a)(iv); the substitution of a semicolon for the period at the
end of Section 3(a)(v) and the addition of Sections 3(a)(vi), as follows:

Eligible Contract Participant; Line of Business. Each party agrees and represents
that it is an “eligible contract participant” as defined in Section 1a(12) of the
U.S. Commodity Exchange Act, as amended (“CEA”), this Agreement and the
Transaction thereunder are subject to individual negotiation by the parties and have
not been executed or traded on a “trading facility” as defined in Section 1a(33) of
the CEA, and it has entered into this Confirmation and this Transaction in
connection with its business or a line of business (including financial
intermediation), or the financing of its business.

Acknowledgements:

	(a)	 	The parties acknowledge and agree that there are no other representations, agreements or
other undertakings of the parties in relation to this Transaction, except as set forth in this
Confirmation.
	 
	(b)	 	The parties hereto intend for:

	 	(i)	 	this Transaction to be a “securities contract” as defined in Section 741(7) of
Title 11 of the United States Code (the “Bankruptcy Code”), qualifying for the
protections under Section 555 of the Bankruptcy Code;
	 
	 	(ii)	 	a party’s right to liquidate this Transaction and to exercise any other
remedies upon the occurrence of any Event of Default under the Agreement with respect
to the other party to constitute a “contractual right” as defined in the Bankruptcy
Code;
	 
	 	(iii)	 	all payments for, under or in connection with this Transaction, all payments
for the Shares and the transfer of such Shares to constitute “settlement payments” as
defined in the Bankruptcy Code.

Amendment of Section 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by
deleting the words “on the day” in the second line thereof and substituting therefore “on the day
that is three Local Business Days after the day.” Section 6(d)(ii) is further modified by
deleting the words “two Local Business Days” in the fourth line thereof and substituting therefore
“three Local Business Days.”

Amendment of Definition of Reference Market-Makers. The definition of “Reference Market-Makers” in
Section 14 is hereby amended by adding in clause (a) after the word “credit” and before the
word “and” the words “or to enter into transactions similar in nature to Transactions.”

Consent to Recording. Each party consents to the recording of the telephone conversations of
trading and marketing personnel of the parties and their Affiliates in connection with this
Confirmation. To the extent that one party records telephone conversations (the “Recording
Party”) and the other party does not (the “Non-Recording Party”), the Recording Party
shall in the event of any dispute, make a complete and unedited copy of such party’s

15

 

tape of the entire day’s conversations with the Non-Recording Party’s personnel available to the
Non-Recording Party. The Recording Party’s tapes may be used by either party in any forum in which
a dispute is sought to be resolved and the Recording Party will retain tapes for a consistent
period of time in accordance with the Recording Party’s policy unless one party notifies the other
that a particular transaction is under review and warrants further retention.

Disclosure. Each party hereby acknowledges and agrees that Seller has authorized Counterparty to
disclose this Transaction and any related hedging transaction between the parties if and to the
extent that Counterparty reasonably determines (after consultation with Seller) that such
disclosure is required by law or by the rules of the New York Stock Exchange.

Severability. If any term, provision, covenant or condition of this Confirmation, or the
application thereof to any party or circumstance, shall be held to be invalid or unenforceable in
whole or in part for any reason, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Confirmation had been executed with the invalid
or unenforceable provision eliminated, so long as this Confirmation as so modified continues to
express, without material change, the original intentions of the parties as to the subject matter
of this Confirmation and the deletion of such portion of this Confirmation will not substantially
impair the respective benefits or expectations of parties to this Agreement; provided,
however, that this severability provision shall not be applicable if any provision of
Section 2, 5, 6 or 13 of the Agreement (or any definition or
provision in Section 14 to the extent that it relates to, or is used in or in connection
with any such Section) shall be so held to be invalid or unenforceable.

Affected Parties. For purposes of Section 6(e) of the Agreement, each party shall be
deemed to be an Affected Party in connection with Illegality and any Tax Event.

[Signatures follow on separate page]

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.

	 	 	 	 	 
	 	Very truly yours,

MERRILL LYNCH INTERNATIONAL

 	 
	 	By:  	/s/ Fran Jacobsen
 	 
	 	 	Name:  	Fran Jacobsen 	 
	 	 	Title:  	 	 
	 

Confirmed as of the date first above written:

ANIXTER INTERNATIONAL INC.

	 	 	 	 	 
	By:

	 	/s/ Rod Shoemaker	 	 
	Name:

	 	 

Rod Shoemaker
	 	 
	Title:

	 	 VP — Treasurer	 	 

Acknowledged and agreed as to matters to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

Solely in its capacity as Agent hereunder

	 	 	 	 	 
	By:

	 	/s/ Brian Carroll	 	 
	Name:

	 	 

Brian Carroll
	 	 
	Title:
	 	 	 	 

17

 

GUARANTEE OF MERRILL LYNCH & CO., INC.

     FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH & CO., INC., a
corporation duly organized and existing under the laws of the State of Delaware (“ML & Co.”),
hereby unconditionally guarantees to Anixter International Inc. (the “Company”), the due and
punctual payment of any and all amounts payable by Merrill Lynch International, a company organized
under the laws of England and Wales (“ML”), under the terms of the Confirmation of OTC Convertible
Note Hedge between the Company and ML (ML as Seller), dated as of February 12, 2007 (the
“Confirmation”), including, in case of default, interest on any amount due, when and as the same
shall become due and payable, whether on the scheduled payment dates, at maturity, upon declaration
of termination or otherwise, according to the terms thereof. In case of the failure of ML
punctually to make any such payment, ML & Co. hereby agrees to make such payment, or cause such
payment to be made, promptly upon demand made by the Company to ML & Co.; provided, however that
delay by the Company in giving such demand shall in no event affect ML & Co.’s obligations under
this Guarantee. This Guarantee shall remain in full force and effect or shall be reinstated (as
the case may be) if at any time any payment guaranteed hereunder, in whole or in part, is rescinded
or must otherwise be returned by the Company upon the insolvency, bankruptcy or reorganization of
ML or otherwise, all as though such payment had not been made.

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

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

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

     ML & Co. shall not exercise any rights that it may acquire by way of subrogation as a result
of a payment by it under this Guarantee at any time when any of the obligations of ML guaranteed
hereunder shall have become due and remain unpaid. Any amount paid to ML & Co. in violation of the
preceding sentence shall be held for the benefit of the Company and shall forthwith be paid to the
Company to be credited and applied to such obligations of ML then due and unpaid. Subject to the
foregoing, upon payment of all such obligations of ML, ML & Co. shall be subrogated to the rights
of the Company against ML, and the Company agrees to take at ML & Co.’s expense such steps as ML
&Co. may reasonably request to implement such subrogation.

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

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

18

 

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

	 	 	 	 	 	 	 
	 	 	MERRILL LYNCH & CO., INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Patricia Kroplewnicki	 	 
	 

	 	 	 	 

Name: Patricia Kroplewnicki
	 	 
	 

	 	 	 	Title: Designated Signatory	 	 
	 

	 	 	 	Date: February 13, 2007	 	 

19exv10w3

 

Exhibit 10.3

Confirmation of OTC Warrant Transaction

	 	 	 
	Date:

	 	February 12, 2007
	 
	 	 
	To:

	 	Anixter International Inc. (“Counterparty”)
	 
	 	 
	From:

	 	Merrill Lynch International (“MLI”)
	 
	 	 
	MLI Reference: 0781831

Dear Sir / Madam:

     The purpose of this letter agreement (this “Confirmation”) is to confirm the terms and
conditions of the above-referenced transaction entered into among Counterparty, MLI and Merrill
Lynch, Pierce, Fenner & Smith Incorporated (the “Agent” or “MLPFS”) on the Trade
Date specified below (the “Transaction”). This Confirmation constitutes a “Confirmation”
as referred to in the Agreement specified below.

     The definitions and provisions contained in the 2000 ISDA Definitions (the “Swap
Definitions”) and the 2002 ISDA Equity Derivatives Definitions (the “Equity
Definitions” and, together with the Swap Definitions, the “Definitions”), in each case
as published by the International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Swap Definitions and the Equity
Definitions, the Equity Definitions will govern, and in the event of any inconsistency between the
Definitions and this Confirmation, this Confirmation will govern. References herein to a
“Transaction” shall be deemed to be references to a “Share Option Transaction” for the purposes of
the Equity Definitions and to a “Swap Transaction” for the purposes of the Swap Definitions. For
purposes of this Transaction, “Warrant Style”, “Warrant Type”, “Number of Warrants” and “Warrant
Entitlement” (each as defined below) shall be used herein as if such terms were referred to as
“Option Style”, “Option Type”, “Number of Options” and “Option Entitlement”, respectively, in the
Definitions.

     This Confirmation evidences a complete binding agreement between you and us as to the terms of
the Transaction to which this Confirmation relates. This Confirmation (notwithstanding anything to
the contrary herein), shall be subject to an agreement in the 1992 form of the ISDA Master
Agreement (Multicurrency Cross Border) (the “Master Agreement” or “Agreement”) as
if we had executed an agreement in such form (but without any Schedule and with elections specified
in the “ISDA Master Agreement” Section of this Confirmation) on the Trade Date. In the event of
any inconsistency between the provisions of that Agreement and this Confirmation, this Confirmation
will prevail for the purpose of this Transaction. The parties hereby agree that the Transaction
evidenced by this Confirmation shall be the only Transaction subject to and governed by the
Agreement.

     The terms of the particular Transaction to which this Confirmation relates are as follows:

	 	 	 
	General Terms:
	 	 
	 
	 	 
	Trade Date:

	 	February 12, 2007
	 
	 	 
	Effective Date:

	 	February 16, 2007, subject to cancellation of the OTC Warrant Transaction prior
to 5:00 p.m. (New York City time) on such date by the Counterparty. In the event
of such cancellation, any payments previously made hereunder, including the
Premium, shall be returned to the person making such payment. In addition,
Counterparty shall pay to MLI an amount equal to the product of (a) 4,725,900
Shares, (b) 0.50 per Share and (c) an amount equal to the excess, if any, of the

 

 

	 	 	 
	 

	 	closing price of the Shares on the date of such cancellation over the closing
price of the Shares on the Trade Date; provided that any negative amount shall
be replaced by zero. Seller and Buyer agree that actual damages would be
difficult to ascertain under these circumstances and that the amount of
liquidated damages resulting from the determination in the preceding sentence
is a good faith estimate of such damages and not a penalty.
	 
	 	 
	Warrant Style:

	 	European
	 
	 	 
	Warrant Type:

	 	Call
	 
	 	 
	Seller:

	 	Counterparty
	 
	 	 
	Buyer:

	 	MLI
	 
	 	 
	Shares:

	 	Shares of common stock, $1.00 par value, of
Counterparty (Security Symbol: “AXE”).
	 
	 	 
	Number of Warrants:

	 	4,725,900
	 
	 	 
	Daily Number of Warrants:

	 	For any day, the Number of Warrants on such
day divided by the remaining number of
Expiration Dates (including such day) and
rounded down to the nearest whole number, with
the balance of the Number of Warrants
exercised on the final Expiration Date.
	 
	 	 
	Warrant Entitlement:

	 	One (1) Share per Warrant
	 
	 	 
	Strike Price:

	 	$82.80
	 
	 	 
	Premium:

	 	$52,050,000
	 
	 	 
	Premium Payment Date:

	 	The Effective Date; provided no cancellation
of the OTC Warrant Transaction has occurred
prior to 5:00 p.m. (New York City time) on
such date by the Counterparty.
	 
	 	 
	Exchange:

	 	NYSE
	 
	 	 
	Related Exchange(s):

	 	All Exchanges
	 
	 	 
	Full Exchange Business Day:

	 	A Scheduled Trading Day that has a scheduled
closing time for its regular trading session
at 4:00 p.m. (New York City time) or the then
standard closing time for regular trading on
the Exchange and is not a Disrupted Day.
	 
	 	 
	Procedures for Exercise:
	 	 
	 
	 	 
	Expiration Time:

	 	11:59 p.m. (New York City time).
	 
	 	 
	Expiration Dates:

	 	The forty (40) consecutive Full Exchange
Business Days beginning on and including May
16, 2013, each shall be an Expiration Date for
a number of Warrants equal to the Daily Number
of Warrants on such date.
	 
	 	 
	Exercise Dates:

	 	Each Expiration Date
	 
	 	 
	Automatic Exercise:

	 	Applicable; provided that Section 3.4(a) of
the Equity Definitions shall apply to Cash
Settlement and Net Physical Settlement; and
provided further that, unless

2

 

	 	 	 
	 

	 	all Warrants have been previously exercised hereunder, a number of Warrants for each Expiration Date equal to the Daily Number of
Warrants for such Expiration Date shall be deemed to be automatically exercised.

	 	 	 	 	 
	Counterparty’s Telephone
	 	 	 	 
	Number and Telex and/or
	 	 	 	 
	Facsimile Number and
	 	 	 	 
	Contact Details for purpose
	 	 	 	 
	of Giving Notice:

	 	Address:
	 	Anixter International Inc.
	 

	 	 	 	2301 Patriot Blvd.
	 

	 	 	 	Glenview, Illinois 60026
	 

	 	Attention:
	 	Treasurer
	 

	 	Telephone No.:
	 	(224) 521-8000
	 

	 	Facsimile No.:
	 	(224) 521-8990

	 	 	 
	Valuation:
	 	 
	 
	 	 
	Valuation Dates:

	 	Each Exercise Date
	 
	 	 
	Settlement Terms:
	 	 
	 
	 	 
	Cash Settlement:

	 	Applicable. If Counterparty elects to settle the Transaction by Cash Settlement, Counterparty
represents and agrees:
	 
	 

	 	(i) that on the date of the Cash Settlement election, neither the
Counterparty nor any of its affiliates is in possession of any
material non-public information with respect to the Counterparty or
the Shares;
	 
	 	 
	 

	 	(ii) that the Counterparty is not, on the date of the Cash Settlement election, and will not
be, on any day during the period from and including the first Expiration Date to and including
the final Expiration Date, engaged in a distribution, as such term is used in Regulation M
under the Securities Exchange Act of 1934, as amended (the
“Exchange Act”); and
	 
	 	 
	 

	 	(iii) that, during the period from and including the first Expiration Date to and including
the final Expiration Date, without the prior written consent of MLI, the Counterparty shall
not, and shall cause its affiliates and affiliated purchasers (each as defined in Rule 10b-18
under the Exchange Act) 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 (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 the Shares.
	 
	 	 
	Settlement Currency:

	 	USD
	 
	 	 
	Settlement Price:

	 	For each Valuation Date, the Volume Weighted Average Price of the Shares (“VWAP”) calculated
from 9:45 a.m. to 3:45 p.m., as observed on Bloomberg page AXE.N <equity> VAP (or any
successor thereto). Section 6.3(a) of the Equity Definitions is hereby amended by replacing
the words “during the one hour period that ends at the relevant Valuation Time, Latest
Exercise Time, Knock-in Valuation Time or Knock-out Valuation Time, as the case may be” with
the following words: “prior to 3:45 p.m. on the relevant Valuation Date”.
	 
	 	 

3

 

	 	 	 
	Option Cash Settlement Amount:

	 	For any Exercise Date, the corresponding Net Physical Settlement Amount.
	 
	 	 
	Cash Settlement Payment Date:

	 	With respect to each Valuation Date, three (3) Currency Business Days after the final
Valuation Date.
	 
	 	 
	Settlement Method Election:

	 	Applicable with respect to Cash Settlement or Net Physical Settlement only.
	 
	 	 
	Electing Party:

	 	Counterparty
	 
	 	 
	Settlement Method Election Date:

	 	Ten (10) Business Days prior to the first Expiration Date.
	 
	 	 
	Default Settlement Method:

	 	Net Physical Settlement.
	 
	 	 
	Net Physical Settlement:

	 	In the event that the Counterparty elects to settle this Transaction by Net Physical
Settlement, subject to “Conditions of Net Physical Settlement” below, Counterparty shall
deliver to MLI on the Settlement Date a number of Shares (the
“Delivered Shares”) equal to the
Share Delivery Quantity, provided that in the event that the number of Shares calculated
comprises any fractional Share, only whole Shares shall be delivered and an amount in cash
equal to the value of such fractional share shall be payable by the Counterparty to MLI in
lieu of such fractional Share.
	 
	 	 
	Share Delivery Quantity:

	 	For each Exercise Date, a number of Shares, as calculated by the Calculation Agent, equal to
the Net Physical Settlement Amount for such Exercise Date divided by the Settlement Price on
the Valuation Date in respect of such Settlement Date plus an amount in cash in lieu of any
fractional shares (based on the Settlement Price).
	 
	 	 
	Net Physical Settlement Amount:

	 	For any Exercise Date, an amount equal to the product of (i) the Number of Warrants being
exercised on the relevant Exercise Date, (ii) the Strike Price Differential for such Exercise
Date and (iii) the Warrant Entitlement.
	 
	 	 
	Strike Price Differential:

	 	For any Valuation Date, (i) if the Settlement Price is greater than the Strike Price, an
amount equal to the excess of such Settlement Price over the Strike Price for such Valuation
Date or (ii) if such Settlement Price is less than or equal to the Strike Price, zero.
	 
	 	 
	Settlement Date:

	 	Settlement with respect to each Exercise Date shall occur on the third (3rd) Full
Exchange Business Day following the final Valuation Date, provided that MLI shall have the
right to request by prior written notice to Counterparty a Settlement Date with respect to any
Exercise Date and the related Share Delivery Quantity that is three (3) Full Exchange Business
Days following such Exercise Date. Such request shall not unreasonably be denied.
	 
	 	 
	Conditions to Net

Physical Settlement:

	 	If, in connection with or two months following delivery of Shares hereunder, MLI notifies the
Counterparty that MLI has reasonably determined after advice from counsel that there is a
considered risk that such Shares are subject to restrictions on transfer in the hands of MLI
pursuant to the rules and regulations promulgated under the Securities Act of 1933, as amended
(the “Securities Act”), then Counterparty shall either (i) deliver Shares that are covered by
an effective registration statement of Counterparty for immediate resale by MLI or (ii) agree
to deliver additional Shares so that the value of such Shares as determined by the Calculation
Agent (in a commercially reasonable manner) to reflect an appropriate liquidity discount,
equals the value of the number of

4

 

	 	 	 
	 

	 	Shares that would otherwise be deliverable if such Shares were freely
tradable upon receipt by MLI.
	 
	 	 
	 

	 	(A) If Counterparty elects to deliver Shares as described in above
clause (i), then
	 
	 	 
	 

	 	(a)Counterparty shall afford MLI a reasonable opportunity to conduct a due
diligence investigation with respect to Counterparty that is customary in scope for
underwritten offerings of equity securities that yields a result reasonably satisfactory to MLI
and, if Counterparty has provided to MLI an unqualified opinion satisfactory to MLI of nationally
recognized counsel to the effect such Shares are freely tradable under the Securities Act upon delivery to
MLI and not subject to any legend restricting transferability, MLI shall bear its own costs and expenses in
connection with such due diligence investigation;
	 
	 	 
	 

	 	(b) Counterparty shall promptly make available to MLI an effective
registration statement for immediate resale (the “Registration
Statement”) in form and content reasonably satisfactory to MLI
and filed pursuant to Rule 415 under the Securities Act, and such
prospectuses as MLI may reasonably request to comply with the
applicable prospectus delivery requirements (the
“Prospectus”) for the resale by MLI of such number of Shares
as MLI shall reasonably specify in accordance with this paragraph,
such Registration Statement to be effective and Prospectus to be
current until the earliest of the date on which (1) all Delivered
Shares have been sold by MLI, (2) MLI has advised Counterparty that
it no longer requires that such Registration Statement be effective,
(3) all remaining Delivered Shares could be sold by MLI without
registration pursuant to Rule 144 promulgated under the Securities
Act (the “Registration Period”) or (4) Counterparty has
provided a legal opinion in form and substance satisfactory to MLI
(with customary assumptions and exceptions) that the Shares issuable
upon exercise of these Warrants will be freely tradable under the
Securities Act upon delivery to MLI and not subject to any legend
restricting transferability. It is understood that the Registration
Statement and Prospectus will cover a number of Shares equal to the
aggregate number of Shares (if any) reasonably estimated by MLI to be
potentially deliverable by Counterparty in connection with Net
Physical Settlement hereunder (not to exceed the Maximum Deliverable
Share Amount) and shall be subject to the same suspension of sales
during “blackout dates” as provided in the following paragraph; and
	 
	 	 
	 

	 	(c) Counterparty will enter into a registration rights agreement with
MLI in form and substance reasonably acceptable to MLI, which
agreement will contain among other things, customary representations
and warranties and indemnification, restrictions on sales during
“blackout dates” as provided for in the registration rights agreement
(the “Registration Rights Agreement”) entered into between
Counterparty and the Initial Purchaser in connection with
Counterparty’s 1% Senior Convertible Notes due 2013 (the
“Convertible Notes”), provide for delivery of comfort letters
and opinions of counsel and other rights relating to the registration
of a number of Shares equal to the number of Delivered Shares and
other Shares deliverable hereunder up to the Maximum Deliverable
Share Amount.
	 
	 	 
	 

	 	(d) Counterparty shall promptly pay to MLI a $0.04 per Share fee with
all Shares delivered in connection with Net Physical Settlement
pursuant to a Registration Statement.

5

 

	 	 	 
	 

	 	(B) If Counterparty elects to deliver Shares as described in above
clause (ii), then
	 
	 	 
	 

	 	(a) Counterparty shall afford MLI and any potential institutional
purchaser of any Shares identified by MLI a reasonable opportunity to
conduct a due diligence investigation with respect to Counterparty
that is customary in scope for private placements of equity
securities subject to execution of any customary confidentiality
agreements;
	 
	 	 
	 

	 	(b) Counterparty shall enter into an agreement (a “Private
Placement Agreement”) with MLI on commercially reasonable terms
in connection with the private placement of such Shares by
Counterparty to MLI or an affiliate and the private resale of such
shares by MLI or such affiliate, substantially similar to private
placement purchase agreements customary for private placements of
equity securities, in form and substance commercially reasonably
satisfactory to MLI and Counterparty, which Private Placement
Agreement shall include provisions relating to the indemnification
of, and contribution in connection with the liability of, MLI and its
affiliates, shall provide for the payment by Counterparty of all
out-of-pocket expenses in connection with such resale, including all
reasonable and documented fees and expenses of counsel for MLI, shall
contain representations, warranties and agreements of Counterparty
reasonably necessary or advisable to establish and maintain the
availability of an exemption from the registration requirements of
the Securities Act for such resales, and shall use reasonable best
efforts to provide for the delivery of accountants’ “comfort letters”
to MLI or such affiliate with respect to the financial statements and
certain financial information contained in or incorporated by
reference into the offering memorandum prepared for the resale of
such Shares;
	 
	 	 
	 

	 	(c) MLI shall sell the Delivered Shares in a commercially reasonable
manner until the amount received by MLI for the sale of the Shares
(the “Proceeds Amount”) is equal to the Net Physical
Settlement Amount. Any remaining Delivered Shares shall be returned
to Counterparty. If the Proceeds Amount is less than the Net Physical
Settlement Amount, Counterparty shall promptly deliver upon notice
from MLI additional Shares to MLI until the dollar amount from the
sale of such Shares by MLI equals the difference between the Net
Physical Settlement Amount and the Proceeds Amount. In no event shall
Counterparty be required to deliver to MLI a number of Shares greater
than the Maximum Deliverable Share Amount.
	 
	 	 
	 

	 	(C) Notwithstanding the foregoing: (I) if Counterparty has elected to
deliver Shares as described in clause (i) above and either (a)
Counterparty does not provide for the sale of the Shares under the
Registration Statement as provided in the Registration Rights
Agreement or (b) some Shares cannot be registered under the
Registration Statement due to Rule 415(a)(4) under the Securities
Act, then the provisions of sub-paragraph (B) shall apply to the
extent Counterparty has not satisfied its obligations hereunder by
the delivery of Shares pursuant to sub-paragraph (A). (II) If
sub-paragraph (B) is applicable and Counterparty fails to satisfy its
obligations under such sub-paragraph (B), then Counterparty may
deliver unregistered Shares of equivalent value to the Net Physical
Settlement Amount (or, if applicable, the unsatisfied portion
thereof). The value of any unregistered Shares so delivered shall be
discounted to reflect an appropriate liquidity discount (determined
by the Calculation Agent in a commercially reasonable manner, taking
into account MLI’s policies and determinations with respect to any
transfer restrictions that MLI deems it

6

 

	 	 	 
	 

	 	advisable to observe in connection with sales of such Shares). (III) If some or
all of the Delivered Shares cannot be used to close out stock loans in the
shares of Counterparty entered into to establish or maintain short positions by
MLI in connection with this Transaction without a prospectus being required by
applicable law to be delivered to such lender, then the value of any such
Delivered Shares shall reflect the cost (determined by MLI in good faith and in
a commercially reasonable manner) to MLI of trading Shares in order to close
out its hedge position if any, in all cases for purposes of calculating the
Delivered Shares. In no event shall Counterparty be required to top-up the
delivery in cash.
	 
	 	 
	Limitations on Net Physical

Settlement by Counterparty:

	 	Notwithstanding anything herein or in the
Agreement to the contrary, the number of
Shares that may be delivered at settlement
by Counterparty shall not exceed 8,400,000
at any time (“Maximum Deliverable Share
Amount”), as adjusted by MLI to account for
any subdivision, stock-split, stock
combination, reclassification or similar
dilutive or anti-dilutive event with
respect to the Shares.
	 
	 	 
	 

	 	Counterparty represents and warrants that
the number of Available Shares as of the
Trade Date is greater than the Maximum
Deliverable Share Amount. Counterparty
covenants and agrees that Counterparty
shall not take any action of corporate
governance or otherwise to reduce the
number of Available Shares below the
Maximum Deliverable Share Amount.
	 
	 	 
	 

	 	For this purpose,
“Available Shares” means
the number of Shares Counterparty currently
has authorized (but not issued and
outstanding) less the maximum number of
Shares that may be required to be issued by
Counterparty in connection with stock
options, convertibles, and other
commitments of Counterparty that may
require the issuance or delivery of Shares
in connection therewith.
	 
	 	 
	Dividends:
	 	 
	 
	 	 
	Extraordinary Dividends:

	 	Any and all dividends paid by the Issuer.
	 
	 	 
	Adjustments:
	 	 
	 
	 	 
	Method of Adjustment:

	 	Calculation Agent Adjustment
	 
	 	 
	Extraordinary Events:
	 	 
	 
	 	 
	Consequences of Merger Events:

	 	(a) Share-for-Share: Cancellation and
Payment (Calculation Agent Determination)
	 

	 	(b) Share-for-Other: Cancellation and Payment (Calculation Agent
Determination)
	 
	 	 
	 

	 	(c) Share-for-Combined: Cancellation and Payment (Calculation Agent
Determination)
	 
	 	 
	Tender Offer:

	 	Applicable
	 
	 	 
	Consequences of Tender Offers:

	 	(a) Share-for-Share: Modified Calculation Agent Adjustment

7

 

	 	 	 
	 

	 	(b) Share-for-Other: Cancellation and Payment (Calculation Agent
Determination)
	 
	 	 
	 

	 	(c) Share-for-Combined: Component Adjustment (Calculation Agent
Determination)
	 
	 	 
	 

	 	With respect to any Extraordinary Events hereunder, upon the
occurrence of Cancellation and Payment in whole or in part, the
parties agree that the amount to be paid, in accordance with the
Equity Definitions, shall constitute a Transaction Early Termination
Amount, subject to satisfaction by the payment or delivery of Shares
or cash as set forth in the Early Termination section below.
	 
	 	 
	Nationalization, Insolvency 

or Delisting:

	 	Cancellation and Payment (Calculation
Agent Determination) (subject to
satisfaction by payment or delivery of
Shares or cash as set forth in “Early
Termination” below). In addition to the
provisions of Section 12.6(a)(iii) of the
Equity Definitions, it will also
constitute a Delisting if the Exchange is
located in the United States and the
Shares are not immediately re-listed,
re-traded or re-quoted on any of the New
York Stock Exchange, the American Stock
Exchange or the NASDAQ National Market
System (or their respective successors,
including without limitation the NASDAQ
Global Market and NASDAQ Global Select
Market); if the Shares are immediately
re-listed, re-traded or re-quoted on any
such exchange or quotation system, such
exchange or quotation system shall
thereafter be deemed to be the Exchange.
	 
	 	 
	Determining Party:

	 	MLI
	 
	 	 
	Additional Disruption Events:
	 	 
	 
	 	 
	Change in Law:

	 	Applicable
	 
	 	 
	Failure to Deliver:

	 	Not Applicable
	 
	 	 
	Insolvency Filing:

	 	Applicable
	 
	 	 
	Hedging Disruption Event:

	 	Applicable
	 
	 	 
	Increased Cost of Hedging:

	 	Not Applicable
	 
	 	 
	Loss of Stock Borrow:

	 	Applicable
	 
	 	 
	Maximum Stock Loan Rate:

	 	75 bps
	 
	 	 
	Increased Cost of Stock Borrow:

	 	Applicable
	 
	 	 
	Initial Stock Loan Rate:

	 	25 bps
	 
	 	 
	Hedging Party:

	 	MLI
	 
	 	 
	Determining Party:

	 	MLI
	 
	 	 
	Non-Reliance:

	 	Applicable
	 
	 	 
	Agreements and
Acknowledgments Regarding
	 	 

8

 

	 	 	 
	Hedging Activities:

	 	Applicable
	 
	 	 
	Additional Acknowledgments:

	 	Applicable
	 
	 	 
	Other Provisions:
	 	 
	 
	 	 
	Additional Agreements:

	 	If due to the occurrence of an
Extraordinary Event or otherwise
Counterparty would be obligated to pay
cash to MLI pursuant to the terms of this
Agreement for any reason without having
had the right (other than pursuant to this
paragraph) to elect to deliver Shares in
satisfaction of such payment obligation,
then Counterparty may elect to deliver to
MLI a number of Shares (whether registered
or unregistered) having a cash value equal
to the amount of such payment obligation
(such number of Shares to be delivered to
be determined by the Calculation Agent
acting in a commercially reasonable manner
to determine the number of Shares that
could be sold by MLI over a reasonable
period of time to realize the cash
equivalent of such payment obligation
taking into account any applicable
discount (determined in a commercially
reasonable manner) to reflect any
restrictions on transfer as well as the
market value of the Shares). Further, if
Counterparty is delivering Shares as a
result of a Merger Event, the Settlement
Date will be immediately prior to the
effective time of the Merger Event and the
Shares will be deemed delivered at such
time such that MLI will be a holder of the
Shares prior to such effective time.
Settlement relating to any delivery of
Shares pursuant to this paragraph shall
occur within a reasonable period of time.
The number of Shares delivered pursuant to
this paragraph shall not exceed the
Maximum Deliverable Share Amount and shall
be subject to the provisions under “Early
Termination” hereof regarding Proceeds
Amount.
	 
	 	 
	Early Termination:

	 	Notwithstanding any provision to the contrary, upon the
designation of an Early Termination Date or the
occurrence of Cancellation and Payment in whole or in
part hereunder, Counterparty’s payment obligation in
respect of this Transaction (which shall, in the case
of an Early Termination Date be determined in
accordance with Second Method and Loss) (the
“Transaction Early Termination Amount”) may, at the
option of Counterparty, be satisfied by the delivery of
a number of Shares equal to the Transaction Early
Termination Amount divided by the Termination Price
(“Early Termination Stock Settlement”); provided,
however, that Counterparty must notify MLI of its
election of Early Termination Stock Settlement by the
close of business on the day that is two Exchange
Business Days following the day that the notice
designating the Early Termination Date, or notice that
an Extraordinary Event has resulted in the cancellation
or termination of the Transaction in whole or in part,
is effective. “Termination Price” means the market
value per Share on the Early Termination Date, as
determined by the Calculation Agent taking into account
any applicable discount to reflect any restrictions on
transfer.
	 
	 	 
	 

	 	A number of Shares calculated as being due in respect
of any Early Termination Stock Settlement will be
deliverable on the third Clearance System Business Day
following the date that notice specifying the number of
Shares deliverable is effective; provided that, if
Counterparty is delivering Shares as a result of a
Merger Event, the Settlement Date for such delivery
will be immediately prior to the effective time of the
Merger Event and the Shares will be deemed delivered at
such time such that MLI will be a holder of the Shares
prior to such effective time. Section 6(d)(i) of the
Agreement is hereby amended by adding the following
words after the word “paid” in the fifth line thereof: “or any delivery is to be made, as applicable.”

9

 

	 	 	 
	 
	 	 
	 

	 	On or prior to the Early Termination Date or date on
which notice that an Extraordinary Event has resulted
in the cancellation or termination of the Transaction
in whole or in part is effective, as applicable, if
Early Termination Stock Settlement is elected and if so
requested by MLI upon advice of counsel, Counterparty
shall enter into a registration rights agreement with
MLI in form and substance reasonably acceptable to MLI
which agreement will contain among other things,
customary representations and warranties and
indemnification, restrictions on sales during “blackout
dates” as provided for in the Registration Rights
Agreement and shall satisfy the conditions contained
therein and Counterparty shall file and diligently
pursue to effectiveness a Registration Statement
pursuant to Rule 415 under the Securities Act. If and
when such Registration Statement shall have been
declared effective by the Securities and Exchange
Commission, Counterparty shall have made available to
MLI such Prospectuses as MLI may reasonably request to
comply with the applicable prospectus delivery
requirements for the resale by MLI of such number of
Shares as MLI shall specify (or, if greater, the number
of Shares that Counterparty shall specify). Such
Registration Statement shall be effective and
Prospectus shall be current until the earliest of the
date on which (i) all Shares delivered by Counterparty
in connection with an Early Termination Date have been
sold, (ii) MLI has advised Counterparty that it no
longer requires that such Registration Statement be
effective or (iii) all remaining Shares could be sold
by MLI without registration pursuant to Rule 144
promulgated under the Securities Act (the “Termination
Registration Period”). It is understood that the
Registration Statement and Prospectus will cover a
number of Shares equal to the number of Shares plus the
aggregate number of Shares (if any) reasonably
estimated by MLI to be potentially deliverable by
Counterparty in connection with Early Termination Stock
Settlement hereunder, but in no event exceeding the
Maximum Deliverable Share Amount. On each day during
the Termination Registration Period Counterparty shall
represent that each of its filings under the Securities
Act, the Exchange Act or other applicable securities
laws that are required to be filed have been filed and
that, as of the respective dates thereof and as of the
date of this representation, they do not contain any
untrue statement of a material fact or omission of a
material fact required to be stated therein or
necessary to make the statements made, in the light of
the circumstances under which they were made, not
misleading.
	 
	 	 
	 

	 	Notwithstanding anything contained in the preceding
paragraph, if Counterparty does not elect to deliver
Shares subject to an effective Registration Statement
as set forth above (or if some or all of the Shares
delivered cannot be used to close out stock loans in
the shares of Counterparty entered into to establish or
maintain short positions by MLI in connection with this
Transaction without a prospectus being required by
applicable law to be delivered to such lender), the
provisions of sub-paragraphs (B) and (C) set forth
above under “Conditions to Net Physical Settlement”
shall apply, mutatis mutandis, as if the Net Physical
Settlement Amount were the Transaction Early
Termination Amount. In no event shall Counterparty be
required to deliver to MLI a number of Shares greater
than the Maximum Deliverable Share Amount.
	 
	 	 
	Compliance With Securities Laws:

	 	Counterparty represents and agrees that it has complied, and will comply, in connection with
this Transaction and all related or contemporaneous sales and purchases of Shares, with the
applicable provisions of the Securities Act, the Exchange Act and the rules and regulations
promulgated thereunder, including, without limitation, Rule 10b-5 and 13e and Regulation M
under the Exchange Act.

10

 

	 	 	 
	 

	 	Each party acknowledges that the offer and sale of the Transaction to it is intended to be
exempt from registration under the Securities Act by virtue of Section 4(2) thereof.
Accordingly, Counterparty represents and warrants to MLI that (i) it has the financial ability
to bear the economic risk of its investment in the Transaction and is able to bear a total
loss of its investment, (ii) it is an “accredited investor” as that term is defined in
Regulation D as promulgated under the Securities Act and (iii) the disposition of the
Transaction is restricted under this Confirmation, the Securities Act and state securities
laws.
	 
	 	 
	 

	 	Counterparty further represents and warrants that:
	 
	 	 
	 

	 	(a) Counterparty is not entering into this Transaction to create
actual or apparent trading activity in the Shares (or any security
convertible into or exchangeable for Shares) or to raise or depress
or otherwise manipulate the price of the Shares (or any security
convertible into or exchangeable for Shares);
	 
	 	 
	 

	 	(b) Counterparty represents and acknowledges that as of the date
hereof and without limiting the generality of Section 13.1 of the
Equity Definitions, MLI is not making any representations or
warranties with respect to the treatment of the Transaction under
FASB Statements 149 or 150, EITF Issue No. 00-19 (or any successor
issue statements) or under FASB’s Liabilities & Equity Project;
	 
	 	 
	 

	 	(c) Counterparty is not, and after giving effect to the Transaction
contemplated hereby, will not be, an “investment company” as such
term is defined in the Investment Company Act of 1940, as amended.
	 
	 	 
	 

	 	(d) As of the Trade Date and each date on which a payment or delivery
is made by Counterparty hereunder, (i) the assets of Counterparty at
their fair valuation exceed the liabilities of Counterparty,
including contingent liabilities; (ii) the capital of Counterparty is
adequate to conduct its business; and (iii) Counterparty has the
ability to pay its debts and other obligations as such obligations
mature and does not intend to, or believe that it will, incur debt or
other obligations beyond its ability to pay as such obligations
mature.

	 	 	 	 	 	 	 
	Account Details:	 	Account for payments to Counterparty:	 	 
	 
	 	 	 	Name:	 	Anixter International Inc.
	 
	 	 	 	Bank:	 	Bank of America
	 
	 	 	 	ABA#:	 	026-009-593
	 
	 	 	 	Swift:	 	BOFAUS3N
	 
	 	 	 	A/C:	 	8666100213
	 
	 	 	 	 	 	 
	 	 	Account for payments to MLI:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	Chase Manhattan Bank, New York
	 	 	 	 	ABA#: 021-000-021
	 	 	 	 	FAO: ML Equity Derivatives
	 	 	 	 	A/C: 066213118
	 
	 	 	 	 	 	 
	 	 	Account for delivery of Shares to MLI:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	To be advised.

	 	 	 
	Agreement Regarding Shares:

	 	Counterparty agrees that, in respect of any Shares delivered to MLI,
such Shares shall be, upon such delivery, duly and validly authorized, issued and

11

 

	 	 	 
	 

	 	outstanding, fully paid and non-assessable and subject to no adverse
claims of any other party. The issuance of such Shares does not and
will not require the consent, approval, authorization, registration
or qualification of any government authority, except such as shall
have been obtained on or before the delivery date of any Shares or in
connection with any Registration Statement filed with respect to any
Shares.
	 
	 	 
	Bankruptcy Rights:

	 	In the event of Counterparty’s bankruptcy, MLI’s rights in connection with this Transaction shall not exceed
those rights held by common shareholders. For the avoidance of doubt, the parties acknowledge and agree
that MLI’s rights with respect to any other claim arising from this Transaction prior to Counterparty’s
bankruptcy shall remain in full force and effect and shall not be otherwise abridged or modified in
connection herewith.
	 
	 	 
	Set-Off:

	 	Each party waives any and all rights it may have to set-off, whether arising under any agreement, applicable
law or otherwise.
	 
	 	 
	Transfer:

	 	Counterparty may transfer its rights and delegate its obligations under this Transaction in accordance with
Section 7(b) of the Master Agreement or with the prior written consent of MLI, which consent will not be
unreasonably withheld. MLI may assign its rights and delegate its obligations hereunder, in whole or in
part, to any other person (an “Assignee”) without the prior consent of the Counterparty, effective (the
“Transfer Effective Date”) upon delivery to Counterparty of an executed acceptance and assumption by the
Assignee (an “Assumption”) of the transferred obligations of MLI under this Transaction (the “Transferred
Obligations”). Notwithstanding any other provision in this Confirmation to the contrary requiring or
allowing MLI to purchase, sell, receive or deliver any Shares or other securities to or from Counterparty,
MLI may designate any of its affiliates to purchase, sell, receive or deliver such Shares or other
securities and otherwise to perform MLI’s obligations in respect of this Transaction and any such designee
may assume such obligations. MLI shall be discharged of its obligations to Counterparty to the extent of
any such performance.
	 
	 	 
	Regulation:

	 	MLI is regulated by The Securities and Futures Authority Limited.

Additional Agreements, Representations and Covenants of Counterparty, Etc.:

	(a)	 	Counterparty hereby represents and warrants to MLI, on each day from the Trade Date to and
including the earlier of (i) February 16, 2007 and (ii) the date by which MLI is able to
initially complete a hedge of its position created by this Transaction, that:

	 	(1)	 	it will not, and will not permit any person or entity subject to its control
to, bid for or purchase Shares during such period except as disclosed in the Offering
Memorandum relating to the Convertible Notes; and
	 
	 	(2)	 	it has publicly disclosed all material information necessary for it to be able
to purchase or sell Shares in compliance with applicable federal securities laws and
that it has publicly disclosed all material information with respect to its condition
(financial or otherwise).

	(b)	 	No collateral shall be required by either party for any reason in connection with this
Transaction.

	(c)	 	MLI shall not be entitled to exercise any Warrant or receive any Shares deliverable hereunder
and Automatic Exercise shall not apply with respect to any Warrant to the extent (but only to
the extent) that the receipt of any Shares upon the exercise of such Warrant or otherwise
hereunder would result in MLI, or

12

 

	 	 	its ultimate parent entity becoming, directly or indirectly, the beneficial owner (as such
term is defined for purposes of Section 13(d) of the Exchange Act) at any time of more than
8.0 percent of the class of the Counterparty’s outstanding equity securities that is
comprised of the Shares (an “Excess Share Owner”).
	 
	 	 	MLI shall provide prior notice to Counterparty if the exercise of any Warrant or delivery of
Shares hereunder would cause MLI to become directly or indirectly, an Excess Share Owner;
provided that the failure of MLI to provide such notice shall not alter the
effectiveness of the provisions set forth in the preceding sentence and any purported
exercise or delivery in violation of such provisions shall be void and have no effect. If
any delivery owed to MLI hereunder is not made, in whole or in part, as a result of this
provision, Counterparty’s obligation to make such delivery shall not be extinguished and
Counterparty shall make such delivery as promptly as practicable after MLI gives notice that
such delivery would not result in MLI being an Excess Share Owner.
	 
	 	 	If MLI is not entitled to exercise any Warrant because such exercise would cause MLI to
become, directly or indirectly, an Excess Share Owner and MLI thereafter disposes of Shares
owned by it or any action is taken that would then permit MLI to exercise such Warrant
without such exercise causing it to become, directly or indirectly, an Excess Share Owner,
then MLI shall provide notice of the taking of such action to Counterparty and such Warrant
shall then become exercisable by MLI to the extent such Warrant is otherwise or had
otherwise become exercisable hereunder. In such event, the Expiration Date with respect to
such Warrant shall be the date on which Counterparty receives such notice from MLI, and the
related Settlement Date shall be as soon as reasonably practicable after receipt of such
notice but no more than three (3) Exchange Business Days thereafter (but in no event shall
the Settlement Date occur prior to the date on which it would have otherwise occurred but
for the provisions of this subsection); provided that the related Net Physical
Settlement Amount shall be the same as the Net Physical Settlement Amount but for the
provisions of this subsection. In addition, within 30 calendar days of the Settlement Date,
Counterparty shall use its reasonable efforts to refrain from activities that could
reasonably be expected to result in MLI’s ownership of Shares exceeding 10% of all issued
and outstanding Shares.

Matters Relating to Agent:

	1.	 	MLPFS will be responsible for the operational aspects of the Transactions effected through
it, such as record keeping, reporting, and confirming Transactions to Counterparty and MLI;

	2.	 	Unless MLI is a “major U.S. institutional investor,” as defined in Rule 15a-6 of the Exchange
Act, neither Counterparty not MLI will contact the other without the direct involvement of
MLPFS;

	3.	 	MLPFS’s sole role under this Agreement and with respect to any Transaction is as an agent of
Counterparty and MLI on a disclosed basis and MLPFS shall have no responsibility or liability
to Counterparty or MLI hereunder except for gross negligence or willful misconduct in the
performance of its duties as agent. MLPFS is authorized to act as agent for MLI, but only to
the extent expressly required to satisfy the requirements of Rule 15a-6 under the Exchange Act
in respect of the Options described hereunder. MLPFS shall have no authority to act as agent
for Counterparty generally or with respect to transactions or other matters governed by this
Agreement, except to the extent expressly required to satisfy the requirements of Rule 15a-6
or in accordance with express instructions from Counterparty.

ISDA Master Agreement:

With respect to the Agreement, MLI and Counterparty each agree as follows:

“Specified Entity” means in relation to Seller and in relation to Counterparty for purposes of this
Transaction: Not applicable.

The definition of “Specified Transaction” in Section 14 of this Agreement is hereby amended
by adding the text “commodity transaction, credit derivative transaction, repurchase or reverse
purchase transaction, securities lending transaction, futures transaction, prime brokerage or
margin lending transaction” after the words “foreign exchange transaction” in the sixth line
thereof and by replacing the words “any other similar transaction” in the eighth line

13

 

thereof with the text “any other transaction between the parties”. “Specified Transaction” shall
exclude any default under a Specified Transaction if caused solely by the general unavailability of
the currency in which payments under such Specified Transaction are denominated due to exchange
controls or other governmental action. “Specified Transaction” shall also exclude equity
transactions in which Shares represent the underlying equity.

The “Cross Default” provisions of Section 5(a)(vi) of the Agreement will not apply to
Seller and will not apply to Counterparty.

The “Credit Event Upon Merger” provisions of Section 5(b)(iv) of the Agreement will not
apply to MLI and Counterparty.

The “Automatic Early Termination” provision of Section 6(a) of the Agreement will not apply
to MLI or to Counterparty.

Payments on Early Termination. For the purpose of Section 6(e) of the Agreement: (i) Loss
shall apply; and (ii) the Second Method shall apply.

“Termination Currency” means USD.

Tax Representations.

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

	(II)	 	Payee Representations. For the purpose of Section 3(f) of the Agreement, each party makes
the following representations to the other party:

	 	(i)	 	MLI represents that it is a corporation organized under the laws of England and
Wales.
	 
	 	(ii)	 	Counterparty represents that it is a corporation incorporated in Delaware.

Delivery Requirements. For the purpose of Sections 4(a)(i) and (ii) of the
Agreement, each party agrees to deliver the following documents:

	(a)	 	Tax forms, documents or certificates to be delivered are:
	 
	 	 	Each party agrees to complete (accurately and in a manner reasonably satisfactory to the
other party), execute, and deliver to the other party, United States Internal Revenue
Service Form W-9 or W-8 BEN, or any successor of such form(s): (i) before the first payment
date under this agreement; (ii) promptly upon reasonable demand by the other party; and
(iii) promptly upon learning that any such form(s) previously provided by the other party
has become obsolete or incorrect.
	 
	(b)	 	Other documents to be delivered:

14

 

	 	 	 	 	 	 	 
	 	 	 	 	 	 	Covered by
	Party Required to	 	 	 	 	 	Section 3(d)
	Deliver Document	 	Document Required to be Delivered	 	When Required	 	Representation
	Counterparty

	 	Evidence of the authority and
true signatures of each official
or representative signing this
Confirmation
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes
	 
	 	 	 	 	 	 
	Counterparty

	 	Certified copy of the resolution
of the Board of Directors or
equivalent document authorizing
the execution and delivery of
this Confirmation and such other
certificate or certificates as
MLI shall reasonably request
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes
	 
	 	 	 	 	 	 
	MLI

	 	Guarantee of its Credit Support
Provider, substantially in the
form of Exhibit A attached
hereto, together with evidence
of the authority and true
signatures of the signatories,
if applicable
	 	Upon or before
execution and
delivery of this
Confirmation
	 	Yes

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

Address for notices or communications to MLI for all purposes:

	 	 	 
	Address:

	 	Merrill Lynch International
	 

	 	Merrill Lynch Financial Centre
	 

	 	2 King Edward Street
	 

	 	London EC1A 1HQ
	Attention:

	 	Manager, Fixed Income Settlements
	Facsimile No.:

	 	44 207 995 2004
	Telephone No.:

	 	44 207 995 3769

Address for notices or communications to Counterparty for all purposes:

	 	 	 
	Address:

	 	Anixter International Inc.
	 

	 	2301 Patriot Blvd.
	 

	 	Glenview, Illinois 60026
	Attention:

	 	Treasurer
	Telephone No.:

	 	(224) 521-8000
	Facsimile No.:

	 	(224) 521-8990

Process Agent: For the purpose of Section 13(c) of the Agreement, MLI appoints as its process agent:

	 	 	 
	Address:

	 	Merrill Lynch, Pierce, Fenner & Smith Incorporated
	 

	 	222 Broadway, 16th Floor
	 

	 	New York, New York 10038
	Attention:

	 	Litigation Department
	 
	 	 
	Counterparty does not appoint a Process Agent.

Multibranch Party. For the purpose of Section 10(c) of the Agreement: Neither MLI nor
Counterparty is a Multibranch Party.

15

 

Calculation Agent. The Calculation Agent is MLI. The Calculation Agent shall, no later than the
5th Business Day following any calculation, adjustment or other determination made by it hereunder,
provide the parties with a statement showing, in reasonable detail, the computations (including any
relevant quotations) by which it has determined any amount payable or deliverable under, or any
adjustment to the terms of, this Transaction.

Credit Support Document.

MLI: Guarantee of ML & Co. in the form attached hereto as Exhibit A.

Counterparty: Not Applicable

Credit Support Provider.

With respect to MLI: ML & Co.

With respect to Counterparty: Not Applicable.

Governing Law. This Confirmation will be governed by, and construed in accordance with, the laws
of the State of New York.

Waiver of Jury Trial. Each party waives, to the fullest extent permitted by applicable law, any
right it may have to a trial by jury in respect of any suit, action or proceeding relating to this
Transaction. Each party (i) certifies that no representative, agent or attorney of the other party
has represented, expressly or otherwise, that such other party would not, in the event of such a
suit, action or proceeding, seek to enforce the foregoing waiver and (ii) acknowledges that it and
the other party have been induced to enter into this Transaction, as applicable, by, among other
things, the mutual waivers and certifications provided herein.

Netting of Payments. The provisions of Section 2(c) of the Agreement shall not be
applicable to this Transaction.

Basic Representations. Section 3(a) of the Agreement is hereby amended by the deletion of
“and” at the end of Section 3(a)(iv); the substitution of a semicolon for the period at the
end of Section 3(a)(v) and the addition of Sections 3(a)(vi), as follows:

Eligible Contract Participant; Line of Business. Each party agrees and represents
that it is an “eligible contract participant” as defined in Section 1a(12) of the
U.S. Commodity Exchange Act, as amended (“CEA”), this Agreement and the
Transaction thereunder are subject to individual negotiation by the parties and have
not been executed or traded on a “trading facility” as defined in Section 1a(33) of
the CEA, and it has entered into this Confirmation and this Transaction in
connection with its business or a line of business (including financial
intermediation), or the financing of its business.

Amendment of Section 3(a)(iii). Section 3(a)(iii) of the Agreement is modified to read as follows:

No Violation or Conflict. Such execution, delivery and performance do not
materially violate or conflict with any law known by it to be applicable to it, any
provision of its constitutional documents, any order or judgment of any court or
agency of government applicable to it or any of its assets or any material
contractual restriction relating to Specified Indebtedness binding on or affecting
it or any of its assets.

Amendment of Section 3(a)(iv). Section 3(a)(iv) of the Agreement is modified by inserting
the following at the beginning thereof:

     “To such party’s best knowledge,”

Acknowledgements:

16

 

	(a)	 	The parties acknowledge and agree that there are no other representations, agreements or other
undertakings of the parties in relation to this Transaction, except as set forth in this
Confirmation.
	 
	(b)	 	The parties hereto intend for:

	 	(i)	 	this Transaction to be a “securities contract” as defined in Section 741(7) of
Title 11 of the United States Code (the “Bankruptcy Code”), qualifying for the
protections under Section 555 of the Bankruptcy Code;
	 
	 	(ii)	 	a party’s right to liquidate this Transaction and to exercise any other
remedies upon the occurrence of any Event of Default under the Agreement with respect
to the other party to constitute a “contractual right” as defined in the Bankruptcy
Code;
	 
	 	(iii)	 	all payments for, under or in connection with this Transaction, all payments
for the Shares and the transfer of such Shares to constitute “settlement payments” as
defined in the Bankruptcy Code.

Amendment of Section 6(d)(ii). Section 6(d)(ii) of the Agreement is modified by
deleting the words “on the day” in the second line thereof and substituting therefor “on the day
that is three Local Business Days after the day”. Section 6(d)(ii) is further modified by
deleting the words “two Local Business Days” in the fourth line thereof and substituting therefor
“three Local Business Days.”

Amendment of Definition of Reference Market-Makers. The definition of “Reference Market-Makers” in
Section 14 is hereby amended by adding in clause (a) after the word “credit” and before the
word “and” the words “or to enter into transactions similar in nature to the Transactions.”

Consent to Recording. Each party consents to the recording of the telephone conversations of
trading and marketing personnel of the parties and their Affiliates in connection with this
Confirmation. To the extent that one party records telephone conversations (the “Recording Party”)
and the other party does not (the “Non-Recording Party”), the Recording Party shall in the event of
any dispute, make a complete and unedited copy of such party’s tape of the entire day’s
conversations with the Non-Recording Party’s personnel available to the Non-Recording Party. The
Recording Party’s tapes may be used by either party in any forum in which a dispute is sought to be
resolved and the Recording Party will retain tapes for a consistent period of time in accordance
with the Recording Party’s policy unless one party notifies the other that a particular transaction
is under review and warrants further retention.

Disclosure. Each party hereby acknowledges and agrees that MLI has authorized Counterparty to
disclose this Transaction and any related hedging transaction between the parties if and to the
extent that Counterparty reasonably determines (after consultation with MLI) that such disclosure
is required by law or by the rules of the New York Stock Exchange.

Severability. If any term, provision, covenant or condition of this Confirmation, or the
application thereof to any party or circumstance, shall be held to be invalid or unenforceable in
whole or in part for any reason, the remaining terms, provisions, covenants, and conditions hereof
shall continue in full force and effect as if this Confirmation had been executed with the invalid
or unenforceable provision eliminated, so long as this Confirmation as so modified continues to
express, without material change, the original intentions of the parties as to the subject matter
of this Confirmation and the deletion of such portion of this Confirmation will not substantially
impair the respective benefits or expectations of parties to this Agreement; provided,
however, that this severability provision shall not be applicable if any provision of
Section 2, 5, 6 or 13 of the Agreement (or any definition or
provision in Section 14 to the extent that it relates to, or is used in or in connection
with any such Section) shall be so held to be invalid or unenforceable.

Affected Parties. For purposes of Section 6(e) of the Agreement, each party shall be
deemed to be an Affected Party in connection with Illegality and any Tax Event.

[Signatures follow on separate page]

17

 

     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.

	 	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	MERRILL LYNCH INTERNATIONAL	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Fran Jacobsen	 	 
	 

	 	Name:
	 	 

Fran Jacobsen
	 	 
	 

	 	Title:	 	 	 	 

Confirmed as of the date first above written:

ANIXTER INTERNATIONAL INC.

	 	 	 	 	 
	By:

	 	/s/ Rod Shoemaker	 	 
	Name:

	 	 

Rod Shoemaker
	 	 
	Title:
	 	VP—Treasurer	 	

Acknowledged and agreed as to matters to the Agent:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED,

Solely in its capacity as Agent hereunder

	 	 	 	 	 
	By:

	 	/s/ Brian Carroll	 	 
	Name:

	 	 
Brian
Carroll
	 	 
	Title:
	 	 	 	 

 

 

GUARANTEE OF MERRILL LYNCH & CO., INC.

     FOR VALUE RECEIVED, receipt of which is hereby acknowledged, MERRILL LYNCH & CO., INC., a
corporation duly organized and existing under the laws of the State of Delaware (“ML & Co.”),
hereby unconditionally guarantees to Anixter International Inc. (the “Company”), the due and
punctual payment of any and all amounts payable by Merrill Lynch International, a company organized
under the laws of England and Wales (“ML”), under the terms of the Confirmation of OTC Warrant
Transaction between the Company and ML (ML as Buyer), dated as of February 12, 2007 (the
“Confirmation”), including, in case of default, interest on any amount due, when and as the same
shall become due and payable, whether on the scheduled payment dates, at maturity, upon declaration
of termination or otherwise, according to the terms thereof. In case of the failure of ML
punctually to make any such payment, ML & Co. hereby agrees to make such payment, or cause such
payment to be made, promptly upon demand made by the Company to ML & Co.; provided, however that
delay by the Company in giving such demand shall in no event affect ML & Co.’s obligations under
this Guarantee. This Guarantee shall remain in full force and effect or shall be reinstated (as
the case may be) if at any time any payment guaranteed hereunder, in whole or in part, is rescinded
or must otherwise be returned by the Company upon the insolvency, bankruptcy or reorganization of
ML or otherwise, all as though such payment had not been made.

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

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

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

     ML & Co. shall not exercise any rights that it may acquire by way of subrogation as a result
of a payment by it under this Guarantee at any time when any of the obligations of ML guaranteed
hereunder shall have become due and remain unpaid. Any amount paid to ML & Co. in violation of the
preceding sentence shall be held for the benefit of the Company and shall forthwith be paid to the
Company to be credited and applied to such obligations of ML then due and unpaid. Subject to the
foregoing, upon payment of all such obligations of ML, ML & Co. shall be subrogated to the rights
of the Company against ML, and the Company agrees to take at ML & Co.’s expense such steps as ML
&Co. may reasonably request to implement such subrogation.

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

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

 

 

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

	 	 	 	 	 	 	 
	 	 	MERRILL LYNCH & CO., INC.	 	 
	 

	 	By:
	 	/s/ Patricia Kroplewnicki	 	 
	 

	 	 	 	 

Name: Patricia Kroplewnicki
	 	 
	 

	 	 	 	Title: Designated Signatory	 	 
	 

	 	 	 	Date: February 13, 2007

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