<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 5, 1996
REGISTRATION NO. 33-65135
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 4
TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
----------------
MERRILL LYNCH & CO., INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 13-2740599
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
WORLD FINANCIAL CENTER
NORTH TOWER
NEW YORK, NEW YORK 10281-1334
(212) 449-1000
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
----------------
ROSEMARY T. BERKERY, ESQ.
ASSOCIATE GENERAL COUNSEL
MERRILL LYNCH & CO., INC.
WORLD FINANCIAL CENTER
NORTH TOWER
NEW YORK, NEW YORK 10281-1334
(212) 449-6990
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPY TO:
PAUL C. PRINGLE, ESQ.
BROWN & WOOD
555 CALIFORNIA STREET
SAN FRANCISCO, CALIFORNIA 94104
----------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.[X]
----------------
THIS POST-EFFECTIVE AMENDMENT NO. 4 TO THE REGISTRATION STATEMENT SHALL
HEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE SECURITIES
ACT OF 1933 OR ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION
8(a), MAY DETERMINE.
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
ITEM 16. LIST OF EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
------- -----------
<C> <S>
1(a) --Form of Underwriting Agreement among the Company and the
Underwriter.
1(b) --Form of Registration Agreement among the Company, SunAmerica Inc.,
the Selling Stockholder and the Underwriter.
4(a) --Senior Indenture, dated as of April 1, 1983, as amended and
restated, between the Company and Chemical Bank (successor by merger
to Manufacturers Hanover Trust Company), incorporated herein by
reference to Exhibit 99(c) to Registrant's Registration Statement on
Form 8-A dated July 20, 1992.
4(b) --Form of Ninth Supplemental Indenture to the Senior Indenture between
the Company and Chemical Bank (successor by merger to Manufacturers
Hanover Trust Company).
4(c) --Form of certificate representing the STRYPES.
5 --Opinion of Brown & Wood.
10 --Form of Stock Agreement among the Company, the ML&Co. Subsidiary and
the Selling Stockholder.
23(a) --Consent of Deloitte & Touche LLP.*
23(b) --Consent of Brown & Wood (included in Exhibit 5).
99 --Report of Deloitte & Touche LLP with respect to certain financial
data appearing in the Registration Statement.*
</TABLE>
- --------
*Previously filed.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-Effective
Amendment to the Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in The City of New York and State of
New York on the 5th day of June, 1996.
MERRILL LYNCH & CO., INC.
/s/ Joseph T. Willet
By __________________________________
JOSEPH T. WILLET
(Senior Vice President and Chief
Financial Officer)
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS POST-
EFFECTIVE AMENDMENT TO THE REGISTRATION STATEMENT HAS BEEN SIGNED BELOW BY THE
FOLLOWING PERSONS IN THE CAPACITIES INDICATED ON THE 5TH DAY OF JUNE, 1996.
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ Daniel P. Tully* Chairman of the Board,
- ------------------------------------- Chief Executive Officer
(DANIEL P. TULLY) and Director
/s/ David H. Komansky* President, Chief
- ------------------------------------- Operating Officer and
(DAVID H. KOMANSKY) Director
/s/ Joseph T. Willet* Senior Vice President
- ------------------------------------- and Chief Financial
(JOSEPH T. WILLETT) Officer (Principal
Financial Officer)
/s/ Michael J. Castellano* Senior Vice President
- ------------------------------------- and Controller
(MICHAEL J. CASTELLANO)
/s/ William O. Burke* Director
- -------------------------------------
WILLIAM O. BURKE
/s/ Worley H. Clark* Director
- -------------------------------------
(WORLEY H. CLARK)
/s/ Jill K. Conway* Director
- -------------------------------------
(JILL K. CONWAY)
</TABLE>
II-3
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE
<S> <C>
/s/ Stephen L. Hammerman* Director
- -------------------------------------
(STEPHEN L. HAMMERMAN)
/s/ Earle H. Harbison, Jr.* Director
- -------------------------------------
(EARLE H. HARBISON, JR.)
/s/ George B. Harvey* Director
- -------------------------------------
(GEORGE B. HARVEY)
/s/ William R. Hoover* Director
- -------------------------------------
(WILLIAM R. HOOVER)
/s/ Robert P. Luciano* Director
- -------------------------------------
(ROBERT P. LUCIANO)
/s/ Aulana L. Peters* Director
- -------------------------------------
(AULANA L. PETERS)
/s/ John J. Phelan, Jr.* Director
- -------------------------------------
(JOHN J. PHELAN, JR.)
/s/ William L. Weiss* Director
- -------------------------------------
(WILLIAM L. WEISS)
/s/ Joseph T. Willett
*By: ________________________________
JOSEPH T. WILLETT
(ATTORNEY-IN-FACT)
</TABLE>
II-4
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
------- ----------- ------------
<C> <S> <C>
1(a) --Form of Underwriting Agreement among the Company and
the Underwriter.
1(b) --Form of Registration Agreement among the Company,
SunAmerica Inc., the Selling Stockholder and the
Underwriter.
4(a) --Senior Indenture, dated as of April 1, 1983, as
amended and restated, between the Company and Chemical
Bank (successor by merger to Manufacturers Hanover
Trust Company), incorporated herein by reference to
Exhibit 99(c) to Registrant's Registration Statement
on Form 8-A dated July 20, 1992.
4(b) --Form of Ninth Supplemental Indenture to the Senior
Indenture between the Company and Chemical Bank
(successor by merger to Manufacturers Hanover Trust
Company).
4(c) --Form of certificate representing the STRYPES.
5 --Opinion of Brown & Wood.
10 --Form of Stock Agreement among the Company, the ML&Co.
Subsidiary and the Selling Stockholder.
23(a) --Consent of Deloitte & Touche LLP.*
23(b) --Consent of Brown & Wood (included in Exhibit 5).
99 --Report of Deloitte & Touche LLP with respect to
certain financial data appearing in the Registration
Statement.*
</TABLE>
- --------
*Previously filed.
<PAGE>
EXHIBIT 1(A)
===============================================================================
MERRILL LYNCH & CO., INC.
(a Delaware corporation)
UNDERWRITING AGREEMENT
----------------------
Dated: __________, 1996
===============================================================================
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
SECTION 1. Representations and Warranties........................... 4
------------------------------
(a) Representations and Warranties by the Company...... 4
(i) Compliance with Registration Requirements..... 4
(ii) Incorporated Documents....................... 5
(iii) Independent Accountants..................... 5
(iv) Financial Statements......................... 6
(v) No Material Adverse Change in Business........ 6
(vi) Good Standing of the Company................. 6
(vii) Good Standing of Subsidiaries............... 6
(viii) Authorization of Agreement................. 7
(ix) Authorization of the Indenture............... 7
(x) Authorization of the Securities............... 7
(xi) Authorization of the Stock Agreement......... 7
(xii) Description of Securities, Indenture and
Stock Agreement............................. 8
(xiii) Absence of Defaults and Conflicts.......... 8
(xiv) Absence of Labor Dispute.................... 9
(xv) Absence of Proceedings....................... 9
(xvi) Exhibits.................................... 9
(xvii) Possession of Intellectual Property........ 9
(xviii) Absence of Further Requirements........... 9
(xix) Possession of Licenses and Permits......... 10
(xx) Title to Property........................... 10
(xxi) Compliance with Cuba Act................... 10
(b) Officer's Certificates............................ 10
SECTION 2. Sale and Delivery to Underwriter; Closing............... 11
-----------------------------------------
(a) Initial Securities................................ 11
(b) Option Securities................................. 11
(c) Payment........................................... 11
(d) Denominations; Registration....................... 11
SECTION 3. Covenants of the Company with the Underwriter........... 12
---------------------------------------------
(a) Compliance with Securities Regulations and Commission
Requests.......................................... 12
(b) Filing of Amendments.............................. 12
(c) Delivery of ML&Co. Registration Statements........ 12
(d) Delivery of ML&Co. Prospectuses................... 12
(e) Continued Compliance with Securities Laws......... 13
(f) Blue Sky Qualifications........................... 13
(g) Rule 158.......................................... 13
(h) Use of Proceeds................................... 13
(i) Listing........................................... 14
(j) Reporting Requirements............................ 14
SECTION 4. Payment of Expenses..................................... 14
-------------------
</TABLE>
i
<PAGE>
<TABLE>
<S> <C> <C>
(a) Expenses Payable by the Company....................... 14
(b) Termination of Agreement.............................. 14
SECTION 5. Conditions............................................ 14
----------
(a) Conditions of Underwriter's Obligations............... 14
(1) Effectiveness of ML&Co. Registration Statement... 15
(2) Effectiveness of SunAmerica Registration
Statement........................................ 15
(3) Opinion of Counsel for the Company............... 15
(4) Opinion of Counsel for the Underwriter........... 15
(5) Opinion of Maryland Counsel for SunAmerica....... 15
(6) Opinion of General Counsel for SunAmerica........ 15
(7) Opinion of Special Counsel for SunAmerica and
Counsel for the Selling Stockholder.............. 16
(8) Company Officers' Certificate.................... 16
(9) SunAmerica Officer's Certificate................. 16
(10) The Selling Stockholder's Certificate............ 16
(11) Company Accountant's Comfort Letter.............. 17
(12) SunAmerica Accountant's Comfort Letters.......... 17
(13) Company Bring-down Comfort Letter................ 17
(14) SunAmerica Bring-down Comfort Letter............. 17
(15) Maintenance of Rating............................ 17
(16) Approval of Listing.............................. 17
(17) No Objection..................................... 17
(18) Conditions to Purchase of Option Securities...... 17
(19) Additional Documents............................. 19
(b) Conditions of the Company's Obligations............... 19
(1) Effectiveness of SunAmerica Registration
Statement........................................ 19
(2) Opinion of Counsel for the Company............... 19
(3) Opinion of Counsel for the Underwriter........... 20
(4) Opinion of Maryland Counsel for SunAmerica....... 20
(5) Opinion of General Counsel for SunAmerica........ 20
(6) Opinion of Special Counsel for SunAmerica and
Counsel for the Selling Stockholder.............. 20
(7) SunAmerica Officer's Certificate................. 20
(8) The Selling Stockholder's Certificate............ 20
(9) SunAmerica Accountant's Comfort Letters.......... 20
(10) SunAmerica Bring-down Comfort Letter............. 20
(11) Conditions to Sale of Option Securities.......... 21
(c) Termination of Agreement.............................. 22
SECTION 6. Indemnification............................................. 22
---------------
(a) Indemnification of the Underwriter by the Company..... 22
(b) Indemnification of the Company, Directors and
Officers.............................................. 23
(c) Actions against Parties; Notification................. 24
(d) Settlement without Consent if Failure to Reimburse.... 24
SECTION 7. Contribution................................................ 24
------------
SECTION 8. Representations, Warranties and Agreements to Survive
-----------------------------------------------------
Delivery.................................................... 25
-----------
SECTION 9. Termination of Agreement.................................... 26
------------------------
</TABLE>
ii
<PAGE>
<TABLE>
<S> <C> <C>
(a) Termination; General................................ 26
(b) Liabilities......................................... 26
SECTION 10. Notices.................................................. 26
-------
SECTION 11. Parties.................................................. 26
-------
SECTION 12. GOVERNING LAW AND TIME................................... 27
----------------------
SECTION 13. Effect of Headings....................................... 27
------------------
SECTION 14. Counterparts............................................. 27
------------
</TABLE>
iii
<PAGE>
MERRILL LYNCH & CO., INC.
(a Delaware corporation)
____% STRYPES/SM/ DUE ____, 1999
Payable with Shares of Common Stock of SunAmerica Inc.
UNDERWRITING AGREEMENT
----------------------
_____________, 1996
Merrill Lynch & Co.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
Merrill Lynch & Co., Inc., a Delaware corporation (the "Company"), confirms
its agreement with Merrill Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith
Incorporated (the "Underwriter") with respect to the issue and sale by the
Company and the purchase by the Underwriter of an aggregate of 3,000,000 of the
Company's Structured Yield Product Exchangeable for Stock(SM), ____% STRYPES(SM)
Due ____, 1999 (each, a "STRYPES") and with respect to the grant by the Company
to the Underwriter of the option described in Section 2(b) hereof to purchase
all or any part of 450,000 additional STRYPES to cover over-allotments, if any.
The aforesaid 3,000,000 STRYPES (the "Initial Securities") to be purchased by
the Underwriter and all or any part of the 450,000 STRYPES subject to the option
described in Section 2(b) hereof (the "Option Securities") are hereinafter
called, collectively, the "Securities." The Securities are to be issued
pursuant to an indenture, dated as of April 1, 1983 and restated as of April 1,
1987, as amended and supplemented as of __________, 1996 (the "Indenture"),
between the Company and Chemical Bank (successor by merger to Manufacturers
Hanover Trust Company), as trustee (the "Trustee").
__________________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
The STRYPES will be payable at maturity or upon redemption by delivery of
shares of Common Stock, par value $1.00 per share (the "SunAmerica Common
Stock"), of SunAmerica Inc., a Maryland corporation ("SunAmerica") subject to
the Company's option to deliver at maturity, in lieu of shares of SunAmerica
Common Stock, an amount in cash. The Company, SunAmerica, Mr. Eli Broad (the
"Selling Stockholder") and the Underwriter are concurrently entering into an
agreement dated the date hereof (the "Registration Agreement") relating to the
registration of shares of SunAmerica Common Stock deliverable by the Company
pursuant to the STRYPES.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement has been executed and delivered.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 33-65135) for the
registration of debt securities, including the Securities, under the Securities
Act of 1933, as amended (the "1933 Act"), and the offering thereof from time to
time in accordance with Rule 415 of the rules and regulations of the Commission
under the 1933 Act (the "1933 Act Regulations"), and the Company has filed post-
effective amendment no. 2 thereto, including a preliminary prospectus and
preliminary prospectus supplement relating to the offering of the Securities.
Promptly after execution and delivery of this Agreement, the Company will either
(i) prepare and file a prospectus and prospectus supplement in accordance with
the provisions of Rule 430A ("Rule 430A") of the 1933 Act Regulations and
paragraph (b) of Rule 424 ("Rule 424(b)") of the 1933 Act Regulations or (ii) if
the Company has elected to rely upon Rule 434 ("Rule 434") of the 1933 Act
Regulations, prepare and file a term sheet (an "ML&Co. Term Sheet") in
accordance with the provisions of Rule 434 and Rule 424(b). The information
included in such prospectus and prospectus supplement or in such ML&Co. Term
Sheet, as the case may be, that was omitted from such registration statement (as
so amended) at the time it became effective but that is deemed to be part of
such registration statement (as so amended) at the time it became effective (i)
pursuant to paragraph (b) of Rule 430A is referred to as "Rule 430A Information"
or (ii) pursuant to paragraph (d) of Rule 434 is referred to as "Rule 434
Information." Any prospectus and prospectus supplement relating to the offering
of the Securities used before such registration statement (as so amended) became
effective, and any prospectus and prospectus supplement relating to the offering
of the Securities that omitted, as applicable, the Rule 430A Information or the
Rule 434 Information, that was used after such effectiveness and prior to the
execution and delivery of this Agreement, in each case excluding any SunAmerica
preliminary prospectus (as defined below) accompanying such prospectus and
prospectus supplement, as the case may be, are herein called, collectively, an
"ML&Co. preliminary prospectus." Such registration statement (as so amended),
including the exhibits thereto, the schedules thereto, if any, and the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 under the 1933
Act, at the time it became effective and including the Rule 430A Information and
the Rule 434 Information, as applicable, is herein called the "ML&Co.
Registration Statement." Any registration statement filed by the Company
pursuant to Rule 462(b) of the 1933 Act Regulations is herein referred to as the
"ML&Co. Rule 462(b) Registration Statement," and after such filing the term
"ML&Co. Registration Statement" shall include the ML&Co. Rule 462(b)
Registration Statement. The final prospectus and final prospectus supplement
relating to the offering of the Securities, including
2
<PAGE>
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, but excluding any SunAmerica Prospectus (as defined below)
accompanying such final prospectus or prospectus supplement, as the case may be,
in the form first furnished to the Underwriter for use in connection with the
offering of the Securities are collectively referred to herein as the "ML&Co.
Prospectus." If Rule 434 is relied on, the term "ML&Co. Prospectus" shall refer
to the ML&Co. preliminary prospectus dated May ____, 1996 together with the
ML&Co. Term Sheet and all references in this Agreement to the date of the ML&Co.
Prospectus shall mean the date of the ML&Co. Term Sheet. For purposes of this
Agreement, all references to the ML&Co. Registration Statement, any ML&Co.
preliminary prospectus, the ML&Co. Prospectus or any ML&Co. Term Sheet or any
amendment or supplement to any of the foregoing shall be deemed to include the
copy filed with the Commission pursuant to its Electronic Data Gathering,
Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the ML&Co.
Registration Statement, any ML&Co. preliminary prospectus or the ML&Co.
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the ML&Co. Registration Statement, any ML&Co.
preliminary prospectus or the ML&Co. Prospectus, as the case may be, and shall
be deemed to exclude all financial statements and schedules and other
information which is included or incorporated by reference in any SunAmerica
preliminary prospectus or the SunAmerica Prospectus which shall accompany any
ML&Co. preliminary prospectus or the ML&Co. Prospectus; and all references in
this Agreement to amendments or supplements to the ML&Co. Registration
Statement, any ML&Co. preliminary prospectus or the ML&Co. Prospectus shall be
deemed to mean and include the filing of any document under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), which is incorporated by
reference in the ML&Co. Registration Statement, such ML&Co. preliminary
prospectus or the ML&Co. Prospectus, as the case may be.
SunAmerica has filed with the Commission a registration statement on Form
S-3 (No. 333-411) covering the registration of 3,450,000 shares of SunAmerica
Common Stock that may be delivered at maturity or upon redemption of the
Securities under the 1933 Act, including the related preliminary prospectus or
prospectuses. Each prospectus used before such registration statement became
effective is herein called a "SunAmerica preliminary prospectus." Such
registration statement, including the exhibits thereto, the schedules thereto,
if any, and the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the 1933 Act, at the time it became effective, is herein
called the "SunAmerica Registration Statement." Any registration statement filed
by SunAmerica pursuant to Rule 462(b) of the 1933 Act Regulations is herein
referred to as the "SunAmerica Rule 462(b) Registration Statement," and after
such filing the term "SunAmerica Registration Statement" shall include the
SunAmerica Rule 462(b) Registration Statement. The final prospectus, including
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriter for use in
connection with the offering of the Securities is herein called the "SunAmerica
Prospectus." For purposes of this Agreement, all references to the SunAmerica
Registration Statement, any SunAmerica preliminary prospectus, the SunAmerica
Prospectus or
3
<PAGE>
any amendment or supplement to any of the foregoing shall be deemed to include
the copy filed with the Commission pursuant to EDGAR.
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the SunAmerica
Registration Statement, any SunAmerica preliminary prospectus or the SunAmerica
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the SunAmerica Registration Statement, any
SunAmerica preliminary prospectus or the SunAmerica Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
SunAmerica Registration Statement, any SunAmerica preliminary prospectus or the
SunAmerica Prospectus shall be deemed to mean and include the filing of any
document under the 1934 Act which is incorporated by reference in the SunAmerica
Registration Statement, such SunAmerica preliminary prospectus or the SunAmerica
Prospectus, as the case may be.
Prior to the closing under this Agreement, the Company, Merrill Lynch
Capital Services, Inc., a wholly-owned subsidiary of the Company (the "ML&Co.
Subsidiary"), and the Selling Stockholder have entered into an agreement (the
"Stock Agreement") pursuant to which the Selling Stockholder is obligated to
deliver to the ML&Co. Subsidiary, on ___________, 1999, and on any date of
redemption of his obligations under the Stock Agreement, a specified number of
shares of SunAmerica stock, subject to the Selling Stockholder's option,
exercisable in its sole discretion, to satisfy his obligations under the Stock
Agreement by delivering immediately prior to the maturity or redemption a
specified amount of cash in lieu of such shares. Under the Indenture, the
Company has agreed to pay and discharge the STRYPES by delivering to the holders
thereof at maturity or on any redemption date the form of consideration that the
ML&Co. Subsidiary receives from the Selling Stockholder.
SECTION 1. Representations and Warranties.
------------------------------
(a) Representations and Warranties by the Company. The Company represents
and warrants to the Underwriter as of the date hereof, as of the Closing Time
referred to in Section 2(c) hereof, and as of each Date of Delivery (if any)
referred to in Section 2(b) hereof, and agrees with the Underwriter, as follows:
(i) Compliance with Registration Requirements. The Company meets the
-----------------------------------------
requirements for use of Form S-3 under the 1933 Act. Each of the ML&Co.
Registration Statement and any ML&Co. Rule 462(b) Registration Statement
has become effective under the 1933 Act and no stop order suspending the
effectiveness of the ML&Co. Registration Statement or any ML&Co. Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or, to the
knowledge of the Company, are contemplated by the Commission, and any
request on the part of the Commission for additional information has been
complied with.
At the respective times the ML&Co. Registration Statement, any ML&Co.
Rule 462(b) Registration Statement and any post-effective amendments
thereto became effective and at the Closing Time (and, if any Option
Securities are purchased, at the Date of
4
<PAGE>
Delivery), the ML&Co. Registration Statement, the ML&Co. Rule 462(b)
Registration Statement and any amendments and supplements thereto complied
and will comply in all material respects with the requirements of the 1933
Act and the 1933 Act Regulations and the Trust Indenture Act of 1939, as
amended (the "1939 Act"), and the rules and regulations of the Commission
under the 1939 Act (the "1939 Act Regulations"), and did not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading. Neither the ML&Co. Prospectus nor any amendments
or supplements thereto, at the time the ML&Co. Prospectus or any such
amendment or supplement was issued and at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
If Rule 434 is used, the Company will comply with the requirements of Rule
434. The representations and warranties in this subsection shall not apply
to (A) statements in or omissions from the ML&Co. Registration Statement or
ML&Co. Prospectus made in reliance upon and in conformity with information
furnished to the Company in writing by the Underwriter expressly for use in
the ML&Co. Registration Statement or ML&Co. Prospectus or (B) that part of
the ML&Co. Registration Statement that constitutes the Statement of
Eligibility on Form T-1 (the "Form T-1") under the 1939 Act of the Trustee.
Each ML&Co. preliminary prospectus and the prospectus relating to the
offering of the Securities filed as part of the ML&Co. Registration
Statement as originally filed or as part of any amendment thereto, or filed
pursuant to Rule 424 under the 1933 Act, complied when so filed in all
material respects with the 1933 Act Regulations and, if applicable, each
ML&Co. preliminary prospectus and the ML&Co. Prospectus delivered to the
Underwriter for use in connection with this offering was identical to the
electronically transmitted copies thereof filed with the Commission
pursuant to EDGAR, except to the extent permitted by Regulation S-T.
(ii) Incorporated Documents. The documents incorporated or deemed to
----------------------
be incorporated by reference in the ML&Co. Registration Statement and the
ML&Co. Prospectus, when they became effective or at the time they were or
hereafter are filed with the Commission, complied and will comply in all
material respects with the requirements of the 1933 Act and the 1933 Act
Regulations or the 1934 Act and the rules and regulations of the Commission
thereunder (the "1934 Act Regulations"), as applicable, and, when read
together with the other information in the ML&Co. Prospectus, at the time
the ML&Co. Registration Statement became effective, at the time the ML&Co.
Prospectus was issued and at the Closing Time (and, if any Option
Securities are purchased, at the Date of Delivery), did not and will not
contain an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading.
(iii) Independent Accountants. The accountants who certified the
-----------------------
financial statements and supporting schedules included in the ML&Co.
Registration Statement are independent public accountants as required by
the 1933 Act and the 1933 Act Regulations.
5
<PAGE>
(iv) Financial Statements. The financial statements included in the
--------------------
ML&Co. Registration Statement and the ML&Co. Prospectus, together with the
related schedules and notes, present fairly the financial position of the
Company and its consolidated subsidiaries at the dates indicated and the
statement of operations, stockholders' equity and cash flows of the Company
and its consolidated subsidiaries for the periods specified; said financial
statements have been prepared in conformity with generally accepted
accounting principles ("GAAP") applied on a consistent basis throughout the
periods involved. The supporting schedules, if any, included in the ML&Co.
Registration Statement present fairly in accordance with GAAP the
information required to be stated therein. The selected financial data and
the summary financial information included in the ML&Co. Prospectus present
fairly the information shown therein and have been compiled on a basis
consistent with that of the audited financial statements included in the
ML&Co. Registration Statement.
(v) No Material Adverse Change in Business. Since the respective
--------------------------------------
dates as of which information is given in the ML&Co. Registration Statement
and the ML&Co. Prospectus, except as otherwise stated therein, (A) there
has been no material adverse change in the condition, financial or
otherwise, or in the earnings, business affairs or business prospects of
the Company and its subsidiaries considered as one enterprise, whether or
not arising in the ordinary course of business (a "Material Adverse
Effect"), (B) there have been no transactions entered into by the Company
or any of its subsidiaries, other than those in the ordinary course of
business, which are material with respect to the Company and its
subsidiaries considered as one enterprise, and (C) except for regular
quarterly dividends on its outstanding common stock and regular dividends
on its outstanding preferred stock in amounts per share that are consistent
with past practice, there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock.
(vi) Good Standing of the Company. The Company has been duly
----------------------------
organized and is validly existing as a corporation in good standing under
the laws of the State of Delaware and has corporate power and authority to
own, lease and operate its properties and to conduct its business as
described in the ML&Co. Prospectus and to enter into and perform its
obligations under this Agreement and the Indenture; and the Company is duly
qualified as a foreign corporation to transact business and is in good
standing in each other jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or the
conduct of business, except where the failure so to qualify or to be in
good standing would not result in a Material Adverse Effect.
(vii) Good Standing of Subsidiaries. Each subsidiary of the Company
-----------------------------
which is a "significant subsidiary" as defined in Rule 1-02 of Regulation
S-X under the 1933 Act (each a "Subsidiary" and, collectively, the
"Subsidiaries") has been duly organized and is validly existing as a
corporation in good standing under the laws of the jurisdiction of its
incorporation, has corporate power and authority to own, lease and operate
its properties and to conduct its business as described in the ML&Co.
Prospectus and is duly qualified as a foreign corporation to transact
business and is in good standing in each jurisdiction in which such
qualification is required, whether by reason of the ownership or leasing of
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property or the conduct of business, except where the failure so to qualify
or to be in good standing would not result in a Material Adverse Effect;
except as otherwise disclosed in the ML&Co. Registration Statement, all of
the issued and outstanding capital stock of each such Subsidiary has been
duly authorized and validly issued and is fully paid and non-assessable and
is owned by the Company, directly or through subsidiaries, free and clear
of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity; and none of the outstanding shares of capital stock of any
Subsidiary was issued in violation of the preemptive or similar rights of
any securityholder of such Subsidiary. The only subsidiaries of the
Company are (A) the subsidiaries listed in Exhibit 21 to the Annual Report
on Form 10-K of the Company filed with the Commission under Section 13 of
the 1934 Act for the fiscal year ended December 29, 1995 and (B) certain
other subsidiaries which, considered in the aggregate as a single
subsidiary, do not constitute a "significant subsidiary" as defined in Rule
1-02 of Regulation S-X under the 1933 Act.
(viii) Authorization of Agreement. This Agreement has been duly
--------------------------
authorized, executed and delivered by the Company.
(ix) Authorization of the Indenture. The Indenture has been duly
------------------------------
authorized by the Company, duly qualified under the 1939 Act and duly
executed and delivered by the Company and (assuming the due authorization,
execution and delivery by the Trustee) will constitute a valid and binding
agreement of the Company, enforceable against the Company in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(x) Authorization of the Securities. The Securities have been duly
-------------------------------
authorized by the Company for issuance and sale to the Underwriter pursuant
to this Agreement and, at the Closing Time, will have been duly executed by
the Company and, when authenticated by the Trustee in the manner provided
for in the Indenture and delivered against payment of the purchase price
therefor as provided in this Agreement, will constitute valid and binding
obligations of the Company, enforceable against the Company in accordance
with their terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law), and will be
in the form contemplated by, and entitled to the benefits of, the
Indenture.
(xi) Authorization of the Stock Agreement. The Stock Agreement has
------------------------------------
been duly authorized by the Company and the ML&Co. Subsidiary and, at the
Closing Time, will have been duly executed and delivered by the Company and
the ML&Co. Subsidiary and (assuming the due authorization, execution and
delivery by the Selling Stockholder) will constitute a valid and binding
agreement of the Company and the ML&Co. Subsidiary,
7
<PAGE>
enforceable against the Company and the ML&Co. Subsidiary in accordance
with its terms, except as the enforcement thereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement
thereof is subject to general principles of equity (regardless of whether
enforcement is considered in a proceeding in equity or at law).
(xii) Description of Securities, Indenture and Stock Agreement. The
--------------------------------------------------------
Securities, the Indenture and the Stock Agreement will conform in all
material respects to the respective statements relating thereto contained
in the ML&Co. Prospectus and will be in substantially the respective forms
filed or incorporated by reference, as the case may be, as exhibits to the
ML&Co. Registration Statement.
(xiii) Absence of Defaults and Conflicts. Neither the Company nor
---------------------------------
any of its subsidiaries is in violation of its charter or by-laws or in
default in the performance or observance of any obligation, agreement,
covenant or condition contained in any contract, indenture, mortgage, deed
of trust, loan or credit agreement, note, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which it or any of them may be bound, or to which any of the property or
assets of the Company or any subsidiary is subject (collectively,
"Agreements and Instruments") except for such defaults that would not
result in a Material Adverse Effect; and (A) the execution, delivery and
performance by the Company of this Agreement, the Indenture and the
Securities and the consummation of the transactions contemplated herein,
therein and in the ML&Co. Registration Statement (including the issuance
and sale of the Securities and the delivery of shares of SunAmerica Common
Stock pursuant thereto and the use of the proceeds from the sale of the
Securities as described in the ML&Co. Prospectus under the caption "Use of
Proceeds") and compliance by the Company with its obligations hereunder and
under the Indenture and the Securities and (B) the execution, delivery and
performance by the ML&Co. Subsidiary of the Stock Agreement and the
consummation of the transactions contemplated therein and compliance by the
ML&Co. Subsidiary with its obligations under the Stock Agreement have been
duly authorized by all necessary corporate action and do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default or Repayment Event (as
defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any
subsidiary pursuant to, the Agreements and Instruments (except for such
conflicts, breaches or defaults or liens, charges or encumbrances that
would not result in a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or any subsidiary or, to the best of the Company's knowledge, any
applicable law, statute, rule, regulation, judgment, order, writ or decree
of any government, government instrumentality or court, domestic or
foreign, having jurisdiction over the Company or any subsidiary or any of
their assets, properties or operations. As used herein, a "Repayment
Event" means any event or condition which gives the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or
repayment of all or a portion of such indebtedness by the Company or any
subsidiary.
8
<PAGE>
(xiv) Absence of Labor Dispute. No labor dispute with the employees
------------------------
of the Company or any subsidiary exists or, to the knowledge of the
Company, is imminent which may reasonably be expected to result in a
Material Adverse Effect.
(xv) Absence of Proceedings. There is no action, suit, proceeding,
----------------------
inquiry or investigation before or brought by any court or governmental
agency or body, domestic or foreign, now pending, or, to the knowledge of
the Company, threatened, against or affecting the Company or any
subsidiary, which is required to be disclosed in the ML&Co. Registration
Statement (other than as disclosed therein), or which, individually or in
the aggregate, might reasonably be expected to result in a Material Adverse
Effect, or which, individually or in the aggregate, might reasonably be
expected to materially and adversely affect the properties or assets
thereof or the consummation of the transactions contemplated in this
Agreement, the Indenture or the Stock Agreement (including the issuance and
sale of the Securities and the delivery of shares of SunAmerica Common
Stock pursuant thereto) or the performance by the Company of its
obligations hereunder or thereunder or the performance by the ML&Co.
Subsidiary of its obligations under the Stock Agreement; the aggregate of
all pending legal or governmental proceedings to which the Company or any
subsidiary is a party or of which any of their respective property or
assets is the subject which are not described in the ML&Co. Registration
Statement, including ordinary routine litigation incidental to the
business, could not reasonably be expected to result in a Material Adverse
Effect.
(xvi) Exhibits. There are no contracts or documents which are of a
--------
character required to be described in the ML&Co. Registration Statement,
the ML&Co. Prospectus or the documents incorporated by reference therein or
to be filed as exhibits thereto which have not been so described or filed
as required.
(xvii) Possession of Intellectual Property. The Company and its
-----------------------------------
subsidiaries own or possess, or can acquire on reasonable terms, adequate
trademarks, service marks, trade names and other intellectual property
(collectively, "Intellectual Property") necessary to carry on the business
now operated by them, and neither the Company nor any of its subsidiaries
has received any notice or is otherwise aware of any infringement of or
conflict with asserted rights of others with respect to any Intellectual
Property or of any facts or circumstances which would render any
Intellectual Property invalid or inadequate to protect the interest of the
Company or any of its subsidiaries therein, and which infringement or
conflict (if the subject of any unfavorable decision, ruling or finding) or
invalidity or inadequacy, singly or in the aggregate, would result in a
Material Adverse Effect.
(xviii) Absence of Further Requirements. No filing with, or
-------------------------------
authorization, approval, consent, license, order, registration,
qualification or decree of, any court or governmental authority or agency
is necessary or required (A) for the performance by the Company of its
obligations under this Agreement or the Stock Agreement or the consummation
by the Company of the transactions contemplated herein or therein
(including the issuance and sale of the Securities and the delivery of
shares of SunAmerica Common Stock pursuant thereto) or for the due
execution, delivery or performance of the Indenture by the Company or (B)
for the performance by the ML&Co.
9
<PAGE>
Subsidiary of its obligations under the Stock Agreement or the consummation
by the ML&Co. Subsidiary of the transactions contemplated therein, except,
in each case, such as have been already obtained or as may be required
under the 1933 Act or the 1933 Act Regulations or state securities laws and
except for the qualification of the Indenture under the 1939 Act.
(xix) Possession of Licenses and Permits. The Company and its
----------------------------------
subsidiaries own or possess such permits, licenses, approvals, consents and
other authorizations (collectively, "Governmental Licenses") issued by the
appropriate federal, state, local or foreign regulatory agencies or bodies
necessary to conduct the business now operated by them; the Company and its
subsidiaries are in compliance with the terms and conditions of all such
Governmental Licenses, except where the failure so to comply would not,
singly or in the aggregate, have a Material Adverse Effect; all of the
Governmental Licenses are valid and in full force and effect, except when
the invalidity of such Governmental Licenses or the failure of such
Governmental Licenses to be in full force and effect would not have a
Material Adverse Effect; and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the
revocation or modification of any such Governmental Licenses which, singly
or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a Material Adverse Effect.
(xx) Title to Property. The Company and its subsidiaries have good
-----------------
and marketable title to all real property owned by the Company and its
subsidiaries and good title to all other properties owned by them, in each
case, free and clear of all mortgages, pledges, liens, security interests,
claims, restrictions or encumbrances of any kind except such as (A) are
described in the ML&Co. Prospectus or (B) do not, singly or in the
aggregate, materially affect the value of such property and do not
interfere with the use made and proposed to be made of such property by the
Company or any of its subsidiaries; and all of the leases and subleases
material to the business of the Company and its subsidiaries, considered as
one enterprise, and under which the Company or any of its subsidiaries
holds properties described in the ML&Co. Prospectus, are in full force and
effect, and neither the Company nor any subsidiary has any notice of any
material claim of any sort that has been asserted by anyone adverse to the
rights of the Company or any subsidiary under any of the leases or
subleases mentioned above, or affecting or questioning the rights of the
Company or such subsidiary to the continued possession of the leased or
subleased premises under any such lease or sublease.
(xxi) Compliance with Cuba Act. The Company has complied with, and
------------------------
is and will be in compliance with, the provisions of that certain Florida
act relating to disclosure of doing business with Cuba, codified as Section
517.075 of the Florida statutes, and the rules and regulation thereunder
(collectively, the "Cuba Act") or is exempt therefrom.
(b) Officer's Certificates. Any certificate signed by any officer of the
Company or any of its subsidiaries delivered to the Underwriter shall be deemed
a representation and warranty by the Company to the Underwriter as to the
matters covered thereby.
10
<PAGE>
SECTION 2. Sale and Delivery to Underwriter; Closing.
-----------------------------------------
(a) Initial Securities. On the basis of the representations and
warranties herein contained and subject to the terms and conditions herein set
forth, the Company agrees to sell to the Underwriter, and the Underwriter agrees
to purchase from the Company, at the price per STRYPES set forth in Schedule A,
the Initial Securities.
(b) Option Securities. In addition, on the basis of the representations
and warranties herein contained and subject to the terms and conditions herein
set forth, the Company hereby grants an option to the Underwriter to purchase up
to an additional 450,000 STRYPES at the price per STRYPES set forth in Schedule
A. The option hereby granted will expire 30 days after the date hereof and may
be exercised in whole or in part from time to time only for the purpose of
covering over-allotments which may be made in connection with the offering and
distribution of the Initial Securities upon notice by the Underwriter to the
Company setting forth the number of Option Securities as to which the
Underwriter is then exercising the option and the time and date of payment and
delivery for such Option Securities. Any such time and date of delivery (a
"Date of Delivery") shall be determined by the Underwriter, but shall not be
later than seven full business days after the exercise of said option, nor in
any event prior to the Closing Time, as hereinafter defined.
(c) Payment. Payment of the purchase price for, and delivery of
certificates for, the Initial Securities shall be made at the offices of Brown &
Wood, One World Trade Center, New York, New York 10048, or at such other place
as shall be agreed upon by the Underwriter and the Company, at 10:00 A.M.
(Eastern time) on the third (fourth, if the pricing occurs after 4:30 P.M.
(Eastern time) on any given day) business day after the date hereof, or such
other time not later than ten business days after such date as shall be agreed
upon by the Underwriter and the Company (such time and date of payment and
delivery being herein called "Closing Time"). In addition, in the event that
any or all of the Option Securities are purchased by the Underwriter, payment of
the purchase price for, and delivery of certificates for, such Option Securities
shall be made at the above-mentioned offices, or at such other place as shall be
agreed upon by the Underwriter and the Company, on each Date of Delivery as
specified in the notice from the Underwriter to the Company.
Payment shall be made to the Company by wire transfer of immediately
available funds to a bank account designated by the Company, against delivery to
the Underwriter of certificates for the Securities to be purchased by it.
(d) Denominations; Registration. Certificates for the Initial Securities
and the Option Securities, if any, shall be in such denominations and registered
in such names as the Underwriter may request in writing at least one full
business day before the Closing Time or the relevant Date of Delivery, as the
case may be. The certificates for the Initial Securities and the Option
Securities, if any, will be made available for examination and packaging by the
Underwriter in The City of New York not later than 10:00 A.M. (Eastern time) on
the business day prior to the Closing Time or the relevant Date of Delivery, as
the case may be.
11
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SECTION 3. Covenants of the Company with the Underwriter.
---------------------------------------------
(a) Compliance with Securities Regulations and Commission Requests. The
Company, subject to Section 3(a)(ii) hereof, will comply with the requirements
of Rule 430A or Rule 434, as applicable, and will notify the Underwriter
immediately, and confirm the notice in writing, (A) when any post-effective
amendment to the ML&Co. Registration Statement shall become effective, or any
supplement to the ML&Co. Prospectus or any amended ML&Co. Prospectus shall have
been filed, (B) of the receipt of any comments from the Commission, (C) of any
request by the Commission for any amendment to the ML&Co. Registration Statement
or any amendment or supplement to the ML&Co. Prospectus or for additional
information, and (D) of the issuance by the Commission of any stop order
suspending the effectiveness of the ML&Co. Registration Statement or of any
order preventing or suspending the use of any ML&Co. preliminary prospectus, or
of the suspension of the qualification of the Securities for offering or sale in
any jurisdiction, or of the initiation or threatening of any proceedings for any
of such purposes. The Company will promptly effect the filings necessary
pursuant to Rule 424(b) and will take such steps as it deems necessary to
ascertain promptly whether the form of prospectus transmitted for filing under
Rule 424(b) was received for filing by the Commission and, in the event that it
was not, it will promptly file such prospectus. The Company will use its best
efforts to prevent the issuance of any stop order and, if any stop order is
issued, to obtain the lifting thereof at the earliest possible moment.
(b) Filing of Amendments. The Company will give the Underwriter notice
of its intention to file or prepare any amendment to the ML&Co. Registration
Statement (including any filing under Rule 462(b)), any ML&Co. Term Sheet or any
amendment, supplement or revision to either the prospectus relating to the
offering of the Securities included in the ML&Co. Registration Statement at the
time it became effective or to the ML&Co. Prospectus, whether pursuant to the
1933 Act, the 1934 Act or otherwise, will furnish the Underwriter with copies of
any such documents a reasonable amount of time prior to such proposed filing or
use, as the case may be, and will not file or use any such document to which the
Underwriter or counsel for the Underwriter shall reasonably object.
(c) Delivery of ML&Co. Registration Statements. The Company has furnished
or will deliver to the Underwriter, without charge, and to the Selling
Stockholder and counsel for the Selling Stockholder signed copies of the ML&Co.
Registration Statement as originally filed and of each amendment thereto
(including exhibits filed therewith or incorporated by reference therein and
documents incorporated or deemed to be incorporated by reference therein) and
signed copies of all consents and certificates of experts. If applicable, the
copies of the ML&Co. Registration Statement and each amendment thereto furnished
to the Underwriter and the Selling Stockholder will be identical to the
electronically transmitted copies thereof filed with the Commission pursuant to
EDGAR, except to the extent permitted by Regulation S-T.
(d) Delivery of ML&Co. Prospectuses. The Company has delivered to the
Underwriter, without charge, as many copies of each ML&Co. preliminary
prospectus as the Underwriter reasonably requested, and the Company hereby
consents to the use of such copies for purposes permitted by the 1933 Act. The
Company will furnish to the Underwriter, without charge, during the period when
the ML&Co. Prospectus is required to be delivered under the
12
<PAGE>
1933 Act or the 1934 Act, such number of copies of the ML&Co. Prospectus (as
amended or supplemented) as the Underwriter may reasonably request. If
applicable, the ML&Co. Prospectus and any amendments or supplements thereto
furnished to the Underwriter will be identical to the electronically transmitted
copies thereof filed with the Commission pursuant to EDGAR, except to the extent
permitted by Regulation S-T.
(e) Continued Compliance with Securities Laws. The Company will comply
with the 1933 Act and the 1933 Act Regulations and the 1934 Act and the 1934 Act
Regulations so as to permit the completion of the distribution of the Securities
as contemplated in this Agreement and in the ML&Co. Prospectus. If at any time
when a prospectus is required by the 1933 Act to be delivered in connection with
sales of the Securities, any event shall occur or condition shall exist as a
result of which it is necessary, in the reasonable opinion of counsel for the
Underwriter or for the Company, to amend the ML&Co. Registration Statement or
amend or supplement the ML&Co. Prospectus in order that the ML&Co. Prospectus
will not include any untrue statements of a material fact or omit to state a
material fact necessary in order to make the statements therein not misleading
in the light of the circumstances existing at the time it is delivered to a
purchaser, or if it shall be necessary, in the reasonable opinion of either such
counsel, at any such time to amend the ML&Co. Registration Statement or amend or
supplement the ML&Co. Prospectus in order to comply with the requirements of the
1933 Act or the 1933 Act Regulations, the Company will promptly prepare and file
with the Commission, subject to Section 3(a)(ii) hereof, such amendment or
supplement as may be necessary to correct such statement or omission or to make
the ML&Co. Registration Statement or the ML&Co. Prospectus comply with such
requirements, and the Company will furnish to the Underwriter such number of
copies of such amendment or supplement as the Underwriter may reasonably
request.
(f) Blue Sky Qualifications. The Company will use its best efforts, in
cooperation with the Underwriter, to qualify the Securities for offering and
sale under the applicable securities laws of such states and other jurisdictions
of the United States as the Underwriter may designate and to maintain such
qualifications in effect for a period of not less than one year from the later
of the effective date of the ML&Co. Registration Statement and any ML&Co. Rule
462(b) Registration Statement; provided, however, that the Company shall not be
obligated to file any general consent to service of process or to qualify as a
foreign corporation or as a dealer in securities in any jurisdiction in which it
is not so qualified or to subject itself to taxation in respect of doing
business in any jurisdiction in which it is not otherwise so subject. In each
jurisdiction in which the Securities have been so qualified, the Company will
file such statements and reports as may be required by the laws of such
jurisdiction to continue such qualification in effect for a period of not less
than one year from the effective date of the ML&Co. Registration Statement and
any ML&Co. Rule 462(b) Registration Statement.
(g) Rule 158. The Company will timely file such reports pursuant to the
1934 Act as are necessary in order to make generally available to its
securityholders as soon as practicable an earnings statement for the purposes
of, and to provide the benefits contemplated by, the last paragraph of Section
11(a) of the 1933 Act.
(h) Use of Proceeds. The Company will use the net proceeds received by it
from the sale of the Securities in the manner specified in the ML&Co. Prospectus
under "Use of Proceeds."
13
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(i) Listing. The Company will use its best efforts to effect the listing
of the Securities on the New York Stock Exchange.
(j) Reporting Requirements. The Company, during the period when the
ML&Co. Prospectus is required to be delivered under the 1933 Act or the 1934
Act, will file all documents required to be filed with the Commission pursuant
to the 1934 Act within the time periods required by the 1934 Act and the 1934
Act Regulations.
SECTION 4. Payment of Expenses.
-------------------
(a) Expenses Payable by the Company. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the preparation, printing and filing of the ML&Co. Registration Statement
(including financial statements and exhibits) as originally filed and of each
amendment thereto, (ii) the preparation, printing and delivery to the
Underwriter of this Agreement, the Indenture, the Stock Agreement and such other
documents as may be required in connection with the offering, purchase, sale,
issuance or delivery of the Securities, (iii) the preparation, issuance and
delivery of the certificates for the Securities to the Underwriter, (iv) the
fees and disbursements of the Company's counsel, accountants and other advisors,
(v) the qualification of the Securities under securities laws in accordance with
the provisions of Section 3(a)(vi) hereof, including filing fees and the
reasonable fees and disbursements of the Company's counsel in connection
therewith and in connection with the preparation of the Blue Sky Survey and any
supplement thereto, (vi) the printing and delivery to the Underwriter of copies
of each ML&Co. preliminary prospectus, any ML&Co. Term Sheets and of the ML&Co.
Prospectus and any amendments or supplements thereto, (vii) the preparation,
printing and delivery to the Underwriter of copies of the Blue Sky Survey and
any supplement thereto, (viii) the fees and expenses of the Trustee, including
the fees and disbursements of counsel for the Trustee in connection with the
Indenture and the Securities, (ix) any fees payable in connection with the
rating of the Securities, (x) the filing fees incident to, and the reasonable
fees and disbursements of counsel to the Underwriter in connection with, the
review by the National Association of Securities Dealers, Inc. (the "NASD") of
the terms of the sale of the Securities and (xi) the fees and expenses incurred
in connection with the listing of the Securities on the New York Stock Exchange.
(b) Termination of Agreement. If this Agreement is terminated by the
Underwriter in accordance with the provisions of Section 5 or Section 9(a)(i)
hereof, the Company shall reimburse the Underwriter for all of its out-of-pocket
expenses, including the reasonable fees and disbursements of counsel for the
Underwriter.
SECTION 5. Conditions.
----------
(a) Conditions of Underwriter's Obligations. The obligations of the
Underwriter hereunder are subject to the accuracy of the representations and
warranties of the Company contained in Section 1(a) hereof, to the accuracy of
the representations and warranties of SunAmerica and the Selling Stockholder
contained in Sections 1(A) and 1(B), respectively, in the Registration
Agreement, to the accuracy of the statements in certificates of any officer of
the Company, SunAmerica or the Selling Stockholder delivered pursuant to the
provisions hereof,
14
<PAGE>
to the performance by the Company of its covenants and other obligations
hereunder, to the performance by SunAmerica and the Selling Stockholder of its
and his covenants and other obligations under the Registration Agreement, and to
the following further conditions:
(1) Effectiveness of ML&Co. Registration Statement. The ML&Co.
Registration Statement, including any ML&Co. Rule 462(b) Registration
Statement, has become effective and at Closing Time no stop order
suspending the effectiveness of the ML&Co. Registration Statement shall
have been issued under the 1933 Act or proceedings therefor initiated or
threatened by the Commission, and any request on the part of the Commission
for additional information shall have been complied with to the reasonable
satisfaction of counsel to the Underwriter. A prospectus containing the
Rule 430A Information shall have been filed with the Commission in
accordance with Rule 424(b) (or a post-effective amendment providing such
information shall have been filed and declared effective in accordance with
the requirements of Rule 430A) or, if the Company has elected to rely upon
Rule 434, an ML&Co. Term Sheet shall have been filed with the Commission in
accordance with Rule 424(b).
(2) Effectiveness of SunAmerica Registration Statement. The
SunAmerica Registration Statement, including any SunAmerica Rule 462(b)
Registration Statement, has become effective and at Closing Time no stop
order suspending the effectiveness of the SunAmerica Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(3) Opinion of Counsel for the Company. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Brown & Wood, counsel for the Company, in form and substance
satisfactory to the Underwriter, to the effect set forth in Exhibit A
hereto and to such further effect as the Underwriter may reasonably
request.
(4) Opinion of Counsel for the Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom, counsel for the Underwriter,
in form and substance satisfactory to the Underwriter, to the effect set
forth in Exhibit B hereto and to such further effect as the Underwriter may
reasonably request.
(5) Opinion of Maryland Counsel for SunAmerica. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Piper & Marbury L.L.P., Maryland counsel for SunAmerica, in form
and substance satisfactory to the Underwriter, to the effect set forth in
Exhibit C hereto.
(6) Opinion of General Counsel for SunAmerica. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Susan L. Harris, Senior Vice President, General Counsel--Corporate
Affairs and Secretary of SunAmerica, in form and substance satisfactory to
the Underwriter, to the effect set forth in Exhibit D hereto.
15
<PAGE>
(7) Opinion of Special Counsel for SunAmerica and Counsel for the
Selling Stockholder. At Closing Time, the Underwriter shall have received
the favorable opinion, dated as of Closing Time, of Davis Polk & Wardwell,
special counsel for SunAmerica and counsel for the Selling Stockholder, in
form and substance satisfactory to the Underwriter, to the effect set forth
in Exhibit E hereto.
(8) Company Officers' Certificate. At Closing Time, there shall not
have been, since the date hereof or since the respective dates as of which
information is given in the ML&Co. Prospectus, any material adverse change
in the condition, financial or otherwise, or in the earnings, business
affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course
of business, and the Underwriter shall have received a certificate of the
President or a Vice President of the Company and of the chief financial or
chief accounting officer of the Company, dated as of Closing Time, to the
effect that (i) there has been no such material adverse change, (ii) the
representations and warranties in Section 1(a) hereof are true and correct
with the same force and effect as though expressly made at and as of
Closing Time, (iii) the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied at or
prior to Closing Time, and (iv) no stop order suspending the effectiveness
of the ML&Co. Registration Statement has been issued and no proceedings for
that purpose have been instituted or are pending or are contemplated by the
Commission.
(9) SunAmerica Officer's Certificate. At Closing Time, the
Underwriter shall have received a certificate, signed by an executive
officer of SunAmerica and dated as of Closing Time, to the effect that (a)
no stop order suspending the effectiveness of the SunAmerica Registration
Statement is in effect, and no proceedings for such purpose are pending
before or threatened by the Commission, (b) subsequent to the execution and
delivery of this Agreement and prior to Closing Time, there shall not have
occurred any material adverse change, or any development involving a
prospective material adverse change, in the condition, financial or
otherwise, or in the earnings, business or operations, of SunAmerica and
its subsidiaries, taken as a whole, from that set forth in the SunAmerica
Prospectus, and (c) the representations and warranties of SunAmerica
contained in the Registration Agreement are true and correct as of Closing
Time and that SunAmerica has complied with all of the agreements and
satisfied all of the obligations on its part to be performed or satisfied
on or before Closing Time pursuant to the Registration Agreement. The
officer signing and delivering such certificate may rely upon the best of
his or her knowledge as to proceedings threatened.
(10) The Selling Stockholder's Certificate. At Closing Time, the
Underwriter shall have received a certificate of the Selling Stockholder,
dated as of Closing Time, in which the Selling Stockholder shall state that
(i) the representations and warranties of the Selling Stockholder contained
in Section 1(b) hereof are true and correct with the same force and effect
as though expressly made at and as of Closing Time and (ii) the Selling
Stockholder has complied with all agreements and satisfied all conditions
on its part to be performed or satisfied at or prior to Closing Time.
16
<PAGE>
(11) Company Accountant's Comfort Letter. At the time of the
execution of this Agreement, the Underwriter shall have received from
Deloitte & Touche LLP a letter dated such date, in form and substance
satisfactory to the Underwriter, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to
underwriters in accordance with the American Institute of Certified Public
Accountants standards with respect to the financial statements and certain
financial information contained in or incorporated by reference into the
ML&Co. Registration Statement and the ML&Co. Prospectus.
(12) SunAmerica Accountant's Comfort Letters. At the time of the
execution of this Agreement, the Underwriter shall have received from
SunAmerica's independent public accountants a letter dated such date, in
form and substance satisfactory to the Underwriter, containing statements
and information of the type ordinarily included in accountants' "comfort
letters" to underwriters in accordance with the American Institute of
Certified Public Accountants standards, with respect to the financial
statements and certain financial information contained in or incorporated
by reference into the SunAmerica Registration Statement and the SunAmerica
Prospectus.
(13) Company Bring-down Comfort Letter. At Closing Time, the
Underwriter shall have received from Deloitte & Touche LLP a letter, dated
as of Closing Time, to the effect that they reaffirm the statements made in
the letter furnished by them pursuant to Section 5(a)(11) hereof, except
that the "specified date" referred to shall be a date not more than three
business days prior to Closing Time.
(14) SunAmerica Bring-down Comfort Letter. At Closing Time, the
Underwriter shall have received from SunAmerica's independent public
accounts a letter, dated as of Closing Time, to the effect that they
reaffirm the statements made in the letter furnished by them pursuant to
Section 5(a)(12) hereof, except that the "specified date" referred to shall
be a date not more than three business days prior to Closing Time.
(15) Maintenance of Rating. Since the date of this Agreement, there
shall not have occurred a downgrading in the rating assigned to any of the
Company's securities by any "nationally recognized statistical rating
agency", as that term is defined by the Commission for purposes of Rule
436(g)(2) under the 1933 Act, and no such organization shall have publicly
announced that it has under surveillance or review its rating of any of the
Company's securities.
(16) Approval of Listing. At Closing Time, the Securities shall have
been approved for listing on the New York Stock Exchange, subject only to
official notice of issuance.
(17) No Objection. The NASD shall not have raised any objection with
respect to the fairness and reasonableness of the underwriting terms and
arrangements.
(18) Conditions to Purchase of Option Securities. In the event that
the Underwriter exercises its option provided in Section 2(b) hereof to
purchase all or any
17
<PAGE>
portion of the Option Securities, the representations and warranties of the
Company contained herein, the representations and warranties of SunAmerica
and the Selling Stockholder contained in the Registration Agreement and the
statements in any certificates furnished by the Company, SunAmerica or the
Selling Stockholder hereunder shall be true and correct as of each Date of
Delivery and, at the relevant Date of Delivery, the Underwriter shall have
received:
(A) Company Officers' Certificate. A certificate, dated such
-----------------------------
Date of Delivery, of the President or a Vice President of the Company
and of the chief financial or chief accounting officer of the Company
confirming that the certificate delivered at Closing Time pursuant to
Section 5(a)(8) hereof is true and correct as of such Date of
Delivery.
(B) SunAmerica Officer's Certificate. A certificate, dated such
--------------------------------
Date of Delivery, of an executive officer of SunAmerica confirming
that the certificate delivered at Closing Time pursuant to Section
5(a)(9) hereof is true and correct as of such Date of Delivery.
(C) The Selling Stockholder's Certificate. A certificate, dated
-------------------------------------
such Date of Delivery, of the Selling Stockholder confirming that the
certificate delivered at Closing Time pursuant to Section 5(a)(10)
hereof is true and correct as of such Date of Delivery.
(D) Opinion of Counsel for the Company. The favorable opinion
----------------------------------
of Brown & Wood, counsel for the Company, in form and substance
reasonably satisfactory to the Underwriter, dated such Date of
Delivery, relating to the Option Securities to be purchased on such
Date of Delivery and otherwise to the same effect as the opinion
required by Section 5(a)(3) hereof.
(E) Opinion of Counsel for the Underwriter. The favorable
--------------------------------------
opinion of Skadden, Arps, Slate, Meagher & Flom, counsel for the
Underwriter, in form and substance satisfactory to the Underwriter,
dated such Date of Delivery, relating to the Option Securities to be
purchased on such Date of Delivery and otherwise to the same effect as
the opinion required by Section 5(a)(4) hereof.
(F) Opinion of Maryland Counsel for SunAmerica. The favorable
------------------------------------------
opinion of Piper & Marbury L.L.P., Maryland counsel for SunAmerica, in
form and substance satisfactory to the Underwriter, dated such Date of
Delivery, to the same effect as the opinion required by Section
5(a)(5) hereof.
(G) Opinion of General Counsel for SunAmerica. The favorable
-----------------------------------------
opinion of Susan L. Harris, Senior Vice President, General Counsel--
Corporate Affairs and Secretary of SunAmerica, in form and substance
satisfactory to the Underwriter, dated such Date of Delivery, to the
same effect as the opinion required by Section 5(a)(6) hereof.
18
<PAGE>
(H) Opinion of Special Counsel for SunAmerica and Counsel for
---------------------------------------------------------
the Selling Stockholder. The favorable opinion of Davis Polk &
-----------------------
Wardwell, special counsel for SunAmerica and counsel for the Selling
Stockholder, in form and substance satisfactory to the Underwriter,
dated such Date of Delivery, to the same effect as the opinion
required by Section 5(a)(7) hereof.
(I) Company Bring-down Comfort Letter. A letter from Deloitte &
---------------------------------
Touche LLP, in form and substance satisfactory to the Underwriter and
dated such Date of Delivery, substantially the same in form and
substance as the letter furnished to the Underwriter pursuant to
Section 5(a)(13) hereof, except that the "specified date" in the
letter furnished pursuant to this paragraph shall be a date not more
than five days prior to such Date of Delivery.
(J) SunAmerica Bring-down Comfort Letter. A letter from
------------------------------------
SunAmerica's independent public accountants, in form and substance
satisfactory to the Underwriter and dated such Date of Delivery, to
the effect that they reaffirm the statements made in the letter
furnished to the Underwriter pursuant to Section 5(a)(14) hereof,
except that the "specified date" in the letter furnished pursuant to
this paragraph shall be a date not more than five days prior to such
Date of Delivery.
(19) Additional Documents. At Closing Time and at each Date of
Delivery, counsel for the Underwriter shall have been furnished with such
documents and opinions as they may require for the purpose of enabling them
to pass upon the issuance and sale of the Securities as herein
contemplated, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the conditions,
contained herein or in the Registration Agreement; and all proceedings
taken by the Company in connection with the issuance and sale of the
Securities as herein contemplated shall be satisfactory in form and
substance to the Underwriter and counsel for the Underwriter.
(b) Conditions of the Company's Obligations. The obligations of the
Company hereunder are subject to the accuracy of the representations and
warranties of SunAmerica and the Selling Stockholder contained in the
Registration Agreement, to the accuracy of the statements in certificates of any
officer of SunAmerica or the Selling Stockholder delivered pursuant to the
provisions hereof, to the performance by SunAmerica and the Selling Stockholder
of its and his covenants and other obligations under the Registration Agreement,
and to the following further conditions:
(1) Effectiveness of SunAmerica Registration Statement. The
SunAmerica Registration Statement, including any SunAmerica Rule 462(b)
Registration Statement, has become effective and at Closing Time no stop
order suspending the effectiveness of the SunAmerica Registration Statement
shall have been issued under the 1933 Act or proceedings therefor initiated
or threatened by the Commission.
(2) Opinion of Counsel for the Company. At Closing Time, the Company
shall have received the favorable opinion, dated as of Closing Time, of
Brown & Wood,
19
<PAGE>
counsel for the Company, to the same effect as the opinion required by
Section 5(a)(3) hereof.
(3) Opinion of Counsel for the Underwriter. At Closing Time, the
Underwriter shall have received the favorable opinion, dated as of Closing
Time, of Skadden, Arps, Slate, Meagher & Flom, counsel for the Underwriter,
to the same effect as the opinion required by Section 5(a)(4) hereof.
(4) Opinion of Maryland Counsel for SunAmerica. At Closing Time, the
Company shall have received the favorable opinion, dated as of Closing
Time, of Piper & Marbury L.L.P., Maryland counsel for SunAmerica, to the
same effect as the opinion required by Section 5(a)(5) hereof.
(5) Opinion of General Counsel for SunAmerica. At Closing Time, the
Company shall have received the favorable opinion, dated as of Closing
Time, of Susan L. Harris, Senior Vice President, General Counsel--Corporate
Affairs and Secretary of SunAmerica, to the same effect as the opinion
required by Section 5(a)(6) hereof.
(6) Opinion of Special Counsel for SunAmerica and Counsel for the
Selling Stockholder. At Closing Time, the Company shall have received the
favorable opinion, dated as of Closing Time, of Davis Polk & Wardwell,
special counsel for SunAmerica and counsel for the Selling Stockholder, to
the same effect as the opinion required by Section 5(a)(7) hereof.
(7) SunAmerica Officer's Certificate. At Closing Time, the Company
shall have received a certificate of an executive officer of SunAmerica,
dated as of Closing Time, to the same effect as the certificate delivered
to the Underwriter pursuant to Section 5(a)(9) hereof.
(8) The Selling Stockholder's Certificate. At Closing Time, the
Company shall have received a certificate of the Selling Stockholder, dated
as of Closing Time, to the same effect as the certificate delivered to the
Underwriter pursuant to Section 5(a)(10) hereof.
(9) SunAmerica Accountant's Comfort Letters. At the time of the
execution of this Agreement, the Company shall have received from
SunAmerica's independent public accountants a letter dated such date, in
form and substance satisfactory to the Company, substantially the same in
form and substance as the letter delivered to the Underwriter pursuant to
Section 5(a)(12) hereof.
(10) SunAmerica Bring-down Comfort Letter. At Closing Time, the
Company shall have received from SunAmerica's independent public
accountants a letter, dated as of Closing Time, in form and substance
satisfactory to the Company, and to the effect that they reaffirm the
statements made in the letter delivered to the Underwriter pursuant to
Section 5(a)(14) hereof.
20
<PAGE>
(11) Conditions to Sale of Option Securities. In the event that the
Underwriter exercises its option provided in Section 2(b) hereof to
purchase all or any portion of the Option Securities, the representations
and warranties of SunAmerica and the Selling Stockholder contained in the
Registration Agreement and the statements in any certificates furnished by
SunAmerica or the Selling Stockholder hereunder shall be true and correct
as of each Date of Delivery and, at the relevant Date of Delivery, the
Company shall have received:
(A) SunAmerica Officer's Certificate. A certificate, dated such
--------------------------------
Date of Delivery, of an executive officer of SunAmerica confirming
that the certificate delivered at Closing Time pursuant to Section
5(b)(7) hereof is true and correct as of such Date of Delivery.
(B) The Selling Stockholder's Certificate. A certificate, dated
-------------------------------------
such Date of Delivery, of the Selling Stockholder confirming that the
certificate delivered at Closing Time pursuant to Section 5(b)(8)
hereof is true and correct as of such Date of Delivery.
(C) Opinion of Counsel for the Company. The favorable opinion,
----------------------------------
dated such Date of Delivery, of Brown & Wood, counsel for the Company,
to the same effect as the opinion required by Section 5(a)(18)(D)
hereof.
(D) Opinion of Counsel for the Underwriter. The favorable
--------------------------------------
opinion, dated such Date of Delivery, of Skadden, Arps, Slate, Meagher
& Flom, counsel for the Underwriter, to the same effect as the opinion
required by Section 5(a)(18)(E) hereof.
(E) Opinion of Maryland Counsel for SunAmerica. The favorable
------------------------------------------
opinion, dated such Date of Delivery, of Piper & Marbury L.L.P.,
Maryland counsel for SunAmerica, to the same effect as the opinion
required by Section 5(a)(18)(F) hereof.
(F) Opinion of General Counsel for SunAmerica. The favorable
-----------------------------------------
opinion, dated such Date of Delivery, of Susan L. Harris, Senior Vice
President, General Counsel--Corporate Affairs and Secretary of
SunAmerica, to the same effect as the opinion required by Section
5(a)(18)(G) hereof.
(G) Opinion of Special Counsel for SunAmerica and Counsel for
---------------------------------------------------------
the Selling Stockholder. The favorable opinion, dated such Date of
-----------------------
Delivery, of Davis Polk & Wardwell, special counsel for SunAmerica and
counsel for the Selling Stockholder, dated such Date of Delivery, to
the same effect as the opinion required by Section 5(a)(18)(H) hereof.
(H) SunAmerica Bring-down Comfort Letter. A letter from
------------------------------------
SunAmerica's independent public accountants, in form and substance
satisfactory to the Company and dated such Date of Delivery, to the
effect that they reaffirm
21
<PAGE>
the statements made in the letter furnished to the Underwriter
pursuant to Section 5(a)(18)(J) hereof.
(c) Termination of Agreement. If any condition specified in subsection
(a) of this Section shall not have been fulfilled when and as required to be
fulfilled, this Agreement, or, in the case of any condition to the purchase of
Option Securities on a Date of Delivery which is after the Closing Time, the
obligations of the Underwriter to purchase the relevant Option Securities, may
be terminated by the Underwriter by notice to the Company at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect. If any condition specified
in subsection (b) of this Section shall not have been fulfilled when and as
required to be fulfilled, this Agreement, or, in the case of any condition to
the sale of Option Securities on a Date of Delivery which is after the Closing
Time, the obligations of the Company to sell the relevant Option Securities, may
be terminated by the Company by notice to the Underwriter at any time at or
prior to Closing Time or such Date of Delivery, as the case may be, and such
termination shall be without liability of any party to any other party except as
provided in Section 4 and except that Sections 1, 6, 7 and 8 shall survive any
such termination and remain in full force and effect.
SECTION 6. Indemnification.
---------------
(a) Indemnification of the Underwriter by the Company. The Company agrees
to indemnify and hold harmless the Underwriter and each person, if any, who
controls the Underwriter within the meaning of Section 15 of the 1933 Act or
Section 20 of the 1934 Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the ML&Co. Registration
Statement (or any amendment thereto), including the Rule 430A Information
and the Rule 434 Information, if applicable, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading or arising out of
any untrue statement or alleged untrue statement of a material fact
contained in any ML&Co. preliminary prospectus or the ML&Co. Prospectus
(or any amendment or supplement thereto), or the omission or alleged
omission therefrom of a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, referred to under (i) above; provided
that (subject to Section 6(d) below) any such settlement is effected with
the written consent of the Company; and
22
<PAGE>
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of counsel chosen by the Underwriter),
reasonably incurred in investigating, preparing or defending against any
litigation, or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever based upon any
such untrue statement or omission, or any such alleged untrue statement or
omission, referred to under (i) above, to the extent that any such expense
is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by the
Underwriter expressly for use in the ML&Co. Registration Statement (or any
amendment thereto), including the Rule 430A Information and the Rule 434
Information, if applicable, or any ML&Co. preliminary prospectus or the ML&Co.
Prospectus (or any amendment or supplement thereto); and provided, further, that
-------- -------
this indemnity agreement with respect to any preliminary prospectus shall not
inure to the benefit of the Underwriter from whom the person asserting any such
losses, liabilities, claims, damages or expenses purchased Securities, or any
person controlling the Underwriter, if a copy of the Prospectus (as then amended
or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter to
such person, if such is required by law, at or prior to the written confirmation
of the sale of such Securities to such person and if the Prospectus (as so
amended or supplemented) would have cured the defect giving rise to such loss,
liability, claim, damage or expense.
Insofar as this indemnity agreement may permit indemnification for
liabilities under the 1933 Act of any person who controls an underwriter within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act and who,
at the date of this Agreement, is a director or officer of the Company or
controls the Company within the meaning of Section 15 of the 1933 Act or Section
20 of the 1934 Act, such indemnity agreement is subject to the undertaking of
the Company in the ML&Co. Registration Statement under Item 17 thereof.
(b) Indemnification of the Company, Directors and Officers. The
Underwriter agrees to indemnify and hold harmless the Company, its directors,
each of its officers who signed the ML&Co. Registration Statement, and each
person, if any, who controls the Company within the meaning of Section 15 of the
1933 Act or Section 20 of the 1934 Act against any and all loss, liability,
claim, damage and expense described in the indemnity contained in subsection (a)
of this Section, as incurred, but only with respect to untrue statements or
omissions, or alleged untrue statements or omissions, made in the ML&Co.
Registration Statement (or any amendment thereto), including the Rule 430A
Information and the Rule 434 Information, if applicable, or any ML&Co.
preliminary prospectus or the ML&Co. Prospectus (or any amendment or supplement
thereto) in reliance upon and in conformity with written information furnished
to the Company by the Underwriter expressly for use in the ML&Co. Registration
Statement (or any amendment thereto) or such ML&Co. preliminary prospectus or
the ML&Co. Prospectus (or any amendment or supplement thereto).
23
<PAGE>
(c) Actions against Parties; Notification. Each indemnified party shall
give notice as promptly as reasonably practicable to each indemnifying party of
any action commenced against it in respect of which indemnity may be sought
hereunder, but failure to so notify an indemnifying party shall not relieve such
indemnifying party from any liability hereunder to the extent it is not
materially prejudiced as a result thereof and in any event shall not relieve it
from any liability which it may have otherwise than on account of this indemnity
agreement. In the case of parties indemnified pursuant to Section 6(a), counsel
to the indemnified parties shall be selected by the Underwriter, and, in the
case of parties indemnified pursuant to Section 6(b) above, counsel to the
indemnified parties shall be selected by the Company. An indemnifying party may
participate at its own expense in the defense of any such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party. In
no event shall the indemnifying parties be liable for fees and expenses of more
than one counsel (in addition to any local counsel) separate from their own
counsel for all indemnified parties in connection with any one action or
separate but similar or related actions in the same jurisdiction arising out of
the same general allegations or circumstances. No indemnifying party shall,
without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any
litigation, or any investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever in respect of which
indemnification or contribution could be sought under this Section 6 or Section
7 hereof (whether or not the indemnified parties are actual or potential parties
thereto), unless such settlement, compromise or consent (i) includes an
unconditional release of each indemnified party from all liability arising out
of such litigation, investigation, proceeding or claim and (ii) does not include
a statement as to or an admission of fault, culpability or a failure to act by
or on behalf of any indemnified party.
(d) Settlement without Consent if Failure to Reimburse. If at any time an
indemnified party shall have requested an indemnifying party to reimburse the
indemnified party for fees and expenses of counsel, such indemnifying party
agrees that it shall be liable for any settlement of the nature contemplated by
Section 6(a)(ii) effected without its written consent if (i) such settlement is
entered into more than 45 days after receipt by such indemnifying party of the
aforesaid request, (ii) such indemnifying party shall have received notice of
the terms of such settlement at least 30 days prior to such settlement being
entered into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
SECTION 7. Contribution.
------------
If the indemnification provided for in Sections 6(a) and 6(b) is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then the Company and the Underwriter shall contribute to the aggregate
amount of such losses, liabilities, claims, damages and expenses incurred by
such indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriter on the other hand from the offering of the Securities pursuant to
this Agreement or (ii) if the allocation provided by clause (i) is not permitted
by applicable law, in such proportion as is appropriate to reflect not only the
relative benefits referred to in clause (i) above but also the relative fault of
the Company
24
<PAGE>
on the one hand and of the Underwriter on the other hand in connection with the
statements or omissions which resulted in such losses, liabilities, claims,
damages or expenses, as well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriter on the other hand in connection with the offering of the Securities
pursuant to this Agreement shall be deemed to be in the same respective
proportions as the total net proceeds from the offering of the Securities
pursuant to this Agreement (before deducting expenses) received by the Company
and the total underwriting discount received by the Underwriter, in each case as
set forth on the cover of the ML&Co. Prospectus, or, if Rule 434 is used, the
corresponding location on the ML&Co. Term Sheet, bear to the aggregate initial
public offering price of the Securities as set forth on such cover. The
relative fault of the Company on the one hand and the Underwriter on the other
hand shall be determined by reference to, among other things, whether any such
untrue or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the Company
or by the Underwriter and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or omission.
Notwithstanding the provisions of this Section 7, the Underwriter shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which the
Underwriter has otherwise been required to pay by reason of any such untrue or
alleged untrue statement or omission or alleged omission.
The Company and the Underwriter agree that it would not be just and
equitable if contribution pursuant to this Section 7 were determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to above in this Section 7. The aggregate
amount of losses, liabilities, claims, damages and expenses incurred by an
indemnified party and referred to above in this Section 7 shall be deemed to
include any legal or other expenses reasonably incurred by such indemnified
party in investigating, preparing or defending against any litigation, or any
investigation or proceeding by any governmental agency or body, commenced or
threatened, or any claim whatsoever based upon any such untrue or alleged untrue
statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the 1933 Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation.
For purposes of this Section 7, each person, if any, who controls the
Underwriter within the meaning of Section 15 of the 1933 Act or Section 20 of
the 1934 Act shall have the same rights to contribution as the Underwriter, and
each director of the Company, each officer of the Company who signed the ML&Co.
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the 1933 Act or Section 20 of the 1934 Act shall
have the same rights to contribution as the Company.
SECTION 8. Representations, Warranties and Agreements to Survive Delivery.
--------------------------------------------------------------
All representations, warranties and agreements contained in this Agreement or in
certificates of officers of the Company, SunAmerica or the Selling Stockholder
submitted pursuant hereto, shall
25
<PAGE>
remain operative and in full force and effect, regardless of any investigation
made by or on behalf of the Underwriter or controlling person, or by or on
behalf of the Company or the Selling Stockholder, and shall survive delivery of
the Securities to the Underwriter.
SECTION 9. Termination of Agreement.
------------------------
(a) Termination; General. The Underwriter may terminate this Agreement,
by notice to the Company, at any time at or prior to Closing Time (i) if there
has been, since the time of execution of this Agreement or since the respective
dates as of which information is given in the ML&Co. Prospectus, any material
adverse change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company and its subsidiaries
considered as one enterprise, whether or not arising in the ordinary course of
business, or (ii) if there has been, since the time of execution of this
Agreement, or since the respective dates as of which information is given in the
SunAmerica Prospectus, any material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or business prospects of
SunAmerica and its subsidiaries considered as one enterprise, whether or not
arising in the ordinary course of business, or (iii) if there has occurred any
material adverse change in the financial markets in the United States, any
outbreak of hostilities or escalation thereof or other calamity or crisis or any
change or development involving a prospective change in national or
international political, financial or economic conditions, in each case the
effect of which is such as to make it, in the judgment of the Underwriter,
impracticable to market the Securities or to enforce contracts for the sale of
the Securities, or (iv) if trading in any securities of the Company or in the
SunAmerica Common Stock has been suspended or limited by the Commission or the
New York Stock Exchange, or if trading generally on the American Stock Exchange
or the New York Stock Exchange or in the Nasdaq National Market has been
suspended or limited, or minimum or maximum prices for trading have been fixed,
or maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the NASD or any other governmental
authority, or (v) if a banking moratorium has been declared by either federal or
New York authorities.
(b) Liabilities. If this Agreement is terminated pursuant to this
Section, such termination shall be without liability of any party to any other
party except as provided in Section 4 hereof, and provided further that Sections
1, 6, 7 and 8 shall survive such termination and remain in full force and
effect.
SECTION 10. Notices. All notices and other communications hereunder shall
-------
be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to the
Underwriter shall be directed to it at North Tower, World Financial Center, New
York, New York 10281-1328, attention of Douglas Squires, Managing Director; and
notices to the Company shall be directed to it at 100 Church St., 12th Floor,
New York, New York 10007, attention of the Secretary, with a copy to the
Treasurer at World Financial Center, South Tower, New York, New York 10080-6107.
SECTION 11. Parties. This Agreement shall each inure to the benefit of
-------
and be binding upon each of the Underwriter and the Company and their respective
successors. Nothing expressed or mentioned in this Agreement is intended or
shall be construed to give any person,
26
<PAGE>
firm or corporation, other than the parties hereto and their respective
successors and the controlling persons and officers and directors referred to in
Sections 6 and 7 and their heirs and legal representatives, any legal or
equitable right, remedy or claim under or in respect of this Agreement or any
provision herein contained. This Agreement and all conditions and provisions
hereof are intended to be for the sole and exclusive benefit of the parties
hereto and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
SECTION 12. GOVERNING LAW AND TIME. THIS AGREEMENT SHALL BE GOVERNED BY
----------------------
AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. SPECIFIED
TIMES OF DAY REFER TO NEW YORK CITY TIME.
SECTION 13. Effect of Headings. The Article and Section headings herein
------------------
and the Table of Contents are for convenience only and shall not affect the
construction hereof.
SECTION 14. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same agreement.
27
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriter and the Company in accordance with its terms.
Very truly yours,
MERRILL LYNCH & CO., INC.
By _______________________________________
Name:
Title:
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By ___________________________________
Authorized Signatory
28
<PAGE>
SCHEDULE A
MERRILL LYNCH & CO. INC
____% STRYPES(SM) DUE ____, 1999
1. The initial public offering price of the Securities shall be
$__________ per STRYPES.
2. The purchase price for the Securities to be paid by the
Underwriter shall be $___________ per STRYPES, being an amount equal to the
initial public offering price set forth above less $_______ per STRYPES.
__________________________
/SM/ Service mark of Merrill Lynch & Co., Inc.
Sch A - 1
<PAGE>
Exhibit A
FORM OF OPINION OF COMPANY'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(3)
(i) The Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the State of Delaware.
(ii) The Company has corporate power and authority to own, lease and
operate its properties and to conduct its business as described in the
ML&Co. Prospectus and to enter into and perform its obligations under the
Underwriting Agreement.
(iii) The Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure so
to qualify or to be in good standing would not result in a Material Adverse
Effect.
(iv) Merrill Lynch, Pierce, Fenner & Smith Incorporated ("MLPF&S")
has been duly incorporated and is validly existing as a corporation in good
standing under the laws of the State of Delaware, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in the ML&Co. Prospectus and is duly qualified as a
foreign corporation to transact business and is in good standing in the
State of New York; all of the issued and outstanding capital stock of
MLPF&S has been duly authorized and validly issued, is fully paid and non-
assessable and, to the best of our knowledge, is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance, claim or equity; none of the
outstanding shares of capital stock of MLPF&S was issued in violation of
the preemptive or similar rights of any securityholder of MLPF&S.
(v) The Underwriting Agreement has been duly authorized, executed
and delivered by the Company.
(vi) The Indenture has been duly authorized, executed and delivered
by the Company and (assuming the due authorization, execution and delivery
thereof by the Trustee) constitutes a valid and binding agreement of the
Company, enforceable against the Company in accordance with its terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general
A-1
<PAGE>
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law).
(vii) The Securities are in the form contemplated by the Indenture,
have been duly authorized by the Company and, assuming that the Securities
have been duly authenticated by the Trustee in the manner described in its
certificate delivered to you today (which fact such counsel need not
determine by an inspection of the Securities), the Securities have been
duly executed, issued and delivered by the Company and constitute valid and
binding obligations of the Company, enforceable against the Company in
accordance with their terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and will be entitled to the benefits of the Indenture.
(viii) The Stock Agreement has been duly authorized, executed and
delivered by the Company and the ML&Co. Subsidiary and (assuming the due
authorization, execution and delivery thereof by the Selling Stockholder)
constitutes a valid and binding agreement of the Company and the ML&Co.
Subsidiary, enforceable against the Company and the ML&Co. Subsidiary in
accordance with its terms, except as the enforcement thereof may be limited
by bankruptcy, insolvency (including, without limitation, all laws relating
to fraudulent transfers), reorganization, moratorium or similar laws
affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law).
(ix) The Indenture has been duly qualified under the 1939 Act.
(x) The Securities, the Indenture and the Stock Agreement conform
in all material respects as to legal matters to the descriptions thereof
contained in the ML&Co. Prospectus.
(xi) The ML&Co. Registration Statement, including any ML&Co. Rule
462(b) Registration Statement, has been declared effective under the 1933
Act; any required filing of the ML&Co. Prospectus pursuant to Rule 424(b)
has been made in the manner and within the time period required by Rule
424(b); and, to the best of our knowledge, no stop order suspending the
effectiveness of the ML&Co. Registration Statement or any ML&Co. Rule
462(b) Registration Statement has been issued under the 1933 Act and no
proceedings for that purpose have been instituted or are pending or
threatened by the Commission.
(xii) The ML&Co. Registration Statement, including any ML&Co. Rule
462(b) Registration Statement, the Rule 430A Information and the Rule 434
Information, as applicable, the ML&Co. Prospectus, excluding the documents
incorporated by reference therein, and each amendment or supplement to the
ML&Co. Registration Statement and
A-2
<PAGE>
ML&Co. Prospectus, excluding the documents incorporated by reference
therein, as of their respective effective or issue dates (other than the
financial statements and supporting schedules included therein or omitted
therefrom, and the Trustee's Statement of Eligibility on Form T-1 (the
"Form T-1"), as to which we need express no opinion) complied as to form in
all material respects with the requirements of the 1933 Act and the 1933
Act Regulations.
(xiii) The documents incorporated by reference in the ML&Co.
Prospectus (other than the financial statements and supporting schedules
included therein or omitted therefrom, as to which we need express no
opinion), when they became effective or were filed with the Commission, as
the case may be, complied as to form in all material respects with the
requirements of the 1933 Act or the 1934 Act, as applicable, and the rules
and regulations of the Commission thereunder.
(xiv) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency, domestic or foreign (other than under the 1933 Act and
the 1933 Act Regulations, which have been obtained, or as may be required
under the securities or blue sky laws of the various states and except for
the qualification of the Indenture under the 1939 Act, as to which we need
express no opinion) is necessary or required in connection with the due
authorization, execution and delivery of the Underwriting Agreement by the
Company or the due execution, delivery or performance of the Indenture or
the Stock Agreement by the Company or for the offering, issuance, sale or
delivery of the Securities or for the due execution, delivery or
performance of the Stock Agreement by the ML&Co. Subsidiary.
(xv) (A) The execution, delivery and performance by the Company of
the Underwriting Agreement, the Indenture and the Securities and the Stock
Agreement and the consummation by the Company of the transactions
contemplated in the Underwriting Agreement and the Stock Agreement and in
the ML&Co. Registration Statement (including the issuance and sale of the
Securities and the delivery of shares of SunAmerica Common Stock pursuant
thereto and the use of the proceeds from the sale of the Securities as
described in the ML&Co. Prospectus under the caption "Use of Proceeds") and
compliance by the Company with its obligations under the Underwriting
Agreement, the Indenture, the Securities and the Stock Agreement and (B)
the execution, delivery and performance by the ML&Co. Subsidiary of the
Stock Agreement and the consummation by the ML&Co. Subsidiary of the
transactions contemplated therein and compliance by the ML&Co. Subsidiary
with its obligations under the Stock Agreement do not and will not, whether
with or without the giving of notice or lapse of time or both, conflict
with or constitute a breach of, or default or Repayment Event (as defined
in Section 1(a)(xiii) of the Underwriting Agreement) under or result in the
creation or imposition of any lien, charge or encumbrance upon any property
or assets of the Company or any subsidiary pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease
or any other agreement or instrument, known to us, to which the Company or
any subsidiary is a party or by which it or any of them may be bound, or to
which any of the property or assets of the Company or any subsidiary is
subject (except for such conflicts, breaches or defaults or liens, charges
or encumbrances
A-3
<PAGE>
that would not have a Material Adverse Effect), nor will such action result
in any violation of the provisions of the charter or by-laws of the Company
or any subsidiary, or any applicable law, statute, rule, regulation,
judgment, order, writ or decree, known to us, of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary or any of their respective properties, assets or
operations.
We have participated in conferences with officers and representatives
of the Company and representatives of the independent accountants of the
Company and the Underwriter at which the contents of the ML&Co.
Registration Statement and Prospectus and related matters were discussed
and, although we are not passing upon or assuming responsibility for the
accuracy, completeness or fairness of the statements contained or
incorporated by reference in said Registration Statement and Prospectus and
have made no independent check or verification thereof, on the basis of the
foregoing, nothing has come to our attention that would lead us to believe
that the ML&Co. Registration Statement or any amendment thereto, including
the Rule 430A Information and Rule 434 Information (if applicable), (except
for financial statements and schedules and other financial data included or
incorporated by reference therein or omitted therefrom and the Form T-1, as
to which we need make no statement), at the time such ML&Co. Registration
Statement or any such amendment became effective or at the date of the
Underwriting Agreement, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or that the ML&Co. Prospectus
or any amendment or supplement thereto (except for financial statements and
schedules and other financial data included or incorporated by reference
therein or omitted therefrom, as to which we need make no statement), at
the time the ML&Co. Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time, included or
includes an untrue statement of a material fact or omitted or omits to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of the Company and public officials.
A-4
<PAGE>
Exhibit B
FORM OF OPINION OF UNDERWRITER'S COUNSEL
TO BE DELIVERED PURSUANT TO
SECTION 5(a)(4)
(i) The SunAmerica Registration Statement, including any SunAmerica
Rule 462(b) Registration Statement, has been declared effective under the
1933 Act; any required filing of the SunAmerica Prospectus pursuant to Rule
424(b) has been made in the manner and within the time period required by
Rule 424(b); and, to the best of our knowledge, no stop order suspending
the effectiveness of the SunAmerica Registration Statement or any
SunAmerica Rule 462(b) Registration Statement has been issued under the
1933 Act and no proceedings for that purpose have been instituted or are
pending or threatened by the Commission.
(ii) The SunAmerica Registration Statement, including any SunAmerica
Rule 462(b) Registration Statement, the SunAmerica Prospectus, excluding
the documents incorporated by reference therein, and each amendment or
supplement to the SunAmerica Registration Statement and SunAmerica
Prospectus, excluding the documents incorporated by reference therein, as
of their respective effective or issue dates (other than the financial
statements and supporting schedules included therein or omitted therefrom,
as to which we need express no opinion) complied as to form in all material
respects with the requirements of the 1933 Act and the 1933 Act
Regulations.
We have participated in conferences with officers and representatives
of SunAmerica, representatives of the independent accountants of
SunAmerica, and the Underwriter at which the contents of the SunAmerica
Registration Statement and Prospectus and related matters were discussed
and, although we are not passing upon or assuming responsibility for the
accuracy, completeness or fairness of the statements contained or
incorporated by reference in said Registration Statement and Prospectus and
have made no independent check or verification thereof, on the basis of the
foregoing, nothing has come to our attention that would lead us to believe
that the SunAmerica Registration Statement or any amendment thereto,
(except for financial statements and schedules and other financial data
included or incorporated by reference therein or omitted therefrom, as to
which we need make no statement), at the time such SunAmerica Registration
Statement or any such amendment became effective, contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading or that the SunAmerica Prospectus or any amendment or supplement
thereto (except for financial statements and schedules and other financial
data included or incorporated by reference therein or omitted therefrom, as
to which we need make no statement), at the time the SunAmerica Prospectus
was issued, at the time any such amended or supplemented prospectus was
B-1
<PAGE>
issued or at the Closing Time, included or includes an untrue statement of
a material fact or omitted or omits to state a material fact necessary in
order to make the statements therein, in the light of the circumstances
under which they were made, not misleading.
In rendering such opinion, such counsel may rely as to matters of fact (but
not as to legal conclusions), to the extent they deem proper, on certificates of
responsible officers of SunAmerica and public officials.
B-2
<PAGE>
Exhibit C
---------
FORM OF OPINION OF SUNAMERICA'S MARYLAND COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(a)(5)
(i) SunAmerica has been duly incorporated and is validly existing
as a corporation in good standing under the laws under the State of
Maryland; and SunAmerica has the corporate power under the laws of the
State of Maryland and under its charter to own, lease and operate its
properties and to conduct its business as described in the SunAmerica
Registration Statement and the SunAmerica Prospectus;
(ii) the Registration Agreement has been duly authorized and
executed by SunAmerica;
(iii) all of the shares of issued and outstanding Nontransferable
Class B Stock, par value $1.00 (the "Class B Stock"), of SunAmerica have
been duly authorized and validly issued and are fully paid and non-
assessable;
(iv) the statements in the SunAmerica Prospectus under the caption
"Description of Capital Stock", insofar as such statements constitute
summaries of the legal matters or documents or proceedings referred to
therein, fairly present the matters referred to therein;
(v) the execution and delivery of the Registration Agreement, and
the consummation of the transactions contemplated therein and in the
Underwriting Agreement and Stock Agreement, the delivery, if any, to the
ML&Co. Subsidiary of Class B Stock pursuant to the Stock Agreement, and the
issuance and delivery to the ML&Co. Subsidiary of shares of SunAmerica
Common Stock upon conversion of any such Class B Common Stock, will not
result in any violation of the provisions of the articles of incorporation
or by-laws of SunAmerica or any material law, administrative regulations or
administrative or court decree applicable to SunAmerica (except that no
opinion need be expressed with respect to Maryland securities or Blue Sky
laws);
(vi) each share of Class B Stock is convertible into one share of
SunAmerica Common Stock; the shares of SunAmerica Common Stock issuable
upon conversion of the Class B Stock have been duly authorized and reserved
for issuance upon such conversion; and, upon the delivery, if any, to the
ML&Co. Subsidiary of shares of Class B Stock pursuant to the Stock
Agreement, such shares will immediately and automatically convert into a
like number of shares of SunAmerica Common Stock and such shares of
SunAmerica Common Stock, when issued and delivered upon such conversion,
will be validly issued, fully paid and non-assessable and the issuance of
such shares of SunAmerica Common Stock upon such conversion will not be
subject to any preemptive or other similar rights arising by law or under
SunAmerica's charter or by-laws;
C-1
<PAGE>
(vii) the forms of certificates used to evidence the Class B Stock
and the SunAmerica Common Stock comply with all applicable statutory
requirements; and
(viii) SunAmerica's Restated Articles of Incorporation filed with the
Maryland State Department of Assessments and Taxation on October 3, 1991
represented on such date the true, correct and complete articles of
incorporation, as amended, governing SunAmerica.
C-2
<PAGE>
Exhibit D
---------
FORM OF OPINION OF SUNAMERICA'S GENERAL COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(a)(6)
(i) to the best of such counsel's knowledge and information,
SunAmerica is duly qualified as a foreign corporation to transact business
and in good standing in each jurisdiction in which such qualification is
required, except where the failure to so qualify or be in good standing
would not have a material adverse effect on the condition, financial or
otherwise, on the earnings or business affairs of SunAmerica and its
subsidiaries, taken as a whole;
(ii) the authorized, issued and outstanding capital stock of
SunAmerica is correctly set forth in the SunAmerica Prospectus under
"Description of Capital Stock";
(iii) each of SunAmerica Life Insurance Company, First SunAmerica
Life Insurance Company, Anchor National Life Insurance Company, SunAmerica
Asset Management Corp., Resources Trust Company, Royal Alliance Associates,
Inc., SunAmerica Securities, Inc., and Ford Life Insurance Company (each a
"Subsidiary" and, collectively, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own, lease and operate its properties and to conduct
its business as presently conducted and as described in the SunAmerica
Registration Statement and SunAmerica Prospectus, it being understood that
as to each Subsidiary, the foregoing opinion is based solely on a
certificate dated as of a recent date of an appropriate official of the
jurisdiction of incorporation of such Subsidiary and, as applicable, a
letter from CT Corporation System dated as of a recent date as to the good
standing of such Subsidiary in such jurisdiction, copies of which will be
delivered to the Underwriter on the date of such opinion; nothing has come
to the attention of such counsel to lead such counsel to believe that any
of SunAmerica Life Insurance Company, Anchor National Life Insurance
Company or SunAmerica Asset Management Corp. is not duly qualified as a
foreign corporation to transact business or is not in good standing in each
jurisdiction in which such qualification is required, except where the
failure to so qualify or be in good standing would not have a material
adverse effect on the condition, financial or otherwise, or the earnings or
business affairs of SunAmerica and its subsidiaries, considered as one
enterprise; to the best of such counsel's knowledge and information, all of
the issued and outstanding capital stock of each Subsidiary is owned
(except for directors qualifying shares) directly or through subsidiaries,
by SunAmerica, free and clear of any security interest, mortgage, pledge,
lien, encumbrance, claim or equity;
(iv) to the best of such counsel's knowledge and information, the
execution and delivery of the Registration Agreement by SunAmerica and the
consummation of the
D-1
<PAGE>
transactions contemplated therein by SunAmerica, and the delivery, if any,
to the ML&Co. Subsidiary of Nontransferable Class B Stock, par value $1.00
per share (the "Class B Stock"), of SunAmerica pursuant to the Stock
Agreement and the issuance and delivery to the ML&Co. Subsidiary of shares
of SunAmerica Common Stock upon conversion of any such Class B Common
Stock, will not conflict with or constitute a breach of, or default under,
or result in the creation or imposition of any lien, charge or encumbrance
upon any property of assets of SunAmerica or any of the Subsidiaries
pursuant to, any material contract, indenture, mortgage, loan agreement,
note, lease or other instrument to which SunAmerica or any of the
Subsidiaries is a party or by which it or any of them may be bound, or to
which any of the property or assets of SunAmerica or any of the
Subsidiaries is subject, except for a conflict, breach, default, lien,
charge or encumbrance which would not have a material adverse effect on the
condition, financial or otherwise, or the earnings or business affairs of
SunAmerica and its subsidiaries considered as one enterprise, nor will such
action result in any violation of the provisions of the articles of
incorporation or by-laws of SunAmerica and the Subsidiaries or any material
applicable law, administrative regulation or administrative or court decree
and, to the best of such counsel's knowledge and information, no consent,
approval, authorization or order of or qualification with any court or
administrative or governmental authority or agency is required for the
performance by SunAmerica of its obligations under the Registration
Agreement except such as may be required by the 1933 Act or the rules and
regulations thereunder, the securities or Blue sky laws or insurance
securities laws of the various states or except such as have been obtained;
(v) to the best of such counsel's knowledge and information, there
are no statutes or regulations that are required to be described in the
SunAmerica Registration Statement or the SunAmerica Prospectus that are not
described as required and there are no legal or governmental proceedings
pending or threatened which are required to be described in the SunAmerica
Registration Statement, other than these disclosed therein;
(vi) to the best of such counsel's knowledge and information there
are no contracts, indentures, mortgages, loan agreements, notes, leases or
other instruments required to be described or referred to in the SunAmerica
Registration Statement or to be filed as exhibits thereto, other than those
described or referred to therein or filed as exhibits thereto, the
descriptions thereof or references thereto are correct in all material
respects and, to the best of such counsel's knowledge and information, no
default exists in the due performance or observance of any material
obligation, agreement, covenant or condition contained in any contract,
indenture, mortgage loan agreement, note, lease or other instrument so
described, referred to or filed, which default could have a material
adverse effect on SunAmerica and its subsidiaries considered as one
enterprise;
(vii) such counsel (1) is of the opinion that each document, if any,
filed pursuant to the 1934 Act and incorporated by reference in the
SunAmerica Prospectus at the time it was filed or last amended (except for
financial statements, supporting schedules and other financial data
included or incorporated by reference therein, as to which such counsel
need not express any opinion) appeared on its face to be appropriately
responsive in all material respects to the requirements of the 1934 Act and
the applicable rules and
D-2
<PAGE>
regulations of the Commission thereunder, (2) believes that (except for
financial statements, supporting schedules and other financial data
included or incorporated by reference therein, as to which such counsel
need not express any belief) each part of the Registration Statement and
any SunAmerica Rule 462(b) Registration Statement, when such part became
effective and as of the date of the Underwriting Agreement, did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, (3) is of the opinion that each of the SunAmerica
Registration Statement (and any SunAmerica Rule 462(b) Registration
Statement, as of its effective date, and the SunAmerica Prospectus, as of
the Closing Time (except in each case for financial statements, supporting
schedules and other financial data included or incorporated by reference
therein, as to which such counsel need not express any opinion), appeared
on their face to be appropriately responsive in all material respects to
the requirements of the 1933 Act and the applicable rules and regulations
of the Commission thereunder and (4) believes that (except for financial
statements, supporting schedules and other financial data included or
incorporated by reference therein, as to which such counsel need not
express any belief) the SunAmerica Prospectus, as of its date and as of the
Closing Time, does not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading; and
(viii) the SunAmerica Registration Statement (including any
SunAmerica Rule 462(b) Registration Statement) is effective under the 1933
Act and to the best of such counsel's knowledge, no stop order suspending
the effectiveness of the SunAmerica Registration Statement or any
SunAmerica Rule 462(b) Registration Statement is in effect under the 1933
Act, and no proceedings for such purpose are pending before or threatened
by the Commission.
With respect to the foregoing paragraph, such counsel may state that her
opinion and belief are based upon her participation in the preparation of the
SunAmerica Registration Statement and SunAmerica Prospectus and any amendments,
supplements thereto and documents incorporated therein by reference and review
and discussion of the contents thereof, but are without independent check or
verification, except as specified.
In rendering such opinion, such counsel may rely, as to matters governed by
laws other than the laws of the State of California and the federal law of the
United States of America, on an opinion or opinions of Davis Polk & Wardwell and
Piper & Marbury L.L.P., in each case so long as such opinion shall be dated as
of Closing Time and in form and substance satisfactory to the Underwriter, and
shall expressly permit the Underwriter to rely thereon as if such opinion were
addressed to the Underwriter.
D-3
<PAGE>
Exhibit E
---------
FORM OF OPINION OF SUNAMERICA'S SPECIAL COUNSEL
AND THE SELLING STOCKHOLDER'S COUNSEL
TO BE DELIVERED PURSUANT TO SECTION 5(a)(7)
(i) the statements in the SunAmerica Prospectus under the caption
"Description of Capital Stock" [and in the ML&Co. Prospectus under the
captions "Summary--Stock Agreement with the Selling Stockholder" and
"Certain Arrangements with the Selling Stockholder",] insofar as such
statements constitute summaries of the legal matters or documents or
proceedings referred to therein, fairly present the information called for
with respect to such legal matters, documents or proceedings and fairly
summarize the matters referred to therein;
(ii) such counsel (1) believes that (except for financial
statements, supporting schedules and other financial data included or
incorporated by reference therein and any of the documents incorporated by
reference therein, as to which such counsel need not express any belief)
each part of the SunAmerica Registration Statement and any SunAmerica Rule
462(b) Registration Statement, when such part became effective and as of
the date of the Underwriting Agreement, did not contain any untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading, (2) is of the opinion that each of the SunAmerica Registration
Statement and any SunAmerica Rule 462(b) Registration Statement, as of its
effective date, and the SunAmerica Prospectus, as of the Closing Time
(except in each case for financial statements, supporting schedules and
other financial data included or incorporated by reference therein and any
of the documents incorporated or deemed to be incorporated by reference
therein, as to which such counsel need not express any opinion) appeared on
its face to be appropriately responsive in all material respects to the
requirements of the 1933 Act and the applicable rules and regulations of
the Commission thereunder and (3) believes that (except for financial
statements, supporting schedules and other financial data included or
incorporated by reference therein or in any of the documents incorporated
or deemed to be incorporated by reference therein, as to which such counsel
need not express any belief) the SunAmerica Prospectus, as of its date and
as of the Closing Time, did not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading;
(iii) the SunAmerica Registration Statement (including any SunAmerica
Rule 462(b) Registration Statement) is effective under the 1933 Act and, to
the best of such counsel's knowledge, no stop order suspending the
effectiveness of the SunAmerica Registration Statement or any SunAmerica
Rule 462(b) Registration Statement is in effect under the 1933 Act, and no
proceedings for such purpose are pending before or threatened by the
Commission;
E-1
<PAGE>
(iv) SunAmerica is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended;
(v) to the best of such counsel's knowledge and information, no
consent, approval, authorization or order of or qualification or filing
with any New York State or federal court or New York State or federal
administrative or governmental authority or agency is required for the
execution, delivery or performance by SunAmerica or the Selling Stockholder
of the Underwriting Agreement, the Registration Agreement or the Stock
Agreement, or the delivery, if any, to the ML&Co. Subsidiary of
Nontransferable Class B Stock, par value $1.00 per share (the "Class B
Stock"), of SunAmerica pursuant to the Stock Agreement or the issuance and
delivery to the ML&Co. Subsidiary of shares of SunAmerica Common Stock upon
conversion of any such Class B Stock, except such as have been obtained
under the 1933 Act or such as may be required under the securities or Blue
Sky laws or insurance securities laws of the various states;
(vi) the Underwriting Agreement has been duly executed and delivered
by the Selling Stockholder;
(vii) the Stock Agreement has been duly executed and delivered by,
and is a valid and binding agreement of, the Selling Stockholder,
enforceable in accordance with its terms except (a) as the enforceability
thereof may be limited by bankruptcy, insolvency or similar laws affecting
creditors' rights generally, (b) as the availability of equitable remedies
may be limited by equitable principles of general applicability and (c)
that such counsel shall state that its opinion, set forth in this paragraph
(vii) does not consider the application of the CEA to the matters set forth
herein;
(viii) the execution and delivery of the Underwriting Agreement, the
Registration Agreement and the Stock Agreement and the consummation of the
transactions contemplated therein, and the delivery, if any, to the ML&Co.
Subsidiary of Class B Stock pursuant to the Stock Agreement and the
issuance and delivery to the ML&Co. Subsidiary of shares of SunAmerica
Common Stock upon conversion of any such Class B Common Stock, will not, to
the best of such counsel's knowledge and information, conflict with or
constitute a breach of, or default under, or result in the creation or
imposition of any lien, charge or encumbrance upon any property or assets
of the Selling Stockholder pursuant to, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Selling Stockholder is a party or by which the Selling Stockholder may be
bound, or to which any of the property or assets of the Selling Stockholder
is subject, nor will any such action result in any violation of any
material applicable law or administrative regulation of the United States
or of the State of New York or any material administrative or court decree;
(ix) the Selling Stockholder is the sole registered owner of the
3,000,000 shares of Class B Stock (the "Subject Shares") delivered to .
pursuant to the Stock Agreement and of at least 450,000 additional shares
(the "Additional Shares") of Class B Stock, in each case, free and clear,
to the best knowledge and information of such counsel, of any
E-2
<PAGE>
security interest, mortgage, pledge, lien, encumbrance, claim or equity; to
the best knowledge and information of such counsel, the Selling Stockholder
is the sole beneficial owner of, and no person other than the Selling
Stockholder has any beneficial interest, in the Subject Shares or the
Additional Shares; and
(x) upon delivery to the ML&Co. Subsidiary of certificates for
shares of Class B Stock or SunAmerica Common Stock pursuant to the Stock
Agreement, in each case in registered form duly endorsed to the ML&Co.
Subsidiary or in blank by the Selling Stockholder, the ML&Co. Subsidiary
will acquire, assuming that the ML&Co. Subsidiary purchased such shares for
value and in good faith and without notice of any "adverse claim" (as such
term is defined in Section 8-302(2) of the New York Uniform Commercial
Code), all of the rights of the Selling Stockholder (a) in the case of
shares of SunAmerica Common Stock, such shares and (b) in the case of
shares of Class B Stock, an equivalent number of shares of SunAmerica
Common Stock, in each case free and clear of all adverse claims, any
security interest created by the transferor that may be perfected under the
New York Uniform Commercial Code and, to the best of their knowledge,
without independent investigation, any mortgage, pledge, lien, encumbrance
or equity.
With respect to the opinion set forth in paragraph (iv), such counsel may
state that their opinion and belief are based upon their participation in the
preparation of the SunAmerica Registration Statement and the SunAmerica
Prospectus and any amendments or supplements thereto (other than the documents
incorporated by reference) and upon review and discussion of the contents
thereof (including documents incorporated by reference) but are without
independent check or verification, except as specified.
In rendering such opinion, such counsel may rely, as to matters governed by
laws other than the laws of the State of New York and the federal law of the
United States of America, on an opinion or opinions of Piper & Marbury L.L.P.,
so long as such opinion shall be dated as of Closing Time and in form and
substance satisfactory to the Underwriter, and shall expressly permit the
Underwriter to rely thereon as if such opinion were addressed to the
Underwriter.
E-3
<PAGE>
Exhibit 1(b)
________________________________________________________________________________
________________________________________________________________________________
SUNAMERICA INC.
(a Maryland corporation)
REGISTRATION AGREEMENT
----------------------
Dated: June __, 1996
________________________________________________________________________________
________________________________________________________________________________
<PAGE>
SUNAMERICA INC.
(a Maryland corporation)
REGISTRATION AGREEMENT
----------------------
June __, 1996
MERRILL LYNCH & CO.
Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209
MERRILL LYNCH & CO., INC.
North Tower
World Financial Center
New York, New York 10281-1209
Ladies and Gentlemen:
SunAmerica Inc., a Maryland corporation (the "Company"), and Mr. Eli Broad
(the "Selling Stockholder") confirm their respective agreements with Merrill
Lynch & Co., Inc., a Delaware corporation ("ML&Co."), and with Merrill Lynch &
Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the "Underwriter"), in
connection with the proposed issue and sale by ML&Co. to the Underwriter,
pursuant to an underwriting agreement, dated the date hereof (the "Underwriting
Agreement"), among ML&Co. and the Underwriter, of an aggregate of 3,000,000 of
ML&Co.'s Structured Yield Product Exchangeable for Stock/SM/, ___% STRYPES/SM/
due ___________, 1999 (each, a "STRYPES"), payable at maturity or upon
redemption by delivery of shares of Common Stock, par value $1.00 per share (the
"SunAmerica Common Stock"), of the Company, and, at the option of the
Underwriter, all or any part of 450,000 additional STRYPES to cover over-
allotments, if any. The aforesaid 3,000,000 STRYPES (the "Initial Securities")
to be purchased by the Underwriter and all or any part of the 450,000 STRYPES
subject to the option described in Section 2(b) of the Underwriting Agreement
(the "Option Securities") are hereinafter called, collectively, the
<PAGE>
"Securities." Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Underwriting Agreement.
The Company understands that the Underwriter proposes to make a public
offering of the Securities as soon as the Underwriter deems advisable after this
Agreement and the Underwriting Agreement have been executed and delivered. The
Company acknowledges that the execution and delivery of this Agreement is a
condition to the execution and delivery of the Underwriting Agreement by the
Underwriter and ML&Co. and that, in consideration of the execution and delivery
of the Underwriting Agreement by the Underwriter and ML&Co., the Company is
willing to make the representations, warranties and covenants herein contained.
The Company has filed with the Securities and Exchange Commission (the
"Commission") a registration statement on Form S-3 (No. 333-4111) covering the
registration of 3,450,000 shares of SunAmerica Common Stock that may be
delivered at maturity or upon redemption of the Securities under the Securities
Act of 1933, as amended (the "1933 Act"), including the related preliminary
prospectus or prospectuses. Each prospectus used before such registration
statement became effective is herein called a "SunAmerica preliminary
prospectus." Such registration statement, including the exhibits thereto, the
schedules thereto, if any, and the documents incorporated by reference therein
pursuant to Item 12 of Form S-3 under the 1933 Act, at the time it became
effective, is herein called the "SunAmerica Registration Statement." Any
registration statement filed pursuant to Rule 462(b) of the rules and
regulations of the Commission under the 1933 Act (the "1933 Act Regulations") is
herein referred to as the "SunAmerica Rule 462(b) Registration Statement," and
after such filing the term "SunAmerica Registration Statement" shall include the
SunAmerica Rule 462(b) Registration Statement. The final prospectus, including
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
under the 1933 Act, in the form first furnished to the Underwriter for use in
connection with the offering of the Securities is herein called the "SunAmerica
Prospectus." For purposes of this Agreement, all references to the SunAmerica
Registration Statement, any SunAmerica preliminary prospectus, the SunAmerica
Prospectus or any amendment or supplement to any of the foregoing shall be
deemed to include the copy filed with the Commission pursuant to its Electronic
Data Gathering, Analysis and Retrieval system ("EDGAR").
All references in this Agreement to financial statements and schedules and
other information which is "contained," "included" or "stated" in the SunAmerica
Registration Statement, any SunAmerica preliminary prospectus or the SunAmerica
Prospectus (or other references of like import) shall be deemed to mean and
include all such financial statements and schedules and other information which
is incorporated by reference in the SunAmerica Registration Statement, any
SunAmerica preliminary prospectus or the SunAmerica Prospectus, as the case may
be; and all references in this Agreement to amendments or supplements to the
SunAmerica Registration Statement, any SunAmerica preliminary prospectus or the
SunAmerica Prospectus shall be deemed to mean and include the filing of any
document under the Securities Exchange Act of 1934, as amended (the "1934 Act"),
which is incorporated by reference in the SunAmerica Registration Statement,
such SunAmerica preliminary prospectus or the SunAmerica Prospectus, as the case
may be.
2
<PAGE>
Prior to the closing under the Underwriting Agreement, the Company, Merrill
Lynch Capital Services, Inc., a wholly owned subsidiary of ML&Co. (the "ML&Co.
Subsidiary"), and the Selling Stockholder have entered into an agreement (the
"Stock Agreement"), pursuant to which the Selling Stockholder is obligated to
deliver to the ML&Co. Subsidiary, on _____, 1999 or immediately prior to a
redemption of his obligations under the Stock Agreement, a specified number of
shares of SunAmerica Common Stock, subject to the Selling Stockholder's option,
exercisable in his sole discretion, to satisfy his obligations under the Stock
Agreement by delivering immediately prior to such maturity or redemption a
specified amount of cash in lieu of such shares.
1. Representations and Warranties. (A) The Company represents and
------------------------------
warrants to each of the Underwriter and to ML&Co. as of the date hereof, as of
the Closing Time referred to in Section 2(c) of the Underwriting Agreement, and
as of each Date of Delivery (if any) referred to in Section 2(b) of the
Underwriting Agreement, and agrees with each of the Underwriter and ML&Co. as
follows:
(a) The SunAmerica Registration Statement (including the most
recent post-effective amendment thereto, if any) has been declared
effective by the Commission; no stop order suspending the effectiveness of
the SunAmerica Registration Statement is in effect, and no proceedings for
such purpose are pending before or threatened by the Commission.
(b) (i) Each document filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the SunAmerica Prospectus
complied or will comply when so filed in all material respects with the
Exchange Act and the applicable rules and regulations of the Commission
thereunder, (ii) each part of the SunAmerica Registration Statement, when
such part became effective, did not contain, and each such part, as amended
or supplemented, if applicable, will not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading, and the
SunAmerica Registration Statement, since the later of the date it became
effective and the date of the most recent post-effective amendment, if any,
will not fail to reflect any facts or events which individually or in the
aggregate represent a fundamental change in the information set forth in
the SunAmerica Registration Statement as of such date, (iii) the SunAmerica
Registration Statement and the SunAmerica Prospectus comply, and, as
amended or supplemented, if applicable, will comply in all material
respects with the Securities Act and the applicable rules and regulations
of the Commission thereun der and (iv) the SunAmerica Prospectus does not
contain and, as amended or supple mented, if applicable, will not contain
any untrue statement of a material fact or omit to state a material fact
necessary to make the statements therein, in the light of the circumstances
under which they were made, not misleading, except that the representa
tions and warranties set forth in this Section 1(b) do not apply to
statements or omissions in the SunAmerica Registration Statement or the
SunAmerica Prospectus based upon information relating to the Underwriter or
ML&Co. furnished to the Company in writing by the Underwriter or ML&Co.
expressly for use therein.
3
<PAGE>
(c) This Agreement and the transactions contemplated hereby have
been duly authorized, and this Agreement has been duly executed and
delivered by the Company.
(d) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the State of
Maryland, with corporate power and authority to own, lease and operate its
properties and to conduct its business as presently conducted and as
described in the SunAmerica Registration Statement and SunAmerica
Prospectus; and the Company is duly qualified as a foreign corporation to
transact business and is in good standing in each jurisdiction in which
such qualification is required, whether by reason of the ownership or
leasing of property or the conduct of business, except where the failure to
so qualify or be in good standing would not have a material adverse effect
on the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries, considered as one enterprise.
(e) Each of SunAmerica Life Insurance Company, First SunAmerica
Life Insurance Company, Anchor National Life Insurance Company, SunAmerica
Asset Management Corp., Resources Trust Company, Royal Alliance Associates,
Inc., SunAmerica Securities, Inc., Ford Life Insurance Company and CalFarm
Life Insurance Company (together, the "Subsidiaries") has been duly
incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has the corporate
power and authority to own, lease and operate its properties and to conduct
its business as presently conducted and as described in the SunAmerica
Registration Statement and SunAmerica Prospectus, and is duly qualified as
a foreign corporation to transact business and is in good standing in each
jurisdic tion in which such qualification is required, whether by reason of
the owner-ship or leasing of property or the conduct of business, except
where the failure to so qualify or be in good standing would not have a
material adverse effect on the condition, financial or otherwise, or the
earnings or business affairs of the Company and its subsidiaries,
considered as one enterprise; and all of the issued and outstanding capital
stock of each Subsidiary has been duly authorized and validly issued, is
fully paid and nonassessable and is owned (except for directors qualifying
shares) directly or through subsidiaries, by the Company, free and clear of
any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(f) The authorized, issued and outstanding capital stock of the
Company is as set forth in the SunAmerica Registration Statement and
SunAmerica Prospectus (except for subsequent issuances, if any, pursuant to
reservations, stock option agreements, employee benefit plans or the
exercise of convertible securities which may be referred to in the
SunAmerica Registration Statement and SunAmerica Prospectus); all of the
issued and outstanding shares of capital stock have been duly authorized
and validly issued and are fully paid, nonassessable and not subject to any
preemptive or similar rights.
4
<PAGE>
(g) None of the Company nor any of the Subsidiaries is in
violation of its respective charter or bylaws, as applicable, or in default
in the performance of any material obligation, agreement, covenant or
condition contained in any material contract, indenture, mortgage, loan
agreement, note, lease or other instrument to which the Company or any of
the Subsidiaries is a party or by which any of them may be bound, or to
which any of the property or assets of the Company or of any of the Sub
sidiaries is subject, or in violation of any applicable law, administrative
regulation or administrative or court order or decree, which violation or
default would, singly or in the aggregate, have a material adverse effect
on the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries, considered as one enterprise;
and the execution and delivery by the Company of, and the perfor mance by
the Company of its obligations under, this Agreement and the registration
of the SunAmerica Common Stock, will not conflict with or constitute a
breach of, or a default under, or result in the creation or imposition of
any lien, charge or encum brance upon any property or assets of the Company
or any of the Subsidiaries pursuant to, any material contract, indenture,
mortgage, loan agreement, note, lease or other instrument to which the
Company or any of the Subsidiaries is a party or by which any of them may
be bound, or to which any of the property or assets of the Company or any
of the Subsidiaries is subject, except for a conflict, breach, default,
lien, charge or encumbrance which would not have a material adverse effect
on the condition, financial or otherwise, or the earnings or business
affairs of the Company and its subsidiaries considered as one enterprise,
nor will such action result in any violation of the provisions of the
articles of incorporation or by-laws of the Company or any of the
Subsidiaries or any applicable law, administrative regulation or
administrative or court decree and no consent, approval, authorization or
order of or qualification with any governmental body or agency is required
for the performance by the Company of its obligations under this Agreement
or the issuance and sale of the Securities, except such as may be required
by the securities or Blue Sky laws or insurance securities laws of the
various states in connection with the offer and sale of the Securities.
(h) There are no legal or governmental proceedings pending or,
to the knowledge of the Company threatened to which the Company or any of
its subsidiaries is a party or to which any of the properties of the
Company or any of its subsidiaries is subject that are required to be
described in the SunAmerica Registration Statement or the SunAmerica
Prospectus and are not so described or which are reasonably likely to
result in any material adverse change in the condition, financial or
otherwise, or in the earnings or business affairs of the Company and its
subsidiaries, considered as one enterprise, or which would be reasonably
likely to materially and adversely affect a material portion of the
properties or assets thereof or which is reasonably likely to materially
and adversely affect the consummation of this Agreement; all pending legal
or governmental proceedings to which the Company or any of its subsidiaries
is a party or of which any of their respective property or assets is the
subject which are not described in the SunAmerica Registration Statement or
the Sun America Prospectus, including ordinary routine litigation
incidental to the business of the Company or any of its subsidiaries, are,
considered in the aggregate, not material;
5
<PAGE>
and there are no contracts or documents that are required to be filed as
exhibits to the SunAmerica Registration Statement by the Securities Act,
the Exchange Act or the rules and regulations thereunder, that have not
been filed as required.
(i) Price Waterhouse LLP, the accountants who certified the
financial statements and supporting schedules of the Company included or
incorporated by reference in the SunAmerica Registration Statement and
SunAmerica Prospectus, are independent public accountants with respect to
the Company and the subsidiaries of the Company as required by the
Securities Act and the rules and regulations promulgated thereunder.
(j) The financial statements of the Company included or
incorporated by reference in the SunAmerica Registration Statement or
SunAmerica Prospectus present fairly the financial position of the Company
and the consolidated subsidiaries of the Company as of the dates indicated
and the results of their operations for the periods specified; except as
otherwise stated in the SunAmerica Registration Statement and SunAmerica
Prospectus, said financial statements have been prepared in conformity with
generally accepted accounting principles applied on a consistent basis; and
the supporting schedules included or incorporated by reference in the
SunAmerica Registration Statement or SunAmerica Prospectus present fairly
the information required to be included therein.
(k) Since the respective dates as of which information is given
in the SunAmerica Registration Statement and SunAmerica Prospectus, and
except as otherwise stated or contemplated therein, (i) there has been no
material adverse change and no development involving a prospective material
adverse change in the condition, financial or otherwise, or in the earnings
or business affairs of the Company and its subsidiaries, considered as one
enterprise, whether or not arising in the ordinary course of business, (ii)
there have been no transactions entered into by the Company or any of the
Subsidiaries which are material to the Company and its subsidiaries,
considered as one enterprise, other than those entered into in the ordinary
course of business and (iii) except for regular quarterly dividends, there
has been no dividend or distribution of any kind declared, paid or made by
the Company on any class of its capital stock.
(l) The Company and the Subsidiaries possess such certificates,
authorizations or permits issued by the appropriate state or federal
regulatory agencies or bodies as are necessary to conduct the business as
now conducted by them and as described in the SunAmerica Registration
Statement or SunAmerica Prospectus, except where the failure to so possess
such certificates, authorizations or permits would not have a material
adverse effect on the condition, financial or otherwise, or the earnings or
business affairs of the Company and its subsidiaries, considered as one
enterprise; and neither the Company nor any of the Subsidiaries has
received any notice of pro ceedings relating to the revocation or
modification of any such certificate, authorization or permit which, singly
or in the aggregate, is reasonably likely to have a material adverse effect
on the condition, financial or otherwise, or the
6
<PAGE>
earnings or business affairs of the Company and its subsidiaries,
considered as one enterprise.
(m) Neither the Company nor any of its affiliates is presently
doing business with the government of Cuba or with any person or affiliate
located in Cuba.
(n) There are no holders of securities of the Company with
currently exercisable registration rights to have any securities registered
as part of the SunAmerica Registration Statement or included in the
offering contemplated by this Agreement.
(o) The SunAmerica Common Stock conforms in all material
respects to the statements relating thereto contained in the SunAmerica
Prospectus and the SunAmerica Registration Statement.
(p) The Company is not an "investment company" or a company
"controlled" by an "investment company" within the meaning of the
Investment Company Act of 1940, as amended.
(q) All of the SunAmerica Stock currently held by the Selling
Stockholder is, and the SunAmerica Common Stock which will be issued upon
conversion of shares of the Company's Nontransferable Class B Stock, par
value $1.00 per share ("Class B Stock"), currently held by the Selling
Stockholder will be, validly issued, fully paid and non-assessable and not
be subject to any preemptive or other right to subscribe for or purchase
Class B Stock or SunAmerica Common Stock.
(B) The Selling Stockholder represents and warrants to each of the
Underwriter and ML&Co. as of the date hereof, as of the Closing Time referred to
in Section 2(c) of the Underwriting Agreement, and as of each Date of Delivery
(if any) referred to in Section 2(b) of the Underwriting Agreement, and agrees
with each of the Underwriter and ML&Co. as follows:
(a) At the date hereof, the Selling Stockholder is the sole
registered owner of and has all rights in and to at least 3,450,000 shares
of Class B Stock, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. If and when the Selling
Stockholder delivers to the ML&Co. Subsidiary shares of Class B Stock or
SunAmerica Common Stock pursuant to the Stock Agreement, upon delivery by
the Selling Stockholder to the ML&Co. Subsidiary of such shares of
SunAmerica Stock pursuant to the Stock Agreement, the ML&Co. Subsidiary
will be the sole registered owner of an equivalent number of shares of
SunAmerica Common Stock and, assuming the ML&Co. Subsidiary purchased for
value in good faith and without notice of any adverse claim, the ML&Co.
Subsidiary will have acquired all rights in and to such shares of
SunAmerica Common Stock, free and clear of any security interest, mortgage,
pledge, lien, encumbrance, claim or equity. The delivery of shares of
SunAmerica Class B Stock or Common Stock to the ML&Co. Subsidiary in
accordance with the Stock Agreement is not, and at the time
7
<PAGE>
of delivery of such shares will not be, subject to any right of first
refusal or similar rights of any person pursuant to any contract to which
the Selling Stockholder is a party or by which he is bound.
(b) This Agreement has been duly executed and delivered by the
Selling Stockholder.
(c) The Stock Agreement at the Closing Time, will have been duly
executed and delivered by the Selling Stockholder and (assuming the due
authorization, execution and delivery by the ML&Co. Subsidiary) will
constitute a valid and binding agreement of the Selling Stockholder,
enforceable against the Selling Stockholder in accordance with its terms,
except (x) as the enforcement thereof may be limited by bankruptcy,
insolvency (including, without limitation, all laws relating to fraudulent
transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally, (y) as enforcement thereof is
subject to general principles of equity (regardless of whether enforcement
is considered in a proceeding in equity or at law), and (z) that the
Selling Stockholder makes no representation or warranty as to the
application of the Commodities Exchange Act or the rules and regulations of
the Commodities Futures Trading Commission promulgated thereunder
(collectively, the "CEA"), to the matters set forth in this paragraph (c).
Amounts received by the Selling Stockholder at Closing Time and at each
Date of Delivery, if any, pursuant to the Stock Agreement will not be used
by the Selling Stockholder for the purpose, whether immediate, incidental
or ultimate, of buying or carrying a margin stock, as such terms are
defined in Regulation G promulgated by the Board of Governors of the
Federal Reserve System.
(d) The execution, delivery and performance by the Selling
Stockholder of this Agreement and the Stock Agreement and the consummation
by the Selling Stockholder of the transactions contemplated herein and
therein and compliance by the Selling Stockholder with its obligations
hereunder and thereunder do not and will not, whether with or without the
giving of notice or passage of time or both, conflict with or constitute a
breach of, or default or a Selling Stockholder Repayment Event (as defined
below) under, or result in the creation or imposition of any lien, charge
or encumbrance upon any property or assets of the Selling Stockholder
pursuant to, any contract, indenture, mortgage, deed of trust, loan or
credit agreement, note, lease or any other agreement or instrument to which
the Selling Stockholder is a part or by which he may be bound, or to which
any of the property or assets of the Selling Stockholder is subject (except
for such conflicts, breaches or defaults or liens, charges or encumbrances
that would not, singly or in the aggregate, materially and adversely affect
the ability of the Selling Stockholder to perform his obligations under
this Agreement or the Stock Agreement), nor will such action result in any
violation of any applicable law, statute, rule, regulation, judgment,
order, writ or decree of any government, government instrumentality or
court, domestic or foreign, having jurisdiction over the Selling
Stockholder or any of his assets, properties or operations (except for (x)
such violations that would not, singly or in the aggregate, materially and
adversely affect the ability of the Selling
8
<PAGE>
Stockholder to perform his obligations under this Agreement or the Stock
Agreement and (y) violations of the CEA, as to which the Selling
Stockholder makes no representation or warranty). As used herein, a
"Selling Stockholder Repayment Event" means any event or condition which
gives the holder of any note, debenture or other evidence of indebtedness
(or any person acting on such holder's behalf) the right to require the
repurchase, redemption or repayment of all or a portion of such
indebtedness by the Selling Stockholder.
(e) No filing with, or authorization, approval, consent,
license, order, registration, qualification or decree of, any court or
governmental authority or agency is necessary or required for the
execution, delivery or performance by the Selling Stockholder of this
Agreement or the Stock Agreement or the consummation by the Selling
Stockholder of the transactions contemplated by this Agreement or the Stock
Agreement, except (x) such as have been already obtained or as may be
required under the 1933 Act or the 1933 Act Regulations or state securities
laws, and (y) that the Selling Stockholder makes no representation or
warranty as to the application of the CEA to the matters set forth in this
paragraph (e).
(f) The Selling Stockholder is familiar with the representations
and warranties of SunAmerica contained in Section 1(A) of this Agreement
and the information included or incorporated by reference in the
SunAmerica Registration Statement and the SunAmerica Prospectus and has no
reason to believe that (x) the representations and warranties of SunAmerica
contained in Section 1(A) of this Agreement are not true and correct, (y)
the SunAmerica Registration Statement, any SunAmerica Rule 462(b)
Registration Statement or any post-effective amendments thereto, at the
respective times the SunAmerica Registration Statement, any SunAmerica Rule
462(b) Registration Statement or any post-effective amendments thereto
became effective, contained an untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary
to make the statements therein not misleading or (z) the SunAmerica
Prospectus or any amendment or supplement thereto, at the time the
SunAmerica Prospectus was issued, at the time any such amended or
supplemented prospectus was issued or at the Closing Time (and, if any
Option Securities are purchased, at the Date of Delivery), included or will
include an untrue statement of a material fact or omitted or will omit to
state a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading.
Any certificate signed by the Selling Stockholder delivered to the
Underwriter or the Company shall be deemed a representation and warranty by
the Selling Stockholder to the Underwriter or the Company, as the case may
be, as to the matters covered thereby.
2. Covenants of the Company. In further consideration of the
------------------------
agreements of the Underwriter and ML&Co. contained herein, the Company covenants
as follows:
(a) To furnish the Underwriter, without charge, a signed copy of
the SunAmerica Registration Statement (including exhibits thereto) and, during
the period men tioned in paragraph (c) below, as many copies of the SunAmerica
Prospectus, any docu-
9
<PAGE>
ments incorporated by reference therein and any supplements and amendments
thereto or to the SunAmerica Registration Statement as the Underwriter may
reasonably request.
(b) Before amending or supplementing the SunAmerica Registration
Statement or the SunAmerica Prospectus with respect to the SunAmerica Common
Stock, to furnish to the Underwriter a copy of each such proposed amendment or
supplement and not to file any such proposed amendment or supplement to which
the Underwriter reasonably objects.
(c) If, during such period after the first date of the public
offering of the Securities as the SunAmerica Prospectus is required by law to be
delivered in connection with sales by the Underwriter or any dealer, any event
shall occur or condition exist as a result of which it is necessary to amend or
supplement the SunAmerica Prospectus in order to make the statements therein, in
the light of the circumstances when the SunAmerica Prospectus is delivered to a
purchaser, not misleading, forthwith to prepare, file with the Commission and
furnish, at its own expense, to the Underwriter, and to any dealers (whose names
and addresses the Underwriter will furnish to the Company) to which Securities
may have been sold by the Underwriter and to any other dealer upon request,
either amendments or supplements to the SunAmerica Prospectus so that the
statements in the SunAmerica Prospectus as so amended or supplemented will not,
in the light of the circumstances when the SunAmerica Prospectus is delivered to
a purchaser, be misleading or so that the SunAmerica Prospectus, as so amended
or supplemented, will comply with law.
(d) To endeavor to qualify the SunAmerica Common Stock for offer
and sale under the securities or Blue Sky laws or insurance securities laws of
such jurisdictions as the Underwriter shall reasonably request.
(e) To make generally available to the Company's security
holders and to the Underwriter as soon as practicable an earning statement
covering a twelve month period beginning on the first day of the first full
fiscal quarter after the date of this Agreement, which earning statement shall
satisfy the provisions of Section 11(a) of the Securities Act and the rules and
regulations of the Commission thereunder.
(f) During the period mentioned in paragraph (c) above, to
advise the Underwriter promptly of the issuance by the Commission of any stop
order suspending the effectiveness of the SunAmerica Registration Statement or
the initiation or threatening of any proceeding for that purpose.
(g) Not to, and to cause its subsidiaries not to, without the
prior written consent of the Underwriter, directly or indirectly, for a period
of 60 days after the date of the ML&Co. Prospectus, sell, offer to sell, grant
any option for the sale of, or otherwise dispose of, or enter into any agreement
to sell, any SunAmerica Common Stock or any securities convertible into or
exchangeable or exercisable for any SunAmerica Common Stock; provided, however,
that such restriction shall not affect the ability of SunAmerica or its
subsidiaries to take any such action (i) as a consequence of obligations under
securities outstanding prior to the date of the ML&Co. Prospectus, (ii) in
connection with any
10
<PAGE>
employee benefit or incentive plan of SunAmerica or its subsidiaries, (iii) in
connection with the offering of the Securities or (iv) in connection with the
transactions contemplated as of the date hereof by the Share Exchange Agreement
dated as of January 12, 1996, by and among the Company, Stanford Ranch, Inc. and
the stockholders of Stanford Ranch, Inc. listed in the signature pages thereto.
(h) To make timely filings of periodic reports under the 1934
Act and to take all other actions reasonably requested by the ML&Co. Subsidiary
which request shall be based on an opinion of Brown & Wood, and which opinion
shall state that it is based on a change in law, regulation or judicial or
regulatory interpretation since the date hereof, to ensure the availability of
Rule 144 under the 1933 Act in connection with resales of SunAmerica Common
Stock by the ML&Co. Subsidiary.
(i) If the bank or trust company (the "Custodian") acting as
collateral agent and custodian for the ML&Co. Subsidiary delivers to the Company
(or its transfer agent) for transfer shares of Class B Stock together with duly
executed stock transfer powers therefor, to (or cause its transfer agent to)
deliver immediately an equivalent number of shares of SunAmerica Common Stock to
the transferees named in such stock powers.
(j) So long as any Securities remain outstanding, not to amend
its charter in any way that would adversely affect the rights, preferences and
privileges of the holders of Class B Stock including, without limitation, (i)
the combination or reclassification of Class B Stock; (ii) the convertibility of
Class B Stock into SunAmerica Common Stock including but not limited to the
conversion of Class B Stock into shares of SunAmerica Common Stock upon a
transfer of shares of Class B Stock not permitted under SunAmerica's charter;
(iii) the exchange of Class B Stock for shares of Transferable Class B Stock;
(iv) the ability to pledge shares of Class B Stock as collateral security for
indebtedness and the ability of pledgees to register such pledged shares in
"street" or "nominee" name; and (v) the reservation and availability of
SunAmerica Common Stock for issuance upon conversion of outstanding shares of
Class B Stock. The amendment (as described at pages 14 and 15 of the Company's
Notice of Annual Meeting of Shareholders and Proxy Statement dated January 15,
1996) to the Company's charter that was approved by the Company's shareholders
at the Company's Annual Meeting on February 16, 1996 shall not be deemed to
adversely affect the Nontransferable Class B Stock in any way.
3. Covenants of the Selling Stockholder.
------------------------------------
(a) The Selling Stockholder covenants with the Underwriter that,
during a period of 60 days from the date of this Agreement, the Selling
Stockholder will not, without the prior written consent of the Underwriter,
(x) offer, sell, contract to sell or otherwise dispose of, directly or
indirectly, any shares of SunAmerica Common Stock, securities convertible
into, exchangeable for or exercisable for or repayable with shares of
SunAmerica Common Stock or any rights or warrants to acquire shares of
SunAmerica Common Stock, or (y) cause to be filed any registration
statement under the 1933 Act with respect to any shares of SunAmerica
Common Stock, securities convertible into, exchangeable for or exercisable
for or repayable with
11
<PAGE>
shares of SunAmerica Common Stock, or any rights or warrants to acquire
shares of SunAmerica Common Stock; provided, however, that such restriction
shall not affect the ability of the Selling Stockholder to transfer
SunAmerica Common Stock (i) upon his death, (ii) in a bona fide gift where
the donee agrees to a similar restriction on transfer and (iii) pursuant to
the Share Exchange Agreement dated as of January 31, 1996 by and among the
Company, Stanford Ranch, Inc., the Selling Stockholder and other Stanford
Ranch Stockholders listed in the signature pages thereto.
(b) At or prior to Closing Time, the Selling Stockholder will deliver
to the ML&Co. Subsidiary a duly executed purpose statement on Form FR, G-3
of the Board of Governors of the Federal Reserve System with respect to the
Stock Agreement.
4. Indemnification and Contribution. The Company and the Selling
--------------------------------
Stockholder jointly and severally agree to indemnify and hold harmless the
Underwriter, ML&Co. and each person, if any, who controls the Underwriter or
ML&Co. within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act from and against any and all losses, claims, damages,
expense and liabilities, joint or several (including, without limitation, any
legal or other expenses reasonably incurred by any Underwriter or any such
controlling person in connection with defending or investigating any such action
or claim) (collectively, "Losses"), caused by any untrue statement or alleged
untrue statement of a material fact contained in the SunAmerica Registration
Statement or any amendment thereof, any SunAmerica preliminary prospectus or the
SunAmerica Prospectus (as amended or supplemented if the Company shall have
furnished any amendments or supplements thereto), or caused by any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such Losses are caused by any such untrue statement or omission or alleged
untrue statement or omission made in reliance upon and in conformity with
information furnished to the Company by the Underwriter or ML&Co. in writing
expressly for use therein; provided, however, that the foregoing indemnity
agreement with respect to any SunAmerica preliminary prospectus shall not inure
to the benefit of the Underwriter or ML&Co., or any person controlling the
Underwriter or ML&Co., if a copy of the SunAmerica Prospectus (as then amended
or supplemented, if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of the Underwriter to
the person asserting such Losses, if required by law so to have been deliv ered,
at or prior to the purchase of Securities by such person, and if the SunAmerica
Prospec tus (as so amended or supplemented) would have cured the defect giving
rise to such Losses. This indemnity will be in addition to any liability which
the Company and the Selling Stockholder may otherwise have.
The obligations and liabilities of the Company under the immediately
preceding paragraph shall be subject to the following terms and conditions: (i)
the indemnified party shall have previously requested indemnification for the
Losses from the Selling Stockholder under this Section 4; (ii) the Company shall
have received from the indemnified party notice of the indemnified party's
request for indemnification from the Selling Stockholder; and (iii)
12
<PAGE>
the Selling Stockholder shall have failed to pay or reimburse such indemnified
party, within 60 days from the date such request was made, in accordance with
such request.
The Underwriter agrees to indemnify and hold harmless the Company, its
direc tors, its officers who sign the SunAmerica Registration Statement and each
person, if any, who controls the Company within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act and the Selling
Stockholder to the same extent as the foregoing indemnity from the Company and
the Selling Stockholder to such Underwriter, but only to the extent that any
untrue statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with information furnished to the Company by the
Underwriter or ML&Co. in writing expressly for use in the SunAmerica
Registration Statement, any SunAmerica preliminary prospectus, the SunAmerica
Prospectus or any amendments or supplements thereto. This indemnity will be in
addition to any liability which the Underwriter may otherwise have.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding and
shall pay the fees and disbursements of such counsel related to such proceeding.
In any such proceeding, any indemnified party shall have the right to retain its
own counsel, but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by the Underwriter, in the case of parties indemnified
pursuant to the second preceding paragraph, and by the Company and the Selling
Stockholder, in the case of parties indemnified pursuant to the first preceding
paragraph. The indemnifying party shall not be liable for any settlement of any
proceeding effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff, the indemnifying
party agrees to indemnify the indemnified party from and against any loss or
liability by reason of such settlement or judgment. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened proceeding in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party, unless such settlement includes an
unconditional release of such indemnified party from all liability on claims
that are the subject matter of such proceeding.
13
<PAGE>
If the indemnification provided for in the first or second paragraph
in this Section 4 is unavailable to an indemnified party or insufficient in
respect of any Losses referred to therein, then each indemnifying party under
such paragraph, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such Losses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and the Selling Stockholder on the one hand and
the Underwriter and ML&Co. on the other hand, from the offering of the
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company and the Selling Stockholder on the one hand and of the
Underwriter and ML&Co. on the other hand in connection with the statements or
omissions that resulted in such Losses, as well as any other relevant equitable
considerations. The relative benefits received by the offering of the Securities
shall be deemed to be such that the Underwriter and ML&Co. shall be responsible
for that portion of the aggregate amount of such Losses, represented by the
percentage that the total underwriting discount received by the Underwriter, as
set forth on the cover of the ML&Co. Prospectus, bears to the aggregate initial
public offering price of the Securities as set forth on such cover and the
Company and the Selling Stockholder shall be responsible for the balance. The
relative fault of the Company and the Selling Stockholder on the one hand and of
the Underwriter and ML&Co. on the other hand shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Company or the Selling Stockholder, on
the one hand, or by the Underwriter or ML&Co., on the other hand and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The Company, the Selling Stockholder, the Underwriter and ML&Co. agree
that it would not be just or equitable if contribution pursuant to this Section
4 were determined by pro rata allocation or by any other method of allocation
that does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an indemnified
party as a result of the Losses referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such indemnified party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 4, the Underwriter and ML&Co.
shall not be required to contribute any amount in excess of the amount by which
the total price at which the Securities distributed to the public were offered
to the public exceeds the amount of any damages that the Underwriter and ML&Co.
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 4 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.
The indemnity and contribution provisions contained in this Section 4
and the representations and warranties of the Company and the Selling
Stockholder, respectively,
14
<PAGE>
contained herein shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by or on
behalf of the Underwriter or ML&Co. or any person controlling the Underwriter or
ML&Co. or by or on behalf of the Company, its directors or officers or any
person controlling the Company or by or on behalf of the Selling Stockholder and
(iii) acceptance of and payment for any of the Securities.
5. Termination. In the event that the Underwriter terminates the
-----------
Underwriting Agreement as provided in Section 9 thereof, this Agreement shall
simultaneously terminate, except that the provisions of Sections 2 and 3, the
indemnity agreements and the contribution provisions set forth in Section 4, and
the provisions of Section 6 shall remain in effect.
6. Notices. All notices and other communications hereunder shall be
-------
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard form of telecommunication. Notices to the Underwriter shall be
directed to it at North Tower, World Financial Center, New York, New York 10281-
1209, attention of Douglas W. Squires, Managing Director; notices to ML&Co.
shall be directed to it at 100 Church St., 12th Floor, New York, New York 10007,
attention of the Secretary, with a copy to the Treasurer at World Financial
Tower, South Tower, New York, New York 10080-6107; notices to the Company shall
be directed to it at 1 SunAmerica Center, 1999 Avenue of the Stars, Century
City, California 90067-6022, attention of Susan L. Harris, Esq., Senior Vice
President and General Counsel -- Corporate Affairs.
7. Parties. This Agreement shall inure to the benefit of and be
-------
binding upon each of the Underwriter, ML&Co. and the Company and their
respective successors. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than the Underwriter, ML&Co. and the Company and their respective successors and
the controlling persons and officers and directors referred to in Sections 4 and
5 and their heirs and legal representatives, any legal or equitable right,
remedy or claim under or in respect of this Agreement or any provision herein
contained. This Agreement and all conditions and provisions hereof are intended
to be for the sole and exclusive benefit of the Underwriter, ML&Co. and the
Company and their respective successors, and said controlling persons and
officers and directors and their heirs and legal representatives, and for the
benefit of no other person, firm or corporation. No purchaser of Securities
from the Underwriter shall be deemed to be a successor by reason merely of such
purchase.
8. Expenses. The Company and the Selling Stockholder, jointly and
--------
severally, will pay all expenses incident to the performance of their
obligations under this Agreement including, without limitation, the expenses of
printing all documents relating to the offering and of the mailing and
delivering of copies thereof to the Underwriter, any fees charged by investment
rating agencies for rating the Securities, and the fees and disbursements of
their counsel and advisers.
15
<PAGE>
9. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK.
10. Effect of Headings. The Article and Section headings herein and
------------------
the Table of Contents are for convenience only and shall not affect the
construction hereof.
11. Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which shall be an original; but such counterparts shall
together constitute but one and the same agreement.
16
<PAGE>
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Company a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the Underwriter, ML&Co., Mr. Eli Broad and the Company in accordance with its
terms.
Very truly yours,
SUNAMERICA INC.
By___________________
Name:
Title:
ELI BROAD
_____________________
CONFIRMED AND ACCEPTED,
as of the date first above written:
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By __________________________
Authorized Signatory
MERRILL LYNCH & CO., INC.
By __________________________
Name:
Title:
17
<PAGE>
Exhibit 4(b)
MERRILL LYNCH & CO., INC.
TO
CHEMICAL BANK,
as Trustee
____________________________________
NINTH SUPPLEMENTAL INDENTURE
Dated as of June 1, 1996
____________________________________
Creating a series of Securities designated
Structured Yield Product Exchangeable for Stock(SM)
__% STRYPES(SM) Due June __, 1999
Supplemental to Indenture
Dated as of April 1, 1983,
as Amended
<PAGE>
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
ARTICLE ONE
DEFINITIONS
<S> <C>
SECTION 101. Definitions.................................................. 2
"Applicable Redemption Date"........................................... 2
"Applicable Redemption Price".......................................... 2
"Business Day"......................................................... 2
"Closing Price"........................................................ 2
"Company".............................................................. 2
"Current Market Price"................................................. 2
"Debt Instrument"...................................................... 2
"Distributed Assets"................................................... 2
"Event of Default"..................................................... 2
"Forward Contract"..................................................... 2
"Indenture"............................................................ 2
"Interest Payment Date"................................................ 3
"Issue Date"........................................................... 3
"Maturity Consideration"............................................... 3
"Maturity Date"........................................................ 3
"Maturity Notice Date"................................................. 3
"Notice of Default".................................................... 3
"NYSE"................................................................. 3
"Principal Indenture".................................................. 3
"Redemption Notice Date"............................................... 3
"Regular Record Date".................................................. 3
"Reorganization Event"................................................. 3
"Securities"........................................................... 3
"STRYPES".............................................................. 3
"STRYPES Certificates"................................................. 3
"SunAmerica"........................................................... 3
"SunAmerica Common Stock".............................................. 3
"SunAmerica Successor"................................................. 3
"Supplemental Indenture"............................................... 3
"Trading Day".......................................................... 3
"Transaction Value".................................................... 4
"Trustee".............................................................. 4
"Unit"................................................................. 4
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
ARTICLE TWO
THE STRYPES
<S> <C> <C>
SECTION 201. Description of the STRYPES.................................. 4
SECTION 202. Form of STRYPES............................................. 5
ARTICLE THREE
PAYMENT AND DISCHARGE OF STRYPES
SECTION 301. Payment and Discharge on the Maturity Date.................. 5
SECTION 302. No Fractional Shares........................................ 6
SECTION 303. Common Equivalent Rate; Dilution Adjustments................ 7
SECTION 304. Notice of Adjustments and Certain Other Events.............. 10
SECTION 305. Shares Free and Clear....................................... 11
SECTION 306. Cancellation of STRYPES Certificates........................ 12
SECTION 307. Form of Redemption and Maturity Consideration............... 12
ARTICLE FOUR
OPTIONAL REDEMPTION
SECTION 401. Optional Redemption......................................... 12
ARTICLE FIVE
TAXES
SECTION 501. Documentary, Stamp, Transfer or Similar Taxes............... 13
SECTION 502. Treatment of STRYPES........................................ 13
ARTICLE SIX
AMENDMENT OF CERTAIN PROVISIONS
OF THE PRINCIPAL INDENTURE
SECTION 601. Amendments Relating to the STRYPES.......................... 14
SECTION 602. Interpretation of Principal Indenture....................... 21
</TABLE>
ii
<PAGE>
<TABLE>
<CAPTION>
ARTICLE SEVEN
MISCELLANEOUS
<S> <C> <C>
SECTION 701. Effect of Supplemental Indenture............................ 21
SECTION 702. Conflict with Trust Indenture Act........................... 21
SECTION 703. Successors and Assigns...................................... 21
SECTION 704. Separability Clause......................................... 21
SECTION 705. Benefits of Supplemental Indenture.......................... 21
SECTION 706. Governing Law............................................... 22
SECTION 707. Execution in Counterparts................................... 22
SECTION 708. Responsibility for Recitals................................. 22
</TABLE>
iii
<PAGE>
Ninth Supplemental Indenture, dated as of June 1, 1996 (the "Supplemental
Indenture"), by and between Merrill Lynch & Co., Inc., a corporation organized
and existing under the laws of the State of Delaware, having its principal
office at World Financial Center, New York, New York 10281 (the "Company"), and
Chemical Bank, a corporation duly organized and existing under the laws of the
State of New York and successor by merger to Manufacturers Hanover Trust
Company, having its Corporate Trust Office at 450 West 33rd Street, New York,
New York 10001, as trustee (the "Trustee").
WHEREAS, the Company has heretofore executed and delivered its Indenture,
dated as of April 1, 1983 and restated as of April 1, 1987 (as amended and
supplemented to the date hereof, the "Principal Indenture"), to the Trustee to
provide for the issuance from time to time of its unsecured and unsubordinated
debentures, notes or other evidences of senior indebtedness (the "Securities"),
unlimited as to principal amount; and
WHEREAS, the Principal Indenture, as amended by the Trust Indenture Reform
Act of 1990, and this Supplemental Indenture are hereinafter collectively
referred to as the "Indenture"; and
WHEREAS, the Company proposes to create and issue a new series of
Securities denominated its Structured Yield Product Exchangeable for Stock(SM),
___% STRYPES(SM) Due June 15, 1999 (each such Security being referred to herein
as a "STRYPES"), the terms of which will require the Company to pay and
discharge the STRYPES on their maturity date or upon earlier redemption by
delivering to the Holders thereof shares of Common Stock, par value $1.00 per
share ("SunAmerica Common Stock"), of SunAmerica Inc., a Maryland corporation
("SunAmerica") (or, in the event there shall occur a Reorganization Event (as
defined in Section 303(b) of Article Three), cash, securities and/or other
property in lieu thereof) or, at the option of the Company, cash, in any such
case as provided herein; and
WHEREAS, Section 901 of the Principal Indenture provides that, without the
consent of any Holders, the Company, when authorized by a Board Resolution, and
the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental to the Principal Indenture, in form satisfactory to the
Trustee, (a) to establish the form or terms of Securities of any series as
permitted by Section 201 and 301 thereof and (b) to cure any ambiguity, to
correct or supplement any provision in the Principal Indenture which may be
defective or inconsistent with any other provision of the Principal Indenture,
or to make any other provisions with respect to matters or questions arising
under the Principal Indenture which shall not adversely affect the interests of
the Holders of Securities of any series or any related coupons in any material
respect; and
WHEREAS, the Company has duly authorized the execution and delivery of this
Supplemental Indenture, and all things necessary to make this Supplemental
Indenture a valid agreement of the Company, in accordance with its terms, have
been done;
________________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
NOW, THEREFORE, the Company and the Trustee, in consideration of the
premises and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby covenant and agree, for the
equal and proportionate benefit of all Holders, as follows:
ARTICLE ONE
DEFINITIONS
SECTION 101. Definitions. For all purposes of the Principal Indenture and
-----------
this Supplemental Indenture relating to the series of Securities (consisting of
STRYPES) created hereby, except as otherwise expressly provided or unless the
context otherwise requires, the terms defined in this Article have the meanings
assigned to them in this Article. Capitalized terms used in the Principal
Indenture and this Supplemental Indenture but not defined herein are used as
they are defined in the Principal Indenture.
"Applicable Redemption Date" has the meaning specified in Section 401.
"Applicable Redemption Price" has the meaning specified in Section
401.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which the NYSE, banking institutions or trust companies in The City of
New York are authorized or obligated by law or executive order to close.
"Closing Price" has the meaning specified in Section 301.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor corporation shall have
become such pursuant to the applicable provisions of the Principal
Indenture, and thereafter "Company" shall mean such successor corporation.
"Current Market Price" has the meaning specified in Section 301.
"Debt Instrument" has the meaning specified in Section 502(a).
"Distributed Assets" has the meaning specified in Section 303(a)(iii).
"Event of Default" has the meaning specified in Section 601(b).
"Forward Contract" has the meaning specified in Section 502(a).
"Indenture" has the meaning specified in the second recital of the
Company in this instrument.
2
<PAGE>
"Interest Payment Date" has the meaning specified in Section 201.
"Issue Date" means June __, 1996.
"Maturity Consideration" has the meaning specified in Section 301.
"Maturity Date" has the meaning specified in Section 201.
"Maturity Notice Date" has the meaning specified in Section 304(c).
"Notice of Default" has the meaning specified in Section 601(b).
"NYSE" means the New York Stock Exchange.
"Principal Indenture" has the meaning specified in the first recital
of the Company in this instrument.
"Redemption Notice Date" has the meaning specified in Section 401.
"Regular Record Date" has the meaning specified in Section 201.
"Reorganization Event" has the meaning specified in Section 303(b).
"Securities" has the meaning specified in the first recital of the
Company in this instrument
"STRYPES" has the meaning specified in the third recital of the
Company in this instrument.
"STRYPES Certificates" has the meaning specified in Section 202.
"SunAmerica" has the meaning specified in the third recital of the
Company in this instrument.
"SunAmerica Common Stock" has the meaning specified in the third
recital of the Company in this instrument.
"SunAmerica Successor" has the meaning specified in Section 303(b).
"Supplemental Indenture" has the meaning specified in the first
paragraph of this instrument.
"Trading Day" has the meaning specified in Section 301.
3
<PAGE>
"Transaction Value" has the meaning specified in Section 303(b).
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee with respect to the
STRYPES shall have become such pursuant to the applicable provisions of the
Principal Indenture, and thereafter "Trustee" shall mean such successor
Trustee.
"Unit" has the meaning specified in Section 502(a).
ARTICLE TWO
THE STRYPES
SECTION 201. Description of the STRYPES. The Securities shall be known
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and designated as the "Structured Yield Product Exchangeable for Stock, ___%
STRYPES Due June 15, 1999" of the Company. The aggregate number of STRYPES
which may be authenticated and delivered under this Supplemental Indenture is
limited to 3,450,000 with an issue price of $__________ per STRYPES, or
$__________ in the aggregate, except for STRYPES evidenced by STRYPES
Certificates authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other STRYPES Certificates evidencing such STRYPES
pursuant to Section 304, 305, 306 or 906 of the Principal Indenture.
The STRYPES shall mature on June 15, 1999 (the "Maturity Date"). On the
Maturity Date, the STRYPES shall be paid and discharged as provided in Article
Three of this Supplemental Indenture.
The STRYPES shall bear interest at the rate of $________ per STRYPES per
annum (or $___________ per STRYPES per quarter), from June __, 1996, or from the
most recent Interest Payment Date (as defined below) to which interest has been
paid or provided for, as the case may be, until the Maturity Date or such
earlier date on which such STRYPES is redeemed or the issue price of such
STRYPES is repaid in accordance with the provisions of the Indenture. Interest
shall be payable in cash quarterly in arrears on __________, __________,
__________ and __________, beginning __________, 1996, and on the Maturity Date
(each, an "Interest Payment Date"), to the Persons in whose names the STRYPES
are registered at the close of business on the last day (whether or not a
Business Day) of the calendar month immediately preceding such Interest Payment
Date (each, a "Regular Record Date"). Interest on the STRYPES shall be computed
on the basis of a 360-day year of twelve 30-day months.
The interest on the STRYPES shall be payable and the Maturity Consideration
or Applicable Redemption Price shall be deliverable or payable at the office or
agency of the Company in the Borough of Manhattan, The City of New York
maintained for such purpose and at any other office or agency maintained by the
Company for such purpose; provided, however,
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that at the option of the Company payment of interest may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register.
At any time or from time to time prior to the Maturity Date, the Company
may, at its option, redeem the outstanding STRYPES, in whole or in part, as
provided in Article Four of this Supplemental Indenture. The STRYPES are not
subject to any sinking fund or other mandatory redemption provisions. The
STRYPES shall not be payable at the option of the Holders prior to the Maturity
Date.
The STRYPES shall be issuable only in registered form without coupons. The
STRYPES will be issued in any whole numbers. No fractional STRYPES or scrip
representing fractional STRYPES shall be issued.
SECTION 202. Form of STRYPES. The STRYPES shall be evidenced by
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certificates ("STRYPES Certificates") in the form attached hereto as Exhibit A.
ARTICLE THREE
PAYMENT AND DISCHARGE OF STRYPES
SECTION 301. Payment and Discharge on the Maturity Date. On the Maturity
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Date, unless previously redeemed pursuant to Section 401 of Article Four, the
Company shall pay and discharge each STRYPES by delivering to the Holder thereof
a number of shares of SunAmerica Common Stock (or, in the event there shall
occur a Reorganization Event, securities and/or other property in lieu thereof)
equal to the Common Equivalent Rate (as defined in Section 303 of this Article
Three) in effect on the Maturity Date. No fractional shares of SunAmerica
Common Stock shall be delivered on the Maturity Date as provided in Section 302
of this Article Three. Notwithstanding the foregoing, the Company may, at its
option, in lieu of delivering shares of SunAmerica Common Stock, deliver cash in
an amount (calculated to the nearest 1/100th of a dollar per STRYPES or, if
there is not a nearest 1/100th of a dollar, then to the next higher 1/100th of a
dollar) equal to the value of such number of shares of SunAmerica Common Stock
at the Current Market Price determined as of the second Trading Day (as defined
below) prior to the Maturity Notice Date pursuant to Section 304(c). Such
option, if exercised by the Company, must be exercised with respect to all
shares of SunAmerica Common Stock otherwise deliverable on the Maturity Date
upon payment and discharge of all Outstanding STRYPES. In determining the
amount of cash deliverable upon payment and discharge of the STRYPES in lieu of
shares of SunAmerica Common Stock pursuant to the second preceding sentence, if
more than one STRYPES shall be held at one time by the same Holder, the amount
of cash which shall be delivered to such Holder upon payment and discharge shall
be computed on the basis of the aggregate number of STRYPES so held on the
Maturity Date. If the Company elects to deliver shares of SunAmerica Common
Stock, Holders of the STRYPES will be responsible for the payment of any and all
brokerage costs upon the subsequent sale of such stock. Such number of shares
of SunAmerica Common Stock (or, in the event there shall occur a
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Reorganization Event, cash, securities and/or other property in lieu thereof)
or, at the Company's option, the amount of cash, in either case deliverable upon
payment and discharge of the STRYPES on the Maturity Date is hereinafter
referred to as the "Maturity Consideration."
As used in this Section 301 and in Section 303 and in Article Four, the
Current Market Price per share of SunAmerica Common Stock on any date of
determination shall be the average of the daily Closing Prices for the five
consecutive Trading Days ending on and including the date of determination of
the Current Market Price (appropriately adjusted to take into account the
occurrence during such five-day period of any event that results in an
adjustment of the Common Equivalent Rate); provided, however, that if the
Closing Price for the Trading Day next following such five-day period (the
"Next-Day Closing Price") is less than 95% of such five-day average, then the
Current Market Price per share of SunAmerica Common Stock on such date of
determination shall be the Next-Day Closing Price; and provided, further, that,
for the purposes of calculating the Current Market Price in connection with the
Maturity Date or any Applicable Redemption Date of STRYPES or any determination
of an amount in cash payable in lieu of a fraction of a share of SunAmerica
Common Stock or in connection with a determination date under Section 303(a)(ii)
or Section 303(a)(iii), if any adjustment of the Common Equivalent Rate becomes
effective as of any date during the period beginning on the first day of such
five-day period and ending on the Maturity Date or the Applicable Redemption
Date, or applicable determination date under Section 303(a)(ii) or Section
303(a)(iii), then the Current Market Price as determined pursuant to the
foregoing will be appropriately adjusted to reflect such adjustment. For
purposes of this Section 301 and Section 401, a "Trading Day" is a day on which
the security, the Closing Price of which is being determined, (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security; provided that, if the Closing Price of such security
is to be determined by a NYSE member firm, then the term Trading Day shall mean,
for purposes of determining such Closing Price, a day on which the NYSE is open
for trading. The "Closing Price" of any security on any day shall mean the
closing sales price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way on such day, in each case on the NYSE, or, if such security is not listed or
admitted to trading on the NYSE, on the principal national securities exchange
on which such security is listed or admitted to trading, or, if not listed or
admitted to trading on any national securities exchange, the average of the
closing bid and asked prices of such security on the over-the-counter market on
the day in question as reported by the National Quotation Bureau Incorporated,
or a similarly generally accepted reporting service, or if not so available in
such manner, as furnished by any NYSE member firm selected from time to time by
the Board of Directors of the Company for that purpose.
SECTION 302. No Fractional Shares. No fractional shares or scrip
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representing fractional shares of SunAmerica Common Stock shall be delivered if
the Company pays and discharges the STRYPES by delivering shares of SunAmerica
Common Stock on the Maturity Date or any Applicable Redemption Date. If more
than one STRYPES shall be held at one time
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by the same Holder, the number of full shares of SunAmerica Common Stock which
shall be delivered in payment of such Holder's STRYPES shall be computed on the
basis of the aggregate number of STRYPES so held on the Maturity Date or the
Applicable Redemption Date. In lieu of any fractional share of SunAmerica
Common Stock which would otherwise be deliverable upon payment and discharge of
any STRYPES on the Maturity Date or any Applicable Redemption Date, the Company,
through any applicable Paying Agent, shall make a cash payment in respect of
such fractional interest in an amount equal to the value of such fractional
share at the Current Market Price of the SunAmerica Common Stock determined as
of the second Trading Day immediately preceding the relevant Maturity Notice
Date or Redemption Notice Date.
SECTION 303. Common Equivalent Rate; Dilution Adjustments.
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(a) The Common Equivalent Rate shall be initially one share of SunAmerica
Common Stock for each STRYPES; provided, however, that such Common Equivalent
Rate shall be subject to adjustment from time to time as provided below. Such
rate in effect at any time is herein called the "Common Equivalent Rate."
(i) If SunAmerica shall:
(A) pay a stock dividend or make a distribution with respect to
SunAmerica Common Stock in shares of such stock;
(B) subdivide or split the outstanding shares of SunAmerica
Common Stock into a greater number of shares;
(C) combine the outstanding shares of SunAmerica Common Stock
into a smaller number of shares; or
(D) issue by reclassification of shares of SunAmerica Common
Stock any shares of common stock of SunAmerica;
then, in any such event, the Common Equivalent Rate shall be adjusted by
multiplying the Common Equivalent Rate in effect immediately prior to such event
by a fraction, the numerator of which shall be the number of shares of
SunAmerica Common Stock outstanding immediately following such event, and the
denominator of which shall be the number of shares of SunAmerica Common Stock
outstanding immediately prior to such event. Each such adjustment shall become
effective at the opening of business on the Business Day next following the
record date for determination of holders of SunAmerica Common Stock entitled to
receive such dividend or distribution in the case of a dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, split, combination or reclassification. Each such adjustment shall
be made successively.
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(ii) If SunAmerica shall, after the date hereof, issue rights or
warrants to all holders of SunAmerica Common Stock entitling them (for a period
not exceeding 45 days from the date of such issuance) to subscribe for or
purchase shares of SunAmerica Common Stock at a price per share less than the
then Current Market Price of the SunAmerica Common Stock determined as of the
second Trading Day preceding the date of such issuance, then in each case the
Common Equivalent Rate shall be adjusted by multiplying the Common Equivalent
Rate in effect immediately prior to the date of issuance of such rights or
warrants by a fraction, the numerator of which shall be the number of shares of
SunAmerica Common Stock outstanding on the date of issuance of such rights or
warrants, immediately prior to such issuance, plus the number of additional
shares of SunAmerica Common Stock offered for subscription or purchase pursuant
to such rights or warrants, and the denominator of which shall be the number of
shares of SunAmerica Common Stock outstanding on the date of issuance of such
rights or warrants, immediately prior to such issuance, plus the number of
additional shares of SunAmerica Common Stock which the aggregate offering price
of the total number of shares of SunAmerica Common Stock so offered for
subscription or purchase pursuant to such rights or warrants would purchase at
such Current Market Price, which shall be determined by multiplying such total
number of shares by the exercise price of such rights or warrants and dividing
the product so obtained by such Current Market Price. Such adjustment shall
become effective at the opening of business on the Business Day next following
the record date for the determination of stockholders entitled to receive such
rights or warrants. To the extent that shares of SunAmerica Common Stock are
not delivered after the expiration of such rights or warrants, or if such rights
or warrants are not issued, the Common Equivalent Rate shall be readjusted to
the Common Equivalent Rate which would then be in effect had such adjustments
for the issuance of such rights or warrants been made upon the basis of delivery
of only the number of shares of SunAmerica Common Stock actually delivered.
Each such adjustment shall be made successively.
(iii) If SunAmerica shall pay a dividend or make a distribution to
all holders of SunAmerica Common Stock of evidences of its indebtedness or other
assets (including shares of capital stock of SunAmerica but excluding any cash
dividends and any stock dividends or distributions referred to in subparagraph
(i)(A) above or shall issue to all holders of SunAmerica Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than those
referred to in subparagraph (ii) above) (any of the foregoing being hereinafter
referred to in this subparagraph (iii) as the "Distributed Assets"), then in
each such case, the Common Equivalent Rate shall be adjusted by multiplying the
Common Equivalent Rate in effect on the record date referred to below by a
fraction, the numerator of which shall be the Current Market Price per share of
the SunAmerica Common Stock determined as of the second Trading Day preceding
the record date for the determination of stockholders entitled to receive such
dividend or distribution or such rights or warrants, and the denominator of
which shall be such Current Market Price per share of SunAmerica Common Stock
less the fair market value (as determined by the Board of Directors of the
Company, whose determination shall be conclusive as of such record date) of the
portion of the Distributed Assets so distributed applicable to one share of
SunAmerica Common Stock. Each such adjustment shall become effective on the
opening of business on the Business Day next following the record date for the
determination of
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stockholders entitled to receive such dividend or distribution or such rights or
warrants. To the extent that such dividend or distribution is not so paid or
made, the Common Equivalent Rate shall be readjusted to the Common Equivalent
Rate which would then be in effect if such dividend or distribution had not
occurred. Each such adjustment shall be made successively.
(iv) Any shares of SunAmerica Common Stock issuable in payment of a
dividend or distribution shall be deemed to have been issued immediately prior
to the close of business on the record date for such dividend or distribution
for purposes of calculating the number of outstanding shares of SunAmerica
Common Stock under subparagraphs (ii) and (iii) above.
(v) All adjustments to the Common Equivalent Rate shall be
calculated to the nearest 1/100th of a share of SunAmerica Common Stock (or if
there is not a nearest 1/100th of a share to the next lower 1/100th of a share).
No adjustment in the Common Equivalent Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, however, that any adjustments which by reason of this
subparagraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(b) Adjustment for Consolidation, Merger or Other Reorganization Event. In
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the event of (i) any consolidation or merger of SunAmerica, or any surviving
entity or subsequent surviving entity of SunAmerica (a "SunAmerica Successor"),
with or into another entity (other than a merger or consolidation in which
SunAmerica is the continuing corporation and in which the SunAmerica Common
Stock outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of SunAmerica or another
corporation), (ii) any sale, transfer, lease or conveyance to another
corporation of the property of SunAmerica or any SunAmerica Successor as an
entirety or substantially as an entirety, (iii) any statutory exchange of
securities of SunAmerica or any SunAmerica Successor with another corporation
(other than in connection with a merger or acquisition) or (iv) any liquidation,
dissolution, winding up or bankruptcy of SunAmerica or any SunAmerica Successor
(any such event described in clause (i), (ii), (iii) or (iv), a "Reorganization
Event"), the Common Equivalent Rate will be adjusted to provide that each Holder
of STRYPES will receive for each STRYPES on the Maturity Date or any Applicable
Redemption Date cash in an amount equal to the Transaction Value. "Transaction
Value" means (x) for any cash received in any such Reorganization Event, the
amount of cash received per share of SunAmerica Common Stock, (y) for any
property other than cash or securities received in any such Reorganization
Event, an amount equal to the market value on the Maturity Date or any
Applicable Redemption Date of such property received per share of SunAmerica
Common Stock as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Company and (z) for any securities
received in any such Reorganization Event, an amount equal to the average
Closing Price per unit of such securities on the five Trading Days immediately
prior to the second Trading Day preceding the Maturity Date or any Applicable
Redemption Date, multiplied by the number of such securities received for each
share of SunAmerica Common Stock. Notwithstanding the foregoing, in the event
that property or securities, or a combination of cash,
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on the one hand, and property or securities, on the other, are received in such
Reorganization Event, the Company may, at its option, in lieu of delivering cash
as described above, deliver the amount of cash, securities and other property
received per share of SunAmerica Common Stock in such Reorganization Event
determined in accordance with clause (x), (y) or (z) above, as applicable. If
the Company elects to deliver securities or other property, Holders of the
STRYPES will be responsible for the payment of any and all brokerage and
transaction costs upon any subsequent sale of such securities or other property.
The kind and amount of securities with which the STRYPES shall be paid and
discharged after consummation of such transaction shall be subject to adjustment
as described in paragraph (a) above following the date of consummation of such
transaction.
SECTION 304. Notice of Adjustments and Certain Other Events.
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(a) Whenever the Common Equivalent Rate requires adjustment as herein
provided, the Company shall:
(i) forthwith compute the adjusted Common Equivalent Rate in
accordance with Section 303 of this Article Three and prepare a certificate
signed by an officer of the Company setting forth the adjusted Common Equivalent
Rate, the method of calculation thereof in reasonable detail, and the facts
requiring such adjustment and upon which such adjustment is based, which
certificate shall be conclusive, final and binding evidence of the correctness
of the adjustment, and file such certificate forthwith with the Trustee; and
(ii) within 10 Business Days following the occurrence of an event
that requires an adjustment to the Common Equivalent Rate pursuant to Section
303 of this Article Three (or if the Company is not aware of such occurrence, as
soon as practicable after becoming so aware), provide written notice to the
Trustee and to the Holders of the STRYPES of the occurrence of such event and a
statement in reasonable detail setting forth the adjusted Common Equivalent Rate
and the method by which the adjustment to the Common Equivalent Rate was
determined.
(b) In case at any time while any of the STRYPES are outstanding the
Company receives notice that:
(i) SunAmerica shall declare a dividend (or any other
distribution) on or in respect of the SunAmerica Common Stock to which Section
303(a)(i) or (iii) shall apply;
(ii) SunAmerica shall authorize the issuance to all holders of
SunAmerica Common Stock of rights or warrants to subscribe for or purchase
shares of SunAmerica Common Stock or of any other subscription rights or
warrants;
(iii) there shall occur any conversion or reclassification of
SunAmerica Common Stock (other than a subdivision or combination of outstanding
shares of such SunAmerica Common Stock) or any consolidation, merger or
reorganization to which
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SunAmerica is a party and for which approval of any stockholders of SunAmerica
is required, or the sale or transfer of all or substantially all of the assets
of SunAmerica; or
(iv) there shall occur the voluntary or involuntary dissolution,
liquidation, winding up or bankruptcy of SunAmerica;
then the Company shall promptly cause to be delivered to the Trustee and any
applicable Paying Agent and filed at the office or agency maintained for the
purpose of payment and discharge of STRYPES on the Maturity Date in the Borough
of Manhattan, The City of New York by the Trustee (or any applicable Paying
Agent), and shall promptly cause to be mailed to the Holders of STRYPES at their
last addresses as they shall appear in the Security Register, at least 10 days
before the date hereinafter specified (or the earlier of the dates hereinafter
specified, in the event that more than one is specified), a notice stating (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights or warrants, or, if a record is not to be taken,
the date as of which the holders of SunAmerica Common Stock of record to be
entitled to such dividend, distribution or grant of rights or warrants are to be
determined, or (y) the date, if known by the Company, on which such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation, winding up or bankruptcy is expected to become effective.
(c) The Company shall mail a notice, at least 30 but not more than 60 days
prior to the Maturity Date, to each Holder of STRYPES at its registered address,
which notice shall state whether the STRYPES will be paid and discharged with
shares of SunAmerica Common Stock or in cash (or any other property or
securities that may be delivered pursuant to Section 303(b)) on the Maturity
Date in accordance with Section 301 and, if payable in cash, specifying the
amount of cash payable for each STRYPES and the Current Market Price used to
calculate such amount. The date of the commencement of the mailing of such
notice is called the "Maturity Notice Date".
SECTION 305. Shares Free and Clear. The Company hereby warrants that upon
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payment and discharge of a STRYPES on the Maturity Date or any Applicable
Redemption Date pursuant to this Supplemental Indenture, the Holder of a STRYPES
shall receive all rights held by the Company in the Maturity Consideration or
Applicable Redemption Price with which such STRYPES is at such time payable and
dischargeable pursuant to this Supplemental Indenture, free and clear of any and
all liens, claims, charges and encumbrances, other than any liens, claims,
charges and encumbrances which may have been placed on any Maturity
Consideration or Applicable Redemption Price by the prior owner thereof prior to
the time such Maturity Consideration or Applicable Redemption Price was acquired
by the Company. Except as provided in Section 501 of Article Five, the Company
will pay all taxes and charges with respect to the delivery of the Maturity
Consideration or Applicable Redemption Price delivered upon payment and
discharge of STRYPES hereunder. In addition, the Company further warrants that
any Maturity Consideration or Applicable Redemption Price so delivered upon
payment and discharge of STRYPES hereunder shall be free of any transfer
restrictions (other than such as are solely attributable to any Holder's status
as an affiliate of SunAmerica).
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SECTION 306. Cancellation of STRYPES Certificates. Upon receipt by the
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Trustee of a STRYPES Certificate delivered to it for payment and discharge of
the STRYPES evidenced thereby under this Article Three, the Trustee shall cancel
and dispose of the same as provided in Section 309 of the Principal Indenture.
SECTION 307. Form of Redemption and Maturity Consideration. The Company
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agrees to deliver on the Maturity Date and on any Applicable Redemption Date the
form of consideration that Merrill Lynch Capital Services, Inc. receives on the
Maturity Date or any Applicable Redemption Date pursuant to the Stock Agreement
dated as of June ___, 1996, among the Company, Merrill Lynch Capital Services,
Inc. and Mr. Eli Broad. The Company further agrees to redeem the STRYPES if, as
and when Mr. Broad redeems his obligations under such Stock Agreement.
ARTICLE FOUR
OPTIONAL REDEMPTION
SECTION 401. Optional Redemption. At any time or from time to time prior
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to the Maturity Date, the Company may, at its option, redeem the outstanding
STRYPES, in whole or in part, at a redemption price per STRYPES initially equal
to $______________, declining by $___________ on each day following the Issue
Date to $____________ on ___________, 1999, and equal to $_____________
thereafter (each such redemption price, an "Applicable Redemption Price"),
payable in either (i) the number of shares of SunAmerica Common Stock (or, in
the event there shall occur a Reorganization Event, securities and/or other
property in lieu thereof) equal to the Applicable Redemption Price on the
applicable date fixed for redemption (the "Applicable Redemption Date") divided
by the Current Market Price of the Sun America Stock determined as of the second
Trading Day preceding the applicable Redemption Notice Date or (ii) at the
Company's option (which may be exercised with respect to all, but not less than
all, of the STRYPES to be redeemed on any Applicable Redemption Date) cash, plus
in either case an amount in cash equal to accrued and unpaid interest on the
STRYPES to but excluding the Applicable Redemption Date; provided that
installments of interest which are due and payable on or prior to the Applicable
Redemption Date shall be payable to the holders of STRYPES registered as such at
the close of business on the relevant Regular Record Dates. If the Company
elects to deliver shares of SunAmerica Common Stock, Holders of the STRYPES will
be responsible for the payment of any and all brokerage costs upon the
subsequent sale of such stock. Notice of redemption shall be given within the
time period and manner specified in Section 1104 of the Principal Indenture;
provided, however, that such notice shall additionally specify whether the
Company will pay the Applicable Redemption Price by delivery of SunAmerica
Common Stock or in cash and, if payable in Sun America Common Stock, shall also
specify the number of shares of SunAmerica Common Stock to be delivered for each
STRYPES and the Current Market Price used to calculate such number of shares.
In the event that less than all of the STRYPES are to be redeemed on any
Applicable Redemption Date, selection by the Trustee of the STRYPES for
redemption shall be in accordance with Section
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1103 of the Principal Indenture (subject to compliance with the requirements of
any principal national securities exchange on which the STRYPES may be listed);
provided, however, that STRYPES shall not be subject to redemption except in
units of one or more whole STRYPES. For purposes of this Section 401, a
"Redemption Notice Date" shall mean the commencement of mailing of the notice of
redemption to holders of STRYPES in accordance with Section 1104 of the
Principal Indenture.
ARTICLE FIVE
TAXES
SECTION 501. Documentary, Stamp, Transfer or Similar Taxes. The Company
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will pay any and all documentary, stamp, transfer or similar taxes that may be
payable in respect of the transfer and delivery of SunAmerica Common Stock (or,
in the event that there shall occur a Reorganization Event, securities and/or
other property in lieu thereof) pursuant hereto; provided, however, that the
Company shall not be required to pay any such tax which may be payable in
respect of any transfer involved in the delivery of SunAmerica Common Stock (or,
in the event that there shall occur a Reorganization Event, securities and/or
other property in lieu thereof) in a name other than that in which the STRYPES
so paid and discharged were registered, and no such transfer or delivery shall
be made unless and until the Person requesting such transfer has paid to the
Company the amount of any such tax, or has established, to the satisfaction of
the Company, that such tax has been paid.
SECTION 502. Treatment of STRYPES. The parties hereto hereby agree, and
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each Holder of a STRYPES by its purchase of a STRYPES hereby agrees:
(a) to treat, for all United States Federal, state and local tax
purposes, each STRYPES as a unit (a "Unit") consisting of (A) a debt
instrument (the "Debt Instrument") with a fixed principal amount
unconditionally payable on the Maturity Date equal to the issue price
of the STRYPES and bearing interest at the stated interest rate on the
STRYPES and (B) a forward purchase contract (the "Forward Contract")
pursuant to which the Holder is irrevocably committed to use the
principal payment due on the Debt Instrument (or, in the event of a
redemption, the Applicable Redemption Price) to purchase on the
Maturity Date or upon redemption the SunAmerica Common Stock which the
Company is obligated to deliver at that time (subject to the Company's
right to deliver cash in lieu of the SunAmerica Common Stock), which
treatment will require, among other things, each Holder that is
subject to United States Federal income tax in connection with its
ownership of the STRYPES to include currently in income payments
denominated as interest that are made with respect to the STRYPES in
accordance with such Holder's regular method of tax accounting;
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(b) in the case of purchases of STRYPES in connection with the original
issuance thereof, (A) to allocate $__________ of the entire initial
purchase price of a STRYPES (i.e., the issue price of a STRYPES) to
the Debt Instrument component and to allocate the remaining
$__________ of the entire initial purchase price of a STRYPES to the
Forward Contract component and (B) to treat such acquisition of the
STRYPES by the Holder as a purchase of the Debt Instrument by the
Holder for $__________ and the making of an initial payment by the
Holder with respect to the Forward Contract of $__________;
(c) in the case of purchases and sales of STRYPES subsequent to the
original issuance thereof, the purchase price paid (or received) by a
Holder will be allocated by the Holder between the Debt Instrument and
the Forward Contract based upon their relative fair market values (as
determined on the date of acquisition or disposition);
(d) to file all United States Federal, state and local income, franchise
and estate tax returns consistent with the treatment of each STRYPES
as a Unit consisting of the Debt Instrument and the Forward Contract
(in the absence of any change or clarification in applicable law, by
regulation or otherwise, requiring a different characterization or
treatment of the STRYPES).
ARTICLE SIX
AMENDMENT OF CERTAIN PROVISIONS
OF THE PRINCIPAL INDENTURE
SECTION 601. Amendments Relating to the STRYPES. The Principal Indenture
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is hereby amended, solely with respect to the STRYPES, as follows:
(a) By deleting Section 308 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 308. Persons Deemed Owners. Prior to due presentment of a STRYPES
Certificate for registration of transfer of STRYPES evidenced thereby, the
Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name such STRYPES Certificate is registered as the
owner of the STRYPES evidenced thereby for the purpose of receiving
delivery or payment of the Maturity Consideration or the Applicable
Redemption Price in respect of, and (subject to Sections 305 and 307)
interest on, such STRYPES and for all other purposes whatsoever, whether or
not such STRYPES be overdue, and neither the Company, the Trustee nor any
agent of the Company or the Trustee shall be affected by notice to the
contrary."
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(b) By deleting Section 501 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 501. Events of Default. "Event of Default", wherever used herein
with respect to STRYPES, 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) failure to deliver or pay the Maturity Consideration on the
Maturity Date, or to pay the Applicable Redemption Price on the Applicable
Redemption Date; or
(2) failure to pay any interest on any STRYPES when due, and
continuance of such failure for a period of 30 days; or
(3) failure to perform any other covenant of the Company in this
Indenture (other than a covenant a failure in whose performance is
elsewhere in this Section specifically dealt with), and the continuance of
such failure for a period of 60 days after there has been given, by
registered or certified mail, to the Company by the Trustee, or to the
Company and the Trustee by the Holders of at least 10% of the aggregate
issue price of the Outstanding STRYPES a written notice specifying such
failure 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 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 for any
substantial part of its property, or ordering the winding-up or liquidation
of its affairs, and such decree or order shall remain unstayed and in
effect for a period of 60 consecutive days; or
(5) the Company 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 for any substantial
part of its property, or shall fail generally to pay its debts as they
become due or shall take any corporate action in furtherance of any of the
foregoing."
(c) By deleting Section 502 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 502. Acceleration of Maturity; Rescission and Annulment. If an
Event of Default (other than an Event of Default specified in Section
501(4) or 501(5)) occurs and
15
<PAGE>
is continuing, then and in every such case the Trustee or the Holders of
not less than 25% of the aggregate issue price of the Outstanding STRYPES
may declare an amount equal to the issue price of all the STRYPES to be due
and payable immediately, by a notice in writing to the Company (and to the
Trustee if given by the Holders), and upon any such declaration such amount
shall become immediately due and payable in cash. If an Event of Default
specified in Section 501(4) or 501(5) occurs, an amount equal to the issue
price of all the STRYPES shall automatically, and without any declaration
or other action on the part of the Trustee or any Holder, become
immediately due and payable in cash.
At any time after such a declaration of acceleration has been made or an
Event of Default specified in Section 501(4) or 501(5) has occurred, and
before a judgment or decree for payment of the money due has been obtained
by the Trustee as hereinafter provided, the Holders of a majority of the
aggregate issue price of the Outstanding STRYPES, by written notice to the
Company and the Trustee, may rescind and annul such declaration or Event of
Default and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue installments of interest on all STRYPES,
(B) to the extent that payment of such interest is lawful,
interest upon overdue installments of interest at the rate borne
by the STRYPES, and
(C) 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
(2) all Events of Default with respect to the STRYPES, other than the
non-payment of the amount equal to the issue price of all the STRYPES
due solely by reason of such declaration of acceleration or Event of
Default specified in Section 501(4) or 501(5), have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon."
(d) By deleting the first paragraph of Section 503 of the Principal
Indenture in its entirety and inserting in its stead the following:
"The Company covenants that, if default is made in the payment of any
installment of interest on any STRYPES (other than interest due on the
Maturity Date)
16
<PAGE>
when such interest becomes due and payable and such default continues for a
period of 30 days, the Company will, upon demand of the Trustee, pay to it,
for the benefit of the Holders of such STRYPES, an amount equal to the
issue price of all the STRYPES, the whole amount of interest then due and
payable on such STRYPES and, to the extent that payment of such interest
shall be legally enforceable, interest on any overdue interest, at the rate
borne by the STRYPES, 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, its agents and counsel.
The Company further covenants that, if the Maturity Consideration or
any interest due on the Maturity Date is not delivered or paid in respect
of any STRYPES on the Maturity Date or if the Applicable Redemption Price
is not delivered or paid in respect of any STRYPES on the Applicable
Redemption Date, the Company will, upon demand of the Trustee, pay to it,
for the benefit of the Holders of such STRYPES, the Maturity Consideration
or the Applicable Redemption Price, as the case may be, then due and
payable on such STRYPES, the whole amount of interest then due and payable
on such STRYPES and, to the extent that payment of such interest shall be
legally enforceable, interest on any Maturity Consideration or Applicable
Redemption Price, as the case may be, that is overdue and on any overdue
interest, at the rate borne by the STRYPES, 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, its agents and counsel."
(e) By deleting Section 506 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 506. Application of Money Collected. Any money collected by the
Trustee pursuant to this Article shall be applied in the following order,
at the date or dates fixed by the Trustee and, in case of the distribution
of such money on account of the Maturity Consideration, the Applicable
Redemption Price or interest, upon presentation of the relevant STRYPES
Certificate and the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of any amounts then due and unpaid on the
STRYPES in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such STRYPES; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto."
17
<PAGE>
(f) By deleting Section 508 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 508. Unconditional Right of Holders to Receive the Maturity
Consideration and Interest. Notwithstanding any other provision in this
Indenture, the Holder of any STRYPES shall have the right, which is
absolute and unconditional, to receive (subject to Section 502) payment of
the Maturity Consideration or the Applicable Redemption Price in respect of
and (subject to Sections 305 and 307) interest on such STRYPES and to
institute suit for the enforcement of any such payment, and such right
shall not be impaired without the consent of such Holder."
(g) By deleting the first sentence of Section 513 of the Principal
Indenture in its entirety and inserting in its stead the following:
"The Holders of not less than a majority of the aggregate issue price of
the Outstanding STRYPES may on behalf of the Holders of all STRYPES waive
any past default hereunder and its consequences, except a default
(1) in the delivery or payment of the Maturity Consideration or the
Applicable Redemption Price or in the payment of interest on any STRYPES,
or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding STRYPES affected."
(h) By deleting Section 801 of the Principal Indenture in its entirety and
inserting in its stead the following:
"SECTION 801. Consolidations and Mergers of the Company and Sales, Leases
and Conveyances Permitted Subject to Certain Conditions. 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, (i) either the Company 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 or a State thereof and such
successor corporation shall expressly assume the due and punctual delivery
or payment of the Maturity Consideration or the Applicable Redemption Price
in respect of and interest on all the STRYPES, according to their tenor,
and the due and punctual performance and observance of all of the covenants
and conditions of this Indenture to be performed by the Company by
supplemental indenture satisfactory to the Trustee, executed and delivered
to the Trustee by such corporation, and (ii) the Company or 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."
18
<PAGE>
(i) By deleting the first sentence of Section 902 of the Principal
Indenture in its entirety and inserting in its stead the following:
"With the consent of the Holders of not less than 66-2/3% of the aggregate
issue price of the Outstanding STRYPES, by Act of said Holders delivered to
the Company and the Trustee, the Company, when authorized by a Board
Resolution, 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 STRYPES under this
Indenture; provided, however, that no such supplemental indenture shall,
without the consent of the Holder of each Outstanding STRYPES affected
thereby,
(1) change the Maturity Date or the Stated Maturity of any
installment of interest on any STRYPES, or reduce the amount of Maturity
Consideration deliverable or payable on the Maturity Date or reduce the
amount of interest payable on any STRYPES or reduce the amount of cash
payable with respect to any STRYPES upon acceleration of the Maturity, or
change the provisions with respect to redemption of any STRYPES, or change
any Place of Payment where, or the coin or currency in which, any interest
on or any amount of cash payable with respect to any STRYPES is payable, or
impair the right to institute suit for the enforcement of (i) any payment
on or with respect to any STRYPES or (ii) the delivery or payment of the
Maturity Consideration or the Applicable Redemption Price with respect to
any STRYPES, or
(2) reduce the percentage of the aggregate issue price of Outstanding
STRYPES, the consent of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required for waiver (of
compliance with certain provisions of this Indenture or certain defaults
hereunder and their consequences) provided for in this Indenture, or reduce
the requirements of Section 1404 for quorum or voting, or
(3) modify any of the provisions of this Section, or Section 513, or
Section 1007, 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 STRYPES affected
thereby.
(j) By deleting Section 1001 of the Principal Indenture in its entirety
and inserting in its stead the following:
"SECTION 1001. Delivery and Payment of the Maturity Consideration or the
Applicable Redemption Price and Interest. The Company covenants and agrees
for the benefit of the Holders of the STRYPES that it will duly and
punctually deliver or pay the Maturity Consideration or the Applicable
Redemption Price in respect of, and interest on, the STRYPES in accordance
with the terms of the STRYPES and this Indenture."
19
<PAGE>
(k) By deleting Section 1003 of the Principal Indenture in its entirety
and inserting in its stead the following:
"SECTION 1003. Money for Security Payments to Be Held in Trust. If the
Company shall at any time act as its own Paying Agent, it will, on or
before each due date of the Maturity Consideration or the Applicable
Redemption Price in respect of, or interest on, any of the STRYPES,
segregate and hold in trust for the benefit of the Persons entitled thereto
consideration in an amount sufficient to deliver or pay the Maturity
Consideration or the Applicable Redemption Price or a sum sufficient to pay
the interest so becoming due until such consideration shall be delivered or
paid to such Persons or otherwise disposed of as herein provided and will
promptly notify the Trustee of its action or failure so to act.
Whenever the Company shall have one or more Paying Agents, it will, prior
to each due date of the Maturity Consideration or the Applicable Redemption
Price in respect of, or interest on, any STRYPES, deposit with a Paying
Agent consideration in an amount sufficient to deliver or pay the Maturity
Consideration or the Applicable Redemption Price or a sum sufficient to pay
the interest so becoming due, such consideration to be held as provided by
the Trust Indenture Act, and (unless such Paying Agent is the Trustee) the
Company will promptly notify the Trustee of its action or failure so to
act.
The Company will cause each Paying Agent other than the Trustee to execute
and deliver to the Trustee an instrument in which such Paying Agent shall
agree with the Trustee, subject to the provisions of this Section, that
such Paying Agent will (i) comply with the provisions of the Trust
Indenture Act applicable to it as Paying Agent and (ii) during the
continuance of any default by the Company (or any other obligor upon the
STRYPES) in the making of any payment in respect of the STRYPES, upon the
written request of the Trustee, forthwith pay to the Trustee all sums held
in trust by such Paying Agent as such.
The Company may at any time, for any purpose, pay, or by Company Order
direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon
the same trusts as those upon which such sums were held by the Company or
such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability
with respect to such money.
Any consideration deposited with the Trustee or any Paying Agent, or then
held by the Company, in trust for the payment of the interest on or
delivery upon discharge of any STRYPES and remaining unclaimed for two
years after such consideration has become due and payable shall be paid to
the Company on Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such STRYPES shall
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust
20
<PAGE>
consideration, and all liability of the Company as trustee thereof, shall
thereupon cease; provided, however, that the Trustee or such Paying Agent,
before being required to make any such repayment, may at the expense of the
Company cause to be published once, in an Authorized Newspaper in each
Place of Payment or to be mailed to Holders of the STRYPES, or both, notice
that such consideration remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such
publication or mailing, any unclaimed balance of such consideration then
remaining will be repaid to the Company."
SECTION 602. Interpretation of Principal Indenture. Except as otherwise
-------------------------------------
specifically provided in this Supplemental Indenture, whenever in the Principal
Indenture there is mentioned, in any context, the principal of or principal
amount of any Security of any series or a percentage in principal amount of the
Outstanding Securities of any series, such mention shall be deemed to be, solely
with respect to the STRYPES, the issue price of the STRYPES or a percentage of
the aggregate issue price of the Outstanding STRYPES.
ARTICLE SEVEN
MISCELLANEOUS
SECTION 701. Effect of Supplemental Indenture. The Principal Indenture,
--------------------------------
as supplemented and amended by this Supplemental Indenture and all other
indentures supplemental thereto, is in all respects ratified and confirmed, and
the Principal Indenture, this Supplemental Indenture and all indentures
supplemental thereto shall be read, taken and construed as one and the same
instrument.
SECTION 702. Conflict with Trust Indenture Act. If any provision hereof
---------------------------------
limits, qualifies or conflicts with another provision hereof which is required
to be included in this Supplemental Indenture by any of the provisions of the
Trust Indenture Act, such required provision shall control.
SECTION 703. Successors and Assigns. All covenants and agreements in this
----------------------
Supplemental Indenture by the Company shall bind its successors and assigns,
whether so expressed or not.
SECTION 704. Separability Clause. In case any provision in this
-------------------
Supplemental Indenture or in the STRYPES shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions (or of the other series of Securities) shall not in any way be
affected or impaired thereby.
SECTION 705. Benefits of Supplemental Indenture. Nothing in this
----------------------------------
Supplemental Indenture, express or implied, shall give to any Person, other than
the parties hereto and their
21
<PAGE>
successors hereunder and the Holders of the STRYPES, any benefit or any legal or
equitable right, remedy or claim under this Supplemental Indenture.
SECTION 706. Governing Law. THIS SUPPLEMENTAL INDENTURE AND EACH STRYPES
-------------
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF NEW YORK
AND THIS SUPPLEMENTAL INDENTURE AND EACH SUCH STRYPES SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.
SECTION 707. Execution in Counterparts. This Supplemental Indenture may
-------------------------
be executed in any number of counterparts, each of which shall be an original;
but such counterparts shall together constitute but one and the same instrument.
SECTION 708. Responsibility for Recitals. The recitals contained herein
---------------------------
shall be taken as statements of the Company, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representations as
to the validity or sufficiency of the Principal Indenture or this Supplemental
Indenture.
22
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Merrill Lynch & Co., Inc.
By: __________________________________
Name:
Title:
Chemical Bank, as Trustee
By: __________________________________
Name:
Title:
23
<PAGE>
EXHIBIT A
[Form of Face of STRYPES Certificate]
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
No. ____________ ___________ STRYPES
CUSIP NO. 590188 76 9
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock(SM)
__% STRYPES(SM) Due June __, 1999
(Payable with Shares of Common Stock,
par value $1.00 per share, of SunAmerica Inc.)
Issue Price Per STRYPES: $_____
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay and
discharge each STRYPES evidenced hereby on __________, 1999 (the "Maturity
Date") (subject to the Company's right to redeem the STRYPES evidenced hereby,
as described on the reverse hereof) by delivering to
A-1
<PAGE>
_____________________________________, or registered assigns, a number of shares
of common stock, par value $1.00 per share ("SunAmerica Common Stock"), of
SunAmerica Inc. ("SunAmerica") equal to the Common Equivalent Rate (as defined
in the Indenture) in effect on the Maturity Date (or, in the event there shall
occur a Reorganization Event, cash, securities and/or other property in lieu
thereof), and to pay interest (computed on the basis of a 360-day year of twelve
30-day months) on such STRYPES from __________, 1996, or from the most recent
Interest Payment Date to which interest has been paid or provided for, on
__________, __________, __________ and __________ in each year, beginning
__________, 1996, and on the Maturity Date, at the rate of $____________ per
STRYPES per annum (or $____________ per STRYPES per quarter), until the Maturity
Date or such earlier date on which such STRYPES is redeemed or the issue price
of such STRYPES is repaid in accordance with the provisions described below.
The interest so payable, and punctually paid or duly provided for, on any
Interest Payment Date will, as provided in said Indenture, be paid to the Person
in whose name this STRYPES Certificate (or one or more Predecessor STRYPES
Certificates) is registered at the close of business on the last day (whether or
not a Business Day) of the calendar month immediately preceding such Interest
Payment Date (each a "Regular Record Date"). In any case where such Interest
Payment Date shall not be a Business Day, then (notwithstanding any other
provision of said Indenture or this STRYPES Certificate) payment of such
interest 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 such date, and, if
such payment is so made, no interest shall accrue for the period from and after
such date, and, if such payment is so made, no interest shall accrue for the
period from and after such date. Any such interest not so punctually paid or
duly provided for shall forthwith cease to be payable to the registered Holder
on the relevant Regular Record Date, and may be paid to the Person in whose name
this STRYPES Certificate (or one or more Predecessor STRYPES Certificates) is
registered at the close of business on a Special Record Date for the payment of
such interest to be fixed by the Trustee hereinafter referred to, notice whereof
shall be given to Holders of STRYPES not less than 10 days prior to such Special
Record Date, or may be paid at any time in any other lawful manner not
inconsistent with the requirements of any securities exchange on which the
STRYPES may be listed, and upon such notice as may be required by such exchange,
all as more fully provided in said Indenture.
Notwithstanding the foregoing, the Company may, at its option in lieu of
delivering shares of SunAmerica Common Stock, deliver cash in an amount equal to
the value of such number of shares of SunAmerica Common Stock at the Current
Market Price determined as of the second Trading Day prior to the Maturity
Notice Date. Such number of shares of SunAmerica Common Stock (or amount of
cash or, in the event there shall occur a Reorganization Event as provided in
the Indenture, cash, securities and/or other property in lieu thereof)
deliverable upon payment and discharge hereof on the Maturity Date is
hereinafter referred to as the "Maturity Consideration." The Current Market
Price per share of SunAmerica Common Stock on any date of determination shall be
the average of the daily Closing Prices for the five consecutive Trading Days
ending on and including the date of determination of the Current Market Price
(appropriately adjusted to take into account the occurrence during such five-day
period of any event that results in an adjustment of the Common Equivalent
Rate);
A-2
<PAGE>
provided, however, that if the Closing Price for the Trading Day next following
such five-day period (the "Next-Day Closing Price") is less than 95% of such
five-day average, then the Current Market Price per share of SunAmerica Common
Stock on such date of determination shall be the Next-Day Closing Price; and
provided, further, that, for the purposes of calculating the Current Market
Price in connection with the Maturity Date or any Applicable Redemption Date of
STRYPES or any determination of an amount in cash payable in lieu of a fraction
of a share of SunAmerica Common Stock or in connection with certain anti-
dilution adjustments as provided in the Indenture, if any adjustment of the
Common Equivalent Rate becomes effective as of any date during the period
beginning on the first day of such five-day period and ending on the Maturity
Date or Applicable Redemption Date or applicable date of determination under the
Indenture, then the Current Market Price as determined pursuant to the foregoing
will be appropriately adjusted to reflect such adjustment. A "Trading Day" is a
day on which the security, the Closing Price of which is being determined, (A)
is not suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security; provided that, if the Closing Price of such security
is to be determined by a NYSE member firm, then the term Trading Day shall mean,
for purposes of determining such Closing Price, a day on which the NYSE is open
for trading. The "Closing Price" of any security on any day shall mean the
closing sales price regular way on such day or, in case no such sale takes place
on such day, the average of the reported closing bid and asked prices regular
way on such day, the average of the reported closing bid and asked prices
regular way on such date, in each case on the NYSE, or, if such security is not
listed or admitted to trading on the NYSE, on the principal national securities
exchange on which such security is listed or admitted to trading, or, if not
listed or admitted to trading on any national securities exchange, the average
of the closing bid and asked prices of such security on the over-the-counter
market on the day in question as reported by the National Quotation Bureau
Incorporated, or a similarly generally accepted reporting service, or if not so
available in such manner, as furnished by any NYSE member firm selected from
time to time by the Board of Directors of the Company for that purpose.
Interest on the STRYPES evidenced hereby will be payable, and delivery of
the Maturity Consideration or Applicable Redemption Price in payment of the
STRYPES evidenced hereby on the Maturity Date or Applicable Redemption Date will
be made, upon surrender of this STRYPES Certificate, at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York, and payment of interest on the STRYPES evidenced by this STRYPES
Certificate (and, if the Company elects to deliver cash in lieu of SunAmerica
Common Stock on the Maturity Date or Applicable Redemption Date, the amount of
cash payable on the Maturity Date or Applicable Redemption Date) will be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided, however, that
at the option of the Company payment of interest may be made by check mailed to
the address of the Person entitled thereto as such address shall appear on the
Securities Register.
A-3
<PAGE>
ADDITIONAL PROVISIONS OF THIS STRYPES CERTIFICATE ARE CONTAINED ON THE
REVERSE HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY
SET FORTH IN THIS PLACE.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this STRYPES Certificate shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose. "Structured Yield Product Exchangeable for Stock" and "STRYPES" are
service marks of Merrill Lynch & Co., Inc.
IN WITNESS WHEREOF, Merrill Lynch & Co., Inc. has caused this instrument to
be duly executed under its corporate seal.
Dated:
Merrill Lynch & Co., Inc.
By: _________________________________
Name: Theresa Lang
Title: Treasurer
Attest: ______________________________
Name: Gregory T. Russo
Title: Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This certificate evidences Securities of the series designated herein and
referred to in the within-mentioned Indenture.
Chemical Bank, as Trustee
By:__________________________________
Authorized Officer
A-4
<PAGE>
[Form of Reverse of STRYPES Certificate]
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock
___% STRYPES Due _________, 1999
(Payable with Shares of Common Stock, par value $1.00 per share,
of SunAmerica Inc.)
This STRYPES Certificate evidences part of a duly authorized issue of
unsecured and unsubordinated debentures, notes or other evidences of senior
indebtedness (hereinafter called the "Securities") of the Company of the series
hereinafter specified, all such Securities issued and to be issued under an
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as amended
and supplemented as of June 1, 1996, between the Company and Chemical Bank
(successor by merger to Manufacturers Hanover Trust Company), as Trustee (the
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as
amended, restated and supplemented from time to time, the "Indenture"), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the rights and limitation of rights thereunder of the Holders
of the Securities and of the rights, obligations, duties and immunities of the
Trustee for each series of Securities and of the Company, and the terms upon
which the Securities are and are to be authenticated and delivered. As provided
in the Indenture, the Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may be
denominated in currencies other than U.S. Dollars (including composite
currencies), may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase and analogous funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided or permitted. This STRYPES Certificate evidences
Securities of the series designated as Structured Yield Product Exchangeable for
Stock, ___% STRYPES Due June, 1999 (each, a "STRYPES").
The STRYPES will be redeemable at the option of the Company, in whole or in
part, at any time or from time to time prior to the Maturity Date at a
redemption price per STRYPES initially equal to $_____________, declining by
$______________ on each day following the Issue Date to $______________ on
April, 1999, and equal to $__________________ thereafter (each such redemption
price, an "Applicable Redemption Price"), payable in either (a) the number of
shares of SunAmerica Common Stock equal to the Applicable Redemption Price on
the applicable date fixed for redemption (the "Applicable Redemption Date")
divided by the Current Market Price of the SunAmerica Stock determined as of the
second Trading Day preceding the applicable Redemption Notice Date or (ii) at
the Company's option (which may be exercised with respect to all, but not less
than all, of the STRYPES to be redeemed on any Applicable Redemption Date) cash,
plus in either case an amount in cash equal to accrued and unpaid interest on
such STRYPES to but not including the Applicable Redemption Date.
A-5
<PAGE>
The STRYPES are not subject to any sinking fund or other mandatory
redemption provisions. The STRYPES are not payable at the option of the Holders
prior to the Maturity Date.
If an Event of Default with respect to the STRYPES, as defined in the
Indenture, shall occur and be continuing, then an amount equal to the issue
price of all the STRYPES may be declared immediately due and payable in cash in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the STRYPES under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of 66-2/3%
of the aggregate issue price of the Outstanding STRYPES. The Indenture also
contains provisions permitting the Holders of a majority of the aggregate issue
price of the Outstanding STRYPES, on behalf of the Holders of all STRYPES, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences with respect to
the STRYPES. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of the
STRYPES evidenced by this STRYPES Certificate and of any STRYPES evidenced by a
STRYPES Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent of waiver is made upon this
STRYPES Certificate.
No reference herein to the Indenture and no provision of this STRYPES
Certificate or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to deliver or pay the interest on,
and Maturity Consideration in respect of, the STRYPES evidenced by this STRYPES
Certificate at the times, place and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the STRYPES evidenced by this STRYPES Certificate are transferable on the
Security Register of the Company, upon surrender of this STRYPES Certificate for
registration of transfer at the office or agency of the Company to be maintained
for that purpose in The City of New York, New York, or at any other office or
agency of the Company maintained for that purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new STRYPES
Certificates, evidencing the same aggregate number of STRYPES, will be issued to
the designated transferee or transferees.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the registration of such transfer
or exchange, other than certain exchanges not involving any transfer. Certain
terms used in this STRYPES Certificate which are defined in the Indenture have
the meanings set forth therein.
A-6
<PAGE>
This STRYPES Certificate shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York. The Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this STRYPES Certificate is registered as the owner of the STRYPES
evidenced hereby for the purpose of receiving payment as herein provided and for
all other purposes, whether or not the STRYPES be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
A-7
<PAGE>
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 UNIF GIFT MIN -- _____ Custodian _______
common (Cust) (Minor)
TEN ENT -- as tenants by the Under Uniform Gifts to Minors Act
entireties ________________________
(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.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY
OR TAXPAYER I.D. OR OTHER
IDENTIFYING NUMBER OF
ASSIGNEE
________________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
___________________________ STRYPES and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________________
attorney to transfer said STRYPES on the books of the Company, with full power
of substitution in the premises.
Dated:
____________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon on the face of the within Security in
every particular, without alteration or
enlargement or any change whatever.
A-8
<PAGE>
Exhibit 4(c)
[Form of Face of STRYPES Certificate]
[THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITORY OR A
NOMINEE THEREOF. UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN CERTIFICATED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS
A WHOLE BY THE DEPOSITORY TRUST COMPANY (THE "DEPOSITORY") TO A NOMINEE OF THE
DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR
A NOMINEE OF SUCH SUCCESSOR DEPOSITORY. UNLESS THIS SECURITY IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY (AND ANY PAYMENT IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE
BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
No. ____________ ___________ STRYPES
CUSIP NO. 590188 76 9
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock(SM)
__% STRYPES(SM) Due June __, 1999
(Payable with Shares of Common Stock,
par value $1.00 per share, of SunAmerica Inc.)
Issue Price Per STRYPES: $_____
Merrill Lynch & Co., Inc., a Delaware corporation (hereinafter called the
"Company", which term includes any successor corporation under the Indenture
hereinafter referred to), for value received, hereby promises to pay and
discharge each STRYPES evidenced hereby on __________, 1999 (the "Maturity
Date") (subject to the Company's
<PAGE>
right to redeem the STRYPES evidenced hereby, as described on the reverse
hereof) by delivering to _____________________________________, or registered
assigns, a number of shares of common stock, par value $1.00 per share
("SunAmerica Common Stock"), of SunAmerica Inc. ("SunAmerica") equal to the
Common Equivalent Rate (as defined in the Indenture) in effect on the Maturity
Date (or, in the event there shall occur a Reorganization Event, cash,
securities and/or other property in lieu thereof), and to pay interest (computed
on the basis of a 360-day year of twelve 30-day months) on such STRYPES from
__________, 1996, or from the most recent Interest Payment Date to which
interest has been paid or provided for, on __________, __________, __________
and __________ in each year, beginning __________, 1996, and on the Maturity
Date, at the rate of $____________ per STRYPES per annum (or $____________ per
STRYPES per quarter), until the Maturity Date or such earlier date on which such
STRYPES is redeemed or the issue price of such STRYPES is repaid in accordance
with the provisions described below. The interest so payable, and punctually
paid or duly provided for, on any Interest Payment Date will, as provided in
said Indenture, be paid to the Person in whose name this STRYPES Certificate (or
one or more Predecessor STRYPES Certificates) is registered at the close of
business on the last day (whether or not a Business Day) of the calendar month
immediately preceding such Interest Payment Date (each a "Regular Record Date").
In any case where such Interest Payment Date shall not be a Business Day, then
(notwithstanding any other provision of said Indenture or this STRYPES
Certificate) payment of such interest 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 such date, and, if such payment is so made, no interest shall accrue for
the period from and after such date, and, if such payment is so made, no
interest shall accrue for the period from and after such date. Any such
interest not so punctually paid or duly provided for shall forthwith cease to be
payable to the registered Holder on the relevant Regular Record Date, and may be
paid to the Person in whose name this STRYPES Certificate (or one or more
Predecessor STRYPES Certificates) is registered at the close of business on a
Special Record Date for the payment of such interest to be fixed by the Trustee
hereinafter referred to, notice whereof shall be given to Holders of STRYPES not
less than 10 days prior to such Special Record Date, or may be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the STRYPES may be listed, and upon such notice as
may be required by such exchange, all as more fully provided in said Indenture.
Notwithstanding the foregoing, the Company may, at its option in lieu of
delivering shares of SunAmerica Common Stock, deliver cash in an amount equal to
the value of such number of shares of SunAmerica Common Stock at the Current
Market Price determined as of the second Trading Day prior to the Maturity
Notice Date. Such number of shares of SunAmerica Common Stock (or amount of
cash or, in the event there shall occur a Reorganization Event as provided in
the Indenture, cash, securities and/or other property in lieu thereof)
deliverable upon payment and discharge hereof on the Maturity Date is
hereinafter referred to as the "Maturity Consideration." The Current Market
Price per share of SunAmerica Common Stock on any date of determination shall be
the average of the daily Closing Prices for the five consecutive Trading Days
ending on and including the date of
2
<PAGE>
determination of the Current Market Price (appropriately adjusted to take into
account the occurrence during such five-day period of any event that results in
an adjustment of the Common Equivalent Rate); provided, however, that if the
Closing Price for the Trading Day next following such five-day period (the
"Next-Day Closing Price") is less than 95% of such five-day average, then the
Current Market Price per share of SunAmerica Common Stock on such date of
determination shall be the Next-Day Closing Price; and provided, further, that,
for the purposes of calculating the Current Market Price in connection with the
Maturity Date or any Applicable Redemption Date of STRYPES or any determination
of an amount in cash payable in lieu of a fraction of a share of SunAmerica
Common Stock or in connection with certain anti-dilution adjustments as provided
in the Indenture, if any adjustment of the Common Equivalent Rate becomes
effective as of any date during the period beginning on the first day of such
five-day period and ending on the Maturity Date or Applicable Redemption Date or
applicable date of determination under the Indenture, then the Current Market
Price as determined pursuant to the foregoing will be appropriately adjusted to
reflect such adjustment. A "Trading Day" is a day on which the security, the
Closing Price of which is being determined, (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-counter
market at the close of business and (B) has traded at least once on the national
or regional securities exchange or association or over-the-counter market that
is the primary market for the trading of such security; provided that, if the
Closing Price of such security is to be determined by a NYSE member firm, then
the term Trading Day shall mean, for purposes of determining such Closing Price,
a day on which the NYSE is open for trading. The "Closing Price" of any
security on any day shall mean the closing sales price regular way on such day
or, in case no such sale takes place on such day, the average of the reported
closing bid and asked prices regular way on such day, the average of the
reported closing bid and asked prices regular way on such date, in each case on
the NYSE, or, if such security is not listed or admitted to trading on the NYSE,
on the principal national securities exchange on which such security is listed
or admitted to trading, or, if not listed or admitted to trading on any national
securities exchange, the average of the closing bid and asked prices of such
security on the over-the-counter market on the day in question as reported by
the National Quotation Bureau Incorporated, or a similarly generally accepted
reporting service, or if not so available in such manner, as furnished by any
NYSE member firm selected from time to time by the Board of Directors of the
Company for that purpose.
Interest on the STRYPES evidenced hereby will be payable, and delivery of
the Maturity Consideration or Applicable Redemption Price in payment of the
STRYPES evidenced hereby on the Maturity Date or Applicable Redemption Date will
be made, upon surrender of this STRYPES Certificate, at the office or agency of
the Company maintained for that purpose in the Borough of Manhattan, The City of
New York, and payment of interest on the STRYPES evidenced by this STRYPES
Certificate (and, if the Company elects to deliver cash in lieu of SunAmerica
Common Stock on the Maturity Date or Applicable Redemption Date, the amount of
cash payable on the Maturity Date or Applicable Redemption Date) will be made in
such coin or currency of the United States of America as at the time of payment
is legal tender for payment of public and private debts; provided,
3
<PAGE>
however, that at the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto as such address shall
appear on the Securities Register.
ADDITIONAL PROVISIONS OF THIS STRYPES CERTIFICATE ARE CONTAINED ON THE
REVERSE HEREOF AND SUCH PROVISIONS SHALL HAVE THE SAME EFFECT AS THOUGH FULLY
SET FORTH IN THIS PLACE.
Unless the certificate of authentication hereon has been executed by or on
behalf of the Trustee by manual signature, this STRYPES Certificate shall not be
entitled to any benefit under the Indenture, or be valid or obligatory for any
purpose. "Structured Yield Product Exchangeable for Stock" and "STRYPES" are
service marks of Merrill Lynch & Co., Inc.
IN WITNESS WHEREOF, Merrill Lynch & Co., Inc. has caused this instrument to
be duly executed under its corporate seal.
Dated:
Merrill Lynch & Co., Inc.
By: _______________________________
Name: Theresa Lang
Title: Treasurer
Attest: _____________________________
Name: Gregory T. Russo
Title: Secretary
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This certificate evidences Securities of the series designated herein and
referred to in the within-mentioned Indenture.
Chemical Bank, as Trustee
By:___________________________________
Authorized Officer
4
<PAGE>
[Form of Reverse of STRYPES Certificate]
MERRILL LYNCH & CO., INC.
Structured Yield Product Exchangeable for Stock
___% STRYPES Due _________, 1999
(Payable with Shares of Common Stock, par value $1.00 per share,
of SunAmerica Inc.)
This STRYPES Certificate evidences part of a duly authorized issue of
unsecured and unsubordinated debentures, notes or other evidences of senior
indebtedness (hereinafter called the "Securities") of the Company of the series
hereinafter specified, all such Securities issued and to be issued under an
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as amended
and supplemented as of June 1, 1996, between the Company and Chemical Bank
(successor by merger to Manufacturers Hanover Trust Company), as Trustee (the
indenture dated as of April 1, 1983 and restated as of April 1, 1987, as
amended, restated and supplemented from time to time, the "Indenture"), to which
Indenture and all other indentures supplemental thereto reference is hereby made
for a statement of the rights and limitation of rights thereunder of the Holders
of the Securities and of the rights, obligations, duties and immunities of the
Trustee for each series of Securities and of the Company, and the terms upon
which the Securities are and are to be authenticated and delivered. As provided
in the Indenture, the Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may be
denominated in currencies other than U.S. Dollars (including composite
currencies), may mature at different times, may bear interest, if any, at
different rates, may be subject to different redemption provisions, if any, may
be subject to different sinking, purchase and analogous funds, if any, may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided or permitted. This STRYPES Certificate evidences
Securities of the series designated as Structured Yield Product Exchangeable for
Stock, ___% STRYPES Due June, 1999 (each, a "STRYPES").
The STRYPES will be redeemable at the option of the Company, in whole or in
part, at any time or from time to time prior to the Maturity Date at a
redemption price per STRYPES initially equal to $_____________, declining by
$______________ on each day following the Issue Date to $______________ on
April, 1999, and equal to $__________________ thereafter (each such redemption
price, an "Applicable Redemption Price"), payable in either (a) the number of
shares of SunAmerica Common Stock equal to the Applicable Redemption Price on
the applicable date fixed for redemption (the "Applicable Redemption Date")
divided by the Current Market Price of the SunAmerica Stock determined as of the
second Trading Day preceding the applicable Redemption Notice Date or (ii) at
the Company's option (which may be exercised with respect to all, but not less
than all, of the STRYPES to be redeemed on any Applicable Redemption Date) cash,
plus in either case an amount in cash equal to accrued and unpaid interest on
such STRYPES to but not including the Applicable Redemption Date.
5
<PAGE>
The STRYPES are not subject to any sinking fund or other mandatory
redemption provisions. The STRYPES are not payable at the option of the Holders
prior to the Maturity Date.
If an Event of Default with respect to the STRYPES, as defined in the
Indenture, shall occur and be continuing, then an amount equal to the issue
price of all the STRYPES may be declared immediately due and payable in cash in
the manner and with the effect provided in the Indenture.
The Indenture permits, with certain exceptions as therein provided, the
amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the STRYPES under the Indenture at any
time by the Company and the Trustee with the consent of the Holders of 66-2/3%
of the aggregate issue price of the Outstanding STRYPES. The Indenture also
contains provisions permitting the Holders of a majority of the aggregate issue
price of the Outstanding STRYPES, on behalf of the Holders of all STRYPES, to
waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences with respect to
the STRYPES. Any such consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future Holders of the
STRYPES evidenced by this STRYPES Certificate and of any STRYPES evidenced by a
STRYPES Certificate issued upon the transfer hereof or in exchange herefor or in
lieu hereof whether or not notation of such consent of waiver is made upon this
STRYPES Certificate.
No reference herein to the Indenture and no provision of this STRYPES
Certificate or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to deliver or pay the interest on,
and Maturity Consideration in respect of, the STRYPES evidenced by this STRYPES
Certificate at the times, place and rate, and in the manner, herein prescribed.
As provided in the Indenture and subject to certain limitations therein set
forth, the STRYPES evidenced by this STRYPES Certificate are transferable on the
Security Register of the Company, upon surrender of this STRYPES Certificate for
registration of transfer at the office or agency of the Company to be maintained
for that purpose in The City of New York, New York, or at any other office or
agency of the Company maintained for that purpose, duly endorsed by, or
accompanied by a written instrument of transfer in form satisfactory to the
Company and the Security Registrar duly executed by, the Holder hereof or his
attorney duly authorized in writing, and thereupon one or more new STRYPES
Certificates, evidencing the same aggregate number of STRYPES, will be issued to
the designated transferee or transferees.
No service charge shall be made for any such transfer or exchange, but the
Company may require payment of a sum sufficient to cover any tax or other
governmental charge payable in connection with the registration of such transfer
or exchange, other than certain exchanges not involving any transfer. Certain
terms used in this STRYPES Certificate which are defined in the Indenture have
the meanings set forth therein.
6
<PAGE>
This STRYPES Certificate shall for all purposes be governed by, and
construed in accordance with, the laws of the State of New York. The Company,
the Trustee and any agent of the Company or the Trustee may treat the Person in
whose name this STRYPES Certificate is registered as the owner of the STRYPES
evidenced hereby for the purpose of receiving payment as herein provided and for
all other purposes, whether or not the STRYPES be overdue, and neither the
Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
7
<PAGE>
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 UNIF GIFT MIN -- _____ Custodian _______
common (Cust) (Minor)
TEN ENT -- as tenants by the Under Uniform Gifts to Minors Act
entireties ________________________
(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.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
PLEASE INSERT SOCIAL SECURITY
OR TAXPAYER I.D. OR OTHER
IDENTIFYING NUMBER OF
ASSIGNEE
________________________________________________________________________________
(Please print or typewrite name and address including postal
zip code of assignee)
___________________________ STRYPES and all rights thereunder, hereby
irrevocably constituting and appointing ________________________________________
attorney to transfer said STRYPES on the books of the Company, with full power
of substitution in the premises.
Dated:
____________________________________________
NOTICE: The signature to this assignment
must correspond with the name as written
upon on the face of the within Security in
every particular, without alteration or
enlargement or any change whatever.
8
<PAGE>
[LETTER HEAD OF BROWN & WOOD APPEARS HERE]
EXHIBIT 5
May 30, 1996
Merrill Lynch & Co., Inc.
World Financial Center
North Tower
New York, New York 10281-1334
Ladies and Gentlemen:
We have acted as your counsel and are familiar with the corporate
proceedings in connection with the proposed issuance and sale by Merrill Lynch &
Co., Inc. (the "Company") of up to 3,450,000 of its Structured Yield Product
Exchangeable for Stock, _____% STRYPES Due _________, 1999 (the "Securities").
We have examined such documents and records as we deemed appropriate,
including the following:
(a) a copy of the Restated Certificate of Incorporation of the
Company, certified by the Secretary of State of the State of Delaware;
(b) a copy of the Company's Registration Statement on Form S-3, as
amended by Post-Effective Amendment No. 2 thereto, relating to the
Securities (as so amended, the "Registration Statement");
(c) a copy of the indenture with respect to the Company's senior debt
securities between the Company and Chemical Bank (successor by merger to
Manufacturers Hanover Trust Company), as trustee (the "Trustee"), dated as
of April 1, 1983, as amended and restated (the "Principal Indenture"), in
the form executed by the Company and the Trustee; and
(d) a copy of the supplemental indenture with respect to the
Securities between the Company and the Trustee (the "Supplemental
Indenture"), in the form to be filed as an exhibit to the Registration
Statement.
The term "Indenture" shall mean the Principal Indenture as amended by the
Trust Indenture Reform Act of 1990 and as amended and supplemented by the
Supplemental Indenture.
Based upon the foregoing and upon such further investigation as we deem
relevant in the premises, we are of the opinion:
1. The Company has been duly incorporated under the laws of the State of
Delaware.
<PAGE>
2. The Principal Indenture has been duly and validly authorized, executed
and delivered by the Company and, as amended by the Trust Indenture Reform Act
of 1990, constitutes a valid and binding agreement of the Company, enforceable
in accordance with its terms.
3. The Supplemental Indenture has been duly authorized by the Company
and, when the Supplemental Indenture has been duly executed and delivered by the
Company and the Trustee, such Supplemental Indenture will constitute a valid and
binding agreement of the Company, enforceable in accordance with its terms.
4. When the Supplemental Indenture has been duly executed and delivered
by the Company and the Trustee, and when the Securities shall have been duly
authenticated or countersigned by the Trustee and duly issued under the
Indenture, such Securities will constitute valid and binding obligations of the
Company, enforceable in accordance with their terms.
With respect to enforcement, the above opinions are qualified to the extent
that enforcement of the Principal Indenture, the Supplemental Indenture or the
Securities may be limited by bankruptcy, insolvency (including, without
limitation, all laws relating to fraudulent transfers), reorganization,
moratorium or other similar laws affecting enforcement of creditors' rights
generally and may be subject to general principles of equity (regardless of
whether enforcement is considered in a proceeding in equity or at law).
We consent to the filing of this opinion as an exhibit to the Registration
Statement, to the quotation in the Registration Statement of our opinion with
respect to certain tax matters and to the use of our name wherever appearing in
the Registration Statement and any amendment thereto.
Very truly yours,
/s/ Brown & Wood
Brown & Wood
<PAGE>
EXHIBIT 10
STOCK AGREEMENT
---------------
THIS AGREEMENT is made as of this ___ day of ____, 1996, between MERRILL
LYNCH CAPITAL SERVICES, INC. ("Purchaser"), a Delaware corporation and wholly-
owned subsidiary of MERRILL LYNCH & CO., INC., a Delaware corporation ("ML &
Co."), ML & Co. and Eli Broad ("Seller").
WHEREAS, ML & Co. has filed with the Securities and Exchange Commission
(the "SEC") a registration statement on Form S-3 (File No. 33-65135) and Post-
Effective Amendment No. 2 thereto contemplating the offering of up to 3,450,000
of its Structured Yield Product Exchangeable for Stock(SM), ____% STRYPES(SM)
Due _____, 1999 (the "STRYPES"), the terms of which require ML & Co. to pay and
discharge the STRYPES on _____, 1999 by delivering to the holders thereof a
specified number of shares of Common Stock, par value $1.00 per share (the
"SunAmerica Common Stock"), of SunAmerica, Inc., a Maryland corporation
("SunAmerica"), or, at ML & Co.'s option, an amount in cash.
WHEREAS, ML & Co. has agreed, pursuant to an underwriting agreement dated
the date hereof (the "Underwriting Agreement") between ML & Co. and Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated (the
"Underwriter"), to issue and sell to the Underwriter an aggregate of 3,000,000
STRYPES (the "Initial STRYPES") and, at the Underwriter's option, all or any
part of 450,000 additional STRYPES (the "Option STRYPES") to cover over-
allotments, if any.
WHEREAS, the STRYPES are to be issued under an indenture, dated as of April
1, 1983 and restated as of April 1, 1987 (as amended and supplemented from time
to time, the "Principal Indenture"), between ML & Co. and Chemical Bank
(successor by merger to Manufacturers Hanover Trust Company), as trustee (the
"Trustee"), as further amended and supplemented by the Ninth Supplemental
Indenture, dated as of ______, 1996 (the "Supplemental Indenture"), between ML &
Co. and the Trustee, relating to the STRYPES. The Principal Indenture, as
amended and supplemented by the Supplemental Indenture, is hereinafter referred
to as the "Indenture."
WHEREAS, in order to obtain the cash and/or shares of SunAmerica Common
Stock (or, in the event there shall occur a Reorganization Event (as such term
is defined in the Supplemental Indenture), cash, securities and/or other
property in lieu thereof) required to satisfy its obligations under the STRYPES,
ML & Co. has agreed to purchase from Purchaser, and Purchaser has agreed to sell
to ML & Co., (i) concurrent with the issuance and sale of the Initial STRYPES,
an obligation of Purchaser (the "Initial Subsidiary STRYPES") and (ii)
concurrent
_____________________
(SM) Service mark of Merrill Lynch & Co., Inc.
<PAGE>
with each issuance and sale of any Option STRYPES, an additional obligation of
Purchaser (an "Option Subsidiary STRYPES"); the Initial Subsidiary STRYPES and
each Option Subsidiary STRYPES are hereinafter collectively referred to as the
"Subsidiary STRYPES".
WHEREAS, Seller owns a number of shares of Nontransferable Class B Stock,
par value $1.00 per share (the "Nontransferable Class B Stock"), of SunAmerica
in excess of the maximum number of shares of SunAmerica Common Stock that would
be required by Purchaser to satisfy its obligations under the Subsidiary
STRYPES; the SunAmerica Common Stock and the Nontransferable Class B Stock are
hereinafter collectively referred to as the "SunAmerica Stock".
WHEREAS, in exchange for certain consideration to be paid by Purchaser and
to be established hereunder, Purchaser and Seller desire to provide for the
future purchase, sale and delivery of a certain number of shares of
Nontransferable Class B Stock, which Nontransferable Class B Stock will
automatically convert to SunAmerica Common Stock upon delivery thereof to
Purchaser pursuant to the provisions of this Agreement, (or, in the event there
shall occur a Restructuring Event (as such term is defined in Section 1.2(h)(2)
hereof), cash, securities and/or other property in lieu thereof), subject to
Seller's right to deliver cash in lieu thereof, that would enable Purchaser to
pay and discharge the Subsidiary STRYPES on the maturity date thereof or redeem
any of the Subsidiary STRYPES on any redemption date, without taking into
account any default with respect to the Subsidiary STRYPES or any acceleration
of the maturity of the Subsidiary STRYPES resulting therefrom.
WHEREAS, Seller and Purchaser desire that, at the option of Seller, the
respective future purchase, sale and delivery obligations with respect to the
Contract Shares (as such term is defined in Section 1.2(j) hereof) at any
Closing (as such term is defined in Section 3.1 hereof) can be settled entirely,
but not less than entirely, through cash settlement in lieu of delivery of the
Contract Shares.
WHEREAS, Seller has agreed, pursuant to a Collateral Agreement dated as of
_________, 1996 (the "Collateral Agreement"), among Purchaser, Seller and
_________________, as collateral agent (the "Collateral Agent"), under the
circumstances set forth therein, to pledge and grant to Purchaser a first
priority lien on, and security interest in, and right to set off against, all of
Seller's right, title and interest in and to an aggregate of ________ shares of
any combination of SunAmerica Stock (or, in the event there shall occur a
Restructuring Event (as such term is defined in Section 1.2(h)(2) hereof), cash,
securities and/or other property in lieu thereof) and any other cash or
securities ("Substitute Collateral") held thereunder; all such shares of
SunAmerica Stock (or, in the event there shall occur a Restructuring Event,
cash, securities and/or other property in lieu thereof) and any Substitute
Collateral are hereinafter referred to as the "Collateral Property".
WHEREAS, the ownership, voting rights and rights to receive any dividends
or other distributions in respect of the Collateral Property consisting of
SunAmerica Stock (the "Collateral Shares") shall remain with Seller unless and
until delivery, if any, of the Collateral
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Shares to Purchaser pursuant to the provisions of this Agreement. Upon the
delivery of any shares of Nontransferable Class B Stock to Purchaser pursuant to
the provisions of this Agreement, such shares of Nontransferable Class B Stock
will automatically convert to SunAmerica Common Stock.
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
1.
Definitions
-----------
1.1. General. For all purposes of this Agreement, except as otherwise
-------
expressly provided or unless the context otherwise requires, the terms defined
in this Section have the meanings assigned to them in this Section.
1.2. Definitions.
-----------
(a) "Applicable Early Settlement Contract Shares" means a number of
shares of Nontransferable Class B Stock (or, in the event there shall occur
a Restructuring Event, cash, securities and/or other property in lieu
thereof) equal to the Applicable Early Settlement Price on any Applicable
Early Settlement Date divided by the Current Market Price of SunAmerica
Common Stock determined as of the second Trading Day preceding the Early
Settlement Notice Date relating to such Applicable Early Settlement Date.
(b) "Applicable Early Settlement Date" means the date designated
and fixed by Seller as the Early Settlement Date in any Early Settlement
Notice as provided for in Section 3.1 hereof.
(c) "Applicable Early Settlement Percentage" means the percentage
of Seller's outstanding obligations under this Agreement designated and
fixed by Seller in any Early Settlement Notice to be satisfied and
discharged by Seller on the Applicable Early Settlement Date as provided
for in Section 3.1 hereof.
(d) "Applicable Early Settlement Price" means, with respect to any
Applicable Early Settlement Date, an amount equal to the product of (i) an
amount initially equal to $______, declining by $_____ on each day
following the Contract Date to $____ on _____, 1999, and equal to $_____
thereafter multiplied by a percentage equal to 100% less the Previous
Applicable Early Settlement Percentage and (ii) the Applicable Early
Settlement Percentage. The Applicable Early Settlement Price shall be
adjusted in any amendment made to this Agreement pursuant to Section 9.4(b)
hereof by increasing each of the dollar amounts specified in (i) above, as
each such dollar amount specified in (i)
3
<PAGE>
above is stated as of the date immediately prior to the date on which any
such amendment is made, by an amount, as determined separately for each
such dollar amount specified in (i) above, equal to the product of (a) the
dollar amount of each such dollar amount specified in (i) above, as each
such dollar amount specified in (i) above is stated as of the date hereof,
and (b) a fraction, the numerator of which shall equal the Option Share
Amount specified in the related Option Notice and the denominator of which
shall equal 3,000,000.
(e) "Applicable Early Settlement Required Cash Component" means,
with respect to any Applicable Early Settlement Date, an amount equal the
product of (i) an amount equal to the amount which will have accrued at the
rate of ___% on an amount equal to $_____ to but excluding any Applicable
Early Settlement Date from the later of the Contract Date or the most
recent Reset Date (as defined below), multiplied by a percentage equal to
100% less the Previous Applicable Early Settlement Percentage (provided
that if the Applicable Early Settlement Date is a Reset Date, such amount
shall be zero) and (ii) the Applicable Early Settlement Percentage.
________, ______, ______, and _______, beginning _______, 1996, each
constitute a "Reset Date". For these purposes, accrued amounts shall be
computed on the basis of a 360-day year of twelve 30-day months. The Early
Settlement Required Cash Component shall be adjusted in any amendment made
to this Agreement pursuant to Section 9.4(b) hereof by increasing the
dollar amount specified in (i) above, as such dollar amount specified in
(i) above is stated as of the date immediately prior to the date on which
any such amendment is made, by an amount equal to the product of (i) the
Option Share Amount specified in the related Option Notice and (ii)
$_________.
(f) "Business Day" means any day that is not a Saturday, a Sunday
or a day on which the NYSE, banking institutions or trust companies in The
City of New York are authorized or obligated by law or executive order to
close.
(g) "Closing Price" means the closing sales price regular way of
any security on any day or, in case no such sale takes place on such day,
the average of the reported closing bid and asked prices regular way on
such day, in each case on the NYSE, or, if such security is not listed or
admitted to trading on the NYSE, on the principal national securities
exchange on which such security is listed or admitted to trading, or, if
not listed or admitted to trading on any national securities exchange, the
average of the closing bid and asked prices of such security on the over-
the-counter market on the day in question as reported by the National
Quotation Bureau Incorporated, or a similarly generally accepted reporting
service, or if not so available in such manner, as furnished by any NYSE
member firm selected from time to time by the Board of Directors of ML &
Co. for that purpose.
(h) "Common Equivalent Rate" shall mean the Common Equivalent Rate
in effect at any time as determined below.
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<PAGE>
(1) The Common Equivalent Rate shall be initially one share
of SunAmerica Common Stock; provided, however, that such Common Equivalent Rate
shall be subject to adjustment from time to time as provided below.
(A) If SunAmerica shall:
(1) pay a stock dividend or make a distribution with
respect to SunAmerica Common Stock in shares of such stock;
(2) subdivide or split the outstanding shares of
SunAmerica Common Stock into a greater number of shares;
(3) combine the outstanding shares of SunAmerica
Common Stock into a smaller number of shares; or
(4) issue by reclassification of shares of SunAmerica
Common Stock any shares of common stock of SunAmerica;
then, in any such event, the Common Equivalent Rate shall be adjusted by
multiplying the Common Equivalent Rate in effect immediately prior to such event
by a fraction, the numerator of which shall be the number of shares of
SunAmerica Common Stock outstanding immediately following such event, and the
denominator of which shall be the number of shares of SunAmerica Common Stock
outstanding immediately prior to such event. Each such adjustment shall become
effective at the opening of business on the Business Day next following the
record date for determination of holders of SunAmerica Common Stock entitled to
receive such dividend or distribution in the case of a dividend or distribution
and shall become effective immediately after the effective date in the case of a
subdivision, split, combination or reclassification. Each such adjustment shall
be made successively.
(B) If SunAmerica shall, after the date hereof, issue
rights or warrants to all holders of SunAmerica Common Stock entitling them (for
a period not exceeding 45 days from the date of such issuance) to subscribe for
or purchase shares of SunAmerica Common Stock at a price per share less than the
then Current Market Price of the SunAmerica Common Stock determined as of the
second Trading Day preceding the date of such issuance, then in each case the
Common Equivalent Rate shall be adjusted by multiplying the Common Equivalent
Rate in effect immediately prior to the date of issuance of such rights or
warrants by a fraction, the numerator of which shall be the number of shares of
SunAmerica Common Stock outstanding on the date of issuance of such rights or
warrants, immediately prior to such issuance, plus the number of additional
shares of SunAmerica Common Stock offered for subscription or purchase pursuant
to such rights or warrants, and the denominator of which shall be the number of
shares of SunAmerica Common Stock outstanding on the date of issuance of such
rights or warrants, immediately prior to such issuance, plus the number of
additional shares of SunAmerica Common Stock which the aggregate offering price
of the total number of shares of SunAmerica Common Stock so offered for
subscription or purchase pursuant to such rights or warrants would purchase at
such Current Market Price, which shall be determined by
5
<PAGE>
multiplying such total number of shares by the exercise price of such rights or
warrants and dividing the product so obtained by such Current Market Price.
Such adjustment shall become effective at the opening of business on the
Business Day next following the record date for the determination of
stockholders entitled to receive such rights or warrants. To the extent that
shares of SunAmerica Common Stock are not delivered after the expiration of such
rights or warrants, or if such rights or warrants are not issued, the Common
Equivalent Rate shall be readjusted to the Common Equivalent Rate which would
then be in effect had such adjustments for the issuance of such rights or
warrants been made upon the basis of delivery of only the number of shares of
SunAmerica Common Stock actually delivered. Each such adjustment shall be made
successively.
(C) If SunAmerica shall pay a dividend or make a
distribution to all holders of SunAmerica Common Stock of evidences of its
indebtedness or other assets (including shares of capital stock of SunAmerica
but excluding any cash dividends and any stock dividends or distributions
referred to in subparagraph (A) above) or shall issue to all holders of
SunAmerica Common Stock rights or warrants to subscribe for or purchase any of
its securities (other than those referred to in subparagraph (B) above) (any of
the foregoing being hereinafter referred to in this subparagraph (C) as the
"Distributed Assets"), then in each such case, the Common Equivalent Rate shall
be adjusted by multiplying the Common Equivalent Rate in effect on the record
date referred to below by a fraction, the numerator of which shall be the
Current Market Price per share of the SunAmerica Common Stock determined as of
the second Trading Day preceding the record date for the determination of
stockholders entitled to receive such dividend or distribution or such rights or
warrants, and the denominator of which shall be such Current Market Price per
share of SunAmerica Common Stock less the fair market value (as determined by
the Board of Directors of ML&Co., whose determination shall be conclusive as of
such record date) of the portion of the Distributed Assets so distributed
applicable to one share of SunAmerica Common Stock. Each such adjustment shall
become effective on the opening of business on the Business Day next following
the record date for the determination of stockholders entitled to receive such
dividend or distribution or such rights or warrants. To the extent that such
dividend or distribution is not so paid or made, the Common Equivalent Rate
shall be readjusted to the Common Equivalent Rate which would then be in effect
if such dividend or distribution had not occurred. Each such adjustment shall be
made successively.
(D) Any shares of SunAmerica Common Stock issuable in
payment of a dividend or distribution shall be deemed to have been issued
immediately prior to the close of business on the record date for such dividend
or distribution for purposes of calculating the number of outstanding shares of
SunAmerica Common Stock under subparagraphs (B) and (C) above.
(E) All adjustments to the Common Equivalent Rate shall be
calculated to the nearest 1/100th of a share of SunAmerica Common Stock (or if
there is not a nearest 1/100th of a share to the next lower 1/100th of a share).
No adjustment in the Common Equivalent Rate shall be required unless such
adjustment would require an increase or decrease of at least one percent
therein; provided, however, that any adjustments which by reason of this
6
<PAGE>
subparagraph are not required to be made shall be carried forward and taken into
account in any subsequent adjustment.
(2) Adjustment for Consolidation, Merger or Other
---------------------------------------------
Restructuring Event. In the event of (A) any consolidation or merger of
- -------------------
SunAmerica, or any surviving entity or subsequent surviving entity of SunAmerica
(a "SunAmerica Successor"), with or into another entity (other than a merger or
consolidation in which SunAmerica is the continuing corporation and in which the
SunAmerica Common Stock outstanding immediately prior to the merger or
consolidation is not exchanged for cash, securities or other property of
SunAmerica or another corporation), (B) any sale, transfer, lease or conveyance
to another corporation of the property of SunAmerica or any SunAmerica Successor
as an entirety or substantially as an entirety, (C) any statutory exchange of
securities of SunAmerica or any SunAmerica Successor with another corporation
(other than in connection with a merger or acquisition) or (D) any liquidation,
dissolution, winding up or bankruptcy of SunAmerica or any SunAmerica Successor
(any such event described in clause (A), (B), (C) or (D), a "Restructuring
Event"), the Common Equivalent Rate will be adjusted to provide that Purchaser
will receive for each share of Nontransferable Class B Stock deliverable by
Seller hereunder on the Termination Date or any Early Settlement Date cash in an
amount equal to the Transaction Value. "Transaction Value" means (x) for any
cash received in any such Restructuring Event, the amount of cash received per
share of SunAmerica Common Stock, (y) for any property other than cash or
securities received in any such Restructuring Event, an amount equal to the
market value on the Termination Date or any Early Settlement Date of such
property received per share of SunAmerica Common Stock as determined by a
nationally recognized independent investment banking firm retained for this
purpose by ML & Co. and (z) for any securities received in any such
Restructuring Event, an amount equal to the average Closing Price per unit of
such securities on the five Trading Days immediately prior to the second Trading
Day preceding the Termination Date or any Early Settlement Date, multiplied by
the number of such securities received for each share of SunAmerica Common
Stock. Notwithstanding the foregoing, in the event that property or securities,
or a combination of cash, on the one hand, and property or securities, on the
other, are received in such Restructuring Event, the Seller may, at his option,
in lieu of delivering cash as described above, deliver the amount of cash,
securities and other property received per share of SunAmerica Common Stock in
such Restructuring Event determined in accordance with clause (x), (y) or (z)
above, as applicable. The kind and amount of securities with which the Seller's
obligations hereunder shall be paid and discharged after consummation of such
transaction shall be subject to adjustment as described in paragraph (1) above
following the date of consummation of such transaction.
(i) "Contract Date" means __________, 1996.
(j) "Contract Shares" means, with respect to any Closing (as such
term is defined in Section 3.1 hereof), the Termination Contract Shares or
the Applicable Early Settlement Contract Shares, as the case may be.
7
<PAGE>
(k) "Current Market Price" means the Current Market Price per share
of SunAmerica Common Stock on any date of determination which shall be the
average of the daily Closing Prices for the five consecutive Trading Days
ending on and including the date of determination of the Current Market
Price (appropriately adjusted to take into account the occurrence during
such five-day period of any event that results in an adjustment of the
Common Equivalent Rate); provided, however, that if the Closing Price for
the Trading Day next following such five-day period (the "Next-Day Closing
Price") is less than 95% of such five-day average, then the Current Market
Price per share of SunAmerica Common Stock on such date of determination
shall be the Next-Day Closing Price; and provided, further, that, for the
purposes of calculating the Current Market Price in connection with the
Termination Date Closing or any Early Settlement Date Closing or any
determination of an amount in cash payable in lieu of a fraction of a share
of SunAmerica Common Stock, if any adjustment of the Common Equivalent Rate
becomes effective as of any date during the period beginning on the first
day of such five-day period and ending on the Termination Date, then the
Current Market Price as determined pursuant to the foregoing will be
appropriately adjusted to reflect such adjustment.
(l) "Early Settlement Notice Date" has the meaning specified in
Section 3.1 hereof.
(m) "Notice Date" means any Termination Notice Date or Early
Settlement Notice Date.
(n) "NYSE" means the New York Stock Exchange.
(o) "Previous Applicable Early Settlement Percentage" means, with
respect to any Applicable Early Settlement Date or the Termination Date
Closing, a percentage equal to the sum of the Applicable Early Settlement
Percentages designated and fixed by Seller in any Early Settlement Notices
relating to any Early Settlement Dates occurring prior to such Applicable
Early Settlement Date or Termination Date Closing.
(p) "Restructuring Event" has the meaning specified in Section
1.2(h)(2) hereof.
(q) "SunAmerica Successor" has the meaning specified in Section
1.2(h)(2) hereof.
(r) "Termination Contract Share Amount" means a number of shares of
Nontransferable Class B Stock equal to the product of (i) the Common
Equivalent Rate in effect on the Termination Date Closing (as defined in
Section 2.3 hereof), (ii) 3,000,000 and (iii) a percentage equal to 100%
less the Previous Applicable Early Settlement Percentage. The Termination
Contract Share Amount shall be adjusted in any amendment made to this
Agreement pursuant to Section 9.4(b) hereof by increasing the
8
<PAGE>
amount specified in (ii) above, as such amount specified in (ii) above is
stated as of the date immediately prior to the date on which any such
amendment is made, by the Option Share Amount specified in the related
Option Notice.
(s) "Termination Contract Shares" mean a number of shares of
Nontransferable Class B Stock (or, in the event there shall occur a
Restructuring Event, cash, securities and/or other property in lieu
thereof) equal to the Termination Contract Share Amount.
(t) "Termination Date" means _________, 1999.
(u) "Termination Date Closing" has the meaning specified in Section
2.3 hereof.
(v) "Termination Notice Date" has the meaning specified in Section
2.5 hereof.
(w) "Termination Price" has the meaning specified in Section 2.4
hereof.
(x) "Trading Day" means a day on which the security, the Closing
Price of which is being determined, (A) is not suspended from trading on
any national or regional securities exchange or association or over-the-
counter market at the close of business and (B) has traded at least once on
the national or regional securities exchange or association or over-the-
counter market that is the primary market for the trading of such security;
provided that, if the Closing Price of such security is to be determined by
a NYSE member firm, then the term Trading Day shall mean, for purposes of
determining such Closing Price, a day on which the NYSE is open for
trading.
(y) "Transaction Value" has the meaning specified in Section
1.2(h)(2) hereof.
2.
Future Sale of Contract Shares or Cash Settlement
-------------------------------------------------
2.1. Sale and Purchase. On the basis of the representations and
-----------------
warranties herein set forth and subject to the terms and conditions herein set
forth, (i) Purchaser agrees to pay the consideration to Seller required by
Section 2.2 hereof, and (ii) on the Termination Date Closing (as defined in
Section 2.3 hereof) or on any Early Settlement Date Closing (as defined in
Section 3.1 hereof), Seller agrees to sell, assign, transfer, convey and deliver
to Purchaser, and Purchaser agrees to purchase and acquire from Seller, the
Contract Shares, subject to Seller's right, pursuant to Section 2.5 hereof and
Section 3.4 hereof, to deliver cash in lieu of the Contract Shares.
9
<PAGE>
2.2. Consideration.
-------------
(a) The aggregate consideration to be paid by Purchaser in exchange
for Seller's obligations hereunder to deliver the Contract Shares (the "Firm
Consideration Amount") shall be $_______ in cash. Upon the terms and subject to
the conditions of this Agreement, Purchaser shall deliver to Seller the Firm
Consideration Amount on _____, 1996 (the "Firm Payment Date") at the offices of
Brown & Wood, One World Trade Center, New York, New York 10048, or at such other
place as shall be agreed upon by Purchaser and Seller.
(b) The consideration (the "Option Consideration Amount") to be paid
by Purchaser in exchange for Seller's obligations hereunder to deliver the
Contract Shares arising from any amendment made to this Agreement pursuant to
Section 9.4(b) hereof shall be set forth in such amendment and shall be in an
amount equal to ____% of an amount equal to the product of (i) the Option Share
Amount specified in the related Option Notice and (ii) $_________. Upon the
terms and subject to the conditions of this Agreement, Purchaser shall deliver
to Seller the Option Consideration Amount on the related Date of Delivery (as
such term is defined in Section 9.4(b) hereof) at the offices of Brown & Wood,
One World Trade Center, New York, New York 10048, or at such other place as
shall be agreed upon by Purchaser and Seller.
(c) Payment of the Firm Consideration Amount and the Option
Consideration Amount shall be made by Fedwire transfer of immediately available
funds to an account designated by Seller, or such other form of payment
specified by Seller, against delivery by Seller to the Collateral Agent of the
number of shares of SunAmerica Stock (or, in the event there shall occur a
Restructuring Event, cash, securities and/or other property in lieu thereof)
necessary to comply with Seller's obligations under Section 6.1 hereof.
2.3. Delivery upon Termination. Consummation of the purchase, sale and
-------------------------
delivery of the Termination Contract Shares shall take place on a date mutually
agreeable to Purchaser and Seller, not later than one (1) Trading Day prior to
the Termination Date (the "Termination Date Closing"). Delivery of the
certificates representing the Termination Contract Shares (unless the
Termination Contract Shares are represented by one or more global certificates
registered in the name of a depositary or a nominee of a depositary, in which
event Purchaser's interest in such Termination Contract Shares shall be noted in
a manner reasonably satisfactory to Purchaser and its counsel) shall be made at
the offices of Purchaser, or at such other place as shall be agreed upon by
Purchaser and Seller. Any certificates for the Termination Contract Shares
delivered shall be registered in Purchaser's name (or endorsed in blank or
otherwise registered as requested by Purchaser).
2.4. No Fractional Shares. No fractional shares or script representing
--------------------
fractional shares of Nontransferable Class B Stock shall be delivered at the
Termination Date Closing. Instead of any fractional share of Nontransferable
Class B Stock which would otherwise be deliverable by Seller at the Termination
Date Closing, Seller shall make a cash payment in respect of such fractional
interest in an amount equal to the value of such fractional share at the Current
Market Price of the SunAmerica Common Stock (the "Termination Price") determined
as of the second
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Trading Day preceding the Termination Notice Date (as such term is defined in
Section 2.5 hereof).
2.5. Cash Settlement. Notwithstanding the provisions of Sections 2.1, 2.3
---------------
and 2.4 hereof, except as provided in Section 8.1 hereof, Seller shall have the
option, exercisable in his sole discretion, to require that his obligation
contained therein be settled, in whole, through a cash payment at the
Termination Date Closing in lieu of delivery of the Termination Contract Shares.
The amount of such cash settlement payment shall be equal to the value of the
Termination Contract Shares at the Termination Price. On or prior to a date
that is at least 32 but not more than 62 calendar days before the Termination
Date, Seller shall notify Purchaser whether he will exercise his option to
require cash settlement pursuant to this Section 2.5. The date on which Seller
provides such notice to Purchaser shall be referred to herein as the
"Termination Notice Date". In the event of a failure by Seller to provide such
notice to Purchaser, Seller shall be deemed to have elected not to exercise his
option to require cash settlement pursuant to this Section 2.5 and the
Termination Notice Date shall be deemed to be the date that is 32 days before
the Termination Date.
2.6. Termination Date Closing Condition. If a Restructuring Event shall
----------------------------------
have occurred, Seller's right to deliver to Purchaser hereunder securities
and/or other property received pursuant to such Restructuring Event shall be
conditioned upon such securities and/or other property so delivered being (a)
transferable after such delivery without contemporaneous registration under the
Securities Act of 1933, as amended (the "1933 Act"), and (b) free of any
transfer restrictions. If the condition set forth in the preceding sentence
shall not be satisfied, then, notwithstanding the provisions hereof, the parties
respective obligations contained in clause (ii) of Section 2.1 shall be settled,
in whole, through a cash payment at the Termination Date Closing in lieu of
delivery of the Termination Contract Shares as provided in Section 2.5 hereof.
3.
Early Satisfaction and Discharge
--------------------------------
3.1. Early Satisfaction and Discharge. Except as provided in Section 8.1
--------------------------------
hereof, Seller shall have the option, exercisable at any time, to require that
the parties satisfy and discharge their respective obligations hereunder, in
whole or in part, on any date or dates fixed by Seller for early settlement
(each an "Early Settlement Date Closing" and, together with the Termination Date
Closing, a "Closing"), in the following manner:
(i) Seller shall sell, assign, transfer, convey and deliver to
Purchaser, and Purchaser shall purchase and acquire from Seller, the
Applicable Early Settlement Contract Shares; and
(ii) Seller shall deliver to Purchaser cash in an amount equal to
the Applicable Early Settlement Required Cash Component.
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<PAGE>
Seller shall provide notice ("Early Settlement Notice") of his intention to
require early satisfaction and discharge, in whole or in part, of this Agreement
to Purchaser and ML & Co. on or prior to a date that is not less than 32 but not
more than 62 calendar days prior to any Early Settlement Date Closing. Seller
shall designate and fix the date (the "Early Settlement Date") of Early
Settlement Date Closing in any Early Settlement Notice. Seller shall also
designate and fix in any Early Settlement Notice the percentage (the "Applicable
Early Settlement Percentage") of his then outstanding obligations under this
Agreement that he will satisfy and discharge on any Early Settlement Date.
Notwithstanding the foregoing, Seller shall have the option set forth in this
Section 3.1 only if, as of the date (the "Early Settlement Notice Date") on
which Seller provides Early Settlement Notice to Purchaser and ML & Co., Seller
has fully complied with the provisions contained in Sections 6.1(b), 6.1(c) and
6.2 hereof.
3.2. Payment and Delivery. Consummation of the purchase, sale and
--------------------
delivery of the Early Settlement Contract Shares and delivery of the Early
Settlement Required Cash Component shall take place at the Early Settlement Date
Closing. Payment of the Early Settlement Required Cash Component shall be made
by Fedwire transfer of immediately available funds to an account designated by
Purchaser, or such other form of payment specified by Purchaser. Delivery of
the certificates representing the Early Settlement Contract Shares (unless the
Early Settlement Contract Shares are represented by one or more global
certificates registered in the name of a depositary or a nominee of a
depositary, in which event Purchaser's interest in such Early Settlement
Contract Shares shall be noted in a manner reasonably satisfactory to Purchaser
and its counsel) shall be made at the offices of Purchaser, or at such other
place as shall be agreed upon by Purchaser and Seller. Any certificates for the
Early Settlement Contract Shares delivered shall be registered in Purchaser's
name (or endorsed in blank or otherwise registered as requested by Purchaser).
3.3. No Fractional Shares. No fractional shares or script representing
--------------------
fractional shares of Nontransferable Class B Stock shall be delivered at any
Early Settlement Date Closing. Instead of any fractional share of
Nontransferable Class B Stock which would otherwise be deliverable by Seller at
any Early Settlement Date Closing, Seller shall make a cash payment in respect
of such fractional interest in an amount equal to such fractional share at the
Current Market Price of the SunAmerica Common Stock determined as of the second
Trading Day preceding the applicable Early Settlement Notice Date.
3.4. Cash Settlement. Notwithstanding the provisions of Sections 3.1, 3.2
---------------
and 3.3 hereof, Seller shall have the option, exercisable in his sole
discretion, to require that his obligation contained therein be settled, in
whole, through a cash payment at any Early Settlement Date Closing in lieu of
delivery of the Early Settlement Contract Shares. The amount of any such cash
settlement payment shall be equal to the Applicable Early Settlement Price. In
the Early Settlement Notice given to Purchaser pursuant to Section 3.1 hereof,
Seller shall notify Purchaser whether he will exercise his option to require
cash settlement pursuant to this Section 3.4.
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4.
Representations and Warranties of Seller
----------------------------------------
Seller represents and warrants to Purchaser as of the date hereof and as of
the date of each Closing as follows:
(a) This Agreement has been duly executed and delivered by Seller
and (assuming the due authorization, execution and delivery by Purchaser and ML
& Co.) constitutes a valid and binding agreement of Seller, enforceable against
Seller in accordance with its terms, except as the enforcement hereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), or similar laws affecting enforcement of
creditors' rights generally, except as enforcement hereof is subject to general
principles of equity (regardless of whether enforcement is considered in a
proceeding in equity or at law), and except that Seller makes no representation
or warranty as to the application of the Commodities Exchange Act or the rules
and regulations of the Commodities Futures Trading Commission promulgated
thereunder (collectively, the "CEA"), to the matters set forth in this Section
4(a).
(b) (i) At the date hereof, Seller is the sole registered owner of
and has all rights in and to at least ____________ shares of SunAmerica Stock,
free and clear of any security interest, mortgage, pledge, lien, encumbrance,
claim or equity; and (ii) to the extent Seller elects to deliver the Contract
Shares at Closing, upon delivery of such Contract Shares pursuant to this
Agreement, Purchaser will be the sole registered owner of an equivalent number
of shares of SunAmerica Common Stock and, assuming Purchaser purchased for value
in good faith and without notice of any adverse claim, Purchaser will have
acquired all rights in and to such shares of SunAmerica Common Stock, free and
clear of any security interest, mortgage, pledge, lien, encumbrance, claim or
equity.
(c) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the execution, delivery or
performance by Seller of this Agreement or the consummation by Seller or
SunAmerica of the transactions contemplated herein, except such as have been
already obtained or as may be required under the 1933 Act or the rules and
regulations promulgated thereunder or state securities laws and except that
Seller makes no representation or warranty as to the application of the CEA to
the matters set forth in this Section 4(c); and Seller has full right and power
to enter into this Agreement and to sell, assign, transfer and deliver the
Contract Shares pursuant to this Agreement.
(d) The execution, delivery and performance by Seller of this
Agreement and the consummation by Seller of the transactions contemplated herein
and compliance by Seller with his obligations hereunder do not and will not,
whether with or without the giving of notice or passage of time or both,
conflict with or constitute a breach of, or default under, or result in the
creation or imposition of any lien, charge or encumbrance upon any shares of
SunAmerica Stock owned by Seller pursuant to any contract, mortgage, deed of
trust, loan or credit
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agreement, note, lease or any other agreement or instrument to which Seller is a
party or by which Seller is bound, or to which any shares of SunAmerica Stock
owned by Seller is subject (except for such conflicts, breaches or defaults or
liens, charges or encumbrances that would not, singly or in the aggregate,
materially and adversely affect the ability of Seller to perform his obligations
under this Agreement), nor will such action result in any violation of any
applicable law, statute, rule, regulation, judgment, order, writ or decree of
any government, government instrumentality or court, domestic or foreign, having
jurisdiction over Seller or any of Seller's assets or properties (except for
violations that would not, singly or in the aggregate, materially and adversely
affect the ability of Seller to perform his obligations under this Agreement)
and except that Seller makes no representation and warranty as to the
application of the CEA to the matters set forth in this Section 4(d).
5.
Representations and Warranties of Purchaser
-------------------------------------------
Purchaser represents and warrants to Seller as of the date hereof and as of
the date of each Closing as follows:
(a) Purchaser has been duly organized and is validly existing as a
corporation in good standing under the laws of the State of Delaware.
(b) This Agreement has been duly authorized, executed and delivered
by Purchaser and (assuming the due execution and delivery by Seller) constitutes
a valid and binding agreement of Purchaser, enforceable against Purchaser in
accordance with its terms, except as the enforcement hereof may be limited by
bankruptcy, insolvency (including, without limitation, all laws relating to
fraudulent transfers), reorganization, moratorium or similar laws affecting
enforcement of creditors' rights generally and except as enforcement hereof is
subject to general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law).
(c) No filing with, or authorization, approval, consent, license,
order, registration, qualification or decree of, any court or governmental
authority or agency is necessary or required for the execution, delivery or
performance by Purchaser of this Agreement or the consummation by Purchaser of
the transactions contemplated herein, except such as have been already obtained
or as may be required under the 1933 Act or the rules and regulations
promulgated thereunder or state securities laws; and Purchaser has full right,
power and authority to enter into this Agreement and to purchase the Contract
Shares pursuant to this Agreement.
(d) The execution, delivery and performance by Purchaser of this
Agreement and the consummation by Purchaser of the transactions contemplated
herein and compliance by Purchaser with its obligations hereunder do not and
will not, whether with or without the giving
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of notice or passage of time or both, conflict with or constitute a breach of,
or default under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of Purchaser pursuant to any contract,
indenture, mortgage, deed of trust, loan or credit agreement, note, lease or any
other agreement or instrument to which Purchaser is a party or by which
Purchaser is bound, or to which any of the property or assets of Purchaser is
subject (except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not, singly or in the aggregate, materially and
adversely affect the ability of Purchaser to perform its obligations under this
Agreement), nor will such action result in any violation of the provisions of
the charter or by-laws of Purchaser, or any applicable law, statute, rule,
regulation, judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over
Purchaser or any of its assets, properties or operations (except for violations
that would not, singly or in the aggregate, materially and adversely affect the
ability of Purchaser to perform its obligations under this Agreement).
6.
Covenants
---------
6.1. Collateral.
----------
(a) Seller shall, on the date hereof and at all times from the date
hereof through the later of the last Early Settlement Date or the date of the
Termination Date Closing hereunder (the "Final Closing Date"), cause to be held
by the Collateral Agent under the Collateral Agreement an aggregate number of
shares of any combination of SunAmerica Stock (or, in the event there shall
occur a Restructuring Event, cash, securities and/or other property in lieu
thereof) at least equal to the maximum number of shares of Nontransferable Class
B Stock (or, in the event there shall occur a Restructuring Event, cash,
securities and/or other property in lieu thereof) that would be required by
Seller to pay and discharge all of Seller's outstanding obligations to deliver
Contract Shares hereunder on the Termination Date Closing (the "Applicable
Maximum Contract Shares"), subject to Seller's right under the Collateral
Agreement, as set forth therein, to cause to be held by the Collateral Agent
under the Collateral Agreement any Substitute Collateral in the manner and
amount required under the Collateral Agreement.
(b) In the event that Seller exercises his option set forth in
Section 3.1 hereof, on or before any Early Settlement Notice Date, Seller shall
cause to be held by the Collateral Agent under the Collateral Agreement an
amount of cash equal to the Applicable Early Settlement Required Cash Component
that would be deliverable by Seller to Purchaser hereunder on the Applicable
Early Settlement Date to which such Early Settlement Notice Date relates.
(c) Seller shall cause the required orders to be given to the
Transfer Agent for the SunAmerica Stock in order to restrict the transfer
thereof.
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6.2. No Default. Seller agrees that at all times from the date hereof
----------
through the Final Closing Date, Seller will conduct Seller's affairs so that
compliance with his obligations hereunder and under the Collateral Agreement do
not and will not result in any conflict with or constitute a breach or default
(or in any situation that, with the giving of notice or the passage of time, or
both, would result in default) in the performance or observance of any
obligation, agreement, covenant or condition contained in any contract,
mortgage, deed of trust, loan or credit agreement, note, lease or other
agreement or instrument to which Seller is a party or by which he may be bound
or to which any of the property or assets of Seller is subject (except for such
conflicts, breaches or defaults that would not, singly or in the aggregate,
materially and adversely affect the ability of Seller to perform his obligations
under this Agreement and under the Collateral Agreement).
6.3. Taxes.
-----
(a) Seller shall pay any and all documentary, stamp, transfer or
similar taxes and charges that may be payable in respect of the entry into this
Agreement and the transfer and delivery of the Contract Shares pursuant hereto.
(b) Purchaser and Seller hereby agree to treat, for all United
States Federal, state and local tax purposes, this Agreement as a pre-paid
forward contract, which does not constitute, in whole or in part, indebtedness,
pursuant to which Purchaser is obligated to purchase at the Termination Date
Closing or any Early Settlement Date Closing the Contract Shares which Seller is
obligated to deliver at that time (subject to Seller's right to deliver cash in
lieu of the Contract Shares).
6.4. Certain Notices.
---------------
(a) In case at any time from the date hereof through the Final
Closing Date Seller receives notice that:
(i) SunAmerica shall declare a dividend (or any other
distribution) on or in respect of the SunAmerica Common Stock to which
Section 1.2(h)(1)(A) or 1.2(h)(1)(C) of this Agreement shall apply;
(ii) SunAmerica shall authorize the issuance to all holders of
SunAmerica Common Stock of rights or warrants to subscribe for or
purchase shares of SunAmerica Common Stock or of any other
subscription rights or warrants;
(iii) there shall occur any conversion or reclassification of
SunAmerica Common Stock (other than a subdivision or combination of
outstanding shares of such SunAmerica Common Stock) or any
consolidation, merger or reorganization to which SunAmerica is a party
and for which approval of any stockholders of
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SunAmerica is required, or the sale or transfer of all or
substantially all of the assets of SunAmerica; or
(iv) there shall occur the voluntary or involuntary
dissolution, liquidation, winding up or bankruptcy of SunAmerica;
then Seller shall promptly notify Purchaser and ML & Co. of such fact and of (x)
the date on which a record is to be taken for the purpose of such dividend,
distribution or grant of rights or warrants, or, if a record is not to be taken,
the date as of which the holders of SunAmerica Common Stock of record to be
entitled to such dividend, distribution or grant of rights or warrants are to be
determined, or (y) the date, if known by Seller, on which such reclassification,
consolidation, merger, sale, transfer, dissolution, liquidation, winding up or
bankruptcy is expected to become effective.
(b) Whenever the Common Equivalent Rate requires adjustment as
herein provided, the Purchaser shall forthwith compute the adjusted Common
Equivalent Rate in accordance with Section 1.2(h) hereof and prepare a
certificate signed by an officer of Purchaser setting forth the adjusted Common
Equivalent Rate, the method of calculation thereof in reasonable detail, and the
facts requiring such adjustment and upon which such adjustment is based, which
certificate shall be conclusive, final and binding evidence of the correctness
of the adjustment, and deliver such certificate to Seller within 15 Business
Days following the occurrence of an event that requires an adjustment to the
Common Equivalent Rate pursuant to Section 1.2(h) (or if Purchaser is not aware
of such occurrence, as soon as practicable after becoming so aware).
6.5. Limitations on Trading During Certain Days. Each of Seller and ML &
------------------------------------------
Co. hereby agrees that it will not, and ML & Co. will cause each of its
Majority-Owned Subsidiaries not to, buy or sell shares of SunAmerica Common
Stock for their own account during the five consecutive Trading Days immediately
prior to the second Trading Day preceding any Notice Date hereunder relating to
an Early Settlement pursuant to Section 3.1 hereof or any cash settlement
pursuant to Section 2.5 or 3.4 hereof. For purposes hereof, "Majority-Owned
Subsidiaries" with respect to ML & Co. means a subsidiary more than 50% of whose
outstanding securities representing the right to vote for the election of
directors is owned by ML & Co. and/or one or more of ML & Co.'s other Majority-
Owned Subsidiaries.
6.6. Further Assurances. From time to time on and after the date hereof
------------------
through the Final Closing Date, each of the parties hereto shall use its best
efforts to take, or cause to be taken, all action and to do, or cause to be
done, all things necessary, proper and advisable to consummate and make
effective as promptly as practicable the transactions contemplated by this
Agreement in accordance with the terms and conditions hereof, including (i)
using best efforts to remove any legal impediment to the consummation of such
transactions and (ii) the execution and delivery of all such deeds, agreements,
assignments and further instruments of transfer and conveyance necessary, proper
or advisable to consummate and make effective the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof.
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7.
Conditions to Closing
---------------------
7.1. Seller's Conditions to Each Closing. Seller's obligation to
-----------------------------------
consummate the transactions contemplated hereunder is conditioned upon (i) the
representations and warranties of Purchaser contained in Article 5 hereof being
true and correct as of the date of each such Closing, and (ii) the performance
by Purchaser and ML & Co. of their respective covenants and other obligations
hereunder as of the date of each such Closing.
7.2. Purchaser's Conditions to each Closing. Purchaser's obligation to
--------------------------------------
consummate the transactions contemplated hereunder is conditioned upon (i) the
representations and warranties of Seller contained in Section 4 hereof being
true and correct as of the date of each such Closing, and (ii) the performance
by Seller of his covenants and other obligations hereunder as of the date of
each such Closing.
8.
Acceleration of Delivery
------------------------
8.1. Events of Default; Acceleration of Delivery. If one or more of the
-------------------------------------------
following events (each an "Event of Default") shall occur:
(a) Seller shall commence a voluntary case or other proceeding
seeking relief with respect to himself or his debts under any bankruptcy,
insolvency or other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, custodian or other similar person of
his or any substantial part of his property, or shall consent to any such
relief or to the appointment of or taking possession by any such person in
an involuntary case or other proceeding commenced against him;
(b) an involuntary case or other proceeding shall be commenced
against Seller seeking relief with respect to himself or his debts under
any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, custodian or other
similar person of his or any substantial part of his property, and such
involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 60 days; or an order for relief shall be entered against
Seller, under any applicable bankruptcy laws as now or hereafter in effect;
(c) a Collateral Event of Default within the meaning of the
Collateral Agreement; and
(d) the inaccuracy of the representation and warranty
contained in Section 4 hereof;
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then, (A) the Applicable Maximum Contract Shares as of the date on which an
Event of Default occurs (the "Acceleration Value") shall become immediately
deliverable and payable by Seller to Purchaser in accordance with the Collateral
Agreement without any declaration or other action on the part of Purchaser
hereunder, and (B) Seller's rights under Sections 2.5 and 3.1 hereof shall
terminate immediately.
[Purchaser, Seller and ML & Co. agree that the Acceleration Value is a
reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and Purchaser will not be entitled to recover additional
damage as a consequence of loss resulting from an Event of Default.]
9.
Miscellaneous
-------------
9.1. Notices. All notices and other communications hereunder shall be in
-------
writing and shall be deemed to have been duly given if mailed or transmitted by
any standard form of telecommunication. Notices to Purchaser shall be directed
to him at North Tower, World Financial Center, New York, New York 10281-1322,
attention of _______________, with a copy to the Treasurer of ML & Co. at World
Financial Center, South Tower, New York, New York, 10080-6105; notices to Seller
shall be directed to Seller at _____________________.
9.2. Governing Law; Consent to Jurisdiction. This Agreement shall be
--------------------------------------
governed by and construed in accordance with the laws of the State of New York
applicable to agreements made and to be performed wholly within such State. For
the purpose of any suit, action or proceeding arising out of or relating to this
Agreement, the parties hereto hereby expressly and irrevocably consent and
submit to the non-exclusive jurisdiction of any competent court in the place of
its domicile and any United States Federal court sitting in the Borough of
Manhattan, City and State of New York, and expressly and irrevocably waive, to
the extent permitted under applicable law, any immunity from the jurisdiction
thereof and any claim or defense in such suit, action or proceeding based on a
claim of improper venue, forum non conveniens or any similar basis to which it
might otherwise be entitled.
9.3. Entire Agreement. Except as expressly set forth herein, this
----------------
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written and oral, among the parties with respect to the
subject matter of this Agreement.
9.4. Amendments; Waivers.
-------------------
(a) Any provision of this Agreement may be amended or waived if, and
only if, such amendment or waiver is in writing and signed, in the case of
an amendment, by Purchaser, ML & Co. and Seller or, in the case of a
waiver, by the party against whom the waiver is to be effective. No
failure or delay by any party in exercising any right,
19
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power or privilege hereunder shall operate as a waiver thereof nor shall
any single or partial exercise thereof preclude any other or further
exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
(b) Purchaser shall have the right, exercisable in Purchaser's sole
discretion, at any time until ____, 1996, to cause an amendment to this
Agreement providing for the future purchase, sale and delivery of an
additional number of shares of Nontransferable Class B Stock (or, in the
event there shall occur a Restructuring Event, cash, securities and/or
other property in lieu thereof) on any Closing Date pursuant to the
provisions of this Agreement, subject to Seller's right to deliver cash in
lieu thereof pursuant to Section 2.5 and Section 3.4 hereof, by delivering
notice (an "Option Notice") to ML & Co. and Seller. Any such Option Notice
shall specify the total number (the "Option Share Amount") of additional
shares of Nontransferable Class B Stock to be purchased, sold and delivered
pursuant to the provisions of this Agreement; provided, however, that the
aggregate Option Share Amounts specified in all Option Notices shall not
exceed 450,000. Any such Option Notice shall also specify a date (the
"Date of Delivery") on which the Option Consideration Amount to be paid by
Purchaser in exchange for Seller's obligations hereunder to deliver the
Contract Shares at any Closing arising from any amendment made to this
Agreement pursuant to this Section 9.4(b) shall be delivered by Purchaser
to Seller pursuant to Section 2.2(b) hereof. Any such Date of Delivery
shall be no later than 8 Business Days after the date on which such Option
Notice is delivered by Purchaser to ML & Co. and Seller. On the date on
which any Option Notice is delivered by Purchaser to ML & Co. and Seller
pursuant to this Section 9.4(b), ML & Co., Purchaser and Seller shall amend
this Agreement. Any such amendment will include appropriate amendments to
Sections 1.2(d), 1.2(e), 1.2(r), and 2.2(b) hereof as more fully described
herein.
9.5. Unilateral Modification by Seller. Notwithstanding any other
---------------------------------
provision contained herein, Seller shall have the right, exercisable in Seller's
sole discretion, at any time and from time to time, to modify this Agreement so
that he may satisfy his obligations under Sections 2.1, 2.3, 2.4, 3.1, 3.2, and
3.3 hereof (including related definitions), in whole or in part, by delivering
shares of SunAmerica Common Stock instead of Nontransferable Class B Stock.
9.6. Conversion of Nontransferable Class B Stock. Notwithstanding any
-------------------------------------------
other provision of this Agreement or the Collateral Agreement, Seller shall, to
the extent necessary to comply with the Articles of Incorporation of SunAmerica,
as amended and restated and including any Articles Supplementary, immediately
prior to any sale, assignment, transfer, conveyance or delivery of any shares of
Nontransferable Class B Stock to Purchaser required by this Agreement or the
Collateral Agreement, convert such shares to shares of SunAmerica Common Stock.
9.7. Successors; Assigns. The provisions of this Agreement shall be
-------------------
binding upon and accrue to the benefit of the parties hereto and their
respective heirs, distributees, next of kin,
20
<PAGE>
executors, administrators, legal and personal representatives, successors and
assigns. Notwithstanding the foregoing, neither this Agreement nor any right,
remedy, obligation or liability arising hereunder or by reason hereof shall be
assignable by any party hereto without the prior written consent of the other
parties hereto.
9.8. No Third Party Rights. This Agreement is not intended and shall not
---------------------
be construed to create any rights in any person other than Seller, Purchaser and
ML & Co. and no person shall assert any rights as third party beneficiary
hereunder.
9.9. Counterparts. This Agreement may be signed in any number of
------------
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
21
<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement as of the date
and year first above written.
MERRILL LYNCH CAPITAL SERVICES, INC. ELI BROAD
By_________________________ By____________________________________
Name:
Title:
MERRILL LYNCH & CO., INC.
By_________________________
Name:
Title:
22
