Exhibit 4.8
------------------------------------------------------------------------------
AFFILIATE DEBENTURE GUARANTEE AGREEMENT
Merrill Lynch & Co., Inc., as Guarantor
Merrill Lynch International Incorporated, as Issuer
Dated as of ________ __, 1998
------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
------
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and
Interpretation......................................... 1
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application....................... 5
SECTION 2.2 Lists of Holders of Securities......................... 5
SECTION 2.3 Reports by the Investment Guarantee
Trustee............................................. 5
SECTION 2.4 Periodic Reports to Investment Guarantee
Trustee................................................ 6
SECTION 2.5 Evidence of Compliance with Conditions
Precedent........................................... 6
SECTION 2.6 Events of Default; Waiver.............................. 6
ARTICLE III
POWERS, DUTIES AND RIGHTS OF INVESTMENT GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Investment
Guarantee Trustee................................... 7
SECTION 3.2 Certain Rights of Investment Guarantee
Trustee............................................. 9
SECTION 3.3 Not Responsible for Recitals or Issuance
of Investment Guarantee............................. 11
ARTICLE IV
INVESTMENT GUARANTEE TRUSTEE
SECTION 4.1 Investment Guarantee Trustee;
Eligibility......................................... 11
SECTION 4.2 Appointment, Removal and Resignation of
Investment Guarantee Trustee........................ 12
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee.............................................. 13
SECTION 5.2 Waiver of Notice and Demand............................ 13
SECTION 5.3 Obligations Not Affected............................... 14
SECTION 5.4 Rights of Holders...................................... 15
SECTION 5.5 Guarantee of Payment................................... 15
SECTION 5.6 Subrogation............................................ 15
SECTION 5.7 Independent Obligations................................ 16
i
Page
----
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking................................................ 16
ARTICLE VII
TERMINATION
SECTION 7.1 Termination............................................ 16
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation............................................ 17
SECTION 8.2 Indemnification........................................ 17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns................................. 17
SECTION 9.2 Amendments............................................. 18
SECTION 9.3 Consolidations and Mergers............................. 18
SECTION 9.4 Notices................................................ 18
SECTION 9.5 Benefit................................................ 19
SECTION 9.6 Governing Law.......................................... 19
ii
AFFILIATE DEBENTURE GUARANTEE AGREEMENT (this "Investment
Guarantee"), dated as of ________ __, 1998, is executed and delivered by
Merrill Lynch & Co., Inc., a Delaware corporation (the "Guarantor"), and The
Chase Manhattan Bank, as trustee (the "Investment Guarantee Trustee"), for
the benefit of the Holder (as defined herein) of the Affiliate Debenture (as
defined herein) of Merrill Lynch International Incorporated, a Delaware
corporation (the "Issuer").
WHEREAS, pursuant to an Indenture (the "Affiliate Indenture"), dated
as of December 17, 1996, between the Issuer and The Chase Manhattan Bank, as
indenture trustee (in such capacity, the "Indenture Trustee"), the Issuer is
issuing to the Holder on the date hereof its % Debenture Due 201_ (the
"Affiliate Debenture");
WHEREAS, as incentive for the Holder to purchase the Affiliate
Debenture, the Guarantor desires irrevocably and unconditionally to agree, to
the extent set forth in this Investment Guarantee, to make Guarantee Payments
(as defined herein) to the Holder of the Affiliate Debenture on the terms and
conditions set forth herein; and
NOW, THEREFORE, in consideration of the purchase by the Holder of
the Affiliate Debenture, which purchase the Guarantor hereby acknowledges
shall benefit the Guarantor, the Guarantor executes and delivers this
Investment Guarantee for the benefit of the Holder.
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions and Interpretation
In this Investment Guarantee, unless the context otherwise requires:
(a) Capitalized terms used in this Investment Guarantee but not
defined in the Preamble above have the respective meanings
assigned to them in this Section 1.1;
(b) Capitalized terms used in this Investment Guarantee but not
otherwise defined herein shall have the meanings assigned to them
in the Affiliate Indenture.
(c) a term defined anywhere in this Investment Guarantee has the same
meaning throughout;
(d) all references to "the Investment Guarantee" or "this Investment
Guarantee" are to this Investment
Guarantee as modified, supplemented or amended from time to time;
(e) all references in this Investment Guarantee to Articles and
Sections are to Articles and Sections of this Investment
Guarantee, unless otherwise specified;
(f) a term defined in the Trust Indenture Act has the same meaning
when used in this Investment Guarantee, unless otherwise defined
in this Investment Guarantee or unless the context otherwise
requires; and
(g) a reference to the singular includes the plural and vice versa.
"Affiliate" has the same meaning as given to that term in Rule 405
under the Securities Act of 1933, as amended, or any successor rule
thereunder.
"Business Day" means any day other than a day on which banking
institutions in The City of New York are authorized or required by law to
close.
"Company Debenture" means the series of debt securities issued on
________ __, 1998 under the Company Indenture.
"Company Indenture" means the Indenture between Merrill Lynch &
Co., Inc. and The Chase Manhattan Bank, dated as of December 17, 1996.
"Corporate Trust Office" means the office of the Investment
Guarantee Trustee at which the corporate trust business of the Investment
Guarantee Trustee shall, at any particular time, be principally administered,
which office at the date of execution of this Agreement is located at 450
West 33rd Street, 15th Floor, New York, New York 10001, Attention: Corporate
Trust Services Division.
"Covered Person" means the Holder or any beneficial owner of the
Affiliate Debenture.
"Declaration" means the Amended and Restated Declaration of Trust by
and among the Guarantor and certain Trustees, dated as of ________ __, 1998.
"Event of Default" means a default by the Guarantor on any of its
payment or other obligations under this Investment Guarantee.
2
"Guarantee Payments" means, without duplication, with respect to the
Affiliate Debenture, to the extent not paid or made by the Issuer, the due
and punctual payment of the principal of, premium, if any, and interest on
the Affiliate Debenture, when and as the same shall become due and payable,
whether at maturity or upon declaration of acceleration or otherwise,
according to the terms of the Affiliate Debenture and of the Affiliate
Indenture.
"Holder" shall mean any holder, as registered on the books and
records of the Issuer of the Affiliate Debenture. The initial Holder of the
Affiliate Debenture is the Partnership.
"Holder of Partnership Preferred Securities" shall have the meaning
specified in the Partnership Agreement.
"Indemnified Person" means the Investment Guarantee Trustee, any
Affiliate of the Investment Guarantee Trustee, or any officers, directors,
shareholders, members, partners, employees, representatives, nominees,
custodians or agents of the Investment Guarantee Trustee.
"Investment Guarantee Trustee" means The Chase Manhattan Bank, until
a Successor Investment Guarantee Trustee has been appointed and has accepted
such appointment pursuant to the terms of this Investment Guarantee and
thereafter means each such Successor Investment Guarantee Trustee.
"Majority in aggregate principal amount of the Affiliate Debenture"
means, except as provided by the Trust Indenture Act, a vote by Holder(s) of
the Affiliate Debenture, voting separately as a class, of more than 50% of
the outstanding aggregate principal amount of the Affiliate Debenture plus
accrued and unpaid interest to the date upon which the voting percentages are
determined.
"Officers' Certificate" means, with respect to any Person, a
certificate signed by two authorized officers of such Person. Any Officers'
Certificate delivered with respect to compliance with a condition or covenant
provided for in this Investment Guarantee shall include:
(a) a statement that each officer signing the Officers' Certificate
has read the covenant or condition and the definition relating
thereto;
(b) a brief statement of the nature and scope of the examination or
investigation undertaken by each officer in rendering the
Officers' Certificate;
(c) a statement that each such officer has made such examination or
investigation as, in such officer's
3
opinion, is necessary to enable such officer to express an
informed opinion as to whether or not such covenant or condition
has been complied with; and
(d) a statement as to whether, in the opinion of each such officer,
such condition of covenant has been complied with.
"Partnership" means Merrill Lynch Preferred Funding , L.P.
"Partnership Agreement" means the Amended and Restated Agreement of
Limited Partnership of the Partnership, dated as of ________ __, 1998, among
Merrill Lynch & Co., Inc., a Delaware corporation, as general partner,
Merrill Lynch Group, Inc., a Delaware corporation, as initial limited partner
and such other persons who become limited partners as provided therein.
"Partnership Preferred Securities" means those securities
representing limited partnership interests in the Partnership.
"Person" means a legal person, including any individual,
corporation, estate, partnership, joint venture, association, joint stock
company, limited liability company, trust, unincorporated association, or
government or any agency or political subdivision thereof, or any other
entity of whatever nature.
"Property Trustee" shall have the meaning specified in the
Declaration.
"Responsible Officer" means, with respect to the Investment
Guarantee Trustee, any officer within the Corporate Trust Office of the
Investment Guarantee Trustee, including any vice president, any assistant
vice president, any assistant secretary, the treasurer, any assistant
treasurer or other officer of the Corporate Trust Office of the Investment
Guarantee Trustee customarily performing functions similar to those performed
by any of the above designated officers and also means, with respect to a
particular corporate trust matter, any other officer to whom such matter is
referred because of that officer's knowledge of and familiarity with the
particular subject.
"Senior Indebtedness" shall have the meaning specified in the
Company Indenture.
"Successor Investment Guarantee Trustee" means a Successor
Investment Guarantee Trustee possessing the qualifications to act as
Investment Guarantee Trustee under Section 4.1.
4
"Trust" means the Merrill Lynch Preferred Capital Trust , a
Delaware business Trust, formed under the Declaration.
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trust Preferred Securities" shall have the meaning specified in the
Declaration.
ARTICLE II
TRUST INDENTURE ACT
SECTION 2.1 Trust Indenture Act; Application
(a) This Investment Guarantee is subject to the provisions of the
Trust Indenture Act that are required to be part of this Investment Guarantee
and shall, to the extent applicable, be governed by such provisions; and
(b) if and to the extent that any provision of this Investment
Guarantee limits, qualifies or conflicts with the duties imposed by Sections
310 to 317, inclusive, of the Trust Indenture Act, such imposed duties shall
control;
SECTION 2.2 Lists of Holders of Securities
(a) The Guarantor shall provide the Investment Guarantee Trustee
(unless the Investment Guarantee Trustee is otherwise the Security Registrar
of the Affiliate Debenture) with a list, in such form as the Investment
Guarantee Trustee may reasonably require, of the names and addresses of the
Holder(s) of the Affiliate Debenture ("List of Holders") as of such date, (i)
within one (1) Business Day after June 15 and December 15 of each year, and
(ii) at any other time within 30 days of receipt by the Guarantor of a
written request for a List of Holders as of a date no more than 14 days
before such List of Holders is given to the Investment Guarantee Trustee
provided, that the Guarantor shall not be obligated to provide such List of
Holders at any time the List of Holders does not differ from the most recent
List of Holders given to the Investment Guarantee Trustee by the Guarantor.
The Investment Guarantee Trustee may destroy any List of Holders previously
given to it on receipt of a new List of Holders.
(b) The Investment Guarantee Trustee shall comply with its
obligations under Sections 311(a), 311(b) and Section 312(b) of the Trust
Indenture Act.
5
SECTION 2.3 Reports by the Investment Guarantee Trustee
Within 60 days after ________ __ of each year, commencing ________ __,
____ the Investment Guarantee Trustee shall provide to the Holders of the
Affiliate Debenture such reports as are required by Section 313 of the Trust
Indenture Act, if any, in the form and in the manner provided by Section 313 of
the Trust Indenture Act. The Investment Guarantee Trustee shall also comply
with the requirements of Section 313(d) of the Trust Indenture Act.
SECTION 2.4 Periodic Reports to Investment Guarantee Trustee
The Guarantor shall provide to the Investment Guarantee Trustee such
documents, reports and information as required by Section 314 (if any) and the
compliance certificate required by Section 314 of the Trust Indenture Act in the
form, in the manner and at the times required by Section 314 of the Trust
Indenture Act.
SECTION 2.5 Evidence of Compliance with Conditions Precedent
The Guarantor shall provide to the Investment Guarantee Trustee such
evidence of compliance with any conditions precedent, if any, provided for in
this Investment Guarantee that relate to any of the matters set forth in Section
314(c) of the Trust Indenture Act. Any certificate or opinion required to be
given by an officer pursuant to Section 314(c)(1) may be given in the form of an
Officers' Certificate.
SECTION 2.6 Events of Default; Waiver
The Holders of a Majority in aggregate principal amount of the
Affiliate Debenture may, by vote, on behalf of the Holders of the Affiliate
Debenture, waive any past Event of Default and its consequences. Upon such
waiver, any such Event of Default shall cease to exist, and any Event of Default
arising therefrom shall be deemed to have been cured, for every purpose of this
Investment Guarantee, but no such waiver shall extend to any subsequent or other
default or Event of Default or impair any right consequent thereon.
SECTION 2.7 Event of Default; Notice
(a) The Investment Guarantee Trustee shall, within 90 days after the
occurrence of an Event of Default, transmit by mail, first class postage
prepaid, to the Holders of the Affiliate Debenture, notices of all Events of
Default actually known to a Responsible Officer of the Investment Guarantee
6
Trustee, unless such defaults have been cured before the giving of such notice,
provided, that, except in the case of default of any Guaranty Payment, the
Investment Guarantee Trustee shall be protected in withholding such notice if
and so long as a Responsible Officer of the Investment Guarantee Trustee in good
faith determines that the withholding of such notice is in the interests of the
Holders of the Affiliate Debenture.
(b) The Investment Guarantee Trustee shall not be deemed to have
knowledge of any Event of Default unless the Investment Guarantee Trustee shall
have received written notice, or a Responsible Officer of the Investment
Guarantee Trustee charged with the administration of the Affiliate Debenture
shall have obtained actual knowledge, of such Event of Default.
SECTION 2.8 Conflicting Interests
The Affiliate Debenture shall be deemed to be specifically described
in this Investment Guarantee for the purposes of clause (i) of the first proviso
contained in Section 310(b) of the Trust Indenture Act.
ARTICLE III
POWERS, DUTIES AND RIGHTS OF INVESTMENT GUARANTEE TRUSTEE
SECTION 3.1 Powers and Duties of the Investment Guarantee Trustee
(a) This Investment Guarantee shall be held by the Investment
Guarantee Trustee for the benefit of the Holders of the Affiliate Debenture, and
the Investment Guarantee Trustee shall not transfer this Investment Guarantee to
any Person except a Holder of the Affiliate Debenture exercising his or her
rights pursuant to Section 5.4(b) or to a Successor Investment Guarantee Trustee
on acceptance by such Successor Investment Guarantee Trustee of its appointment
to act as Successor Investment Guarantee Trustee. The right, title and interest
of the Investment Guarantee Trustee shall automatically vest in any Successor
Investment Guarantee Trustee, and such vesting and succession of title shall be
effective whether or not conveyancing documents have been executed and delivered
pursuant to the appointment of such Successor Investment Guarantee Trustee.
(b) If an Event of Default actually known to a Responsible Officer of
the Investment Guarantee Trustee has occurred and is continuing, the Investment
Guarantee Trustee shall enforce this Investment Guarantee for the benefit of the
Holders of the Affiliate Debenture.
(c) The Investment Guarantee Trustee, before the occurrence of any
Event of Default and after the curing or waiver
7
of all Events of Default that may have occurred, shall undertake to perform only
such duties as are specifically set forth in this Investment Guarantee, and no
implied covenants shall be read into this Investment Guarantee against the
Investment Guarantee Trustee. In case an Event of Default has occurred (that
has not been cured or waived pursuant to Section 2.6) and is actually known to a
Responsible Officer of the Investment Guarantee Trustee, the Investment
Guarantee Trustee shall exercise such of the rights and powers vested in it by
this Investment Guarantee, and use the same degree of care and skill in its
exercise thereof, as a prudent person would exercise or use under the
circumstances in the conduct of his or her own affairs.
(d) No provision of this Investment Guarantee shall be construed to
relieve the Investment Guarantee Trustee from liability for its own negligent
action, its own negligent failure to act, or its own willful misconduct, except
that:
(i) prior to the occurrence of any Event of Default and after
the curing or waiving of all such Events of Default that may have occurred:
(A) the duties and obligations of the Investment Guarantee
Trustee shall be determined solely by the express provisions of this
Investment Guarantee, and the Investment Guarantee Trustee shall not
be liable except for the performance of such duties and obligations as
are specifically set forth in this Investment Guarantee, and no
implied covenants or obligations shall be read into this Investment
Guarantee against the Investment Guarantee Trustee; and
(B) in the absence of bad faith on the part of the
Investment Guarantee Trustee, the Investment Guarantee Trustee may
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates
or opinions furnished to the Investment Guarantee Trustee and
conforming to the requirements of this Investment Guarantee; but in
the case of any such certificates or opinions that by any provision
hereof are specifically required to be furnished to the Investment
Guarantee Trustee, the Investment Guarantee Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Investment Guarantee;
(ii) the Investment Guarantee Trustee shall not be liable for any
error of judgment made in good faith by a Responsible Officer of the
Investment Guarantee Trustee, unless it shall be proved that the Investment
Guarantee
8
Trustee was negligent in ascertaining the pertinent facts upon which such
judgment was made;
(iii) the Investment Guarantee 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 in aggregate
principal amount of the Affiliate Debenture relating to the time, method
and place of conducting any proceeding for any remedy available to the
Investment Guarantee Trustee, or exercising any trust or power conferred
upon the Investment Guarantee Trustee under this Investment Guarantee; and
(iv) no provision of this Investment Guarantee shall require the
Investment Guarantee Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of its duties
or in the exercise of any of its rights or powers, if the Investment
Guarantee Trustee shall have reasonable grounds for believing that the
repayment of such funds or liability is not reasonably assured to it under
the terms of this Investment Guarantee or indemnity, reasonably
satisfactory to the Investment Guarantee Trustee, against such risk or
liability is not reasonably assured to it.
SECTION 3.2 Certain Rights of Investment Guarantee Trustee
(a) Subject to the provisions of Section 3.1:
(i) The Investment Guarantee Trustee may conclusively rely, and
shall be fully protected in acting or refraining from acting, upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, direction, consent, order, bond, debenture, note, other evidence
of indebtedness or other paper or document believed by it to be genuine and
to have been signed, sent or presented by the proper party or parties.
(ii) Any direction or act of the Guarantor contemplated by this
Investment Guarantee shall be sufficiently evidenced by an Officers'
Certificate.
(iii) Whenever, in the administration of this Investment
Guarantee, the Investment Guarantee Trustee shall deem it desirable that a
matter be proved or established before taking, suffering or omitting any
action hereunder, the Investment Guarantee Trustee (unless other evidence
is herein specifically prescribed) may, in the absence of bad faith on its
part, request and conclusively rely upon an Officers' Certificate which,
upon receipt of such request, shall be promptly delivered by the Guarantor.
9
(iv) The Investment Guarantee Trustee shall have no duty to see
to any recording, filing or registration of any instrument (or any
rerecording, refiling or registration thereof).
(v) The Investment Guarantee Trustee may consult with counsel of
its selection, and the advice or opinion of such counsel with respect to
legal matters shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good
faith and in accordance with such advice or opinion. Such counsel may be
counsel to the Guarantor or any of its Affiliates and may include any of
its employees. The Investment Guarantee Trustee shall have the right at
any time to seek instructions concerning the administration of this
Investment Guarantee from any court of competent jurisdiction.
(vi) The Investment Guarantee Trustee shall be under no
obligation to exercise any of the rights or powers vested in it by this
Investment Guarantee at the request or direction of any Holder, unless such
Holder shall have provided to the Investment Guarantee Trustee such
security and indemnity, reasonably satisfactory to the Investment Guarantee
Trustee, against the costs, expenses (including attorneys' fees and
expenses and the expenses of the Investment Guarantee Trustee's agents,
nominees or custodians) and liabilities that might be incurred by it in
complying with such request or direction, including such reasonable
advances as may be requested by the Investment Guarantee Trustee; provided
that, nothing contained in this Section 3.2(a)(vi) shall be taken to
relieve the Investment Guarantee Trustee, upon the occurrence of an Event
of Default, of its obligation to exercise the rights and powers vested in
it by this Investment Guarantee.
(vii) The Investment Guarantee 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, debenture, note, other evidence of
indebtedness or other paper or document, but the Investment Guarantee
Trustee, in its discretion, may make such further inquiry or investigation
into such facts or matters as it may see fit.
(viii) The Investment Guarantee Trustee may execute any of the
trusts or powers hereunder or perform any duties hereunder either directly
or by or through agents, nominees, custodians or attorneys, and the
Investment Guarantee Trustee shall not be responsible for any
10
misconduct or negligence on the part of any agent or attorney appointed
with due care by it hereunder.
(ix) Any action taken by the Investment Guarantee Trustee or its
agents hereunder shall bind the holders of the Affiliate Debenture, and the
signature of the Investment Guarantee Trustee or its agents alone shall be
sufficient and effective to perform any such action. No third party shall
be required to inquire as to the authority of the Investment Guarantee
Trustee to so act or as to its compliance with any of the terms and
provisions of this Investment Guarantee, both of which shall be
conclusively evidenced by the Investment Guarantee Trustee or its agent
taking such action.
(x) whenever in the administration of this Investment Guarantee
the Investment Guarantee Trustee shall deem it desirable to receive
instructions with respect to enforcing any remedy or right or taking any
other action hereunder, the Investment Guarantee Trustee (i) may request
instructions from the Holders of a Majority in aggregate principal amount
of the Affiliate Debenture, (ii) may refrain from enforcing such remedy or
right or taking such other action until such instructions are received, and
(iii) shall be fully protected in conclusively relying on or acting in
accordance with such instructions.
(xi) The Investment Guarantee Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in good faith, without
negligence, and reasonably believed by it to be authorized or within the
discretion or rights or powers conferred upon it by this Investment
Guarantee.
(b) No provision of this Investment Guarantee shall be deemed to
impose any duty or obligation on the Investment Guarantee Trustee to perform any
act or acts or exercise any right, power, duty or obligation conferred or
imposed on it in any jurisdiction in which it shall be illegal, or in which the
Investment Guarantee Trustee shall be unqualified or incompetent in accordance
with applicable law, to perform any such act or acts or to exercise any such
right, power, duty or obligation. No permissive power or authority available to
the Investment Guarantee Trustee shall be construed to be a duty.
SECTION 3.3 Not Responsible for Recitals or Issuance of Investment
Guarantee
The recitals contained in this Investment Guarantee shall be taken as
the statements of the Guarantor, and the Investment Guarantee Trustee does not
assume any responsibility for their correctness. The Investment Guarantee
Trustee makes no
11
representation as to the validity or sufficiency of this Investment Guarantee.
ARTICLE IV
INVESTMENT GUARANTEE TRUSTEE
SECTION 4.1 Investment Guarantee Trustee; Eligibility
(a) There shall at all times be an Investment Guarantee Trustee which
shall:
(i) not be an Affiliate of the Guarantor; and
(ii) be a corporation organized and doing business under the laws
of the United States of America or any State or Territory thereof or of the
District of Columbia, or a corporation or Person permitted by the
Securities and Exchange Commission to act as an institutional trustee under
the Trust Indenture Act, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least 50 million
U.S. dollars ($50,000,000), and subject to supervision or examination by
Federal, State, Territorial or District of Columbia authority. If such
corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the supervising or examining authority
referred to above, then, for the purposes of this Section 4.1(a)(ii), 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.
(b) If at any time the Investment Guarantee Trustee shall cease to be
eligible to so act under Section 4.1(a), the Investment Guarantee Trustee shall
immediately resign in the manner and with the effect set out in Section 4.2(c).
(c) If the Investment Guarantee Trustee has or shall acquire any
"conflicting interest" within the meaning of Section 310(b) of the Trust
Indenture Act, the Investment Guarantee Trustee and Guarantor shall in all
respects comply with the provisions of Section 310(b) of the Trust Indenture
Act.
SECTION 4.2 Appointment, Removal and Resignation of Investment
Guarantee Trustee
(a) Subject to Section 4.2(b), the Investment Guarantee Trustee may
be appointed or removed without cause at any time by the Guarantor except during
a default or an Event of Default.
12
(b) The Investment Guarantee Trustee shall not be removed in
accordance with Section 4.2(a) until a Successor Investment Guarantee Trustee
has been appointed and has accepted such appointment by written instrument
executed by such Successor Investment Guarantee Trustee and delivered to the
Guarantor.
(c) The Investment Guarantee Trustee shall hold office until a
Successor Investment Guarantee Trustee shall have been appointed or until its
removal or resignation. The Investment Guarantee Trustee may resign from office
(without need for prior or subsequent accounting) by an instrument in writing
executed by the Investment Guarantee Trustee and delivered to the Guarantor,
which resignation shall not take effect until a Successor Investment Guarantee
Trustee has been appointed and has accepted such appointment by instrument in
writing executed by such Successor Investment Guarantee Trustee and delivered to
the Guarantor and the resigning Investment Guarantee Trustee.
(d) If no Successor Investment Guarantee Trustee shall have been
appointed and accepted appointment as provided in this Section 4.2 within 30
days after delivery of an instrument of removal or resignation, the Investment
Guarantee Trustee resigning or being removed may petition any court of competent
jurisdiction for appointment of a Successor Investment Guarantee Trustee. Such
court may thereupon, after prescribing such notice, if any, as it may deem
proper, appoint a Successor Investment Guarantee Trustee.
(e) No Investment Guarantee Trustee shall be liable for the acts or
omissions to act of any Successor Investment Guarantee Trustee.
(f) Upon termination of this Investment Guarantee or removal or
resignation of the Investment Guarantee Trustee pursuant to this Section 4.2,
the Guarantor shall pay to the Investment Guarantee Trustee all amounts due to
the Investment Guarantee Trustee accrued to the date of such termination,
removal or resignation.
ARTICLE V
GUARANTEE
SECTION 5.1 Guarantee
The Guarantor irrevocably and unconditionally agrees to pay in full to
the Holders the Guarantee Payments (without duplication of amounts theretofore
paid by the Issuer), as and when due, regardless of any defense, right of
set-off or counterclaim that the Issuer may have or assert. The Guarantor's
obligation to make a Guarantee Payment may be satisfied by direct payment of the
required amounts by the Guarantor to the Holders or by causing the Issuer to pay
such amounts to the Holders.
13
SECTION 5.2 Waiver of Notice and Demand
The Guarantor hereby waives notice of acceptance of this Investment
Guarantee and of any liability to which it applies or may apply, presentment,
demand for payment, any right to require a proceeding first against the Issuer
or any other Person before proceeding against the Guarantor, protest, notice of
nonpayment, notice of dishonor, notice of redemption and all other notices and
demands.
SECTION 5.3 Obligations Not Affected
The obligations, covenants, agreements and duties of the Guarantor
under this Investment Guarantee shall in no way be affected or impaired by
reason of the happening from time to time of any of the following:
(a) the release or waiver, by operation of law or otherwise, of the
performance or observance by the Issuer of any express or implied agreement,
covenant, term or condition relating to the Affiliate Debenture to be performed
or observed by the Issuer;
(b) the extension of time for the payment by the Issuer of all or any
portion of the interest, principal or premium, if any, or any other sums payable
under the terms of the Affiliate Debenture or the extension of time for the
performance of any other obligation under, arising out of, or in connection
with, the Affiliate Debenture (other than an extension of time for payment of
interest during an Extension Period, as defined in the Affiliate Debenture,
permitted by the Affiliate Indenture);
(c) any failure, omission, delay or lack of diligence on the part of
the Holders to enforce, assert or exercise any right, privilege, power or remedy
conferred on the Holders pursuant to the terms of the Affiliate Debenture, or
any action on the part of the Issuer granting indulgence or extension of any
kind;
(d) the voluntary or involuntary liquidation, dissolution, sale of
any collateral, receivership, insolvency, bankruptcy, assignment for the benefit
of creditors, reorganization, arrangement, composition or readjustment of debt
of, or other similar proceedings affecting, the Issuer or any of the assets of
the Issuer;
(e) any invalidity of, or defect or deficiency in, the Affiliate
Debenture;
(f) the settlement or compromise of any obligation guaranteed hereby
or hereby incurred; or
14
(g) any other circumstance whatsoever that might otherwise constitute
a legal or equitable discharge or defense of a guarantor, it being the intent of
this Section 5.3 that the obligations of the Guarantor hereunder shall be
absolute and unconditional under any and all circumstances.
There shall be no obligation of the Holders to give notice to, or
obtain consent of, the Guarantor with respect to the happening of any of the
foregoing.
SECTION 5.4 Rights of Holders
(a) The Holders of a Majority in aggregate principal amount of the
Affiliate Debenture have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Investment Guarantee
Trustee in respect of this Investment Guarantee or exercising any trust or power
conferred upon the Investment Guarantee Trustee under this Investment Guarantee.
(b) If the Investment Guarantee Trustee fails to enforce its rights
under the Investment Guarantee after a Holder of the Affiliate Debenture has
made a written request, such Holder of the Affiliate Debenture may institute a
legal proceeding directly against the Guarantor to enforce the Investment
Guarantee Trustee's rights under this Investment Guarantee, without first
instituting a legal proceeding against the Issuer, the Investment Guarantee
Trustee or any other Person. Notwithstanding the foregoing, if the Guarantor
has failed to make a Guarantee Payment, a Holder of the Affiliate Debenture may
directly institute a proceeding in such Holder's own name against the Guarantor
for enforcement of the Investment Guarantee for such payment. The Guarantor
waives any right or remedy to require that any action be brought first against
the Issuer or any other person or entity before proceeding directly against the
Guarantor.
SECTION 5.5 Guarantee of Payment
This Investment Guarantee creates a guarantee of payment and not of
collection.
SECTION 5.6 Subrogation
The Guarantor shall be subrogated to all (if any) rights of the
Holders of Affiliate Debenture against the Issuer in respect of any amounts paid
to such Holders by the Guarantor under this Investment Guarantee; provided,
however, that the Guarantor shall not (except to the extent required by
mandatory provisions of law) be entitled to enforce or exercise any right that
it may acquire by way of subrogation or any indemnity, reimbursement or other
agreement, in all cases as a result of
15
payment under this Investment Guarantee, if, at the time of any such payment,
any amounts are due and unpaid under this Investment Guarantee. If any amount
shall be paid to the Guarantor in violation of the preceding sentence, the
Guarantor agrees to hold such amount in trust for the Holders and to pay over
such amount to the Holders.
SECTION 5.7 Independent Obligations
The Guarantor acknowledges that its obligations hereunder are
independent of the obligations of the Issuer with respect to the Affiliate
Debenture, and that the Guarantor shall be liable as principal and as debtor
hereunder to make Guarantee Payments pursuant to the terms of this Investment
Guarantee notwithstanding the occurrence of any event referred to in subsections
(a) through (g), inclusive, of Section 5.3 hereof.
ARTICLE VI
SUBORDINATION
SECTION 6.1 Ranking
This Investment Guarantee will constitute an unsecured obligation of
the Guarantor and will rank (i) subordinate and junior in right of payment to
all other liabilities of the Guarantor, (ii) pari passu with the most senior
preferred or preference stock now or hereafter issued by the Guarantor and with
any other guarantee now or hereafter entered into by the Guarantor in respect of
any preferred or preference stock of any Affiliate of the Guarantor, and (iii)
senior to the Guarantor's common stock. The holders of obligations of the
Guarantor that are senior to the obligations under the Investment Guarantee
(including, but not limited to, obligations constituting Senior Indebtedness)
shall be entitled to the same rights in payment default or dissolution,
liquidation and reorganization in respect of this Investment Guarantee that
inure to the holders of Senior Indebtedness as against the holders of the
Company Debenture specified in Sections 1102, 1103 and 1105 of the Company
Indenture.
ARTICLE VII
TERMINATION
SECTION 7.1 Termination
This Investment Guarantee shall terminate upon the repayment in full
(whether at maturity, upon redemption or otherwise) of all of the principal of,
premium, if any, and interest on (including all accrued and unpaid interest
thereon) and any other amounts payable in respect of the Affiliate Debenture.
Notwithstanding the foregoing, this Investment Guarantee will continue to be
effective or will be reinstated, as
16
the case may be, if at any time any Holder of the Affiliate Debenture must
restore payment of any sums paid under the Affiliate Debenture or under this
Investment Guarantee.
ARTICLE VIII
INDEMNIFICATION
SECTION 8.1 Exculpation
(a) No Indemnified Person shall be liable, responsible or accountable
in damages or otherwise to the Guarantor or any Covered Person for any loss,
damage or claim incurred by reason of any act or omission performed or omitted
by such Indemnified Person in good faith in accordance with this Investment
Guarantee and in a manner that such Indemnified Person reasonably believed to be
within the scope of the authority conferred on such Indemnified Person by this
Investment Guarantee or by law, except that an Indemnified Person shall be
liable for any such loss, damage or claim incurred by reason of such Indemnified
Person's gross negligence or willful misconduct with respect to such acts or
omissions.
(b) An Indemnified Person shall be fully protected in relying in good
faith upon the records of the Guarantor and upon such information, opinions,
reports or statements presented to the Guarantor by any Person as to matters the
Indemnified Person reasonably believes are within such other Person's
professional or expert competence and who has been selected with reasonable care
by or on behalf of the Guarantor, including information, opinions, reports or
statements as to the value and amount of the assets, liabilities, profits,
losses, or any other facts pertinent to the existence and amount of assets from
which principal, premium, interest or other payments to Holders of the Affiliate
Debenture might properly be paid.
SECTION 8.2 Indemnification
The Guarantor agrees to indemnify each Indemnified Person for, and to
hold each Indemnified Person harmless against, any and all loss, liability,
damage, claim or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of the
trust or trusts hereunder, including the costs and expenses (including
reasonable legal fees and expenses) of defending itself against, or
investigating, any claim or liability in connection with the exercise or
performance of any of its powers or duties hereunder. The obligation to
indemnify as set forth in this Section 8.2 shall survive the termination of this
Investment Guarantee.
17
ARTICLE IX
MISCELLANEOUS
SECTION 9.1 Successors and Assigns
All guarantees and agreements contained in this Investment Guarantee
shall bind the successors, assigns, receivers, trustees and representatives of
the Guarantor and shall inure to the benefit of the Holders of the Partnership
Preferred Securities then outstanding. The Company may not assign its rights or
delegate its obligations hereunder without the prior approval of the Holders of
at least a majority of the aggregated stated liquidation preference of the
Partnership Preferred Securities then outstanding, except that the Company may
consolidate with, or sell, lease or convey all or substantially all of its
assets to, or merge with or into any other corporation, provided that in any
such case either the Company shall be the continuing corporation, or the
successor corporation shall expressly assume the obligations of the Guarantor
hereunder.
SECTION 9.2 Amendments
Except with respect to any changes that do not adversely affect the
rights of Holders of Partnership Preferred Securities (in which case no consent
will be required), this Investment Guarantee may be amended only with the prior
approval of the Holders of not less than a majority in liquidation preference of
the outstanding Partnership Preferred Securities, provided that so long as the
Property Trustee of the Trust is the Holder of the Partnership Preferred
Securities, such amendment will not be effective without the prior written
approval of a majority in liquidation amount of the outstanding Trust Preferred
Securities.
SECTION 9.3 Consolidations and Mergers
The Guarantor may consolidate with, or sell, lease 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 the Guarantor shall be the
continuing corporation, or the successor corporation shall be a corporation
organized and existing under the laws of the United States of America thereof
and such successor corporation shall expressly assume the due and punctual
payment of the Guarantee Payments payable pursuant to Section 5.1 hereof and the
due and punctual performance and observance of all of the covenants and
conditions of this Investment Guarantee to be performed by the Guarantor by a
separate guarantee satisfactory to the Investment Guarantee Trustee (as defined
in this Investment Guarantee dated as of ________ __, 1998), executed and
delivered to the Investment Guarantee Trustee by such corporation, and (ii) the
Guarantor or
18
such successor corporation, as the case may be, shall not, immediately after
such merger or consolidation, or such sale, lease or conveyance, be in default
in the performance of any such covenant or condition.
SECTION 9.4 Notices
All notices provided for in this Investment Guarantee shall be in
writing, duly signed by the party giving such notice, and shall be delivered,
telecopied or mailed by first class mail, as follows:
(a) If given to the Investment Guarantee Trustee, at the Investment
Guarantee Trustee's Corporate Trust Office, Attention: James Heaney, Telecopy:
(212) 946-8158 (or such other address as the Investment Guarantee Trustee may
give notice of to the Holders of the Affiliate Debenture); and
(b) If given to the Guarantor, at the Guarantor's mailing address set
forth below (or such other address as the Guarantor may give notice of to the
Holders of the Affiliate Debenture):
Merrill Lynch & Co., Inc.
World Financial Center
South Tower
225 Liberty Street
New York, New York 10080-6105
Attention: Treasurer
(c) If given to any Holder of Affiliate Debenture, at the address set
forth on the books and records of the Issuer.
All such notices shall be deemed to have been given when received in
person, telecopied with receipt confirmed, or mailed by first class mail,
postage prepaid except that if a notice or other document is refused delivery or
cannot be delivered because of a changed address of which no notice was given,
such notice or other document shall be deemed to have been delivered on the date
of such refusal or inability to deliver.
SECTION 9.5 Benefit
This Investment Guarantee is solely for the benefit of the Holders of
the Affiliate Debenture and, subject to Section 3.1(a), is not separately
transferable from the Affiliate Debenture.
19
SECTION 9.6 Governing Law
THIS INVESTMENT GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES THEREOF.
This Investment Guarantee is executed as of the day and year first
above written.
MERRILL LYNCH & CO., INC., as
Guarantor
By: _____________________________
Name:
Title:
THE CHASE MANHATTAN BANK, as
Investment Guarantee Trustee
By: ______________________________
Name:
Title:
20