SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
November 19, 1997
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Date of Report (Date of Earliest Event Reported)
Petrie Stores Liquidating Trust
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(Exact Name of Registrant as Specified in Charter)
New York 0-3777 22-6679945
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(State or Other Jurisdiction (Commission File (IRS Employer
of Incorporation) Number) Identification No.)
150 Meadowlands Parkway
Secaucus, New Jersey 07094
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(Address of Principal Executive Offices and Zip Code)
(212) 556-9600
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(Registrant's Telephone Number, Including Area Code)
N/A
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(Former Name or Former Address, if Changed Since Last Report)
Item 5. Other Events.
Petrie Stores Liquidating Trust (the "Liquidating Trust") and
Canadian Imperial Bank of Canada ("CIBC") have entered into a Master
Agreement, dated as of November 19, 1997 and based upon the International
Swaps and Derivatives Association, Inc. form (the "Master Agreement"),
the purpose of which is to hedge certain investment risks associated with
2,000,000 shares of common stock of Toys "R" Us, Inc. ("Toys Common
Stock") held by the Liquidating Trust.
Pursuant to the terms of the Master Agreement, if on December 3,
1999 (the "Expiration Date") the price of Toys Common Stock is below
$30.7264 (the "Put Price"), CIBC will be obligated to pay the Liquidating
Trust the difference between the Put Price and the then prevailing price
of Toys Common Stock multiplied by 2,000,000. The Master Agreement
further provides that if on the Expiration Date the price of Toys Common
Stock is above $47.1137 (the "Call Price"), the Liquidating Trust will be
obligated to pay CIBC the difference between the Call Price and the then
prevailing market price of Toys Common Stock multiplied by 2,000,000. Any
required payments will be made in cash.
A Secured Term Note, dated as of December 31, 1997, between the
Liquidating Trust and CIBC (the "Secured Term Note"), also provides for
CIBC to make available to the Liquidating Trust a non-purpose loan
facility in the amount of approximately $55 million. This facility, if
drawn upon, will bear interest at a floating rate equal to the
three-month LIBOR rate plus thirty-five basis points. The Liquidating
Trust does not presently anticipate that it will need to draw upon such
facility. Any determination to draw upon the facility will be based upon
the Liquidating Trust's then anticipated liquidity needs, including the
status of its contingent liabilities. To secure the covenants made by the
Liquidating Trust pursuant to the Master Agreement and the Secured Term
Note, the Liquidating Trust has agreed pursuant to a Stock Pledge
Agreement, dated as of December 31, 1997, and a Tri-Party Custody
Agreement, dated as of December 31, 1997, among the United States Trust
Company of New York, the Liquidating Trust and CIBC, to pledge for the
benefit of CIBC 2,000,000 shares of Toys Common Stock.
Although the Liquidating Trust does not presently expect to seek to
terminate the transactions contemplated by the Master Agreement prior to
the Expiration Date, should it determine to do so (including in order to
provide additional liquidity for the payment of contingent liabilities or
to permit the distribution of the shares of Toys Common Stock pledged to
secure any amounts due under the Master Agreement and the Secured Term
Note), the Liquidating Trust understands that, in accordance with industry
practice, it would be able to do so upon terms to be agreed upon with CIBC
based on then prevailing market conditions.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits.
99.1 Master Agreement, dated as of November 19, 1997, by and
between Petrie Stores Liquidating Trust and Canadian
Imperial Bank of Commerce.
99.2 Confirmation, dated as of December 31, 1997, of the
Master Agreement by and between Petrie Stores
Liquidating Trust and Canadian Imperial
Bank of Commerce.
99.3 Secured Term Note, dated as of December 31, 1997, by
and between Petrie Stores Liquidating Trust and
Canadian Imperial Bank of Commerce.
99.4 Stock Pledge Agreement, dated as of December 31, 1997,
by and between Petrie Stores Liquidating Trust and
Canadian Imperial Bank of Commerce.
99.5 Tri-Party Custody Agreement, dated as of December 31,
1997, by and among the United States Trust Company of
New York, Petrie Stores Liquidating Trust and Canadian
Imperial Bank of Commerce.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
Date: January 22, 1998
PETRIE STORES LIQUIDATING TRUST
By: /s/ Stephanie R. Joseph
___________________________________
Stephanie R. Joseph
Manager and Chief Executive Officer
Exhibit Index
Exhibit Description
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99.1 Master Agreement, dated as of November 19, 1997, by and
between Petrie Stores Liquidating Trust and Canadian Imperial
Bank of Commerce.
99.2 Confirmation, dated as of December 31, 1997, of the Master
Agreement by and between Petrie Stores Liquidating Trust and
Canadian Imperial Bank of Commerce.
99.3 Secured Term Note, dated as of December 31, 1997, by and
between Petrie Stores Liquidating Trust and Canadian Imperial
Bank of Commerce.
99.4 Stock Pledge Agreement, dated as of December 31, 1997, by and
between Petrie Stores Liquidating Trust and Canadian Imperial
Bank of Commerce.
99.5 Tri-Party Custody Agreement, dated as of December 31, 1997,
by and among the United States Trust Company of New York,
Petrie Stores Liquidating Trust and Canadian Imperial Bank of
Commerce.
Exhibit 99.1
(MULTICURRENCY--CROSS BORDER)
ISDA(R)
International Swap Dealers Association, Inc.
MASTER AGREEMENT
dated as of November 19, 1997
PETRIE STORES LIQUIDATING TRUST and CANADIAN IMPERIAL BANK OF
COMMERCE have entered and/or anticipate entering into one or more
transactions (each a "Transaction") that are or will be governed by this
Master Agreement, which includes the schedule (the "Schedule"), and the
documents and other confirming evidence (each a "Confirmation") exchanged
between the parties confirming those Transactions.
Accordingly, the parties agree as follows:--
1. INTERPRETATION
(a) DEFINITIONS. The terms defined in Section 14 and in the Schedule will
have the meanings therein specified for the purpose of this Master
Agreement.
(b) INCONSISTENCY. In the event of any inconsistency between the
provisions of the Schedule and the other provisions of this Master
Agreement, the Schedule will prevail. In the event of any inconsistency
between the provisions of any Confirmation and this Master Agreement
(including the Schedule), such Confirmation will prevail for the purpose
of the relevant Transaction.
(c) SINGLE AGREEMENT. All Transactions are entered into in reliance on
the fact that this Master Agreement and all Confirmations form a single
agreement between the parties (collectively referred to as this
"Agreement"), and the parties would not otherwise enter into any
Transactions.
2. OBLIGATIONS
(a) GENERAL CONDITIONS.
(i) Each party will make each payment or delivery specified in
each Confirmation to be made by it, subject to the other
provisions of this Agreement.
(ii) Payments under this Agreement will be made on the due date
for value on that date in the place of the account specified in
the relevant Confirmation or otherwise pursuant to this
Agreement, in freely transferable funds and in the manner
customary for payments in the required currency. Where
settlement is by delivery (that is, other than by payment), such
delivery will be made for receipt on the due date in the
manner customary for the relevant obligation unless otherwise
specified in the relevant Confirmation or elsewhere in this
Agreement.
(iii) Each obligation of each party under Section 2(a)(i) is
subject to (1) the condition precedent that no Event of Default
or Potential Event of Default with respect to the other party
has occurred and is continuing, (2) the condition precedent that
no Early Termination Date in respect of the relevant Transaction
has occurred or been effectively designated and (3) each other
applicable condition precedent specified in this Agreement.
(b) CHANGE OF ACCOUNT. Either party may change its account for receiving
a payment or delivery by giving notice to the other party at least five
Local Business Days prior to the scheduled date for the payment or
delivery to which such change applies unless such other party gives
timely notice of a reasonable objection to such change.
(c) NETTING. If on any date amounts would otherwise be payable:--
(i) in the same currency; and
(ii) in respect of the same Transaction,
by each party to the other, then, on such date, each party's obligation
to make payment of any such amount will be automatically satisfied and
discharged and, if the aggregate amount that would otherwise have been
payable by one party exceeds the aggregate amount that would otherwise
have been payable by the other party, replaced by an obligation upon the
party by whom the larger aggregate amount would have been payable to pay
to the other party the excess of the larger aggregate amount over the
smaller aggregate amount.
The parties may elect in respect of two or more Transactions that a net
amount will be determined in respect of all amounts payable on the same
date in the same currency in respect of such Transactions, regardless of
whether such amounts are payable in respect of the same Transaction. The
election may be made in the Schedule or a Confirmation by specifying that
subparagraph (ii) above will not apply to the Transactions identified as
being subject to the election, together with the starting date (in which
case subparagraph (ii) above will not, or will cease to, apply to such
Transactions from such date). This election may be made separately for
different groups of Transactions and will apply separately to each
pairing of Offices through which the parties make and receive payments or
deliveries.
(d) DEDUCTION OR WITHHOLDING FOR TAX.
(i) GROSS-UP. All payments under this Agreement will be made
without any deduction or withholding for or on account of any
Tax unless such deduction or withholding is required by any
applicable law, as modified by the practice of any relevant
governmental revenue authority, then in effect. If a party is so
required to deduct or withhold, then that party ("X") will:--
(1) promptly notify the other party ("Y") of such
requirement;
(2) pay to the relevant authorities the full amount
required to be deducted or withheld (including the full
amount required to be deducted or withheld from any
additional amount paid by X to Y under this Section
2(d)) promptly upon the earlier of determining that
such deduction or withholding is required or receiving
notice that such amount has been assessed against Y;
(3) promptly forward to Y an official receipt (or a
certified copy), or other documentation reasonably
acceptable to Y, evidencing such payment to such
authorities; and
(4) if such Tax is an Indemnifiable Tax, pay to Y, in
addition to the payment to which Y is otherwise
entitled under this Agreement, such additional amount
as is necessary to ensure that the net amount actually
received by Y (free and clear of Indemnifiable Taxes,
whether assessed against X or Y) will equal the full
amount Y would have received had no such deduction or
withholding been required. However, X will not be required
to pay any additional amount to Y to the extent
that it would not be required to be paid but for:--
(A) the failure by Y to comply with or perform
any agreement contained in Section 4(a)(i),
4(a)(iii) or 4(d); or
(B) the failure of a representation made by Y
pursuant to Section 3(f) to be accurate and
true unless such failure would not have
occurred but for (I) any action taken by a
taxing authority, or brought in a court of
competent jurisdiction, on or after the date
on which a Transaction is entered into
(regardless of whether such action is taken or
brought with respect to a party to this
Agreement) or (II) a Change in Tax Law.
(ii) LIABILITY. If:--
(1) X is required by any applicable law, as modified by
the practice of any relevant governmental revenue
authority, to make any deduction or withholding in
respect of which X would not be required to pay an
additional amount to Y under Section 2(d)(i)(4);
(2) X does not so deduct or withhold; and
(3) a liability resulting from such Tax is assessed
directly against X,
then, except to the extent Y has satisfied or then satisfies the
liability resulting from such Tax, Y will promptly pay to X the
amount of such liability (including any related liability for
interest, but including any related liability for penalties only
if Y has failed to comply with or perform any agreement
contained in Section 4(a)(i), 4(a)(iii) or 4(d)).
(e) DEFAULT INTEREST; OTHER AMOUNTS. Prior to the occurrence or effective
designation of an Early Termination Date in respect of the relevant
Transaction, a party that defaults in the performance of any payment
obligation will, to the extent permitted by law and subject to Section
6(c), be required to pay interest (before as well as after judgment) on
the overdue amount to the other party on demand in the same currency as
such overdue amount, for the period from (and including) the original due
date for payment to (but excluding) the date of actual payment, at the
Default Rate. Such interest will be calculated on the basis of daily
compounding and the actual number of days elapsed. If, prior to the
occurrence or effective designation of an Early Termination Date in
respect of the relevant Transaction, a party defaults in the performance
of any obligation required to be settled by delivery, it will compensate
the other party on demand if and to the extent provided for in the
relevant Confirmation or elsewhere in this Agreement.
3. REPRESENTATIONS
Each party represents to the other party (which representations will be
deemed to be repeated by each party on each date on which a Transaction
is entered into and, in the case of the representations in Section 3(f),
at all times until the termination of this Agreement) that:--
(a) BASIC REPRESENTATIONS.
(i) STATUS. It is duly organised and validly existing under the
laws of the jurisdiction of its organisation or incorporation
and, if relevant under such laws, in good standing;
(ii) POWERS. It has the power to execute this Agreement and any
other documentation relating to this Agreement to which it is a
party, to deliver this Agreement and any other documentation
relating to this Agreement that it is required by this Agreement
to deliver and to perform its obligations under this Agreement
and any obligations it has under any Credit Support Document to
which it is a party and has taken all necessary action to
authorise such execution, delivery and performance;
(iii) NO VIOLATION OR CONFLICT. Such execution, delivery and
performance do not violate or conflict with any law applicable
to it, any provision of its constitutional documents, any order
or judgment of any court or other agency of government
applicable to it or any of its assets or any contractual
restriction binding on or affecting it or any of its assets;
(iv) CONSENTS. All governmental and other consents that are
required to have been obtained by it with respect to this
Agreement or any Credit Support Document to which it is a party
have been obtained and are in full force and effect and all
conditions of any such consents have been complied with; and
(v) OBLIGATIONS BINDING. Its obligations under this Agreement
and any Credit Support Document to which it is a party
constitute its legal, valid and binding obligations, enforceable
in accordance with their respective terms (subject to applicable
bankruptcy, reorganization, insolvency, moratorium or similar
laws affecting creditors' rights generally and subject, as to
enforceability, to equitable principles of general application
(regardless of whether enforcement is sought in a proceeding in
equity or at law)).
(b) ABSENCE OF CERTAIN EVENTS. No Event of Default or Potential Event of
Default or, to its knowledge, Termination Event with respect to it has
occurred and is continuing and no such event or circumstance would occur
as a result of its entering into or performing its obligations under this
Agreement or any Credit Support Document to which it is a party.
(c) ABSENCE OF LITIGATION. There is not pending or, to its knowledge,
threatened against it or any of its Affiliates any action, suit or
proceeding at law or in equity or before any court, tribunal,
governmental body, agency or official or any arbitrator that is likely to
affect the legality, validity or enforceability against it of this
Agreement or any Credit Support Document to which it is a party or its
ability to perform its obligations under this Agreement or such Credit
Support Document.
(d) ACCURACY OF SPECIFIED INFORMATION. All applicable information that is
furnished in writing by or on behalf of it to the other party and is
identified for the purpose of this Section 3(d) in the Schedule is, as of
the date of the information, true, accurate and complete in every
material respect.
(e) PAYER TAX REPRESENTATION. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(e) is
accurate and true.
(f) PAYEE TAX REPRESENTATIONS. Each representation specified in the
Schedule as being made by it for the purpose of this Section 3(f) is
accurate and true.
4. AGREEMENTS
Each party agrees with the other that, so long as either party has or may
have any obligation under this Agreement or under any Credit Support
Document to which it is a party:--
(a) FURNISH SPECIFIED INFORMATION. It will deliver to the other party or,
in certain cases under subparagraph (iii) below, to such government or
taxing authority as the other party reasonably directs:--
(i) any forms, documents or certificates relating to taxation
specified in the Schedule or any Confirmation;
(ii) any other documents specified in the Schedule or any
Confirmation; and
(iii) upon reasonable demand by such other party, any form or
document that may be required or reasonably requested in writing
in order to allow such other party or its Credit Support
Provider to make a payment under this Agreement or any
applicable Credit Support Document without any deduction or
withholding for or on account of any Tax or with such deduction
or withholding at a reduced rate (so long as the completion,
execution or submission of such form or document would not
materially prejudice the legal or commercial position of the
party in receipt of such demand), with any such form or document
to be accurate and completed in a manner reasonably satisfactory
to such other party and to be executed and to be delivered with
any reasonably required certification,
in each case by the date specified in the Schedule or such Confirmation or,
if none is specified. as soon as reasonably practicable.
(b) MAINTAIN AUTHORIZATIONS. It will use all reasonable efforts to
maintain in full force and effect all consents of any governmental or
other authority that are required to be obtained by it with respect to
this Agreement or any Credit Support Document to which it is a party and
will use all reasonable efforts to obtain any that may become necessary
in the future.
(c) COMPLY WITH LAWS. It will comply in all material respects with all
applicable laws and orders to which it may be subject if failure so to
comply would materially impair its ability to perform its obligations
under this Agreement or any Credit Support Document to which it is a
party.
(d) TAX AGREEMENT. It will give notice of any failure of a representation
made by it under Section 3(f) to be accurate and true promptly upon
learning of such failure.
(e) PAYMENT OF STAMP TAX. Subject to Section 11, it will pay any Stamp
Tax levied or imposed upon it or in respect of its execution or
performance of this Agreement by a jurisdiction in which it is
incorporated, organised, managed and controlled, or considered to have
its seat, or in which a branch or office through which it is acting for
the purpose of this Agreement is located ("Stamp Tax Jurisdiction") and
will indemnify the other party against any Stamp Tax levied or imposed
upon the other party or in respect of the other party's execution or
performance of this Agreement by any such Stamp Tax Jurisdiction which is
not also a Stamp Tax Jurisdiction with respect to the other party.
5. EVENTS OF DEFAULT AND TERMINATION EVENTS
(a) EVENTS OF DEFAULT. The occurrence at any time with respect to a party
or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any of the following events constitutes
an event of default (an "Event of Default") with respect to such party:--
(i) FAILURE TO PAY OR DELIVER. Failure by the party to make,
when due, any payment under this Agreement or delivery under
Section 2(a)(i) or 2(e) required to be made by it if such
failure is not remedied on or before the third Local Business
Day after notice of such failure is given to the party;
(ii) BREACH OF AGREEMENT. Failure by the party to comply with or
perform any agreement or obligation (other than an obligation to
make any payment under this Agreement or delivery under Section
2(a)(i) or 2(e) or to give notice of a Termination Event or any
agreement or obligation under Section 4(a)(i), 4(a)(iii) or
4(d)) to be complied with or performed by the party in
accordance with this Agreement if such failure is not remedied
on or before the thirtieth day after notice of such failure is
given to the party;
(iii) CREDIT SUPPORT DEFAULT.
(1) Failure by the party or any Credit Support Provider
of such party to comply with or perform any agreement
or obligation to be complied with or performed by it in
accordance with any Credit Support Document if such
failure is continuing after any applicable grace period
has elapsed;
(2) the expiration or termination of such Credit
Support Document or the failing or ceasing of such
Credit Support Document to be in full force and effect
for the purpose of this Agreement (in either case
other than in accordance with its terms) prior to
the satisfaction of all obligations of such
party under each Transaction to which such Credit
Support Document relates without the written consent of
the other party; or
(3) the party or such Credit Support Provider
disaffirms, disclaims, repudiates or rejects, in whole
or in part, or challenges the validity of, such Credit
Support Document;
(iv) MISREPRESENTATION. A representation (other than a
representation under Section 3(e) or (f)) made or repeated or
deemed to have been made or repeated by the party or any Credit
Support Provider of such party in this Agreement or any Credit
Support Document proves to have been incorrect or misleading in
any material respect when made or repeated or deemed to have
been made or repeated;
(v) DEFAULT UNDER SPECIFIED TRANSACTION. The party, any Credit
Support Provider of such party or any applicable Specified
Entity of such party (1) defaults under a Specified Transaction
and, after giving effect to any applicable notice requirement or
grace period, there occurs a liquidation of, an acceleration of
obligations under, or an early termination of, that Specified
Transaction, (2) defaults, after giving effect to any applicable
notice requirement or grace period, in making any payment or
delivery due on the last payment, delivery or exchange date of,
or any payment on early termination of, a Specified Transaction
(or such default continues for at least three Local Business
Days if there is no applicable notice requirement or grace
period) or (3) disaffirms, disclaims, repudiates or rejects, in
whole or in part, a Specified Transaction (or such action is
taken by any person or entity appointed or empowered to operate
it or act on its behalf);
(vi) CROSS DEFAULT. If "Cross Default" is specified in the
Schedule as applying to the party, the occurrence or existence
of (1) a default, event of default or other similar condition or
event (however described) in respect of such party, any Credit
Support Provider of such party or any applicable Specified
Entity of such party under one or more agreements or instruments
relating to Specified Indebtedness of any of them (individually
or collectively) in an aggregate amount of not less than the
applicable Threshold Amount (as specified in the Schedule) which
has resulted in such Specified Indebtedness becoming, or
becoming capable at such time of being declared, due and payable
under such agreements or instruments, before it would otherwise
have been due and payable or (2) a default by such party, such
Credit Support Provider or such Specified Entity (individually
or collectively) in making one or more payments on the due date
thereof in an aggregate amount of not less than the applicable
Threshold Amount under such agreements or instruments (after
giving effect to any applicable notice requirement or grace
period);
(vii) BANKRUPTCY. The party, any Credit Support Provider of such
party or any applicable Specified Entity of such party:--
(1) is dissolved (other than pursuant to a
consolidation, amalgamation or merger); (2) becomes
insolvent or is unable to pay its debts or fails or
admits in writing its inability generally to pay its
debts as they become due; (3) makes a general
assignment, arrangement or composition with or for the
benefit of its creditors; (4) institutes or has
instituted against it a proceeding seeking a judgment
of insolvency or bankruptcy or any other relief under
any bankruptcy or insolvency law or other similar law
affecting creditors' rights, or a petition is presented
for its winding-up or liquidation, and, in the case of
any such proceeding or petition instituted or presented
against it, such proceeding or petition (A) results in
a judgment of insolvency or bankruptcy or the entry of
an order for relief or the making of an order for its
winding-up or liquidation or (B) is not dismissed,
discharged, stayed or restrained in each case within 30
days of the institution or presentation thereof; (5)
has a resolution passed for its winding-up, official
management or liquidation (other than pursuant to a
consolidation, amalgamation or merger); (6) seeks or
becomes subject to the appointment of an administrator,
provisional liquidator, conservator, receiver, trustee,
custodian or other similar official for it or for all
or substantially all its assets; (7) has a secured
party take possession of all or substantially all its
assets or has a distress, execution, attachment,
sequestration or other legal process levied, enforced
or sued on or against all or substantially all its
assets and such secured party maintains possession, or
any such process is not dismissed, discharged, stayed
or restrained, in each case within 30 days thereafter;
(8) causes or is subject to any event with respect to
it which, under the applicable laws of any jurisdiction,
has an analogous effect to any of the events specified in
clauses (1) to (7) (inclusive); or (9) takes any action
in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the foregoing
acts; or
(viii) MERGER WITHOUT ASSUMPTION. The party or any Credit
Support Provider of such party consolidates or amalgamates with,
or merges with or into, or transfers all or substantially all
its assets to, another entity and, at the time of such
consolidation, amalgamation, merger or transfer:--
(1) the resulting, surviving or transferee entity fails
to assume all the obligations of such party or such
Credit Support Provider under this Agreement or any
Credit Support Document to which it or its predecessor
was a party by operation of law or pursuant to an
agreement reasonably satisfactory to the other party to
this Agreement; or
(2) the benefits of any Credit Support Document fail to
extend (without the consent of the other party) to the
performance by such resulting, surviving or transferee
entity of its obligations under this Agreement.
(b) TERMINATION EVENTS. The occurrence at any time with respect to a
party or, if applicable, any Credit Support Provider of such party or any
Specified Entity of such party of any event specified below constitutes
an Illegality if the event is specified in (i) below, a Tax Event if the
event is specified in (ii) below or a Tax Event Upon Merger if the event
is specified in (iii) below, and, if specified to be applicable, a Credit
Event Upon Merger if the event is specified pursuant to (iv) below or an
Additional Termination Event if the event is specified pursuant to (v)
below:--
(i) ILLEGALITY. Due to the adoption of, or any change in, any
applicable law after the date on which a Transaction is entered
into, or due to the promulgation of, or any change in, the
interpretation by any court, tribunal or regulatory authority
with competent jurisdiction of any applicable law after such
date, it becomes unlawful (other than as a result of a breach by
the party of Section 4(b)) for such party (which will be the
Affected Party):--
(1) to perform any absolute or contingent obligation to
make a payment or delivery or to receive a payment or
delivery in respect of such Transaction or to comply
with any other material provision of this Agreement
relating to such Transaction; or
(2) to perform, or for any Credit Support Provider of
such party to perform, any contingent or other
obligation which the party (or such Credit Support
Provider) has under any Credit Support Document
relating to such Transaction;
(ii) TAX EVENT. Due to (x) any action taken by a taxing
authority, or brought in a court of competent jurisdiction, on
or after the date on which a Transaction is entered into
(regardless of whether such action is taken or brought with
respect to a party to this Agreement) or (y) a Change in Tax
Law, the party (which will be the Affected Party) will, or there
is a substantial likelihood that it will, on the next succeeding
Scheduled Payment Date (1) be required to pay to the other party
an additional amount in respect of an Indemnifiable Tax under
Section 2(d)(i)(4) (except in respect of interest under Section
2(e), 6(d)(ii) or 6(e)) or (2) receive a payment from which an
amount is required to be deducted or withheld for or on account
of a Tax (except in respect of interest under Section 2(e),
6(d)(ii) or 6(e)) and no additional amount is required to be
paid in respect of such Tax under Section 2(d)(i)(4) (other than
by reason of Section 2(d)(i)(4)(A) or (B));
(iii) TAX EVENT UPON MERGER. The party (the "Burdened Party") on
the next succeeding Scheduled Payment Date will either (1) be
required to pay an additional amount in respect of an
Indemnifiable Tax under Section 2(d)(i)(4) (except in respect of
interest under Section 2(e), 6(d)(ii) or 6(e)) or (2) receive a
payment from which an amount has been deducted or withheld for
or on account of any Indemnifiable Tax in respect of which the
other party is not required to pay an additional amount (other
than by reason of Section 2(d)(i)(4)(A) or (B)), in either case
as a result of a party consolidating or amalgamating with, or
merging with or into, or transferring all or substantially all
its assets to, another entity (which will be the Affected Party)
where such action does not constitute an event described in
Section 5(a)(viii);
(iv) CREDIT EVENT UPON MERGER. If "Credit Event Upon Merger" is
specified in the Schedule as applying to the party, such party
("X"), any Credit Support Provider of X or any applicable
Specified Entity of X consolidates or amalgamates with, or
merges with or into, or transfers all or substantially all its
assets to, another entity and such action does not constitute an
event described in Section 5(a)(viii) but the creditworthiness
of the resulting, surviving or transferee entity is materially
weaker than that of X, such Credit Support Provider or such
Specified Entity, as the case may be, immediately prior to such
action (and, in such event, X or its successor or transferee, as
appropriate, will be the Affected Party); or
(v) ADDITIONAL TERMINATION EVENT. If any "Additional Termination
Event" is specified in the Schedule or any Confirmation as
applying, the occurrence of such event (and, in such event, the
Affected Party or Affected Parties shall be as specified for
such Additional Termination Event in the Schedule or such
Confirmation).
(c) EVENT OF DEFAULT AND ILLEGALITY. If an event or circumstance which
would otherwise constitute or give rise to an Event of Default also
constitutes an Illegality, it will be treated as an Illegality and will
not constitute an Event of Default.
6. EARLY TERMINATION
(a) RIGHT TO TERMINATE FOLLOWING EVENT OF DEFAULT. If at any time an
Event of Default with respect to a party (the "Defaulting Party") has
occurred and is then continuing, the other party (the "Non-defaulting
Party") may, by not more than 20 days notice to the Defaulting Party
specifying the relevant Event of Default, designate a day not earlier
than the day such notice is effective as an Early Termination Date in
respect of all outstanding Transactions. If, however, "Automatic Early
Termination" is specified in the Schedule as applying to a party, then an
Early Termination Date in respect of all outstanding Transactions will
occur immediately upon the occurrence with respect to such party of an
Event of Default specified in Section 5(a)(vii)(1), (3), (5), (6) or, to
the extent analogous thereto, (8), and as of the time immediately
preceding the institution of the relevant proceeding or the presentation
of the relevant petition upon the occurrence with respect to such party
of an Event of Default specified in Section 5(a)(vii)(4) or, to the
extent analogous thereto, (8).
(b) RIGHT TO TERMINATE FOLLOWING TERMINATION EVENT.
(i) NOTICE. If a Termination Event occurs, an Affected Party
will, promptly upon becoming aware of it, notify the other
party, specifying the nature of that Termination Event and each
Affected Transaction and will also give such other information
about that Termination Event as the other party may reasonably
require.
(ii) TRANSFER TO AVOID TERMINATION EVENT. If either an
Illegality under Section 5(b)(i)(1) or a Tax Event occurs and
there is only one Affected Party, or if a Tax Event Upon Merger
occurs and the Burdened Party is the Affected Party, the
Affected Party will, as a condition to its right to designate an
Early Termination Date under Section 6(b)(iv), use all
reasonable efforts (which will not require such party to incur a
loss, excluding immaterial, incidental expenses) to transfer
within 20 days after it gives notice under Section 6(b)(i) all
its rights and obligations under this Agreement in respect of
the Affected Transactions to another of its Offices or
Affiliates so that such Termination Event ceases to exist.
If the Affected Party is not able to make such a transfer it
will give notice to the other party to that effect within such
20 day period, whereupon the other party may effect such a
transfer within 30 days after the notice is given under Section
6(b)(i).
Any such transfer by a party under this Section 6(b)(ii) will be
subject to and conditional upon the prior written consent of the
other party, which consent will not be withheld if such other
party's policies in effect at such time would permit it to enter
into transactions with the transferee on the terms proposed.
(iii) TWO AFFECTED PARTIES. If an Illegality under Section
5(b)(i)(1) or a Tax Event occurs and there are two Affected
Parties, each party will use all reasonable efforts to reach
agreement within 30 days after notice thereof is given under
Section 6(b)(i) on action to avoid that Termination Event.
(iv) RIGHT TO TERMINATE. If:--
(1) a transfer under Section 6(b)(ii) or an agreement
under Section 6(b)(iii), as the case may be, has not
been effected with respect to all Affected Transactions
within 30 days after an Affected Party gives notice
under Section 6(b)(i); or
(2) an Illegality under Section 5(b)(i)(2), a Credit
Event Upon Merger or an Additional Termination Event
occurs, or a Tax Event Upon Merger occurs and the
Burdened Party is not the Affected Party,
either party in the case of an Illegality, the Burdened Party in
the case of a Tax Event Upon Merger, any Affected Party in the
case of a Tax Event or an Additional Termination Event if there
is more than one Affected Party, or the party which is not the
Affected Party in the case of a Credit Event Upon Merger or an
Additional Termination Event if there is only one Affected Party
may, by not more than 20 days notice to the other party and
provided that the relevant Termination Event is then continuing,
designate a day not earlier than the day such notice is
effective as an Early Termination Date in respect of all
Affected Transactions.
(c) EFFECT OF DESIGNATION.
(i) If notice designating an Early Termination Date is given
under Section 6(a) or (b), the Early Termination Date will occur
on the date so designated, whether or not the relevant Event of
Default or Termination Event is then continuing.
(ii) Upon the occurrence or effective designation of an Early
Termination Date, no further payments or deliveries under
Section 2(a)(i) or 2(e) in respect of the Terminated
Transactions will be required to be made, but without prejudice
to the other provisions of this Agreement. The amount, if any,
payable in respect of an Early Termination Date shall be
determined pursuant to Section 6(e).
(d) CALCULATIONS.
(i) STATEMENT. On or as soon as reasonably practicable following
the occurrence of an Early Termination Date, each party will
make the calculations on its part, if any, contemplated by
Section 6(e) and will provide to the other party a statement (1)
showing, in reasonable detail, such calculations (including all
relevant quotations and specifying any amount payable under
Section 6(e)) and (2) giving details of the relevant account to
which any amount payable to it is to be paid. In the absence of
written confirmation from the source of a quotation obtained in
determining a Market Quotation, the records of the party
obtaining such quotation will be conclusive evidence of the
existence and accuracy of such quotation.
(ii) PAYMENT DATE. An amount calculated as being due in respect
of any Early Termination Date under Section 6(e) will be payable
on the day that notice of the amount payable is effective (in
the case of an Early Termination Date which is designated or
occurs as a result of an Event of Default) and on the day which
is two Local Business Days after the day on which notice of the
amount payable is effective (in the case of an Early Termination
Date which is designated as a result of a Termination Event).
Such amount will be paid together with (to the extent permitted
under applicable law) interest thereon (before as well as after
judgment) in the Termination Currency, from (and including) the
relevant Early Termination Date to (but excluding) the date such
amount is paid, at the Applicable Rate. Such interest will be
calculated on the basis of daily compounding and the actual
number of days elapsed.
(e) PAYMENTS ON EARLY TERMINATION. If an Early Termination Date occurs,
the following provisions shall apply based on the parties' election in
the Schedule of a payment measure, either "Market Quotation" or "Loss,"
and a payment method, either the "First Method" or the "Second Method."
If the parties fail to designate a payment measure or payment method in
the Schedule, it will be deemed that "Market Quotation" or the "Second
Method," as the case may be, shall apply. The amount, if any, payable in
respect of an Early Termination Date and determined pursuant to this
Section will be subject to any Set-off.
(i) EVENTS OF DEFAULT. If the Early Termination Date results
from an Event of Default:--
(1) First Method and Market Quotation. If the First
Method and Market Quotation apply, the Defaulting Party
will pay to the Non-defaulting Party the excess, if a
positive number, of (A) the sum of the Settlement
Amount (determined by the Non-defaulting Party) in
respect of the Terminated Transactions and the
Termination Currency Equivalent of the Unpaid Amounts
owing to the Non-defaulting Party over (B) the
Termination Currency Equivalent of the Unpaid Amounts
owing to the Defaulting Party.
(2) First Method and Loss. If the First Method and Loss
apply, the Defaulting Party will pay to the
Non-defaulting Party, if a positive number, the
Non-defaulting Party's Loss in respect of this
Agreement.
(3) Second Method and Market Quotation. If the Second
Method and Market Quotation apply, an amount will be
payable equal to (A) the sum of the Settlement Amount
(determined by the Non- defaulting Party) in respect of
the Terminated Transactions and the Termination
Currency Equivalent of the Unpaid Amounts owing to the
Non-defaulting Party less (B) the Termination Currency
Equivalent of the Unpaid Amounts owing to the
Defaulting Party. If that amount is a positive number,
the Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the
Defaulting Party.
(4) Second Method and Loss. If the Second Method and
Loss apply, an amount will be payable equal to the
Non-defaulting Party's Loss in respect of this
Agreement. If that amount is a positive number, the
Defaulting Party will pay it to the Non-defaulting
Party; if it is a negative number, the Non-defaulting
Party will pay the absolute value of that amount to the
Defaulting Party.
(ii) TERMINATION EVENTS. If the Early Termination Date results
from a Termination Event:--
(1) One Affected Party. If there is one Affected Party,
the amount payable will be determined in accordance
with Section 6(e)(i)(3), if Market Quotation applies,
or Section 6(e)(i)(4), if Loss applies, except that, in
either case, references to the Defaulting Party and to
the Non-defaulting Party will be deemed to be
references to the Affected Party and the party which is
not the Affected Party, respectively, and, if Loss
applies and fewer than all the Transactions are being
terminated, Loss shall be calculated in respect of all
Terminated Transactions.
(2) Two Affected Parties. If there are two Affected
Parties:--
(A) if Market Quotation applies, each party
will determine a Settlement Amount in respect
of the Terminated Transactions, and an amount
will be payable equal to (I) the sum of (a)
one-half of the difference between the
Settlement Amount of the party with the higher
Settlement Amount ("X") and the Settlement
Amount of the party with the lower Settlement
Amount ("Y") and (b) the Termination Currency
Equivalent of the Unpaid Amounts owing to X
less (II) the Termination Currency Equivalent
of the Unpaid Amounts owing to Y; and
(B) if Loss applies, each party will determine
its Loss in respect of this Agreement (or, if
fewer than all the Transactions are being
terminated, in respect of all Terminated
Transactions) and an amount will be payable
equal to one-half of the difference between
the Loss of the party with the higher Loss
("X") and the Loss of the party with the lower
Loss ("Y").
If the amount payable is a positive number, Y will pay
it to X; if it is a negative number, X will pay the
absolute value of that amount to Y.
(iii) ADJUSTMENT FOR BANKRUPTCY. In circumstances where an Early
Termination Date occurs because "Automatic Early Termination"
applies in respect of a party, the amount determined under this
Section 6(e) will be subject to such adjustments as are
appropriate and permitted by law to reflect any payments or
deliveries made by one party to the other under this Agreement
(and retained by such other party) during the period from the
relevant Early Termination Date to the date for payment
determined under Section 6(d)(ii).
(iv) PRE-ESTIMATE. The parties agree that if Market Quotation
applies an amount recoverable under this Section 6(e) is a
reasonable pre-estimate of loss and not a penalty. Such amount
is payable for the loss of bargain and the loss of protection
against future risks and except as otherwise provided in this
Agreement neither party will be entitled to recover any
additional damages as a consequence of such losses.
7. TRANSFER
Subject to Section 6(b)(ii), neither this Agreement nor any interest or
obligation in or under this Agreement may be transferred (whether by way
of security or otherwise) by either party without the prior written
consent of the other party, except that:--
(a) a party may make such a transfer of this Agreement pursuant to a
consolidation or amalgamation with, or merger with or into, or transfer
of all or substantially all its assets to, another entity (but without
prejudice to any other right or remedy under this Agreement); and
(b) a party may make such a transfer of all or any part of its interest
in any amount payable to it from a Defaulting Party under Section 6(e).
Any purported transfer that is not in compliance with this Section will
be void.
8. CONTRACTUAL CURRENCY
(a) PAYMENT IN THE CONTRACTUAL CURRENCY. Each payment under this
Agreement will be made in the relevant currency specified in this
Agreement for that payment (the "Contractual Currency"). To the extent
permitted by applicable law, any obligation to make payments under this
Agreement in the Contractual Currency will not be discharged or satisfied
by any tender in any currency other than the Contractual Currency, except
to the extent such tender results in the actual receipt by the party to
which payment is owed, acting in a reasonable manner and in good faith in
converting the currency so tendered into the Contractual Currency, of the
full amount in the Contractual Currency of all amounts payable in respect
of this Agreement. If for any reason the amount in the Contractual
Currency so received falls short of the amount in the Contractual
Currency payable in respect of this Agreement, the party required to make
the payment will, to the extent permitted by applicable law, immediately
pay such additional amount in the Contractual Currency as may be
necessary to compensate for the shortfall. If for any reason the amount
in the Contractual Currency so received exceeds the amount in the
Contractual Currency payable in respect of this Agreement, the party
receiving the payment will refund promptly the amount of such excess.
(b) JUDGMENTS. To the extent permitted by applicable law, if any judgment
or order expressed in a currency other than the Contractual Currency is
rendered (i) for the payment of any amount owing in respect of this
Agreement, (ii) for the payment of any amount relating to any early
termination in respect of this Agreement or (iii) in respect of a
judgment or order of another court for the payment of any amount
described in (i) or (ii) above, the party seeking recovery, after
recovery in full of the aggregate amount to which such party is entitled
pursuant to the judgment or order, will be entitled to receive
immediately from the other party the amount of any shortfall of the
Contractual Currency received by such party as a consequence of sums paid
in such other currency and will refund promptly to the other party any
excess of the Contractual Currency received by such party as a
consequence of sums paid in such other currency if such shortfall or such
excess arises or results from any variation between the rate of exchange
at which the Contractual Currency is converted into the currency of the
judgment or order for the purposes of such judgment or order and the rate
of exchange at which such party is able, acting in a reasonable manner
and in good faith in converting the currency received into the
Contractual Currency, to purchase the Contractual Currency with the
amount of the currency of the judgment or order actually received by such
party. The term "rate of exchange" includes, without limitation, any
premiums and costs of exchange payable in connection with the purchase of
or conversion into the Contractual Currency.
(c) SEPARATE INDEMNITIES. To the extent permitted by applicable law,
these indemnities constitute separate and independent obligations from
the other obligations in this Agreement, will be enforceable as separate
and independent causes of action, will apply notwithstanding any
indulgence granted by the party to which any payment is owed and will not
be affected by judgment being obtained or claim or proof being made for
any other sums payable in respect of this Agreement.
(d) EVIDENCE OF LOSS. For the purpose of this Section 8, it will be
sufficient for a party to demonstrate that it would have suffered a loss
had an actual exchange or purchase been made.
9. MISCELLANEOUS
(a) ENTIRE AGREEMENT. This Agreement constitutes the entire agreement and
understanding of the parties with respect to its subject matter and
supersedes all oral communication and prior writings with respect
thereto.
(b) AMENDMENTS. No amendment, modification or waiver in respect of this
Agreement will be effective unless in writing (including a writing
evidenced by a facsimile transmission) and executed by each of the
parties or confirmed by an exchange of telexes or electronic messages on
an electronic messaging system.
(c) SURVIVAL OF OBLIGATIONS. Without prejudice to Sections 2(a)(iii) and
6(c)(ii), the obligations of the parties under this Agreement will
survive the termination of any Transaction.
(d) REMEDIES CUMULATIVE. Except as provided in this Agreement, the
rights, powers, remedies and privileges provided in this Agreement are
cumulative and not exclusive of any rights, powers, remedies and
privileges provided by law.
(e) COUNTERPARTS AND CONFIRMATIONS.
(i) This Agreement (and each amendment, modification and waiver
in respect of it) may be executed and delivered in counterparts
(including by facsimile transmission), each of which will be
deemed an original.
(ii) The parties intend that they are legally bound by the terms
of each Transaction from the moment they agree to those terms
(whether orally or otherwise). A Confirmation shall be entered
into as soon as practicable and may be executed and delivered in
counterparts (including by facsimile transmission) or be created
by an exchange of telexes or by an exchange of electronic
messages on an electronic messaging system, which in each case
will be sufficient for all purposes to evidence a binding
supplement to this Agreement. The parties will specify therein
or through another effective means that any such counterpart,
telex or electronic message constitutes a Confirmation.
(f) NO WAIVER OF RIGHTS. A failure or delay in exercising any right,
power or privilege in respect of this Agreement will not be presumed to
operate as a waiver, and a single or partial exercise of any right, power
or privilege will not be presumed to preclude any subsequent or further
exercise, of that right, power or privilege or the exercise of any other
right, power or privilege.
(g) HEADINGS. The headings used in this Agreement are for convenience of
reference only and are not to affect the construction of or to be taken
into consideration in interpreting this Agreement.
10. OFFICES; MULTIBRANCH PARTIES
(a) If Section 10(a) is specified in the Schedule as applying, each party
that enters into a Transaction through an Office other than its head or
home office represents to the other party that, notwithstanding the place
of booking office or jurisdiction of incorporation or organisation of
such party, the obligations of such party are the same as if it had
entered into the Transaction through its head or home office. This
representation will be deemed to be repeated by such party on each date
on which a Transaction is entered into.
(b) Neither party may change the Office through which it makes and
receives payments or deliveries for the purpose of a Transaction without
the prior written consent of the other party.
(c) If a party is specified as a Multibranch Party in the Schedule, such
Multibranch Party may make and receive payments or deliveries under any
Transaction through any Office listed in the Schedule, and the Office
through which it makes and receives payments or deliveries with respect
to a Transaction will be specified in the relevant Confirmation.
11. EXPENSES
A Defaulting Party will, on demand, indemnify and hold harmless the other
party for and against all reasonable out-of-pocket expenses, including
legal fees and Stamp Tax, incurred by such other party by reason of the
enforcement and protection of its rights under this Agreement or any
Credit Support Document to which the Defaulting Party is a party or by
reason of the early termination of any Transaction, including, but not
limited to, costs of collection.
12. NOTICES
(a) EFFECTIVENESS. Any notice or other communication in respect of this
Agreement may be given in any manner set forth below (except that a
notice or other communication under Section 5 or 6 may not be given by
facsimile transmission or electronic messaging system) to the address or
number or in accordance with the electronic messaging system details
provided (see the Schedule) and will be deemed effective as indicated:--
(i) if in writing and delivered in person or by courier, on the
date it is delivered;
(ii) if sent by telex, on the date the recipient's answerback is
received;
(iii) if sent by facsimile transmission, on the date that
transmission is received by a responsible employee of the
recipient in legible form (it being agreed that the burden of
proving receipt will be on the sender and will not be met by a
transmission report generated by the sender's facsimile
machine);
(iv) if sent by certified or registered mail (airmail, if
overseas) or the equivalent (return receipt requested), on the
date that mail is delivered or its delivery is attempted; or
(v) if sent by electronic messaging system, on the date that
electronic message is received, unless the date of that delivery
(or attempted delivery) or that receipt, as applicable, is not a
Local Business Day or that communication is delivered (or
attempted) or received, as applicable, after the close of
business on a Local Business Day, in which case that
communication shall be deemed given and effective on the first
following day that is a Local Business Day.
(b) CHANGE OF ADDRESSES. Either party may by notice to the other change
the address, telex or facsimile number or electronic messaging system
details at which notices or other communications are to be given to it.
13. GOVERNING LAW AND JURISDICTION
(a) GOVERNING LAW. This Agreement will be governed by and construed in
accordance with the law specified in the Schedule.
(b) JURISDICTION. With respect to any suit, action or proceedings
relating to this Agreement ("Proceedings"), each party irrevocably:--
(i) submits to the jurisdiction of the English courts, if this
Agreement is expressed to be governed by English law, or to the
non-exclusive jurisdiction of the courts of the State of New
York and the United States District Court located in the Borough
of Manhattan in New York City, if this Agreement is expressed to
be governed by the laws of the State of New York; and
(ii) waives any objection which it may have at any time to the
laying of venue of any Proceedings brought in any such court,
waives any claim that such Proceedings have been brought in an
inconvenient forum and further waives the right to object, with
respect to such Proceedings, that such court does not have any
jurisdiction over such party.
Nothing in this Agreement precludes either party from bringing
Proceedings in any other jurisdiction (outside, if this Agreement is
expressed to be governed by English law, the Contracting States, as
defined in Section 1(3) of the Civil Jurisdiction and Judgments Act 1982
or any modification, extension or re-enactment thereof for the time being
in force) nor will the bringing of Proceedings in any one or more
jurisdictions preclude the bringing of Proceedings in any other
jurisdiction.
(c) SERVICE OF PROCESS. Each party irrevocably appoints the Process Agent
(if any) specified opposite its name in the Schedule to receive, for it
and on its behalf, service of process in any Proceedings. If for any
reason any party's Process Agent is unable to act as such, such party
will promptly notify the other party and within 30 days appoint a
substitute process agent acceptable to the other party. The parties
irrevocably consent to service of process given in the manner provided
for notices in Section 12. Nothing in this Agreement will affect the
right of either party to serve process in any other manner permitted by
law.
(d) WAIVER OF IMMUNITIES. Each party irrevocably waives, to the fullest
extent permitted by applicable law, with respect to itself and its
revenues and assets (irrespective of their use or intended use), all
immunity on the grounds of sovereignty or other similar grounds from (i)
suit, (ii) jurisdiction of any court, (iii) relief by way of injunction,
order for specific performance or for recovery of property, (iv)
attachment of its assets (whether before or after judgment) and (v)
execution or enforcement of any judgment to which it or its revenues or
assets might otherwise be entitled in any Proceedings in the courts of
any jurisdiction and irrevocably agrees, to the extent permitted by
applicable law, that it will not claim any such immunity in any
Proceedings.
14. DEFINITIONS
As used in this Agreement:--
"ADDITIONAL TERMINATION EVENT" has the meaning specified in Section 5(b).
"AFFECTED PARTY" has the meaning specified in Section 5(b).
"AFFECTED TRANSACTIONS" means (a) with respect to any Termination Event
consisting of an Illegality, Tax Event or Tax Event Upon Merger, all
Transactions affected by the occurrence of such Termination Event and (b)
with respect to any other Termination Event, all Transactions.
"AFFILIATE" means, subject to the Schedule, in relation to any person,
any entity controlled, directly or indirectly, by the person, any entity
that controls, directly or indirectly, the person or any entity directly
or indirectly under common control with the person. For this purpose,
"control" of any entity or person means ownership of a majority of the
voting power of the entity or person.
"APPLICABLE RATE" means:--
(a) in respect of obligations payable or deliverable (or which would have
been but for Section 2(a)(iii)) by a Defaulting Party, the Default Rate;
(b) in respect of an obligation to pay an amount under Section 6(e) of
either party from and after the date (determined in accordance with
Section 6(d)(ii)) on which that amount is payable, the Default Rate;
(c) is respect of all other obligations payable or deliverable (or which
would have been but for Section 2(a)(iii)) by a Non-defaulting Party, the
Non-default Rate; and
(d) in all other cases, the Termination Rate.
"BURDENED PARTY" has the meaning specified in Section 5(b).
"CHANGE IN TAX LAW" means the enactment, promulgation, execution or
ratification of, or any change in or amendment to, any law (or in the
application or official interpretation of any law) that occurs on or
after the date on which the relevant Transaction is entered into.
"CONSENT" includes a consent, approval, action, authorisation, exemption,
notice, filing, registration or exchange control consent.
"CREDIT EVENT UPON MERGER" has the meaning specified in Section 5(b).
"CREDIT SUPPORT DOCUMENT" means any agreement or instrument that is
specified as such in this Agreement.
"CREDIT SUPPORT PROVIDER" has the meaning specified in the Schedule.
"DEFAULT RATE" means a rate per annum equal to the cost (without proof or
evidence of any actual cost) to the relevant payee (as certified by it)
if it were to fund or of funding the relevant amount plus 1% per annum.
"DEFAULTING PARTY" has the meaning specified in Section 6(a).
"EARLY TERMINATION DATE" means the date determined in accordance with
Section 6(a) or 6(b)(iv).
"EVENT OF DEFAULT" has the meaning specified in Section 5(a) and, if
applicable, in the Schedule.
"ILLEGALITY" has the meaning specified in Section 5(b).
"INDEMNIFIABLE TAX" means any Tax other than a Tax that would not be
imposed in respect of a payment under this Agreement but for a present or
former connection between the jurisdiction of the government or taxation
authority imposing such Tax and the recipient of such payment or a person
related to such recipient (including, without limitation, a connection
arising from such recipient or related person being or having been a
citizen or resident of such jurisdiction, or being or having been
organized, present or engaged in a trade or business in such
jurisdiction, or having or having had a permanent establishment or fixed
place of business in such jurisdiction, but excluding a connection
arising solely from such recipient or related person having executed,
delivered, performed its obligations or received a payment under, or
enforced, this Agreement or a Credit Support Document).
"LAW" includes any treaty, law, rule or regulation (as modified, in the
case of tax matters, by the practice of any relevant governmental revenue
authority) and "LAWFUL" and "UNLAWFUL" will be construed accordingly.
"LOCAL BUSINESS DAY" means, subject to the Schedule, a day on which
commercial banks are open for business (including dealings in foreign
exchange and foreign currency deposits) (a) in relation to any obligation
under Section 2(a)(i), in the place(s) specified in the relevant
Confirmation or, if not so specified, as otherwise agreed by the parties
in writing or determined pursuant to provisions contained, or
incorporated by reference, in this Agreement, (b) in relation to any
other payment, in the place where the relevant account is located and, if
different, in the principal financial centre, if any, of the currency of
such payment, (c) in relation to any notice or other communication,
including notice contemplated under Section 5(a)(i), in the city
specified in the address for notice provided by the recipient and, in the
case of a notice contemplated by Section 2(b), in the place where the
relevant new account is to be located and (d) in relation to Section
5(a)(v)(2), in the relevant locations for performance with respect to
such Specified Transaction.
"LOSS" means, with respect to this Agreement or one or more Terminated
Transactions, as the case may be, and a party, the Termination Currency
Equivalent of an amount that party reasonably determines in good faith to
be its total losses and costs (or gain, in which case expressed as a
negative number) in connection with this Agreement or that Terminated
Transaction or group of Terminated Transactions, as the case may be,
including any loss of bargain, cost of funding or, at the election of
such party but without duplication, loss or cost incurred as a result of
its terminating, liquidating, obtaining or reestablishing any hedge or
related trading position (or any gain resulting from any of them). Loss
includes losses and costs (or gains) in respect of any payment or
delivery required to have been made (assuming satisfaction of each
applicable condition precedent) on or before the relevant Early
Termination Date and not made, except, so as to avoid duplication, if
Section 6(e)(i)(1) or (3) or 6(e)(ii)(2)(A) applies. Loss does not
include a party's legal fees and out-of-pocket expenses referred to under
Section 11. A party will determine its Loss as of the relevant Early
Termination Date or, if that is not reasonably practicable, as of the
earliest date thereafter as is reasonably practicable. A party may (but
need not) determine its Loss by reference to quotations of relevant rates
or prices from one or more leading dealers in the relevant markets.
"MARKET QUOTATION" means, with respect to one or more Terminated
Transactions and a party making the determination, an amount determined
on the basis of quotations from Reference Market-makers. Each quotation
will be for an amount, if any, that would be paid to such party
(expressed as a negative number) or by such party (expressed as a
positive number) in consideration of an agreement between such party
(taking into account any existing Credit Support Document with respect to
the obligations of such party) and the quoting Reference Market-maker to
enter into a transaction (the "Replacement Transaction") that would have
the effect of preserving for such party the economic equivalent of any
payment or delivery (whether the underlying obligation was absolute or
contingent and assuming the satisfaction of each applicable condition
precedent) by the parties under Section 2(a)(i) in respect of such
Terminated Transaction or group of Terminated Transactions that would,
but for the occurrence of the relevant Early Termination Date, have been
required after that date. For this purpose, Unpaid Amounts in respect of
the Terminated Transaction or group of Terminated Transactions are to be
excluded but, without limitation, any payment or delivery that would, but
for the relevant Early Termination Date, have been required (assuming
satisfaction of each applicable condition precedent) after that Early
Termination Date is to be included. The Replacement Transaction would be
subject to such documentation as such party and the Reference
Market-maker may, in good faith, agree. The party making the
determination (or its agent) will request each Reference Market-maker to
provide its quotation to the extent reasonably practicable as of the same
day and time (without regard to different time zones) on or as soon as
reasonably practicable after the relevant Early Termination Date. The day
and time as of which those quotations are to be obtained will be selected
in good faith by the party obliged to make a determination under Section
6(e), and, if each party is so obliged, after consultation with the
other. If more than three quotations are provided, the Market Quotation
will be the arithmetic mean of the quotations, without regard to the
quotations having the highest and lowest values. If exactly three such
quotations are provided, the Market Quotation will be the quotation
remaining after disregarding the highest and lowest quotations. For this
purpose, if more than one quotation has the same highest value or lowest
value, then one of such quotations shall be disregarded. If fewer than
three quotations are provided, it will be deemed that the Market
Quotation in respect of such Terminated Transaction or group of
Terminated Transactions cannot be determined.
"NON-DEFAULT RATE" means a rate per annum equal to the cost (without
proof or evidence of any actual cost) to the Non-defaulting Party (as
certified by it) if it were to fund the relevant amount.
"NON-DEFAULTING PARTY" has the meaning specified in Section 6(a).
"OFFICE" means a branch or office of a party, which may be such party's
head or home office.
"POTENTIAL EVENT OF DEFAULT" means any event which, with the giving of
notice or the lapse of time or both, would constitute an Event of
Default.
"REFERENCE MARKET-MAKERS" means four leading dealers in the relevant
market selected by the party determining a Market Quotation in good faith
(a) from among dealers of the highest credit standing which satisfy all
the criteria that such party applies generally at the time in deciding
whether to offer or to make an extension of credit and (b) to the extent
practicable, from among such dealers having an office in the same city.
"RELEVANT JURISDICTION" means, with respect to a party, the jurisdictions
(a) in which the party is incorporated organized, managed and controlled
or considered to have its seat, (b) where an Office through which the
party is acting for purposes of this Agreement is located, (c) in which
the party executes this Agreement and (d) in relation to any payment,
from or through which such payment is made.
"SCHEDULED PAYMENT DATE" means a date on which a payment or delivery is
to be made under Section 2(a)(i) with respect to a Transaction.
"SET-OFF" means set-off, offset, combination of accounts, right of
retention or withholding or similar right or requirement to which the
payer of an amount under Section 6 is entitled or subject (whether
arising under this Agreement, another contract, applicable law or
otherwise) that is exercised by, or imposed on, such payer.
"SETTLEMENT AMOUNT" means, with respect to a party and any Early
Termination Date, the sum of:--
(a) the Termination Currency Equivalent of the Market Quotations (whether
positive or negative) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation is determined; and
(b) such party's Loss (whether positive or negative and without reference
to any Unpaid Amounts) for each Terminated Transaction or group of
Terminated Transactions for which a Market Quotation cannot be determined
or would not (in the reasonable belief of the party making the
determination) produce a commercially reasonable result.
"SPECIFIED ENTITY" has the meaning specified in the Schedule.
"SPECIFIED INDEBTEDNESS" means, subject to the Schedule, any obligation
(whether present or future, contingent or otherwise, as principal or
surety or otherwise) in respect of borrowed money.
"SPECIFIED TRANSACTION" means, subject to the Schedule, (a) any
transaction (including an agreement with respect thereto) now existing or
hereafter entered into between one party to this Agreement (or any Credit
Support Provider of such party or any applicable Specified Entity of such
party) and the other party to this Agreement (or any Credit Support
Provider of such other party or any applicable Specified Entity of such
other party) which is a rate swap transaction, basis swap, forward rate
transaction, commodity swap, commodity option, equity or equity index
swap, equity or equity index option, bond option, interest rate option,
foreign exchange transaction, cap transaction, floor transaction, collar
transaction, currency swap transaction, cross-currency rate swap
transaction, currency option or any other similar transaction (including
any option with respect to any of these transactions), (b) any
combination of these transactions and (c) any other transaction
identified as a Specified Transaction in this Agreement or the relevant
confirmation.
"STAMP TAX" means any stamp, registration, documentation or similar tax.
"TAX" means any present or future tax, levy, impost, duty, charge,
assessment or fee of any nature (including interest, penalties and
additions thereto) that is imposed by any government or other taxing
authority in respect of any payment under this Agreement other than a
stamp, registration, documentation or similar tax.
"TAX EVENT" has the meaning specified in Section 5(b).
"TAX EVENT UPON MERGER" has the meaning specified in Section 5(b).
"TERMINATED TRANSACTIONS" means with respect to any Early Termination
Date (a) if resulting from a Termination Event, all Affected Transactions
and (b) if resulting from an Event of Default, all Transactions (in
either case) in effect immediately before the effectiveness of the notice
designating that Early Termination Date (or, if "Automatic Early
Termination" applies, immediately before that Early Termination Date).
"TERMINATION CURRENCY" has the meaning specified in the Schedule.
"TERMINATION CURRENCY EQUIVALENT" means, in respect of any amount
denominated in the Termination Currency, such Termination Currency amount
and, in respect of any amount denominated in a currency other than the
Termination Currency (the "Other Currency"), the amount in the
Termination Currency determined by the party making the relevant
determination as being required to purchase such amount of such Other
Currency as at the relevant Early Termination Date, or, if the relevant
Market Quotation or Loss (as the case may be), is determined as of a
later date, that later date, with the Termination Currency at the rate
equal to the spot exchange rate of the foreign exchange agent (selected
as provided below) for the purchase of such Other Currency with the
Termination Currency at or about 11:00 a.m. (in the city in which such
foreign exchange agent is located) on such date as would be customary for
the determination of such a rate for the purchase of such Other Currency
for value on the relevant Early Termination Date or that later date. The
foreign exchange agent will, if only one party is obliged to make a
determination under Section 6(e), be selected in good faith by that party
and otherwise will be agreed by the parties.
"TERMINATION EVENT" means an Illegality, a Tax Event or a Tax Event Upon
Merger or, if specified to be applicable, a Credit Event Upon Merger or
an Additional Termination Event.
"TERMINATION RATE" means a rate per annum equal to the arithmetic mean of
the cost (without proof or evidence of any actual cost) to each party (as
certified by such party) if it were to fund or of funding such amounts.
"UNPAID AMOUNTS" owing to any party means, with respect to an Early
Termination Date, the aggregate of (a) in respect of all Terminated
Transactions, the amounts that became payable (or that would have become
payable but for Section 2(a)(iii)) to such party under Section 2(a)(i) on
or prior to such Early Termination Date and which remain unpaid as at
such Early Termination Date and (b) in respect of each Terminated
Transaction, for each obligation under Section 2(a)(i) which was (or
would have been but for Section 2(a)(iii)) required to be settled by
delivery to such party on or prior to such Early Termination Date and
which has not been so settled as at such Early Termination Date, an
amount equal to the fair market value of that which was (or would have
been) required to be delivered as of the originally scheduled date for
delivery, in each case together with (to the extent permitted under
applicable law) interest, in the currency of such amounts, from (and
including) the date such amounts or obligations were or would have been
required to have been paid or performed to (but excluding) such Early
Termination Date, at the Applicable Rate. Such amounts of interest will
be calculated on the basis of daily compounding and the actual number of
days elapsed. The fair market value of any obligation referred to in
clause (b) above shall be reasonably determined by the party obliged to
make the determination under Section 6(e) or, if each party is so
obliged, it shall be the average of the Termination Currency Equivalents
of the fair market values reasonably determined by both parties.
IN WITNESS WHEREOF the parties have executed this document on the
respective dates specified below with effect from the date specified on
the first page of this document.
PETRIE STORES LIQUIDATING TRUST
(Name of Party)
By: /s/ Stephanie R. Joseph
Name: Stephanie R. Joseph
Title: Manager and Chief Executive Officer
CANADIAN IMPERIAL BANK OF COMMERCE
(Name of Party)
By: /s/ Wayne J. Halenda
Name: Wayne J. Halenda
Title: Vice President
By: /s/ Antonia Lobo
Name: Antonia Lobo
Title: Vice President
EXECUTION COPY
SCHEDULE TO THE MASTER AGREEMENT
DATED AS OF NOVEMBER 19, 1997
BETWEEN
CANADIAN IMPERIAL BANK OF COMMERCE ("PARTY A")
AND
PETRIE STORES LIQUIDATING TRUST ("COUNTERPARTY")
Part 1
Termination Provisions
In this Agreement: -
(1) "Specified Entity" shall not apply to Party A or the Counterparty.
(2) "Specified Transaction" will have the meaning specified in Section
14.
(3) The "Cross Default" provisions of Section 5(a)(vi) will apply to
Party A and to the Counterparty, and for such purpose:
(a) "Specified Indebtedness" will have the meaning
specified in Section 14;
(b) "Threshold Amount" means 3% of the net assets of Party
A, in the case of Party A, and 3% of the net assets of
the Counterparty, in the case of the Counterparty; and
(c) Section 5(a)(vi) will be deemed to be amended to
include the following:
"or (3) a default or event of default (however
described) occurs and is continuing which entitles any
person or entity to terminate its commitment under any
agreement to lend or advance or make available funds to
a party in respect of an aggregate amount in excess of
the Threshold Amount."
(4) "Termination Currency" means United States Dollars.
(5) The "Credit Event Upon Merger" provisions of Section 5(b)(iv) will
not apply to Party A or the Counterparty.
(6) The "Automatic Early Termination" provisions of Section 6(a) will not
apply to Party A or the Counterparty.
(7) For the purpose of the "PAYMENTS ON EARLY TERMINATION" provisions of
Section 6(e), the Second Method and Loss will apply. Counterparty agrees
that if an Early Termination Date occurs and Party A is the party
calculating Loss in connection therewith, and if at the time of such
Early Termination Date any Shares of Stock pledged to Party A pursuant to
a Collateral Pledge Agreement executed by Counterparty are subject to any
restrictions on their transferability (including any restriction arising
under the securities laws) or if for any other reason Party A is unable
at such time to liquidate any Collateral pledged by Counterparty to
secure Counterparty's obligations to Party A, Party A may, in order to
more accurately determine and minimize its Loss with respect to any
Terminated Transaction, calculate and determine such Loss as of the date
or dates following such Early Termination Date on which Party A, in its
reasonable good faith judgment, is able to sell such Collateral at such
price or prices it deems reasonable under the circumstances and terminate
any hedge it may have in connection with such Terminated Transaction.
Part 2
Tax Representations
None.
Part 3
Agreements to Deliver Documents
For the purpose of Section 4(a)(i) or 4(a)(ii) of the Agreement, each
party (as specified below) agrees to deliver the following documents:
<TABLE>
<CAPTION>
PARTY REQUIRED TO FORM/DOCUMENT/ DATE BY WHICH TO BE COVERED BY SECTION
DELIVER DOCUMENT CERTIFICATE DELIVERED 3(D) REPRESENTATION
<S> <C> <C> <C>
Counterparty Collateral Pledge Upon execution of the YES
Agreement transaction
Counterparty Enforceability Opinion Upon execution of the NO
transaction
Party A Enforceability Opinion Upon execution of the NO
transaction
</TABLE>
all of such documents to be in form and substance satisfactory to Party A
or Counterparty, as applicable.
Part 4
Miscellaneous
(1) GOVERNING LAW. THIS AGREEMENT WILL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
REFERENCE TO CHOICE OF LAW DOCTRINE.
(2) Notices.
(a) In connection with Section 12(a), all notices to Party
A shall, with respect to any particular Transaction, be
sent to the address, telex number or facsimile number
specified in the relevant Confirmation and any notice
for purposes of Sections 5 or 6 shall be sent to the
address or telex number specified below:
Addresses for notices or communications to Party A:
Office: Toronto, Canada
Address: Head Office - Commerce Court, Toronto,
Ontario, Canada M5L I A2
Attention: Manager, Swap Operations
Telex No: 065-24116 Answerback: CANBANK TOR
Facsimile No: 416-594-7343 Telephone: 416-594-8566
(Only with respect to Transactions through that Office)
Office: London, England
Address: Cottons Centre, Cottons Lane,
London SE1 2QL, England
Attention: Executive Vice President
Telex No: 889342 Answerback: CIBC G
Facsimile No: 71-234-6423 Telephone: 71-234-6963
(Only with respect to Transactions through that Office)
Office: New York, U.S.A.
Address: 425 Lexington Avenue, New York, New York,
U.S.A. 10017
Attention: Manager, Swaps Operations
Telex No: Answerback:
Facsimile No: 212-856-6699 Telephone: 212-856-4000
(Only with respect to Transactions through that Office)
(b) In connection with Section 12(a), all notices to the
Counterparty shall, with respect to any particular
Transaction, be sent to the address, telex number or
purposes of Sections 5 or 6 shall be sent to the
address or telex number specified below:
Address: c/o The Director's Network, Inc.
685 Fifth Avenue, Suite 601
New York, New York 10022
Attention: Stephanie R. Joseph
Facsimile No: 212-754-3087
Telephone: 212-754-3086
(3) Netting of Payments. Subparagraph (ii) of Section 2(c) of this
Agreement will not apply for the purpose of Section 2(c) with
respect to all Transactions under this Agreement with effect
from the date of this Agreement.
(4) Offices; Multibranch Party.
(a) Section 10(a) shall apply to this Agreement.
(b) For the purpose of Section 10(c):
(i) Party A is a Multibranch Party and may act through
its Toronto, New York and London Offices; and
(ii) The Counterparty is not a Multibranch Party.
(5) Credit Support Documents.
The Collateral Pledge Agreement dated of even date herewith
shall be a Credit Support Document for purposes of this
Agreement.
(6) Credit Support Provider.
None.
Part 5
Other Provisions
(1) ISDA Definitions. Reference is hereby made to the 1991 ISDA
Definitions (the "1991 Definitions"), the 1992 ISDA FX and
Currency Option Definitions (the "FX Definitions") and the 1994
ISDA Equity Option Definitions (the "Equity Definitions") each
as published by the International Swap Dealers Association Inc.,
which are hereby incorporated by reference herein. Any terms
used and not otherwise defined herein which are contained in the
1991 Definitions, FX Definitions or the Equity Definitions shall
have the meaning set forth therein.
(2) Scope of Agreement. Notwithstanding anything contained in the
Agreement to the contrary, if the parties enter into any
Specified Transaction, such Specified Transaction shall be
subject to, governed by and construed in accordance with the
terms of this Agreement unless the Confirmation relating thereto
shall specifically state to the contrary. Each such Specified
Transaction shall be a Transaction for the purposes of this
Agreement.
(3) Inconsistency. In the event of any inconsistency between any of
the following documents, the relevant document first listed
below shall govern: (i) a Confirmation; (ii) the Schedule; (iii)
the 1991 Definitions, the Equity Definitions or the FX
Definitions; and (iv) the printed form of ISDA Master Agreement.
(4) Right of Set-Off.
(A) Party A has committed to providing a loan (the "Loan") to
Counterparty, as evidenced by a Secured Term Note dated as of
December 31, 1997 (the "Note"), and Counterparty has agreed to
repay the Loan in accordance with the terms of the Note if
Counterparty exercised its right to receive such Loan.
Counterparty agrees that Party A's obligation to make any
payment due Counterparty in connection with this Agreement
(including any Transaction executed hereunder) shall be
conditioned upon Counterparty's payment in full of all amounts,
if any, due and payable to Party A (acting through its New York
agency, or any permitted transferee thereof) under the
Note and any and all other agreements Counterparty may have with
Party A (regardless of the Office or agency through which it is
acting) at the time such payment is due.
(B) Upon any termination of a Transaction, Party A will have the
right to set-off or withhold any payment it (including any of
its branches or agencies) may owe Counterparty hereunder in
satisfaction of any obligation of the Counterparty to Party A
under the Note and any and all other agreements Counterparty may
have executed with Party A (including any branch or agency
thereof), irrespective of whether such obligations are at such
time matured or unmatured. Party A's obligations to Counterparty
in connection with such Transaction shall be deemed satisfied
and discharged to the extent of any such set off or withholding.
(5) Affiliate. "Affiliate" will have the meaning specified in Section 14.
(6) Calculation Agent. The Calculation Agent will be Party A unless
Party A is the Defaulting Party in which case the Calculation
Agent will be the Counterparty. All determinations by the
Calculation Agent shall be made in good faith and after
consultation with the other party and shall be binding and
conclusive on the parties absent manifest error.
(7) WAIVER OF JURY TRIAL. EACH PARTY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN RESPECT OF ANY SUIT, ACTION OR PROCEEDING RELATING TO
THIS AGREEMENT OR ANY CREDIT SUPPORT DOCUMENT. EACH PARTY (i)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF THE OTHER
PARTY OR ANY CREDIT SUPPORT PROVIDER HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
SUCH A SUIT, ACTION OR PROCEEDING, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (ii) ACKNOWLEDGES THAT IT AND THE OTHER PARTY HAVE
BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND PROVIDE FOR ANY
CREDIT SUPPORT DOCUMENT, AS APPLICABLE, BY, AMONG OTHER THINGS,
THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
(8) Additional Representations. (i) Section 3 is amended by adding
the following subsections thereto:
"(g) Line of Business. This Agreement has been, and
each Transaction hereunder will be, entered into for
purposes of managing its borrowings or investments or
in connection with a line of business.
(h) Net Worth. The Counterparty hereby represents and
warrants that the Counterparty (i) has individual net
worth that exceeds USD 5,000,000 and (ii) has such
knowledge and experience in financial and business
matters that the Counterparty is capable of evaluating
the merits and risks of any Transactions under this
Agreement."
(9) Consent to Tape Recording. Each of Party A and the Counterparty
hereby consents to the tape recording of all conversations
between the Counterparty and the Counterparty's representatives
and Party A.
(10) No Reliance, etc. In connection with the negotiation of, the
entering into, and the confirming of the execution of this
Agreement, any Credit Support Document, each Transaction and any
other documentation relating to this Agreement to which it is a party
or that it is required by this Agreement to deliver, each party
hereby represents and warrants to the other that:
(i) the other party hereto or thereto is entering
into this Agreement and each Transaction as
principal (and not as agent or in any other
capacity) and is not acting as fiduciary for
it;
(ii) it is not relying (for purposes of making any
investment decision or otherwise) upon any
representations (whether written or oral) of
the other party hereto or thereto other than
the representations expressly set forth in
this Agreement, in such Credit Support
Document and in any Confirmation;
(iii) the other party hereto or thereto has not
given to it (directly or indirectly through
any other person) any assurance or guaranty as
to the success, profitability, return,
performance, result, effect, consequence, or
benefit (either legal, regulatory, tax,
financial, accounting, or otherwise) of this
Agreement, such Credit Support Document, such
Transaction or other documentation;
(iv) it has consulted with its own legal,
regulatory, tax, business, investment,
financial and accounting advisors to the
extent it has deemed necessary, and it has
made its own investment, hedging and trading
decisions (including decisions regarding the
appropriateness or suitability of any
Transaction pursuant to this Agreement) based
upon its own judgment and upon any advice from
such advisors as it has deemed necessary;
(v) it has determined that the rates, prices or
amounts and other terms of each Transaction
and the indicative quotations (if any)
provided by the other party hereto or thereto
reflect those in the relevant market for
similar transactions, and all trading
decisions have been the result of arm's-length
negotiations between the parties; and
(vi) it is entering into this Agreement, such
Credit Support Document, each Transaction and
any other documentation relating to this
Agreement with a full understanding of all of
the terms, conditions and risks hereof and
thereof (economic and otherwise), and it is
capable of assuming and willing to assume
(financially and otherwise) those risks.
(11) Generic Risk Disclosure Statement. Counterparty represents to
Party A that it has read and understands the Generic Risk
Disclosure Statement provided to the Counterparty by Party A.
(12) Illegality. The "Illegality" provisions Section 5(b)(i) shall be
expanded to include the obligation of a party to comply with any
directive, direction or similar order issued or given by any
government agency or authority with competent jurisdiction
(whether or not having the force of law) which prohibits its
performance under this Agreement, and in that event such party
will be the Affected Party for the purpose of that Section.
(13) Transfer. In addition to the permitted transfers set out in
Section 7 of this Agreement, this Agreement or any interest or
obligation of Party A in or under this Agreement may be
transferred to and assumed by any Affiliate of Party A, provided
that:
(i) the liabilities of such Affiliate (including
such assumed obligations) are unconditionally
guaranteed by Party A on terms reasonably
satisfactory to the Counterparty; and
(ii) such transfer and assumption will only be
effective upon the Counterparty receiving
notice of such transfer and assumption signed
by Party A and acknowledged by such Affiliate.
Upon the effective date of a transfer and assumption:
(i) each of Party A and the Counterparty shall
have no further rights against or obligations
to the other in connection with this Agreement
or any Transaction (other than Counterparty's
rights and Party A's obligations in connection
with such guarantee); and
(ii) each of such Affiliate and the Counterparty
shall have the same rights against, and shall
owe the same obligations to, the other in
connection with each Transaction as if such
Affiliate had been named as a party to that
Transaction and was a party to this Agreement
instead of Party A.
(14) U.S. Provisions.
(i) Master Agreement. The parties hereto intend
that this Agreement shall be a master
agreement (as described in 11 U.S.C. 101 and
12 U.S.C. 1821(e)(8)(D)(vii)) for a "swap
agreement" (as defined in 11 U.S.C. 101 and 12
U.S.C. 1821(e)(8)(D)(vi)).
Please confirm your agreement to the terms of the foregoing Schedule by
signing below.
CANADIAN IMPERIAL BANK OF COMMERCE PETRIE STORES LIQUIDATING TRUST
/s/ Wayne J. Halenda /s/ Stephanie R. Joseph
Wayne J. Halenda Stephanie R. Joseph
Vice President Manager and Chief Executive Officer
/s/ Antonia Lobo
Antonia Lobo
Vice President
Exhibit 99.2
DATE: December 31, 1997
<TABLE>
<S> <C>
TO: Petrie Stores Liquidating Trust FROM: Canadian Imperial Bank of Commerce
ATTENTION: Stephanie R. Josep CONTACT: Gina S. Ghent
PHONE NUMBER: 212-754-3086 PHONE NUMBER: 212-856-6538
FACSIMILE NUMBER: 212-754-3087 FACSIMILE NUMBER: 212-885-4378
RE: Equity Collar Confirmation
CIBC Reference Number: NY EQT 0522
</TABLE>
THIS CONFIRMATION SUPERSEDES AND REPLACES ANY PREVIOUSLY EXECUTED
CONFIRMATION OF THIS TRANSACTION. FOR EASE OF REFERENCE, ALL CHANGES ARE
IN BOLD TYPE.
The purpose of this letter agreement (this "Confirmation") is to confirm
the terms and conditions of the Transaction entered into between Canadian
Imperial Bank of Commerce ("CIBC") and Petrie Stores Liquidating Trust
("Counterparty") on the Trade Date specified below (the "Transaction").
This Confirmation constitutes a "Confirmation" as referred to in the
Master Agreement specified below.
The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "Equity Definitions"), as published by the
International Swaps and Derivatives Association, Inc. are incorporated
into this Confirmation. In the event of any inconsistency between the
Equity Definitions and this Confirmation, this Confirmation will govern.
1. This Confirmation supplements, forms part of, and is subject to,
the Master Agreement dated as of November 19, 1997, as amended and
supplemented from time to time (the "Agreement"), between CIBC and
Counterparty. All provisions contained in the Agreement shall
govern this Confirmation except as expressly modified below.
This Transaction shall be subject to all laws, rules and
regulations applicable thereto, including, but not by way of
limitation, the provisions of the Securities Act of 1933 (the
"Act"), and the Securities Exchange Act of 1934 (the "Exchange
Act"), as amended and all rules and regulations, promulgated or to
be promulgated thereunder. The parties hereto each acknowledges
that the options acquired under this Transaction will not be
registered under the Act and are being sold in reliance upon the
exemption for private placements pursuant to Section 4(2) of the
Act.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
GENERAL TERMS:
AGENT: CIBC, New York Agency, has acted as agent in
confirming this Transaction.
TRANSACTION I:
-------------
Trade Date: November 26, 1997
Effective Date: November 26, 1997
Option Style: European
Option Type: Call
Seller: Counterparty
Buyer: CIBC
Shares: The common shares of stock issued by Toys "R"
Us, Inc. (New York Stock Exchange Ticker Symbol
= "TOY").
Number of Options: 2,000,000
Option Entitlement: 1 Share per Option
Multiple Exercise: Inapplicable
Strike Price: 47.1137
Exchange: The New York Stock Exchange or any successor to
such exchange or quotation system.
Related Exchange: Chicago Board Options Exchange
Calculation Agent: CIBC. Whenever the Calculation Agent is
required to act, it will do so in good faith,
and its determinations and calculations will be
binding in the absence of manifest error.
TRANSACTION II:
--------------
Trade Date: November 26, 1997
Effective Date: November 26, 1997
Option Style: European
Option Type: Put
Seller: CIBC
Buyer: Counterparty
Shares: The common shares of stock issued by Toys "R"
Us, Inc. (New York Stock Exchange Ticker Symbol
= "TOY").
Number of Options: 2,000,000
Option Entitlement: 1 Share per Option
Multiple Exercise: Inapplicable
Strike Price: 30.7264
Exchange: The New York Stock Exchange or any successor to
such exchange or quotation system.
Related Exchange: Chicago Board Options Exchange
Calculation Agent: CIBC. Whenever the Calculation Agent is
required to act, it will do so in good faith,
and its determinations and calculations will be
binding in the absence of manifest error.
PROCEDURE FOR EXERCISE:
Expiration Time: 4:00 p.m. (local time in New York).
Expiration Date: December 3, 1999
Automatic Exercise: Applicable
Settlement Price: The actual average price per share of the
Shares purchased by CIBC to close out its
hedging position during the period extending
from the fifth (5th) Exchange Business Day
immediately preceding the Exercise Date through
the Exercise Date, such period subject to
modification upon mutual agreement of CIBC and
Counterparty.
Put Seller's Telephone Number and Telex and/or
Facsimile Number and Contact Details for
Purpose of Giving Notice:
Mr. Eamon McCooey
(P) 212-885-4361
(F) 212-856-4266
SETTLEMENT TERMS:
Cash Settlement: Applicable
Cash Settlement
Amount: An amount, as calculated by the Calculation
Agent in the Settlement Currency, equal to the
number of Options exercised on the Expiration
Date multiplied by (i) the Strike Price
Differential, and (ii) any Option Entitlement
specified above
Strike Price
Differential
(Put): An amount equal to the greater of (i) the
excess of the Strike Price over the Settlement
Price, and (ii) zero
Strike Price
Differential
(Call): An amount equal to the greater of (i) the
excess of the Settlement Price over the Strike
Price, and (ii) zero
Cash Settlement
Payment Date: Three (3) Currency Business Days after the
Valuation Date
ADJUSTMENTS:
Method of Adjustment: Options Exchange Adjustment
Additional Potential
Adjustment Event: The issuer of the Shares distributes a cash
dividend greater than $0.00 to shareholders of
record during the term of the Transaction.
EXTRAORDINARY EVENTS:
SHARE FOR SHARE: ALTERNATIVE OBLIGATION, PROVIDED HOWEVER, THAT
IF THE TRADING VOLATILITY OF THE NEW SHARES
DIFFERS SUCH THAT CIBC IS UNABLE TO MAINTAIN A
HEDGING POSITION THEN CIBC SHALL HAVE THE RIGHT
TO TERMINATE THE TRANSACTION IN ACCORDANCE WITH
THE PROVISIONS OF CANCELLATION AND PAYMENT.
SHARE FOR OTHER: CANCELLATION AND PAYMENT.
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing the copy of this Confirmation enclosed for that
purpose and returning it to us or by sending to us a letter or telex
substantially similar to this letter, which letter or telex sets forth
the material terms of the Transaction to which this Confirmation relates
and indicates your agreement to those terms.
Yours Sincerely,
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Gina S. Ghent
-------------------------------
Name: Gina S. Ghent
Title: Director
Confirmed as of the date first written:
PETRIE STORES LIQUIDATING TRUST
By: /s/ Stephanie R. Joseph
----------------------------
Name: Stephanie R. Joseph
Title: Manager and Chief
Executive Officer
Exhibit 99.3
EXECUTION COPY
December 31, 1997
SECURED TERM NOTE
Reference is made to the ISDA Master Agreement (as modified
by the Schedule thereto) executed by Borrower and Lender (the
"Master Agreement") and dated as of November 19, 1997.
Capitalized terms used and not defined herein shall have the
meanings specified therefor in the Master Agreement.
Canadian Imperial Bank of Commerce (the "Lender"), New York
Agency, hereby agrees to lend to Petrie Stores Liquidating Trust
("Borrower") an amount not exceeding $55,300,000 (the "Maximum
Loan Commitment Amount") on any Business Day (the "Draw Date")
occurring during the period (the "Commitment Period") beginning
on the date hereof (the "Commitment Start Date") and ending
September 3, 1999 (the "Commitment Termination Date"), or if the
Commitment Termination Date is not a Business Day, the next
succeeding Business Day. The Borrower may elect to borrow an
amount (the "Principal") up to the Maximum Loan Commitment Amount
by providing the Lender with a notice substantially in the form
of Exhibit A hereto (the "Draw Notice") not later than three (3)
Business Days prior to the Draw Date.
The Lender is only required to lend monies hereunder during
the Commitment Period and the Draw Date shall be the later of the
Draw Date specified on the Draw Notice or the date that is three
(3) Business Days after the Lender's actual receipt of the Draw
Notice.
Upon receipt of the Principal from the Lender, the Borrower
shall pay to the order of the Lender the Principal on December 3,
1999 (the "Maturity Date") and accrued and unpaid interest on the
Principal ("Interest," and together with the Principal, the
"Loan") on the Maturity Date and each 3rd day of each March,
June, September and December after the Draw Date and prior to the
Maturity Date (each such day, an "Interest Payment Date"),
beginning on the first Interest Payment Date immediately
following the Draw Date.
Interest shall accrue on the outstanding principal amount of
the Loan from the date hereof through and including the date the
Loan is paid in full (whether by acceleration, at stated maturity
or otherwise) at a floating rate per annum equal to three month
USD-LIBOR-BBA plus 0.35%, which rate shall be reset quarterly on
the relevant principal amount of the Loan on the basis of the
actual number of days elapsed during the relevant quarterly
period divided by 360. Accrued interest shall be compounded
quarterly and is payable quarterly on each Interest Payment Date
and on the Maturity Date in lawful money of the United States of
America, in same day funds, to Lender at the following account or
other such address as Lender may designate to Borrower in
writing: Chase Manhattan Bank N.Y. for the account of Canadian
Imperial Bank of Commerce, Toronto, Account Number 544-708-234,
ABA Number 021-000-021, Attention: Financial Products.
Principal shall be due and payable, not later than 12:00 noon
Eastern Time on the Maturity Date and shall be payable in lawful
money of the United States of America, in same day funds, to
Lender at the following account or other such address as Lender
may designate to Borrower in writing: Chase Manhattan Bank N.Y.
for the account of Canadian Imperial Bank of Commerce, Toronto,
Account Number 544-708-234, ABA Number 021-000-021, Attention:
Financial Products.
Whenever any payment to be made under this Note would be due
on a day which is not a Business Day such payment shall be made
on the next succeeding Business Day and such extension of time
shall in such case be included in the computation of interest.
As used herein "Business Day" means a day other than a Saturday
or Sunday or a day which is a public holiday or other day on
which banks in New York are required or authorized to remain
closed.
This Note is secured by the pledge of stock and the rights
of the Borrower under the Master Agreement, each as provided in
the Collateral Pledge Agreement dated as of December 31, 1997
between Borrower and Lender (the "Pledge Agreement").
This Note may not be prepaid.
Borrower represents and warrants as follows:
(a) Borrower is authorized and has the capacity to execute,
deliver and perform this Note.
(b) Borrower's execution, delivery and performance of this
Note and the Pledge Agreement do not conflict with, or
constitute a breach of or default under, any provision of
any material agreement to which Borrower is a party or by
which Borrower is bound. Borrower is not in default under
any agreement to which it is a party or by which it is
bound, which default could have a material adverse effect on
Borrower.
(c) This Note and the Pledge Agreement constitute the
legal, valid and binding obligations of Borrower,
enforceable against Borrower in accordance with their
respective terms.
(d) There are no actions or proceedings pending by or
against Borrower before any court or administrative agency
in which an adverse decision could have a material adverse
effect on Borrower, its ability to perform its obligations
hereunder or under the Pledge Agreement or on the stock
pledged as collateral pursuant to the Pledge Agreement.
Borrower does not have any knowledge that any such actions
or proceedings are threatened.
(e) No representation, warranty or other statement made by
Borrower in any certificate or written statement furnished
to Lender (including with respect to any financial
information) contains any untrue statement of a material
fact or omits to state a material fact necessary in order to
make the statements contained in such certificates or
statements not misleading.
(f) None of the proceeds of the Loan will be used for the
purpose of purchasing or carrying "margin stock" within the
meaning of Regulation U of the Board of Governors of the
Federal Reserve Board.
Any one or more of the following events shall constitute an
"Acceleration Event" hereunder:
(a) Borrower shall fail to pay any amount when due
hereunder;
(b) Borrower shall fail to perform any obligation under
this Note or the Pledge Agreement or there is a Pledgor
Default under (and as defined in) the Pledge Agreement;
(c) An Event of Default or a Termination Event shall occur
under the Master Agreement or an Early Termination Date
shall be designated for any other reason under any
Confirmation executed by Borrower and Lender under the
Master Agreement;
(d) Borrower shall become insolvent, or generally fail to
pay its debts as such debts become due, or Borrower shall
admit in writing its inability to pay its debts generally,
or make a general assignment for the benefit of creditors,
or any proceeding shall be instituted by or against Borrower
seeking an order for relief or to adjudicate Borrower a
bankrupt or insolvent, or any other proceeding shall be
instituted with respect to Borrower under any law relating
to bankruptcy, insolvency or relief of debtors, or seeking
the appointment of a receiver, trustee or other similar
official for Borrower or any substantial part of Borrower's
property; or
(e) Any material misrepresentation or material misstatement
exists now or hereafter in any warranty or representation
set forth herein or in any certificate delivered to Lender
by Borrower.
Upon the occurrence of an Acceleration Event described in
paragraph (d) above, the Loan and all interest and other amounts
payable hereunder shall be forthwith due and payable and upon the
occurrence of any other Acceleration Event the Lender may,
without notice to Borrower, declare the Loan and all interest and
other amounts payable hereunder to be forthwith due and payable,
whereupon the Loan, all such interest and all such amounts shall
become and be due and payable.
Borrower waives presentment, demand, protest, notice of
protest, notice of dishonor, notice of nonpayment, and any and
all other notices and demands in connection with the delivery,
acceptance, performance, default or enforcement of this Note. No
delay by the Lender in exercising any power or right hereunder
shall operate as a waiver of any power or right.
Borrower promises to pay on demand all costs and expenses,
including reasonable attorney's fees, incurred in the
preparation, collection and enforcement of this Note and the
Pledge Agreement.
Borrower acknowledges and agrees that Lender may apply and
Set-Off against any amounts which Borrower may owe Lender
hereunder (whether in respect of principal, interest or
otherwise), any amounts that Lender may owe Borrower under the
Master Agreement (including any Transaction executed thereunder).
Lender acknowledges and agrees that Borrower may apply and Set-
Off against any amounts which Lender may owe Borrower under the
Master Agreement (including any Transaction executed thereunder)
any amounts that Borrower may owe Lender hereunder (whether in
respect of principal, interest or otherwise).
This Note shall be governed by and construed in accordance
with the laws of the State of New York.
PETRIE STORES LIQUIDATING TRUST
By: /s/ Stephanie R. Joseph
Name: Stephanie R. Joseph
Title: Manager and Chief
Executive Officer
RECEIVED AND AGREED BY:
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Wayne J. Halenda
Name: Wayne J. Halenda
Title: Vice President
CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Antonio Lobo
Name: Antonio Lobo
Title: Vice President
EXHIBIT A
Reference is made to the Secured Term Note (the "Note")
executed by Petrie Stores Liquidating Trust ("Borrower") and
received and agreed to by Canadian Imperial Bank of Commerce, New
York Agency (the "Lender"), on December 31, 1997.
Pursuant to the terms of the Note, the Borrower hereby
exercises its right to receive from the Lender a loan in the
amount of $_____________________ (the "Principal") [Note: Amount
may not exceed the Maximum Loan Commitment Amount] on
________________________ (the "Draw Date"). We acknowledge and
agree that, upon receipt of the Principal, we will be required to
make the payments of principal and interest on the Loan (as
defined in the Note) in accordance with the terms of the Note.
We understand that the actual Draw Date shall be the
later of (i) the Draw Date requested above and (ii) the date
which is three (3) Business Days after the Lender's actual
receipt of this Draw Notice.
PETRIE STORES LIQUIDATING TRUST
By:
Title:
Exhibit 99.4
EXECUTION COPY
STOCK PLEDGE AGREEMENT
THIS STOCK PLEDGE AGREEMENT (this "Agreement") is made this
31st day of December, 1997 (the "Closing Date") by and between
Petrie Stores Liquidating Trust ("Pledgor") and Canadian Imperial
Bank of Commerce ("Pledgee").
Recitals
Pledgee and Pledgor propose to enter into one or more
transactions pursuant to the ISDA Master Agreement (as modified
by the Schedule thereto) dated as of November 19, 1997 between
Pledgee and Pledgor (the "Master Agreement"). In addition,
Pledgor may exercise its right to borrow monies from Pledgee and
Pledgee has committed to lend such monies to Pledgor on or after
the Closing Date pursuant to the terms of a Secured Term Note
executed by Pledgor (the "Note") on the Closing Date. To secure
payment and performance of its obligations under the Note and the
Master Agreement, Pledgor has agreed to pledge to Pledgee the
shares of stock listed on Exhibit A hereto (the "Shares") and may
from time to time, in accordance with the terms hereof, pledge
additional stock (the "Additional Shares"), which, upon such
pledge, shall also constitute "Shares." Capitalized terms used
and not otherwise defined herein shall have the meaning specified
in the Master Agreement.
NOW, THEREFORE, Pledgor and Pledgee agree as follows:
1. Pledge of Securities.
(a) Pledgor hereby pledges and assigns to Pledgee, and
grants to Pledgee a security interest in, the Shares and any
Additional Shares delivered hereunder, together with all proceeds
and substitutions thereof, all cash, dividends, stock and other
moneys and property paid thereon, all rights to subscribe for
securities declared or granted in connection therewith, and all
other cash and noncash proceeds of the foregoing (all hereinafter
called the "Collateral"), as security for the prompt payment and
performance of all of Pledgor's obligations under the Note and
the Master Agreement, including any obligations arising out of
any Transactions entered into between Pledgor and Pledgee after
the date hereof under the Master Agreement (all such obligations
of Pledgor, collectively, the "Obligations"). If any Additional
Shares are at any time pledged to Pledgee, Exhibit A shall be
amended to reflect the addition of such Additional Shares.
(b) The term "Collateral" shall also include any
securities, instruments or distributions of any kind issuable,
issued or received by Pledgor upon conversion of, in respect of,
or in exchange for any other Collateral, including, but not
limited to, those arising from a stock dividend, stock split,
reclassification, reorganization, merger, consolidation, sale of
assets or other exchange of securities or any dividends or other
distributions of any kind upon or with respect to the Collateral.
(c) The certificate or certificates for any securities
included in the Collateral, accompanied by an instrument of
assignment duly executed in blank by Pledgor, have been, or will
be immediately upon the subsequent receipt thereof by Pledgor,
delivered by Pledgor to United States Trust Company of New York
(the "Custodian") for the benefit of Pledgee, pursuant to a Tri-
Party Custody Agreement dated as of the Closing Date (the
"Custodial Agreement"), by and among the Custodian, Pledgee and
Pledgor. Pledgor shall cause the books of each corporation whose
stock is part of the Collateral to reflect the pledge of the
Shares. Pledgee may, at any time, effect the transfer of any
securities included in the Collateral into the name of Pledgee
and cause new certificates representing such securities to be
issued in the name of Pledgee, subject to Pledgee's obligation
hereunder to return the Collateral to Pledgor.
2. Power of Attorney. Pledgor hereby constitutes and
irrevocably appoints Pledgee, with full power of substitution and
revocation by Pledgee, as Pledgor's true and lawful
attorney-in-fact, to the full extent permitted by law, for the
purpose of carrying out the provisions of this Agreement and
taking any action and executing any instrument that Pledgee deems
necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation,
(a) to affix to certificates and documents
representing the Collateral the endorsements or other instruments
of transfer or assignment delivered with respect thereto and to
transfer or cause the transfer of the Collateral, or any part
thereof, on the books of the issuer thereof;
(b) to give such orders and instructions to the issuer
of any Shares or its transfer agent as the Pledgee in its sole
discretion shall determine, with respect to the transfer on the
books of the issuer of the Shares to be transferred to the
Custodian in order to effect such transfer (including giving the
names in which new certificates for such Shares are to be issued
and the denominations thereof) and the delivery to or for the
account of the Custodian of certificates for such Shares; and
(c) to endorse (in blank or otherwise) on behalf of
Pledgor the certificate(s) representing any Shares, and one or
more stock powers attached to such certificate(s).
The power of attorney granted pursuant to this Agreement and all
authority hereby conferred are granted and conferred solely to
protect Pledgee's interest in the Collateral and shall not impose
any duty upon Pledgee to exercise any power. This power of
attorney shall be irrevocable as one coupled with an interest.
3. Representations and Warranties. Pledgor represents and
warrants to Pledgee (which representations shall be deemed to be
repeated as of each date on which it delivers any Additional
Shares) that:
(a) Pledgor is the sole legal and beneficial owner of
the Collateral and has the right to pledge and transfer such
Collateral free and clear of any security interests, liens or
encumbrances.
(b) Pledgor has full power and authority to create a
first lien on the Collateral in favor of Pledgee and no
disability or contractual obligation exists which would prohibit
Pledgor from pledging the Collateral pursuant to this Agreement.
(c) The Shares have been duly authorized and validly
issued, are fully paid and non-assessable, and have been
registered under the Securities Act of 1933, as amended, and are
freely tradeable on the public markets.
(d) The Collateral is not the subject of any present
or threatened suit, action, arbitration, administrative or other
proceeding, and Pledgor knows of no reasonable grounds for the
institution of any such proceedings.
All the above representations and warranties shall survive the
making of this Agreement.
4. Covenants. Pledgor covenants to Pledgee that:
(a) Pledgor will not assign, create or permit to exist
any other claim to, lien or encumbrance upon, or security
interest in any of the Collateral other than the security
interest granted to Pledgee herein.
(b) If any restrictive legends appear on the
certificates evidencing the Shares, Pledgor will exercise its
right to have such legends removed.
(c) Pledgor will execute and deliver such documents,
and take or cause to be taken such actions, as Pledgee may
reasonably request to create, preserve, perfect, enforce or
validate the Pledgee's security interest in and rights with
respect to the Collateral.
(d) Pledgor will promptly give notice to Pledgee of,
and defend against, any suit, action, proceeding or lien that
involves any Collateral or that could adversely affect the
security interest in the Collateral granted by Pledgor hereunder.
5. Care and Maintenance of Collateral. The Collateral
shall be maintained by the Custodian pursuant to the Custodial
Agreement.
6. Credit Support Document. This Agreement shall
constitute a Credit Support Document for all purposes of the
Master Agreement, including, without limitation, for purposes of
Sections 3 and 5 thereof.
7. Pledgor Defaults. Each of the following shall
constitute an event of default hereunder (each a "Pledgor
Default"):
(a) An Acceleration Event shall occur under the Note;
(b) An Event of Default or a Termination Event shall
occur under the Master Agreement;
(c) Pledgor shall fail to pay any amounts due Pledgee
under the Master Agreement following an Event of Default or a
Termination Event thereunder; or
(d) Pledgor shall breach or fail to observe or perform
any provision of this Agreement.
8. Remedies Upon Default.
(a) Upon the occurrence and during the continuance of
a Pledgor Default, Pledgee shall have the right to exercise all
such rights as a secured party under the Uniform Commercial Code
of the State of New York as it, in its sole judgment, shall deem
necessary or appropriate, including the right to cause the
Custodian to sell, pursuant to the Custodial Agreement, all or
any part of the Collateral at one or more public or private sales
upon two days' written notice to Pledgor, and any such sale or
sales may be made for cash, upon credit, or for future delivery,
and in connection therewith, Pledgee may grant options, provided
that any such terms or options shall, in the best judgment of
Pledgee, be extended only in order to obtain a better price.
Further Pledgee may Set-Off any Obligations against any
Collateral. Pledgee hereby waives, to the extent permitted by
applicable law, any equity or right of redemption, in the
Collateral.
(b) Pledgor recognizes that Pledgee may be unable to
effect a public sale of all or a part of the Collateral by reason
of certain prohibitions contained in the Securities Act of 1933,
as amended ("Act"), so that Pledgee may be compelled to resort to
one or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire the
Collateral for their own account, for investment and without a
view to the distribution or resale thereof. Pledgor understands
that private sales so made any be at prices and on other terms
less favorable to the seller than if the Collateral were sold at
public sales, and agrees that Pledgee has no obligation to delay
the sale of any of the Collateral for the period of time
necessary (even if Pledgee would agree), to register such
securities for sale under the Act. Pledgor agrees that private
sales made under the foregoing circumstances shall be deemed to
have been made in a commercially reasonable manner.
(c) Pledgee may elect to obtain the advice of any
independent investment banking firm with respect to the method
and manner of sale or other disposition of any of the Collateral,
the best price reasonably obtainable therefor, the consideration
of cash and/or credit terms, or any other details concerning such
sale or disposition.
(d) All of Pledgee's rights and remedies under this
Agreement and under applicable law, including but not limited to
the foregoing, shall be cumulative and not exclusive and shall be
enforceable alternatively, successively or concurrently as
Pledgee may deem expedient.
(e) If any consent, approval or authorization of, or
filing with, any governmental authority or any other person or
entity should be necessary to effectuate any sale or other
disposition of the Collateral, or any partial disposition of the
Collateral, Pledgor agrees to execute all such applications and
other instruments as may be required in connection with securing
any such consent, approval or authorization, and will otherwise
use its best efforts to secure the same. Pledgor agrees to do or
cause to be done all such acts and things as may be necessary to
make the sale of the Collateral or any part thereof valid and
binding and in compliance with applicable law, including, without
limitation, the Securities Act of 1933, as amended.
(f) After the sale of the Collateral following a
Pledgor Default, Pledgee may deduct all reasonable legal and
other expenses and attorney's fees for preserving, collecting,
selling and delivering the Collateral and for enforcing its
rights with respect to the Obligations, and shall apply the
residue of the proceeds to the Obligations in such manner as
Pledgee in its reasonable discretion shall determine, and shall
pay the balance, if any to Pledgor.
(g) Notwithstanding anything herein to the contrary,
the Pledgee may exercise its remedies hereunder only upon the
termination of the Master Agreement and the Note.
9. Release of Collateral. The pledge of a grant of a
security interest in the Collateral pursuant to this Agreement
shall be of no further force or effect and the Collateral shall
be returned to Pledgor within five business days of payment and
performance in full of the Obligations to Pledgee.
10. Miscellaneous.
(a) All notices, consents, approvals and other
communications required or permitted hereunder shall be addressed
to the receiving party at the address set forth below its
signature. All such communications shall be delivered personally
or by facsimile or by courier or sent by first class mail,
postage prepaid. Communications by mail shall be deemed
delivered upon receipt.
(b) This Agreement shall be construed in accordance
with, and the rights of the parties shall be governed by, the law
of the State of New York.
(c) This Agreement may not be amended or modified
except by a written instrument signed by Pledgee and Pledgor.
(d) This Agreement and the agreements and instruments
executed in connection herewith constitute the entire agreement
between Pledgee and Pledgor with respect to the subject matter
hereof and supersede all prior agreements, understandings, offers
and negotiations, oral or written.
(e) This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all
of which shall together constitute one and the same document.
IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.
Pledgor:
Petrie Stores Liquidating Trust
By: /s/ Stephanie R. Joseph
Name: Stephanie R. Joseph
Title: Manager and Chief
Executive Officer
Pledgee:
Canadian Imperial Bank of Commerce
By: /s/ Wayne J. Halenda
Name: Wayne J. Halenda
Title: Vice President
By: /s/ Antonio Lobo
Name: Antonio Lobo
Title: Vice President
EXHIBIT A
TO STOCK PLEDGE AGREEMENT
Corporation Shares Class of Stock Certif. No(s) Number of Shares
Toys "R" Us, Inc. ("TOY") common 2,000,000
Exhibit 99.5
EXECUTION COPY
TRI-PARTY CUSTODY AGREEMENT
BY AND AMONG
PETRIE STORES LIQUIDATING TRUST
(Pledgor)
AND
CANADIAN IMPERIAL BANK OF COMMERCE
(Pledgee)
AND
UNITED STATES TRUST COMPANY OF NEW YORK
(Custodian)
TRI-PARTY CUSTODY AGREEMENT
THIS AGREEMENT (this "Agreement") is made and entered
into as of the date written below by and among Pledgor, Pledgee,
and Custodian as identified upon the signature page hereof.
R E C I T A L S
WHEREAS, Pledgor has executed a Master Pledge Agreement
dated as of December __, 1997 in favor of Pledgee (the "Pledge
Agreement") providing for the pledge and delivery of collateral
for security for the obligations of Pledgor under a certain
Master Agreement (the "Master Agreement"); and
WHEREAS, Custodian is authorized to hold securities and
properties and to utilize agents, correspondent banks or
affiliates where appropriate for the custody, retention,
safekeeping and processing of securities and properties, and to
use other means available to it for the custody, retention,
safekeeping and processing of securities and properties; and
WHEREAS, Custodian has agreed to act as custodian of
certain monies and securities on behalf of Pledgee as described
herein,
NOW THEREFORE, in consideration of the mutual promises
set forth herein and intending to be legally bound hereby, it is
agreed as follows:
1. DEFINITIONS
Unless otherwise defined herein, terms defined in the
Master Agreement or the Master Pledge Agreement will have such
defined meanings when used herein. In addition, as used in this
Agreement, the following terms will have the following meanings:
"Authorized Person". A person described on Exhibit C
hereto.
"Business Day" or "New York Banking Day". Any day on
which commercial banks are open for business in New York, New
York.
"Collateral". All securities, obligations and other
property (including cash) and all additions and substitutions
therefor, all of a type agreed to in writing (which may include a
Confirmation) by Pledgor and Pledgee, which are pledged to and
received by Pledgee under the Pledge Agreement, together with all
collections, income, distributions and claims in respect thereof,
all proceeds of any of the foregoing and all powers and rights of
the Pledgor now or hereafter acquired by the Pledgor, including
rights of enforcement, under any or all of the foregoing.
"Collateral Account". The account or accounts
described in Paragraph 4a. hereof as the Collateral Account.
"Collateral Securities". All securities comprising the
Collateral.
"UCC". The Uniform Commercial Code as in effect from
time to time in the State of New York.
2. SERVICES OF CUSTODIAN
a. Appointment of Custodian. Pledgor and Pledgee
hereby jointly appoint Custodian as custodian to hold in custody
all Collateral at any time transferred by Pledgor to Pledgee as
security for Pledgor's obligations to Pledgee under the Master
Agreement to the extent that such Collateral shall be delivered
by Pledgor or Pledgee to the Custodian. Custodian shall act as
agent of Pledgee with respect to such Collateral.
b. Acceptance of Custodian. Custodian accepts the
appointment and, subject to the terms and conditions of this
Agreement, agrees to receive Collateral in the manner specified
herein to be held hereunder, and to hold, release, or otherwise
dispose of such Collateral as hereinafter provided. Custodian
will act solely on the instructions of Pledgor and Pledgee as
specifically set forth under this Agreement.
c. Scope of Custodian's Duties. Custodian's duties
hereunder shall continue until altered in writing by the parties
hereto or until the termination of this Agreement. Custodian
undertakes to perform only those duties which are expressly set
forth in this Agreement and no covenant or obligation shall be
implied in this Agreement against Custodian. If Collateral shall
not be held or disposed of as required by the Pledge Agreement or
a collateral transaction shall not be completed for any reason
whatsoever (other than Custodian's failure to perform its
obligations hereunder) and Custodian shall request further
instructions as hereinafter provided, Custodian's duties to
Pledgor and Pledgee shall be limited to accepting new
instructions with respect to any transaction, holding Collateral
or transferring or delivering Collateral as hereinafter provided.
d. Authorization: Agents, Subcustodians, and
Securities Custody. Pledgor and Pledgee authorize Custodian to
utilize agents, subcustodians, depositories, correspondent banks
and affiliates (collectively, "Agents") to process deliveries in
and out of the Collateral Account and to hold Collateral and to
use any other means legally available to it for the retention,
processing or maintenance of Collateral; provided that the
representations and warranties of the Custodian would be true and
correct for such Agent and such Agent is able and does maintain
the Collateral in compliance with Paragraph 4 hereof. References
to "Custodian" hereunder shall be deemed to include other agents
of Custodian to the extent that such entities perform Custodian's
duties under this Agreement. Neither the appointment of any
other agent, subcustodian, depository, correspondent bank or
affiliate nor any other action taken pursuant to this Paragraph
2d. shall relieve Custodian of any of its obligations under this
Agreement.
Pledgor further authorizes Custodian to hold securities
constituting part of the Collateral in bulk or to hold such
securities registered in street name, or in the name of
Custodian's nominee or the nominee of its agents or affiliates,
in each case in negotiable form.
3. REPRESENTATIONS AND WARRANTIES
a. Representations of Pledgor and Pledgee. Pledgor
and Pledgee each represents and warrants to Custodian as of the
date hereof, as of each Purchase Date, and as of each Repurchase
Date, the following:
(i) It is duly organized and existing under the
laws of the jurisdiction of its organization with full power
and authority to execute and deliver this Agreement and to
perform all the duties and obligations to be performed by it
hereunder.
(ii) This Agreement has been duly authorized,
executed, and delivered, and the performance of all
transactions contemplated hereunder has been duly
authorized, in accordance with all requisite corporate
action, and this Agreement constitutes a valid, legal and
binding obligation enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency or
similar laws, or by equitable principles relating to or
limiting creditors rights generally.
(iii) The execution, delivery, and performance of
this Agreement, and the performance of the transactions
contemplated hereunder, will not violate any agreement by
which it is bound or by which any of its assets are
affected, or its charter, by-laws, or any statute,
regulation, rule, order or judgment applicable to it.
(iv) It has the power and authority to enter into
the Master Agreement and the Pledge Agreement and to deliver
and transfer the Collateral to be delivered or transferred
by it hereunder.
(v) It is acting as principal in executing this
Agreement and will act as principal in all transactions
hereunder.
b. Representations of Custodian. Custodian
represents and warrants to Pledgor and Pledgee as of the date
hereof and as of each date on which any Collateral is held,
delivered to the Custodian or delivered out by the Custodian the
following:
(i) It is duly organized and existing under the
laws of the jurisdiction of its organization with full power
and authority to execute and deliver this Agreement and to
perform all the duties and obligations to be performed by it
hereunder.
(ii) This Agreement has been duly authorized,
executed, and delivered, and the performance of all
transactions contemplated hereunder has been duly
authorized, in accordance with all requisite corporate
action, and this Agreement constitutes a valid, legal and
binding obligation enforceable in accordance with its terms,
except as may be limited by bankruptcy, insolvency or
similar laws, or by equitable principles relating to or
limiting creditors' rights generally.
(iii) The execution, delivery, and performance of
this Agreement, and the performance of the transactions
contemplated hereunder, will not violate any agreement by
which it is bound or by which any of its assets are
affected, or its charter, by-laws, or any statute,
regulation, rule, order or judgment applicable to it.
(iv) It will maintain the Collateral Account as a
custody account and shall administer the Collateral Account
in the same manner it administers similar accounts
established for the same purpose, and it shall create and
maintain the books and records created in connection with
the Collateral Account in the State of New York. Custodian
in the ordinary course of its business maintains custody
accounts for customers with respect to cash and securities
(including those securities and instruments of the types
constituting Collateral as defined herein) and with respect
to securities held by it hereunder will be acting in that
capacity.
(v) It is a bank and trust company chartered
under the laws of the State of New York with its principal
office at 114 West 47th Street, New York, New York 10036.
Custodian in the ordinary course of its business maintains
securities custody accounts for its customers and when
performing services pursuant to this Agreement, Custodian
shall be acting in that capacity. Custodian regularly
accepts in the course of its business securities such as
Collateral Securities as a custodial service for customers
and maintains accounts in the names of such customers
reflecting ownership of or interest in such securities.
Custodian shall administer the Collateral Account in the
same manner in which it administers similar accounts of
other customers established for the same purpose.
c. Continuing Warranties of Custodian. Custodian
shall promptly notify Pledgee and Pledgor if any of Custodian's
representations hereunder shall be or become untrue or misleading
in any material respect.
4. MAINTENANCE OF THE COLLATERAL ACCOUNT
a. The Collateral Account. Custodian shall maintain
such records and establish such accounts on its books as may be
required from time to time to receive, hold and account for all
cash and securities to be held as Collateral pursuant to this
Agreement.
b. Transfer of Collateral Securities to the
Collateral Account. Each security constituting part of the
Collateral shall be continuously maintained by Custodian in the
Collateral Account. Custodian shall continuously identify such
Collateral Securities as belonging to the Pledgee and identified
to the Collateral Account on Custodian's books and records.
Whenever any security constituting part of the Collateral is
transferred to the Custodian, the Custodian shall send to the
Pledgee a confirmation of such transfer and a certificate with
respect to such securities in the form of Exhibit E hereto. Upon
receipt of any securities by the Custodian from the Pledgor for
the benefit of the Pledgee, the Custodian shall immediately
notify the Pledgee of such receipt and the Custodian shall by
identify such securities as subject to Pledgee's interest. On
the first Business Day of each month on which Collateral is held,
Custodian shall forward to Pledgor and Pledgee a statement
identifying the securities held in the Collateral Account.
Custodian shall maintain cash in the Collateral Account in
immediately available funds.
c. Segregation of Assets. Custodian shall segregate
and separately account on its books and records for all cash and
securities held for customers, including the Collateral Account
from assets it holds in its individual capacity. Custodian shall
maintain and hold in custody cash and securities held in the
Collateral Account until: (i) it shall receive Pledgee's
instructions to deliver or transfer to Pledgee cash and
Collateral Securities, as provided in Paragraph 16 hereof; or
(ii) this Agreement is terminated.
d. Pledge by Custodian. The Collateral Account shall
not be subject to any security interest, lien or any right of
set-off by Custodian. Custodian shall not pledge, encumber,
hypothecate, transfer, dispose of, or otherwise grant any party
other than Pledgor and Pledgee an interest in, any cash or
securities held by Custodian as collateral pursuant to this
Agreement.
5. RECEIPT OF INSTRUCTIONS; PAYMENT OF MONIES; DELIVERY OF
SECURITIES
a. Terms of Instructions. If at any time, the terms
of Pledgor's instructions and Pledgee's instructions are not
identical, Custodian shall notify Pledgor and Pledgee, who shall
use their best efforts to provide new instructions as quickly as
possible. Except as provided in this Agreement with respect to a
Notice of Collection, in the event of such a conflict Custodian
shall take no action and shall wait for further instructions from
Pledgor and Pledgee for three (3) Business Days, after which time
the Custodian shall follow the instructions of Pledgee.
b. Cash Transfers. All payments of cash shall be
maintained in the Collateral Account or be credited to Pledgee,
as instructed by Pledgee, in immediately available funds and
effected by wire transfer to the appropriate account designated
in Exhibit B hereto.
c. Securities Transfers. All transfers of securities
to be transferred to the Collateral Account shall be effected by
Pledgee's transfer of the same to the account and at the location
and within the time periods designated in Exhibit A hereto. All
securities transferred to Custodian shall be in negotiable form.
d. Effect of Notice of Levy etc. Notwithstanding
anything in this Agreement to the contrary, Custodian shall not
be required to deliver or transfer cash or securities in
contravention of any notice of levy, seizure or similar notice or
order, or judgment, issued or directed by a governmental agency
or court, or officer thereof, having jurisdiction over Custodian
or its agent or affiliates, which on its face affects such cash
or securities. Custodian shall give Pledgor and Pledgee prompt
notice of any such notice or order.
e. Collateral Securities. Upon the transfer of
securities or cash to the Collateral Account, it is agreed by
Pledgee and Pledgor that the securities or cash held by Custodian
in the Collateral Account shall be subject to the pledge, lien,
and security interest granted by Pledgor to Pledgee.
6. [RESERVED]
7. CUSTODIAN STATEMENTS
Custodian shall provide Pledgor and Pledgee with semi-
monthly information statements reflecting cash and securities
positions in the Collateral Account as of the 1st and 15th day of
each month. Pledgor and Pledgee shall promptly review all such
information statements and shall promptly advise Custodian of any
error, omission, or inaccuracy in the cash transactions, cash
balances, securities deposits and withdrawals or securities
positions reported. Custodian shall undertake to correct any
errors, failures, or omissions that are reported to Custodian by
Pledgor or Pledgee. Any such corrections shall be reflected on
subsequent information statements.
8. CUSTODIAN FEES AND EXPENSES
Pledgor shall pay Custodian's fees and expenses
including reasonable legal fees incurred in connection with the
execution and delivery of this Agreement and thereafter for
services provided pursuant to this Agreement.
9. NO GUARANTY BY CUSTODIAN
PLEDGOR AND PLEDGEE SPECIFICALLY ACKNOWLEDGE THAT
CUSTODIAN IS NOT GUARANTEEING PERFORMANCE OF THE OBLIGATIONS OF
PLEDGOR OR PLEDGEE HEREUNDER, UNDER THE PLEDGE AGREEMENT OR
MASTER AGREEMENT OR WITH RESPECT TO ANY TRANSACTION OR ASSUMING
ANY LIABILITY WITH RESPECT TO THE PERFORMANCE OF PLEDGOR OR
PLEDGEE, NOR IS CUSTODIAN UNDERTAKING ANY CREDIT RISK ASSOCIATED
WITH THE TRANSACTIONS, WHICH LIABILITIES ARE THE RESPONSIBILITY
OF PLEDGOR AND PLEDGEE. FURTHER, EXCEPT AS MAY BE ARRANGED BY A
SEPARATE AGREEMENT, CUSTODIAN IS UNDER NO OBLIGATION TO UNDERTAKE
TO MAKE ANY CREDIT AVAILABLE TO EITHER PLEDGOR OR PLEDGEE TO
ENABLE EITHER OF THEM TO COMPLETE TRANSACTIONS.
10. FORCE MAJEURE
Any party to this Agreement (the "Obligor") shall not
be liable for any expense, loss, claim or damage (including
counsel fees) suffered by any other party to this Agreement
arising out of or caused by any delay in, or failure of,
performance by the Obligor, in whole or in part, arising out of,
or caused by, acts of God; interruption of, delay in, or loss
(partial or complete) of electrical power or communication
services provided to the Obligor by unaffiliated parties; act of
civil or military authority; sabotage; natural emergency;
epidemic; war or other government action; civil disturbance;
flood, earthquake, drought, fires or other catastrophe; strike or
other labor disturbance by employees or personnel of unaffiliated
Parties; government, judicial, or self regulatory organization
order, rule, or regulation adopted or entered after the date
hereof; or riot; provided, however, that such expenses, losses,
claims or damages do not arise from circumstances within the
Obligor's control. For purposes of this Paragraph 10, Obligor,
with respect to Custodian, shall be deemed to include affiliates.
Nothing in this Paragraph 10 shall be read to affect the
indemnity provided in Paragraph 12 hereof.
11. CONCERNING THE CUSTODIAN
a. Intermediary. With respect to all securities
delivered or transferred by Custodian hereunder, Custodian shall
be deemed an "intermediary" within the meaning of Section 8-
306(3) of the UCC and, except as expressly provided in Paragraph
3b. hereof, the only warranty given by Custodian shall be the
warranty provided in Section 8-306(3) of the UCC.
b. Delay in Receiving Cash or Securities. Custodian
shall not be liable for any expense, loss, claim or damage
(including counsel fees) that Pledgor, Pledgee or any other
third-party may suffer by reason of any delay Pledgor, Pledgee or
Custodian may experience in obtaining cash or securities from, or
by reason of any action or omission to act on the part of, any
depository, clearing agent, transfer agent, issuer, securities
broker or dealer, any other party, or the FRBNY securities wire
transfer system, or in obtaining cash from any bank, including
the FRBNY, clearing agent, or other party, unless such expense,
loss, claim or damage arose by reason of a delay in obtaining
cash, or securities from, or by reason of gross negligence or
willful misconduct on the part of, Custodian.
c. Forgery; False Data. Custodian shall not be
liable for any expense, loss, claim or damage (including counsel
fees) Pledgor, Pledgee or any other third-party may suffer by
reason of any failure of signature by an Authorized Person on or
inaccuracy, incompleteness or falsity of any notice or
instruction or any other written instrument or inaccuracy,
incompleteness or falsity of data transmitted by computer tape or
terminal or other computer facilities, if Custodian shall have
reasonably believed that such instructions, instrument or data
was for the account or benefit of Pledgor or Pledgee or that the
writing was signed by, or the data was transmitted by, an
Authorized Person.
d. No Duty of Inquiry. Without limiting the
generality of the foregoing, Custodian shall be under no
obligation to inquire into, and shall not be liable for:
(i) the title, validity or genuineness of any
security;
(ii) the legality of the purchase or delivery or
transfer of any security or the propriety of the price at
which the same are acquired or sold;
(iii) the due authority of any Authorized Person to
act on behalf of Pledgor or Pledgee with respect to cash or
securities held in the Collateral Account; or
(iv) the due authority of Pledgor to deliver cash
or any security delivered to Pledgee or Custodian pursuant
to this Agreement.
e. Price Data. Custodian shall not be liable for any
expense, loss, claim or damage (including counsel fees) Pledgor,
Pledgee or any third person may suffer by reason of any error in,
or any inaccuracy of, any price received from the Pledgor or any
other pricing source. Custodian shall have no duty to inquire
into the appropriateness or relative change of any price nor
shall Custodian be required to determine volatility factors with
respect to any price.
f. Limitation of Liability. Custodian shall use
reasonable care in performing its obligations hereunder.
Custodian shall be liable to Pledgor and Pledgee as their
interests may appear for the negligent loss of securities and
cash from the Collateral Account by reason of robbery, burglary
or theft by it or its employees, agents or delegates.
Notwithstanding any other provision of this Agreement, Pledgor
and Pledgee agree that Custodian's liability hereunder shall be
limited to the direct damages resulting from Custodian's breach
of this Agreement, and in no event shall Custodian be liable for
special, consequential or incidental damages incurred or suffered
by Pledgor or Pledgee.
12. INDEMNIFICATION
Pledgor agrees to release, indemnify and hold harmless,
Custodian, its directors, officers, employees or agents (the
"Indemnified Parties") for all costs, losses, expenses, damages,
liabilities or claims, including reasonable fees and expenses of
counsel, which any of them may sustain or incur or which may be
asserted against any of them (i) relating to those areas of
liability expressly disclaimed or restricted in this Agreement or
(ii) by reason of or as a result of any action taken or omitted
by them in connection with operating under this Agreement or
resulting from any actual or alleged breach of this Agreement by
Pledgor or Pledgee (including costs and expenses of the
Indemnified Parties' defense of or participation in regulatory
investigations, administrative proceedings or other legal
proceedings), except those losses and damages, including
counsel's fees and expenses, arising out of the gross negligence
or willful misconduct of the Indemnified Party. Any Indemnified
Party that is made a defending party in an action, claim or
administration proceeding, the expense of the defense of which is
covered by this Paragraph 12, shall so notify Pledgor
immediately. Pledgor shall have the right at its election to
take over the defense or settlement of such action, claim or
administrative proceeding by giving prompt notice to the
Indemnified Party that it will do so. If Pledgor makes such
election, it may conduct the defense of such action, claim or
administrative proceeding through counsel of its choice and the
Indemnified Party shall be bound by the result of Pledgor's
defense or settlement of the action, claim or administrative
proceeding.
13. CONTINUING DISPUTES
In the event of any dispute between or conflicting
claims by Pledgor and Pledgee and any other party, except
Custodian, with respect to securities or cash in the Collateral
Account, Custodian may decline to comply with any and all claims,
demands or instructions with respect to such Collateral
Securities or cash so long as such dispute or conflict shall
continue, and Custodian shall not be liable for failure to act or
to comply with such claims, demands or instructions. Custodian
shall be entitled to refuse to act or comply until either (i)
such conflicting or adverse claims or demands shall have been
determined in a court of competent jurisdiction or settled by
agreement between the conflicting parties and Custodian shall
have received evidence satisfactory to it of the same, or (ii)
Custodian shall have received security or an indemnity
satisfactory to it sufficient to hold it harmless from and
against any and all losses or damages, including counsel's fees
and expenses, which it may incur by reason of taking any action.
14. FORM OF INSTRUCTIONS
Instructions shall be in writing and effective from the
time they are actually received by an Authorized Person of
Custodian from an Authorized Person of the instructing party or
from a person reasonably believed by Custodian to be an
Authorized Person of the instructing party by mail, by telecopy
or other facsimile machine, or any other means designated by the
Custodian.
15. TERMINATION
Any of the parties hereto may terminate this Agreement
by giving to the other parties a notice in writing specifying the
date of such termination, which shall be not less than ninety
days after the date of giving of such notice, except that if any
of the representations made by Custodian hereunder have become
untrue or misleading in any material respect, Pledgor and Pledgee
may terminate this Agreement immediately; provided, however, that
no termination of this Agreement shall be effective until a
successor custodian (reasonably acceptable to Pledgee) has
accepted the duties of Custodian. Custodian shall remain liable
for its representations and warranties hereunder after
termination of this Agreement. Custodian shall deliver any
securities or cash remaining in the Collateral Account on
termination of this Agreement to a successor custodian designated
in written instructions from Pledgor and Pledgee.
16. NOTICE OF COLLECTION
a. Delivery of Notice of Collection. If Pledgee
shall elect to demand collection of all or any part of the
Collateral, it shall deliver a Notice of Collection to Custodian
and the Pledgor. Such notice of Collection shall only be given
to the Custodian after three New York Banking Days' written
notice to Pledgor as required by Section 7 of the Pledge
Agreement and shall recite the satisfaction such notice
requirement. Custodian shall notify the Pledgor of the receipt
of a Notice of Collection but shall have no further obligation or
duty to inquire into the nature or validity of the failure to pay
any Obligation or portion thereof by Pledgee set forth in the
Notice of Collection.
b. Effect of Pledgee's Notice of Collection. From
and after receipt of a Notice of Collection from Pledgee
hereunder, Custodian shall continue to hold all securities and
cash in the Collateral Account unless it shall receive
instructions from Pledgee to transfer all or any part of the
Collateral Securities and cash in the Collateral Account.
c. Further Assurances. If Custodian receives a
Notice of Collection from the Pledgee, Custodian shall continue
to provide custody services with respect to securities and cash
held in the Collateral Account for a period not to exceed 90 days
but shall not be required to provide additional services unless
Pledgee gives Custodian assurances that Pledgee shall pay
Custodian's fees or Pledgor undertakes to pay Custodian's fees
for such additional services.
17. MISCELLANEOUS
a. Authorized Personnel. Exhibit C hereto contains
the names, titles and specimen signatures of those individuals
authorized to act on behalf of Pledgor and Pledgee and the
purposes for which each is authorized. It is understood that
certain designated persons may be Authorized Persons for limited
purposes set forth in Exhibit C hereto. Pledgor and Pledgee
agree to furnish to all parties a written notice if any such
individual authorized by either of them ceases to be authorized
or if other or additional authorized individuals are appointed
and authorized. Upon receipt and acknowledgment of a notice from
Pledgor or Pledgee that an individual is no longer an Authorized
Person, Custodian shall cease accepting instructions from such
person as soon as practicable thereafter.
b. Notices. Any notice authorized or required by
this Agreement shall be sufficiently given if addressed to the
receiving party and hand delivered or sent by mail, telecopy or
other facsimile machine to the receiving party, to the other
party to this Agreement. Any such notice shall be addressed to
the individuals at the addresses set forth on Exhibit D hereto or
to such other person or persons as the receiving party may from
time to time designate to the other parties in writing and shall
become effective upon receipt.
c. Amendments. Except as otherwise expressly
provided in this Agreement, this Agreement may not be amended or
modified in any manner except by a written agreement executed by
all the parties by an Authorized Person of each party. No waiver
or acceptance of performance other than as provided herein on the
part of any party shall constitute a waiver or acceptance of such
performance in the future.
d. Binding Agreement. This Agreement shall extend to
and shall be binding upon the parties hereto, and their
respective successors and assigns (including any trustees,
conservators or other officers of the court in any bankruptcy or
insolvency proceeding); provided, however, that this Agreement
shall not be assignable by any party without the written consent
of the other parties hereto and any such assignment shall be null
and void. If any provision of this Agreement shall be
inconsistent or conflict with any provision of the Master
Agreement or the Master Pledge Agreement, the provisions of this
Agreement shall control.
e. Survival. All releases and indemnifications
provided in this Agreement shall survive the termination of this
Agreement.
f. Applicable Law. This Agreement shall be construed
in accordance with the laws of the State of New York without
giving effect to the conflict of law principals thereof.
g. Headings and References. The headings and
captions in this Agreement are for reference only and shall not
affect the construction or interpretation of any of its
provisions. Except as expressly provided herein, all references
to Paragraphs, Subparagraphs and Exhibits refer to the
Paragraphs, Subparagraphs and Exhibits of this Agreement.
h. Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be
an original, but such counterparts shall, together, constitute
only one Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed by their respective corporate officers,
thereunto duly authorized, as of the 31st day of December, 1997.
Pledgor: PETRIE STORES LIQUIDATING TRUST
By: /s/ Stephanie R. Joseph
Name: Stephanie R. Joseph
Title: Manager and Chief Executive Officer
Pledgee: CANADIAN IMPERIAL BANK OF COMMERCE
By: /s/ Wayne J. Halenda
Name: Wayne J. Halenda
Title: Vice President
By: /s/ Antonia Lobo
Name: Antonia Lobo
Title: Vice President
Custodian: UNITED STATES TRUST COMPANY OF NEW
YORK
By: /s/ Patricia Stermer
Name: Patricia Stermer
Title: Assistant Vice President
EXHIBIT A
TRANSFER OR DELIVERY OF SECURITIES - Procedures
CUSTODIAN'S ACCOUNT
Location:
Account Designation:
Timing for deliveries:
The foregoing may be amended from time to time by
agreement of Pledgee and Custodian.
PLEDGOR'S ACCOUNT
Location:
Account Designation:
Timing for deliveries:
The foregoing may be amended from time to time by
agreement of Pledgor and Custodian.
EXHIBIT B
DESCRIPTION OF ACCOUNTS
CASH
A. The Collateral Account
ABA:
Name:
A/C:
A/C Name:
B. Pledgor's Delivery Instructions
ABA:
Name:
A/C:
A/C Name:
C. Pledgee's Delivery Instruction
ABA:
Name:
For Credit of:
DDA Account No.:
Reference:
Trust A/C:
Branch:
Attention:
EXHIBIT C
AUTHORIZED PERSONS
PLEDGOR
[SEE ATTACHED]
I, , a Secretary of _______________
(the "Corporation"), a corporation duly incorporated under the
laws of the State of _________, do hereby certify that the titles
and specimen signatures of the persons listed below are true and
correct:
NAME SIGNATURE
IN WITNESS WHEREOF, I set my hand and placed the seal
of the Corporation this day of , 1993
[PLEDGOR]
[Secretary]
EXHIBIT C
(Continued)
AUTHORIZED PERSONS
PLEDGEE
Signature Name Official Title
EXHIBIT C
(continued)
AUTHORIZED PERSONS
CUSTODIAN
Name, Title, Purpose Specimen
1.
Corporate Trust Officer
2.
Assistant Vice President
3.
Assistant Vice President
4.
Vice President
The information hereon may be amended or deleted unilaterally by
the party designating the Authorized Persons by notice in writing
to the other parties hereto.
EXHIBIT D
NOTICES
TO PLEDGEE:
Name:
Title:
Address:
Telephone:
Fax No.:
TO PLEDGOR:
Name:
Title:
Address:
Telephone:
Fax No.:
TO CUSTODIAN:
Name:
Title:
Address:
Telephone:
Fax No.:
EXHIBIT E
CERTIFICATE OF THE CUSTODIAN
This Certificate is submitted by _______________ (the
"Custodian") in connection with the securities listed in the
attached Exhibit 1 (the "Securities").
The Custodian by its duly authorized officer hereby
certifies and confirms to ________________ (the "Pledgee") that:
(1) The Securities are being and will be held in the
[COLLATERAL ACCOUNT] of the Custodian (or its nominee).
(2) The Custodian has by book entry or otherwise
identified on its records that the Securities are being held, and
will continuously be held, in a segregated non-fungible account
at the Custodian in favor of the Pledgee, and has confirmed to
the Pledgee that it has made such identification.
(3) The Custodian in the ordinary course of its
business maintains security accounts for its customers, regularly
accepts [Describe Collateral Securities] as a custodial service
for customers and maintains accounts in the names of such
customers reflecting ownership of or interest in such securities.
(4) The Custodian has credited the Collateral
Securities to the account of the Pledgee in good faith and
without notice of any adverse claim to the Collateral Securities.
DATE: ________________________
[CUSTODIAN]
By:
Title:
