EXHIBIT 10.3
ALLEGHANY FUNDING CORPORATION,
Issuer
AND
THE CHASE MANHATTAN BANK,
Trustee
INDENTURE
Dated as of October 20, 1997
FLOATING RATE SECURED NOTES DUE 2007
EXHIBIT 10.3
TABLE OF CONTENTS
PAGE
PRELIMINARY STATEMENT........................................................1
GRANTING CLAUSE..............................................................1
ARTICLE I.
DEFINITIONS
Section 1.1 Definitions......................................................2
ARTICLE II.
THE NOTES
Section 2.1 Forms Generally.................................................12
Section 2.2 Forms of Notes and Certificate of Authentication................13
Section 2.3 Authorized Amount; Note Interest Rate;
Stated Maturity.................................................14
Section 2.4 Denominations...................................................15
Section 2.5 Execution, Authentication, Delivery and Dating..................15
Section 2.6 Registration, Registration of Transfer and Exchange.............16
Section 2.7 Mutilated, Destroyed, Lost or Stolen Notes......................19
Section 2.8 Payment of Principal and Interest; Principal and Interest Rights
Preserved.......................................................20
Section 2.9 Persons Deemed Owners...........................................25
Section 2.10 Cancellation...................................................25
ARTICLE III.
AUTHENTICATION AND DELIVERY OF NOTES
Section 3.1 General Provisions.............................................25
ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 4.1 Satisfaction and Discharge of Indenture.........................31
Section 4.2 Application of Trust Money......................................32
ARTICLE V.
REMEDIES
Section 5.1 Event of Default................................................32
Section 5.2 Acceleration of Maturity; Rescission and Annulment..............35
Section 5.3 Collection of Indebtedness and Suits for Enforcement by Trustee.37
Section 5.4 Remedies........................................................37
Section 5.5 Preservation of Trust Estate....................................39
Section 5.6 Trustee May File Proofs of Claim................................39
Section 5.7 Trustee May Enforce Claims Without Possession
of Notes........................................................41
Section 5.8 Application of Money Collected..................................41
Section 5.9 Limitation on Suits.............................................41
Section 5.10 Unconditional Rights of Noteholders to Receive Principal and
Interest.......................................................42
Section 5.11 Restoration of Rights and Remedies.............................42
Section 5.12 Rights and Remedies Cumulative.................................43
Section 5.13 Delay or Omission Not Waiver...................................43
Section 5.14 Control by Noteholders.........................................43
Section 5.15 Waiver of Past Defaults........................................44
Section 5.16 Undertaking for Costs..........................................45
Section 5.17 Waiver of Stay or Extension Laws...............................45
Section 5.18 Sale of Trust Estate...........................................45
Section 5.19 Action on Notes................................................46
ARTICLE VI.
THE TRUSTEE
Section 6.1 Certain Duties and Responsibilities...........................47
Section 6.2 Notice of Default...............................................48
Section 6.3 Certain Rights of Trustee.......................................49
Section 6.4 Not Responsible for Recitals or Issuance of Notes...............50
Section 6.5 May Hold Notes..................................................51
Section 6.6 Money Held in Trust.............................................51
Section 6.7 Compensation and Reimbursement..................................51
Section 6.8 Corporate Trustee Required; Eligibility.........................52
Section 6.9 Resignation and Removal; Appointment of Successor...............52
Section 6.10 Acceptance of Appointment by Successor.........................54
Section 6.11 Merger, Conversion, Consolidation or Succession to Business
of Trustee.....................................................55
Section 6.12 Co-Trustees and Separate Trustee...............................55
ARTICLE VII.
COVENANTS
Section 7.1 Payment of Principal and Interest...............................57
Section 7.2 Maintenance of Office or Agency.................................57
Section 7.3 Money for Note Payments to Be Held in Trust.....................57
Section 7.4 Existence of Issuer.............................................58
Section 7.5 Protection of Trust Estate......................................58
Section 7.6 Opinions as to Trust Estate.....................................59
Section 7.7 Performance of Obligations......................................59
Section 7.8 Negative Covenants..............................................60
Section 7.9 Statement as to Compliance......................................60
Section 7.10 Issuer May Not Consolidate, etc................................61
Section 7.11 Successor Substituted..........................................62
Section 7.12 No Other Business..............................................62
Section 7.13 Indebtedness...................................................62
Section 7.14 Purchase of Notes..............................................62
ARTICLE VIII.
SUPPLEMENTAL INDENTURES
Section 8.1 Supplemental Indentures Without Consent of Noteholders..........63
Section 8.2 Supplemental Indentures With Consent of Noteholders.............64
Section 8.3 Execution of Supplemental Indentures............................66
Section 8.4 Effect of Supplemental Indentures...............................66
Section 8.5 Reference in Notes to Supplemental Indentures...................66
ARTICLE IX.
REDEMPTION; TERMINATION
Section 9.1 Redemption at the Option of the Issuer; Election to Redeem......67
Section 9.2 Notice to Trustee...............................................68
Section 9.3 Notice of Redemption by the Issuer..............................68
Section 9.4 Deposit of Redemption Price.....................................69
Section 9.5 Notes Payable on Redemption Date................................69
ARTICLE X
TRUST ACCOUNT
Section 10.1 Collection of Money............................................70
Section 10.2 Trust Account..................................................70
ARTICLE XI.
APPLICATION OF MONIES
Section 11.1 Payment of Monies to and Disbursements of Monies
from the Trust Account.........................................71
ARTICLE XII.
MEETINGS OF HOLDERS
Section 12.1 Purposes for Which Meetings May Be Called......................72
Section 12.2 Call, Notice and Place of Meetings by Issuer, Trustee or Holder73
Section 12.3 Person Entitled to Vote at Meetings............................73
Section 12.4 Quorum; Adjourned Meetings; Action.............................74
Section 12.5 Determination of Voting Rights; Conduct and Adjournment of
Meetings.......................................................75
Section 12.6 Counting Votes and Recording Action............................76
Section 12.7 No Delay of Rights by Meeting..................................76
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 Form of Documents Delivered to Trustee.........................77
Section 13.2 Acts of Noteholders............................................78
Section 13.3 Notices, Etc., to Trustee and Issuer...........................79
Section 13.4 Standard of Conduct............................................79
Section 13.5 Right to List of Holders.......................................79
Section 13.6 Notices to Noteholders; Waiver.................................80
Section 13.7 Effect of Headings and Table of Contents.......................80
Section 13.8 Successors and Assigns.........................................80
Section 13.9 Separability...................................................81
Section 13.10 Benefits of Indenture.........................................81
Section 13.11 Governing Law.................................................81
Section 13.12 Counterparts..................................................81
Section 13.13 Rule 144A Information........................................81
ARTICLE XIV.
ASSIGNMENT OF SWAP AGREEMENT
Section 14.1 Assignment of Swap Agreement...................................82
SIGNATURES................................................................. 84
EXHIBIT 10.3
EXHIBIT A FORM OF FLOATING RATE SECURED NOTE
EXHIBIT B FORM OF TRANSFEREE CERTIFICATE
EXHIBIT C-1 INSTALLMENT NOTE
EXHIBIT C-2 INSTALLMENT NOTE EXTENSION
EXHIBIT C-3 INSTALLMENT SALES AGREEMENT
EXHIBIT D FORM OF SWAP AGREEMENT
EXHIBIT E FORM OF INTERCREDITOR AGREEMENT
SCHEDULE A LIBOR CALCULATION
SCHEDULE B ELIGIBLE INVESTMENTS
SCHEDULE C IDENTIFICATION OF TRUST ACCOUNT
INDENTURE, dated as of October 20, 1997, between ALLEGHANY FUNDING
CORPORATION, a corporation organized under the laws of the State of Delaware
(the "Issuer"), and THE CHASE MANHATTAN BANK, a corporation organized and
existing under the laws of the State of New York, as trustee (herein, together
with its permitted successors in the trusts hereunder, called the "Trustee").
PRELIMINARY STATEMENT
The Issuer is duly authorized to execute and deliver this Indenture
and to execute and deliver the Notes issuable as provided in this Indenture. All
covenants and agreements made by the Issuer herein are for the benefit and
security of the Noteholders in accordance with the priorities set forth herein
and in the Intercreditor Agreement. The Issuer is entering into this Indenture,
and the Trustee is accepting the trusts created hereby, for good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged.
All things necessary to make the Notes, when executed by the Issuer
and authenticated and delivered by the Trustee, the valid obligation of the
Issuer and to make this Indenture a valid deed of trust, security agreement and
contract for the security of the Notes of the Issuer in accordance with its
terms have been done.
GRANTING CLAUSE
The Issuer hereby Grants to the Trustee, for the benefit and
security of the Holders of the Notes, a lien and security interest in and to all
of its right, title and interest in and to (a) the Swap Agreement and all
proceeds thereof and (b) all proceeds of the conversion, voluntary or
involuntary, of any of the foregoing into cash or other liquid property. Such
Grant is made, however, in trust, to secure the Notes, equally and ratably
without prejudice, priority or distinction, except as expressly provided between
the Holder of any Note and the Holder of any other Note by reason of difference
in time of issuance or otherwise, and to secure (i) the payment of all amounts
due on the Notes in accordance with their terms, (ii) the payment of all other
sums payable under this Indenture, and (iii) compliance with the provisions of
this Indenture, all as provided in this Indenture.
The Trustee acknowledges such Grant, accepts the trusts hereunder in
accordance with the provisions hereof and agrees to perform the duties herein to
the end that the interests of the Noteholders may be adequately and effectively
protected.
ARTICLE I.
DEFINITIONS
Section 1.1 DEFINITIONS.
Except as otherwise specified herein or as the context may otherwise
require, the following terms have the respective meanings set forth below for
all purposes of this Indenture, and the definitions of such terms are equally
applicable both to the singular and plural forms of such terms and to the
masculine, feminine and neuter genders of such terms.
"ACCRUAL DATE": October 20, 1997.
"ACT" and "ACTS OF NOTEHOLDERS": The meanings specified in Section
13.2.
"AFFILIATE" of any specified Person: Any other Person controlling or
controlled by or under common control with such specified Person. For the
purposes of this definition, "control," when used with respect to any specified
Person, means the power to direct the management and policies of such Person,
directly or indirectly, whether through the ownership of voting securities, by
contract or otherwise; and the terms "controlling" and "controlled" have
meanings correlative to the foregoing.
"AGGREGATE OUTSTANDING AMOUNT": When used with respect to the
Notes, the aggregate principal amount of Notes Outstanding.
"AUTHORIZED OFFICER": With respect to the Issuer, any president,
vice president, secretary, treasurer or other officer of the Issuer who is
authorized to act for the Issuer in matters relating to, and binding upon, the
Issuer. With respect to the Trustee or any other bank or trust company acting as
trustee of an express trust or as custodian, a Responsible Officer. Each party
may receive and accept a certification of the authority of any other party as
conclusive evidence of the authority of any person to act, and such
certification may be considered as in full force and effect until receipt by
such other party of written notice to the contrary.
"BANKRUPTCY CODE": The federal Bankruptcy Code, Title 11 of the
United States Code.
"BUSINESS DAY": A day on which the Trustee, commercial banks and
foreign exchange markets are open for business in New York and London.
"CALCULATION AGENT": The Trustee and its successors and any
corporation resulting from or surviving any consolidation or merger to which
it or its successors may be a party and any successor trustee at the time
serving as successor trustee hereunder.
"CHANGE IN LAW": The enactment, promulgation, execution or
ratification to, or any change in or amendment to, any law or treaty (or in the
application or official interpretation of any law or treaty or in the practice
of any relevant governmental revenue authority) that occurs on or after the date
on which the Notes are issued.
"CLOSING DATE": October 20, 1997.
"CODE": The Internal Revenue Code of 1986, as amended.
"COLLATERAL": The Trust Estate securing the Notes.
"COLLATERAL ACCOUNT": The collateral account established
pursuant to Section 5.1 of the Intercreditor Agreement.
"COLLATERAL AGENT": The Chase Manhattan Bank, solely in such
capacity under the Intercreditor Agreement, a corporation organized and existing
under the laws of the State of New York, and its successors and any corporation
resulting from or surviving any consolidation or merger to which it or its
successors may be a party and any successor trustee at the time serving as
successor trustee hereunder.
"CORPORATE TRUST OFFICE": The principal corporate trust office of
the Trustee currently located at 450 West 33rd Street, 15th Floor, New York, NY
10001, or at such other address as the Trustee may designate from time to time
by notice to the Noteholders and the Issuer or the principal corporate trust
office of any successor Trustee.
"DEFAULT": Any Event of Default or any occurrence that is, or
with notice or the lapse of time or both would become, an Event of Default.
"DEFAULTED INTEREST": Any interest on the Notes that is payable,
but is not punctually paid or provided for in accordance with the Indenture
on any Payment Date.
"ELIGIBLE INVESTMENTS": The meaning specified in Schedule B.
"ERISA": The Employee Retirement Income Security Act of 1974, as
amended.
"EVENT OF DEFAULT": The meaning specified in Section 5.1.
"EXCHANGE ACT": The Securities Exchange Act of 1934, as amended.
"FILING OFFICES": The offices in the jurisdictions in which a
filing is required to perfect the Trustee's security interest in the Trust
Estate.
"FINANCING STATEMENTS": Financing statements relating to the
Trust Estate naming the Issuer as debtor and the Trustee as secured party.
"GRANT": To grant, bargain, sell, warrant, alienate, remise, demise,
release, convey, assign, transfer, mortgage, pledge, create and grant a security
interest in and right of set-off against, deposit, set over and confirm. A Grant
of any other instrument shall include all rights, powers and options (but none
of the obligations) of the granting party thereunder, including without
limitation the immediate continuing right to claim for, collect, receive and
receipt for principal and interest payments in respect of such instrument, and
all other monies payable thereunder, to give and receive notices and other
communications, to make waivers or other agreements, to exercise all rights and
options, to bring Proceedings in the name of the granting party or otherwise,
and generally to do and receive anything that the granting party is or may be
entitled to do or receive thereunder or with respect thereto.
"GUARANTEE": The Guarantee, dated December 8, 1986 of ML&Co. to
the registered holder of the Installment Note in a principal amount not to
exceed $94,535,343.54.
"INDENTURE": This instrument as originally executed and, if from
time to time supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof, as so
supplemented or amended. All references in this instrument to designated
"Articles," "Sections," "Subsections" and other subdivisions are to the
designated Articles, Sections, Subsections and other subdivisions of this
instrument as originally executed. The words "herein," "hereof," "hereunder" and
other words of similar import refer to this Indenture as a whole and not to any
particular Article, Section, Subsection or other subdivision.
"INDEPENDENT": When used with respect to any specified Person means
such a Person who (a) is in fact independent of the Issuer and any other obligor
upon the Notes or any Affiliate of the Issuer or such other obligor, (b) does
not have any direct financial interest or any material indirect financial
interest in the Issuer or in any such other obligor or in an Affiliate of the
Issuer or such other obligor, and (c) is not connected with the Issuer or any
such other obligor or any Affiliate of the Issuer or such other obligor as an
officer, employee, promoter, underwriter, trustee, partner, director or person
performing similar functions. Whenever it is provided herein that any
Independent Person's opinion or certificate shall be furnished to the Trustee,
such Person shall be appointed by Issuer Order and approved by the Trustee in
the exercise of reasonable care and such opinion or certificate shall state that
the signer has read this definition and that the signer is independent within
the meaning thereof.
"INSTALLMENT NOTE": The Installment Note, dated January 7, 1987 from
MLPFS to the Parent in the face amount of $91,535,343.54 and entitled to the
benefits of the Guarantee of ML&Co. attached thereto, and the maturity of which
contemporaneously herewith has been extended by the Installment Note Extension
to January 22, 2007, unless further extended pursuant to the terms of the
Installment Note Extension. A copy of the Installment Note is attached hereto as
Exhibit C-1. References in this Indenture to "Installment Note" shall mean the
Installment Note as extended by the Installment Note Extension.
"INSTALLMENT NOTE AND GUARANTEE ASSIGNMENT": The Installment
Note and Guarantee Assignment, dated as of October 20, 1997, among the
Issuer, the Collateral Agent, MLPFS and ML&Co., including the consent of
MLPFS and ML&Co. to such assignment.
"INSTALLMENT NOTE EXTENSION": Amendment No. 2 to Installment
Sales Agreement, Installment Note No. 001 and Guarantee, dated October 20,
1997 by and among the Issuer, MLPFS and ML&Co., a copy of the form of which
is attached hereto as Exhibit C-2.
"INSTALLMENT NOTE EXTENSION DATE": Any Business Day on or after
January 1, 2006 and on or prior to January 31, 2006, to be elected by the
Collateral Agent in the capacity of registered holder of the Installment Note at
the direction of the Issuer.
"INSTALLMENT NOTE INTEREST PAYMENT DATE": October 29, 1997 and each
succeeding fourth Wednesday after such date (except that if such fourth
Wednesday is not a Business Day (as such term is defined in the Installment
Note), then interest on the Installment Note shall be paid on the immediately
preceding Business Day (as such term is defined in the Installment Note).
"INSTALLMENT NOTE PRINCIPAL PAYMENT DATE": January 22, 2007, unless
the Installment Note shall have been extended on the Installment Note Extension
Date pursuant to the terms of the Installment Note Extension in which case the
"Installment Note Principal Payment Date" shall be deemed not to occur for
purposes of this Indenture.
"INSTALLMENT SALES AGREEMENT": The Installment Sales Agreement,
dated as of December 8, 1986, by and among the Parent, MLPFS and ML&Co., and if
from time to time amended as permitted therein, as so amended, a copy of which
is attached hereto as Exhibit C-3.
"INTERCREDITOR AGREEMENT": The Intercreditor and Collateral Agency
Agreement, dated as of October 20, 1997, among the Issuer, The Chase Manhattan
Bank, as Collateral Agent and the Swap Counterparty, a copy of the form of which
is attached hereto as Exhibit E.
"INTERCREDITOR COLLATERAL": The meaning specified in the
Intercreditor Agreement.
"INTEREST ACCRUAL PERIOD": With respect to any Payment Date, the
period commencing on and including the prior Payment Date (or the Accrual Date
in the case of the first Payment Date) and ending on and including the day
preceding such Payment Date.
"INTEREST DETERMINATION DATE": With respect to each Interest
Accrual Period, the second London business day prior to the commencement of
such Interest Accrual Period.
"INVESTMENT COMPANY ACT": The Investment Company Act of 1940, as
amended.
"ISSUER": Alleghany Funding Corporation, a Delaware corporation,
until a successor Person or Persons shall have become the Issuer pursuant to the
applicable provisions of this Indenture, and thereafter "Issuer" shall mean such
successor Person or Persons.
"ISSUER ORDER" and "ISSUER REQUEST": A written order or request
dated and signed in the name of the Issuer by an Authorized Officer of the
Issuer, and delivered to the Trustee.
"LIBOR": The meaning specified in Schedule A.
"LONDON BUSINESS DAY": A day on which dealings in U.S. deposits
in U.S. dollars are transacted in the London interbank market.
"MAJORITY": With respect to the Notes, the Holders of more than
50% of the Aggregate Outstanding Amount of the Notes.
"MATURITY": With respect to any Note, the date on which the
unpaid principal of such Note becomes due and payable as therein or herein
provided, whether at the Stated Maturity or by declaration of acceleration or
otherwise.
"MEMORANDUM": The private placement memorandum, dated October
20, 1997, relating to the Notes.
"ML&CO.": Merrill Lynch & Co., Inc., a Delaware corporation.
"MLPFS": Merrill Lynch, Pierce, Fenner & Smith Incorporated, a
Delaware corporation.
"MOODY'S": Moody's Investors Service, Inc. and any successor or
successors thereto.
"NOTE INTEREST RATE": With respect to the Notes is the rate at
which interest accrues on the Notes for the applicable Interest Accrual
Period, as specified in Section 2.3 and in such Notes.
"NOTE REGISTER" and "NOTE REGISTRAR": The respective meanings
specified in Section 2.6.
"NOTEHOLDER" or "HOLDER": The Person in whose name a Note is
registered in the Note Register.
"NOTES": The Floating Rate Secured Notes Due 2007, which are
authorized by, and authenticated and delivered under, this Indenture in the
form of Exhibit A as attached to this Indenture.
"OFFICER": With respect to any corporation other than the Trustee,
the Chairman of the Board of Directors, the President, any Vice President, the
Secretary or the Treasurer of such corporation; with respect to any partnership,
any general partner thereof; with respect to any bank or trust company acting as
trustee of an express trust or as custodian, any Responsible Officer thereof.
"OFFICERS' CERTIFICATE": A certificate signed on behalf of the
Issuer by two Authorized Officers of the Issuer, one of whom must be a President
or Vice President and the other of whom must be a Secretary, Treasurer,
Assistant Secretary or Assistant Treasurer.
"OPINION OF COUNSEL": A written opinion, addressed to the Trustee
and to the Noteholders (or, permitting the Noteholders' reliance thereon), in
form and substance reasonably satisfactory to the Trustee, of an attorney at law
admitted to practice before the highest court of any state of the United States
or the District of Columbia or a law firm that may, except as otherwise
expressly provided in this Indenture, be counsel for the Issuer and who shall be
reasonably satisfactory to the Trustee. Whenever an Opinion of Counsel is
required hereunder, such Opinion of Counsel may rely on opinions of other
counsel who are so admitted and so satisfactory.
"OUTSTANDING": With respect to the Notes, as of the date of
determination, "Outstanding" refers to all Notes theretofore authenticated
and delivered under this Indenture except:
(i) Notes theretofore cancelled by the Note
Registrar or delivered to the Note Registrar for cancellation;
(ii) Notes or portions thereof for whose payment or
redemption money in the necessary amount has been theretofore irrevocably
deposited with the Trustee or any Paying Agent in trust for the Holders of
such Notes; provided that, if such Notes or portions thereof are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provision therefor satisfactory to the Trustee has been made;
(iii) Notes in exchange for or in lieu of which other
Notes have been authenticated and delivered pursuant to this Indenture,
unless proof satisfactory to the Trustee is presented that any such Notes
are held by a holder in due course; and
(iv) Notes alleged to have been destroyed, lost or
stolen for which replacement Notes have been issued as provided in Section
2.7;
provided that, in determining whether the Holders of the requisite Aggregate
Outstanding Amount have given any request, demand, authorization, direction,
notice, consent or waiver hereunder, Notes owned by or pledged to the Issuer or
any other obligor upon the Notes or any Affiliate of the Issuer or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Trustee shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent or waiver, only Notes
that a Responsible Officer of the Trustee actually knows to be so owned or
pledged shall be so disregarded. Notes so owned that have been pledged in good
faith may be regarded as Outstanding if the pledgee establishes to the
satisfaction of the Trustee the pledgee's right so to act with respect to such
Notes and that the pledgee is not the Issuer or any other obligor upon the Notes
or any Affiliate of the Issuer or such other obligor.
"PARENT": Alleghany Corporation, a Delaware corporation.
"PAYMENT DATE": Interest will be payable, and subject to adjustment,
on each October 20, January 20, April 20 and July 20 of each year, commencing
January 20, 1998 and at Stated Maturity on January 22, 2007, unless the Payment
Date is a day which is not a Business Day, in which case the Payment Date will
be postponed to the next day which is a Business Day.
"PERSON": Any individual, corporation, partnership, joint venture,
association, joint stock company, trust (including any beneficiary thereof),
unincorporated organization or government or any agency or political subdivision
thereof.
"PRIVATE PLACEMENT LEGEND": The meaning specified in Section 2.2(c).
"PROCEEDING": Any suit in equity, action at law or other
judicial or administrative proceeding.
"QIB": A Qualified Institutional Buyer under Rule 144A.
"QIB REPRESENTATIONS": The meaning specified in Section
2.6(b)(ii).
"RATING AGENCY": Standard and Poor's Ratings Group and Moody's
Investors Service, Inc. and any successor or successors thereto.
"REDEMPTION DATE": When used with respect to any Note to be
redeemed, the date fixed by the Issuer for such redemption pursuant to this
Indenture.
"REDEMPTION PRICE": When used with respect to any Note to be
redeemed, the applicable price specified in Section 9.1.
"REDEMPTION RECORD DATE": The date on which Holders of Notes
entitled to receive the Redemption Price on the Redemption Date are determined,
such date to be the fifth Business Day preceding such Redemption Date.
"REGULAR RECORD DATE": The date on which the Holders of Notes
entitled to receive a payment of principal or interest on the succeeding Payment
Date are determined, such date as to any Payment Date being the 15th day
preceding such Payment Date.
"RESPONSIBLE OFFICER": When used with respect to the Trustee, any
officer within the corporate trust department of the Trustee (or any successor
group of the Trustee) including any vice president, assistant vice president,
assistant secretary, senior trust officer, trust officer, or any other officer
of the Trustee customarily performing functions similar to those performed by
the persons who at the time shall be such officers, respectively, or to whom any
corporate trust matter is referred at the Corporate Trust Office because of his
or her knowledge of and familiarity with the particular subject.
"RULE 144A": Rule 144A under the Securities Act or, if at any time
after the execution of this Indenture such rule is suspended or no longer in
effect, then any rule, regulation or statutory provision of like intent
successor thereto.
"SALE": The meaning specified in Section 5.18.
"SEARCH CERTIFICATES": Certificates of a commercial reporting agent
as to copies of financing statements naming the Issuer as debtor and the Trustee
as the secured party and on file in the Filing Offices.
"SECURITIES ACT": The Securities Act of 1933, as amended.
"SPECIAL PAYMENT DATE": With respect to the payment of any Defaulted
interest and principal for the Notes, a date fixed by the Issuer pursuant to
Section 2.8(e)(1).
"SPECIAL PAYMENT DATE STATEMENT": The meaning specified in Section
2.8(e)(1).
"SPECIAL RECORD DATE": With respect to the payment of any Defaulted
Interest and principal for the Notes, a date fixed by the Trustee pursuant to
Section 2.8(e)(1).
"STANDARD & POOR'S": Standard & Poor's Ratings Group and any
successor or successors thereto.
"STATED MATURITY": With respect to any Note, the date specified in
such Note as the Payment Date on which the unpaid principal amount of such Note
is due and payable.
"SWAP AGREEMENT": The Interest Rate and Currency Exchange Agreement
and related Confirmation, each dated as of October 20, 1997 between the Issuer
and the Swap Counterparty, and if from time to time amended as permitted
therein, as so amended, or such other similar agreement substituted by the
Issuer in accordance with the proviso to Section 5.1 hereof. A copy of the form
of Swap Agreement is attached hereto as Exhibit D.
"SWAP AGREEMENT ASSIGNMENT": The Swap Agreement Assignment and
Consent, dated as of October 20, 1997, among the Issuer, the Swap Counterparty
and the Trustee, including the consent of the Swap Counterparty to such
assignment.
"SWAP COUNTERPARTY": Barclays Bank PLC, or such other financial
institution substituted by the Issuer in accordance with the proviso to Section
5.1 hereof.
"SWAP COUNTERPARTY PAYMENT AMOUNT": With respect to the Swap
Counterparty, the amount owed to the Swap Counterparty by the Issuer, of which
the Trustee is notified in writing by the Issuer, on each Installment Note
Interest Payment Date under the terms of the Swap Agreement, such amount
representing 94.2426% of the amount received from MLPFS or ML&Co. on the related
Installment Note Interest Payment Date.
"TAXES": Any present or future taxes, levies, imposts, deductions,
charges or withholdings imposed by the United States or any state, territory or
possession of the United States and all liabilities with respect thereto,
excluding income and franchise taxes imposed by the jurisdiction of a person's
incorporation, organization or residence, for tax purposes, or any political
subdivision thereof.
"TELERATE PAGE 3750": The display on page 3750 on the Telerate
Service (or such other page as may replace the 3750 Page on that service or such
other service or services as may be negotiated by the British Bankers'
Association for the purpose of displaying London interbank offered rates for
U.S. dollar deposits).
"TERM NOTE": The Term Note, dated August 14, 1990, from Parent to
the Issuer in the principal amount of $19,123,212.50 and, pursuant to the Term
Note Extension, maturing on August 14, 2008.
"TERM NOTE EXTENSION": Amendment No. 1 to Term Note, dated October
20, 1997, by and between the Parent and the Issuer.
"TRANSFEREE CERTIFICATE": The meaning specified in Section 2.6(b), a
copy of the form of which is attached hereto as Exhibit B.
"TRUST ACCOUNT": The trust account established pursuant to Section
10.2.
"TRUST ESTATE": All money, instruments and other property and rights
subject or intended to be subject to the lien of this Indenture for the benefit
of the Holders of the Notes as of any particular time, including all proceeds
thereof.
"TRUSTEE": The Chase Manhattan Bank, a corporation organized and
existing under the laws of the State of New York and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party and any successor trustee at the time serving
as successor trustee hereunder.
"UCC": The Uniform Commercial Code as in effect in the State of New
York.
ARTICLE II.
THE NOTES
Section 2.1 FORMS GENERALLY.
The Notes and the Trustee's certificate of authentication thereon
shall be in substantially the forms attached hereto and incorporated by
reference herein, with such appropriate insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon, as may, consistently herewith, be determined by the
Authorized Officers of the Issuer executing such Notes as evidenced by their
execution of such Notes. Any portion of the text of any Note may be set forth on
the reverse thereof, with an appropriate reference thereto on the face of the
Note.
The Notes shall be typed, printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner, all as determined by the Authorized Officers of
the Issuer executing such Notes, as evidenced by their execution of such Notes.
Section 2.2 FORMS OF NOTES AND CERTIFICATE OF AUTHENTICATION.
(a) The Notes shall be in substantially the form attached
hereto as Exhibit A.
(b) The form of the Trustee's certificate of authentication is
as follows:
This is one of the Notes referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK
[Date] as Trustee
By___________________________
Authorized officer
(c) Unless and until the Notes have been registered pursuant
to an effective registration statement each Note shall bear the following legend
(the "Private Placement Legend") on the face thereof:
FORM OF FLOATING RATE SECURED NOTE DUE 2007
PRINCIPAL OF THIS NOTE IS PAYABLE AT MATURITY AS SET FORTH HEREIN. ACCORDINGLY,
THE OUTSTANDING PRINCIPAL OF THIS NOTE AT ANY TIME SHALL BE THE AMOUNT SHOWN ON
THE FACE HEREOF.
THE NOTES REPRESENT OBLIGATIONS SOLELY OF THE ISSUER AND WILL NOT BE INSURED OR
GUARANTEED BY ANY AFFILIATE OF THE ISSUER OR BY ANY OTHER PERSON OR ENTITY.
THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
AMENDED (THE "SECURITIES ACT"), OR ANY STATE OR OTHER SECURITIES LAWS. NEITHER
THIS SECURITY NOR ANY INTEREST OR PARTICIPATION HEREIN MAY BE REOFFERED, SOLD,
ASSIGNED, TRANSFERRED, PLEDGED, ENCUMBERED OR OTHERWISE DISPOSED OF IN THE
ABSENCE OF SUCH REGISTRATION OR UNLESS THE TRANSACTION IS EXEMPT FROM, OR NOT
SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT. THE HOLDER OF
THIS SECURITY BY ITS ACCEPTANCE HEREOF (1) REPRESENTS THAT (A) IT IS A
"QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE 144A, UNDER THE SECURITIES
ACT) OR (B) IT IS AN INSTITUTIONAL "ACCREDITED INVESTOR" (AS DEFINED IN RULE
501(a)(1), (2), (3) OR (7) UNDER THE SECURITIES ACT) (AN "ACCREDITED INVESTOR"),
(2) AGREES THAT IT WILL NOT OFFER, SELL OR OTHERWISE TRANSFER THIS SECURITY
EXCEPT (A) TO THE COMPANY, (B) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT, (C) FOR SO LONG AS THE
SECURITIES ARE ELIGIBLE FOR RESALE PURSUANT TO RULE 144A, TO A PERSON IT
REASONABLY BELIEVES IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT THAT PURCHASES FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT
OF A QUALIFIED INSTITUTIONAL BUYER TO WHOM NOTICE IS GIVEN THAT THE TRANSFER IS
BEING MADE IN RELIANCE ON RULE 144A, OR (D) TO AN ACCREDITED INVESTOR THAT IS
ACQUIRING THE SECURITY FOR ITS OWN ACCOUNT, OR FOR THE ACCOUNT OF SUCH AN
ACCREDITED INVESTOR, FOR INVESTMENT AND NOT WITH A VIEW TO, OR FOR OFFER OR SALE
IN CONNECTION WITH, ANY DISTRIBUTION IN VIOLATION OF THE SECURITIES ACT AND (3)
AGREES THAT IT WILL GIVE TO EACH PERSON TO WHOM THIS SECURITY IS TRANSFERRED A
NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND; PROVIDED THAT THE COMPANY AND
THE TRUSTEE SHALL HAVE THE RIGHT PRIOR TO ANY SUCH OFFER, SALE OR TRANSFER (I)
PURSUANT TO CLAUSE (D) TO REQUIRE THE DELIVERY OF AN OPINION OF COUNSEL,
CERTIFICATION AND/OR OTHER INFORMATION SATISFACTORY TO EACH OF THEM, AND (II) IN
EACH OF THE FOREGOING CASES, TO REQUIRE THAT A CERTIFICATION OF TRANSFER IN THE
FORM APPEARING ON THE OTHER SIDE OF THIS SECURITY IS COMPLETED AND DELIVERED BY
THE TRANSFEROR TO THE TRUSTEE. ANY TRANSFER IN VIOLATION OF THE FOREGOING WILL
BE OF NO FORCE AND EFFECT, WILL BE VOID AB INITIO, AND WILL NOT OPERATE TO
TRANSFER ANY RIGHTS TO THE TRANSFEREE, NOTWITHSTANDING ANY INSTRUCTIONS TO THE
CONTRARY TO THE ISSUER, THE TRUSTEE OR ANY INTERMEDIARY. NEITHER THE ISSUER NOR
THE TRUSTEE IS OBLIGATED TO REGISTER THIS NOTE UNDER THE SECURITIES ACT OR ANY
STATE SECURITIES LAWS.
Section 2.3 AUTHORIZED AMOUNT; NOTE INTEREST RATE; STATED Maturity.
The Notes shall be designated generally as the Issuer's Floating
Rate Secured Notes Due 2007. The aggregate principal amount of Notes that may be
authenticated and delivered under this Indenture is limited to $80,000,000,
except for Notes authenticated and delivered upon registration of transfer of,
or in exchange for, or in lieu of, other Notes pursuant to Section 2.6, 2.7, or
8.5 of the Indenture.
Such aggregate principal amount shall have designations, original
principal amounts, Note Interest Rates and Stated Maturities as follows:
Designation Original Note Stated
Principal Interest Maturity
Amount Rate
Floating Rate $80,000,000 * January 22, 2007
Secured Notes
Due 2007
Section 2.4 DENOMINATIONS.
The Notes shall be issuable in registered form in minimum
denominations of $1,000,000 and integral multiples of $100,000 in excess
thereof; provided that upon any redemption in part of the Notes in accordance
with Article IX hereof the Notes shall be issuable in minimum denominations
below $1,000,000 reflecting the pro rata redemption of the Notes of a Holder
whose Notes are to be redeemed.
Section 2.5 EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Notes shall be executed on behalf of the Issuer by one of the
Authorized Officers of the Issuer under its corporate seal which may be in
facsimile form and imprinted or otherwise reproduced thereon and attested by
another of such Authorized Officers. The signature of any of these Authorized
Officers on the Notes may be manual or facsimile.
Notes bearing the manual or facsimile signatures of individuals who
were at any time the Authorized Officers of the Issuer shall bind the Issuer,
notwithstanding the fact that such individuals or any of them have ceased to
hold such offices prior to the authentication and delivery of such Notes or
shall not have held such offices at the date of issuance of such Notes.
At any time and from time to time after the execution and delivery
of this Indenture, the Issuer may deliver Notes executed by the Issuer to the
Trustee for authentication and the Trustee shall authenticate and deliver such
Notes as provided in this Indenture and not otherwise.
Each Note authenticated and delivered by the Trustee to or upon
Issuer Order on the Closing Date shall be dated as of the Closing Date. All
other Notes that are authenticated after the Closing Date for any other purpose
under the Indenture shall be dated the date of their authentication.
Notes issued upon transfer, exchange or replacement of other Notes
shall be issued in authorized denominations reflecting the original aggregate
principal amount of the Notes so transferred, exchanged or replaced, but shall
represent only the current outstanding principal amount of the Notes so
transferred, exchanged or replaced. In the event that any Note is divided into
more than one Note in accordance with this Article Two, the original principal
amount of such Note shall be proportionately divided among the Notes delivered
in exchange therefor and shall be deemed to be the original aggregate principal
amount of such subsequently issued Notes.
No Note shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose, unless there appears on such Note a
certificate of authentication, substantially in the form provided for herein,
executed by the Trustee by the manual signature of one of its Authorized
Officers, and such certificate upon any Note shall be conclusive evidence, and
the only evidence, that such Note has been duly authenticated and delivered
hereunder.
Section 2.6 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Issuer shall cause to be kept a register (the "Note
Register") in which, subject to such reasonable regulations as it may prescribe,
the Issuer shall provide for the identification of the dollar account in the
depositary institution designated by each Holder as the recipient of payments of
principal and interest on the Notes, the wire transfer information relating
thereto and the mailing address, telex number and telecopy number of each Holder
and for the registration of Notes and the registration of transfers of Notes.
The Trustee is hereby irrevocably appointed "Note Registrar" for the purpose of
registering Notes and transfers of Notes as herein provided. The Issuer will
notify the Trustee of any Notes owned by or pledged to the Issuer or any of its
Affiliates promptly upon the acquisition thereof or the creation of such pledge.
Subject to the provisions of paragraph (b) of this Section 2.6, upon
surrender for registration of transfer of any Note, the Issuer shall execute,
and the Trustee shall authenticate and deliver, in the name of the designated
transferee or transferees, one or more new Notes, of any authorized denomination
and of a like aggregate principal amount.
Subject to the provisions of paragraph (b) of this Section 2.6, at
the option of the Holder, Notes may be exchanged for other Notes in any
authorized denominations and of the like aggregate principal amount, upon
surrender of the Notes to be exchanged at such office or agency. Whenever any
Notes are so surrendered for exchange, the Issuer shall execute, and the Trustee
shall authenticate and deliver, the Notes that the Noteholder making the
exchange is entitled to receive.
All Notes issued upon any registration of transfer or exchange of
Notes shall be the valid obligations of the Issuer, evidencing the same debt,
and entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
Every Note presented or surrendered for registration of transfer or
exchange shall (if so required by the Issuer or the Trustee) be duly endorsed,
or be accompanied by a written instrument of transfer in form satisfactory to
the Issuer and the Trustee duly executed by the Holder thereof or his attorney
duly authorized in writing.
No service charge shall be made to a Holder for any registration of
transfer or exchange of Notes, but the Issuer may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
The Issuer shall not be required (i) to issue, transfer or exchange
any Note during a period beginning at the opening of business 15 days before the
day of the mailing of a notice of redemption of Notes and ending at the close of
business on the day of such mailing or (ii) to transfer or exchange any Note so
to be redeemed.
(b) Unless and until the Notes have been registered pursuant
to an effective registration statement, a Note may be transferred only to a
person or entity which is either a QIB or an institutional "accredited investor"
as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act, and the following provisions shall apply:
(i) with regard to the registration of any proposed transfer
of a Note to any institutional "accredited investor" (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) which is
not a QIB, the Issuer and Trustee shall register the transfer of Notes, whether
or not such Note bears the Private Placement Legend, if (x) the proposed
transferee has delivered to the Issuer a certificate substantially in the form
set forth in Exhibit B hereto (the "Transferee Certificate"), and (y) such
transfer does not constitute a "prohibited transaction" under ERISA; and
(ii) with regard to the registration of any proposed transfer
of a Note to a QIB, the Issuer shall register the transfer if (x) such transfer
is being made by a proposed transferor who has checked the box provided for on
the form of such Note stating, or has otherwise advised the Issuer in writing
that the sale has been made in compliance with the provisions of Rule 144A to a
transferee who has signed the certification provided for on the form of Note
stating, or has otherwise advised the Issuer in writing, that it is purchasing
the Note for its own account, or an account with respect to which it exercises
sole investment discretion and that it, or the person on whose behalf it is
acting with respect to any such account, is a QIB within the meaning of Rule
144A, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Issuer as
it has requested pursuant to Rule 144A or has determined not to request such
information and that it is aware that the transferor is relying upon its
foregoing representations (the "QIB Representations") in order to claim the
exemption from registration provided by Rule 144A, and (y) such transfer does
not constitute a "prohibited transaction" under ERISA.
(c) The Transferee Certificate or the QIB Representations may
be relied on conclusively by the Trustee in determining whether the provisions
of Section 2.6(b)(i) or 2.6(b)(ii), respectively, have been complied with and
the Issuer hereby agrees to indemnify the Trustee for any liability arising out
of such a sale or transfer in reliance thereon. Neither of the Issuer nor the
Trustee is obligated to register the Notes under the Securities Act or any state
securities laws.
(d) By its acceptance of any Note bearing the Private
Placement Legend, each Holder of such a Note acknowledges the restrictions on
transfer of such Note set forth in this Indenture and in the Private Placement
Legend and agrees that it will transfer such Note only as provided in this
Indenture. The Issuer shall not register a transfer of any Note unless such
transfer complies with the restrictions on transfer of the Notes set forth
herein.
(e) Upon the request of the Collateral Agent, the Note
Registrar shall, as promptly as possible, deliver to the Collateral Agent a
certificate evidencing the outstanding principal amount of the Notes.
Section 2.7 MUTILATED, DESTROYED, LOST OR STOLEN NOTES.
If (i) any mutilated Note is surrendered to the Trustee, or the
Issuer and the Trustee receive evidence to their reasonable satisfaction of the
destruction, loss or theft of any Note, and (ii) there is delivered to the
Issuer and the Trustee such security or indemnity as may be required by them to
save each of them harmless, then, in the absence of notice to the Issuer or the
Trustee that such Note has been acquired by a bona fide purchaser, the Issuer
shall execute and, upon Issuer Request (which the Issuer shall make) the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
mutilated, destroyed, lost or stolen Note, a new Note of like tenor and
principal amount, bearing a number not contemporaneously outstanding. If, after
the delivery of such new Note, a bona fide purchaser of the original Note in
lieu of which such new Note was issued presents such original Note for payment,
the Issuer and the Trustee shall be entitled to recover such new Note from the
Person to whom it was delivered or any Person taking title therefrom, except a
bona fide purchaser, and shall be entitled to recover upon the security or
indemnity provided therefor to the extent of any loss, damage, cost or expense
incurred by the Issuer or the Trustee in connection therewith. If any such
mutilated, destroyed, lost or stolen Note shall have become or shall be about to
become due and payable, or shall have been called for redemption, instead of
issuing a new Note, the Issuer may pay such Note without surrender thereof,
except that any mutilated Note shall be surrendered.
Upon the issuance of any new Note under this Section, the Issuer or
the Trustee may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto.
Every new Note issued pursuant to this Section in lieu of any
mutilated, destroyed, lost or stolen Note shall constitute an original
additional contractual obligation of the Issuer, whether or not the mutilated,
destroyed, lost or stolen Note shall be at any time enforceable by anyone, and
shall be entitled to all the benefits of this Indenture equally and
proportionately with any and all other Notes of the same Class duly issued
hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Notes.
Section 2.8 PAYMENT OF PRINCIPAL AND INTEREST; PRINCIPAL AND
INTEREST RIGHTS PRESERVED.
(a) The Notes shall accrue interest during each Interest
Accrual Period at the Note Interest Rate determined as set forth in Section 2.3.
Interest on the Notes shall be due and payable on each Payment Date immediately
following the related Interest Accrual Period on the Outstanding principal
amount of the Notes as set forth in Section 2.3.
(b) The principal of the Notes shall be payable on the Stated
Maturity thereof as specified in Section 2.3 hereof, unless the unpaid principal
of such Note becomes due and payable at an earlier date by declaration of
acceleration or otherwise. All payments of principal on the Notes shall be
allocated on a pro rata basis among all Outstanding Notes, without preference or
priority of any kind.
(c) Interest on, and principal of, any Note shall be payable
by wire transfer to a United States dollar account maintained by such Holder (or
the payee designated by such Holder) at a depository institution in the United
States as reflected on the Note Register. Upon final payment due on the Maturity
of a Note, the Holder thereof must present and surrender such Note at the
Corporate Trust Office of the Trustee on or prior to such Maturity. In the case
of any Note upon which the final payment is due on the Maturity of such Note,
the Issuer or, upon Issuer Request given 25 days prior to the date of such
payment, the Trustee, in the name, and at the expense of the Issuer, shall
notify the Person entitled thereto at his address as it appears on the Note
Register that such Note is to be paid in full. Such notice shall be mailed, by
first class mail no later than the fifth day prior to the Regular Record Date
relating to the Payment Date on which the final payment is to be made on such
Note. Absence of such notice or any defect therein shall not extend the Maturity
of any Note or give rise to any claim based upon the absence thereof or defect
therein.
(d) The Holders of the Notes as of the Regular Record Date in
respect of a Payment Date or as of the Redemption Record Date in respect of a
Redemption Date shall be entitled to the interest accrued and payable and
principal payable on such Payment Date or Redemption Date. Payments of principal
to such Holders shall be made in the proportion that the Aggregate Outstanding
Amount of the Notes registered in the name of each such Holder on such Regular
Record Date or Redemption Record Date bears to the Aggregate Outstanding Amount
of all Notes on such Regular Record Date or Redemption Record Date.
(e) Subject to Section 2.8(a) hereof, any Defaulted Interest
shall be paid by the Issuer as provided in Subsection (1) or Subsection (2)
below (the Subsection pursuant to which such payment shall be made to be at the
Issuer's election); provided that in any event such Defaulted Interest shall be
promptly paid upon sufficient funds being available to pay Defaulted Interest in
full:
(1) The Issuer may elect to make payment of any Defaulted Interest
to the Holders of the Notes in accordance with the priorities set forth in
Section 11.1(a) as of the close of business on a record date for the
payment of such Defaulted Interest (the "Special Record Date"), which
shall be fixed in the following manner. The Issuer shall notify the
Trustee in writing (the "Special Payment Date Statement") of the amount of
Defaulted Interest proposed to be paid on such Note and the date of the
proposed payment (a "Special Payment Date"), and at the same time the
Issuer shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the Special Payment Date, such money when deposited to be held in
trust for the benefit of the Persons entitled to such Defaulted Interest
as in this Subsection provided. Thereupon the Trustee shall fix a Special
Record Date for the payment of such Defaulted Interest, which shall be not
more than 15 nor less than 10 Business Days prior to the Special Payment
Date and not less than 10 Business Days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall promptly notify
the Issuer of such Special Record Date and the Issuer shall either mail,
or cause to be mailed, notice of the Special Payment Date for such
Defaulted Interest and of the Special Record Date. Such notice shall be
sent by first-class mail, postage prepaid, to each Holder of Notes at his
address as it appears in the Note Register, not less than the fifth day
prior to such Special Record Date. Notice of the proposed payment of such
Defaulted Interest and of the Special Record Date therefor having been
mailed as aforesaid, such Defaulted Interest shall be paid pro rata to the
Holders of the Notes as of the close of business on such Special Record
Date and shall no longer be payable pursuant to the following Subsection
(2).
(2) The Issuer may make payment of any Defaulted Interest in any
other lawful manner if, after notice given by the Issuer to the Trustee of
the proposed manner of payment pursuant to this Subsection, such manner of
payment shall be deemed practicable by the Trustee.
(f) (1) Subject to the terms and conditions hereof, any and
all payments made by the Issuer hereunder to a Person other than a United States
person (within the meaning of Section 7701(a)(30) of the Code) shall be made
free and clear of and without deduction for any Taxes imposed as a result of a
Change in Law. If the Issuer shall be required by law to make any such deduction
for Taxes imposed as a result of a Change in Law from any payment hereunder, (i)
the sum payable shall be increased as may be necessary so that, after making all
required deductions (including deductions applicable to additional sums payable
under this Section 2.8(f)), the recipient of such payment receives an amount
equal to the sum it would have received had no such deductions been made and
(ii) the Issuer shall make such deductions and shall pay the full amount
deducted to the relevant taxation authority or other authority in accordance
with applicable law. The Issuer shall indemnify each recipient of any payment
from the Issuer hereunder for the full amount of Taxes imposed as a result of a
Change in Law (including any Taxes imposed by any jurisdiction on amounts
payable under this Section 2.8(f)) which is paid by any of the recipients or any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto whether or not such Taxes were correctly asserted. Anything to
the contrary notwithstanding, obligations of the Issuer pursuant to this section
2.8(f) shall not apply to any Taxes which are:
(i) imposed by reason of one or more of the following:
(A) such recipient (or settlor or beneficiary of, or a person holding a
power over, an estate or trust administered by a fiduciary holder or a
partner of a partnership recipient) being considered as engaging or having
engaged in trade or business, or being or having been physically present,
in the United States, or any state, territory or possession of the United
States or area subject to its jurisdiction, (B) a relationship or former
relationship between such recipient (or settlor or beneficiary of, or
person holding power over, an estate or trust administered by a fiduciary
holder or a partner of a partnership recipient) and the United States, or
any state, territory or possession of the United States or area subject to
its jurisdiction (including, without limitation, such person's status as a
citizen, former citizen or resident thereof), or (C) such recipient's
status as a domestic or foreign personal holding company with respect to
the United States or a controlled foreign corporation or passive foreign
investment company for United States tax purposes; or
(ii) an estate, inheritance, gift or personal property
tax or tax similar thereto.
Recipients shall make available to the Issuer as reasonably requested any forms,
certificates, or other documents evidencing the recipient's entitlement to an
exemption from, or reduction in the amount of, any such Taxes, and will make a
good faith effort to make available all information, records and documents
relating to liabilities or potential liabilities incurred as a result of any
Taxes indemnified hereunder and any related benefits or deductions in respect
thereof and to preserve all such information, records and documents until the
expiration of any applicable statute of limitations or extensions thereof.
Recipients shall also make a good faith effort to make available to the Issuer
all such information, records and documents as reasonably requested by the
Issuer's personnel responsible for preparing or maintaining information, records
and documents, both in connection with matters relating to the Taxes and
litigation and such recipients shall execute any applications, returns, forms
and certificates as reasonably requested by the Issuer in connection with
matters relating to the Taxes. In the event of a contest with a taxing
authority, the recipients referred to in this Section 2.8(f) shall notify the
Issuer of the relevant facts as promptly as possible (but the failure to give
such notice shall not affect such recipient's right to indemnification). The
Issuer shall have the right to control the contest in the United States of any
Taxes for which any recipient has been indemnified. The Issuer shall also be
entitled to any refunds or credits attributable to Taxes for which the Issuer
was responsible and on which payment was made pursuant to this Section 2.8(f).
Within 30 days after the date of any payment of Taxes the Issuer shall furnish
to each Noteholder at its address in the Note Register the original or a
certified copy of a receipt evidencing payment thereof or other evidence
acceptable to the Noteholders establishing payment of such Taxes. Without
prejudice to the survival of any other agreement of the Issuer hereunder, the
agreements and obligations of the Issuer contained in this Section 2.8(f) shall
survive the payment obligations of the Issuer hereunder and the termination of
this Indenture.
(2) Notwithstanding anything in clause (1) above, the amount of
payments otherwise payable to a Noteholder in accordance with this Section
2.8, may be reduced by the amount of any Taxes timely deducted or withheld
by the Issuer with respect to any payment (i) if and only to the extent
that at the time such a payment is made, the Issuer shall furnish to the
Noteholders such certificates, receipts and other documents, satisfactory
to the Noteholders, as may be required to establish any Hong Kong, Japan
or Netherlands tax credit to which the Noteholder may be entitled and (ii)
if and only to the extent that the Noteholder has determined, in its
reasonable best good faith judgment, that it can make use of a Hong Kong,
Japan or Netherlands tax credit to reduce its liability for taxes,
including benefits obtained through use of carry forwards and carry backs
which determination shall be made by the Noteholder in good faith promptly
after request therefor by the Issuer.
(a) Interest accrued with respect to any Note shall be
computed on the basis of the actual number of days in the applicable Interest
Accrual Period and on the basis of a 360 day year.
(b) In the case where the date of any Special Payment Date or
Redemption Date shall not be a Business Day, then payment need not be made on
such date, but may be made on the next succeeding Business Day with the same
force and effect as if made on the nominal date of any such Special Payment Date
or Redemption Date, as the case may be.
(c) Principal of and interest on the Notes will be full
recourse obligations of the Issuer. The Parent shall not be liable nor shall any
of the agents, partners, beneficiaries, officers, directors, employees,
stockholders, attorneys, advisors or successors or assigns of the Parent or the
Issuer be liable for any amounts payable, or performance due, under the Notes,
the Indenture, the Swap Agreement or the Intercreditor Agreement. It is
understood that the foregoing provisions of this paragraph shall not (A) prevent
recourse to the Trust Estate or the Intercreditor Collateral or the sums due or
to become due under any security, instrument or agreement which is part of the
Trust Estate or the Intercreditor Collateral or (B) constitute a waiver, release
or discharge of any indebtedness or obligation evidenced by the Notes or secured
by this Indenture or of the Term Note, but the same shall continue until paid or
discharged, and provided, further, that the foregoing provisions of this
paragraph shall not limit the right of any person to name the Issuer as a party
defendant in any action, suit or in the exercise of any other remedy under the
Notes or this Indenture, so long as no judgment in the nature of a deficiency
judgment or seeking personal liability shall be asked for or (if obtained)
enforced against any such person or entity other than the Issuer.
(d) Subject to the foregoing provisions of this Section, each
Note delivered under this Indenture and upon registration of transfer of, or in
exchange for, or in lieu of, any other Note shall carry the rights to unpaid
interest and principal that were carried by such other Note.
Section 2.9 PERSONS DEEMED OWNERS.
Prior to due presentment for registration of transfer of any Note,
the Issuer and the Trustee, and any agent of the Issuer or the Trustee shall
treat the Person in whose name any Note is registered as the owner of such Note
for the purpose of receiving payments of principal and interest on such Note and
for all other purposes whatsoever (whether or not such Note is overdue), and
neither the Issuer, the Trustee nor any agent thereof, shall be affected by
notice to the contrary.
Section 2.10 CANCELLATION.
All Notes surrendered for payment, registration of transfer,
exchange or redemption, or deemed lost or stolen, shall, if surrendered to any
Person other than the Trustee, be delivered to the Trustee and shall be promptly
cancelled by it. No Notes shall be authenticated in lieu of or in exchange for
any Notes cancelled as provided in this Section, except as expressly permitted
by this Indenture. All cancelled Notes held by the Trustee shall be destroyed
unless the Issuer shall direct by an Issuer Order that they be returned to the
Issuer.
ARTICLE III
AUTHENTICATION AND DELIVERY OF NOTES
Section 3.1 GENERAL PROVISIONS.
On the Closing Date, Notes may be executed by the Issuer and
delivered to the Trustee for authentication and thereupon the same shall be
authenticated and delivered by the Trustee upon Issuer Request and upon receipt
by the Trustee of the following:
(1) an Officers' Certificate evidencing the authorization of
the execution, authentication and delivery of this Indenture, the Swap
Agreement and the Notes and specifying the Stated Maturity, the principal
amount and the Note Interest Rate of the Notes to be authenticated and
delivered;
(2) either (i) a certificate or other official document
evidencing the due authorization, approval or consent of any governmental
body or bodies, at the time having jurisdiction in the premises, together
with an Opinion of Counsel that the Trustee is entitled to rely thereon
and that the authorization, approval or consent of no other governmental
body is required for the valid issuance of the Notes, or (ii) an Opinion
of Counsel that, no consent or approval of, or other action by, any
administrative or governmental body which has not been obtained or taken
is required for the valid issuance of the Notes;
(3) the executed Swap Agreement;
(4) the Swap Agreement Assignment;
(5) a copy of the executed Installment Sales Agreement;
(6) the executed Installment Note;
(7) the executed Installment Note Extension;
(8) the Installment Note and Guarantee Assignment;
(9) the executed Intercreditor Agreement;
(10) evidence that the Issuer has designated the Collateral
Agent as registered holder of the Installment Note for all purposes
thereunder; and
(11) an Opinion of Counsel of Donovan Leisure Newton &
Irvine, counsel to the Issuer, dated the Closing Date, to the effect that,
as of such date:
(a) all instruments furnished to the Trustee as conditions precedent
to the authentication of the Notes by the Trustee pursuant to the Indenture
comply in all material respects to the requirements of this Indenture and such
instruments constitute sufficient authority hereunder for the Trustee to
authenticate and deliver the Notes;
(b) all conditions precedent provided for in this Indenture relating
to the authentication and delivery of the Notes have been complied with in all
material respects, and the Issuer is duly entitled to the authentication and
delivery of the Notes under the Indenture;
(c) the Issuer is a corporation organized, existing and in good
standing under the laws of the State of Delaware;
(d) the Issuer has the corporate power and authority to execute and
deliver the Indenture, the Intercreditor Agreement and the Swap Agreement, to
issue the Notes and to perform its obligations under the Indenture, the
Intercreditor Agreement and the Notes and has duly taken all necessary corporate
action for those purposes;
(e) the Indenture, the Intercreditor Agreement and the Swap
Agreement have been duly authorized by all requisite corporate action, executed
and delivered by the Issuer and, assuming the due authorization, execution and
delivery thereof by each of the other parties thereto, constitute valid and
binding agreements of the Issuer enforceable against the Issuer in accordance
with their respective terms, except that the enforceability thereof may be
subject to (i) bankruptcy, insolvency, reorganization, moratorium or other
similar laws now or hereafter in effect relating to creditors' rights; (ii)
general principles of equity (regardless of whether such enforcement is
considered in a proceeding in equity or at law); and (iii) the qualification
that certain remedial provisions of the Indenture may be unenforceable in whole
or in part under the UCC but the inclusion of such provisions does not render
the other provisions of the Indenture invalid;
(f) the Notes have been duly authorized and executed by the Issuer
and, when authenticated by the Trustee in accordance with the Indenture and
delivered against payment therefor, will constitute valid and binding
obligations of the Issuer, enforceable against the Issuer in accordance with
their terms and be entitled to the benefits of the Indenture and the lien
afforded thereby, except that the enforceability thereof may be subject to (i)
bankruptcy, insolvency, reorganization, moratorium or other similar laws now or
hereafter in effect relating to creditors' rights and (ii) general principles of
equity (regardless of whether such enforcement is considered in a proceeding in
equity or at law);
(g) the Issuer has the corporate power and authority to assign,
pledge and deliver the Trust Estate to the Trustee and the Intercreditor
Collateral to the Collateral Agent as security for the Notes and has duly
authorized such assignment, pledge and delivery to the Trustee by all necessary
action;
(h) the issuance and sale of the Notes by the Issuer and the
execution, delivery and performance of the Indenture, the Intercreditor
Agreement and the Swap Agreement by the Issuer will not conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien upon any property or assets of the Issuer pursuant to,
any contract, indenture, mortgage, loan agreement, note, lease or other
instrument identified in writing by the Issuer to such counsel other than the
liens created by the Indenture and the Intercreditor Agreement, nor will such
actions result in any violation of the provisions of the certificate of
incorporation or by-laws of the Issuer;
(i) the issuance and sale of the Notes by the Issuer and the
execution, delivery and performance of the Indenture, the Intercreditor
Agreement and the Swap Agreement by the Issuer will not cause the Issuer to
violate any law, administrative regulation or, to such counsel's knowledge, any
administrative or court decree, which have applicability to the Issuer;
(j) under the circumstances contemplated by Section 2.6 of this
Indenture and the Memorandum, the offer and sale of the Notes are transactions
exempt from the registration requirements of the Securities Act, and do not
require the registration of the Notes thereunder, and the Indenture is not
required to be qualified under the Trust Indenture Act of 1939;
(k) the Issuer is not, and will not be, required, as a result of the
offer and sale of the Notes as contemplated by Section 2.6 of this Indenture and
the Memorandum, to register as an "investment company" under the Investment
Company Act, and the Issuer is not "controlled" by an "investment company" as
defined in the Investment Company Act;
(l) this Indenture and the Intercreditor Agreement, together with
the transfer and delivery of the Trust Estate to the Trustee and the
Intercreditor Collateral to the Collateral Agent, create a valid security
interest in favor of the Trustee and the Collateral Agent, respectively, for the
benefit of the Holders of the Notes in the Trust Estate and the Intercreditor
Collateral; and
(m) the Financing Statements are in appropriate form for filing in
each of the Filing Offices; and the security interest of the Trustee and the
Collateral Agent has been perfected and has priority over all other creditors of
the Issuer.
In rendering the opinion expressed in paragraph (j), such counsel
need express no opinion as to any violation of any law or regulation which may
have become applicable to the Issuer as a result of the involvement of other
parties in the transactions contemplated by the Indenture, the Intercreditor
Agreement or the Swap Agreement because of their legal or regulatory status or
because of any other facts specifically pertaining to them. In addition, such
opinion need relate only to those laws and regulations which, in the experience
of such counsel, are normally applicable to transactions of the type provided
for in the Indenture, the Intercreditor Agreement and the Swap Agreement or
which are made applicable by a court or administrative judgment, order or decree
of which such counsel has been specifically advised by the Issuer in connection
with the rendering of such opinion. Such opinion shall also state that although
such counsel has not specifically considered the possible applicability to the
Issuer of any other laws, regulations, judgments, orders or decrees, no facts
have been disclosed to such counsel that cause them to conclude that the
issuance and sale of the Notes by the Issuer or the execution, delivery or
performance of the Indenture, the Intercreditor Agreement and the Swap Agreement
by the Issuer will cause the Issuer to violate any other law or regulation.
In rendering the opinion expressed in paragraph (m) above, such
counsel may assume based on Search Certificates that the Trustee and the
Collateral Agent acquired their respective interests in the Trust Estate and the
Intercreditor Collateral in good faith for value and without notice or knowledge
by them or the Holders of the Notes of any adverse claims, liens or
encumbrances.
In rendering the opinion expressed in paragraph (m) above, such
counsel may assume (i) that representations made by the Issuer to such counsel
regarding the locations of the Issuer's chief executive office, principal places
of business, and offices where it keeps its records concerning the Trust Estate
and Intercreditor Collateral are accurate and complete, (ii) that the Issuer has
not had or operated under any name other than Alleghany Funding Corporation,
(iii) all relevant financing statements in which the Issuer is named as debtor
have been properly filed, indexed and recorded in the appropriate Filing
Offices, (iv) no financing statements naming the Issuer as debtor were filed in
any of the Filing Offices between the date of the Search Certificate relating to
each such Filing Office and the date of the filing of the Financing Statement in
such Filing Office and, (v) that all fees and taxes with respect to the liens
have been paid but that no opinion is expressed as to the priority of the
Trustee's and Collateral Agent's respective security interests over federal tax
liens and other statutory liens which are made prior by applicable law or liens
or security interests of which the Trustee, any Holder of the Notes and/or
Collateral Agent have knowledge as of the date of the opinion.
In rendering such opinions, such counsel may rely on facts as
presented in an Officers' Certificate delivered to the Trustee, certificates and
records of public officials, certificates of the Trustee or the Collateral Agent
and such other certificates as such counsel deems necessary and reasonable;
(12) an Officers' Certificate stating that the Issuer is not
in Default under this Indenture and that the issuance of the Notes then
applied for will not result in a breach of any of the terms, conditions or
provisions of, or constitute a Default under, any indenture or other
agreement or instrument to which the Issuer is a party or by which the
Issuer is bound, or any order of any court or administrative agency
entered in any Proceeding to which the Issuer is a party or by which the
Issuer may be bound or to which Issuer may be subject; and that all
conditions precedent provided in this Indenture relating to the
authentication and delivery of the Notes applied for have been complied
with;
(13) the executed Purchase Agreements;
(14) an Opinion of Counsel of Skadden, Arps, Slate, Meagher &
Flom LLP, special counsel to the Placement Agent, dated the Closing Date,
to the effect that (a) the transfer of the Installment Note and the
Guarantee by the Parent to the Issuer would not be disregarded or treated
as a fraudulent conveyance in the event of the bankruptcy or insolvency of
the Parent and (b) in the event of the bankruptcy or insolvency of the
Parent, the Issuer and its assets subject to the lien of this Indenture
would not be substantively consolidated with the assets of the Parent; and
(15) such other documents as the Trustee or any Noteholder may
reasonably require.
ARTICLE IV.
SATISFACTION AND DISCHARGE
Section 4.1 SATISFACTION AND DISCHARGE OF INDENTURE.
Provided no Event of Default has occurred and is continuing
hereunder, this Indenture shall cease to be of further effect with respect to
the Notes except as to (i) rights of registration of transfer and exchange, (ii)
substitution of mutilated, destroyed, lost or stolen Notes, (iii) rights of
Noteholders to receive payments of principal thereof and interest thereon, (iv)
the rights, obligations and immunities of the Trustee hereunder, and (v) the
rights of Noteholders as beneficiaries hereof with respect to the property
deposited with the Trustee and payable to all or any of them, and the Trustee,
on demand of and at the expense of the Issuer, shall execute proper instruments
acknowledging satisfaction and discharge of this Indenture when:
(1) either
(a) all Notes theretofore authenticated and delivered
(other than (i) Notes which have been destroyed, lost or stolen and which
have been paid or replaced as provided in Section 2.7, and (ii) Notes for
whose payment money has theretofore been deposited in trust and thereafter
repaid to the Issuer or discharged from such trust, as provided in Section
7.3) have been delivered to the Trustee for cancellation; or
(b) all Notes not theretofore delivered to
the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated
Maturity within one year;
and the Issuer, in the case of (b)(i) or (ii) above, has irrevocably
deposited or caused to be deposited with the Trustee in a manner
satisfactory to the Trustee an amount sufficient to pay and discharge the
entire indebtedness on such Notes not theretofore delivered to the Trustee
for cancellation, for principal and interest to the date of such deposit
(in the case of Notes which have become due and payable) or to the
Maturity, as the case may be;
(2) the Issuer has paid or caused to be paid all other sums
payable hereunder by the Issuer; and
(3) the Issuer has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that all conditions
precedent herein provided for relating to the satisfaction and discharge
of this Indenture with respect to the Notes have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture,
the rights and obligations of the Issuer, the Trustee and the Noteholders under
Sections 4.2, 5.19, 6.7 and 7.3 shall survive.
Section 4.2 APPLICATION OF TRUST MONEY.
All monies deposited with the Trustee pursuant to Section 4.1 shall
not be deemed part of the Trust Estate but be separately held in trust by the
Trustee and applied by it, in accordance with the provisions of the Notes and
this Indenture, to the payment to the Person entitled thereto of the principal
and interest for whose payment such money has been deposited with the Trustee,
and such money shall be held in a segregated trust account identified as being
held in trust for the benefit of the Noteholders.
ARTICLE V.
REMEDIES
Section 5.1 EVENT OF DEFAULT.
"Event of Default," wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) Default in the payment of any interest on any Note when
the same becomes due and payable as provided in this Indenture, which
Default shall continue for a period of five days;
(2) Default in the payment of principal on any Note at its
Stated Maturity or Redemption Date;
(3) Default in the payment of any interest on the Installment
Note or of any amount due under the Swap Agreement when the same becomes
due and payable as provided therein, which Default shall continue for a
period of forty-five days;
(4) Default in the payment of principal on the Installment
Note at the Installment Note Principal Payment Date, which Default shall
continue for a period of thirty days;
(5) Default in the performance, or breach, of any covenant,
warranty or other agreement of the Issuer in this Indenture (other than a
covenant, warranty or other agreement a default in the performance of
which or breach of which is elsewhere in this Section or in Article Seven
specifically dealt with), the Swap Agreement or the Intercreditor
Agreement or the failure of any representation or warranty of the Issuer
made in this Indenture or in any certificate or other writing delivered
pursuant hereto or in connection herewith to be correct in all material
respects when the same shall have been made and continuance of such
default, breach or failure for a period of 45 days after notice thereof
shall have been given by courier guaranteeing overnight delivery, by
registered or certified mail, to the Issuer by the Trustee or to the
Issuer and the Trustee by the Holders of at least a Majority of the Notes,
specifying such default, breach or failure and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder;
(6) Default in the performance, or breach, of any covenant or
warranty of MLPFS or ML&Co. in the Installment Sales Agreement, the
Guarantee, or the Installment Note (other than a covenant or warranty a
default in whose performance or whose breach is elsewhere in the
Installment Note specifically dealt with) and continuance of such default
or breach for a period of 90 days after there has been given, by
registered or certified mail, to MLPFS and ML&Co. by the registered holder
of the Installment Note a written notice specifying such default or breach
and requiring it to be remedied and stating that such notice is a "Notice
of Default" thereunder;
(7) The entry of a decree or order by a court having
jurisdiction in the premises adjudging the Issuer a bankrupt or insolvent,
or approving as properly filed a petition seeking reorganization,
arrangement, adjustment or composition of or in respect of the Issuer
under the Bankruptcy Code or any other applicable federal or state law, or
appointing a receiver, liquidator, assignee, or sequestrator (or other
similar official) of the Issuer or of any substantial part of its
property, or ordering the winding up or liquidation of its respective
affairs, and the continuance of any such decree or order unstayed and in
effect for a period of 120 consecutive days;
(8) The institution by the Issuer of Proceedings to be
adjudicated as bankrupt or insolvent, or the consent by it to the
institution of bankruptcy or insolvency Proceedings against it, or the
filing by it of a petition or answer or consent seeking reorganization or
relief under the Bankruptcy Code or any other similar applicable federal
or state law, or the consent by it to the filing of any such petition or
to the appointment of a receiver, liquidator, assignee, trustee or
sequestrator (or other similar official) of the Issuer or of any
substantial part of its property, or ordering the winding up or
liquidation of its affairs, or the making by it of an assignment for the
benefit of creditors, or the admission by it in writing of its inability
to pay its debts generally as they become due, or the taking of any action
by the Issuer in furtherance of any such action;
(9) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of MLPFS or ML&Co. in an involuntary
case under any applicable bankruptcy, insolvency or other similar law now
or hereafter in effect or appointing a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of MLPFS or ML&Co.
or for any substantial part of their respective property, or ordering the
winding-up or liquidation of their respective affairs, and such decree or
order shall remain unstayed and in effect for a period of 90 consecutive
days; or
(10) At any time, that the obligation of the Issuer under this
Indenture to pay principal of or interest on the Notes or any other
payment required to be made by the Issuer hereunder or under the Notes has
become unlawful by compliance by the Issuer in good faith with any law,
governmental rule, regulation, guideline of or order of any court,
administrative agency or arbitrator under Federal or State law;
PROVIDED, HOWEVER, that in the event the Swap Counterparty Defaults in the
payment of any amount due under the Swap Agreement when the same becomes due and
payable as provided therein the Issuer may cure such Default by substituting a
new Swap Agreement and new Swap Counterparty which replacement Swap Agreement
and Swap Counterparty shall be deemed to be the Swap Agreement and Swap
Counterparty for all purposes under the Indenture if (i) the Issuer provides the
Holders of the Notes with notice within ten Business Days of the Default of its
intention to substitute such replacement Swap Agreement and Swap Counterparty
(which notice shall include a copy of the replacement Swap Agreement the Issuer
plans to enter into) to which notice a Majority of the Holders Outstanding does
not object to in writing within fifteen Business Days of the Default, (ii) such
replacement Swap Agreement is in substantially the same form as the Swap
Agreement attached hereto and obligates the replacement Swap Counterparty to pay
to the Issuer the same amounts on the same dates as the Swap Agreement attached
hereto (or such other amounts and on such other dates as all the Holders of the
Outstanding Notes shall agree in writing) and (iii) such replacement Swap
Counterparty has a credit rating of "AA-" or better by Standard & Poor's and
"Aa3" or better by Moody's in the case of unsecured senior debt obligations.
Section 5.2 ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than an Event of Default specified in
Section 5.1(7) or (8)) with respect to the Notes occurs and is continuing, then
and in every such case the Trustee or the Holders of not less than a Majority of
the Notes may declare the principal of all the Notes to be immediately due and
payable, by a notice in writing to the Collateral Agent and the Issuer (or to
the Trustee if given by Noteholders, the Trustee notifying the Issuer), and upon
any such declaration such principal together with all accrued and unpaid
interest thereon shall become immediately due and payable. If an Event of
Default specified in Section 5.1(7) or (8) occurs, all unpaid principal together
with all accrued and unpaid interest thereon of all the Notes shall
automatically become due and payable without any declaration or other act on the
part of the Trustee or any Noteholder.
At any time after such a declaration of acceleration of Maturity has
been made and before a judgment or decree for payment of the money due has been
obtained as hereinafter in this Article provided:
(1) the Holders of a Majority in aggregate principal amount of
Notes outstanding may rescind and annul such declaration and its
consequences if (a) the Issuer has paid or deposited with the Trustee a
sum sufficient to pay
(i) all overdue installments of interest and principal
on all Notes,
(ii) to the extent that payment of such interest is
lawful, interest upon overdue installments of interest and principal on
the Notes at the applicable Note Interest Rate for each Interest Accrual
Period plus 1.50%, and
(iii) all sums paid or advanced by the Trustee hereunder
and the reasonable compensation, expenses, disbursements and advances of
the Trustee, its agents and counsel; and
(b) the Trustee has determined that all Events of
Default, other than the non-payment of the interest on or principal of
Notes that have become due solely by such acceleration, have been (i)
cured, and a Majority of the Noteholders agrees with such determination,
or (ii) waived as provided in Section 5.15; or
(2) the Trustee shall rescind and annul such declaration and
its consequences if the Trustee shall have been required to preserve the
Trust Estate in accordance with the provisions of Section 5.5 with respect
to the Event of Default that gave rise to such declaration; PROVIDED,
however, that if such preservation of the Trust Estate is rescinded
pursuant to Section 5.5, the Notes may be accelerated pursuant to the
first paragraph of this Section 5.2 notwithstanding any previous
rescission and annulment of a declaration of acceleration pursuant to this
clause (2).
No such rescission shall affect any subsequent Default or impair any right
consequent thereon.
Section 5.3 COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT .
BY TRUSTEE
The Issuer covenants that if Default is made in the payment of any
principal of or interest on any Note, the Issuer will, upon demand of the
Trustee or of any affected Noteholder, pay to the Trustee, for the benefit of
the Holder of such Note, the whole amount then due and payable on such Note for
principal and interest, with interest upon the overdue principal and, to the
extent that payments of such interest shall be legally enforceable, upon
Defaulted Interest, at the applicable Note Interest Rate for each Interest
Accrual Period plus 1.50% and, in addition thereto, such further amount as shall
be sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee and
such Noteholder, and their respective agents and counsel.
If the Issuer fails to pay such amounts forthwith upon such demand,
the Trustee, in its own name and as Trustee of an express trust, may institute a
Proceeding for the collection of the sums so due and unpaid, and prosecute such
Proceeding to judgment or final decree, and enforce the same against the Issuer
or any other obligor upon the Notes and collect the monies adjudged or decreed
to be payable in the manner provided by law out of the Trust Estate, and the
Issuer shall reimburse and indemnify the Trustee for any expenses incurred in
connection with any such Proceeding as provided in Section 6.7.
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Noteholders by such appropriate Proceedings as the Trustee shall deem most
effectual (if no direction by the Majority of the Noteholders is received by the
Trustee) or as the Trustee may be directed by the Majority of the Noteholders to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy or legal or equitable
right vested in the Trustee by this Indenture or by law.
Section 5.4 REMEDIES.
(a) If the Notes have been declared due and payable
and such declaration and its consequences have not been rescinded and annulled,
the Trustee shall upon direction by the Majority of the Noteholders, do one or
more of the following:
(i) institute Proceedings for the collection of all
amounts then payable on the Notes or under this Indenture, whether by
declaration or otherwise, enforce any judgment obtained, and collect from
the Trust Estate securing the Notes monies adjudged due;
(ii) sell all or a portion of the Trust Estate securing
the Notes or rights or interest therein, at one or more public or private
sales called and conducted in any manner permitted by law and in
accordance with Section 5.18 hereof and Section 6 of the Installment Sales
Agreement;
(iii) institute Proceedings from time to time for the
complete or partial foreclosure of this Indenture with respect to the
Trust Estate securing the Notes;
(iv) direct the Collateral Agent to sell the Installment
Note and the Guarantee or to foreclose or realize upon the respective
Liens of the Swap Counterparty and the Noteholders therein or otherwise to
exercise a specific remedy with respect thereto as provided in Section 4.1
of the Intercreditor Agreement;
(v) exercise any remedies of a secured party under the
Uniform Commercial Code and take any other appropriate action to protect
and enforce the rights and remedies of the Trustee or the Holders of the
Notes hereunder; or
(vi) exercise any other rights and remedies that may be
available at law or in equity.
(b) If an Event of Default as described in Section
5.1(5) hereof shall have occurred and be continuing the Trustee shall upon
direction of the Majority of the Noteholders institute a proceeding solely to
compel performance of the covenant or to cure the representation or warranty,
the breach of which gave rise to the Event of Default under such Section and
enforce any equitable decree or order arising from such proceeding.
Section 5.5 PRESERVATION OF TRUST ESTATE.
(a) If an Event of Default shall have occurred and
be continuing with respect to the Notes and no Notes have been declared due and
payable under Section 5.2 hereof or such declaration and its consequences have
been rescinded and annulled, then the Trustee may, but shall not be required to,
and, at the request of a Majority of the Aggregate Outstanding Amount shall
collect and cause the collection of the proceeds of the Trust Estate securing
the Notes thereof and make and apply all payments and deposits and maintain all
accounts in respect of the Notes in accordance with the provisions of Article
Ten and Article Eleven. The Trustee shall give written notice of the taking
possession of and retention of the Trust Estate to the Issuer. So long as such
Event of Default is continuing, any such possession and retention may be
rescinded at any time by written notice to the Trustee and the Issuer from a
Majority of the Noteholders.
(b) Nothing contained in Section 5.5(a) shall be
construed to require the Trustee to sell the Trust Estate securing the Notes if
the conditions set forth in Section 5.5(a) are not satisfied or to preserve the
Trust Estate if prohibited by applicable law.
Section 5.6 TRUSTEE MAY FILE PROOFS OF CLAIM.
In case there shall be pending Proceedings relative to the Issuer or
any other obligor upon the Notes under the Bankruptcy Code or any other
applicable federal or state bankruptcy, insolvency or other similar law, or in
case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor or its
property, or in case of any other comparable Proceedings relative to the Issuer
or other obligor upon the Notes, or the creditors or property of the Issuer or
such other obligor, the Trustee, regardless whether the principal of any Notes
shall then be due and payable as therein expressed or by declaration or
otherwise and regardless whether the Trustee shall have made any demand pursuant
to the provisions of Section 5.3, shall be entitled and empowered to, by
intervention in such Proceedings or otherwise:
(i) file and prove a claim or claims for the whole
amount of principal and interest owing and unpaid in respect of the Notes,
and to file such other papers or documents and take such other action,
including participating as a member, voting or otherwise, of any committee
of creditors, as may be necessary or advisable in order to have the claims
of the Trustee (including any claim for reasonable compensation to the
Trustee and each predecessor Trustee, and their respective agents,
attorneys and counsel, and for reimbursement of all expenses and
liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee or any Noteholder, except as a result of negligence or
bad faith) and of the Noteholders allowed in any Proceedings relative to
the Issuer or other obligor upon the Notes or to the creditors or property
of the Issuer or such other obligor; and
(ii) collect and receive any monies or other property
payable to or deliverable on any such claims, and to distribute in
accordance with Section 5.8 all amounts received with respect to the
claims of the Noteholders and of the Trustee on their behalf; and any
trustee, receiver or liquidator, custodian or other similar official is
hereby authorized by each of the Noteholders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Noteholders, to pay to the Trustee such amounts
as shall be sufficient to cover reasonable compensation to the Trustee,
each predecessor Trustee and their respective agents, attorneys and
counsel, and all other expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee or any Noteholder except
as a result of negligence or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Noteholder any plan of reorganization, arrangement, adjustment or compromise
affecting the Notes or the rights of any Holder thereof, or to authorize the
Trustee to vote in respect of the claim of any Noteholder in any such Proceeding
or to participate as a member of any committee of creditors.
In any Proceedings brought by the Trustee (and also any Proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Notes subject to the provisions of this Indenture, and it shall not be
necessary to make any Holders of the Notes parties to any such Proceedings.
. Section 5.7 TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF NOTES.
All rights of action and claims under this Indenture or the Notes
may be prosecuted and enforced by the Trustee without the possession of any of
the Notes or the production thereof in any Proceeding relating thereto, and any
such Proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall be applied,
after payment of the Trustee's fees and expenses, by the Trustee on behalf of
the Noteholders as set forth in Section 5.8 hereof.
Section 5.8 APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee under this Article V with respect
to the Notes shall be applied promptly: (i) first, to the payment of any fees,
expenses, liabilities, advances or other amounts reasonably incurred by the
Trustee in acting hereunder or maintaining, foreclosing, realizing upon or
taking any other action with respect to the Trust Estate pursuant to the terms
of this Indenture (including, without limitation, compensation to the Trustee
and its agents and counsel in connection therewith); (ii) second, to the payment
of any accrued and unpaid interest on the Notes at the applicable Note Interest
Rate thereto for each Interest Accrual Period and the unpaid principal amount of
the Notes until such amounts have been reduced to zero; and (iii) third, the
excess, if any, to the Issuer.
Section 5.9 LIMITATION ON SUITS.
Except as otherwise provided in Section 5.10, no Holder of any Note
shall have any right to institute any Proceedings, judicial or otherwise, with
respect to this Indenture, or for the appointment of a receiver or trustee, or
for any other remedy hereunder, unless:
(1) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than a Majority of the Notes shall
have made written request to the Trustee to institute Proceedings in
respect of such Event of Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be
incurred in compliance with such request;
(4) the Trustee for 30 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such
Proceeding; and
(5) no direction inconsistent with such written request has
been given to the Trustee during such 30-day period by the Holders of a
Majority of the Notes;
it being understood and intended that no one or more Holders of Notes shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders of Notes or to obtain or to seek to obtain priority or preference over
any other Holders of Notes or to enforce any right under this Indenture, except
in the manner herein provided and for the equal and ratable benefit of all the
Holders of Notes.
In the event the Trustee shall receive conflicting or inconsistent
requests and indemnity from two or more groups of Holders of Notes, each
representing less than a Majority of the Noteholders, the Trustee shall follow
the directions of the plurality of such Holders.
Section 5.10 UNCONDITIONAL RIGHTS OF NOTEHOLDERS TO RECEIVE
PRINCIPAL AND INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Note shall have the right, which is absolute and unconditional, to receive
payment of the principal of and interest on such Note and any other payment due
to such Noteholder under the Indenture or such Note as such principal and
interest or other payment become due and payable and to institute suit for the
enforcement of any such payment, and such right shall not be impaired without
the consent of such Holder.
Section 5.11 RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Noteholder has instituted any Proceeding to
enforce any right or remedy under this Indenture and such Proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Noteholder, then and in every such case the Issuer, the
Trustee and the Noteholder shall, subject to any determination in such
Proceeding, be restored severally and respectively to their former positions
hereunder, and thereafter all rights and remedies of the Trustee and the
Noteholders shall continue as though no such Proceeding had been instituted.
Section 5.12 RIGHTS AND REMEDIES CUMULATIVE.
No right or remedy herein conferred upon or reserved to the Trustee
or to the Noteholders is intended to be exclusive of any other right or remedy,
and every right and remedy shall, to the extent permitted by law, be cumulative
and in addition to every other right and remedy given hereunder or now or
hereafter existing by law or in equity or otherwise. The assertion or employment
of any right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
Section 5.13 DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Note to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Noteholders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Noteholders, as the
case may be.
Section 5.14 CONTROL BY NOTEHOLDERS.
Notwithstanding any other provision of this Indenture, the Holders
of a Majority of the Notes on behalf of the Holders of all the Notes, shall have
the right (a) to cause the institution of and direct the time, method and place
of conducting any Proceeding for any remedy available to the Trustee or (b) to
direct the Trustee with respect to its exercise of any right, remedy, trust or
power conferred on the Trustee; provided that:
(1) such direction shall not be in conflict with any rule of
law or with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee that is not inconsistent with such direction; provided, however,
that, subject to Section 6.1(c)(4), the Trustee need not take any action
that it determines might involve it in liability. During the continuance
of an Event of Default that has not been cured, the Trustee shall, prior
to the receipt of directions, if any, from a Majority of the Noteholders,
exercise such of the rights and powers expressly vested in it by this
Indenture and use the same degree of care and skill in their exercise,
with respect to such Event of Default, as is required by Section 6.1(b).
Section 5.15 WAIVER OF PAST DEFAULTS.
Prior to the time a judgment or decree for payment of the money due
has been obtained by the Trustee, as provided in this Article, the Holders of a
Majority of the Notes may on behalf of the Holders of all the Notes waive any
past Default and its consequences, except a Default:
(1) in the payment of the principal of or interest
on any Note, or
(2) in respect of a covenant or provision hereof that under
Section 8.2 cannot be modified or amended without the consent of the
Holder of each Outstanding Note affected.
In the case of any such waiver, the Issuer, the Trustee and the
Holders of the Notes shall be restored to their former positions and rights
hereunder, respectively; but no such waiver shall extend to any subsequent or
other Default or impair any right consequent thereto. Upon any such waiver, such
Default shall cease to exist, and any Event of Default arising therefrom shall
be deemed to have been cured, for every purpose of this Indenture; but no such
waiver shall extend to any subsequent or other Default or impair any right
consequent thereto.
Section 5.16 UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Note by
his acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require, in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken, or
omitted by it as Trustee, the filing by any party litigant in such suit of an
undertaking to pay the costs of such suit, and that such court may in its
discretion assess reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant; but the
provisions of this Section 5.16 shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Noteholder, or group of Noteholders,
holding in the aggregate more than 10% in Aggregate Outstanding Amount of the
Notes, or to any suit instituted by any Noteholder for the enforcement of the
payment of the principal of or interest on any Note on or after the Stated
Maturity expressed in such Note (or, in the case of redemption or the
termination of the obligations of the Issuer hereunder pursuant to Section 9.5,
on or after the Redemption Date).
Section 5.17 WAIVER OF STAY OR EXTENSION LAWS.
The Issuer covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of or the exercise of any remedies under this Indenture; and the
Issuer (to the extent that it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not hinder,
delay or impede the execution of any power herein granted to the Trustee or any
Noteholder, but will suffer and permit the execution of every such power as
though no such law had been enacted.
Section 5.18 SALE OF TRUST ESTATE.
(a) Upon any transfer or sale of the Trust Estate
whether pursuant to this Indenture or otherwise, the Notes shall become
immediately due and payable.
(b) The power to effect any sale (a "Sale") of any
portion of the Trust Estate pursuant to Section 5.4 and Section 5.5 shall not be
exhausted by any one or more Sales as to any portion of such Trust Estate
remaining unsold but shall continue unimpaired until the entire Trust Estate
securing the Notes shall have been sold or all amounts payable on the Notes
under this Indenture with respect thereto shall have been paid. The Trustee may,
upon notice to and subject to the direction of the Majority of the Noteholders,
and shall upon direction of the Majority of the Noteholders, from time to time
postpone any sale by public announcement made at the time of and place of such
Sale.
(c) The Trustee may bid for and acquire any portion
of the Trust Estate in connection with a Sale thereof to the extent not
prohibited by applicable law, and may pay all or part of the purchase price by
crediting against amounts owing on the Notes or other amounts secured by this
Indenture, all or part of the net proceeds of such Sale after deducting the
costs, charges and expenses incurred by the Trustee in connection with such Sale
notwithstanding the provisions of Section 6.7 hereof. The Notes need not be
produced in order to complete any such Sale, or in order for the net proceeds of
such Sale to be credited against amounts owing on the Notes. The Trustee may
hold, lease, operate, manage or otherwise deal with any property so acquired in
any manner permitted by law in accordance with this Indenture.
(d) The Trustee shall execute and deliver an
appropriate instrument of conveyance transferring its interest in any portion of
the Trust Estate in connection with a Sale thereof. In addition, the Trustee is
hereby irrevocably appointed the agent and attorney-in-fact of the Issuer to
transfer and convey their interest in any portion of the Trust Estate in
connection with a Sale thereof, and to take all action necessary to effect such
Sale. No purchaser or transferee at such a Sale shall be bound to ascertain the
Trustee's authority, inquire into the satisfaction of any conditions precedent
or see to the application of any monies.
Section 5.19 ACTION ON NOTES.
The Trustee's right to seek and recover judgment on the Notes or
under this Indenture shall not be affected by the seeking or obtaining of or
application for any other relief under or with respect to this Indenture.
Neither the lien of this Indenture nor any rights or remedies of the Trustee or
the Noteholders shall be impaired by the recovery of any judgment by the
Trustee.
ARTICLE VI.
THE TRUSTEE
Section 6.1 CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default:
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture against the
Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or opinions furnished
to the Trustee and conforming to the requirements of this Indenture;
provided, however, that in the case of any such certificates or opinions
which by any provision hereof are specifically required to be furnished to
the Trustee, the Trustee shall be under a duty to examine the same to
determine whether or not they conform to the requirements of this
Indenture and shall promptly notify the party delivering the same if such
certificate or opinion does not conform.
(b) In case an Event of Default known to the Trustee has
occurred and is continuing, the Trustee shall, prior to the receipt of
directions, if any, from a Majority of the Noteholders, exercise such of the
rights and powers vested in it by this Indenture, and use the same degree of
care and skill in their exercise as a prudent man would exercise or use under
the circumstances in the conduct of such man's own affairs.
(c) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action, its own
negligent failure to act, or its own willful misconduct, except that:
(1) this subsection shall not be construed to limit the effect of
subsection (a) of this Section;
(2) the Trustee shall not be liable for any error of judgment made
in good faith by a Responsible Officer, unless it shall be proven that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority (or such larger percentage as may
be required by the terms hereof) in Aggregate Outstanding Amount of Notes
relating to the time, method and place of conducting any Proceeding for
any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Indenture;
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any liability in the
performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it; and
(5) the Trustee shall not be liable to the Noteholders for any
action taken or omitted by it at the direction of a Majority of the
Noteholders.
(d) Whether or not therein expressly so provided, every
provision of this Indenture relating to the conduct or affecting the liability
of or affording protection, to the Trustee shall be subject to the provisions of
this Section.
(e) The Trustee, promptly after receipt by a Responsible
Officer thereof, shall transmit by mail to all Holders of Notes, as their names
and addresses appear on the Note Register, all written communications required
under the Indenture to be delivered to the Trustee and received from or on
behalf of the Issuer.
Section 6.2 NOTICE OF DEFAULT.
Promptly after the occurrence of any Default becomes known to a
Responsible Officer of the Trustee, the Trustee shall transmit by mail to the
Collateral Agent and all Holders of Notes, as their names and addresses appear
on the Note Register, notice of all Defaults hereunder known to a Responsible
Officer of the Trustee, unless such Default shall have been cured or waived.
Section 6.3 CERTAIN RIGHTS OF TRUSTEE.
Except as otherwise provided in Section 6.1:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, note or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(b) any request or direction of the Issuer mentioned herein
shall be sufficiently evidenced by an Issuer Request or Issuer Order, as the
case may be;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established prior to
taking, suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad faith on
its part, rely upon an Officers' Certificate delivered to the Trustee;
(d) as a condition to the taking or omitting of any action by
it hereunder, the Trustee may consult with counsel and the advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture or to honor the request
or direction of any of the Noteholders pursuant to this Indenture unless such
Noteholders shall have offered to the Trustee reasonable security or indemnity
against all costs, expenses and liabilities which might reasonably be incurred
by it in compliance with such request or direction;
(f) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent, order, bond,
note or other paper documents, but the Trustee, in its discretion, may and, upon
written direction of the Majority of the Noteholders shall, make such further
inquiry or investigation into such facts or matters as it may see fit or as it
shall be directed, and the Trustee and any Noteholder shall be entitled, on
reasonable prior request (which request shall include a statement of the purpose
therefor) made in advance to the Issuer, to examine the books and records
relating to the Trust Estate of the Issuer, personally or by agent or attorney
during the Issuer's normal business hours; provided that the Trustee or any such
Noteholder shall, and shall cause its agents, to hold in confidence all such
information, except to the extent disclosure may be required by law or by any
regulatory authority and except to the extent that the Trustee, in its sole
judgment, may determine that such disclosure is consistent with its obligations
hereunder;
(g) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or through
agents or attorneys and the Trustee shall not be responsible for any misconduct
or negligence on the part of any agent appointed and supervised, or attorney
appointed, with due care by it hereunder;
(h) to the extent permitted by applicable law, the Trustee
shall not be required to give any bond or surety in respect of the execution of
this Indenture or otherwise;
(i) the Trustee shall not be deemed to have notice or
knowledge of any matter unless a Responsible Officer assigned to and working in
the Trustee's corporate trust department has actual knowledge thereof or unless
written notice thereof is received by the Trustee at the Corporate Trust Office
and such notice references the Notes generally, the Issuer or this Indenture.
Whenever reference is made in this Indenture to an Event of Default such
reference shall, insofar as determining any liability on the part of the Trustee
is concerned, be construed to refer only to an Event of Default of which the
Trustee is deemed to have knowledge in accordance with this paragraph; and
(j) the permissive right of the Trustee to take or refrain
from taking any actions enumerated in this Indenture shall not be construed as a
duty.
Section 6.4 NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF NOTES.
The recitals contained herein and in the Notes, other than the
certificate of authentication thereon, shall be taken as the statements of the
Issuer, and the Trustee assumes no responsibility for their correctness. The
Trustee makes no representation as to the validity or sufficiency of this
Indenture, the Notes or its security interest in the Trust Estate. The Trustee
shall not be accountable for the use or application by the Issuer of Notes or
the proceeds thereof.
Section 6.5 MAY HOLD NOTES.
The Trustee, in its individual or any other capacity, may become the
owner or pledgee of Notes and, may otherwise deal with the Issuer or any
Affiliate thereof, with the same rights it would have if it were not Trustee.
Section 6.6 MONEY HELD IN TRUST.
Money held by the Trustee in trust hereunder need not be segregated
from other funds held by the Trustee in trust hereunder except to the extent
required herein or required by law. The Trustee shall be under no liability for
interest on any money received by it hereunder except as otherwise agreed upon
with the Issuer.
Section 6.7 COMPENSATION AND REIMBURSEMENT.
The Issuer agrees:
(1) to pay the Trustee reasonable compensation for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee in a timely manner upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Trustee in accordance
with any provision of this Indenture or in the enforcement of any
provision hereof (including the reasonable compensation and the expenses
and disbursements of its agents and counsel); and
(3) to indemnify the Trustee, its directors, officers, employees and
agents for, and to hold it harmless against, any loss, liability or
expense incurred without negligence, willful misconduct or bad faith
arising out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defense against any claim
or liability in connection with the exercise or performance of any of its
powers or duties hereunder.
The Trustee hereby agrees not to cause the filing of a petition in
bankruptcy against the Issuer for the non-payment to the Trustee of any amounts
provided by this Section 6.7 until at least 121 days after the payment in full
of all Notes issued under this Indenture. No direction by a Majority of the
Noteholders shall affect the right of the Trustee to collect amounts owed to it
under this Indenture.
As security for the performance of the obligations of the Issuer
under this Section the Trustee shall have a lien prior to the Noteholders upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the payment of principal of or interest on Notes.
Section 6.8 CORPORATE TRUSTEE REQUIRED; ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any State, authorized under such laws to exercise corporate trust
powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by Federal or state authority. If such
corporation publishes reports of condition at least annually, pursuant to law or
to the requirements of the aforesaid supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
Section 6.9 RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee under
Section 6.10.
(b) The Trustee may resign at any time by giving written
notice thereof to the Issuer and the Noteholders. Upon receiving such notice of
resignation, the Issuer shall promptly appoint a successor Trustee or Trustees
by written instrument, in duplicate, executed by an Authorized Officer of the
Issuer, one original copy of which shall be delivered to the Trustee so
resigning and one original copy to the successor Trustee or Trustees, provided
that such successor Trustee shall be appointed only upon the written consent of
the Holders of a Majority of the Notes. If no successor Trustee shall have been
appointed and an instrument of acceptance by a successor Trustee shall not have
been delivered to the Trustee within 30 days after the giving of such notice of
resignation, the resigning Trustee, or any Holder of a Note, may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of a
Majority of the Holders of the Notes delivered to the Trustee and to the Issuer.
(d) If at any time:
(1) the Trustee shall cease to be eligible under Section 6.8 and
shall fail to resign after written request therefor by the Issuers or by
any Noteholder, or
(2) the Trustee shall become incapable of acting or shall be
adjudged a bankrupt or insolvent or a receiver or liquidator of the
Trustee or of its property shall be appointed or any public officer shall
take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation,
then, in any such case, (i) the Issuer, by Issuer Order, may remove the Trustee,
or (ii) any Noteholder may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Trustee and the appointment of a successor Trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Trustee
for any cause, the Issuer, by Issuer Order, shall promptly appoint a successor
Trustee, provided that such successor Trustee shall be appointed only upon the
written notice to Holders of the Notes, which notice states that such
appointment shall be effective unless rejected by a Majority of the Notes within
30 days after the date of such notice and which notice is not followed by a
rejection of the appointment by a Majority of the Holders of the Notes within 30
days. If no successor Trustee shall have been so appointed by the Issuer or the
Noteholders and shall have accepted appointment in the manner hereinafter
provided any Noteholder may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(f) The Issuer shall give prompt notice of each resignation
and each removal of the Trustee and each appointment of a successor Trustee by
mailing written notice of such event by first-class mail, postage prepaid, to
the Holders of the Notes as their names and addresses appear in the Note
Register. Each notice shall include the name of the successor Trustee and the
address of its Corporate Trust Office.
Section 6.10 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Issuer, the retiring Trustee and each Noteholder
an instrument accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts, duties and obligations of the retiring Trustee;
but, on request of the Issuer or the successor Trustee or the Majority of the
Noteholders, such retiring Trustee shall, upon payment of its charges then
unpaid, execute and deliver an instrument transferring to such successor Trustee
all the rights, powers and trusts of the retiring Trustee, and shall duly
assign, transfer and deliver to such successor Trustee all property and money
held by such retiring Trustee hereunder, subject nevertheless to its lien, if
any, provided for in Section 6.7. Upon request of any such successor Trustee,
the Issuer shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts.
Upon acceptance of appointment by a successor Trustee as provided in
this Section, the Issuer shall mail notice thereof by first-class mail, postage
prepaid, to the Holders of the Notes at their last addresses appearing upon the
Note Register. If the Issuer fails to mail such notice within ten days after
acceptance of appointment by the successor Trustee, the successor Trustee shall
cause such notice to be mailed at the expense of the Issuer.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor shall be qualified and eligible under this
Article Six.
Section 6.11 MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS OF TRUSTEE
Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all of the corporate trust
business of the Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be otherwise qualified and eligible under this
Article, without the execution or filing of any paper or any further act on the
part of any of the parties hereto. In case any Notes have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Notes so authenticated with the same effect as if
such successor Trustee had itself authenticated such Notes.
Section 6.12 CO-TRUSTEES AND SEPARATE TRUSTEE.
At any time or times, (a) for the purpose of meeting the legal
requirements of any jurisdiction in which any part of the Trust Estate may at
the time be located, the Issuer and the Trustee shall have power to appoint one
or more Persons either to act as co-trustee, jointly with the Trustee, of all or
any part of the Trust Estate, or to act as separate trustee of any such
property, with such powers as may be provided in the instrument of appointment,
which shall expressly designate the property affected and the capacity of the
appointee as either a co-trustee or separate trustee, and to vest in such Person
or Persons in the capacity aforesaid, any property, title, right or power deemed
necessary or desirable, subject to the other provisions of this Section and in
each case, the Issuer shall for such purpose join with the Trustee in the
execution, delivery and performance of all instruments and agreements necessary
or proper to appoint such co-trustee or separate trustee. If the Issuer does not
join in such appointment within 15 days after the receipt by them of a request
so to do, or in case an Event of Default has occurred and is continuing, the
Trustee alone shall have power to make such appointment.
Should any written instrument from the Issuer be required by any
co-trustee or separate trustee so appointed for more fully confirming to such
co-trustee or separate trustee such property, title, right or power, any and all
such instruments shall, on request, be executed, acknowledged and delivered by
the Issuer.
Every co-trustee or separate trustee shall, to the extent permitted
by law, but to such extent only, be appointed subject to the following terms:
(1) the Notes shall be authenticated and delivered and all rights,
powers, duties and obligations hereunder in respect of the custody of
securities, cash and other personal property held by, or required to be
deposited or pledged with, the Trustee hereunder, shall be exercised
solely by the Trustee;
(2) the rights, powers, duties and obligations hereby conferred or
imposed upon the Trustee in respect of any property covered by the
appointment a co-trustee or separate trustee shall be conferred or imposed
upon and exercised or performed by the Trustee or by the Trustee and such
co-trustee or separate trustee jointly, as shall be provided in the
instrument appointing such co-trustee or separate trustee, except to the
extent that under any law of any jurisdiction in which any particular act
is to be performed, the Trustee shall be incompetent or unqualified to
perform such act, in which event such rights, powers, duties and
obligations shall be exercised and performed by such co-trustee or
separate trustee;
(3) the Trustee at any time, by an instrument in writing executed by
it, with the concurrence of the Issuer evidenced by an Issuer Order, may
accept the resignation of or remove any co-trustee or separate trustee
appointed under this Section 6.12, and, in case an Event of Default has
occurred and is continuing, the Trustee shall have power to accept the
resignation of, or remove, any such co-trustee or separate trustee without
the concurrence of the Issuer. Upon the written request of the Trustee or
the Majority of the Holders of the Notes, the Issuer shall join with the
Trustee or the Majority of the Holders of the Notes, in the execution,
delivery and performance of all instruments and agreements necessary or
proper to effectuate such resignation or removal; a successor to any
co-trustee or separate trustee so resigned or removed may be appointed in
the manner provided in this Section 6.12;
(4) no co-trustee or separate trustee hereunder shall be personally
liable by reason of any act or omission of the Trustee, or any other such
Trustee hereunder;
(5) the Trustee shall not be liable by reason of any act or omission
of a co-trustee or separate trustee; and
(6) any act of Noteholders delivered to the Trustee shall be deemed
to have been delivered to each such co-trustee and separate trustee.
ARTICLE VII.
COVENANTS
Section 7.1 PAYMENT OF PRINCIPAL AND INTEREST.
The Issuer will duly and punctually pay the principal of and
interest on the Notes in accordance with the terms of the Notes and this
Indenture.
Section 7.2 MAINTENANCE OF OFFICE OR AGENCY.
The Issuer will maintain an office or agency in the Borough of
Manhattan, the City of New York, the State of New York where Notes may be
presented or surrendered for payment, where Notes may be surrendered for
registration of transfer or exchange and where notices and demands to or upon
the Issuer in respect of the Notes and this Indenture may be served. The Issuer
hereby initially appoints the Corporate Trust Office of the Trustee, as such
office or agency. The Issuer will give prompt written notice to the Trustee and
the Noteholders of the location, and of any change in the location, of any such
office or agency. If at any time the Issuer shall fail to maintain any such
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, surrenders, notices and demands may be made or served at the
Corporate Trust Office, and the Issuer hereby appoints the Trustee at its
Corporate Trust Office as its agent to receive all such presentations,
surrenders, notices and demands.
Section 7.3 MONEY FOR NOTE PAYMENTS TO BE HELD IN TRUST.
All payments of amounts due and payable with respect to any Notes
that are to be made from amounts withdrawn from the Trust Account shall be made
on behalf of the Issuer by the Trustee.
Section 7.4 EXISTENCE OF ISSUER.
The Issuer will maintain in full force and effect its existence,
rights and franchises as a corporation organized under the laws of the State of
Delaware and will obtain and preserve its qualification to do business as a
corporation in each jurisdiction in which such qualification is or shall be
necessary to protect the validity and enforceability of this Indenture, the Swap
Agreement, the Installment Note or the Notes or other property included in the
Trust Estate.
Section 7.5 PROTECTION OF TRUST ESTATE.
(a) The Issuer shall from time to time execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action as may be necessary or advisable to:
(i) grant more effectively all or any portion of the
Trust Estate;
(ii) maintain or preserve the lien (and the priority
thereof) of this Indenture or to carry out more effectively the purposes
hereof;
(iii) perfect, publish notice of, or protect the
validity of any Grant made or to be made by this Indenture;
(iv) enforce any of the instruments or property included
in the Trust Estate;
(v) preserve and defend title to the Trust Estate and
the rights therein of the Trustee and the Holders of the Notes in such
Trust Estate against the claims of all persons and parties; or
(vi) pay any and all taxes levied or assessed upon all
or any part of the Trust Estate.
The Issuer hereby designates the Trustee its agent and attorney-in-fact to
execute any financing statement, continuation statement or other instrument
required pursuant to this Section 7.5; PROVIDED, HOWEVER, that the Trustee shall
not be responsible for preparing, filing or recording any such instrument.
(b) The Trustee shall not remove any portion of the Trust
Estate that consists of money or is evidenced by an instrument, certificate or
other writing (A) from the jurisdiction in which it was held at the date the
most recent Opinion of Counsel was delivered pursuant to Section 7.6 hereof (or
from the jurisdiction in which it was held as described in the Opinion of
Counsel delivered at the Closing Date pursuant to Section 3.1(11) hereof, if no
Opinion of Counsel has yet been delivered pursuant to Section 7.6 hereof) or (B)
from the possession of the Person who held it on such date unless the Trustee
shall have first received an Opinion of Counsel to the effect that the lien and
security interest created by this Indenture with respect to such property will
continue to be maintained after giving effect to such action or actions.
Section 7.6 OPINIONS AS TO TRUST ESTATE.
On or before February 1 in each calendar year, commencing in 1998,
the Issuer shall furnish to the Trustee an Opinion of Counsel either stating
that, in the opinion of such counsel, such action has been taken with respect to
the Trust Estate, this Indenture, any indentures supplemental hereto and any
other requisite documents as is necessary to maintain the first lien and
perfected security interest created by this Indenture with respect to the Trust
Estate and reciting the details of such action or stating that, in the opinion
of such counsel, no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the actions that will, in
the opinion of such counsel, be required to maintain the lien and security
interest of this Indenture with respect to the Trust Estate until February 1 in
the following calendar year.
Section 7.7 PERFORMANCE OF OBLIGATIONS.
(a) The Issuer shall not take any action, and will use its
best efforts not to permit any action to be taken by others, that would release
any Person from any of such Person's covenants or obligations under any
instrument included in the Trust Estate.
(b) The Issuer shall from time to time execute and deliver all
such supplements and amendments hereto and all such financing statements,
continuation statements, instruments of further assurance and other instruments,
and shall take such other action as may be necessary or advisable to secure the
rights and remedies of the Holders of the Notes hereunder.
Section 7.8 NEGATIVE COVENANTS.
The Issuer will not:
(1) sell, transfer, exchange or otherwise dispose of, or pledge,
mortgage, hypothecate or otherwise encumber (or permit such to occur or
suffer such to exist), any part of the Trust Estate, except as expressly
permitted by this Indenture;
(2) claim any credit on, or make any deduction from, the principal
or interest payable with respect to the Notes, or assert any claim against
any present or future Noteholder, by reason of the payment of any taxes
levied or assessed upon any part of the Trust Estate;
(3) (A) permit the validity or effectiveness of this Indenture or
any Grant hereunder to be impaired, or permit the lien of this Indenture
to be amended, hypothecated, subordinated, terminated or discharged, or
permit any Person to be released from any covenants or obligations with
respect to this Indenture or the Notes, except as may be expressly
permitted hereby or thereby, (B) permit any lien, charge, adverse claim,
security interest, mortgage or other encumbrance (other than the lien of
this Indenture) to be created on or extend to or otherwise arise upon or
burden the Trust Estate or any part thereof, any interest therein or the
proceeds thereof, or (c) take any action that would permit the lien of
this Indenture not to constitute a valid first priority perfected security
interest in the Trust Estate; or
(4) convey, transfer or otherwise distribute to the Parent the Term
Note or the proceeds of the sale, or other disposition, of the Term Note.
Section 7.9 STATEMENT AS TO COMPLIANCE.
On or before February 1 in each calendar year, beginning February 1,
1998, or immediately if there has been a default in the fulfillment of an
obligation under this Indenture, the Issuer shall deliver to the Trustee an
Officers' Certificate stating, as to each signer thereof, that:
(1) a review of the activities of the Issuer during such year and of
the Issuer's performance under this Indenture has been made under his
supervision; and
(2) to the best of his knowledge, based on such review, the Issuer
has fulfilled all of its obligations under this Indenture throughout such
year, or, if there has been a Default in the fulfillment of any such
obligation, specifying each such Default known to him and the nature and
status thereof.
Section 7.10 ISSUER MAY NOT CONSOLIDATE, ETC.
The Issuer shall not consolidate or merge with or into any other
Person or convey or transfer its respective properties and assets substantially
as an entirety to any Person, unless:
(1) the formed, surviving or transferee corporation shall be a
corporation organized and existing under the laws of the United States of
America or any State and shall expressly assume, by an indenture
supplemental hereto, executed and delivered to the Trustee and each
Noteholder, the due and punctual payment of the principal of and interest
on all Notes and the performance of every covenant of this Indenture on
the part of the Issuer to be performed or observed, all as provided
herein;
(2) any formed, surviving or transferee corporation shall have
agreed with the Trustee for the benefit of the Noteholders (i) to observe
the same legal requirements for the recognition of such corporation as a
legal entity separate and apart from any of its Affiliates as are
applicable to the Issuer with respect to its Affiliates as provided in the
certificate of incorporation of the Issuer, and (ii) not to consolidate or
merge with or into any other Person or convey or transfer the Trust Estate
or its respective assets substantially as an entirety to any other Person
except in accordance with the provisions of this Section 7.10;
(3) immediately after giving effect to such transaction, no Default
or Event of Default shall have occurred and be continuing;
(4) the Issuer shall have delivered to the Trustee and each
Noteholder an Officers' Certificate and an Opinion of Counsel each stating
that such consolidation, merger, conveyance or transfer and such
supplemental indenture comply with this Article Seven and that all
conditions precedent in this Article Seven provided for relating to such
transaction have been complied with; and
(5) the corporation into which the Issuer is consolidated or merged
or to which its respective properties and assets are conveyed or
transferred shall not have outstanding any debt obligations or any
liabilities other than those arising under or in respect of the Notes and
the Swap Agreement and other agreements referred to herein.
Section 7.11 SUCCESSOR SUBSTITUTED.
Upon any consolidation or, merger, or conveyance or transfer of the
properties and assets of the Issuer substantially as an entirety, in accordance
with Section 7.10 hereof, the Person with which such consolidation or merger, or
to which such conveyance or transfer is made, shall succeed to, and be
substituted for, and may exercise every right and power of, the Issuer under
this Indenture with the same effect as if such Person had been named as the
Issuer herein. In the event of any such consolidation, merger, conveyance or
transfer, the Person named as the "Issuer", in the first paragraph of this
instrument or any successor which shall theretofore have become such in the
manner prescribed in this Article Seven may be dissolved, wound-up and
liquidated at any time thereafter, and such Person thereafter shall be released
from its liabilities as obligor and maker on all the Notes and from its
obligations under this Indenture.
Section 7.12 NO OTHER BUSINESS.
The Issuer shall not engage in any business or activity other than
(i) issuing and selling Notes pursuant to this Indenture and (ii) engaging in
any other activities that are necessary, suitable or convenient to accomplish
the foregoing or are incidental thereto or connected therewith.
Section 7.13 INDEBTEDNESS.
The Issuer shall not incur or have outstanding, assume, or guarantee
any indebtedness of any Person other than pursuant to this Indenture or as
contemplated hereby.
Section 7.14 PURCHASE OF NOTES.
Notwithstanding anything contained in this Indenture to the
contrary, the Issuer may acquire Notes in open market or privately negotiated
transactions or otherwise.
ARTICLE VIII.
SUPPLEMENTAL INDENTURES
Section 8.1 SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF NOTEHOLDERS.
Without the consent of the Holders of any Notes, the Issuer and the
Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(1) to correct or amplify the description of any property at any
time subject to the lien of this Indenture, or better to assure, convey
and confirm unto the Trustee any property subject or required to be
subjected to the lien of this Indenture, or to subject to the lien of this
Indenture additional property;
(2) to evidence the succession of another Person to the Issuer, and
the assumption by any such successor of the covenants of the Issuer herein
and in the Notes contained;
(3) to add to the covenants of the Issuer or the Trustee, for the
benefit of the Holders of the Notes, or to surrender any right or power
herein conferred upon the Issuer;
(4) to convey, transfer, assign, mortgage or pledge any property to
or with the Trustee; or
(5) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee and to add to or change any of the
provisions of this Indenture as shall be necessary to facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.9, 6.10 or 6.12 hereof.
The Trustee is hereby authorized to join in the execution of any
such supplemental indenture and to make any further appropriate agreements and
stipulations that may be therein contained, but the Trustee shall not be
obligated to enter into any such supplemental indenture that affects the
Trustee's own rights, duties, liabilities or immunities under this Indenture or
otherwise except to the extent required by law. The Trustee shall mail to the
Noteholders a copy of any supplemental indenture at least ten days prior to the
execution thereof by the Trustee and a notice that such supplemental indenture
is in effect after its execution.
Section 8.2 SUPPLEMENTAL INDENTURES WITH CONSENT OF NOTEHOLDERS
With the consent of a Majority of the Holders of the Notes, by Act
of said Holders delivered to the Issuer and the Trustee, the Issuer and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to, or changing in any manner or eliminating
any of the provisions of, this Indenture or of modifying in any manner the
rights of the Holders of the Notes under this Indenture; provided, however, that
no such supplemental indenture shall, without the consent of the Holder of each
outstanding Note affected thereby:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Note, or reduce the
principal amount thereof or the Note Interest Rate thereon or the
Redemption Price with respect thereto, change the provisions of this
Indenture relating to the application of proceeds of the Trust Estate to
the payment of principal of Notes or change any place where, or the coin
or currency in which, any Note or the interest thereon is payable, or
impair the right to institute suit for the enforcement of any such payment
on or after the Maturity thereof (or, in the case of redemption or the
termination of the obligations of the Issuer hereunder pursuant to Section
9.5, on or after the applicable Redemption Date);
(2) reduce the percentage in Aggregate Outstanding Amount, the
consent of the Holders of which is required for the execution of any such
supplemental indenture, or the consent of the Holders of which is required
for any waiver of compliance with certain provisions of this Indenture or
certain Defaults hereunder and their consequences provided for in this
Indenture;
(3) impair or adversely affect the Trust Estate except as otherwise
permitted herein;
(4) permit the creation of any lien ranking prior to or on a parity
with or junior to the lien of this Indenture with respect to any part of
the Trust Estate or terminate the lien of this Indenture on any property
at any time subject hereto or deprive the Holder of any Note of the
security afforded by the lien of this Indenture;
(5) reduce the percentage of the Aggregate Outstanding Amount, the
consent of the Holders of which is required to request that the Trustee
preserve the Trust Estate or to rescind the Trustee's election to preserve
the Trust Estate pursuant to Section 5.5 or to sell or liquidate the Trust
Estate pursuant to Section 5.4 or 5.5;
(6) modify any of the provisions of this Section or Section 5.15,
except to increase any such percentage or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby;
(7) modify the definition of the term "Outstanding" or any of the
provisions of Section 2.8(f); or
(8) modify any of the provisions of this Indenture in such a manner
as to affect the calculation of the amount of any payment of interest or
principal due on any Note on any Payment Date or to affect the rights of
the Holders of Notes to the benefit of any provisions for the redemption
of such Notes contained herein.
The Trustee may in its discretion determine whether or not the
Holders of any Notes would be affected by any supplemental indenture and any
such determination shall be conclusive upon the Holders of all Notes, whether
theretofore or thereafter authenticated and delivered hereunder. The Trustee
shall not be liable for any such determination made in good faith.
It shall not be necessary for any Act of Noteholders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to this Section 8.2, the Trustee shall mail to
the Holders of the Notes a copy thereof. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.
Section 8.3 EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing or accepting the additional trusts created by any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Sections 6.1 and 6.3 hereof) shall be fully protected in relying
upon, an Opinion of Counsel stating that the execution of such supplemental
indenture is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
Section 8.4 EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this Article,
this indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Notes theretofore and thereafter authenticated and delivered hereunder shall
be bound thereby.
Section 8.5 REFERENCE IN NOTES TO SUPPLEMENTAL INDENTURES.
Notes authenticated and delivered after the execution of any
supplemental indenture pursuant to this Article may, and if required by the
Trustee shall, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Issuer shall so determine,
new Notes, so modified as to conform in the opinion of the Trustee and the
Issuer to any such supplemental indenture, may be prepared and executed by the
Issuer and authenticated and delivered by the Trustee in exchange for
Outstanding Notes.
ARTICLE IX.
REDEMPTION; TERMINATION OF TRUST
Section 9.1 REDEMPTION AT THE OPTION OF THE ISSUER; ELECTION TO
. REDEEM
(a) The Notes shall be redeemable, (i) in whole or in part, at
the option of the Issuer on any Payment Date on or after January 20, 2002, and
(ii) in whole but not in part, at the option of the Issuer on any Payment Date
after the Closing Date if the Issuer shall determine (which determination shall
be confirmed by an Opinion of Counsel mailed to the Noteholders at their
addresses in the Note Register) as a result of any Change in Law the Issuer has
or will become obligated to make any deduction for Taxes from any payment
hereunder as described under Section 2.8(f), in each case at the Redemption
Price. All partial redemptions of the Notes shall be allocated on a pro rata
basis among all Holders of the Notes to be redeemed. The "Redemption Price" for
Notes which are optionally redeemed by the Issuer shall be equal to the
Aggregate Outstanding Amount of the Notes to be redeemed, together with accrued
interest at the Note Interest Rate through the last day of the Interest Accrual
Period preceding the date fixed for redemption (exclusive of installments of
interest and principal maturing on or prior to such date, payment of which shall
have been made or duly provided for, to the Holders of the Notes on relevant
Record Dates or as otherwise provided in this Indenture).
(b) Installments of interest and principal due on or prior to
a Redemption Date shall continue to be payable to the Holders of the Notes to be
redeemed, as of the relevant Regular Record Dates according to their terms and
the provisions of Section 2.9. The election of the Issuer to redeem any Notes
pursuant to this Section 9.1 shall be evidenced by an Issuer Order directing the
Trustee to make the payment of the Redemption Price of all of the Notes to be
redeemed from funds in the Trust Account and/or from monies deposited with the
Trustee by the Issuer pursuant to Section 9.4.
(c) The Issuer shall set the Redemption Date and the
Redemption Record Date for any redemption pursuant to this Section and give
notice thereof to the Trustee pursuant to Section 9.2.
(d) Upon redemption in part of the Notes, the Issuer shall
execute, and the Trustee shall authenticate and deliver, in the name of each
Holder of Notes to be redeemed, one or more new Notes, of any authorized
denomination and of an aggregate principal amount reflecting the pro rata
redemption of such Holder's Notes.
Section 9.2 NOTICE TO TRUSTEE.
In the event of any redemption pursuant to Section 9.1, the Issuer
shall, not later than the 35th day immediately preceding the proposed Redemption
Date, notify in writing the Trustee of such proposed Redemption Date and the
proposed Redemption Record Date and of the principal amount of any Notes to be
redeemed on such Redemption Date.
Section 9.3 NOTICE OF REDEMPTION BY THE ISSUER.
Notice of a redemption pursuant to Section 9.1 shall be given by
telex or by telecopy, confirmed by first-class mail, postage prepaid, mailed not
less than twenty-five days prior to the proposed Redemption Record Date, to each
Holder of Notes to be redeemed at his address in the Note Register.
All notices of redemption shall state:
(1) the proposed Redemption Date;
(2) the portion (if the Notes are not to be paid in full) of the
principal amount of such Holder's Notes to be redeemed;
(3) the Redemption Price;
(4) the proposed Redemption Record Date; and
(5) that on such proposed Redemption Date, the Notes are to be paid
in full or in part and if in full that interest thereon shall cease to
accrue on the date specified in the notice and the place where such Notes
must be surrendered for payment of the Redemption Price, which shall be
the office or agency of the Issuer to be maintained as provided in Section
7.2.
Notice of redemption of the Notes to be redeemed shall be given by
the Issuer or, at the Issuer's request, by the Trustee in the name and at the
expense of the Issuer. Such notice of redemption shall be effective only upon
receipt by the Issuer from a Majority in aggregate principal amount of Notes
outstanding of a telex or telecopy indicating their agreement with the
calculations described in subclause (2) or (3) above; provided, however, that if
a Majority in aggregate principal amount of Notes outstanding have not objected
to the notice properly given as described above within forty-eight hours of
initial communication by the Issuer or the Trustee, such notice shall be
effective for all purposes hereunder.
Section 9.4 DEPOSIT OF REDEMPTION PRICE.
In the case of a redemption pursuant to Section 9.1, on or before
the fifth Business Day preceding the proposed Redemption Date contained in the
notice of redemption as provided in Section 9.3, the Issuer shall deposit in the
Trust Account with the Trustee cash in an amount sufficient to provide for
payment of the Redemption Price of all of the Notes that are to be redeemed on
such Redemption Date plus accrued interest until the Redemption Date (unless
such payment is to be made from the Trust Account and there is an amount in
excess of amounts required to be paid on the next Payment Date and sufficient to
make such payment in the Trust Account).
Section 9.5 NOTES PAYABLE ON REDEMPTION DATE.
In the event that notice of redemption pursuant to Section 9.1 has
been given as provided in Section 9.3 hereof, the Notes to be redeemed shall, on
the applicable Redemption Date, become due and payable at the Redemption Price,
and (unless the Issuer shall default in the payment of the Redemption Price)
such Notes shall cease to bear interest on the Redemption Date. Upon final
payment on a Note to be redeemed, the Holder shall present and surrender such
Note at the place specified in the notice of redemption on or prior to such
Redemption Date, provided, however, that payments due on a Payment Date prior to
the Redemption Date shall be payable to the Holders of such Notes registered as
such on the relevant Regular Record Dates according to their terms and the
provisions of Section 2.9.
If any Note called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid, bear interest
from the Redemption Date, at the Note Interest Rate in effect on the date a
notice of redemption was mailed.
ARTICLE X.
TRUST ACCOUNT
Section 10.1 COLLECTION OF MONEY.
Except as otherwise expressly provided herein, the Trustee may
demand payment or delivery of, and shall receive and collect, directly and
without intervention or assistance of any fiscal agent or other intermediary,
all money and other property payable to or receivable by the Trustee pursuant to
this Indenture, including all payments due on the Swap Agreement and the
proceeds thereof included in the Trust Estate, in accordance with the terms and
conditions of the Swap Agreement. The Trustee shall segregate and hold all such
money and property received by it in trust for the Holders of the Notes and
shall apply it as provided in this Indenture.
Section 10.2 TRUST ACCOUNT.
(a) The Trustee shall, prior to the Closing Date, establish a
segregated trust account identified in Schedule C hereto which shall be
designated as the Trust Account identified as held in trust for the benefit of
the Noteholders under this Indenture, into which shall be deposited from time to
time all amounts paid by (i) the Swap Counterparty pursuant to the Swap
Agreement, (ii) the Issuer pursuant to Section 9.4 or 11.1(a)(2)(x) hereof or,
if the amount required to be paid by the Swap Counterparty has not been paid on
a Payment Date, in satisfaction of the amount payable to the Noteholders
pursuant to Section 11.1(a)(1)(x), and (iii) the Collateral Agent pursuant to
Section 5.2 of the Intercreditor Agreement, and from which the Trustee shall
from time to time withdraw all amounts payable to (x) the Holders of the Notes
and (y) the Issuer hereunder. In addition, the Issuer may, but under no
circumstances is required to, remit from time to time such monies to the Trustee
as it deems, in its sole discretion, to be advisable in the event that, but for
such deposit, an Event of Default would occur. All such monies remitted from
time to time to the Trustee pursuant to this Indenture shall be held by the
Trustee as part of the Trust Estate and shall be applied to the purposes
provided herein.
ARTICLE XI.
APPLICATION OF MONIES
Section 11.1 PAYMENT OF MONIES TO AND DISBURSEMENTS OF MONIES FROM
THE TRUST ACCOUNT
(a) Notwithstanding any other provision in this Indenture, the
following payments and withdrawals shall be made to and from the Trust Account:
(1) on each Payment Date, the Trustee shall (x) withdraw from the
Trust Account all amounts payable to the Noteholders as interest pursuant
to this Indenture and disburse such amounts to the Noteholders, and (y)
withdraw all amounts, if any, in the Trust Account in excess of the
amounts referred to in Section 11.1(a)(1)(x) and disburse such amounts to
the Issuer; PROVIDED, HOWEVER, that if on any of the Installment Note
Interest Payment Dates that have occurred since the immediately preceding
Payment Date the amount representing the Swap Counterparty Payment Amount
has not been received by the Swap Counterparty in full, the Swap
Counterparty shall be permitted to net any deficiency against the amounts
the Swap Counterparty is obligated to pay on the succeeding Payment Date
pursuant to the Swap Agreement;
(2) on the Installment Note Extension Date, if any, (x) the Issuer
shall deposit in the Trust Account an amount equal to the unpaid principal
amount of the Notes and (y) the Trustee shall withdraw all amounts
received from the Issuer pursuant to Section 11.1(a)(2)(x) and invest such
amounts in Eligible Investments maturing not later than the Stated
Maturity of the Notes; PROVIDED, HOWEVER, that if on the Installment Note
Extension Date the Trustee invests the deposit amount received from the
Issuer in Eligible Investments maturing before the Stated Maturity of the
Notes then on such maturity date and any subsequent maturity date before
the Stated Maturity of the Notes the Trustee shall reinvest such deposit
amount in Eligible Investments; and
(3) on the Stated Maturity of the Notes, the Trustee shall (x)
withdraw from the Trust Account the unpaid principal amount of the Notes
and all unpaid amounts of interest payable to the Noteholders pursuant to
Section 2.8 of this Indenture and disburse such amounts to the
Noteholders; and (y) withdraw all amounts in the Trust Account in excess
of the amounts referred to in Section 11.1(a)(3)(x) and disburse such
amounts to the Issuer.
(b) If on any Payment Date the amount available in the Trust
Account from the related Interest Accrual Period is insufficient to make the
full amount of the disbursements required to be made by the Trustee on behalf of
the Issuer, the Trustee shall make the disbursements called for in the order and
according to the priority set forth under Section 11.1(a) above to the extent
funds are available therefor.
ARTICLE XII.
MEETINGS OF HOLDERS
Section 12.1 PURPOSES FOR WHICH MEETINGS MAY BE CALLED.
A meeting of Holders may be called at any time and from time to time
pursuant to the provisions of this Article Twelve for any of the following
purposes:
(1) to give any notice to the Issuer or the Trustee, or to give any
direction to the Trustee, or to waive any default hereunder and its
consequences, or to take any other action authorized to be taken by
Holders pursuant to any of the provisions of Article Five;
(2) to remove the Trustee and appoint a successor Trustee pursuant
to the provisions of Article Six;
(3) to consent to the execution of an indenture or indentures
supplemental hereto or to the execution of a supplement, modification or
amendment of the Notes pursuant to the provisions of Section 8.2; and
(4) to take any other action authorized to be taken by or on behalf
of the Holders or any specified percentage of the Holders of the Aggregate
Outstanding Amount of Notes under any other provision of this Indenture or
any of the other instruments included in the Trust Estate or under
applicable law.
Section 12.2 CALL, NOTICE AND PLACE OF MEETINGS BY ISSUER, TRUSTEE
OR HOLDER
(a) The Trustee may at any time call a meeting of all Holders
for any purpose specified in Section 12.1, to be held at such time and at such
place as the Trustee shall determine. Notice of every meeting of Holders,
setting forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, shall be mailed to the Holders of Notes at
their addresses as they shall appear on the Note Register. Except as otherwise
specifically required herein, such notices shall be mailed not less than 20 nor
more than 60 days prior to the date fixed for the meeting. Any failure of the
Trustee to mail such notice, or any defect therein, shall not in any way impair
or affect the validity of any such meeting. The Trustee may fix, in advance of
the giving of such notice, a date which will be considered the record date for
determining the Holders entitled to notice of or to vote at any meeting not more
than 15 days prior to the date fixed for the giving of such notice.
(b) In case at any time the Issuer or the Holders of at least
10% of the Aggregate Outstanding Amount of the Notes shall have requested the
Trustee to call a meeting of all Holders, for any purpose specified in Section
12.1, by written request setting forth in reasonable detail the action proposed
to be taken at the meeting, and the Trustee shall not have given notice of such
meeting within 21 days after receipt of such request or shall not thereafter
proceed to cause the meeting to be held as provided herein, then the Issuer or
the Holders in the amount above specified may determine the time and the place
for such meeting, and may call such meeting for such purposes by giving notice
thereof as provided in Subsection (a) of this Section at the expense of the
Issuer.
Section 12.3 PERSON ENTITLED TO VOTE AT MEETINGS.
To be entitled to vote at any meeting of the Holders, a Person shall
be (a) a Holder of one or more Notes, or (b) a Person appointed by an instrument
in writing as proxy for a Holder or Holders of one or more Notes, by such Holder
or Holders. The only Persons who shall be entitled to be present or to speak at
any meeting of all Holders shall be the Persons entitled to vote at such meeting
and their counsel, any representative of the Trustee and its counsel and any
representative or designee of the Issuer and their respective counsel.
Section 12.4 QUORUM; ADJOURNED MEETINGS; ACTION.
The persons entitled to vote a majority in Aggregate Outstanding
Amount of the Notes shall constitute a quorum for a meeting of all Holders. No
business shall be transacted in the absence of the quorum (determined as
provided in this Section 12.4). In the absence of a quorum within two hours of
the time appointed for any such meeting, the meeting shall, if convened at the
request of Holders, be dissolved. In any other case the meeting may be adjourned
for a period of not less than ten (10) days as determined by the chairman of the
meeting. In the absence of a quorum at any such reconvened meeting, such
reconvened meeting may be further adjourned for a period of not less than ten
(10) days as determined by the chairman of the meeting. Notice of the
reconvening of any adjourned meeting shall be given as provided in Section
12.2(a), except that such notice must be published or mailed not less than eight
(8) days prior to the date on which the meeting is scheduled to be reconvened.
Subject to the foregoing, at the second reconvening of any meeting
adjourned for lack of quorum, the Persons entitled to vote 25% of the Aggregate
Outstanding Amount of the Notes shall constitute a quorum for the taking of any
action set forth in the notice of the original meeting. Notice of the
reconvening of an adjourned meeting shall state expressly the percentage of the
Amount of the Notes which shall constitute a quorum.
At a meeting or an adjourned meeting duly convened and at which a
quorum is presented as aforesaid, any resolution and all matters (except as
limited by the proviso in Section 8.2) shall be effectively passed and decided
if passed or decided by the Persons entitled to vote the lesser of (a) a
majority of the Aggregate Outstanding Amount of the Notes and (b) 75% of the
Aggregate Outstanding Amount of the Notes represented and voting at the meeting.
Any resolution passed or decision taken at any meeting of Holders
duly held in accordance with this Section shall be binding on all the Holders
whether or not present or represented at the meeting.
Section 12.5 DETERMINATION OF VOTING RIGHTS; CONDUCT AND ADJOURNMENT
OF MEETINGS
(a) Notwithstanding any other provision of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders in regard to proof of the holding of Bonds and of the
appointment of proxies and in regard to the appointment and duties of inspectors
of votes, the submission and examination of proxies, certificates and other
evidence of the right to vote, and such other matters concerning the conduct of
the meeting as it shall deem appropriate.
(b) The Trustee shall, by instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Issuer or by Holders as provided in Section 12.2(b), in which case the
Issuer or the Holders calling the meeting, as the case may be, shall in like
manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the Holders of a Majority
of the Aggregate Outstanding Amount of the Notes represented at the meeting and
entitled to vote.
(c) Subject to the provisions of Section 12.3, at any meeting
each Holder of a Note or a holder of a proxy thereof shall be entitled to one
vote for each $100,000 of Aggregate Outstanding Amount of Notes held or
represented by that Holder; PROVIDED, HOWEVER, that no vote shall be cast or
counted at any meeting in respect of any Note challenged as not Outstanding and
ruled by the chairman or temporary chairman, as the case may be, of the meeting
to be not Outstanding. The chairman of the meeting shall have no right to vote,
except as a Holder of an Outstanding Amount or as proxy thereof.
(d) Any meeting of Holders duly called pursuant to Section
12.2 at which a quorum is present may be adjourned from time to time by Persons
entitled to vote a majority of the Aggregate Outstanding Amount of the Notes
represented at the meeting; and the meeting may be held as so adjourned without
further notice.
Section 12.6 COUNTING VOTES AND RECORDING ACTION OF MEETINGS.
The vote upon any resolution submitted to any meeting of Holders
shall be by written ballots on which shall be subscribed the signatures of the
Holders or of their representatives by proxy and the principal amounts (or
portions thereof) and serial numbers of the Outstanding Notes held or
represented by them. The permanent chairman of the meeting shall appoint two
inspectors of votes who shall count all votes cast at the meeting for or against
any resolution and who shall make and file with the secretary of the meeting
their verified written report in duplicate of all votes cast at the meeting for
or against any resolution and who shall make and file with the secretary of the
meeting their verified written report in duplicate of all votes cast at the
meeting. A record, at least in duplicate, of the proceedings of each meeting of
Holders shall be prepared by the secretary of the meeting and there shall be
attached to said record the original reports of the inspectors of votes on any
vote by ballot taken thereat and affidavits by one or more persons having
knowledge of the facts setting forth a copy of the notice of the meeting, and
any adjourned meeting if required, and showing that said notice was given as
provided in Section 12.2 and, if applicable, Section 12.4. The record shall be
signed and verified by the affidavits of the permanent chairman and secretary of
the meeting and one such copy shall be delivered to the Issuer and another to
the Trustee to be preserved by the Trustee, the latter to have attached thereto
the ballots voted at the meeting. Any record so signed and verified shall be
conclusive evidence of the matters therein stated.
Section 12.7 NO DELAY OF RIGHTS BY MEETING.
Nothing contained in this Article shall be deemed or construed to
authorize or permit, by reason of any call of a Holders' meeting or any rights
expressly or impliedly conferred hereunder to make such call, any hindrance or
delay in the exercise of any right or rights conferred upon or reserved to the
Trustee or to the Holders under any provisions of this Indenture or any
indenture supplemental hereto or of the Notes.
ARTICLE XIII.
MISCELLANEOUS
Section 13.1 FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
Upon any request or application by the Issuer to the Trustee to take
any action under this Indenture, the Issuer shall furnish, at the Trustee's
request, (a) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided in this Indenture relating
to such proposed action have been satisfied, that such action is in compliance
with this Indenture and that such action will not impair the security of the
Holders hereunder provided, and (b) an Opinion of Counsel stating that, in the
opinion of such counsel, all such conditions precedent have been complied with,
that such action is in compliance with this Indenture and that such action will
not impair the security of the Holders hereunder provided.
In any case where several matters are required to be certified by,
or covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an Authorized Officer of the Issuer
may be based, insofar as it relates to legal matters, upon an Opinion of Counsel
or a certificate of or representations by such legal counsel, unless such
Authorized Officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based are erroneous. Any such
certificate of an Authorized Officer of the Issuer, or Opinion of Counsel or
certificate of or representations by such legal counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by the Issuer, or any other Person, stating that the information
with respect to such factual matters is in the possession of the Issuer or such
other Person, unless such Authorized Officer of the Issuer or counsel knows that
the certificate or opinion or representations with respect to such matters are
erroneous. Any Opinion of Counsel may also be based, insofar as it relates to
factual matters, upon a certificate or opinion of, or representations by, an
Authorized Officer of the Issuer, stating that the information with respect to
such matters is in the possession of the Issuer unless such counsel knows that
the certificate or opinion or representations with respect to such matters are
erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
Section 13.2 ACTS OF NOTEHOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be given or taken
by Noteholders may be embodied in and evidenced by one or more instruments in
form and substance acceptable to the Trustee of substantially similar tenor
signed by such Noteholders in person or by an agent or proxy duly appointed in
writing; and, except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered to the
Trustee, and, where it is hereby expressly required, to the Issuer. Such
instrument or instruments (and the action embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the Noteholders
signing such instrument or instruments. Proof of execution of any such
instrument or of a writing appointing any such agent shall be sufficient for any
purpose of this Indenture and conclusive in favor of the Trustee and the Issuer,
if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any
such instrument or writing may be proved in any manner which the Trustee deems
sufficient.
(c) The ownership of Notes shall be proved by the Note
Register.
(d) Any request, demand, authorization, direction, notice,
consent, waiver or other action by the Holder of any Notes shall bind the Holder
(and any transferee thereof) of every Note issued upon the registration thereof
or in exchange therefor or in lieu thereof, in respect of anything done, omitted
or suffered to be done by the Trustee or the Issuer in reliance thereon, whether
or not notation of such action is made upon such Note.
Section 11.3 NOTICES, ETC., TO TRUSTEE AND ISSUER.
Any request, demand, authorization, direction, notice, consent,
waiver or Act of Noteholders or other documents provided or permitted by this
Indenture to be made upon, given or furnished to, or filed with:
(1) the Trustee by any Noteholder or by the Issuer shall be
sufficient for every purpose hereunder if made, given, furnished or filed
in writing to and mailed, first class postage prepaid, or sent by
overnight courier guaranteeing next day delivery to the Trustee addressed
to it at its Corporate Trust Office, or at any other address furnished in
writing to the Issuer or Noteholder by the Trustee; or
(2) the Issuer by the Trustee or by any Noteholder shall be
sufficient for every purpose hereunder if in writing and mailed, first
class postage prepaid, or sent by overnight courier guaranteeing next day
delivery to the Issuer addressed to the Issuer at 375 Park Avenue, New
York, New York 10152, Attention: Secretary or at any other address
previously furnished in writing to the Trustee by the Issuer.
Section 13.4 STANDARD OF CONDUCT.
In exercising any of its or their voting rights, rights to direct
and consent or any other rights as a Noteholder under this Indenture, subject to
the terms and conditions of the Indenture, including, without limitation,
Section 5.9, a Noteholder or Noteholders shall not have any obligation or duty
to any Person or to consider or take into account the interests of any Person
and shall not be liable to any Person for any action taken by it or them or at
its or their direction or any failure by it or them to act or to direct that an
action be taken, without regard to whether such action or inaction benefits or
adversely affects any Noteholder or an Issuer or any other Person, except for
any liability to which such Noteholder may be subject to the extent the same
results from such Noteholder's taking or directing an action, or failing to take
or direct an action, in bad faith.
Section 13.5 RIGHT TO LIST OF HOLDERS.
Any Noteholder shall have the right, upon five days prior notice to
the Trustee, to obtain a complete list of Noteholders.
Section 13.6 NOTICES TO NOTEHOLDERS; WAIVER.
Where this Indenture provides for giving a copy of any report or
notice to Noteholders (such report or notice a "notice") of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Noteholder
affected by such event, at his mailing address as it appears on the Note
Register, not later than the latest date, and not earlier than the earliest
date, prescribed for the giving of such notice. In any case where notice to
Noteholders is given by mail, neither the failure to mail such notice, nor any
defect in any notice so mailed, to any particular Noteholder shall affect the
sufficiency of such notice with respect to other Noteholders, and any notice
which is mailed in the manner herein provided shall conclusively be presumed to
have been duly given whether or not received.
Where this Indenture provides for notice in any manner, such notice
may be waived in writing by any Person entitled to receive such notice, either
before or after the event, and such waiver shall be the equivalent of such
notice. Waivers of notice by Noteholders shall be filed with the Trustee but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In the event that, by reason of the suspension of the regular mail
service as a result of a strike, work stoppage or similar activity, it shall be
impractical to mail notice of any event to Noteholders when such notice is
required to be given pursuant to any provision of this Indenture, then any
manner of giving such notice as shall be satisfactory to the Trustee shall be
deemed to be a sufficient giving of such notice.
Section 13.7 EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of Contents
are for convenience only and shall not affect the construction hereof.
Section 13.8 SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Issuer shall
bind its respective successors and assigns, whether so expressed or not.
Section 13.9 SEPARABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
Section 13.10 BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Notes, expressed or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder, and the Noteholders, any benefit or any legal or equitable right,
remedy or claim under this Indenture.
Section 13.11 GOVERNING LAW.
This Indenture and each Note shall be construed in accordance with
and governed by the laws of the State of New York applicable to agreements made
and to be performed therein.
Section 13.12 COUNTERPARTS.
This instrument may be executed in any number of counterparts, each
of which so executed shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same instrument.
Section 13.13 RULE 144A INFORMATION.
To permit compliance with Rule 144A under the Securities Act in
connection with the sale of the Notes, the Issuer agrees to furnish upon request
of a Noteholder to such holder and to a prospective purchaser designated by such
holder, the information required to be delivered under Rule 144A(d)(4) under the
Securities Act if at the time of the request the Issuer is not a reporting
company under Section 13 or Section 15(d) of the Exchange Act, or exempt from
reporting pursuant to Rule 12g3-2(b) under the Exchange Act.
ARTICLE XIV.
ASSIGNMENT OF SWAP AGREEMENT
Section 14.1 ASSIGNMENT OF SWAP AGREEMENT.
The Issuer, in furtherance of the covenants of the Indenture and as
security for the Noteholders and the performance and observance of the
provisions hereof and thereof, hereby assigns, transfers, conveys and sets over
to the Trustee, for the benefit of the Noteholders, all of the Issuer's estate,
right, title and interest in, to and under the Swap Agreement, including,
without limitation, (i) all of the Issuer's interest in all monies and proceeds
held by the Issuer thereunder, (ii) the right to give all notices of termination
and to take any legal action upon the breach of an obligation of the other party
thereunder, including the commencement, conduct and consummation of proceedings
at law or in equity, (iii) the right to receive all notices, accountings,
consents, releases and statements thereunder and (iv) the right to do any and
all other things whatsoever that the Issuer is or may be entitled to do
thereunder; PROVIDED, however, that so long as no Event of Default has occurred
and is continuing, the Trustee hereby grants the Issuer a license to exercise
all of the Issuer's rights pursuant to the Swap Agreement without notice to or
the consent of the Trustee or the Noteholders (except as otherwise expressly
required as set forth in paragraph (b) of Section 6.1 of the Intercreditor
Agreement), which license shall be and is hereby deemed to be automatically
revoked upon the occurrence of any Event of Default.
(a) The assignment made hereby is executed as collateral
security, and the execution and delivery hereby shall not in any way impair or
diminish the obligations of the Issuer under the provisions of the Swap
Agreement nor shall any of the obligations contained in the Swap Agreement be
imposed on the Trustee.
(b) Upon the retirement of the Notes and the release of the
Trust Estate from the lien of the Indenture, this assignment and all rights
assigned herein to the Trustee for the benefit of the Noteholders shall cease
and terminate and all the estate, right, title and interest of the Trustee in,
to and under the Swap Agreement shall revert to the Issuer and no further
instrument or act shall be necessary to evidence such termination and reversion.
(c) The Issuer represents that the Issuer has not executed any
other assignment of the Swap Agreement.
(d) The Issuer agrees that this assignment is irrevocable, and
that it will not take any action which is inconsistent with this assignment or
make any other assignment inconsistent herewith. The Issuer will, from time to
time upon the request of the Trustee, execute all instruments of further
assurance and all such supplemental instruments with respect to this assignment
as the Trustee may specify.
IN WITNESS WHEREOF, we have set our hands as of the 20th day of
October, 1997.
ALLEGHANY FUNDING CORPORATION,
Issuer
By: /s/ DAVID B. CUMING
--------------------------------------
Name: David B. Cuming
Title: President
THE CHASE MANHATTAN BANK,
Trustee
By: /s/ W.B. DODGE
--------------------------------------
Name: W.B. Dodge
Title: Vice President
[SIGNATURE INDECIPHERABLE]
- -----------------------------
Attest
[Seal]
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for
said county and state, on this day personally appeared David B. Cuming, known to
me to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said
ALLEGHANY FUNDING CORPORATION, and that he executed the same as the act of said
corporation for the purpose and consideration therein expressed, and in the
capacities therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, as of this 20th day of
October, 1997.
/s/ Carol Stark
-------------------------------------
Carol Stark
Notary Public State of New York
No. 31-9156895
Qualified in New York County
Commission Expires April 30, 1998
[SEAL]
My commission expires:
STATE OF NEW YORK )
)
COUNTY OF NEW YORK )
BEFORE ME, the undersigned authority, a Notary Public in and for
said county and state, on this day personally appeared W.B. Dodge, known to me
to be the person and officer whose name is subscribed to the foregoing
instrument and acknowledged to me that the same was the act of the said THE
CHASE MANHATTAN BANK, a corporation organized and existing under the laws of the
State of New York, and that he executed the same as the act of said corporation
for the purpose and consideration therein expressed, and in the capacities
therein stated.
GIVEN UNDER MY HAND AND SEAL OF OFFICE, as of this 20th day of
October, 1997.
/s/ Annabelle DeLuca
-------------------------------------
Annabelle DeLuca
Notary Public State of New York
No. 01DE5013759
Qualified in Kings County
Commission Expires July 15, 1999
[SEAL]
EXHIBIT A
Form of Floating Rate Secured Note Due 2007
Principal of this note is payable at maturity as set forth herein. Accordingly,
the outstanding principal of this note at any time shall be the amount shown on
the face hereof.
The notes represent obligations solely of the issuer and will not be insured or
guaranteed by any affiliate of the issuer or by any other person or entity.
This security has not been registered under the Securities Act of 1933, as
amended (the "Securities Act"), or any state or other securities laws. Neither
this security nor any interest or participation herein may be reoffered, sold,
assigned, transferred, pledged, encumbered or otherwise disposed of in the
absence of such registration or unless the transaction is exempt from, or not
subject to, the registration requirements of the Securities Act. The holder of
this security by its acceptance hereof (1) represents that (A) it is a
"Qualified Institutional Buyer" (as defined in Rule 144A under the Securities
Act) or (B) it is an institutional "Accredited Investor" (as defined in Rule
501(a)(1), (2), (3) or (7) under the Securities Act (an "Accredited Investor"),
(2) agrees that it will not offer, sell or otherwise transfer this security
except (a) to the Company, (b) pursuant to a registration statement which has
been declared effective under the Securities Act, (C) for so long as the
securities are eligible for resale pursuant to Rule 144A, to a person it
reasonably believes is a "Qualified Institutional Buyer" as defined in Rule 144A
under the Securities Act that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the transfer is
being made in reliance on Rule 144A, or (D) to an accredited investor that is
acquiring the security for its own account, or for the account of such an
accredited investor, for investment and not with a view to, or for offer or sale
in connection with, any distribution in violation of the Securities Act and (3)
agrees that it will give to each person to whom this security is transferred a
notice substantially to the effect of this legend; provided that the Company and
the Trustee shall have the right prior to any such offer, sale or transfer (I)
pursuant to clause (D) to require the delivery of an opinion of counsel,
certification and/or other information satisfactory to each of them, and (II) in
each of the foregoing cases, to require that a certification of transfer in the
form appearing on the other side of this security is completed and delivered by
the transferor to the Trustee. Any transfer in violation of the foregoing will
be of no force and effect, will be void ab initio, and will not operate to
transfer any rights to the transferee, notwithstanding any instructions to the
contrary to the issuer, the Trustee or any intermediary. Neither the Issuer nor
the Trustee is obligated to register this note under the Securities Act or any
state securities laws.
ALLEGHANY FUNDING CORPORATION
FLOATING RATE SECURED NOTE DUE JANUARY 22, 2007
No._____ $_______________________
Alleghany Funding Corporation, a corporation duly organized and existing
under the laws of the State of Delaware (the "Issuer"), for value received,
hereby promises to pay to _________________ _______________________________or
registered assigns the principal sum of _______________________, and to pay
interest (computed on the basis of the actual number of days in the applicable
Interest Accrual Period (as defined below) and a 360-day year) on October 20,
January 20, April 20 and July 20 of each year, commencing January 20, 1998 and
at Stated Maturity on January 22, 2007, unless the Payment Date is a day which
is not a Business Day, in which case the Payment Date will be postponed to the
next day which is a Business Day (each such date, a "Payment Date"), in an
amount equal to the interest accrued at a rate per annum equal to the Note
Interest Rate (as defined below) on the unpaid principal amount of this Note
during the period commencing on the prior Payment Date (or the date of the
initial issuance of the Notes in the case of the first Payment Date) (the
"Accrual Date") and ending on the day preceding such Payment Date (each such
period, an "Interest Accrual Period"). The "Note Interest Rate" for the first
Interest Accrual Period shall be equal to 6.14844%; thereafter the "Note
Interest Rate" shall be equal to 0.375% in excess of LIBOR (where LIBOR is
calculated pursuant to the provisions of Schedule A to the Indenture).
IN WITNESS WHEREOF, the issuer has caused this instrument to be duly
executed.
ALLEGHANY FUNDING CORPORATION,
as Issuer
By ________________________________
President
Attest:
- ---------------------------
Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
Dated
October 20, 1997
By _________________________________
Authorized Officer
This Note is one of a duly authorized issue of Notes of the Issuer
designated as its "Floating Rate Secured Notes Due 2007" (herein called the
"Notes"), issued and to be issued under an indenture dated as of October 20,
1997 (herein called the "Indenture"), between the Issuer and The Chase Manhattan
Bank, in its capacity as trustee (the "Trustee," which term includes any
successor Trustee under the Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a statement of the respective
rights thereunder of the Issuer, the Trustee and the Holders of the Notes and
the terms upon which the Notes are, and are to be, authenticated and delivered.
Capitalized terms used in this Note that are not defined herein shall have the
meanings assigned to them in the Indenture. A copy of the Indenture is on file
with the Trustee at its Corporate Trust Office and is available for inspection
at such office. The following description of certain terms of the Indenture is
qualified in reference to the Indenture; in the event of any inconsistency, the
Indenture shall govern.
Principal will be payable on this Note on January 22, 2007 ("Stated
Maturity"), unless the Stated Maturity is a day which is not a Business Day, in
which case payment will be made on the next succeeding Business Day, and no
interest will accrue from the period after such Stated Maturity. The Notes are
Redeemable at the option of the Issuer, (i) in whole or in part, on any Payment
Date commencing January 20, 2002, or (ii) in whole but not in part, on any
Payment Date after the Closing Date if the Issuer shall determine that it has or
will become obligated to make any deduction for Taxes from any payment under the
Indenture (each such date, a "Redemption Date"), at a Redemption Price equal to
the Aggregate Outstanding Amount of the Notes to be redeemed, plus accrued
interest at the Note Interest Rate through the last day of the Interest Accrual
Period preceding the date fixed for redemption. All partial redemptions of the
Notes shall be allocated on a pro rata basis among all Holders of the Notes to
be redeemed. Notice of any such proposed redemption shall be given to the Holder
not less than twenty-five days prior to the Redemption Record Date. Payments of
interest on this Note shall also be subject to Section 2.8 of the Indenture.
The principal of and interest on this Note are payable to the Person
in whose name this Note (or one or more predecessor Notes) is registered at the
close of business on the Regular Record Date for such Payment Date, which shall
be the fifteenth day (whether or not a Business Day) preceding such Payment
Date, notwithstanding any subsequent transfers between such Regular Record Date
and such Payment Date. Any Defaulted Interest shall forthwith cease to be
payable to the Holder on such Regular Record Date, and shall be paid to the
Person in whose name this Note (or one or more predecessor Notes) is registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest to be fixed by the Trustee, notice of which shall be given to
the Holder not less than five days prior to such Special Record Date. Payment of
principal of and interest on this Note shall be made by wire transfer to a
United States Dollar account maintained by the payee at a depository institution
in the United States.
Any and all payments made by the Issuer to a Person other than a United
States Person (within the meaning of Section 7701(a)(30) of the Code) shall be
made free and clear of and without deduction for any present or future taxes,
levies, imposts, deductions, charges or withholdings imposed by the United
States or any state, territory or possession of the United States and all
liabilities with respect thereto, excluding income and franchise taxes imposed
by the jurisdiction of its incorporation or organization or residence, for tax
purposes, or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities being
referred to as "Taxes") imposed as a result of a Change in Law. If the Issuer
shall be required by law to make any such deduction for Taxes imposed as a
result of a Change in Law from any payment, (i) the sum payable shall be
increased as may be necessary so that, after making all required deductions
(including deductions applicable to additional sums payable under the preceding
sentence), the recipient of such payment receives an amount equal to the sum it
would have received had no such deductions been made and (ii) the Issuer shall
make such deductions and shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable law.
Payment of the principal on this Note at its Maturity shall be made upon
presentation and surrender of this Note to the Corporate Trust Office of the
Trustee. The Issuer or the Trustee will notify the Person who was the registered
Holder hereof on the Regular Record Date preceding such Payment Date that such
Note is to be paid in full, by notice mailed no later than the fifth day
preceding such Payment Date.
Under the Indenture, an Event of Default means any one of the following:
(i) default in the payment of any interest on any Note when the same becomes due
and payable, which default continues for a period of five days; (ii) default in
the payment of principal on any Note at its Stated Maturity or Redemption Date;
(iii) default in the payment of any interest on the Installment Note or any
amount due under the Swap Agreement when the same becomes due and payable, which
default continues for a period of forty-five days; (iv) default in the payment
of principal on the Installment Note when the same becomes due and payable,
which default shall continue for a period of thirty days; (v) default in the
performance, or breach, of certain covenants, warranties and agreements of the
Issuer in the Indenture or the Swap Agreement, or the failure of any
representation or warranty of the Issuer in the Indenture to be correct and the
continuance of such default, breach or failure for a period of 45 days after
Notice of Default is given; (vi) default in the performance, or breach, of
certain covenants, warranties and agreements of MLPFS or ML&Co. in the
Installment Sales Agreement, the Guarantee or the Installment Note and the
continuance of such default or breach for a period of 90 days after "Notice of
Default" is given; (vii) certain events of bankruptcy or insolvency of the
Issuer, MLPFS or ML&Co.; and (viii) at any time, that the obligation of the
Issuer to pay principal of or interest on the Notes has become unlawful under
Federal or State law; PROVIDED, HOWEVER, that in the event any amount due under
the Swap Agreement is not paid when due and payable the Issuer may cure such
default by substituting a replacement Swap Agreement entered into with a
replacement Swap Counterparty rated "AA-" or better by Standard & Poor's and
"Aa3" or better by Moody's in the case of senior debt obligations in the manner
provided in the Indenture. If an Event of Default shall occur and be continuing,
the Notes may become or be declared due and payable in the manner and with the
effect provided in the Indenture.
As provided in the Indenture, no transfer of a Note shall be made unless
such transfer (i) is made to a person or entity which is either a QIB or an
institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or
(7) of Regulation D under the Securities Act of 1933, as amended (the
"Securities Act")), and complies with or is exempt under applicable state
securities laws, and (ii) does not constitute a "prohibited transaction" under
the Employee Retirement Income Security Act of 1974, as amended. In the event
that such a transfer is to be made, the Trustee will require, in order to assure
compliance with the transfer restrictions set forth in Section 2.6 of the
Indenture, the certifications which may be required as set forth in Section 2.6.
Neither the Issuer nor the Trustee is obligated to register the Notes under the
Securities Act or any state securities laws.
Subject to the preceding paragraph, subject to the restrictions on
transfer contained in this Note, and subject to certain further limitations set
forth in the Indenture, the transfer of this Note may be registered on the Note
Register, upon surrender of this Note for registration of transfer at the
Corporate Trust Office of the Trustee, duly endorsed by, or accompanied by a
written instrument of transfer in form satisfactory to the Issuer and the
Trustee duly executed by, the Holder hereof or his attorney duly authorized in
writing, and thereupon one or more new Notes, of the same Class, authorized
denominations and in the same aggregate principal amount, will be issued to the
designated transferee or transferees.
Prior to the due presentment for registration of transfer of this Note,
the Issuer or the Trustee and any agent of the Issuer or the Trustee shall treat
the Person in whose name this Note is registered as the owner hereof for
purposes of making payments and for any other purpose, whether or not this Note
be overdue, and neither the Issuer, the Trustee nor any such agent, shall be
affected by notice to the contrary.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Issuer and the rights of the Holders of the Notes under the Indenture at any
time by the Issuer with the consent of a Majority of the Notes affected thereby.
The Indenture also contains provisions permitting a Majority of the Noteholders
to waive compliance by the Issuer with certain provisions of the Indenture and
certain past Events of Default under the Indenture and their consequences and to
cause the Trustee to initiate and direct the exercise of certain rights and
remedies conferred upon or available to the Trustee as set forth in the
Indenture. Any such consent, waiver or action shall be conclusive and binding
upon the Holder of this Note and upon all future Holders of this Note and of any
Note issued upon the registration of transfer hereof or in exchange therefor or
in lieu hereof whether or not notation of such consent or waiver is made upon
this Note. Without the consent of the Holders of each Outstanding Note affected,
no supplemental indenture may (i) change the Stated Maturity of the principal
of, or any installment of principal of or interest on, any Note, or reduce the
principal amount thereof or the rate of interest thereon or the Redemption Price
with respect thereto, (ii) reduce the percentage of Holders of Notes whose
consent is required for the authorization of any supplemental indenture or for
any waiver of compliance with certain provisions of the Indenture or certain
defaults thereunder or their consequences, (iii) impair or adversely affect the
Trust Estate except as otherwise permitted in the Indenture, (iv) permit the
creation of any lien ranking prior to or on parity with or junior to the lien of
the Indenture with respect to any part of the Trust Estate or terminate the lien
of the Indenture, (v) reduce the percentage of Holders of Notes whose consent is
required to direct the Trustee to preserve or liquidate the Trust Estate, (vi)
modify any of the provisions of the Indenture with respect to supplemental
indentures or waiver of Defaults except to increase the percentage of
Outstanding Notes whose consent is required for any such action or to provide
that other provisions of the Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Note affected thereby, (vii) modify
the definition of the term "Outstanding," or the provisions of the Indenture
obligating the Issuer to make all payments free and clear of and without
deductions for Taxes, or (viii) modify any of the provisions of the Indenture in
such a manner as to affect the calculation of the amount of any payment of
interest or principal on any Note or to affect the right of the Holders of Notes
to the benefit of any provisions for the redemption of such Notes contained
therein.
The Issuer and the Trustee may also enter into supplemental indentures,
without obtaining the consent of Noteholders or the Swap Counterparty, in order
to, among other things, (i) correct or amplify the description of any property
at any time subject to the lien of the Indenture, or to better assure, convey
and confirm unto the Trustee any property subject to the lien of the Indenture,
(ii) evidence the succession of any person to the Issuer, (iii) add to the
covenants of the Issuer or the Trustee for the benefit of the Noteholders or to
surrender any right or power conferred upon the Issuer, (iv) pledge any property
to or with the Trustee, and (v) evidence and provide for the acceptance of
appointment by a successor trustee and to add to or change any of the provisions
of the Indenture as shall be necessary to facilitate the administration of the
Trust Estate by more than one Trustee.
The term "Issuer" as used in this Note includes any successors to the
Issuer under the Indenture.
The Notes are issuable only in registered form in minimum denominations of
$1,000,000 and integral multiples of $100,000 in excess thereof, as provided in
the Indenture. The Notes are exchangeable for a like aggregate principal amount
of Notes of the same Class of different authorized denominations, as requested
by the Holder surrendering same.
The remedies of the Trustee and of the Holder hereof as provided herein,
or in the Indenture, shall be cumulative and concurrent. No failure on the part
of the Trustee or any Holder in exercising any right or remedy hereunder or
thereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or remedy preclude any other further exercise thereof
or the exercise of any other right or remedy hereunder or thereunder.
As provided in the Indenture, this Note and the Indenture shall be
construed in accordance with, and governed by, the laws of the State of New York
applicable to agreements made and to be performed therein.
No reference herein to the Indenture and no provision of this Note or of
the Indenture shall alter or impair the obligation of the Issuer, which is
absolute and unconditional to the extent permitted by applicable law, to pay the
principal of, and interest on, this Note at the times, place and rate, and
manner herein and therein prescribed.
Unless the certificate of authentication on the face of this instrument
has been manually executed by the Trustee under the Indenture, this Note shall
not be entitled to any benefit under such Indenture, or be valid or obligatory
for any purpose.
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM-as tenants in common UNIF GIFT (TRANS) MIN ACT-..Custodian..
(Cust) (Minor)
TEN ENT-as tenants by the under Uniform Gifts(Transfers)
entireties to Minors Act..........................
(State)
JT TEN -as joint tenants with right
of survivorship and not as
tenants in common
Additional abbreviations may also be used though not in the above list.
--------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfers)
unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
- -------------------------------
- --------------------------------------------------------------------------------
Please print or typewrite name and address including postal zip code of assignee
- --------------------------------------------------------------------------------
- ----------------------------------------------------------------
with within Note and all rights thereunder, hereby irrevocably constituting and
appointing ------------------------- attorney to transfer said Note on the books
of the Issuer, with full power of substitution in the premises.
In connection with any transfer of this Note occurring prior to the
date of an effective registration statement under the Securities Act, the
undersigned confirms that without utilizing any general solicitations or general
advertising that:
[Check One]
[ ](a) This Note is being transferred in compliance with the exemption
from registration under the Securities Act of 1933, as amended,
provided by Rule 144A thereunder, and the transfer of this Note will
not constitute a "prohibited transaction" under the Employee
Retirement Income Security Act of 1974, as amended.
or
[ ](b) This Note is being transferred other than in accordance with (a)
above and documents are being furnished which comply with the
conditions of transfer set forth in this Note and the Indenture.
If none of the foregoing boxes is checked, the Issuer shall not be obligated to
register this Note in the name of any Person other than the Holder hereof unless
and until the conditions to any such transfer of registration set forth herein
and in Section 2.6 of the Indenture shall have been satisfied.
Dated: -----------------------------
--------------------------------------------------------------------------
NOTICE: The signature to this assignment must
correspond with the name as written upon the face
of the within-mentioned instrument in every
particular, without alteration or any change
whatsoever.
Signature Guarantee: --------------------------------
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED:
The undersigned represents and warrants that it is purchasing this
Note for its own account or an account with respect to which it exercises sole
investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Issuer as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representation in order to claim the
exemption from registration provided by Rule 144A. The undersigned further
represents and warrants that its acquisition of this Note will not constitute a
prohibited transaction under the Employee Retirement Income Security Act of
1974, as amended.
Dated: -------------------- --------------------------------------------------
NOTICE: To be executed by an executive officer
EXHIBIT B
[Date]
ALLEGHANY FUNDING CORPORATION
375 Park Avenue
New York, NY 10152
THE CHASE MANHATTAN BANK 450 West 33rd Street New York, NY 10001
Ladies and Gentlemen:
In connection with the proposed transfer of $------------- aggregate
principal amount of the Floating Rate Secured Notes Due 2007, (the "Notes") of
Alleghany Funding Corporation (the "Issuer") to the undersigned by (TRANSFEROR)
, pursuant to Section 2.6 of the Indenture, dated as of October 20, 1997 (the
"Indenture"), between the Issuer and The Chase Manhattan Bank, as Trustee (the
"Trustee"), we hereby represent and warrant as follows:
(1) We understand that the Notes have not been, and will not
be, registered under the Securities Act of 1933, as amended (the "Securities
Act"), or any other applicable securities law and may not be offered, sold or
otherwise transferred except in compliance with the registration requirements of
the Securities Act or any other applicable securities law, or pursuant to an
exemption therefrom, and in each case in compliance with the conditions for
transfer set forth below. We agree on our own behalf and on behalf of any
investor account for which we are purchasing Notes to offer, sell or otherwise
transfer such Notes only (a) to the Issuer, (b) pursuant to a registration
statement that has been declared effective under the Securities Act, (c) for so
long as the Notes are eligible for resale pursuant to Rule 144A under the
Securities Act, to a person we reasonably believe is a "Qualified Institutional
Buyer" under Rule 144A (a "QIB") that purchases for its own account or for the
account of a QIB to whom notice is given that the transfer is being made in
reliance on Rule 144A, or (d) to an institutional "accredited investor" within
the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule 501 of Regulation D
under the Securities Act (an "Accredited Investor") that is acquiring the Notes
for its own account or for the account of such an Accredited Investor for
investment and not with a view to, or for offer or sale in connection with, any
distribution in violation of the Securities Act, subject in each of the
foregoing cases to any requirement of law that the disposition of our property
or the property of such investor account or accounts be at all times within our
or their control and to compliance with any applicable state securities laws. If
any resale or other transfer of the Notes is proposed to be made pursuant to
clause (d) above, the transferor shall deliver to the Issuer and the Trustee, a
letter from the transferee substantially in the form of this letter, which shall
provide, among other things, that the transferee is an "Accredited Investor"
within the meaning of subparagraphs (a)(1), (2), (3) or (7) of Rule 501 of
Regulation D under the Securities Act and that it is acquiring such Notes for
investment and not with a view to, or for the offer or sale in connection with,
any distribution in violation of the Securities Act. We acknowledge that the
Issuer and the Trustee reserve the right prior to any offer, sale or other
transfer of the Notes pursuant to clause (d) to require the delivery of an
opinion of counsel, a certification and/or other information satisfactory to the
Issuer and the Trustee.
(2) We are an Accredited Investor (as defined in Rule
501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) purchasing
for our own account or for the account of one or more such Accredited Investors,
and we are acquiring the Notes for investment and not with a view to, or for
offer or sale in connection with, any distribution in violation of the
Securities Act or any other applicable securities laws and we have such
knowledge and experience in financial and business matters as to be capable of
evaluating the risks of our investment in the Notes, and we and any accounts for
which we are acting are each able to bear the economic risk of our or its
investments in the Notes for an indefinite period.
(3) We are acquiring the Notes purchased by us for our own
account or for one or more accounts as to each of which we exercise sole
investment discretion.
(4) We will not acquire the Notes for or on behalf of any
employee benefit plan or other arrangement that is subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of
the Internal Revenue Code of 1986 ("Plan"), any entity whose underlying assets
include assets of a plan pursuant to 29 C.F.R. Section 2510.3-101 or otherwise
(a "Plan Entity"), or any person investing the assets of any Plan or Plan
Entity. [If the foregoing statement cannot be made, describe facts and
applicable exemption.]
(5) You are entitled to rely upon this letter and you are
irrevocably authorized to produce this letter or a copy hereof to any interested
party in any administrative or legal proceeding or official inquiry with respect
to the matters covered hereby.
Very truly yours,
Date: ----------------------
By:--------------------------------
(NAME OF PURCHASER]
Upon registration of transfer, the Notes should be registered
in the name of the new beneficial owner as follows:
Name: ------------------------------------------------------------------------
Address: ---------------------------------------------------------------------
Taxpayer ID Number: ----------------------------------------------------------
EXHIBIT C-1
Note No. 001
INSTALLMENT NOTE
THIS INSTALLMENT NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT
REGISTRATION UNDER THAT ACT EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER THAT
ACT, PROVIDED, HOWEVER, THAT THE FOREGOING SHALL BE SUBJECT TO ANY REQUIREMENT
OF LAW THAT THE DISPOSITION OF THE PROPERTY OF THE HOLDER OF THIS INSTALLMENT
NOTE SHALL AT ALL TIMES BE AND REMAIN WITHIN ITS CONTROL.
Principal Sum $91,535,343.54 Date: January 7, 1987
-------------
FOR VALUE RECEIVED, Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Company") hereby promises to pay to ALLEGHANY CORPORATION ("Alleghany"),
or registered assigns, the Principal Sum of Ninety-One Million Five Hundred
Thirty-Five Thousand Three Hundred Forty-Three Dollars and Fifty-Four Cents
($91,535,343.54) on January 19, 1994, and to pay interest on the unpaid
principal amount hereof until the Principal Sum hereof has been paid in full.
Interest shall be payable to the person to whom this installment note
("Installment Note") is registered as of the close of business on the Wednesday
(whether or not a Business Day (as hereinafter defined)) next preceding an
Interest Payment Date (as hereinafter defined). Interest on this Installment
Note will accrue from January 7, 1987 and will be payable on each succeeding
fourth Wednesday after such date, except that if such fourth Wednesday is not a
Business Day, then interest shall be paid on the immediately preceding Business
Day (an "Interest Payment Date"). Interest payments shall include interest
accrued from and including January 7, 1987 in the case of the first interest
payment, and from and including the immediately preceding Interest Payment Date
in the case of all subsequent interest payments, through and including the day
immediately prior to each Interest Payment Date. Each period for which interest
is payable is hereinafter referred to as an "Interest Period". Interest will be
computed based upon a 360-day year and the actual number of days in the Interest
Period and the Interest Rate (as hereinafter defined) for such Interest Period.
The "Interest Rate" on the Installment Notes for each Interest Period will be
equal to the sum of the following, rounded to four decimal places: (x) the Base
Rate (as hereinafter defined) as determined for the second Business Day
immediately preceding the first day of each Interest Period (the "Interest
Determination Date"), plus (y) 0.125%. The "Base Rate" shall be determined in
accordance with the following formula which converts a rate quoted on a discount
basis to a certificate of deposit equivalent basis (i.e., converting a quoted
discount rate to an interest rate on a basis of actual days divided by a 360-day
year):
R
------------------------
R DAYS
(--- ----)
1 - (100% x 360 )
where:
R = The Reference Rate, or if not determinable, the Alternate
Reference Rate (as both are hereinafter defined) on a discount
basis and expressed as a percentage.
Days = The actual number of days in the Interest Period for which
interest is being calculated.
The "Reference Rate" shall be equal to the one-month Commercial Paper Rate
for firms whose bond rating is "AA" or the equivalent as reported for the
Interest Determination Date by the Federal Reserve Bank of New York and
confirmed in "Federal Reserve Statistical Release -- Selected Interest Rates -
H.15 (519)", published by the Board of Governors of the Federal Reserve System,
or any successor publication.
In the event that the Reference Rate cannot be determined for any Interest
Period, the "Alternate Reference Rate" will be used for purposes of calculating
the Base Rate. The Alternate Reference Rate will be equal to the arithmetic
average of the one-month commercial paper discount rates, as quoted on or about
10:00 a.m. (New York time) on the Interest Determination Date by four leading
commercial paper dealers selected by the Company, for firms whose bond rating is
"AA" or the equivalent
If the Reference Rate and Alternate Reference Rate cannot be determined,
the then current Interest Rate on the Installment Notes will remain in effect
until the next Interest Period for which either the Reference Rate or the
Alternate Reference Rate can be determined.
The Company will communicate or furnish to the registered holder hereof,
as soon as practicable, the calculation of the Interest Rate and the amount of
interest payable for each Interest Period.
Payments of principal and interest shall be made in such coin or currency
of the United States of America as at the time of payment is legal tender for
the payment of public and private debts. Payments of interest will be made by
wire transfer in immediately available funds to such account of the registered
holder hereof in the United States of America as the registered holder hereof
shall designate to the Company in writing.
The principal hereof shall be paid on the maturity date in immediately
available funds against presentation of this Installment Note at the offices of
the Company located at One Liberty Plaza, 165 Broadway, New York, New York
10080, or at such other office or agency of the Company as the Company shall
designate by written notice to the registered holder hereof. The registered
holder of this Installment Note or of any Installment Note or Installment Notes
substituted therefor may at its option surrender the same, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder hereof or such holder's attorney duly authorized in writing, for
registration of transfer or exchange at the principal office of the Company in
New York, New York, and, within a reasonable time thereafter and without expense
(other than transfer taxes, if any), receive in exchange therefor a new
Installment Note or Installment Notes, each in the principal amount of
$1,000,000, to the extent practicable, or any integral multiple thereof, dated
as of the date to which interest has been paid on the Installment Note or
Installment Notes so surrendered, or if no interest has yet been so paid, then
dated the date hereof, and payable to such person or persons, or registered
assigns, all as may be designated by such holder, for the same aggregate
principal amount as the then unpaid principal amount of the Installment Note or
Installment Notes so surrendered. The Company covenants and agrees to take and
cause to be taken all action necessary to effect such exchanges, including, but
not limited to, maintaining an office or agency in New York, New York where
notices, presentations and demands to or upon the Company in respect of this
Installment Note may be given or made and keeping a register for the
registration and recordation of transfer of Installment Notes. Prior to
presentment for registration of transfer, the Company may treat the person in
whose name this Installment Note is registered as the owner of this Installment
Note for the purpose of receiving payments of principal and interest on this
Installment Note and for all other purposes whatsoever. The Company shall not be
obligated to register any transfer of this Installment Note except upon transfer
pursuant to an effective registration statement under the Securities Act of 1933
or an opinion, in form and substance satisfactory to the Company and its
counsel, of counsel satisfactory to the Company that registration is not
required under that Act.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
This Installment Note is not redeemable or subject to prepayment.
The Company hereby irrevocably waives all rights of set-off against the
registered holder hereof with respect to its obligation to make all payments of
principal and interest required under this Installment Note.
As used in this paragraph, "an Installment Note" or "Installment Notes"
refers to installment sale notes, including this Installment Note, issued
pursuant to an Installment Sales Agreement dated December 8, 1986 (the
"Installment Sales Agreement"), among the Company, Alleghany and Merrill Lynch &
Co., Inc. (the "Guarantor") and to installment sale notes issued pursuant to any
other sales agreement or sales agreements between such parties having terms and
conditions substantially identical to the terms and conditions of the
Installment Sales Agreement. "Event of Default" means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon an Installment Note when
it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of an Installment Note when
it becomes due and payable; or
(3) default in the performance, or breach, of any covenant or warranty
of the Company or the Guarantor in the Installment Sales Agreement
(but only so long as Alleghany is the holder of this Installment
Note), the Guarantee, or this Installment Note (other than a
covenant or warranty a default in whose performance or whose breach
is elsewhere in this Installment Note specifically dealt with) and
continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
Company and the Guarantor by the registered holder hereof a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(4) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company or the Guarantor in an
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or the Guarantor or for any
substantial part of their respective property, or ordering the
winding-up or liquidation of their respective affairs, and such
decree or order shall remain unstayed and in effect for a period of
60 consecutive days; or
(5) the Company or the Guarantor shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent
to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or the Guarantor or for any substantial
part of their respective property, or shall make any general
assignment for the benefit of creditors, or shall fail generally to
pay their respective debts as they become due or shall take any
corporate action in furtherance of any of the foregoing.
If an Event or Default occurs and is continuing, then and in every such
case, the registered holder of this Installment Note may declare the principal
of this Installment Note to be due and payable immediately, by a notice in
writing to the Company and the Guarantor, and upon any such declaration such
principal shall become immediately due and payable, and, the Company will, upon
demand of the registered holder of this Installment Note, pay to it the whole
amount then due and payable on this Installment Note for principal and interest,
with interest upon the overdue principal and, to the extent that payment of such
interest shall be legally enforceable, upon overdue installments of interest, at
the rate or rates borne by or provided for in this Installment Note, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable attorneys' fees and expenses.
Any notice given by the registered holder hereof pursuant to any provision
of this Installment Note shall be in writing and by Treasurer; and to the
Guarantor at One Liberty Plaza, 165 Broadway, New York, New York 10080,
Attention: Corporate Secretary.
This Installment Note and any replacement Installment Note shall be
entitled to the benefit of the Guarantee or Merrill Lynch & Co., Inc. attached
hereto. This Installment Note shall be governed by the laws of the State of New
York.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: [Signature Indecipherable]
-----------------------------------
(Authorized Representative)
[Seal]
Attest: /s/ Caroline T. Sorrenterro
-----------------------------
Assistant Secretary
GUARANTEE
OF
MERRILL LYNCH & CO., INC.
FOR VALUE RECEIVED, MERRILL LYNCH & CO., INC. (the "Guarantor"), a
Delaware corporation, hereby unconditionally guarantees to Alleghany Corporation
("Alleghany"), or its registered assigns, as the registered holder of the
installment note issued by Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Installment Note"), to which this Guarantee has been attached in a
principal amount not to exceed $94,535,343.54 and dated as set forth in such
Installment Note, the due and prompt payment of the principal of and interest
(including, in case of default, interest on principal and, to the extent
permitted by applicable law, on overdue interest, at the rate or rates borne by
or provided for in the Installment Note) on the Installment Note, when and as
the same shall become due and payable, whether at the maturity date for the
payment of principal, upon declaration of acceleration or otherwise, according
to the terms of the Installment Note. In case of the failure of Merrill Lynch,
Pierce, Fenner & Smith Incorporated or any company which may have assumed the
obligations of Merrill Lynch, Pierce, Fenner & Smith Incorporated (in either
case, the "Company") under the Installment Note punctually to pay any such
principal or interest, the Guarantor hereby agrees to cause any such payment to
be made punctually when and as the same shall become due and payable, whether at
the maturity date for the payment of principal, upon declaration of acceleration
or otherwise, according to the terms of the Installment Note and as if such
payment were made by the Company.
The Guarantor agrees that this Guarantee is intended to be a guarantee of
payment and not a guarantee of collection. The Guarantor agrees that its
obligations hereunder shall be unconditional, irrespective of the absence of any
action to enforce the Installment Note, the award of any judgment against the
Company or the existence of any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Guarantor. The Guarantor hereby waives diligence, presentment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice (except as provided in the Installment Note) and all demands whatsoever,
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Installment Note and in this
Guarantee. This Guarantee shall continue to be effective or be reinstated, as
the case may be, if at any time payment of the Installment Note, or any part
thereof, is rescinded or must otherwise be returned by the registered holder of
the Installment Note upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, all as though such payment has not been made.
The Guarantor will not, and it will not permit any Subsidiary (as
hereinafter defined) at any time directly or indirectly to, create, assume,
incur or permit to exist any indebtedness for borrowed money secured by a
pledge, lien or other encumbrance (any pledge, lien or other encumbrance being
hereinafter in this paragraph referred to as a "lien") on the Voting Stock (as
hereinafter defined) of any Subsidiary (other than a Subsidiary which, at the
time of incurrence of such secured indebtedness, has a net worth, as determined
in accordance with generally accepted accounting principles, of less that
$3,000,000) without making effective provision whereby the Installment Note
(and, if the Guarantor so elects, any other indebtedness ranking on a parity
with the Installment Note) shall be secured equally and ratably with such
secured indebtedness so long as such other indebtedness shall be so secured;
provided, however, that the foregoing covenant shall not be applicable to liens
for taxes or assessments or governmental charges or levies not then due and
delinquent or the validity of which is being contested in good faith or which
are less then $1,000,000 in amount, liens created by or resulting from any
litigation or legal proceeding which is currently being contested in good faith
by appropriate proceedings or which involve claims of less than $1,000,000, or
deposits to secure (or in lieu of) surety, stay, appeal or customs bonds.
If the Guarantor shall hereafter be required to secure the Installment
Note equally and ratably with any other indebtedness pursuant to the above
paragraph, the Guarantor will promptly give notice to the registered holder of
the Installment Note that the foregoing covenant has been complied with and will
provide such registered holder of the Installment Note with an option of counsel
stating that the foregoing covenant has been complied with and that any
instruments executed by the Guarantor or any Subsidiary in the performance of
the foregoing covenant comply with the requirements of the foregoing covenant
The Guarantor will not (a) sell, transfer or otherwise dispose of any
shares of Voting Stock of Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MLPF&S") or permit MLPF&S to issue, sell, or otherwise dispose of any shares
of its Voting Stock, unless, after giving effect to any such transaction, MLPF&S
remains a Controlled Subsidiary (as hereinafter defined); or (b) permit MLPF&S
to (i) merge or consolidate, unless the surviving company is a Controlled
Subsidiary; or (ii) convey or transfer its properties and assets substantially
as an entirety to any Person (as hereinafter defined), except to one or more
Controlled Subsidiaries.
For purposes hereof:
"Controlled Subsidiary" means any corporation more than 80% of the
outstanding Voting Stock, except for qualifying shares, of which
shall at the time be owned directly or indirectly by the Guarantor.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
"Subsidiary" means any corporation of which at the time of
determination the Guarantor and/or one or more Subsidiaries owns or
controls directly or indirectly more than 50% of the shares of
Voting Stock.
"Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of such
corporation, provided that, for the purposes hereof, stock which
carries only the right to vote conditionally on the happening of an
event shall not be considered voting stock whether or not such event
shall have happened.
The Guarantor may consolidate with, or sell or convey all or substantially
all of its assets to, or merge with or into any other corporation provided that
in any such case, (i) either (a) the Guarantor shall be the continuing
corporation, or (b) the successor corporation shall be a corporation organized
and existing under the laws of the United States of America or a State thereof
and such successor corporation shall expressly assume in writing, as Guarantor,
the due and punctual payment of the principal of and interest on the Installment
Note, according to its terms, and the due and punctual performance and
observance of all of the covenants and conditions of the Installment Sales
Agreement, dated December 8, 1986 among Alleghany, the Guarantor and MLPF&S, and
a copy of such instrument of assumption shall promptly be furnished to the
registered holder of the Installment Note, and (ii) immediately after giving
effect to such transaction, no event of default under the terms of the
Installment Note, and no event which, with notice or lapse of time or both,
would become such event of default shall have happened and be continuing.
In case of any such consolidation, merger, sale or conveyance and upon any
such assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Guarantor, with the same effect as if it
had been named herein and in the Installment Note as the Guarantor, and the
predecessor corporation, except in the event of a conveyance by way of lease,
shall be relieved of any further obligation hereunder and under the Installment
Note.
The Guarantor shall be subrogated to all the rights of the holder of the
Installment Note against the Company in respect of any amount paid by the
Guarantor pursuant to the provisions of this Guarantee.
The obligations of the Guarantor hereunder shall rank PARI PASSU with all
unsecured, unsubordinated indebtedness of the Guarantor.
The Guarantor agrees to reimburse the registered holder of the Installment
Note for any and all costs and expenses of collection, including reasonable
attorneys' fees and expenses, paid or incurred by such registered holder in
connection with collection and enforcement of this Guarantee.
Any notice given by the registered holder of the Installment Note shall be
in writing and by registered or certified mail and delivered to the Guarantor at
One Liberty Plaza, 165 Broadway, New York, New York 10080, Attention: Corporate
Secretary.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
Subject to the next following paragraph, the Guarantor hereby certifies
and warrants that all acts, conditions and things required to be done and
performed and to have happened precedent to the creation and issuance of this
Guarantee and to constitute the same the valid obligation of the Guarantor have
been done and performed and have happened in due compliance with all applicable
laws.
This Guarantee shall not be valid or become obligatory for any purpose
until the Installment Note to which it is attached has been fully executed.
IN WITNESS WHEREOF, MERRILL LYNCH & CO., INC. has caused this Guarantee
to be executed in its corporate name by its Treasurer, its corporate seal to
be impressed hereon, attested by its Secretary or by one of its Assistant
Secretaries.
Dated as of December 8, 1986
MERRILL LYNCH & CO., INC.
By: [Signature Indecipherable]
-----------------------------------
(Treasurer)
(SEAL)
Attest: [Signature Indecipherable]
-----------------------------
Assistant Secretary
EXHIBIT C-2
AMENDMENT NO. 2 TO
INSTALLMENT SALES AGREEMENT,
INSTALLMENT NOTE NO. 001 AND GUARANTEE
This AMENDMENT NO. 2 ("Amendment") made as of this 20th day of October,
1997, by and among ALLEGHANY FUNDING CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED, a Delaware corporation ("MLPF&S), and MERRILL LYNCH & CO.,
INC., a Delaware corporation ("ML&Co.").
W I T N E S S E T H:
WHEREAS, Alleghany Corporation, a Delaware corporation ("Alleghany"),
sold 1,606,800 shares of common stock of American Express Company (the "Shares")
to MLPF&S pursuant to the Installment Sales Agreement dated as of December 8,
1986 by and among Alleghany, MLPF&S and ML& Co. (the "Agreement");
WHEREAS, MLPF&S issued Installment Note No. 001 dated January 7, 1987 in
the Principal Sum of $91,535,343.54 (the "Note") to Alleghany;
WHEREAS, ML&Co. unconditionally guaranteed the due and prompt payment of
principal and interest on the Note in accordance with the terms of its Guarantee
dated December 8, 1986, attached to the Note (the "Guarantee"; such term shall
not be deemed to include the guarantee of ML&Co. to the extent that it relates
to Installment Note No. 002, issued to The Shelby Insurance Company); WHEREAS,
pursuant to Amendment No. 1 to Installment Sales Agreement, Installment Note No.
001 and Guarantee made as of August 14, 1990, Alleghany, MLPF&S and ML&Co. made
certain amendments to the Agreement, the Note and the Guarantee;
WHEREAS, Alleghany has transferred the Note and its rights pursuant to
the Agreement to the Company; and
WHEREAS, the parties hereto desire to further modify certain provisions
of the Agreement, the Note and the Guarantee;
NOW, THEREFORE, in consideration of the premises and covenants
hereinafter set forth, the parties hereto agree as follows:
(1) MATURITY DATE
The Maturity Date of the Note is hereby extended to January 22, 2007. The
Maturity Date shall be extendible to January 22, 2010 at the option of the
Company by written notice to MLPF&S and ML&Co. in accordance with Section 10 of
the Agreement on any business day on or after January 1, 2006 and on or prior to
January 31, 2006; PROVIDED, HOWEVER, that for purposes of this Section 1,
written notice delivered by The Chase Manhattan Bank, as Collateral Agent (the
"Collateral Agent") under Section 5.4 of that certain Intercreditor and
Collateral Agency Agreement, dated as of October 20, 1997, among the Collateral
Agent, Barclays Bank PLC and the Company, also shall be deemed to constitute a
permissible extension of the Maturity Date. All other terms of the Note shall
remain in full force and effect in accordance with the provisions thereof.
(2) INTEREST RATE
The definitions of "Reference Rate" and "Alternate Reference Rate" are
amended as follows:
The "Reference Rate" means, with respect to any Interest
Determination Date, the rate for 30 day commercial paper published in
H.15(519) under the heading "Commercial Paper-Nonfinancial." In the event
that such rate is not published by 3:00 P.M., New York City time, on the
related Interest Determination Date, then the Reference Rate on such
Interest Determination Date will be the rate for 30 day commercial paper
as published in Composite Quotations under the heading "Commercial Paper."
If such rate is not yet published in either H.15(519) or Composite
Quotations by 3:00 P.M., New York City time, on the related Interest
Determination Date, then the Alternate Reference Rate on such Interest
Determination Date will be the Money Market Yield of the arithmetic mean
of the offered rates at approximately 11:00 A.M., New York City time, on
such Interest Determination Date of three leading dealers of commercial
paper in The City of New York selected by the Company for 30 day
commercial paper for an industrial issuer whose bond rating is "Aa," or
the equivalent, from a nationally recognized statistical rating
organization; provided, however, that if the dealers so selected by the
Company are not quoting as mentioned in this sentence, the Base Rate
determined as of such Interest Determination Date will be the Base Rate in
effect on such Interest Determination Date.
(3) GUARANTEE
The terms of the Guarantee shall remain in full force and effect in
accordance with its terms and shall apply to the Note as revised by this
Amendment, until full payment of principal of and interest on the Note, whether
at maturity (as extended or extendible, as the case may be, in accordance with
the provisions of Section 1 of this Amendment) or upon acceleration or
otherwise.
(4) TAX LIABILITY
The Company acknowledges and agrees that neither MLPF&S not ML&Co. shall
have any responsibility or liability for any federal, state or local taxes,
including stock transfer taxes, if any, resulting from the sale of the Shares to
MLPF&S or the amendment of the Agreement, the Note or the Guarantee.
(5) BINDING EFFECT
This Amendment shall be construed in accordance with the laws of the
State of New York and shall be binding upon the parties hereto and their
respective heirs, legal representatives and successors. This Amendment may be
executed in counterparts, and each such counterpart will become a binding
agreement between the parties hereto in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment on
the date first above written.
ALLEGHANY FUNDING CORPORATION
By:-----------------------------
MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:-----------------------------
MERRILL LYNCH & CO., INC.
By:-----------------------------
EXHIBIT C-3
INSTALLMENT SALES AGREEMENT
AGREEMENT ("Agreement") made as of this 8th day of December, 1986, by and
among ALLEGHANY FINANCIAL CORPORATION, a Delaware corporation, (the "Seller"),
MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, a Delaware corporation (the
"Purchaser") and MERRILL LYNCH & CO., INC., a Delaware corporation (the
"Guarantor").
W I T N E S S E T H
WHEREAS, the Seller desires to sell all or a part of 1,606,800 shares of
common stock of American Express Company (the "Shares") to the Purchaser; and
WHEREAS, subject to and on terms and conditions contained herein, the
Purchaser desires to purchase all or part of the 1,606,800 Shares;
NOW, THEREFORE, in consideration of the premises and covenants hereinafter
set forth, the parties hereto agree as follows:
1. SALE AND PURCHASE OF STOCK
The Seller hereby agrees to sell, transfer and assign such aggregate
number of the Shares to the Purchaser as shall from time to time be mutually
agreed upon pursuant to one or more Confirmations, as provided in Section 9
hereof, and the Purchaser hereby agrees to purchase and accept such Shares,
subject to the terms and conditions herein set forth.
2. PURCHASE PRICE AND PAYMENT
The purchase price for the Shares shall be as set forth in the applicable
Confirmation. The Purchaser will pay the purchase price to the Seller in
accordance with the terms of an installment sale note payable to the Seller, or
to the Seller's registered assigns; such note shall initially be in the form of
Exhibit A hereto (the "Temporary Note"), such Temporary Note to be delivered to
the Seller as provided in Section 9 hereof. On January 7, 1987, or on such later
date as shall be mutually agreed upon by the Purchaser and the Seller (the
"Exchange Date"), but in no event later than January 15, 1987, the Purchaser
shall deliver to the Seller, in exchange for the Temporary Note, a definitive
note or notes in the form of Exhibit B hereto (the "Definitive Notes"; as used
herein the term "Installment Note" shall refer to the Temporary Installment Note
prior to the Exchange Date and to the Definitive Notes from and after the
Exchange Date). Payments of interest and principal due under the Installment
Notes shall be unconditionally guaranteed by the Guarantor, as provided in the
Guarantees which are a part of each of the Installment Notes (the "Guarantees").
3. REPRESENTATIONS AND WARRANTIES OF THE SELLER
In addition to all other warranties provided by law, the Seller represents
and warrants to the Purchaser that:
(a) The Seller is a duly organized and validly existing corporation in
good standing under the laws of the state of its incorporation.
(b) The Seller has full corporate power and authority to enter into this
Agreement and to consummate the transactions contemplated hereby.
The execution, delivery and performance of this Agreement by the
Seller have been duly authorized by all requisite corporate action.
This Agreement constitutes a legal, valid and binding obligation of
the Seller, enforceable against the Seller in accordance with its
terms, subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium and other laws
affecting creditors' rights generally from time to time in effect
and to general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
Neither the Seller nor any of its subsidiaries is a party to,
subject to, or bound by any agreement or contract, or any judgment,
order, writ, injunction or decree of any court, governmental body or
arbitrator which would conflict with or be breached by the
execution, delivery or performance of this Agreement by the Seller
and which could prevent the carrying out of this Agreement.
(c) The Seller is the owner of and has good and marketable title to the
Shares, free and clear of any pledge, lien, encumbrance or claim
whatsoever, and has full authority to enter into this Agreement and
to convey the Shares to the Purchaser; and upon delivery of the
Shares to the Purchaser, the Purchaser will receive good and
marketable title to the Shares, free and clear of any pledge, lien,
encumbrance or claim whatsoever (except for such as may arise
through the Purchaser).
(d) The Seller is not an "affiliate" (as defined in subsection (a)(l) of
Rule 144 promulgated under the Securities Act of 1933 ("Rule 144"))
of American Express Company.
(e) The Seller, together with its tax counsel, has made an independent
determination of all federal, state and local tax consequences
relating to the sale of the Shares pursuant to this Agreement, and
neither the Purchaser nor the Guarantor has made any representations
or warranties or provided any information with respect to such tax
consequences.
(f) The Seller has not made, and will not make, any payment to any
person in connection with the offer or sale of the Shares, other
than as provided herein.
(g) The Seller has not solicited or arranged for, and will not solicit
or arrange for, the solicitation of orders to buy the Shares in
anticipation of or in connection with this transaction.
(h) The Seller is not required to register as an investment company
under the Investment Company Act of 1940, and the transactions
contemplated by this Agreement will not constitute a violation of,
or be voidable under, any provisions of such Act, of any rule or
regulation promulgated under such Act, or of any order of the
Securities and Exchange Commission, applicable to the Seller.
(i) The Seller is familiar with the requirements of Rule 145 promulgated
under the Securities Act of 1933 and represents that the Shares are
eligible for sale under subsection (d)(2) of such Rule.
(j) The Seller has received each of the documents described on Schedule
A attached hereto.
(k) The Seller has given any required notices, opinions or
certifications, has received all consents which may be required by,
and has performed all other agreements or covenants pursuant to, any
agreements which it may have with American Express Company necessary
to permit the sale of the Shares: and no approvals or filings, other
than those which may have been required to be obtained from or made
with American Express Company, are necessary to permit the sale of
the Shares.
(l) On each Confirmation Date (hereafter defined) all representations
and warranties of the Seller contained herein shall be true and
correct with the same force and effect as though expressly made at
and as of such Confirmation Date.
4. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
AND THE GUARANTOR
In addition to all other warranties provided by law, the Purchaser and the
Guarantor represent to the Seller that:
(a) Each of the Purchaser and the Guarantor is a duly organized and
validly existing corporation in good standing under the laws of the
state of its incorporation.
(b) The Purchaser has full corporate power and authority to enter into
this Agreement and the Installment Notes and to consummate the
transactions contemplated hereby and thereby. The execution,
delivery and performance of this Agreement and the Installment Notes
by the Purchaser have been duly authorized by all requisite
corporate action. This Agreement constitutes, and the Installment
Notes when issued against payment of the consideration set forth
herein will constitute, legal, valid and binding obligations of the
Purchaser, enforceable against the Purchaser in accordance with
their respective terms, subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium and
other laws affecting creditors' rights generally from time to time
in effect and to general principles of equity (regardless of whether
such enforceability is considered in a proceeding in equity or at
law). Neither the Purchaser nor any of its subsidiaries is a party
to, subject to, or bound by any agreement or contract, or any
judgment, order, writ, injunction or decree of any court,
governmental body or arbitrator which would conflict with or be
breached by the execution, delivery or performance of this Agreement
or the Installment Notes by the Purchaser and which could prevent
the carrying out of this Agreement or the Installment Notes.
(c) The Guarantor has full corporate power and authority to enter into
this Agreement and the Guarantees and to consummate the transactions
contemplated hereby and thereby. The execution, delivery and
performance of this Agreement and the Guarantees by the Guarantor
have been duly authorized by all requisite corporate action. This
Agreement and the Guarantees constitute legal, valid and binding
obligations of the Guarantor, enforceable against the Guarantor in
accordance with their respective terms, subject, as to enforcement
of remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium and other laws affecting creditors' rights generally from
time to time in effect and to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding in equity or at law). Neither the Guarantor nor any of
its subsidiaries is a party to, subject to, or bound by any
agreement or contract, or any judgment, order, writ, injunction or
decree of any court, governmental body or arbitrator which would
conflict with or be breached by the execution, delivery or
performance of this Agreement or the Guarantees by the Guarantor and
which could prevent the carrying out of this Agreement or the
Guarantees.
(d) On each Confirmation Date (hereafter defined) all representations
and warranties of the Purchaser contained herein shall be true and
correct with the same force and effect as though expressly made at
and as of such Confirmation Date.
5. TAX LIABILITY
The Seller acknowledges and agrees that the Purchaser and the Guarantor
shall have no responsibility or liability for any federal, state or local taxes,
including stock transfer taxes, if any, resulting from the sale of the Shares to
the Purchaser provided for herein.
6. TRANSFERS OF THE INSTALLMENT NOTES
The Seller agrees that each Installment Note will bear a legend stating
that such note has not been registered under the Securities Act of 1933 and may
not be sold, pledged, hypothecated or otherwise transferred unless registered
pursuant to such Act or unless an exemption from such registration is available.
The Seller represents to the Purchaser and the Guarantor that it is acquiring
the Installment Notes for its own account (and not for the account of others),
for investment and not with a view to the distribution thereof and that it will
not sell or dispose of all or any part of the Installment Notes without
delivering to the Purchaser an opinion of counsel (reasonably satisfactory to
the Purchaser) to the Seller, in form and substance reasonably satisfactory to
the Purchaser and to counsel for the Purchaser, that such proposed sale or
disposition is exempt from the provisions of Section 5 of the Securities Act of
1933, as amended; PROVIDED, HOWEVER, that the foregoing shall be subject to any
requirement of law that the disposition of the property of the holder of
Installment Notes shall at all times be and remain within its control.
Notwithstanding the foregoing, the Seller shall give the Purchaser and the
Guarantor at least 5 business days' prior notice of its intention to sell any
Installment Notes ("Seller's Notice"). The Seller's Notice shall set forth the
name of each party which the Seller is to invite to bid on such Installment
Notes, and shall state the date and time when such invitations to bid shall be
terminated (the "Close of Bidding"). As soon as practicable following the Close
of Bidding, unless the Seller determines to withdraw the Seller's Notice because
it is not prepared to sell the Installment Notes on the basis of the bids
received, the Seller shall give oral notice to the Purchaser and to the
Guarantor as to (i) the name of each party which has submitted a bid for the
Installment Notes and (ii) the price bid on such Installment Notes by each such
party. Either the Purchaser or Guarantor may, by oral notice to the Seller
(promptly confirmed in writing), within one hour (during normal business hours)
of their receipt of such notice from the Seller, agree to purchase such
Installment Notes from the Seller at a price equal to the highest bid price. If
such Installment Notes are so purchased by either the Purchaser or the
Guarantor, the Purchaser or the Guarantor, as the case may be, shall be free to
resell such Installment Notes, and such resales may be made to parties who have
previously submitted bids on such Installment Notes to the Seller. The closing
of any such sale of Installment Notes to the Purchaser or the Guarantor shall
occur at a date within five business days thereafter and at a place within The
City of New York, as provided by written notice to the Seller from the Purchaser
or the Guarantor, as the case may be. If neither the Purchaser nor the Guarantor
exercise such right to purchase the Installment Notes, the Seller shall be free
to sell the Installment Notes identified in the Seller's Notice, but only to the
highest bidder named in such Notice.
The Seller also agrees that, in the event the Seller intends to pledge any
Installment Note as collateral for a bank borrowing, the Seller shall give
notice to the Guarantor and the Purchaser at least seven business days prior to
attempting to arrange any such pledge, and (with due consideration for the
Seller's agreements with the banks under which the Seller has commitments under
lending agreements) shall consult and cooperate with the Guarantor and the
Purchaser to avoid any disruption in the normal banking relations of the
Guarantor and the Purchaser. Notwithstanding the above, the Seller agrees that
it will not pledge any Note or Notes in an aggregate principal amount of more
than $50,000,000 on a non-recourse basis to any single bank without the prior
written consent of the Purchaser, which consent shall not be unreasonably
withheld.
The provisions of this Section 6 shall not apply to sales, pledges,
hypothecations or other transfers of Installment Notes by the Seller to or with
any of its subsidiaries as to which, at such time and thereafter (for as long as
such subsidiary holds any such Installment Notes), 50% or more of the shares of
Voting Stock (as defined in the Guarantees) are owned directly or indirectly by
the Seller, provided, however, that any sale, pledge, hypothecation or other
transfer of Installment Notes by any such subsidiary may be effected only in
accordance with the provisions of this Section 6.
7. LEGAL OPINIONS
On the Settlement Date referred to in Section 9 hereof, Dorsey & Whitney,
counsel for the Seller, shall furnish to the Purchaser an opinion, dated the
Settlement Date and in form and substance satisfactory to the Purchaser, to the
effect that:
(a) This Agreement has been duly authorized by all necessary corporate
action on the part of the Seller, has been duly executed and
delivered by the Seller, and constitutes a valid and binding
obligation of the Seller enforceable in accordance with its terms,
subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium and other laws affecting
creditors' rights generally from time to time in effect and to
general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
(b) Upon delivery of the Shares to the Purchaser, the Purchaser will
receive good and marketable title to the Shares, free and clear of
any pledge, lien, encumbrance or claim whatsoever (except for such
which may arise through the Purchaser).
(c) The Seller is not required to register as an investment company
under the Investment Company Act of 1940, and the transactions
contemplated by this Agreement will not constitute a violation of,
or be voidable under, any provisions of such Act, of any rule or
regulation promulgated under such Act, or, to such counsel's
knowledge, of any order of the Securities and Exchange Commission,
applicable to the Seller.
(d) The Shares are eligible for sale pursuant to Rule 145 (d)(2).
On the Settlement Date referred to in Section 9 hereof, Brown & Wood,
counsel for the Purchaser and the Guarantor, shall furnish to the Seller an
opinion, dated the Settlement Date and in form and substance satisfactory to the
Seller, to the effect that:
(a) This Agreement and the Installment Notes have been duly authorized
by all necessary corporate action on the part of the Purchaser. This
Agreement has been duly executed and delivered by the Purchaser, and
this Agreement constitutes, and the Installment Notes when issued
against payment of the consideration set forth herein will
constitute, valid and binding obligations of the Purchaser
enforceable in accordance with their terms subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(b) This Agreement and the Guarantees have been duly authorized by all
necessary corporate action on the part of the Guarantor. This
Agreement has been duly executed and delivered by the Guarantor, and
this Agreement constitutes, and the Guarantees upon issuance of the
Installment Notes against payment of the consideration set forth
herein will constitute, valid and binding obligations of the
Guarantor enforceable in accordance with their terms subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium and other laws affecting creditors' rights
generally from time to time in effect and to general principles of
equity (regardless of whether such enforceability is considered in a
proceeding in equity or at law).
(c) After the Exchange Date, upon issuance of the Definitive Notes, each
of the Installment Notes shall be a negotiable instrument within the
meaning of Article 3 of the New York Uniform Commercial Code.
8. GENERAL CREDITOR STATUS
The Seller acknowledges that, with respect to the Purchaser's obligations
under Section 2 of this Agreement, the Seller will be an unsecured general
creditor of the Purchaser; and the Seller realizes that it will not be entitled
to the protections accorded by the Securities investor Protection Act of 1970,
or to the coverage provided by any insurance policy maintained by the Purchaser
for the benefit of its customers. The Seller further acknowledges that, in the
case of any claim which it may have against the Guarantor by reason of the
Guarantees provided under Section 2 of this Agreement and by reason of the
Guarantees accompanying the Installment Notes, the Seller will be an unsecured
general creditor of the Guarantor, except as otherwise provided pursuant to the
terms of the Guarantees.
9. PROCEDURES WITH RESPECT TO SETTLEMENT AND CONFIRMATION
As of 4:00 P.M. on December 18, 1986, or at such later time or date as the
Seller and Purchaser shall agree (the "Settlement Date"), at the offices of
Brown & Wood, One World Trade Center, New York, New York, (i) the Purchaser
shall deliver to the Seller the duly executed Temporary Note, with the Guarantee
duly executed by the Guarantor attached thereto and (ii) each counsel mentioned
in Section 7 shall deliver its respective opinion. In the event that the Seller
receives any dividend or other distribution with respect to the Shares based on
an ex-dividend date occurring after the date of the applicable Confirmation
Settlement Date (hereafter defined), the Seller shall pay or deliver the same to
the Purchaser.
From time to time after the Settlement Date, the Seller and the Purchaser
shall agree to the sale of a certain number of Shares to the Purchaser pursuant
to the terms of a confirmation delivered from the Purchaser to the Seller in the
form attached hereto as Exhibit D (a "Confirmation"). The Purchaser shall
thereby authorize the Seller to increase the principal amount of the Temporary
Note on Schedule I thereto by an amount (each such amount being hereafter
referred to as an "Endorsed Amount") equal to the Aggregate Purchase Price for
the shares (which shall reflect a reduction for the fee payable to the
Securities and Exchange Commission with respect to the transfer of shares) as
set forth on such Confirmation on a date five business days after the date of
the Confirmation (the "Confirmation Settlement Date"). On each Confirmation
Settlement Date the Seller shall deliver to the Purchaser a certificate or
certificates representing the number of Shares sold pursuant to each
Confirmation, with such endorsements or stock transfer powers as may be required
to constitute good delivery, along with a signed counterpart of the Confirmation
and a copy of Schedule I to the Temporary Note revised to reflect such
Confirmation.
10. NOTICES AND PAYMENTS
All notices and payments made pursuant to this Agreement shall be duly
made and given if sent to the parties at the addresses set forth below, or as
set forth in any notice of change of address given in writing:
IF TO THE SELLER:
Park Avenue Plaza
New York, New York 10055
Attn: Treasurer's Office
IF TO THE PURCHASER:
One Liberty Plaza
165 Broadway
New York, New York 10080
Attn: Treasurer
IF TO THE GUARANTOR:
One Liberty Plaza
165 Broadway
New York, New York 10080
Attn: Corporate Secretary
Any oral notices given pursuant to Section 6 hereof shall be given to the
Purchaser and to the Guarantor if given to Richard W. Carrington at (212)
637-0996, or in his absence or unavailability, to the Treasurer of Merrill Lynch
& Co., Inc. and to the Seller if given to John J. Burns, Jr. at (212) 752-1356,
or in his absence or unavailability, to any Vice President of the Seller or to
such other persons as the parties hereto may from time to time give notice in
writing.
11. ASSIGNMENT
This Agreement may not be assigned by any of the parties hereto, and is
intended only for the benefit of the parties hereto and of their respective
successors and assigns.
12. BINDING EFFECT
This Agreement shall be construed in accordance with the laws of the state
of New York and shall be binding upon the parties hereto and their respective
heirs, legal representatives and successors. This Agreement may be executed in
counterparts, and each such counterpart will become a binding agreement between
the parties hereto in accordance with its terms.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the
date first above written.
ALLEGHANY FINANCIAL CORPORATION
By: /S/ DAVID B. CUMING
----------------------------------
Title: President
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: [SIGNATURE INDECIPHERABLE]
----------------------------------
(Authorized Representative)
MERRILL LYNCH & CO., INC.
By: [SIGNATURE INDECIPHERABLE]
----------------------------------
Vice President and Treasurer
SCHEDULE A
DOCUMENTS DELIVERED TO ALLEGHANY FINANCIAL CORPORATION
1. 1985 Annual Report to Shareholders of Merrill Lynch & Co., Inc.
2. Quarterly Reports to Shareholders of Merrill Lynch & Co., Inc. for
the first three quarters of 1986.
3. Annual Report of Merrill Lynch & Co., Inc. on Form 10-K for the year
ended December 7, 1985.
4. Quarterly Reports of Merrill Lynch & Co., Inc. on Form 10-Q for the
quarters ended March 28, 1986, June 7, 1986 and September 26, 1986
and Forms 8 dated March 12, 1986, May 16, 1986 and August 21, 1986.
5. Balance Sheet data for Merrill Lynch, Pierce, Fenner & Smith
Incorporated as of December 27, 1985, and September 26, 1986.
6. Prospectus, dated November 13, 1986, relating to 6 3/4% Notes due
December 1, 1990 of Merrill Lynch & Co., Inc.
7. Press release, dated December 9, 1986, of Moody's Investor Services,
Inc.
8. Press release, dated December 9, 1986, of Merrill Lynch & Co., Inc.
A-1
EXHIBIT A
TEMPORARY INSTALLMENT NOTE
THIS TEMPORARY INSTALLMENT NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT
OF 1933 AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED
WITHOUT REGISTRATION UNDER THAT ACT EXCEPT IN A TRANSACTION THAT IS EXEMPTED
UNDER THAT ACT, PROVIDED, HOWEVER, THAT THE FOREGOING SHALL BE SUBJECT TO ANY
REQUIREMENT OF LAW THAT THE DISPOSITION OF THE PROPERTY OF THE HOLDER OF THIS
TEMPORARY INSTALLMENT NOTE SHALL AT ALL TIMES BE AND REMAIN WITHIN ITS CONTROL.
Principal Amount: (set forth in Date: December 15, 1986
Schedule I hereto as
it may be amended from
time to time as described
herein)
FOR VALUE RECEIVED, Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Company") hereby promises to pay to ALLEGHANY FINANCIAL CORPORATION
("Alleghany"), or registered assigns, the principal amount, as set forth in
Schedule I hereto as it may be amended from time to time pursuant to the terms
of an Installment Sales Agreement dated as of December 8, 1986 (the "Installment
Sales Agreement"), among the Company, Alleghany and Merrill Lynch & Co., Inc.
(the "Guarantor"), of this temporary installment note ("Installment Note") on
January 19, 1994, and to pay interest on the unpaid principal amount hereof
until such principal amount has been paid in full or made available for payment.
Interest shall be payable to the person to whom this Installment Note is
registered as of the close of business on the Wednesday (whether or not a
Business Day (as hereinafter defined)) next preceding an Interest Payment Date
(as hereinafter defined). Interest on this Installment Note will accrue with
respect to any portion of the principal amount hereof from the date on which
such portion of the principal amount is duly endorsed on Schedule I hereto as
provided herein (each such date being referred to herein as the "original issue
date" with respect to such portion of the principal amount) and will be payable
on January 7, 1987 and on each succeeding fourth Wednesday after such date,
except that if such fourth Wednesday is not a Business Day, then interest shall
be paid on the immediately preceding Business Day (an "Interest Payment Date").
Each portion of the principal amount hereof which is duly endorsed on this
Installment Note is referred to herein as an "Endorsed Amount". Interest
payments shall include interest accrued from and including the original issue
date with respect to each Endorsed Amount in the case of the first interest
payment with respect to such Endorsed Amount, and from and including the
immediately preceding Interest Payment Date in the case of all subsequent
interest payments with respect to such Endorsed Amount, through and including
the day immediately prior to each Interest Payment Date. Each period for which
interest is payable with respect to an Endorsed Amount is hereinafter referred
to as an "Interest Period". Interest will be computed based upon a 360-day year
and the actual number of days in each respective Interest Period with respect to
each Endorsed Amount and the Interest Rate (as hereinafter defined) for such
Interest Period. The "Interest Rate" on the Installment Notes for each Interest
Period will be equal to the sum of the following, rounded to four decimal
places: (x) the Base Rate (as hereinafter defined) as determined for the second
Business Day immediately preceding the first day of each Interest Period (the
"Interest Determination Date"), plus (y) 0.125%. The "Base Rate" shall be
determined in accordance with the following formula which converts a rate quoted
on a discount basis to a certificate of deposit equivalent basis (i.e.,
converting a quoted discount rate to an interest rate on a basis of actual days
divided by a 360-day year):
R
------------
R DAYS
1 - ---- ----
(100% x 360 )
where:
R = The Reference Rate, or if not determinable, the Alternate
Reference Rate (as both are hereinafter defined) on a
discount basis and expressed as a percentage.
Days = The actual number of days in the Interest Period for which
interest is being calculated.
The "Reference Rate" shall be equal to the one-month Commercial Paper Rate
for firms whose bond rating is "AA" or the equivalent as reported for the
Interest Determination Date by the Federal Reserve Bank of New York and
confirmed in "Federal Reserve Statistical Release -- Selected interest Rates -
H.15 (519)", published by the Board of Governors of the Federal Reserve System,
or any successor publication.
In the event that the Reference Rate cannot be determined for any Interest
Period, the "Alternate Reference Rate" will be used for purposes of calculating
the Base Rate. The Alternate Reference Rate will be equal to the arithmetic
average of the one-month commercial paper discount rates, as quoted on or about
10:00 a.m. (New York time) on the Interest Determination Date by four leading
commercial paper dealers selected by the Company, for firms whose bond rating is
"AA" or the equivalent.
If the Reference Rate and Alternate Reference Rate cannot be determined,
the then current Interest Rate on the Installment Notes will remain in effect
until the next Interest Period for which either the Reference Rate or the
Alternate Reference Rate can be determined.
The Company will communicate or furnish to the registered holder hereof,
as soon as practicable, the calculation of the Interest Rate and the amount of
interest payable for each Interest Period.
Payments of principal and interest shall be made in such coin or currency
of the United States of America as at the time of payment is legal tender for
the payment of public and private debts. Payments of interest will be made by
wire transfer in immediately available funds to such account of the registered
holder hereof in the United States of America as the registered holder hereof
shall designate to the Company in writing.
The principal hereof shall be paid on the maturity date in immediately
available funds against presentation of this Installment Note at the offices of
the Company located at One Liberty Plaza, 165 Broadway, New York, New York
10080, or at such other office or agency of the Company as the Company shall
designate by written notice to the registered holder hereof. The registered
holder of this Installment Note or of any Installment Note or Installment Notes
substituted therefor may at its option surrender the same, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder hereof or such holder's attorney duly authorized in writing, for
registration of transfer or exchange at the principal office of the Company in
New York, New York, and, within a reasonable time thereafter and without expense
(other than transfer taxes, if any), receive in exchange therefor a new
Installment Note or Installment Notes, each in the principal amount of
$1,000,000, to the extent practicable, or any integral multiple thereof, dated
as of the date to which interest has been paid on the Installment Note or
Installment Notes so surrendered, or if no interest has yet been so paid, then
dated the date hereof, and payable to such person or persons, or registered
assigns, all as may be designated by such holder, for the same aggregate
principal amount as the then unpaid principal amount of the Installment Note or
Installment Notes so surrendered. The Company covenants and agrees to take and
cause to be taken all action necessary to effect such exchanges, including, but
not limited to, maintaining an office or agency in New York, New York where
notices, presentations and demands to or upon the Company in respect of this
Installment Note may be given or made and keeping a register for the
registration and recordation of transfer of Installment Notes. Prior to
presentment for registration of transfer, the Company may treat the person in
whose name this Installment Note is registered as the owner of this Installment
Note for the purpose of receiving payments of principal and interest on this
Installment Note and for all other purposes whatsoever. The Company shall not be
obligated to register any transfer of this Installment Note except upon transfer
pursuant to an effective registration statement under the Securities Act of 1933
or an opinion, in form and substance satisfactory to the Company and its
counsel, of counsel satisfactory to the Company that registration is not
required under that Act.
On January 7, 1987, or on such later date as shall be mutually agreed upon
by the Company and Alleghany (the "Exchange Date"), but in no event later than
January 15, 1987, the Company shall exchange this Temporary Installment Note for
Definitive Installment Notes in forms and aggregate principal amounts (being not
in excess of the aggregate principal amount of this Temporary Installment Note
and subject to the other terms and conditions herein) as requested by such
registered holder. Upon such exchange, this Temporary Installment Note shall be
cancelled.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
This Installment Note is not redeemable or subject to prepayment.
The Company hereby irrevocably waives all rights of set-off against the
registered holder hereof with respect to its obligation to make all payments of
principal and interest required under this Installment Note.
As used in this paragraph, "an Installment Note" or "Installment Notes"
refers to installment sale notes, including this Installment Note, issued
pursuant to the Installment Sales Agreement and to installment sale notes issued
pursuant to any other sales agreement or sales agreements between such parties
having terms and conditions substantially identical to the terms and conditions
of the Installment Sales Agreement. "Event of Default" means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(1) default in the payment of any interest upon an Installment Note
when it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of an Installment Note
when it becomes due and payable; or
(3) default in the performance, or breach, of any covenant or
warranty of the Company or the Guarantor in the Installment Sales
Agreement (but only so long as Alleghany is the holder of this Installment
Note), the Guarantee, or this Installment Note (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Installment Note specifically dealt with) and continuance of such
default or breach for a period of 60 days after there has been given, by
registered or certified mail, to the Company and the Guarantor by the
registered holder hereof a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder; or
(4) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Company or the Guarantor in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of the Company or the Guarantor or for any substantial part of
their respective property, or ordering the winding-up or liquidation of
their respective affairs, and such decree or order shall remain unstayed
and in effect for a period of 60 consecutive days; or
(5) the Company or the Guarantor shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for relief
in an involuntary case under any such law, or shall consent to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or similar official) of the Company or
the Guarantor or for any substantial part of their respective property, or
shall make any general assignment for the benefit of creditors, or shall
fail generally to pay their respective debts as they become due or shall
take any corporate action in furtherance of any of the foregoing.
If an Event of Default occurs and is continuing, then and in every such
case, the registered holder of this Installment Note may declare the principal
of this Installment Note to be due and payable immediately, by a notice in
writing to the Company and the Guarantor, and upon any such declaration such
principal shall become immediately due and payable, and, the Company will, upon
demand of the registered holder of this Installment Note, pay to it the whole
amount then due and payable on this Installment Note for principal and interest,
with interest upon the overdue principal and, to the extent that payment of such
interest shall be legally enforceable, upon overdue installments of interest, at
the rate or rates borne by or provided for in this Installment Note, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable attorneys' fees and expenses.
Any notice given by the registered holder hereof pursuant to any provision
of this Installment Note shall be in writing and by registered or certified mail
and delivered to the Company at One Liberty Plaza, 16S Broadway, New York, New
York 10080, Attention: Treasurer; and to the Guarantor at One Liberty Plaza, 165
Broadway, New York, New York 10080, Attention: Corporate Secretary.
This Installment Note and any replacement Installment Note shall be
entitled to the benefit of the Guarantee of Merrill Lynch & Co., Inc. attached
hereto. This Installment Note shall be governed by the laws of the State of New
York.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:-----------------------------------
(Authorized Representative)
Seal]
Attest:-----------------------
Assistant Secretary
SCHEDULE I
ENDORSED PRINCIPAL AMOUNTS
The following Endorsed Amounts of principal of the Temporary Note
have been made under the Installment Sales Agreement pursuant to Confirmations
from the Purchaser:
Aggregate principal Notation
Confirmation Endorsed Amount amount of Temporary made on
Settlement with respect to Note following behalf of
Date Confirmation Such Confirmation Alleghany
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[Executed Guarantee in the Form
of Exhibit C to the
Installment Sales Agreement]
EXHIBIT B
Note No. ____
INSTALLMENT NOTE
THIS INSTALLMENT NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933
AND MAY NOT BE SOLD, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT
REGISTRATION UNDER THAT ACT EXCEPT IN A TRANSACTION THAT IS EXEMPTED UNDER THAT
ACT, PROVIDED, HOWEVER, THAT THE FOREGOING SHALL BE SUBJECT TO ANY REQUIREMENT
OF LAW THAT THE DISPOSITION OF THE PROPERTY OF THE HOLDER OF THIS INSTALLMENT
NOTE SHALL AT ALL TIMES BE AND REMAIN WITHIN ITS CONTROL.
Principal Sum $______________ Date: January 7, 1987
FOR VALUE RECEIVED, Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Company") hereby promises to pay to ALLEGHANY FINANCIAL CORPORATION ("
Alleghany"), or registered assigns, the Principal Sum of _____ on January 19,
1994, and to pay interest on the unpaid principal amount hereof until the
Principal Sum hereof has been paid in full. Interest shall be payable to the
person to whom this installment note ("Installment Note") is registered as of
the close of business on the Wednesday (whether or not a Business Day (as
hereinafter defined)) next preceding an Interest Payment Date (as hereinafter
defined). Interest on this Installment Note will accrue from January 7, 1987 and
will be payable on each succeeding fourth Wednesday after such date, except that
if such fourth Wednesday is not a Business Day, then interest shall be paid on
the immediately preceding Business Day (an "Interest Payment Date"). Interest
payments shall include interest accrued from and including January 7, 1987 in
the case of the first interest payment, and from and including the immediately
preceding Interest Payment Date in the case of all subsequent interest payments,
through and including the day immediately prior to each Interest Payment Date.
Each period for which interest is payable is hereinafter referred to as an
"Interest Period". Interest will be computed based upon a 360-day year and the
actual number of days in the Interest Period and the Interest Rate (as
hereinafter defined) for such Interest Period. The "Interest Rate" on the
Installment Notes for each Interest Period will be equal to the sum of the
following, rounded to four decimal places: (x) the Base Rate (as hereinafter
defined) as determined for the second Business Day immediately preceding the
first day of each Interest Period (the "Interest Determination Date"), plus (y)
0.125%. The "Base Rate" shall be determined in accordance with the following
formula which converts a rate quoted on a discount basis to a certificate of
deposit equivalent basis (i.e., converting a quoted discount rate to an interest
rate on a basis of actual days divided by a 360-day year):
R
------------
R DAYS
1 - ---- ----
(100% x 360 )
where:
R = The Reference Rate, or if not determinable, the Alternate
Reference Rate (as both are hereinafter defined) on a discount
basis and expressed as a percentage.
Days = The actual number of days in the Interest Period for which
interest is being calculated.
The "Reference Rate" shall be equal to the one-month Commercial Paper Rate
for firms whose bond rating is "AA" or the equivalent as reported for the
Interest Determination Date by the Federal Reserve Bank of New York and
confirmed in "Federal Reserve Statistical Release -- Selected Interest Rates -
H.15 (519)", published by the Board of Governors of the Federal Reserve System,
or any successor publication.
In the event that the Reference Rate cannot be determined for any Interest
Period, the Alternate Reference Rate" will be used for purposes of calculating
the Base Rate. The Alternate Reference Rate will be equal to the arithmetic
average of the one-month commercial paper discount rates, as quoted on or about
10:00 a.m. (New York time) on the Interest Determination Date by four leading
commercial paper dealers selected by the Company, for firms whose bond rating is
"AA" or the equivalent.
If the Reference Rate and Alternate Reference Rate cannot be determined,
the then current Interest Rate on the Installment Notes will remain in effect
until the next Interest Period for which either the Reference Rate or the
Alternate Reference Rate can be determined.
The Company will communicate or furnish to the registered holder hereof,
as soon as practicable, the calculation of the Interest Rate and the amount of
interest payable for each Interest Period.
Payments of principal and interest shall be made in such coin or currency
of the United States of America as at the time of payment is legal tender for
the payment of public and private debts. Payments of interest will be made by
wire transfer in immediately available funds to such account of the registered
holder hereof in the United States of America as the registered holder hereof
shall designate to the Company in writing.
The principal hereof shall be paid on the maturity date in immediately
available funds against presentation of this Installment Note at the offices of
the Company located at One Liberty Plaza, 165 Broadway, New York, New York
10080, or at such other office or agency of the Company as the Company shall
designate by written notice to the registered holder hereof. The registered
holder of this Installment Note or of any Installment Note or Installment Notes
substituted therefor may at its option surrender the same, duly endorsed or
accompanied by a written instrument of transfer duly executed by the registered
holder hereof or such holder's attorney duly authorized in writing, for
registration of transfer or exchange at the principal office of the Company in
New York, New York, and, within a reasonable time thereafter and without expense
(other than transfer taxes, if any), receive in exchange therefor a new
Installment Note or Installment Notes, each in the principal amount of
$1,000,000, to the extent practicable, or any integral multiple thereof, dated
as of the date to which interest has been paid on the Installment Note or
Installment Notes so surrendered, or if no interest has yet been so paid, then
dated the date hereof, and payable to such person or persons, or registered
assigns, all as may be designated by such holder, for the same aggregate
principal amount as the then unpaid principal amount of the Installment Note or
Installment Notes so surrendered. The Company covenants and agrees to take and
cause to be taken all action necessary to effect such exchanges, including, but
not limited to, maintaining an office or agency in New York, New York where
notices, presentations and demands to or upon the Company in respect of this
Installment Note may be given or made and keeping a register for the
registration and recordation of transfer of Installment Notes. Prior to
presentment for registration of transfer, the Company may treat the person in
whose name this Installment Note is registered as the owner of this Installment
Note for the purpose of receiving payments of principal and interest on this
Installment Note and for all other purposes whatsoever. The Company shall not be
obligated to register any transfer of this Installment Note except upon transfer
pursuant to an effective registration statement under the Securities Act of 1933
or an opinion, in form and substance satisfactory to the Company and its
counsel, of counsel satisfactory to the Company that registration is not
required under that Act.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which-is not a day on which banking institutions in The City of New York are
authorized or obligated by law or executive order to close.
This Installment Note is not redeemable or subject to prepayment.
The Company hereby irrevocably waives all rights of set-off against the
registered holder hereof with respect to its obligation to make all payments of
principal and interest required under this Installment Note.
As used in this paragraph, "an Installment Note" or "Installment Notes"
refers to installment sale notes, including this Installment Note, issued
pursuant to an Installment Sales Agreement dated December 8, 1986 (the
"Installment Sales Agreement"), among the Company, Alleghany and Merrill Lynch &
Co., Inc. (the "Guarantor") and to installment sale notes issued pursuant to any
other sales agreement or sales agreements between such parties having terms and
conditions substantially identical to the terms and conditions of the
Installment Sales Agreement. "Event of Default" means any one of the following
events (whatever the reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(1) default in the payment of any interest upon an Installment Note when
it becomes due and payable, and continuance of such default for a
period of 30 days; or
(2) default in the payment of the principal of an Installment Note when
it becomes due and payable; or
(3) default in the performance, or breach, of any covenant or warranty
of the Company or the Guarantor in the Installment Sales Agreement
(but only so long as Alleghany is the holder of this Installment
Note), the Guarantee, or this Installment Note (other than a
covenant or warranty a default in whose performance or whose breach
is elsewhere in this Installment Note specifically dealt with) and
continuance of such default or breach for a period of 60 days after
there has been given, by registered or certified mail, to the
Company and the Guarantor by the registered holder hereof a written
notice specifying such default or breach and requiring it to be
remedied and stating that such notice is a "Notice of Default"
hereunder; or
(4) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Company or the Guarantor in an
involuntary case under any applicable bankruptcy, insolvency or
other similar law now or hereafter in effect or appointing a
receiver, liquidator, assignee, custodian, trustee, sequestrator (or
similar official) of the Company or the Guarantor or for any
substantial part of their respective property, or ordering the
winding-up or liquidation of their respective affairs, and such
decree or order shall remain unstayed and in effect for a period of
60 consecutive days; or
(5) the Company or the Guarantor shall commence a voluntary case under
any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case under any such law, or shall consent
to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or similar
official) of the Company or the Guarantor or for any substantial
part of their respective property, or shall make any general
assignment for the benefit of creditors, or shall fail generally to
pay their respective debts as they become due or shall take any
corporate action in furtherance of any of the foregoing.
If an Event of Default occurs and is continuing, then and in every such
case, the registered holder of this Installment Note may declare the principal
of this Installment Note to be due and payable immediately, by a notice in
writing to the Company and the Guarantor, and upon any such declaration such
principal shall become immediately due and payable, and, the Company will, upon
demand of the registered holder of this Installment Note, pay to it the whole
amount then due and payable on this Installment Note for principal and interest,
with interest upon the overdue principal and, to the extent that payment of such
interest shall be legally enforceable, upon overdue installments of interest, at
the rate or rates borne by or provided for in this Installment Note, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including reasonable attorneys' fees and expenses.
Any notice given by the registered holder hereof pursuant to any provision
of this Installment Note shall be in writing and by registered or certified mail
and delivered to the Company at One Liberty Plaza, 165 Broadway, New York, New
York 10080, Attention: Treasurer; and to the Guarantor at One Liberty Plaza, 165
Broadway, New York, New York 10080, Attention: Corporate Secretary.
This Installment Note and any replacement Installment Note shall be
entitled to the benefit of the Guarantee of Merrill Lynch & Co., Inc. attached
hereto. This Installment Note shall be governed by the laws of the State of New
York.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:------------------------------------
Vice President
[Seal]
Attest:-----------------------
Assistant Secretary
[Executed Guarantee in the Form
of Exhibit C to the
Installment Sales Agreement]
EXHIBIT C
GUARANTEE
OF
MERRILL LYNCH & CO., INC.
FOR VALUE RECEIVED, MERRILL LYNCH & CO., INC. (the "Guarantor"), a
Delaware corporation, hereby unconditionally guarantees to Alleghany Corporation
("Allegheny"), or its registered assigns, as the registered holder of the
installment note issued by Merrill Lynch, Pierce, Fenner & Smith Incorporated
(the "Installment Note"), to which this Guarantee has been attached in a
principal amount not to exceed $94,535,343.54 and dated as set forth in such
Installment Note, the due and prompt payment of the principal of and interest
(including, in case of default, interest on principal and, to the extent
permitted by applicable law, on overdue interest, at the rate or rates borne by
or provided for in the Installment Note) on the Installment Note, when and as
the same shall become due and payable, whether at the maturity date for the
payment of principal, upon declaration of acceleration or otherwise, according
to the terms of the Installment Note. In case of the failure of Merrill Lynch,
Pierce, Fenner & Smith Incorporated or any company which may have assumed the
obligations of Merrill Lynch, Pierce, Fenner & Smith Incorporated (in either
case, the "Company") under the Installment Note punctually to pay any such
principal or interest, the Guarantor hereby agrees to cause any such payment to
be made punctually when and as the same shall become due and payable, whether at
the maturity date for the payment of principal, upon declaration of acceleration
or otherwise, according to the terms of the Installment Note and as if such
payment were made by the Company.
The Guarantor agrees that this Guarantee is intended to be a guarantee of
payment and not a guarantee of collection. The Guarantor agrees that its
obligations hereunder shall be unconditional, irrespective of the absence of any
action to enforce the Installment Note, the award of any judgment against the
Company or the existence of any action to enforce the same, or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of the Guarantor. The Guarantor hereby waives diligence, presentment,
filing of claims with a court in the event of insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest,
notice (except as provided in the Installment Note) and all demands whatsoever,
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Installment Note and in this
Guarantee. This Guarantee shall continue to be effective or be reinstated, as
the case may be, if at any time payment of the Installment Note, or any part
thereof, is rescinded or must otherwise be returned by the registered holder of
the Installment Note upon the insolvency, bankruptcy or reorganization of the
Company or otherwise, all as though such payment had not been made.
The Guarantor will not, and it will not permit any Subsidiary (as
hereinafter defined) at any time directly or indirectly to, create, assume,
incur or permit to exist any indebtedness for borrowed money secured by a
pledge, lien or other encumbrance (any pledge, lien or other encumbrance being
hereinafter in this paragraph referred to as a "lien") on the Voting Stock (as
hereinafter defined) of any Subsidiary (other than a Subsidiary which, at the
time of incurrence of such secured indebtedness, has a net worth, as determined
in accordance with generally accepted accounting principles, of less than
$3,000,000) without making effective provision whereby the Installment Note
(and, if the Guarantor so elects, any other indebtedness ranking on a parity
with the Installment Note) shall be secured equally and ratably with such
secured indebtedness so long as such other indebtedness shall be so secured;
provided, however, that the foregoing covenant shall not be applicable to liens
for taxes or assessments or governmental charges or levies not then due and
delinquent or the validity of which is being contested in good faith or which
are less then $1,000,000 in amount, liens created by or resulting from any
litigation or legal proceeding which is currently being contested in good faith
by appropriate proceedings or which involve claims of less than $1,000,000, or
deposits to secure (or in lieu of) surety, stay, appeal or customs bonds.
If the Guarantor shall hereafter be required to secure the Installment
Note equally and ratably with any other indebtedness pursuant to the above
paragraph, the Guarantor will promptly give notice to the registered holder of
the Installment Note that the foregoing covenant has been complied with and will
provide such registered holder of the Installment Note with an opinion of
counsel stating that the foregoing covenant has been complied with and that any
instruments executed by the Guarantor or any Subsidiary in the performance of
the foregoing covenant comply with the requirements of the foregoing covenant.
The Guarantor will not (a) sell, transfer or otherwise dispose of any
shares of Voting Stock of Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MLPF&S") or permit MLPF&S to issue, sell, or otherwise dispose of any shares
of its Voting Stock, unless, after giving effect to any such transaction, MLPF&S
remains a Controlled Subsidiary (as hereinafter defined); or (b) permit MLPF&S
to (i) merge or consolidate, unless the surviving company is a Controlled
Subsidiary; or (ii) convey or transfer its properties and assets substantially
as an entirety to any Person (as hereinafter defined), except to one or more
Controlled Subsidiaries.
For purposes hereof:
"Controlled Subsidiary" means any corporation more than 80% of the
outstanding Voting Stock, except for qualifying shares, of which
shall at the time be owned directly or indirectly by the Guarantor.
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated
organization or government or any agency or political subdivision
thereof.
"Subsidiary" means any corporation of which at the time of
determination the Guarantor and/or one or more Subsidiaries owns or
controls directly or indirectly more than 50% of the shares of
Voting Stock.
"Voting Stock" means stock of the class or classes having general
voting power under ordinary circumstances to elect at least a
majority of the board of directors, managers or trustees of such
corporation, provided that, for the purposes hereof, stock which
carries only the right to vote conditionally on the happening of an
event shall not be considered voting stock whether or not such event
shall have happened.
The Guarantor may consolidate with, or sell or convey all or substantially
all of its assets to, or merge with or into any other corporation provided that
in any such case, (i) either (a) the Guarantor shall be the continuing
corporation, or (b) the successor corporation shall be a corporation organized
and existing under the laws of the United States of America or a State thereof
and such successor corporation shall expressly assume in writing, as Guarantor,
the due and punctual payment of the principal of and interest on the Installment
Note, according to its terms, and the due and punctual performance and
observance of all of the covenants and conditions of the Installment Sales
Agreement, dated December 8, 1986 among Alleghany, the Guarantor and MLPF&S, and
a copy of such instrument of assumption shall promptly be furnished to the
registered holder of the Installment Note, and (ii) immediately after giving
effect to such transaction, no event of default under the terms of the
Installment Note, and no event which, with notice or lapse of time or both,
would become such event of default shall have happened and be continuing.
In case of any such consolidation, merger, sale or conveyance and upon any
such assumption by the successor corporation, such successor corporation shall
succeed to and be substituted for the Guarantor, with the same effect as if it
had been named herein and in the Installment Note as the Guarantor, and the
predecessor corporation, except in the event of a conveyance by way of lease,
shall be relieved of any further obligation hereunder and under the Installment
Note.
The Guarantor shall be subrogated to all the rights of the holder of the
Installment Note against the Company in respect of any amount paid by the
Guarantor pursuant to the provisions of this Guarantee.
The obligations of the Guarantor hereunder shall rank PARI PASSU with all
unsecured, unsubordinated indebtedness of the Guarantor.
The Guarantor agrees to reimburse the registered holder of the Installment
Note for any and all costs and expenses of collection, including reasonable
attorneys' fees and expenses, paid or incurred by such registered holder in
connection with collection and enforcement of this Guarantee.
Any notice given by the registered holder of the Installment Note shall be
in writing and by registered or certified mail and delivered to the Guarantor at
one Liberty Plaza, 165 Broadway, New York, New York 10080, Attention: Corporate
Secretary.
This Guarantee shall be governed by, and construed in accordance with, the
laws of the State of New York.
Subject to the next following paragraph, the Guarantor hereby certifies
and warrants that all acts, conditions and things required to be done and
performed and to have happened precedent to the creation and issuance of this
Guarantee and to constitute the same the valid obligation of the Guarantor have
been done and performed and have happened in due compliance with all applicable
laws.
This Guarantee shall not be valid or become obligatory for any purpose
until the Installment Note to which it is attached has been fully executed.
IN WITNESS WHEREOF, MERRILL LYNCH & CO., INC. has caused this Guarantee
to be executed in its corporate name by its Treasurer, its corporate seal to
be impressed hereon, attested by its Secretary or by one of its Assistant
Secretaries.
Dated as of December 8, 1986
MERRILL LYNCH & CO., INC.
By:-------------------------------
Treasurer
(Seal)
Attest:-----------------------
Assistant Secretary
EXHIBIT D
CONFIRMATION NO. ____
TO: Alleghany Financial Corporation
Park Avenue Plaza
New York, New York 10055
Attention: Treasurer's Office
Date:
RE: Installment Sales Agreement
dated December 8, 1986
Purchase of Common Stock of American Express Company:
Confirmation Settlement Date:
Number of Shares:
Purchase Price Per Share Net:
Securities and Exchange Commission Fee:
Aggregate Purchase Price (Endorsed Amount):
In payment for the Shares described above, the undersigned hereby
authorizes you to increase the aggregate principal amount of the Temporary Note
by the Endorsed Amount stated above by endorsing Schedule I to the Temporary
Note pursuant to the terms of the Installment Sales Agreement.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By:-----------------------------------
Title:
Accepted:
ALLEGHANY FINANCIAL CORPORATION
By:----------------------------
Title:
EXHIBIT D
(MULTICURRENCY -- CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of October 20, 1997
BARCLAYS BANK PLC and ALLEGHANY FUNDING CORPORATION have entered and/or
anticipate entering into one or more transactions (each a "Transaction") that
are or will be governed by this Master Agreement, which includes the schedule
(the "Schedule"), and the documents and other confirming evidence (each a
"Confirmation") exchanged between the parties confirming those Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will have
the meanings therein specified for the purpose of this Master Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the provisions of
the Schedule and the other provisions of this Master Agreement, the Schedule
will prevail. In the event of any inconsistency between the provisions of any
Confirmation and this Master Agreement (including the Schedule), such
Confirmation will prevail for the purpose of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on the fact
that this Master Agreement and all Confirmations form a single agreement between
the parties (collectively referred to as this "Agreement"), and the parties
would not otherwise enter into any transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery in each Confirmation
to be made by it, subject to the other provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due date for
value on that date in the place of the account specified in the relevant
Confirmation or otherwise pursuant to this Agreement, in freely
transferable funds and in the manner customary for payments in the
required currency. Where settlement is by delivery (that is, other than
by payment), such delivery will be made for receipt on the due date in
the manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is subject to
(1) the condition precedent that no Event of Default or Potential Event
of Default with respect to the other party has occurred and is
continuing, (2) the condition precedent that no Early Termination Date
in respect of the relevant Transaction has occurred or been effectively
designated and (3) each other applicable condition precedent specified
in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving a
payment or delivery by giving notice to the other party at least five Local
Business Days prior to the scheduled date for the payment or delivery to which
such change applies unless such other party gives timely notice of a reasonable
objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation to make
payment of any such amount will be automatically satisfied and discharged and,
if the aggregate amount that would otherwise have been payable by one party
exceeds the aggregate amount that would otherwise have been payable by the other
party, replaced by an obligation upon the party by whom the larger aggregate
amount would have been payable to pay to the other party the excess of the
larger aggregate amount over the smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net amount
will be determined in respect of all amounts payable on the same date in the
same currency in respect of such Transactions, regardless of whether such
amounts are payable in respect of the same Transaction. The election may be made
in the Schedule or a Confirmation by specifying that subparagraph (ii) above
will not apply to the Transactions identified as being subject to the election,
together with the starting date (in which case subparagraph (ii) above will not,
or will cease to, apply to such Transactions for such date). This election may
be made separately for different groups of Transactions and will apply
separately to each pairing of Offices through which the parties make and receive
payments or deliveries.
(d) DEDUCTIONS OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement shall be made without
any deduction or withholding for or on account of any Tax unless such
deduction or withholding is required by any applicable law, as modified
by the practice of any relevant governmental revenue authority, then in
effect. If a party is so required to deduct or withhold, then that party
("X") will:--
(1) promptly notify the other party ("Y") of such requirement;
(2) pay to the relevant authorities the full amount required to
be deducted or withheld (including the full amount required to be
deducted or withheld from any additional amount paid by X to Y
under this Section 2(d)) promptly upon the earlier of determining
that such deduction or withholding is required or receiving
notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a certified
copy), or other documentation reasonably acceptable to Y,
evidencing such payment to such authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in addition to
the payment to which Y is otherwise entitled under this
Agreement, such additional amount as is necessary to ensure that
the net amount actually received by Y (free and clear of
Indemnifiable Taxes, whether assessed against X or Y) will equal
the full amount Y would have received had no such deduction or
withholding been required. However, X will not be required to pay
any additional amount to Y to the extent that it would not be
required to be paid but for:--
(A) the failure by Y to comply with or perform any
agreement contained in Section 4(a)(i), 4(a)(iii) or 4(d);
or
(B) the failure of a representation made by Y pursuant to
Section 3(f) to be accurate and true unless such failure
would not have occurred but for (I) any action taken by a
taxing authority, or brought in a court of competent
jurisdiction, on or after the date on which a Transaction
is entered into (regardless of whether such action is
taken or brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.
(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by the
practice of any relevant governmental revenue authority, to make
any deduction or withholding in respect of which X would not be
required to pay an additional amount to Y under Section
2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed directly
against X.
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the amount
of such liability (including any related liability for interest, but
including any related liability for penalties only if Y has failed to
comply with or perform any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant Transaction,
a party that defaults in the performance of any payment obligation will, to the
extent permitted by law and subject to Section 6(c), be required to pay interest
(before as well as after judgment) on the overdue amount to the other party on
demand in the same currency as such overdue amount, for the period from (and
including) the original due date for payment to (but excluding) the date of
actual payment, at the Default Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed. If, prior to
the occurrence or effective designation of an Early Termination Date in respect
of the relevant Transaction, a party defaults in the performance of any
obligation required to be settled by delivery, it will compensate the other
party on demand if and to the extent provided for in the relevant Confirmation
or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated by each party on each date on which a Transaction is entered into
and, in the case of the representations in Section 3(f), at all times until the
termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organized and validly existing under the laws of
the jurisdiction of its organization or incorporation and, if relevant
under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any other
documentation relating to this Agreement to which it is a party, to
deliver this Agreement and any other documentation relating to this
Agreement that it is required by this Agreement to delivery and to
perform its obligations under this Agreement and any obligations it has
under any Credit Support Document to which it is a party and has taken
all necessary action to authorize such execution, delivery and
performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and performance
do not violate or conflict with any law applicable to it, any provision
of its constitutional documents, any order or judgment of any court or
other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets.
(iv) CONSENTS. All governmental and other consents that are required to
have been obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party have been obtained and are in
full force and effect and all conditions of any such consents have been
complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement and any
Credit Support Document to which it is a party constitutes its legal,
valid and binding obligations, enforceable in accordance with their
respective terms (subject to applicable bankruptcy, reorganization,
insolvency, moratorium or similar laws affecting creditors' rights
generally and subject, as to enforceability, to equitable principles of
general application (regardless of whether enforcement is sought in a
proceeding in equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No event of Default or Potential event of Default
or, to its knowledge, Termination Event with respect to it has occurred and is
continuing and no such event or circumstance would occur as a result of its
entering into or performing its obligations under this Agreement or any Credit
Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge, threatened
against it or any of its Affiliates any action, suit or proceeding at law or in
equity or before any court, tribunal, governmental body, agency or official or
any arbitrator that is likely to affect the legality, validity or enforceability
against it of this Agreement or any Credit Support to which it is a party or its
ability to perform its obligations under this Agreement or such Credit Support
Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is identified
for the purpose of this Section 3(d) in the Schedule is, as of the date of the
information, true, accurate and complete in every material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the Schedule as
being made by it for the purpose of this Section 3(e) is accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the Schedule is
being made by it for the purpose of this Section 3(f) is accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may have
any obligation under this Agreement or any Credit Support Document to which it
is a party:--
(a) FURNISH SPECIFIED Information. It will deliver to the other party or, in
certain cases under subparagraph (iii) below, to such governmental or taxing
authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation
(ii) any other documents specified in the Schedule or any
Conformation; and
(iii) upon reasonable demand by such other party, any form or document
that may be required or reasonably requested in writing in order to
allow such other party or its Credit Support Provider to make a payment
under this Agreement or any applicable Credit Support Document without
any deduction or withholding for or on account of any Tax or with such
deduction or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not materially
prejudice the legal or commercial position of the party in receipt of
such demand), with any such form or document to be accurate and
completed in a manner reasonably satisfactory to such other party and to
be executed and to be delivered with any reasonably required
certification.
in each case by the date specified in the Schedule or such Confirmation or, if
none is specified, as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to maintain in
full force and effect all consents of any governmental or other authority that
are required to be obtained by it with respect to this Agreement or any Credit
Support Document to which it is a party and will use all reasonable efforts to
obtain any that may become necessary in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to comply
would materially impair its ability to perform its obligations under this
Agreement or any Credit Support Documents to which it is a party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation made
by it under Section 3(f) to be accurate and true promptly upon learning of such
failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp Tax
levied or imposed upon it or in respect of its execution or performance of this
Agreement by a jurisdiction in which it is incorporated, organized, managed and
controlled, or considered to have its seat, or in which a branch or office
through which it is acting for the purpose of this Agreement is located ("Stamp
Tax Jurisdiction") and will indemnify the other party against any Stamp Tax
levied or imposed upon the other party or in respect of the other party's
execution or performance of this Agreement by any such Stamp Tax Jurisdiction
which is not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party or, if
applicable, any Credit Support Provider of such party or any Specified Entity or
such party of any of the following events constitutes an event of default (an
"Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make, when due,
any payment under this Agreement or delivery under Section 2(a)(i) or
2(e) required to be made by it if such failure is not remedied on or
before the third Local Business Day after notice of such failure is
given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or perform
any agreement or obligation (other than an obligation to make any
payment under this Agreement or delivery under Section 2(a)(i) or 2(e)
or to give notice of a Termination Event or any agreement or obligation
under Section 4(a)(i), 4(a)(iii) or 4(d)) to be complied with or
performed by the party in accordance with this Agreement if such failure
is not remedied on or before the thirtieth day after notice of such
failure is given to the party.
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider of such
party to comply with or perform any agreement or obligation to be
complied with or performed by it in accordance with any Credit
Support Document if such failure is continuing after any
applicable grace period has elapsed;
(2) the expiration or termination of such Credit Support Document
or the failing or ceasing of such Credit Support Document to be
in full force and effect for the purpose of this Agreement (in
either case other than in accordance with its terms) prior to the
satisfaction of all obligations of such party under each
Transaction to which such Credit Support Document relates without
the written consent of the other party; or
(3) the party or such Credit Support Provider disaffirms,
disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, such Credit Support Document;
(iv) MISREPRESENTATION. A representation (other than a representation
under Section 3(e) or (f)) made or repeated or deemed to have been made
or repeated by the party or any Credit Support Provider of such party in
this Agreement or any Credit Support Document proves to have been
incorrect or misleading in any material respect when made or repeated or
deemed to have been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit Support
Provider of such party or any applicable Specified Entity of such party
(1) defaults under a Specified Transaction and, after giving effect to
any applicable notice requirement or grace period, there occurs a
liquidation of, an acceleration of obligations under, or an early
termination of, that Specified Transaction, (2) defaults, after giving
effect to any applicable notice requirement or grace period, in making
any payment or delivery due on the last payment, delivery or exchange
date of, or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business Days if
there is no applicable notice requirement or grace period) or (3)
disaffirms, disclaims, repudiates or rejects, in whole or in part, a
Specified Transaction (or such action is taken by any person or entity
appointed or empowered to operate it or act on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the Schedule as
applying to the party, the occurrence or existence of (1) a default,
event of default or other similar condition or event (however described)
in respect of such party, any Credit Support Provider of such party or
any applicable Specified Entity of such party under one or more
agreements or instruments relating to Specified Indebtedness of any of
them individually or collectively) in an aggregate amount of not less
than the applicable Threshold Amount (as specified in the Schedule)
which has resulted in such Specified Indebtedness becoming, or becoming
capable at such time of being declared, due and payable under such
agreements or instruments, before it would otherwise have been due and
payable or (2) a default by such party, such Credit Support Provider or
such Specified Entity (individually or collectively) in making one or
more payments on the due date thereof in an aggregate amount of not less
than the applicable Threshold Amount under such agreements or
instruments (after giving effect to any applicable notice requirement or
grace period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such party
or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a consolidation,
amalgamation or merger); (2) becomes insolvent or is unable to
pay its debts or fails or admits in writing its inability
generally to pay its debts as they become due; (3) makes a
general assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has instituted
against it a proceeding seeking a judgment or insolvency or
bankruptcy or any other relief under any bankruptcy or insolvency
law or other similar law affecting creditors' rights, or a
petition is presented for its winding-up or liquidation, and, in
the case of any such proceeding or petition instituted or
presented against it, such proceeding or petition (A) results in
a judgment of insolvency or bankruptcy or the entry of an order
for relief or the making of an order for its winding-up or
liquidation or (B) is not dismissed, discharged, stayed or
restrained in each case within 30 days of the institution or
presentation thereof; (5) has a resolution passed for its
winding-up, official management or liquidation (other than
pursuant to a consolidation, amalgamation or merger); (6) seeks
or becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee, custodian
or other similar official for it or for all or substantially all
its assets; (7) has a secured party take possession of all or
substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced
or sued on or against all or substantially all its assets and
such secured party maintains possession, or any such process is
not dismissed, discharged, stayed or restrained, in each case
within 30 days thereafter; (8) causes or is subject to any event
with respect to it which, under the applicable laws of any
jurisdiction, has an analogous effect to any of the events
specified in clauses (1) to (7) (inclusive); or (9) takes any
action in furtherance of, or indicating its consent to, approval
of, or acquiescence in, any of the foregoing acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit Support
Provider of such party consolidates or amalgamates with, or merges with
or into, or transfers all or substantially all its assets to, another
entity and, at the time of such consolidation, amalgamation, merger or
transfer:--
(1) the resulting, surviving or transferee entity fails to assume
all the obligations of such party or such Credit Support Provider
under this Agreement or any Credit Support Document to which it
or its predecessor was a party by operation of law or pursuant to
an agreement reasonably satisfactory to the other party to this
Agreement; or
(2) the benefits of any Credit Support Document fail to extend
(without the consent of the other party) to the performance by
such resulting, surviving or transferee entity of its obligations
under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a party or,
if applicable, any Credit Support Provider of such party or any Specified Entity
of such party of any event specified below constitutes an Illegality if the
event is specified in (i) below, a Tax Event if the event is specified in (ii)
below or a Tax Event Upon Merger if the event is specified in (iii) below, and,
if specified to be applicable, a Credit Event Upon Merger if the event is
specified pursuant to (iv) below or an Additional Termination Event if the event
is specified pursuant to (v) below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any applicable
law after the date on which a Transaction is entered into, or due to the
promulgation of, or any change in, the interpretation by any court,
tribunal or regulatory authority with competent jurisdiction of any
applicable law after such date, it becomes unlawful (other than as a
result of a breach by the party of Section 4(b)) for such party (which
will be the Affected Party):--
(1) to perform any absolute or contingent obligation to make a
payment or delivery or to receive a payment or delivery in
respect of such Transaction or to comply with any other material
provision of this Agreement relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of such party
to perform, any contingent or other obligation which the party
(or such Credit Support Provider) has under any Credit Support
Document relating to such Transaction:
(ii) TAX EVENT. Due to (x) any action taken by a taxing authority, or
brought in a court of competent jurisdiction, on or after the date on
which a Transaction is entered into (regardless of whether such action
is taken or brought with respect to a party to this Agreement) or (y) a
Change in Tax Law, the party (which will be the Affected Party) will, or
there is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party an
additional amount in respect of an Indemnifiable Tax under Section
2(d)(i)(4) (except in respect of interest under Section 2(e), 6(d)(ii)
or 6(e)) or (2) receive a payment from which an amount is required to be
deducted or withheld for or on account of a Tax (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) and no additional amount
is required to be paid in respect of such Tax under Section 2(d)(i)(4)
(other than by reason of Section 2(d)(i)(4)(A) or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on the
next succeeding Scheduled Payment Date will either (1) be required to
pay an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) or (2) receive a payment from which an amount has been
deducted or withheld for or on account of any Indemnifiable Tax in
respect of which the other party is not required to pay an additional
amount (other than by reason of Section 2(d)(i)(4)(A) or (B)), in either
case as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all its
assets to, another entity (which will be the Affected Party) where such
action does not constitute an event described in Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party ("X"),
any Credit Support Provider of X or any applicable Specified Entity of X
consolidates or amalgamates with, or merges with or into, or transfers
all or substantially all its assets to, another entity and such action
does not constitute an event described in Section 5(a)(viii) but the
creditworthiness of the resulting, surviving or transferee entity is
materially weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such action
(and, in such event, X or its successor or transferee, as appropriate,
will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination Event"
is specified in the Schedule or any Confirmation as applying, the
occurrence of such event (and, in such event, the Affected Party or
Affected Parties shall be as specified for such Additional Termination
Event in the Schedule or such Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. In an event or circumstance which would
otherwise constitute or give rise to an Event of Default also constitutes an
Illegality, it will be treated as an Illegality and will not constitute an Event
of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an Event of
Default with respect to a party (the "Defaulting Party") has occurred and is
then continuing, the other party (the "Non-defaulting Party") may, by not more
than 20 days notice to the Defaulting Party specifying the relevant Event of
Default, designate a day not earlier than the day such notice is effective as an
Early Termination Date in respect of all outstanding Transactions. If, however,
"Automatic Early Termination" is specified in the Schedule as applying to a
party, then an Early Termination Date in respect of all outstanding Transactions
will occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to the
extent analogous thereto, (8), and as of the time immediately preceding the
institution of the relevant proceeding or the presentation of the relevant
petition upon the occurrence with respect to such party of an Event of Default
specified in Section 5(a)(vii)(4) or, to the extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party will,
promptly upon becoming aware of it, notify the other party, specifying
the nature of that Termination Event and each Affected Transaction and
will also give such other information about that Termination Event as
the other party may reasonably require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an Illegality under
Section 5(b)(i)(1) or a Tax Event occurs and there is only one Affected
Party, or if a Tax Event Upon Merger occurs and the Burdened Party is
the Affected Party, the Affected Party will, as a condition to its right
to designate an Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a loss,
excluding immaterial, incidental expenses) to transfer within 20 days
after it gives notice under Section 6(b)(i) all its rights and
obligations under this Agreement in respect of the Affected Transactions
to another of its Offices or Affiliates so that such Termination Event
ceases to exist.
If the Affected Party is not able to make such a transfer it will give
notice to the other party to that effect within such 20 day period,
whereupon the other party may effect such a transfer within 30 days
after the notice is given under Section 6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be subject
to and conditional upon the prior written consent of the other party,
which consent will not be withheld if such other party's policies in
effect at such time would permit it to enter into transactions with the
transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section 5(b)(i)(1) or
a Tax Event occurs and there are two Affected Parties, each party will
use all reasonable efforts to reach agreement within 30 days after
notice thereof is given under Section 6(b)(i) on action to avoid that
Termination Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement under
Section 6(b)(iii), as the case may be, has not been effected with
respect to all Affected Transactions within 30 days after an
Affected Party gives notice under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit Event Upon
Merger or an Additional Termination Event occurs, or a Tax Event
Upon Merger occurs and the Burdened Party is not the Affected
Party,
either party in the case of an Illegality, the Burdened Party in the
case of a Tax Event Upon Merger, any Affected Party in the case of a Tax
Event or an Additional Termination Event if there is more than one
Affected Party, or the party which is not the Affected Party in the case
of a Credit Event Upon Merger or an Additional Termination Event if
there is only one Affected Party may, by not more than 20 days notice to
the other party and provided that the relevant Termination Event is then
continuing, designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all Affected
Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given under
Section 6(a) or (b), the Early Termination Date will occur on the date
so designated, whether or not the relevant Event of Default or
Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under Section
2(a)(i) or 2(e) in respect of the Terminated Transactions will be
required to be made, but without prejudice to the other provisions of
this Agreement. The amount, if any, payable in respect of an Early
Termination Date shall be determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following the
occurrence of an Early Termination Date, each party will make the
calculations on its part, if any, contemplated by Section 6(e) and will
provide to the other party a statement (1) showing, in reasonable
detail, such calculations (including all relevant quotations and
specifying any amount payable under Section 6(e)) and (2) giving details
of the relevant account to which any amount payable to it is to be paid.
In the absence of written confirmation from the source of a quotation
obtained in determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the existence
and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect of any
Early Termination Date under Section 6(e) will be payable on the day
that notice of the amount payable is effective (in the case of an Early
Termination Date which is designated or occurs as a result of an Event
of Default) and on the day which is two Local Business Days after the
day on which notice of the amount payable is effective (in the case of
an Early Termination Date which is designated as a result of a
Termination Event). Such amount will be paid together with (to the
extent permitted under applicable law) interest thereon (before as well
as after judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such amount
is paid, at the Applicable Rate. Such interest will be calculated on the
basis of daily compounding and the actual number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs, the
following provisions shall apply based on the parties' election in the Schedule
of a payment measure, either "Market Quotation" or "Loss", and a payment method,
either the "First Method" or the "Second Method". If the parties fail to
designate a payment measure or payment method in the Schedule, it will be deemed
that "Market Quotation" or the "Second Method", as the case may be, shall apply.
The amount, if any, payable in respect of an Early Termination Date and
determined pursuant to this Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results from an
Event of Default:--
(1) FIRST METHOD AND MARKET QUOTATION. If the First Method and
Market Quotation apply, the Defaulting Party will pay to the
Non-defaulting Party the excess, if a positive number, of (A) the
sum of the Settlement Amount (determined by the Non-defaulting
Party) in respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts owing to
the Non-defaulting Party over (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the Defaulting Party.
(2) FIRST METHOD AND LOSS. If the First Method and Loss apply,
the Defaulting Party will pay to the Non-defaulting Party, if a
positive number, the Non-defaulting Party's Loss in respect of
this Agreement.
(3) SECOND METHOD AND MARKET QUOTATION. If the Second Method and
Market Quotation apply, an amount will be payable equal to (A)
the sum of the Settlement Amount (determined by the
Non-defaulting Party) in respect of the Terminated Transactions
and the Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party less (B) the Termination
Currency Equivalent of the Unpaid Amounts owing to the Defaulting
Party. If that amount is a positive number, the Defaulting Party
will pay it to the Non-defaulting Party, if it is a negative
number, the Non-defaulting Party will pay the absolute value of
that amount to the Defaulting Party.
(4) SECOND METHOD AND LOSS. If the Second Method and Loss apply,
an amount will be payable equal to the Non-defaulting Party's
Loss in respect of this Agreement. If that amount is a positive
number, the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting Party will
pay the absolute value of that amount to the Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results from a
Termination Event:--
(1) ONE AFFECTED PARTY. If there is one Affected Party, the
amount payable will be determined in accordance with Section
6(e)(i)(3), if Market Quotation applies, or Section 6(e)(i)(4),
if Loss applies, except that, in either case, references to the
Defaulting Party and to the Non-defaulting Party will be deemed
to be references to the Affected Party and the party which is not
the Affected Party, respectively, and, if Loss applies and fewer
than all the Transactions are being terminated, Loss shall be
calculated in respect of all Terminated Transactions.
(2) TWO AFFECTED PARTIES. If there are two Affected Parties:--
(A) if Market Quotation applies, each party will determine
a Settlement Amount in respect of the Terminated
Transactions, and an amount will be payable equal to (I)
the sum of (a) one-half of the difference between the
Settlement Amount of the party with the higher Settlement
Amount ("X") and the Settlement Amount of the party with
the lower Settlement Amount ("Y") and (b) the Termination
Currency Equivalent of the Unpaid Amounts owing to X less
(II) the Termination Currency Equivalent of the Unpaid
Amounts owing to Y; and
(B) if Loss applies, each party will determine its Loss in
respect of this Agreement (or, if fewer than all the
Transactions are being terminated, in respect of all
Terminated Transactions) and an amount will be payable
equal to one-half of the difference between the Loss of
the party with the higher Loss ("X") and the Loss of the
party with the lower Loss ("Y").
If the amount payable is a positive number, Y will pay it to X;
if it is a negative number, X will pay the absolute value of that
amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination" applies in
respect of a party, the amount determined under this Section 6(e) will
be subject to such adjustments as are appropriate and permitted by law
to reflect any payments or deliveries made by one party to the other
under this Agreement (and retained by such other party) during the
period from the relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation applies an
amount recoverable under this Section 6(e) is a reasonable pre-estimate
of loss and not a penalty. Such amount is payable for the loss of
bargain and the loss of protection against future risks and except as
otherwise provided in this Agreement neither party will be entitled to
recover any additional damages as a consequence of such losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way of
security or otherwise) by either party without the prior written consent of the
other party except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer of all
or substantially all its assets to, another entity (but without prejudice to any
other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest in any
amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this Agreement will
be made in the relevant currency specified in this Agreement for that payment
(the "Contractual Currency"). To the extent permitted by applicable law, any
obligation to make payments under this Agreement in the Contractual Currency
will not be discharged or satisfied by any tender in any currency other than the
Contractual Currency, except to the extent such tender results in the actual
receipt by the party to which payment is owed, acting in a reasonable manner and
in good faith in converting the currency so tendered into the Contractual
Currency, of the full amount in the Contractual Currency of all amounts payable
in respect of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual Currency
payable in respect of this Agreement, the party required to make the payment
will, to the extent permitted by applicable law, immediately pay such additional
amount in the Contractual Currency as may be necessary to compensate for the
shortfall. If for any reason the amount in the Contractual Currency so received
exceeds the amount in the Contractual Currency payable in respect of this
Agreement, the party receiving the payment will refund promptly the amount of
such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment or
order expressed in a currency other than the Contractual Currency is rendered
(i) for the payment of any amount owing in respect of this Agreement, (ii) for
the payment of any amount relating to any early termination in respect of this
Agreement or (iii) in respect of a judgment or order of another court for the
payment of any amount described in (i) or (ii) above, the party seeking
recovery, after recovery in full of the aggregate amount to which such party is
entitled pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the Contractual
Currency received by such party as a consequence of sums paid in such other
currency and will refund promptly to the other party any excess of the
Contractual Currency received by such party as a consequence of sums paid in
such other currency if such shortfall or such excess arises or results from any
variation between the rate of exchange at which the Contractual Currency is
converted into the currency of the judgment or order for the purposes of such
judgment or order and the rate of exchange at which such party is able, acting
in a reasonable manner and in good faith in converting the currency received
into the Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such party.
The term "rate of exchange" includes, without limitation, any premiums and costs
of exchange payable in connection with the purchase of or conversion into the
Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law, these
indemnities constitute separate and independent obligations from the other
obligations in this Agreement, will be enforceable as separate and independent
causes of action, will apply notwithstanding any indulgence granted by the party
to which any payment is owed and will not be affected by judgment being obtained
or claim or proof being made for any other sums payable in respect of this
Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be sufficient
for a party to demonstrate that it would have suffered a loss had an actual
exchange or purchase been made.
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and supersedes
all oral communication and prior writings with respect thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing evidence by a
facsimile transmission) and executed by each of the parties or confirmed by an
exchange of telexes or electronic messages on an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Section 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will survive the
termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the rights,
powers, remedies and privileges provided in this Agreement are cumulative and
not exclusive of any rights, powers, remedies and privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver in
respect of it) may be executed and delivered in counterparts (including
by facsimile transmission), each of which will be deemed an original.
(ii) The parties intend that they are legally bound by the terms of each
Transaction from the moment they agree to those terms (whether orally or
otherwise). A Confirmation shall be entered into as soon as practicable
and may be executed and delivered in counterparts (including by
facsimile transmission) or be created by an exchange of telexes or by an
exchange of electronic messages on an electronic messaging system, which
in each case will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein or
through another effective means that any such counterpart, telex or
electronic message constitutes a Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right, power or
privilege in respect of this Agreement will not be presumed to operate as a
waiver, and a single or partial exercise of any right, power or privilege will
not be presumed to preclude any subsequent or further exercise, of that right,
power or privilege or the exercise of any other right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken into
consideration in interpreting this Agreement.
10. OFFICES: MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party that
enters into a Transaction through an Office other than its head or home office
represents to the other party that, notwithstanding the place of booking office
or jurisdiction of incorporation or organization of such party, the obligations
of such party are the same as if it had entered into the Transaction through its
head or home office. This representation will be deemed to be repeated by such
party on each date on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and receives
payments or deliveries for the purpose of a Transaction without the prior
written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office through
which it makes and receives payments or deliveries with respect to a Transaction
will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other party
for and against all reasonable out-of-pocket expenses, including legal fees and
Stamp Tax, incurred by such other party by reason of the enforcement and
protection of its rights under this Agreement or any Credit Support Document to
which the Defaulting Party is a party or by reason of the early termination of
any Transaction, including, but not limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a notice or
other communication under Section 5 or 6 may not be given by facsimile
transmission or electronic messaging system) to the address or number or in
accordance with the electronic messaging system details provided (see the
Schedule) and will be deemed effective as indicated.--
(i) if in writing and delivered in person or by courier, on the date
it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that transmission
is received by a responsible employee of the recipient in legible form
(it being agreed that the burden of proving receipt will be on the
sender and will not be met by a transmission report generated by the
sender's facsimile machine);
(iv) if sent by certified or registered mail (airmail, if overseas) or
the equivalent (return receipt requested), on the date that mail is
delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that electronic
message is received.
unless the date of that delivery (or attempted delivery) or that receipt, as
applicable, is not a Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of business on a Local
Business Day, in which case that communication shall be deemed given and
effective on the first following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change the
address, telex or facsimile number or electronic messaging system details at
which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings relating to
this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this Agreement
is expressed to be governed by English law, or to the non-exclusive
jurisdiction of the courts of the State of New York and the United
States District Court located in the Borough of Manhattan in New York
City, if this Agreement is expressed to be governed by the laws of the
State of New York; and
(ii) waives any objection which it may have at any time to the laying of
venue of any Proceedings brought in any such court, waives any claim
that such Proceedings have been brought in an inconvenient forum and
further waives the right to object, with respect to such Proceedings,
that such court does not have any jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing Proceedings in
any other jurisdiction (outside, if this Agreement is expressed to be governed
by English law, the Contracting States, as defined in Section 1(3) of the Civil
Jurisdiction and Judgments Act 1982 or any modification, extension or
re-enactment thereof for the time being in force) nor will the bringing of
Proceedings in any one or more jurisdictions preclude the bringing of
Proceedings in any other jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent (if
any) specified opposite its name in the Schedule to receive, for it and on its
behalf, service of process in any Proceedings. If for any reason any party's
Process Agent is unable to act as such, such party will promptly notify the
other party and within 30 days appoint a substitute process agent acceptable to
the other party. The parties irrevocably consent to service of process given in
the manner provided for notices in Section 12. Nothing in this Agreement will
affect the right of either party to serve process in any other manner permitted
by law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest extent
permitted by applicable law, with respect to itself and its revenues and assets
(irrespective of their use or intended use), all immunity on the grounds of
sovereignty or other similar grounds from (i) suit, (ii) jurisdiction of any
court, (iii) relief by way of injunction, order for specific performance or for
recovery of property, (iv) attachment of its assets (whether before or after
judgment) and (v) execution or enforcement of any judgment to which it or its
revenues or assets might otherwise be entitled in any Proceedings in the courts
of any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b) with
respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person, any
entity controlled, directly or indirectly, by the person, any entity that
controls, directly or indirectly, the person or any entity directly or
indirectly under common control with the person. For this purpose, "control" of
any entity or person means ownership of a majority of the voting power of the
entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have been
but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of either
party from and after the date (determined in accordance with Section 6(d)(ii))
on which that amount is payable, the Default Rate;
(c) in respect of all other obligations payable or deliverable (or which would
have been but for Section 2(a)(iii)) by a Non-defaulting Party, the Non-default
Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or ratification
of, or any change in or amendment to, any law (or in the application or official
interpretation of any law) that occurs on or after the date on which the
relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorization, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is specified as
such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it) if it
were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with Section
6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if applicable,
in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be imposed in
respect of a payment under this Agreement but for a present or former connection
between the jurisdiction of the government or taxation authority imposing such
Tax and the recipient of such payment or a person related to such recipient
(including, without limitation, a connection arising from such recipient or
related person being or having been a citizen or resident of such jurisdiction,
or being or having been organized, present or engaged in a trade or business in
such jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection arising
solely from such recipient or related person having executed, delivered,
performed its obligations or received a payment under, or enforced, this
Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the case of
tax matters, by the practice of any relevant governmental revenue authority) and
"LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) (a) in relation to any obligation under Section 2(a)(i), in
the place(s) specified in the relevant Confirmation or, if not so specified, as
otherwise agreed by the parties in writing or determined pursuant to provisions
contained, or incorporated by reference, in this Agreement, (b) in relation to
any other payment, in the place where the relevant account is located and, if
different, in the principal financial center, if any, of the currency of such
payment, (c) in relation to any notice or other communication, including notice
contemplated under Section 5(a)(i), in the city specified in the address for
notice provided by the recipient and, in the case of a notice contemplated by
Section 2(b), in the place where the relevant new account is to be located and
(d) in relation to Section 5(a)(v)(2), in the relevant locations for performance
with respect to such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to be its
total losses and costs (or gain, in which case expressed as a negative number)
in connection with this Agreement or that Terminated Transaction or group of
Terminated Transactions, as the case may be, including any loss of bargain, cost
of funding or, at the election of such party but without duplication, loss or
cost incurred as a result of its terminating, liquidating, obtaining or
reestablishing any hedge or related trading position resulting from any of
them). Loss includes losses and costs (or gains) in respect of any payment or
delivery required to have been made (assuming satisfaction of each applicable
condition precedent) on or before the relevant Early Termination Date and not
made, except, so as to avoid duplication, if Section 6(e)(i)(1) or (3) or
6(e)(ii)(2)(A) applies. Loss does not include a party's legal fees and
out-of-pocket expenses referred to under Section 11. A party will determine its
Loss as of the relevant Early Termination Date, or, if that is not reasonably
practicable, as of the earliest date thereafter as is reasonably practicable. A
party may (but need not) determine its Loss by reference to quotations of
relevant rates or prices from one or more leading dealers in the relevant
markets.
"MARKET QUOTATION" means, with respect to one or more Terminated Transactions
and a party making the determination, an amount determined on the basis of
quotations from Reference Market-makers. Each quotation will be for an amount,
if any, that would be paid to such party (expressed as a negative number) or by
such party (expressed as a positive number) in consideration of an agreement
between such party (taking into account any existing Credit Support Document
with respect to the obligations of such party) and the quoting Reference
Market-maker to enter into a transaction (the "Replacement Transaction") that
would have the effect of preserving for such party the economic equivalent of
any payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition precedent)
by the parties under Section 2(a)(i) in respect of such Terminated Transaction
or group of Terminated Transactions that would, but for the occurrence of the
relevant Early Termination Date, have been required after that date. For this
purpose, Unpaid Amounts in respect of the Terminated Transaction or group of
Terminated Transactions are to be excluded but, without limitation, any payment
or delivery that would, but for the relevant Early Termination Date, have been
required (assuming satisfaction of each applicable condition precedent) after
that Early Termination Date is to be included. The Replacement Transaction would
be subject to such documentation as such party and the Reference Market-maker
may, in good faith, agree. The party making the determination (or its agent)
will request each Reference Market-maker to provide its quotation to the extent
reasonably practicable as of the same day and time (without regard to different
time zones) on or as soon as reasonably practicable after the relevant Early
Termination Date. The day and time as of which those quotations are to be
obtained will be selected in good faith by the party obliged to make a
determination under Section 6(e), and, if each party is so obliged, after
consultation with the other. If more than three quotations are provided, the
Market Quotation will be the arithmetic mean of the quotations, without regard
to the quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation remaining
after disregarding the highest and lowest quotations. For this purpose, if more
than one quotation has the same highest value or lowest value, then one of such
quotations shall be disregarded. If fewer than three quotations are provided, it
will be deemed that the Market Quotation in respect of such Terminated
Transaction or group of Terminated Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the Non-defaulting Party (as certified by it) if
it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's head or
home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of notice or
the lapse of time or both, would constitute an Event of Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant market
selected by the party determining a Market Quotation in good faith (a) from
among dealers of the highest credit standing which satisfy all the criteria that
such party applies generally at the time in deciding whether to offer or to make
an extension of credit and (b) to the extent practicable, from among such
dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions (a) in
which the party is incorporated, organized, managed and controlled or considered
to have its seat, (b) where an Office through which the party is acting for
purposes of this Agreement is located, (c) in which the party executes this
Agreement and (d) in relation to any payment, from or through which such payment
is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is to be
made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of retention or
withholding or similar right or requirement to which the payer of an amount
under Section 6 is entitled or subject (whether arising under this Agreement,
another contract, applicable law or otherwise) that is exercised by, or imposed
on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early Termination
Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference to any
Unpaid Amounts) for each Terminated Transaction or group of Terminated
Transactions for which a Market Quotation cannot be determined or would not (in
the reasonable belief of the party making the determination) produce a
commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation (whether
present or future, contingent or otherwise, as principal or surety or otherwise)
in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any transaction
(including an agreement with respect thereto) now existing or hereafter entered
into between one party to this Agreement (or any Credit Support Provider of such
party or any applicable Specified Entity of such party) and the other party to
this Agreement (or any Credit Support Provider of such other party or any
applicable Specified Entity of such other party) which is a rate swap
transaction, basis swap, forward rate transaction, commodity swap, commodity
option, equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, currency swap transaction, cross-currency rate
swap transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any combination of
these transactions and (c) any other transaction identified as a Specified
Transaction in this Agreement or the relevant confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge, assessment or
fee of any nature (including interest, penalties and additions thereto) that is
imposed by any government or other taxing authority in respect of any payment
under this Agreement other than a stamp, registration, documentation or similar
tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination Date (a)
if resulting from a Termination Event, all Affected Transactions and (b) if
resulting from an Event of Default, all Transactions (in either case) in effect
immediately before the effectiveness of the notice designating that Early
Termination Date (or, if "Automatic Early Termination" applies, immediately
before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount denominated in
the Termination Currency, such Termination Currency amount and, in respect of
any amount denominated in a currency other than the Termination Currency (the
"Other Currency"), the amount in the Termination Currency determined by the
party making the relevant determination as being required to purchase such
amount of such Other Currency as at the relevant Early Termination Date, or, if
the relevant Market Quotation or Loss (as the case may be), is determined as of
a later date, that later date, with the Termination Currency at the rate equal
to the spot exchange rate of the foreign exchange agent (selected as provided
below) for the purchase of such Other Currency with the Termination Currency at
or about 11:00 a.m. (in the city in which such foreign exchange agent is
located) on such date as would be customary for the determination of such a rate
for the purchase of such Other Currency for value on the relevant Early
Termination Date or that later date. The foreign exchange agent will, if only
one party is obliged to make a determination under Section 6(e), be selected in
good faith by that party and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon Merger
or, if specified to be applicable, a Credit Event Upon Merger or an Additional
Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of the
cost (without proof or evidence of any actual cost) to each party (as certified
by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early Termination
Date, the aggregate of (a) in respect of all Terminated Transactions, the
amounts that became payable (or that would have become payable but for Section
2(a)(iii)) to such party under Section 2(a)(i) on or prior to such Early
Termination Date and which remain unpaid as at such Early Termination Date and
(b) in respect of each Terminated Transaction, for each obligation under Section
2(a)(i) which was (or would have been but for Section 2(a)(iii)) required to be
settled by delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an amount equal
to the fair market value of that which was (or would have been) required to be
delivered as of the originally scheduled date for delivery, in each case
together with (to the extent permitted under applicable law) interest, in the
currency of such amounts, from (and including) the date such amounts or
obligations were or would have been required to have been paid or performed to
(but excluding) such Early Termination Date, at the Applicable Rate. Such
amounts of interest will be calculated on the basis of daily compounding and the
actual number of days elapsed. The fair market value of any obligation referred
to in clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so obliged, it
shall be the average of the Termination Currency Equivalents of the fair market
values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the respective
dates specified below with effect from the date specified on the first page of
this document.
BARCLAYS BANK PLC ALLEGHANY FUNDING CORPORATION
- ----------------------------------------- -------------------------------------
(Name of Party) (Name of Party)
By: /s/ J. Robert Bredehl By: /s/ David B. Cuming
------------------------------ --------------------------------
Name: J. Robert Bredehl Name: David B. Cuming
Title: Managing Director Title: President
Date: 10/20/97 Date: 10/20/97
(MULTICURRENCY -- CROSS BORDER)
EXECUTION COPY
SCHEDULE
TO THE
MASTER AGREEMENT
dated as of October 20, 1997
between
BARCLAYS BANK PLC a ALLEGHANY FUNDING CORPORATION
n
("PARTY A") d ("PARTY B")
PART 1. TERMINATION PROVISIONS.
(a) "SPECIFIED ENTITY" means:
FOR PURPOSES OF IN RELATION TO PARTY A: IN RELATION TO PARTY B:
Section 5(a)(v): None None
Section 5(a)(vi): None None
Section 5(a)(vii): None None
Section 5(b)(iv): None None
(b) "SPECIFIED TRANSACTION" will have the meaning specified in Section 14 of
this Agreement.
(c) The "CROSS DEFAULT" provisions of Section 5(a)(vi) will not apply to
Party A and will not apply to Party B.
(d) The "CREDIT EVENT UPON MERGER" provisions of Section 5(b)(iv) will apply
to Party A and will not apply to Party B.
(e) The "AUTOMATIC EARLY TERMINATION" provisions of Section 6(a) will apply
to Party A and will not apply to Party B.
(f) PAYMENTS OF EARLY TERMINATION. For the purpose of Section 6(e) of
this Agreement:
(i) Market Quotation will apply.
(ii) The Second Method will apply.
(g) "TERMINATION CURRENCY" means United States Dollars.
(h) ADDITIONAL TERMINATION EVENT will not apply.
(i) ADDITIONAL EVENTS OF DEFAULT. There shall be added to Section 5(a) of
the Agreement the following additional Events of Default:
(ix) INSTALLMENT NOTE DEFAULT. With respect to Party B only:
(1) An Event of Default designated (1) shall exist under
the Installment Note dated January 7, 1987, as amended by an
instrument dated August 14, 1990, and as further amended by an
instrument dated October 20, 1997, of Merrill Lynch, Pierce
Fenner & Smith Incorporated (the "Installment Note") and shall
continue for a period of 15 days.
(2) An Event of Default designated (2) shall exist under
the Installment Note and shall continue for a period of 30 days.
(3) An Event of Default designated (4) shall exist under
the Installment Note and shall continue for a period of 30 days.
(4) An Event of Default designated (5) shall exist under
the Installment Note.
(x) NOTE ACCELERATION. As to Party B only, the Floating Rate Secured
Notes due 2007 of Alleghany Funding Corporation ("Issuer") shall
have been declared due and payable as a consequence of an Event
of Default under the Indenture dated as of October 20, 1997
between Issuer and The Chase Manhattan Bank, as Trustee, other
than an Event of Default caused by a default in payment of any
amount due hereunder by Party A."
(j) EVENTS OF DEFAULT. Notwithstanding anything to the contrary in
the Agreement, no Event of Default shall apply to Party B except
those specified in Sections 5(a)(i), 5(a)(vii), 5(a)(ix) and
5(a)(x).
PART 2. TAX REPRESENTATIONS.
(a) PARTY A AND PARTY B PAYER TAX REPRESENTATIONS. For the purpose of
Section 3(e), each of Party A and Party B makes the following
representation:
It is not required by any application law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant
Jurisdiction to make any deduction or withholding for or on account of
any Tax from any payment (other than interest under Section 2(e),
6(d)(ii) or 6(e) of this Agreement) to be made by it to the other party
under this Agreement. In making this representation, it may rely on: (i)
the accuracy of any representation made by the other party pursuant to
Section 3(f) of this Agreement; (ii) the satisfaction of the agreement
of the other party contained in Section 4(a)(i) or 4(a)(iii) of this
Agreement and the accuracy and effectiveness of any document provided by
the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this
Agreement; and (iii) the satisfaction of the agreement of the other
party contained in Section 4(d) of this Agreement, PROVIDED that it
shall not be a breach of this representation where reliance is placed on
clause (ii) and the other party does not deliver a form or document
under Section 4(a)(iii) by reason of material prejudice to its legal or
commercial position.
(b) PARTY A PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f),
Party A makes the following representations:
(i) The following representation applies to Party A with respect to
that portion of its payments that are not attributable to Party
A's U.S. trade or business:
It is fully eligible for the benefits of the "Business Profits"
or "Industrial and Commercial Profits" provision, as the case may
be, the "Interest" provision or the "Other Income" provision (if
any) of the Specified Treaty with respect to any payment
described in such provisions and received or to be received by it
in connection with this Agreement.
"SPECIFIED TREATY" means the income tax convention between the
United States and the United Kingdom.
(ii) The following representation applies to Party A with respect to
that portion of its payments that are attributable to Party A's
U.S. trade or business:
Each payment received or to be received by it in connection with
this Agreement will be effectively connected with its conduct of
a trade or business in the United States.
(c) PARTY B PAYEE TAX REPRESENTATIONS. For the purpose of Section 3(f),
Party B makes the following representation:
It is fully eligible for the benefits of the "Business Profits" or
"Industrial and Commercial Profits" provision, as the case may be, the
"Interest" provisionor the "Other Income" provision (if any) of the
Specified Treaty with respect to any payment described in such
provisions and received or to be received by it in connection with this
Agreement and no such payment is attributable to a trade or business
carried on by it through a permanent establishment in the Specified
Jurisdiction.
"SPECIFIED TREATY" means the income tax convention between the United
States and the United Kingdom.
"SPECIFIED JURISDICTION" means the United Kingdom.
PART 3. AGREEMENT TO DELIVER DOCUMENTS.
For the purpose of Section 4(a)(i) and (ii) of this Agreement, each party agrees
to deliver the following documents as applicable:
(a) Tax forms, documents or certificates to be delivered are:
PARTY FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE DELIVERED
REQUIRED
TO
DELIVER
DOCUMENT
Party A An executed United States Internal Upon execution of this Agreement,
Revenue Service Form 1001 (or any and thereafter promptly upon
successor thereto) with respect to reasonable demand by Party B.
any payments received or to be
received by Party A that are not
effectively connected or otherwise
attributable to Party A's conduct
of a trade or business in the
United States.
Party A An executed United States Internal Upon execution of this Agreement,
Revenue Service Form 4224 (or any and thereafter promptly upon
successor thereto) with respect to reasonable demand by Party B.
any payments received or to be
received by Party A that are
effectively connected or otherwise
attributable to Party A's conduct
of a trade or business in the
United States.
Party B An executed United States Internal Upon execution of this Agreement,
Revenue Service Form and thereafter promptly upon
W-9 (or any successor thereto) reasonable demand by Party A.
with respect to any payments
received or to be received by
Party B.
(b) Other documents to be delivered are:
PARTY FORM/DOCUMENT/CERTIFICATE DATE BY WHICH TO BE COVERED
REQUIRED DELIVERED BY
TO SECTION
DELIVER 3(D)
DOCUMENT REPRE-
SENTATION
Party A Evidence reasonably satisfactory Upon execution of this Yes.
to Party B, as to the incumbency Agreement and, if
and true signatures of the requested, each
signatories of Party A for this Confirmation.
Agreement, each Credit Support
Document to which it is a party
and each Confirmation.
Party B Evidence reasonably satisfactory Upon execution of this Yes
to Party A, as to the incumbency Agreement and, if
and true signatures of the requested, each
signatories of Party B for, and Confirmation.
the authority of Party B to
execute, deliver and perform, this
Agreement, each Credit Support
Document to which it is a party
and each Confirmation.
Party A Copy of the annual report of Party Promptly upon request. Yes
and A (in the case of Party A) or
Party B Party B and Party B's Credit
Support Provider, if any (in the
case of Party B), containing
annual audited consolidated
financial statements of such
entity for its most recently ended
fiscal year (or, if the request to
deliver such financial statements
is received during the 120-day
period following the end of its
most recently ended fiscal year
and such financial statements are
not available, for the immediately
preceding fiscal year), prepared
in accordance with generally
accepted accounting principles in
the country in which such entity
is organized, and certified by
independent certified public
accountants or chartered
accountants.
Party A Onion of Counsel to Party A Upon execution and Yes
reasonably satisfactory to Party B. delivery of this
Agreement.
Party B Opinion of Counsel to Party B Upon execution and Yes
reasonably satisfactory to Party A. delivery of this
Agreement.
Party A Such other documents as the other Promptly upon request. Yes
and party may reasonably request in
Party B connection with each Transaction
so long as providing such
documents would not materially
prejudice the legal or commercial
position of the party in receipt
of the request as determined in
good faith by such party.
PART 4. MISCELLANEOUS.
(a) ADDRESSES FOR NOTICES. For the purpose of Section 12(a) of this Agreement:
ADDRESSES FOR NOTICES OF ADDRESSES FOR NOTICES OR
COMMUNICATIONS TO PARTY A COMMUNICATIONS TO PARTY B
The North Colonnade 375 Park Avenue
Canary Wharf New York, NY 10152
London E14 4BB, ENGLAND Attention: David B. Cuming
Attention: Swaps Documentation
Telephone No.: 212-752-1356
Telephone No.: 0171-773-6915/6904 Facsimile No.: 212-759-8149
Facsimile No.: 0171-773-6857/6858
Telex No.: 811234
Answerback: BZWSEC-G
WITH A COPY IN THE CASE OF NOTICES OR
COMMUNICATIONS RELATING TO SECTIONS 5, 6, 7, 11
OR 13 TO:
General Counsel's Office
222 Broadway
New York, NY 10038
ADDRESSES FOR NOTICES OR COMMUNICATIONS TO PARTY A
FOR U.S. DOLLAR AND CANADIAN DOLLAR
TRANSACTIONS:
222 Broadway
New York, NY 10038
Attention: Swap Operations
Telephone No.: 212-412-6910
Facsimile No.: 212-412-2677
(b) PROCESS AGENT. For the purpose of Section 13(c) of this Agreement
PARTY A APPOINTS AS ITS PROCESS PARTY B APPOINTS AS ITS PROCESS
AGENT: None. AGENT: None
(c) OFFICES. The provisions of Section 10(a) will apply to this Agreement.
(d) [MULTIBRANCH PARTY. For the purpose of Section 10(c) of this Agreement
Party A is not a Multibranch Party. Party B is not a Multibranch Party.
(e) CALCULATION AGENT. The Calculation Agent will be Party A unless
otherwise specified in a Confirmation in relation to the relevant
Transaction.
(f) CREDIT SUPPORT DOCUMENT. Details of any Credit Support Document: Not
Applicable.
(g) CREDIT SUPPORT PROVIDER.
In relation to Party A, none. In relation to Party B, none.
(h) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (WITHOUT REFERENCE TO
CHOICE OF LAW DOCTRINE).
(i) NETTING OF PAYMENTS. Subparagraph (ii) of Section 2(c) of this Agreement
will apply to all Transactions under this Agreement with effect from the
date of this Agreement.
(j) "AFFILIATE" will have the meaning specified in Section 14 of this
Agreement. Each party and its Affiliates may share with each other any
credit or other information concerning the other party and its
Affiliates.
PART 5. OTHER PROVISIONS.
(a) WAIVER OF RIGHT TO TRIAL BY JURY. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO A TRIAL BY JURY WITH RESPECT TO ANY LEGAL
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY TRANSACTION.
(b) INCONSISTENCY. In the event of any inconsistency between any of the
following documents, the relevant document first listed shall govern:
(i) a Confirmation, (ii) this Schedule, (iii) the definitions
incorporated by reference in a Confirmation or in this Agreement, and
(iv) the printed form of ISDA Master Agreement.
(c) CONSENT TO RECORDING. Each party (i) consents to the monitoring or
recording, at any time and from time to time, by the other party of
any and all communications between officers or employees of the
parties, (ii) waives any further notice of such monitoring or
recording, and (iii) agrees to notify (and, if required by law, obtain
the consent of) its officers and employees with respect to such
monitoring or recording. Any such recording may be submitted in
evidence to any court or in any Proceeding for the purpose of
establishing any matters pertinent to this Agreement or any
Transaction.
(d) MODIFIED REPRESENTATION. For purposes of Section 3(d) of this Agreement,
the following shall be added, immediately prior to the period at the end
thereof:
"; provided that, in the case of financial statements delivered by Party
A, such financial statements give a fair view of the state of affairs of
the relevant entity to which they relate as at the date of such
financial statements, and in the case of financial statements delivered
by Party B, such financial statements fairly present the financial
position of the relevant entity to which they relate as at the date of
such financial statements".
(e) ADDITIONAL REPRESENTATIONS. For purposes of Section 3 of this Agreement,
the following shall be added, immediately following paragraph (f)
thereof:
(g) It is an "eligible swap participant" within the meaning of
Commodity Futures Trading Commission ("CFTC") Regulations Section
35.1(b)(2). Neither this Agreement nor any Transaction is one of
a fungible class of agreements that are standardized as to their
material economic terms, within the meaning of CFTC Regulations
Section 35.2(b). The creditworthiness of the other party was or
will be a material consideration in entering into or determining
the terms of this Agreement and each Transaction, including
pricing, cost or credit enhancement terms of the Agreement or
Transaction, within the meaning of CFTC Regulations Section
35.2(c). It has entered into this Agreement (including each
Transaction) in conjunction with its line of business (including
financial intermediation services) or the financing of its
business.
(f) RELATIONSHIP BETWEEN THE PARTIES. Each party will be deemed to represent
to the other party on the date on which it enters into a Transaction
that (absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that Transaction):
(i) NON-RELIANCE. It is acting for its own account, and it has made its
own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon its
own judgment and upon advice from such advisors as it has deemed
necessary. It is not relying on any communication (written or oral) of
the other party as investment advice or as a recommendation to enter
into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction shall
not be considered investment advice or as a recommendation to enter into
that Transaction. No communication (written or oral) received from the
other party shall be deemed to be an assurance or guarantee as to the
expected results of that Transaction.
(ii) ASSESSMENT AND UNDERSTANDING. It is capable of assessing the merits
of and understanding (on its own behalf or through independent
professional advice), and understands and accepts, the terms, conditions
and risks of that Transaction. It is also capable of assuming, and
assumes, the financial and other risks of that Transaction.
(iii) STATUS OF PARTIES. The other party is not acting as a fiduciary or
an advisor for it in respect of that Transaction.
(g) 1991 ISDA DEFINITIONS. The definitions and provisions contained in the
1991 ISDA Definitions (the "1991 ISDA Definitions") as published by the
International Swaps and Derivatives Association, Inc. are incorporated
into this Agreement by reference. For these purposes, all references in
the 1991 ISDA Definitions to a "Swap Transaction" shall be deemed to
apply to each Transaction under this Agreement.
BARCLAYS BANK PLC
AMENDED CONFIRMATION
To: Alleghany Funding Corporation
Attn: Mr. Peter Sismondo
Fax No.: (212) 759-8149
Date: October 24, 1997
Reference: BASIS 500282 / 114676
RATE SWAP TRANSACTION
The purpose of this letter agreement is to confirm the terms and conditions of
the Transaction entered into between Barclays Bank PLC (London Head Office)
("Barclays") and Alleghany Funding Corporation (the "Counterparty") on the Trade
Date specified below (the "Transaction"). This letter agreement constitutes a
"Confirmation" for purposes of the Agreement referred to below.
THIS LETTER AGREEMENT AMENDS, RESTATES AND SUPERSEDES IN ITS ENTIRETY THE
CONFIRMATION DATED OCTOBER 20, 1997 (REF. NO. BASIS 500282 / 114676) AND
EVIDENCES A COMPLETE BINDING AGREEMENT BETWEEN BARCLAYS AND COUNTERPARTY AS TO
THE TERMS OF THE TRANSACTION DESCRIBED BELOW.
This Confirmation supplements, forms a part of, and is subject to the 1992
Master Agreement dated as of October 20, 1997 between Barclays and Counterparty
(the "Agreement"). All provisions of the Agreement shall govern this
Confirmation, except as expressly modified below.
The definitions and provisions contained in the 1991 ISDA Definitions (as
published by the International Swaps and Derivatives Association, Inc. ("ISDA"))
are incorporated into this Confirmation. In the event of any inconsistency
between those definitions and provisions and this Confirmation, this
Confirmation will govern for purposes of the Transaction. References herein to a
"Transaction" shall be deemed to be references to a "Swap Transaction" for the
purposes of the 1991 ISDA Definitions. Capitalized terms used in this
Confirmation and not defined in this Confirmation or the 1991 ISDA Definitions
shall have the respective meanings assigned in the Agreement. Each party hereto
agrees to make payment to the other party hereto in accordance with the
provisions of this Confirmation and of the Agreement.
Each party hereto represents and warrants to the other party hereto that, in
connection with the Transaction, (i) it has and will continue to consult with
its own legal, regulatory, tax, business, investment, financial and accounting
advisors to the extent it deems necessary, and it has and will continue to make
its own investment, hedging and trading decisions (including without limitation
decisions regarding the appropriateness and/or suitability of the Transaction)
based upon its own judgment and upon any advice from such advisors as it deems
necessary, and not in reliance upon the other party hereto or any of its
branches, subsidiaries or affiliates or any of their respective officers,
directors or employees, or any view expressed by any of them, (ii) it has
evaluated and it fully understands all the terms, conditions and risks of the
Transaction, and it is willing to assume (financially and otherwise) all such
risks, (iii) it has and will continue to act as principal, and not agent of any
person, and the other party hereto and its branches, subsidiaries and affiliates
have not and will not be acting as a fiduciary or financial, investment,
commodity trading or other advisor to it and (iv) it is entering into the
Transaction for purposes of hedging its assets or liabilities or in connection
with a line of business, and not for the purpose of speculation.
The terms of the particular Transaction to which this Confirmation
relates are as follows:
- --------------------------------------------------------------------------------
A. TRADE DETAILS
- --------------------------------------------------------------------------------
NOTIONAL AMOUNT:
- --------------------------------------------------------------------------------
Floating Rate Payer (A) Notional USD 80,000,000
Amount:
Floating Rate Payer (B) Notional USD 86,232,000
Amount:
- --------------------------------------------------------------------------------
TRADE DATE: October 17, 1997
- --------------------------------------------------------------------------------
EFFECTIVE DATE: October 20, 1997
- --------------------------------------------------------------------------------
TERMINATION DATE: January 22, 2007; subject to
adjustment in accordance with the
Following Business Day Convention
- --------------------------------------------------------------------------------
FLOATING AMOUNTS (A):
- --------------------------------------------------------------------------------
Floating Rate Payer (A): Barclays
Floating Rate Payer Payment Date(s): The 20th
of January, April, July and October
in each year from (and including)
January 20, 1998 to (and including)
the Termination Date; subject to
adjustment in accordance with the
Following Business Day Convention
Floating Rate for initial Calculation 6.14844% per annum (inclusive of
Period: Spread)
Floating Rate Option: USD-LIBOR-BBA
Spread: 0.375%
Floating Rate Day Count Fraction: Actual/360
Designated Maturity: 3 Months
Reset Dates: The first day in each Calculation
Period
Compounding: Not applicable
- --------------------------------------------------------------------------------
FLOATING AMOUNTS (B):
- --------------------------------------------------------------------------------
Floating Rate Payer (B): Counterparty
Floating Rate Payer Payment Date(s): Every
fourth Wednesday in each year from
(and including) October 29, 1997 to
(and including) January 10, 2007 and
the Termination Date; subject to
adjustment in accordance with the
Following Business Day Convention
Floating Rate for initial Calculation 5.48% per annum (converted to a
Period: Money Market Yield)
Floating Rate Option: USD-CP-H.15
"USD-CP-H.15" means that the rate for
a Reset Date will be the Money Market
Yield of the rate set forth in
H.15(519) for the day that is two
Business Days preceding that Reset
Date opposite the Designated Maturity
under the caption "Commercial
Paper-Nonfinancial." If such rate
does not appear in H.15(519), the
rate for that Reset Date will be
determined as if the parties had
specified "USD-CP-Reference Dealers"
as the applicable Floating Rate
Option.
"USD-CP-Reference Dealers" means that
the rate for a Reset Date will be the
Money Market Yield of the arithmetic
mean of the offered rates of the
Reference Dealers as of 10:00 a.m.,
New York City Time, on the day that
is two Business Days preceding that
Reset Date for U.S. Dollar commercial
paper of the Designated Maturity
placed for industrial issuers whose
bond rating is Aa or the equivalent
from a nationally recognized rating
agency.
"Reference Dealers" means four
leading dealers of U.S. Dollar
commercial paper in New York City.
Spread: Plus 0.0625%
Floating Rate Day Count Fraction: Actual/360
Designated Maturity: 1 Month
Reset Dates: The first day in each Calculation
Period
Compounding: Not applicable
- --------------------------------------------------------------------------------
BUSINESS DAYS: New York and London
- --------------------------------------------------------------------------------
CALCULATION AGENT: Barclays Bank PLC
- --------------------------------------------------------------------------------
ASSIGNMENT: Except as expressly provided in the
Agreement, the Transaction may not
be assigned by either party hereto
without the consent of the other
party hereto, and any purported
assignment of the Transaction
without such consent shall be void
- --------------------------------------------------------------------------------
GOVERNING LAW: THE TRANSACTION AND THIS
CONFIRMATION WILL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK
WITHOUT REFERENCE TO CHOICE OF LAW
DOCTRINE
- --------------------------------------------------------------------------------
B. ACCOUNT DETAILS
- --------------------------------------------------------------------------------
Payments to Barclays: FEDERAL RESERVE BANK OF NEW YORK
ABA: XXX-XXXX-XX
A/C: BARCLAYS BANK PLC, NEW YORK
FAVOR: BARCLAYS SWAPS & OPTIONS
GROUP, NEW YORK
A/C: XXX-XXXXX-X
- --------------------------------------------------------------------------------
Payments to Counterparty: THE CHASE MANHATTAN BANK, NY
ABA: XXX-XXX-XXX
FAVOR: ALLEGHANY FUNDING
CORPORATION
A/C: XXX-XXXXXX
- --------------------------------------------------------------------------------
C. OFFICES
- --------------------------------------------------------------------------------
Barclays: Address for Notices:
222 BROADWAY - 9TH FLOOR
NEW YORK, NY 10038
Telephone: (212) 412-1440
Fax: (212) 412-2677
- --------------------------------------------------------------------------------
Counterparty: Address for Notices:
375 PARK AVENUE - 32ND FLOOR
NEW YORK, NY 10152
Telephone: (212) 752-1356
Fax: (212) 759-8149
- --------------------------------------------------------------------------------
Please confirm that the foregoing correctly sets forth all the terms and
conditions of our agreement with respect to the Transaction by responding within
three (3) Business Days by promptly signing in the space provided below and both
(i) faxing the signed copy to Barclays, Swap Operations, Fax No. (212) 412-2677,
and (ii) mailing the signed copy to Barclays Bank PLC, 222 Broadway, New York,
New York 10038, Attention of Swap Operations. Your failure to respond within
such period shall not affect the validity or enforceability of the Transaction
as against you. Barclays Bank PLC, New York Branch acted as agent in the
Transaction.
For on behalf of For on behalf of
BARCLAYS BANK PLC ALLEGHANY FUNDING CORPORATION
/s/ Patrick Peschler /s/ Peter R. Sismondo
- ------------------------------------- -------------------------------------
NAME: Patrick Peschler NAME: Peter R. Sismondo
Authorized Signatory No.: P017 Authorized Signatory
Date: October 24, 1997 Date: Oct. 28, 1997
For on behalf of For on behalf of
BARCLAYS BANK PLC ALLEGHANY FUNDING CORPORATION
/s/ Giordine Downsgate /s/ David B. Cuming
- ------------------------------------- -------------------------------------
NAME: Giordine Downsgate NAME: David B. Cuming
Authorized Signatory No.: O582 Authorized Signatory
Date: Date: Oct. 28, 1997
- --------------------------------------------------------------------------------
EY-JRC//X:\DATA\EFILE\114676NOCT1797.DOC
BARCLAYS BANK PLC AND ITS AFFILIATES, INCLUDING BZW SECURITIES INC., MAY SHARE
WITH EACH OTHER INFORMATION, INCLUDING NON-PUBLIC CREDIT INFORMATION, CONCERNING
ITS CLIENTS AND PROSPECTIVE CLIENTS. IF YOU DO NOT WANT SUCH INFORMATION TO BE
SHARED, YOU MUST WRITE TO THE DIRECTOR OF COMPLIANCE, BARCLAYS BANK PLC, 222
BROADWAY, NEW YORK, NY 10038.
EXHIBIT E
---------
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT
---------------------------------------------
INTERCREDITOR AND COLLATERAL AGENCY AGREEMENT, dated as of October
20, 1997 among The Chase Manhattan Bank, as Collateral Agent (the "Collateral
Agent"), Barclays Bank PLC, the Swap Counterparty (the "Swap Counterparty") and
Alleghany Funding Corporation, a Delaware corporation (the "Company") and a
wholly owned subsidiary of Alleghany Corporation, a Delaware corporation (the
"Parent").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company and The Chase Manhattan Bank, as trustee (the
"Trustee") have entered into an Indenture dated as of October 20, 1997 (the
"Indenture") pursuant to which the Company will issue its $80,000,000 Floating
Rate Secured Notes Due 2007 (the "Notes");
WHEREAS, the Company acquired from the Parent the Installment Note,
dated January 7, 1987, from Merrill Lynch, Pierce, Fenner & Smith Incorporated
("MLPFS"), to the Parent in the face amount of $91,535,343.54 (the "Original
Installment Note") the maturity of which has been extended from January 20, 1999
to January 22, 2007 (which, subject to further conditions, may be further
extended to January 22, 2010 as therein provided) pursuant to the terms of
Amendment No. 2 to Installment Sales Agreement, Installment Note No. 001 and
Guarantee dated October 20, 1997 by and among the Company, MLPFS and Merrill
Lynch & Co., Inc. ("ML&Co.") (the "Installment Note Extension" and together with
the original Installment Note, the "Installment Note"), which is entitled to the
benefit of the Guarantee, dated December 8, 1986 of ML&CO. in a principal amount
not to exceed $94,535,343.54 (the "Guarantee");
WHEREAS, the Company will also enter into a Master Agreement and
related Confirmation (together, the "Swap Agreement"), each dated October 20,
1997 between the Company and the Swap Counterparty pursuant to which the Company
will pay certain amounts received under the Installment Note and Guarantee and
receive an amount equal to the Note Interest Rate for each Interest Accrual
Period under the Indenture;
WHEREAS, under this Agreement, the Company will pledge the
Installment Note, the Guarantee and the Installment Sales Agreement, dated as of
December 8, 1986 by and among the Parent, MLPFS and ML&CO. to the Collateral
Agent as security for the Noteholders and the Swap Counterparty PARI PASSU in
accordance with the respective amounts owed by the Company to the Noteholders
and the Swap Counterparty;
WHEREAS, under the Indenture the Company will pledge the Swap
Agreement to the Trustee as security for the Noteholders and in this Agreement
the Swap Counterparty will consent to such pledge;
WHEREAS, the Company, the Noteholders and the Swap Counterparty wish
to appoint The Chase Manhattan Bank as Collateral Agent under this Agreement, to
take certain actions relating to the Intercreditor Collateral and to distribute
the proceeds of such Intercreditor Collateral and certain other monies to the
Holders of the Notes and the Swap Counterparty, all as more fully described
herein; and
NOW, THEREFORE, in consideration of the premises and agreements made
herein and for other good and valuable consideration receipt of which is hereby
acknowledged, the parties hereto hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 DEFINED TERMS. (a) Capitalized terms used herein and
defined in the Indenture shall have the meanings therein indicated, except that
the following terms shall have the following meanings:
"Agreement" means this Intercreditor and Collateral Agency
Agreement.
"Final Judgment" means a judgment entered by a court having
jurisdiction over the subject matter of a proceeding and the parties
thereto as to which (a) no appeal or certiorari proceeding may be
commenced, or (b) no appeal or certiorari proceeding has been commenced
and as to which the time for filing a notice of appeal or petition for
certiorari has expired.
"Foreclosure Determination" shall have the meaning provided
in Section 4.1.
"Intercreditor Collateral" means the Installment Sales Agreement,
the Installment Note and the Guarantee and all proceeds thereof and all
proceeds of the conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property.
"Lien" means a lien and security interest in and to all of the
Company's right, title and interest in the Intercreditor Collateral.
"Principal Office" shall mean the principal office of the Collateral
Agent, presently located at 450 West 33rd Street, 15th
Floor, New York, New York 10001.
"Settlement Amount" shall have the meaning ascribed to such term in
the Swap Agreement.
ARTICLE II
GRANT OF SECURITY INTEREST
TO COLLATERAL AGENT
Section 2.1 GRANT OF SECURITY INTEREST. The Company hereby Grants to
the Collateral Agent, for the benefit and security of the Noteholders and of the
Swap Counterparty, all of its right, title and interest in and to the
Intercreditor Collateral, PARI PASSU in accordance with the priorities set forth
herein. Such Grants are made, however, to secure the Noteholders and the Swap
Counterparty, equally and ratably without prejudice, priority or distinction,
except as expressly provided herein and in accordance with the priorities set
forth herein between the Holder of any Note and the Holder of any other Note or
the Swap Counterparty by reason of difference in time of issuance or otherwise,
and to secure (i) the payment of all amounts due on the Notes and to the Swap
Counterparty in accordance with their terms and the terms of the Swap Agreement,
respectively, and in accordance with the priorities set forth herein, (ii) the
payment of all other sums payable under this Agreement and (iii) compliance with
the provisions of this Agreement, all as provided in this Agreement. The
Collateral Agent acknowledges such Grant and agrees to perform the duties herein
to the best of its ability to the end that the interests of the Noteholders and
the Swap Counterparty may be adequately and effectively protected.
ARTICLE III
SECURITY
Section 3.1 PURPOSE OF AGREEMENT. This Agreement defines various
relationships among the parties hereto and sets forth the duties and powers of
the Collateral Agent with respect to the Intercreditor Collateral, and is made
for the benefit of the Swap Counterparty and the Noteholders each to the extent
provided herein to ensure the payment of the amounts owed to the Swap
Counterparty under the Swap Agreement and the Noteholders under the Indenture
from time to time and each of the Swap Counterparty's and the Company's due
performance of and compliance with all the terms of and other obligations under
the Intercreditor Collateral to which it is a party.
Section 3.2 COLLATERAL. The Noteholders and the Swap Counterparty
are entitled to the benefits of any Intercreditor Collateral held or to be held
by or for the benefit of the Collateral Agent pursuant to this Agreement to the
extent more fully described herein. The Company will deliver or cause to be
delivered to the Collateral Agent, promptly upon the execution and delivery
hereof and thereof, the executed Installment Note and Guarantee and the
Assignment of the Intercreditor Collateral in the form of Exhibit A attached
hereto.
ARTICLE IV
DISTRIBUTIONS
Section 4.1 AUTHORIZATION. Each of the Swap Counterparty, the
Company and the Noteholders by their acceptance of the Notes hereby authorizes
the Collateral Agent to act as such party's exclusive agent for purposes of (i)
holding the Intercreditor Collateral, (ii) enforcing the respective Liens of the
Swap Counterparty and the Noteholders in the Intercreditor Collateral and (iii)
exercising only such powers under this Agreement as are expressly delegated to
the Collateral Agent hereunder PROVIDED, HOWEVER, that the Collateral Agent
shall not foreclose or realize upon or otherwise exercise remedies with respect
to the Liens of the Swap Counterparty and the Noteholders unless (A) an Event of
Default has occurred and is continuing with respect to the Notes and the
Collateral Agent receives a notice that the Notes have been declared due and
payable under Section 5.2 of the Indenture and (B) the Trustee at the direction
of a Majority of the Noteholders directs the Collateral Agent in writing to sell
the Intercreditor Collateral or to foreclose or realize upon "Foreclosure
Determination."
Section 4.2 DISTRIBUTION UPON EVENT OF DEFAULT RELATED TO SWAP
AGREEMENT. In the event that the Collateral Agent receives the written notice
and direction referred to in Section 4.1 hereof such that a Foreclosure
Determination has occurred and is continuing by reason of a Default in the
payment of any amount under the Swap Agreement by the Swap Counterparty, the
Collateral Agent shall not apply any proceeds realized upon the Intercreditor
Collateral to the payment of any amounts owed to the Swap Counterparty under the
Swap Agreement, but rather shall apply such proceeds to the payment of the
amounts described in Section 4.3 except the amounts described in Section
4.3(ii)(B) hereof and shall pay the excess, if any, to the Company.
Section 4.3 DISTRIBUTION UPON OTHER EVENT OF Default. In the event
that the Collateral Agent receives the written notice and direction referred to
in Section 4.1 hereof such that a Foreclosure Determination has occurred and is
continuing by reason of the occurrence of an Event of Default under the
Indenture other than by reason of a Default in the payment of any interest under
the Swap Agreement by the Swap Counterparty and upon receipt of any proceeds of
the Intercreditor Collateral, the Collateral Agent shall apply all such
proceeds: (i) FIRST, to the payment of any fees, expenses, liabilities, advances
or other amounts reasonably incurred by the Collateral Agent in maintaining,
foreclosing, realizing upon or taking any other action with respect to the
Intercreditor Collateral pursuant to the terms of this Agreement, including,
without limitation, compensation to the Collateral Agent and its agents and
counsel in connection therewith; (ii) SECOND, pro rata to the payment of (A) any
accrued and unpaid interest on the Notes owed to the Noteholders at the
applicable Note Interest Rate thereto for each Interest Accrual Period and the
unpaid principal amount of the Notes then due, if any, and (B) the Settlement
Amount owed to the Swap Counterparty together with interest at the rate
specified in the Swap Agreement to the date of such application; and (iii) THIRD
the proceeds remaining after the distribution made pursuant to (i) and (ii), if
any, shall be paid by the Collateral Agent to the Company.
ARTICLE V
COLLATERAL ACCOUNT AND
PAYMENTS TO SWAP COUNTERPARTY
Section 5.1 COLLATERAL ACCOUNT. The Collateral Agent shall, prior to
the Closing Date, establish a segregated trust account identified in Schedule A
hereto which shall be designated as the Collateral Account identified as held in
trust for the benefit of the Noteholders and the Swap Counterparty under this
Agreement, into which shall be deposited before 10:00 a.m., New York City time,
on any Business Day from time to time all amounts paid by (i) MLPFS and ML&Co.,
pursuant to the Installment Note and the Guarantee, respectively, in immediately
available funds, (ii) any Person to whom the Collateral Agent transfers or sells
the Installment Note and the Guarantee pursuant to a Foreclosure Determination
and (iii) the Company, and from which the Collateral Agent shall from time to
time withdraw all amounts payable to (w) the Swap Counterparty pursuant to the
Swap Agreement, (x) the Trust Account pursuant to Section 5.2 hereof, (y) the
Swap Counterparty and the Noteholders upon the occurrence of an Event of Default
and a foreclosure on or sale of the Installment Note and the Guarantee in
accordance with the priorities and amounts described herein and (z) the Company
hereunder.
Section 5.2 TRANSFER TO TRUST ACCOUNT. On the Installment Note
Principal Payment Date, if any, the Collateral Agent shall withdraw from the
Collateral Account and transfer to the Trust Account, established by the Trustee
under the Indenture, an amount equal to the amount paid by MLPFS or ML&Co. on
such date in accordance with the Installment Note and the Guarantee,
respectively.
Section 5.3 PAYMENTS TO THE SWAP COUNTERPARTY. (a) Notwithstanding
any other provision in this Agreement, the Collateral Agent shall on each
Installment Note Interest Payment Date, (x) withdraw from the Collateral Account
an amount representing the Swap Counterparty Payment Amount and disburse such
amount to the Swap Counterparty and (y) withdraw all amounts in the Collateral
Account in excess of the Swap Counterparty Payment Amount and disburse such
amounts to the Issuer.
(b) If on any Installment Note Interest Payment Date, the
amount available in the Collateral Account from the related four-week period is
insufficient to make the full amount of the disbursements required to be made by
the Collateral Agent on behalf of the Company, the Collateral Agent shall make
the disbursements called for in the order and according to the priority set
forth under Section 5.3(a) above to the extent funds are available therefor.
Section 5.4 EXTENSION OF MATURITY OF INSTALLMENT NOTE. The
Collateral Agent shall, upon receipt of written certification from the Company
that it has deposited in the Trust Account the amount referred to in Section
11.1(a)(2)(x) of the Indenture and a written request from the Company to extend
the maturity of the Installment Note in accordance with the Installment Note
Extension, provide the written notice to MLPFS and ML&CO. referred to in Section
1 thereof to extend the maturity date of the Installment Note to January 22,
2010; PROVIDED, HOWEVER, that the Collateral Agent, as registered holder of the
Installment Note, shall have no obligation to extend the maturity date of the
Installment Note unless it has received the written certification regarding the
deposit amount and the request to extend referred to in this Section.
ARTICLE VI
ASSIGNMENT OF SWAP AGREEMENT
Section 6.1 ASSIGNMENT OF SWAP AGREEMENT. (a) Upon the retirement of
the Notes and the release of the Installment Note and the Guarantee from the
lien of the Noteholders in this Agreement, the Company agrees that the pledge of
the Intercreditor Collateral to the Collateral Agent for the benefit of the Swap
Counterparty as security for obligations of the Company under the Swap Agreement
shall survive such retirement and release and shall continue until the Swap
Agreement terminates in accordance with its terms; PROVIDED, HOWEVER, that the
Company may substitute for such pledge a pledge to the Collateral Agent for the
benefit of the Swap Counterparty, of bills, notes and bonds issued by the
Department of the Treasury of the United States of America which are backed by
the full faith and credit of the United States of America ("Government
Securities") with a remaining maturity of not more than six months and with an
aggregate market value of not less than $2,000,000. Upon receipt of
documentation satisfactory to the Swap Counterparty providing for such pledge
and upon receipt of evidence satisfactory to the Swap Counterparty that such
pledge grants to the Collateral Agent, for the benefit of the Swap Counterparty,
a valid and perfected first priority security interest in the Government
Securities and all proceeds and reinvestments thereof, the Collateral Agent
shall deliver to the Company and the Swap Counterparty an instrument describing
the release of the Intercreditor Collateral from the lien of the Swap
Counterparty in this Agreement.
(b) The Company and the Swap Counterparty hereby agree, to the
following:
(i) The Swap Counterparty consents to the provisions of the
assignment of the Swap Agreement, such consent to be evidenced by the
delivery of Exhibit B hereto upon the execution of this Agreement.
(ii) The Swap Counterparty acknowledges that the Company is
assigning all of its right, title and interest in, to and under the Swap
Agreement to the Trustee for the benefit of the Noteholders and the Swap
Counterparty agrees that all of the representations, covenants and
agreements made by the Swap Counterparty in the Swap Agreement are also
for the benefit of the Trustee and the Noteholders.
(iii) The Swap Counterparty shall deliver to the Trustee
duplicate original copies of all notices, statements, communications and
instruments delivered or required to be delivered to the Company pursuant
to the Swap Agreement.
(iv) Until such time as the Notes have been retired, neither
the Company nor the Swap Counterparty will enter into any agreement
amending or modifying the Swap Agreement without the prior written consent
of the Majority of the Noteholders and any such amendment or modification,
without such consent by the Majority of the Noteholders shall be void.
(v) Until such time as the Notes have been retired, neither
the Company nor the Swap Counterparty will deliver any notice of
termination of the Swap Agreement without the prior written consent of all
the Noteholders.
ARTICLE VII
POWERS OF THE COLLATERAL AGENT
Section 7.1 ENFORCEMENT OF SECURITY. The Swap Counterparty and the
Noteholders by their acceptance of the Notes confirm that, regardless of the
relative times of attachment or perfection of Liens simultaneously securing the
claims of both the Swap Counterparty and the Noteholders under this Agreement
and the obligations of the Company hereunder, or the order of filing of
financing statements or other security documents, the Liens granted to the
Collateral Agent in respect of the PARI PASSU claims of the Swap Counterparty
and the Noteholders in the proceeds of the Installment Note and the Guarantee
pursuant to this Agreement shall in all respects be equal and ratable to each
other. So long as the Trustee at the direction of a Majority of the Noteholders
so directs, the Collateral Agent may foreclose on Liens in any manner which the
Trustee at the direction of a Majority of the Noteholders, in their sole
discretion, choose, even though a higher price might have been realized if the
Trustee at the direction of a Majority of the Noteholders had directed the
Collateral Agent to foreclose on the Liens in another manner.
Section 7.2 MARSHALLING. The Collateral Agent shall not be required
to marshal any present or future security for, or guaranties of, the
Intercreditor Collateral or to resort to such security or guaranties in any
particular order; and all of the Collateral Agent's rights hereunder and in
respect of such securities and guaranties shall be cumulative and in addition to
all other rights, however existing or arising.
ARTICLE VIII
AGENCY
Section 8.1 APPOINTMENT AND DUTIES. (a) The Swap Counterparty, the
Company and the Noteholders by their acceptance of the Notes designate and
appoint The Chase Manhattan Bank, as the Collateral Agent hereunder.
Notwithstanding any provision to the contrary herein, the Collateral Agent shall
not have any duties or responsibilities except those expressly set forth herein,
or any fiduciary relationship with the Swap Counterparty, the Company or the
Noteholders, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into the Intercreditor Collateral or
this Agreement or otherwise exist against the Collateral Agent. The Collateral
Agent shall not be liable for any action taken or omitted by it as such
hereunder or under any Intercreditor Collateral, or in connection herewith or
therewith, unless caused by its gross negligence or willful misconduct as
determined in a Final Judgment.
(b) The Collateral Agent will give notice to the Swap
Counterparty, the Company and the Noteholders of any sale, foreclosure action or
other exercise of specific remedies taken by it hereunder relating to the
Installment Note and the Guarantee. Such notice shall be given prior to the
taking of such action unless the Collateral Agent determines that to do so would
be detrimental to the interests of the Swap Counterparty, the Company or the
Noteholders, in which event such notice shall be given promptly after the taking
of such action.
(c) The Collateral Agent shall not exercise any rights or
remedies, give any consents or take any other actions under or relating to the
Intercreditor Collateral or enter into any agreement amending, modifying,
supplementing or waiving any provision of the Intercreditor Collateral other
than the exercise of such rights and remedies, the giving of consents and the
taking of actions delegated to the Collateral Agent hereunder or under the
Intercreditor Collateral, unless the Swap Counterparty or a majority of the
Noteholders have directed or consented to the Collateral Agent taking such
action.
Section 8.2 RIGHTS OF COLLATERAL AGENT. (a) The Collateral Agent may
execute any of its duties under this Agreement by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. The Collateral Agent shall not be responsible
for the negligence or misconduct of any agents or attorneys-in-fact selected by
it with reasonable care.
(b) Neither the Collateral Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such Person
under or in connection with any Intercreditor Collateral or this Agreement
(except for its or such Person's own gross negligence or willful misconduct as
determined in a Final Judgment), or (ii) responsible in any manner to the Swap
Counterparty, the Company or the Noteholders for any recitals, statements,
representations or warranties made by the Swap Counterparty, the Parent or the
Company or any officer of any of them contained in this Agreement, any
Intercreditor Collateral or in any certificate, report, statement or other
document referred to or provided for in, or received by the Collateral Agent
under or in connection with, this Agreement or any of the Intercreditor
Collateral or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement, the Intercreditor Collateral or
the Notes or for any failure of the Company or the Swap Counterparty to perform
their obligations hereunder or thereunder. The Collateral Agent shall not be
under any obligation to the Swap Counterparty, the Company or the Noteholders to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any Intercreditor
Collateral, or to inspect the properties, books or records of the Company or the
Swap Counterparty.
(c) The Collateral Agent shall have no obligation whatsoever
to the Swap Counterparty, the Noteholders or to any other Person to assure that
the Intercreditor Collateral exists or is owned by the Company, or is cared for,
protected or insured or has been encumbered or that the Liens granted to the
Collateral Agent herein or pursuant hereto have been properly or sufficiently or
lawfully created, perfected, protected or enforced or are entitled to any
particular priority, or to exercise at all or in any particular manner or under
any duty of care, disclosure or fidelity, or to continue exercising, any of the
rights, authorities and power granted or available to the Collateral Agent in
this Agreement or in the Intercreditor Collateral.
(d) The Collateral Agent shall be entitled to rely, and shall
be fully protected in relying, upon any note, writing, resolution, notice,
consent, certificate, affidavit, letter, cablegram, telegram, telecopy, telex or
teletype message, statement, order or other document or conversation believed by
it to be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Company), independent accountants and other
experts selected by the Collateral Agent. The Collateral Agent shall be fully
justified in failing or refusing to take any action hereunder or under any
Intercreditor Collateral (i) if such action would, in the opinion of the
Collateral Agent (or its counsel), be contrary to law or the terms of this
Agreement or any Intercreditor Collateral, (ii) if it shall not receive such
instructions, advice or concurrence of such Persons as it deems necessary or
appropriate or (iii) if it shall not first be indemnified to its satisfaction by
the Swap Counterparty and the Noteholders against any and all liability and
expense which may be incurred by it by reason of taking or continuing to take
any such action. The Collateral Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement or any Intercreditor
Collateral in accordance with a request of the Swap Counterparty, a Majority of
the Noteholders or such other Persons whose approval, consent or instructions
are expressly required under the terms of this Agreement or any Intercreditor
Collateral, and such request and any action taken or failure to act pursuant
thereto shall be binding upon the Swap Counterparty, the Noteholders or such
other Persons and their successors and assigns.
(e) The Collateral Agent shall not be deemed to have knowledge
or notice of the occurrence of any Default or Event of Default unless the
Collateral Agent has received notice from the Trustee describing such Default or
Event of Default and the agreement under which it arises and stating that such
notice is a "notice of default". In the event that the Collateral Agent receives
such a notice, the Collateral Agent shall give notice thereof to the Swap
Counterparty, the Company and the Noteholders. The Collateral Agent shall take
such action with respect to such Event of Default as shall be required herein
pursuant to Section 4.2 or Section 4.3 hereof. No provision of this Agreement
shall require the Collateral Agent to expend or risk its own funds or otherwise
incur any financial liability in the performance of any of its duties hereunder
or in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity against
such risk or liability is not reasonably assured to it.
(f) In determining whether it has been directed to take action
or refrain from taking action by the Swap Counterparty, a Majority of the
Noteholders or such other Persons whose approval or consent the Collateral Agent
deems necessary or appropriate in its sole discretion, or in determining such
other matters as may be necessary pursuant to the terms of this Agreement or any
of the Intercreditor Collateral (including, without limitation, amounts payable
pursuant to Article IV), the Collateral Agent shall be entitled to request and
to rely upon certificates of the Note Registrar as to the outstanding principal
amount of the Notes or from the Swap Counterparty as to the Settlement Amount
due and payable under the Swap Agreement, and such other matters as the
Collateral Agent shall request.
Section 8.3 LACK OF RELIANCE ON THE AGENT. Each of the Swap
Counterparty, the Company and each of the Noteholders by their purchase of the
Notes expressly acknowledges that neither the Collateral Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates have
made any representations or warranties to it and that no act by the Collateral
Agent hereafter taken, including, without limitation, any review of the affairs
of such Persons, shall be deemed to constitute any representation or warranty by
the Collateral Agent to such Person. Each Noteholder, by their purchase of the
Notes, and the Swap Counterparty represents to the Collateral Agent that it has,
independently and without reliance upon the Collateral Agent or any other
Person, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Company and made its own decision to enter into this Agreement. Each Noteholder,
by their purchase of the Notes, and the Swap Counterparty also represents that
it will, independently and without reliance upon the Collateral Agent or any
other Holder, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and any
Intercreditor Collateral as applicable, and to make such investigation as it
deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Company. Except for
notices, reports and other documents expressly required to be furnished to the
Noteholders and the Swap Counterparty by the Collateral Agent hereunder, the
Collateral Agent shall not have any duty or responsibility to provide any such
Person with any credit or other information concerning the business, operations,
property, financial or other condition or creditworthiness of the Company which
may come into the possession of the Collateral Agent or any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates.
Section 8.4 THE COLLATERAL AGENT IN ITS INDIVIDUAL CAPACITY. The
Collateral Agent and its Affiliates may make loans to, accept deposits from and
generally engage in any kind of business with each of the Company, the Swap
Counterparty and the Noteholders as though the Collateral Agent were not the
Collateral Agent hereunder.
Section 8.5 RESIGNATION OF THE COLLATERAL AGENT; APPOINTMENT OF
SUCCESSOR.
(a) No resignation or removal of the Collateral Agent and no
appointment of a successor Collateral Agent pursuant to this Article shall
become effective until the acceptance of appointment by the successor Collateral
Agent under Section 8.6.
(b) The Collateral Agent may resign at any time by giving
written notice thereof to the Company, the Swap Counterparty and the
Noteholders. Upon receiving such notice of resignation, the Company shall
promptly appoint a successor Collateral Agent by written instrument, in
duplicate, executed by an Authorized Officer of the Company, one original copy
of which shall be delivered to the Collateral Agent so resigning and one
original copy to the successor Collateral Agent, together with a copy to each
Noteholder, provided that such successor Collateral Agent shall be appointed
only upon the written consent of the Holders of a Majority of the Notes if no
successor Collateral Agent shall have been appointed and an instrument of
acceptance by a successor Collateral Agent shall not have been delivered to the
Collateral Agent within 30 days after the giving of such notice of resignation,
the resigning Collateral Agent, or any Holder of a Note, may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the appointment of a successor Collateral Agent.
(c) The Collateral Agent may be removed at any time by Act of
a Majority of the Noteholders delivered to the Collateral Agent, the Swap
Counterparty and to the Company.
(d) If at any time the Collateral Agent shall become incapable
of acting or shall be adjudged a bankrupt or insolvent or a receiver or
liquidator of the Collateral Agent or of its property shall be appointed or any
public officer shall take charge or control of the Collateral Agent or of its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, (i) the Company, by Issuer Order, may remove the Collateral
Agent, or (ii) any Noteholder may, on behalf of himself and all others similarly
situated, petition any court of competent jurisdiction for the removal of the
Collateral Agent and the appointment of a successor Collateral Agent.
(e) If the Collateral Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Collateral
Agent for any cause, the Company, by Issuer Order, shall promptly appoint a
successor Collateral Agent, provided that such successor Collateral Agent shall
be appointed only upon the written notice to the Noteholders, which notice
states that such appointment shall be effective unless rejected by a Majority of
the Noteholders within 30 days after the date of such notice and which notice is
not followed by a rejection of the appointment by a Majority of the Noteholders
within 30 days. If no successor Collateral Agent shall have been so appointed by
the Company or the Noteholders and shall have accepted appointment in the manner
hereinafter provided any Noteholder may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent.
(f) The Company shall give prompt notice of each resignation
and each removal of the Collateral Agent and each appointment of a successor
Collateral Agent by mailing written notice of such event by first-class mail,
postage prepaid, to the Holders of the Notes as their names and addresses appear
in the Note Register. Each notice shall include the name of the successor
Collateral Agent and its Principal Office.
Section 8.6 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
the Company, the retiring Collateral Agent and each Noteholder an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Collateral Agent shall become effective and such successor Collateral
Agent, without any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts, duties and obligations of the retiring Collateral
Agent; but, on request of the Company or the successor Collateral Agent or the
Majority of the Noteholders, such retiring Collateral Agent shall, upon payment
of its charges then unpaid, execute and deliver an instrument transferring to
such successor Collateral Agent all the rights, powers and trusts of the
retiring Collateral Agent, and shall duly assign, transfer and deliver to such
successor Collateral Agent all property and money held by such retiring
Collateral Agent hereunder. Upon request of any such successor Collateral Agent,
the Company shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Collateral Agent all such rights,
powers and trusts.
Upon acceptance of appointment by a successor Collateral Agent as
provided in this Section, the Company shall mail notice thereof by first-class
mail, postage prepaid, to the Noteholders at their last addresses appearing upon
the Note Register. If the Company fails to mail such notice within ten days
after acceptance of appointment by the successor Collateral Agent, the successor
Collateral Agent shall cause such notice to be mailed at the expense of the
Company.
ARTICLE IX
COVENANTS OF THE COMPANY
Section 9.1 PROTECTION OF INTERCREDITOR COLLATERAL. (a) The Company
shall from time to time execute and deliver all such supplements and amendments
hereto and all such financing statements, continuation statements, instruments
of further assurance and other instruments, and shall take such other action as
may be necessary or advisable to:
(i) grant more effectively all or any portion of the
Intercreditor Collateral;
(ii) maintain or preserve the lien (and the priority thereof)
of this Intercreditor Agreement or to carry out more effectively the
purposes hereof;
(iii) perfect, publish notice of, or protect the validity of
any Grant made or to be made by this Intercreditor Agreement;
(iv) enforce any of the instruments or property included in
the Intercreditor Collateral;
(v) preserve and defend title to the Intercreditor Collateral
and the rights therein of the Trustee and Collateral Agent and the Holders
of the Notes in such Intercreditor Collateral against the claims of all
persons and parties; or
(vi) pay any and all taxes levied or assessed upon all or any
part of the Intercreditor Collateral.
The Company hereby designates the Collateral Agent its agent and
attorney-in-fact to execute any financing statement, continuation statement or
other instrument required pursuant to this Section 9.1; PROVIDED, HOWEVER, that
the Collateral Agent shall not be responsible for preparing, filing or recording
any such instrument.
(b) The Collateral Agent shall not remove any portion of the
Intercreditor Collateral that consists of money or is evidenced by an
instrument, certificate or other writing (A) from the jurisdiction in which it
was held at the date the most recent Opinion of Counsel was delivered pursuant
to Section 9.2 hereof (or from the jurisdiction in which it was held as
described in the Opinion of Counsel delivered at the Closing Date pursuant to
Section 3.1(11) of the Indenture, if no Opinion of Counsel has yet been
delivered pursuant to Section 9.2 hereof) or (B) from the possession of the
Person who held it on such date unless the Collateral Agent shall have first
received an Opinion of Counsel to the effect that the lien and security interest
created by this Intercreditor Agreement with respect to such property will
continue to be maintained after giving effect to such action or actions.
Section 9.2 OPINIONS AS TO INTERCREDITOR COLLATERAL. On or before
February 1 in each calendar year, commencing in 2298, the Company shall furnish
to the Collateral Agent an Opinion of Counsel either stating that, in the
opinion of such counsel, such action has been taken with respect to the
Intercreditor Collateral, this Intercreditor Agreement, any agreements
supplemental thereto and any other requisite documents as is necessary to
maintain the first lien and perfected security interest created by this
Intercreditor Agreement with respect to the Intercreditor Collateral and
reciting the details of such action or stating that, in the opinion of such
counsel, no such action is necessary to maintain such lien and security
interest. Such Opinion of Counsel shall also describe the actions that will, in
the opinion of such counsel, be required to maintain the lien and security
interest of this Intercreditor Agreement with respect to the Intercreditor
Collateral until February 1 in the following calendar year.
Section 9.3 NEGATIVE COVENANTS. The Company will not:
(1) sell, transfer, exchange or otherwise dispose of, or
pledge, mortgage, hypothecate or otherwise encumber (or permit such to
occur or suffer such to exist), any part of the Intercreditor Collateral,
except as expressly permitted by this Intercreditor Agreement;
(2) claim any credit on, or make any deduction from, the
principal or interest payable with respect to the Notes other than amounts
withheld pursuant to Section 7.1 of the Indenture, or assert any claim
against any present or future Noteholder, by reason of the payment of any
taxes levied or assessed upon any part of the Intercreditor Collateral; or
(3) (A) permit the validity or effectiveness of this
Intercreditor Agreement or any Grant hereunder to be impaired, or permit
the lien of this Intercreditor Agreement to be amended, hypothecated,
subordinated, terminated or discharged, or permit any Person to be
released from any covenants or obligations with respect to this
Intercreditor Agreement or the Notes, except as may be expressly permitted
hereby or thereby, (B) permit any lien, charge, adverse claim, security
interest, mortgage or other encumbrance (other than the lien of this
Intercreditor Agreement) to be created on or extended to or otherwise
arise upon or burden the Intercreditor Collateral, respectively, or any
part thereof, any interest therein or the proceeds thereof or (C) take any
action that would permit the lien of this Intercreditor Agreement not to
constitute a valid first priority perfected security interest in the
Intercreditor Collateral.
ARTICLE X
MISCELLANEOUS
Section 10.1 WAIVERS, AMENDMENTS. None of the terms or provisions of
this Agreement may be amended, supplemented, waived or otherwise modified except
by an instrument in writing duly executed by the Collateral Agent, the Company,
the Swap Counterparty and the Trustee on behalf of the Noteholders.
Section 10.2 AGENTS OF THE PARENT OR THE COMPANY. Neither the
Parent, nor any of the agents, partners, beneficiaries, officers, directors,
employees, stockholders, attorneys, advisors or assigns or successors of the
Parent or the Company shall be liable for any amounts payable, or performance
due, under this Agreement. It is understood that the foregoing provisions of
this paragraph shall not (A) prevent recourse to the Intercreditor Collateral or
the sums due or to become due under any security, instrument or agreement which
is part of the Intercreditor Collateral or (B) constitute a waiver, release or
discharge of any indebtedness or obligation evidenced by the Notes or secured by
this Agreement, but the same shall continue until paid or discharged, and
provided, further, that the foregoing provisions of this Section shall not limit
the right of any person to name the Company as a party defendant in any action,
suit or in the exercise of any other remedy under the Notes or this Agreement,
so long as no judgment in the nature of a deficiency judgment or seeking
personal liability shall be asked for or (if obtained) enforced against any such
person or entity other than the Company.
Section 10.3 PAYMENT OF EXPENSES, ETC. The Company shall: (i) pay on
demand, or reimburse the Collateral Agent for, all the Collateral Agent's
internal and external legal, appraisal, valuation and investigation expenses and
for all other out-of-pocket costs and expenses of every type and nature
(including, without limitation, the fees, expenses and disbursements of
attorneys retained by the Collateral Agent and other consultants and agents)
incurred by the Collateral Agent in connection with (A) the negotiation,
preparation and execution of this Agreement; (B) the administration of this
Agreement including consultation with attorneys in connection therewith, (C) the
protection, collection or enforcement of any of the Liens granted in the
Intercreditor Collateral, (D) foreclosing against the Intercreditor Collateral
or exercising or enforcing any other right or remedy available by reason of an
Event of Default, (E) the Collateral Agent's commencement, defense or
intervention in any litigation or its filing of a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to the Company and
related to or arising out of the transactions contemplated hereby, (F) the
taking of any other action in or with respect to any suit or proceeding
(bankruptcy or otherwise), (G) the protection, preservation, collection, lease,
sale, taking possession of, or liquidation of any of the Intercreditor
Collateral, or (H) the attempt to enforce or the enforcement of any Lien in any
of the Intercreditor Collateral or any other rights under this Agreement or the
Intercreditor Collateral; (ii) pay such fees as may be agreed to from time to
time between the Collateral Agent and the Company and (iii) indemnify the
Collateral Agent, its officers, directors, employees, representatives, attorneys
and agents from and hold each of them harmless against any and all losses,
liabilities, claims, damages or expenses incurred by any of them arising out of
or by reason of any investigation, litigation or other proceeding related to
this Agreement, the Intercreditor Collateral, and any other agreement entered
into by it in connection therewith including, without limitation, the reasonable
fees and disbursements of counsel incurred in connection with any such
investigation, litigation or other proceeding, unless, pursuant to a Final
Judgment, the Collateral Agent is found to have acted with gross negligence or
willful misconduct in the underlying action. To the extent that the obligations
of the Company under this Section 10.3 are unenforceable for any reason, the
Company hereby agrees to make the maximum contribution to the payment and
satisfaction of such obligations which is permissible under applicable law.
Section 10.4 TERMINATION. The respective obligations and
responsibilities of the Company, the Swap Counterparty and the Collateral Agent
created hereby shall terminate upon the earlier of (i) January 22, 2007 and (ii)
upon the retirement of the Notes, and the satisfaction of the conditions
described in Section 6.1 hereof, the close of business on the date on which the
Collateral Agent delivers to the Swap Counterparty and the Company the release
described therein. Notwithstanding the above, Section 8.2 shall survive the
termination of this Agreement.
Section 10.5 NOTICES. Except as otherwise specified herein,
all notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when received by
the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed to
such party at its address set forth on the signature pages hereto, or at such
other address as any of the parties hereto may hereafter notify the others in
writing.
Section 10.6 BINDING EFFECT. This Agreement and the obligations of
the parties hereto shall be binding upon their respective successors and
assigns, and shall, together with the rights and remedies of the Collateral
Agent and the other parties hereto, inure to the benefit of the Collateral
Agent, the Swap Counterparty (including, without limitation, any replacement
Swap Counterparty succeeding to the duties of the initial Swap Counterparty
pursuant to the proviso to Section 5.1 of the Indenture), the Noteholders and
their respective successors and assigns; PROVIDED, HOWEVER, that except as
provided in Section 7.10 of the Indenture, notwithstanding anything in this
Agreement to the contrary, the rights or duties of each of the parties hereto
may not be assigned by operation of law or otherwise without the written consent
of each of the other parties hereto.
Section 10.7 SURVIVAL OF INDEMNITIES. All indemnities set forth
herein including, without limitation those contained in Section 8.2 shall
survive the termination of this Agreement.
Section 10.8 HEADINGS DESCRIPTIVE. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
SECTION 10.9 SECTION REFERENCES. Any reference to a section or
subsection is, unless otherwise indicated, a reference to a section or
subsection contained in this Agreement.
Section 10.10 COUNTERPARTS; RECEIPT OF DOCUMENTS. This Agreement may
be executed by one or more of the parties to this Agreement on any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.
Section 10.11 GOVERNING LAW; SUBMISSION TO JURISDICTION. This
Agreement and the rights and obligations of the parties hereunder shall be
construed in accordance with and be governed by the laws of the State of New
York. Any legal action or proceeding with respect to this Agreement or any other
Intercreditor Collateral may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, each of the Company and the Swap
Counterparty hereby accepts for itself and in respect of its property, generally
and unconditionally, the jurisdiction of the aforesaid courts. Each of the
Company and the Swap Counterparty irrevocably designates CT Corporation System,
located at 1633 Broadway, New York, New York 10019 the designee, appointee and
agent of such Person (the "Process Agent") to receive, for and on behalf of such
Person, service of process in such respective jurisdictions in any legal action
or proceeding with respect to this Agreement or any other Intercreditor
Collateral, and such service shall be deemed completed ten days after delivery
thereof to said agent. It is understood that a copy of such process served on
such Process Agent for any of the aforementioned Persons will be promptly
forwarded by mail to such Person at its address set forth opposite its signature
below, but the failure of such Person to receive such copy shall not affect in
any way the service of such process. Each party further irrevocably consents to
the service of process out of any of the aforementioned courts in any such
action or proceeding by the mailing of copies thereof by registered or certified
mail, postage prepaid, to such Person at its said address, such service to
become effective ten days after such mailing. Each of the parties hereto
irrevocably waives any objection, including without limitation, any objection to
the laying of venue based on the grounds of forum non conveniens which it may
now or hereafter have to the bringing of any such action or proceeding in the
jurisdictions hereinabove referenced. Nothing herein shall affect the right of
any party hereto to serve process in any other manner permitted by law or to
commence legal proceedings or otherwise proceed against any such party in any
other jurisdiction.
Section 10.12 MERGER AND INTEGRATION. Except as specifically stated
otherwise herein, this Agreement and the agreements referred to herein set forth
the entire understanding of the parties relating to the subject matter hereof,
and all prior understandings, written or oral, are superseded by this Agreement.
This Agreement may not be modified, amended, waived or supplemented except as
provided herein.
IN WITNESS WHEREOF, the undersigned have caused this Agreement to
be duly executed and delivered by their duly authorized officers on the day and
year first above written.
THE CHASE MANHATTAN BANK,
as Collateral Agent
By
--------------------------
Title: Vice President
Notice Address:
----------------------------
New York, New York
------
ALLEGHANY FUNDING CORPORATION
By
--------------------------
Title: President
Notice Address:
375 Park Avenue
New York, New York 10152
Attn:
---------------------
BARCLAYS BANK PLC
By
--------------------------
Title: President
Notice Address:
----------------------------
Attn:
---------------------
INSTALLMENT NOTE AND GUARANTEE ASSIGNMENT
This Agreement is made as of October 20, 1997 among Alleghany
Funding Corporation (the "Company"), The Chase Manhattan Bank in its capacity as
Collateral Agent (the "Collateral Agent"), Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("MLPFS") and Merrill Lynch &
Co., Inc. ("ML&Co.").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company and Trustee have entered into an Indenture
dated as of October 20, 1997 (the "Indenture") pursuant to which the Company
will issue its $80,000,000 Floating Rate Secured Notes Due 2007 (the "Notes");
WHEREAS, the Company acquired from Alleghany Corporation (the
"Parent") the Installment Note, dated January 7, 1987, from MLPFS, to the Parent
in the face amount of $91,535,343.54 (the "Original Installment Note") the
maturity of which was extended from January 20, 1999 to January 22, 2007 (which,
subject to further conditions, may be further extended to January 22, 2010 as
therein provided) pursuant to the terms of Amendment No. 2 to the Installment
Sales Agreement, Installment Note No. 001 and Guarantee dated as of October 20,
1997 by and among the Company, MLPFS and ML&Co. (the "Installment Note
Extension" and together with the Original Installment Note, the "Installment
Note"), which is entitled to the benefit of the Guarantee, dated December 8,
1986 of ML&Co. in a principal amount not to exceed $94,535,343.54 (the
"Guarantee"), and (iii) received the assignment from the Parent of the
Installment Sales Agreement dated December 8, 1986 by and among Alleghany
Financial Corporation (the predecessor of the Parent), MLPFS and ML&Co., as
amended by the Installment Note Extension (the "Installment Sales Agreement");
WHEREAS, the Company will also enter into an Interest Rate and
Currency Exchange Agreement and related Confirmation (together, the Swap
Agreement), each dated as of October 20, 1997 between the Company and the Swap
Counterparty pursuant to which the Company will pay certain amounts received
under the Installment Note and Guarantee and receive an amount equal to the Note
Interest Rate for each Interest Accrual Period under the Indenture;
WHEREAS, under the Intercreditor and Collateral Agency Agreement
(the "Intercreditor Agreement"), dated as of October 20, 1997 among the
Collateral Agent, the Swap Counterparty and the Company, the Company will pledge
the Installment Note, the Guarantee and the Installment Sales Agreement to the
Collateral Agent as security for the Noteholders and the Swap Counterparty PARI
PASSU in accordance with the respective amounts owed by the Company to the
Noteholders and the Swap Counterparty;
WHEREAS, under the Indenture the Company will pledge the Swap
Agreement to the Trustee as security for the Noteholders and under the
Intercreditor Agreement the Swap Counterparty will consent to such pledge;
WHEREAS, the parties hereto wish to enter into this assignment
agreement under which the Company will assign all its right, title and interest
in and to the Installment Note, the Guarantee and the Installment Sales
Agreement to the Collateral Agent for the benefit of the Noteholders and the
Swap Counterparty and MLPFS and ML&Co. will consent to such assignment, all as
more fully described herein; and
NOW, THEREFORE, know by all men these presents, in consideration of
the mutual covenants set forth herein, the parties hereto agree as follows:
1. The Company hereby irrevocably assigns, transfers and sets over
to the Collateral Agent all of the Company's interest in and rights, benefits
and remedies under the Installment Sales Agreement, the Installment Note and the
Guarantee as security under and pursuant to the terms of the Intercreditor
Agreement. Such assignment is given pursuant to the terms and provisions of the
Installment Sales Agreement, the Installment Note and the Guarantee, and the
Collateral Agent and its rights pursuant to such assignment shall be subject to
the terms and provisions of the Installment Sales Agreement, the Installment
Note and the Guarantee, including, without limit, the restrictions on transfers.
MLPFS and ML&Co. shall in no event be obligated to make any payments or to take
any actions to any extent other than those expressly stated in the Installment
Sales Agreement, the Installment Note and the Guarantee.
2. Upon the occurrence of a Foreclosure Determination (as such term
is defined in the Intercreditor Agreement), the Collateral Agent, and not the
Company, shall have the right to exercise the rights, benefits and remedies
under the Intercreditor Agreement and the Intercreditor Collateral (as such term
is defined in the Intercreditor Agreement).
3. MLPFS hereby confirms its consent to, and agrees to honor, the
assignment of the Installment Note, Guarantee and Installment Sales Agreement by
the Parent to the Company, and further confirms its agreement that such
assignments shall be deemed to be in compliance with all applicable requirements
of the Installment Note, the Guarantee and the Installment Sales Agreement.
4. ML&Co. hereby grants its consent to, and agrees to honor, the
assignment of the Installment Note, Guarantee and Installment Sales Agreement by
the Parent to the Company, and further confirms its agreement that such
assignments shall be deemed to be in compliance with all applicable requirements
of the Installment Note, the Guarantee and the Installment Sales Agreement.
5. MLPFS hereby irrevocably grants its consent to, and agrees to
honor, the foregoing irrevocable assignment to the Collateral Agent, and agrees
that such assignment shall be deemed to be in compliance with all applicable
requirements of the Installment Note, the Guarantee and the Installment Sales
Agreement.
6. ML&Co. hereby irrevocably grants its consent to, and agrees to
honor, the foregoing irrevocable assignment to the Collateral Agent, and agrees
that such assignment shall be deemed to be in compliance with all applicable
requirements of the Installment Note, the Guarantee and the Installment Sales
Agreement.
7. For the purpose of paragraph (3) on page six of the original
Installment Note only, the Parent shall be deemed to be the registered holder of
the Installment Note so long as the Installment Note is owned by the Company or
pledged by the Company to secure its obligations. For all other purposes under
the Installment Note and the Guarantee, MLPFS and ML&Co. hereby agree to treat
the Collateral Agent as the registered holder of the Installment Note and the
beneficiary of the Guarantee, respectively.
8. The Company hereby instructs MLPFS and ML&Co. and MLPFS and
ML&Co. hereby agree to make all payments under the Installment Note and the
Guarantee, respectively, to the Collateral Account (as such term is defined in
the above-referenced Intercreditor Agreement).
9. This Agreement shall be construed in accordance with and governed
by the laws of the State of New York applicable to agreements made and to be
performed therein without regard to conflict of laws principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
all as of the day and year first above mentioned.
COLLATERAL AGENT: THE CHASE MANHATTAN BANK
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
COMPANY: ALLEGHANY FUNDING CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
MLPFS: MERRILL LYNCH, PIERCE, FENNER &
SMITH INCORPORATED
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
ML&Co.: MERRILL LYNCH & CO., INC.
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SWAP AGREEMENT ASSIGNMENT
This Agreement is made as of October 20, 1997, among Alleghany
Funding Corporation (the "Company"), The Chase Manhattan Bank in its capacity as
collateral agent (the "Collateral Agent") and in its capacity as trustee (the
"Trustee"), and Barclays Bank Plc (the "Swap
Counterparty").
W I T N E S S E T H
- - - - - - - - - -
WHEREAS, the Company and Trustee have entered into an Indenture
dated as of October 20, 1997 (the "Indenture"; capitalized terms used herein and
not defined having the meanings assigned to such terms in the Indenture)
pursuant to which the Company will issue its $80,000,000 Floating Rate Secured
Notes Due 2007 (the "Notes");
WHEREAS, the Company acquired from Alleghany Corporation (the
"Parent") the Installment Note, dated January 7, 1987, from Merrill Lynch,
Pierce, Fenner & Smith Incorporated ("MLPFS"), to the Parent in the face amount
of $91,535,343.54 (the "Original Installment Note") the maturity of which was
extended from January 20, 1999 to January 22, 2007 (which, subject to further
conditions, may be further extended to January 22, 2010 as therein provided)
pursuant to the terms of Amendment No. 2 to the Installment Sales Agreement,
Installment Note No. 001 and Guarantee dated as of October 20, 1997 by and among
the Company, MLPFS and Merrill Lynch & Co., Inc. ("ML&Co.") (the "Installment
Note Extension" and together with the Original Installment Note, the
"Installment Note"), which is entitled to the benefit of the Guarantee, dated
December 8, 1986 of ML&Co. in a principal amount not to exceed $94,535,343.54
(the "Guarantee");
WHEREAS, the Company will also enter into an Interest Rate and
Currency Exchange Agreement and related Confirmation (together, the "Swap
Agreement"), each dated as of October 20, 1997 between the Company and the Swap
Counterparty pursuant to which the Company will pay an amount equal to certain
amounts received under the Installment Note and Guarantee and receive an amount
equal to the Note Interest Rate for each Interest Accrual Period under the
Indenture;
WHEREAS, under the Intercreditor and Collateral Agency Agreement
(the "Intercreditor Agreement"), dated as of October 20, 1997 among the
Collateral Agent, the Swap Counterparty and the Company, the Company will pledge
the Installment Note and the Installment Sales Agreement (the "Installment Sales
Agreement"), dated as of December 8, 1986 by and among the Parent, MLPFS and
ML&Co. to the Collateral Agent as security for the Noteholders and the Swap
Counterparty PARI PASSU in accordance with the respective amounts owed by the
Company to the Noteholders and the Swap Counterparty;
WHEREAS, under the Indenture the Company will pledge the Swap
Agreement to the Trustee as security for the Noteholders and under the
Intercreditor Agreement the Swap Counterparty will consent to such pledge;
WHEREAS, the parties hereto wish to enter into this assignment
agreement under which the Company will assign all its right, title and interest
in and to the Swap Agreement to the Trustee for the benefit of the Noteholders
and the Swap Counterparty will consent to such assignment;
NOW, THEREFORE, know by all men these presents, in consideration of
the mutual covenants set forth herein, the parties hereto agree as follows:
1. The Company hereby irrevocably assigns, transfers and sets over
to the Trustee all of the Company's estate, right, title and interest in, to and
under the Swap Agreement as security under, and pursuant to the terms of, the
Indenture; provided, however, that so long as no Event of Default has occurred
and is continuing, the Trustee hereby grants the Issuer a license to exercise
any of such rights under the Swap Agreement without notice to or the consent of
the Trustee or the Noteholders, except that, until such time as the Notes have
been retired, neither the Company nor the Swap Counterparty shall (i) enter into
any agreement amending or modifying the Swap Agreement without the prior written
consent of a majority of the Noteholders or (ii) deliver any notice of
termination of the Swap Agreement without the prior written consent of all the
Noteholders.
2. Upon the occurrence of an Event of Default under the Indenture,
the Trustee, and not the Company, shall have the right to exercise the rights,
benefits and remedies under the Swap Agreement.
3. The Swap Counterparty hereby irrevocably grants its consent to
the foregoing irrevocable assignment to the Trustee.
4. The Company hereby instructs the Swap Counterparty and the Swap
Counterparty hereby agrees to make all payments under the Swap Agreement to the
Trust Account (as such term is defined in the above-referenced Indenture).
5. This Agreement shall be construed in accordance with and governed
by the laws of the State of New York applicable to agreements made and to be
performed therein without regard to conflict of laws principles.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement,
all as of the day and year first above mentioned.
COMPANY: ALLEGHANY FUNDING CORPORATION
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SWAP COUNTERPARTY: BARCLAYS BANK PLC
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
TRUSTEE: THE CHASE MANHATTAN BANK
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
SCHEDULE A - LIBOR CALCULATION
-------- - - ----- -----------
"LIBOR" means the rate as determined by the Trustee as Calculation Agent
in respect of an Interest Accrual Period which will be determined on the basis
of the offered rate for deposits in U.S. dollars for a three month period which
rate appears on the Telerate Page 3750 (as defined below) as of 11:00 am.,
London time, on the Interest Determination Date. If no rate appears on the
Telerate Page 3750, LIBOR for such Interest Determination Date will be
determined as follows: the Calculation Agent shall request the principal London
offices of each of four major Reference Banks in the London interbank market
selected by the Calculation Agent to provide the Calculation Agent with a
quotation of the rate at which three-month deposits in U.S. Dollars, commencing
on the second London Business Day immediately following such Interest
Determination Date, are offered by it to prime banks in the London interbank
market as of approximately 11:00 a.m., London time, on such Interest
Determination Date and in a principal amount equal to an amount of not less than
U.S. $1,000,000 that is representative for a single transaction in such market
at such time. If at least two such quotations are not provided, Interest for
such Interest Determination Date will be the arithmetic mean of the rates quoted
as of approximately 11:00 a.m., New York City time, on such Interest
Determination Date by three major banks in The City of New York selected by the
Calculation Agent for loans in U.S. Dollars to leading European banks, having a
three-month maturity commencing on the second London Business Day immediately
following such Interest Determination Date and in a principal amount equal to an
amount of not less than U.S. $1,000,000 that is representative for a single
transaction in such market at such time; provided, however, that if the banks
selected as aforesaid by the Calculation Agent are not quoting as mentioned in
this sentence, LIBOR for such Interest Determination Date will be the LIBOR
determined with respect to the immediately preceding Interest Determination
Date, or in the case of the first Interest Determination Date, LIBOR for the
Initial Quarterly period.
The Calculation Agent will communicate or furnish to each Noteholder
in writing as soon as practicable following each Interest Determination Date:
(1) the calculation of LIBOR for the next following Interest Accrual Period and
(2) the calculation of the amount of interest payable on the Payment Date
falling at the end of the immediately following Interest Accrual Period.
SCHEDULE B - ELIGIBLE INVESTMENTS
Any investment that, at the time of its inclusion in the Trust
Estate or the Intercreditor Collateral, is one or more of the following
obligations or securities:
(a) direct obligations of, and obligations fully guaranteed
by, the United States of America or any agency or instrumentality of the United
States of America (including, but not limited to, bills, notes and bonds issued
by the Department of the Treasury of the United States of America), the
obligations of which are backed by the full faith and credit of the United
States of America; and
(b) repurchase obligations with respect to (i) any security
described in clause (a) above or (ii) any other security issued or guaranteed by
an agency or instrumentality of the United States of America, (including but not
limited to, bills, notes and bonds issued by the Department of Treasury of the
United States of America), in either case entered into with a depository
institution or trust company (acting as principal) incorporated under the laws
of the United States of America (including the Trustee) or any state thereof and
subject to supervision and examination by federal and/or state banking
authorities so long as the commercial paper and/or the debt obligations of such
depository institution or trust company (or, in the case of the principal
depository institution in a holding company system, the commercial paper or debt
obligations of such holding company) at the time of such investment or
contractual commitment providing for such investment have a credit rating of
"A-1" or better by Standard & Poor's or "P-1" or better by Moody's, in the case
of commercial paper, or "A" or better, in the case of debt obligations, by
Standard & Poor's and Moody's.
SCHEDULE C - Identification of Trust
Account
No.: XXXXXXX
Designation: Intercreditor Trust Account 1997
Location: The Chase Manhattan Bank
450 West 22rd Street, 15th Floor
New York, New York 10001