UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No.)*
RJR Nabisco Holdings Corp.
(Name of Issuer)
Common Stock
(Title of Class of Securities)
74960K876
(CUSIP Number)
Marc Weitzen, Esq.
Gordon Altman Butowsky Weitzen Shalov & Wein
114 West 47th Street, 20th Floor
New York, New York 10036
(212) 626-0800
(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
August 12, 1996
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule
13D, and is filing this schedule because of Rule 13d-1(b)(3) or
(4), check the following box / /.
Check the following box if a fee is being paid with the statement
/X/. (A fee is not required only if the reporting person: (1) has
a previous statement on file reporting beneficial ownership of more
than five percent of the class of securities described in Item 1;
and (2) has filed no amendment subsequent thereto reporting
beneficial ownership of five percent or less of such class.) (See
Rule 13d-7).
NOTE: Six copies of this statement, including all exhibits, should
be filed with the Commission. See Rule 13d-1(a) for other parties
to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the
subject class of securities, and for any subsequent amendment
containing information which would alter disclosures provided in a
prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the
Securities Exchange Act of 1934 ("Act") or otherwise subject to the
liabilities of that section of the Act but shall be subject to all
other provisions of the Act (however, see the Notes).
Page 1 of__ Pages
List of Exhibits is on Page __
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
High River Limited Partnership
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC,OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
13,964,300
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
13,964,300
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,964,300
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
Riverdale LLC
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC,AF,OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
0
8 SHARED VOTING POWER
13,964,300
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
13,964,300
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
13,964,300
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.1%
14 TYPE OF REPORTING PERSON*
OO
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
Barberry Corp.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC,OO
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
140,000
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
140,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
140,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than one tenth (1/10) of one percent
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
American Real Estate Holdings, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
1,810,000
8 SHARED VOTING POWER
0
9 SOLE DISPOSITIVE POWER
1,810,000
10 SHARED DISPOSITIVE POWER
0
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,810,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than seven-tenths (7/10) of one percent
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
American Real Estate Partners, L.P.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
0
8 SHARED VOTING POWER
1,810,000
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
1,810,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,810,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than seven-tenths (7/10) of one percent
14 TYPE OF REPORTING PERSON*
PN
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
American Property Investors, Inc.
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
0
8 SHARED VOTING POWER
1,810,000
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
1,810,000
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,810,000
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Less than seven-tenths (7/10) of one percent
14 TYPE OF REPORTING PERSON*
CO
<PAGE>
SCHEDULE 13D
CUSIP No. 74960K876 Page __ of __ Pages
1 NAME OF REPORTING PERSON
Carl C. Icahn
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) /X/
(b) //
3 SEC USE ONLY
4 SOURCE OF FUNDS*
AF
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(d) or 2(e) //
6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH:
7 SOLE VOTING POWER
0
8 SHARED VOTING POWER
15,914,300
9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
15,914,300
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
15,914,300
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
//
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.8%
14 TYPE OF REPORTING PERSON*
IN
SCHEDULE 13D
Item 1. Security and Issuer
This Schedule 13D relates to the common stock, par value $0.01
per share ("Shares"), of RJR Nabisco Holdings Corp., a Delaware corporation
(the "Issuer" or "RJR Nabisco"). The address of the principal executive
offices of the Issuer is 1301 Avenue of the Americas, New York, New York
10019.
Item 2. Identity and Background
The persons filing this statement are High River Limited
Partnership, a Delaware limited partnership ("High River"), Riverdale LLC,
a New York limited liability company ("Riverdale"), Barberry Corp., a
Delaware corporation ("Barberry), American Real Estate Holdings, L.P., a
Delaware limited partnership ("AREH"), American Real Estate Partners, L.P.
a Delaware limited partnership ("AREP"), American Property Investors, Inc.,
a Delaware Corporation ("API") and Carl C. Icahn, a citizen of the United
States of America (collectively, the "Registrants"). The principal
business address and the address of the principal office of the Registrants
is 100 South Bedford Road, Mount Kisco, New York 10549, with the exception
of Carl C. Icahn, whose principal business address is c/o Icahn Associates
Corp., 114 West 47th Street, New York, New York 10036.
Riverdale is the general partner of High River. Riverdale is
over 99 percent owned by Carl C. Icahn. Barberry is wholly owned by Carl
C. Icahn. API is the general partner of both AREH and AREP. API is
wholly-owned by Carl C. Icahn.
Registrants may be deemed to be a "group" with the meaning of
Section 13(d)(3) promulgated under the Securities Exchange Act of 1934, as
amended (the "Act").
High River is primarily engaged in the business of investing in
securities. Riverdale is primarily engaged in the business of owning real
estate and acting as general partner of High River. Barberry is primarily
engaged in the business of investing in securities. API is primarily
engaged in the business of acting as general partner of AREP, AREH and
other limited partnerships. AREP is primarily engaged in the business of
acquiring and managing real estate through AREH, its operating subsidiary.
AREH is in the business acquiring and managing real estate. Carl C.
Icahn's present principal occupation or employment is acting as President
and a Director of Starfire Holding Corporation, a Delaware corporation
("Starfire"), and as the Chairman of the Board and Director of various of
Starfire's subsidiaries, including ACF Industries, Incorporated, a New
Jersey corporation ("ACF"). Starfire, whose principal business address is
100 South Bedford Road, Mount Kisco, New York 10549, is primarily engaged
in the business of holding, either directly or through its subsidiaries, a
majority of the common stock of ACF. ACF is primarily engaged in the
business of leasing, selling and manufacturing railroad freight and tank
cars.
PAGE
<PAGE>
The name, citizenship, present principal occupation or employment
and business address of each member of Riverdale and director and executive
officer of both API and Barberry is set forth in Schedule A attached
hereto.
Carl C. Icahn is the sole stockholder and a director of Barberry.
Carl C. Icahn is a member of Riverdale and owns in excess of 99% of the
interests therein. Carl C. Icahn is the sole stockholder and a director of
API. As such, Mr. Icahn is in a position directly and indirectly to
determine the investment and voting decisions made by Registrants.
Neither High River, Riverdale, Barberry, API, AREH, AREP, Mr.
Icahn, nor any executive officer or director of any of the Registrants,
has, during the past five years, (a) been convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors), or (b)
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction and as a result of such proceeding was or is subject
to a judgment, decree or final order enjoining future violations of, or
prohibiting, or mandating activities subject to, Federal or State
securities laws or a finding of any violation with respect to such laws.
Item 3. Source and Amount of Funds or Other Consideration
The aggregate purchase price of the 15,914,300 Shares purchased
by the Registrants, as set forth in the following paragraphs, was
$489,330,501.40 (including commissions). The source of funding for the
purchase of these Shares was general working capital of the Registrants and
funds borrowed pursuant to margin accounts. A copy of all forms of margin
agreements pertinent to this filing on Schedule 13D is attached hereto as
Exhibit 2, and incorporated herein by reference.
On September 21, 1995, Barberry Corp. purchased 140,000 Shares for an
aggregate purchase price of $3,917,060 (including commissions). Such
shares were purchased with Barberry's working capital and funds borrowed by
Barberry in its margin account with Smith Barney Inc. ("Smith Barney").
Between July 21, 1995 and August 22, 1995, Riverdale Investors
Corp., Inc. ("Riverdale Investors"), a Delaware corporation and general
partner of High River prior to its liquidation in August 1996, purchased
533,500 Shares for an aggregate purchase price of $14,600,935.30 (including
commissions). Such Shares were purchased with Riverdale Investors' working
capital and the funds which Riverdale Investors borrowed pursuant to a
margin account in the regular course of business with Smith Barney.
PAGE
<PAGE>
Between July 24, 1995 and August 14, 1996, High River purchased
13,430,800 Shares for an aggregate purchase price of $423,863,181.12
(including commissions). Such Shares were purchased with general working
capital of High River and funds borrowed pursuant to margin accounts with
Lehman Brothers ("Lehman"), Smith Barney, Merrill Lynch ("Merrill") and
Reynders Grey ("Reynders"). Margin accounts with Reynders Grey clear
through Wagner Stott Clearing Corp. ("Wagner Stott"), National Financial
Services Corporation ("NFSC") and Spear Leeds Kellogg ("Spear Leeds").
From August 21 through August 22, 1996, AREH purchased 1,810,000
Shares for an aggregate purchase price of $46,949,325 (including
commissions). Such Shares were purchased with AREH's working capital.
In addition, as described more fully in Item 6 herein, 2,951,000
of the Shares acquired by High River were loaned by High River to Tortoise
Corp. ("Tortoise") on December 21, 1995 and used by Tortoise to further
secure borrowings by Tortoise to Internationale Nederlanden Capital
Corporation ("ING"), which borrowings are secured by the securities of any
number of issuers.
<PAGE>
Item 4. Purpose of Transaction
Registrants have acquired the Shares for investment since they
believe that the Shares are undervalued. Registrants continue to believe
that in order to enhance the aggregate value of Issuer's component parts
and to maximize stockholder value, Issuer should promptly take all steps
necessary to spin off its holdings of Nabisco Holdings Corp.
The Non-AREP Registrants, as such term is defined in Item 6
hereof, have had a meeting with management of the Issuer at which they
discussed their position that a prompt spin-off should be undertaken.
Issuer's management reiterated its position that a spin-off should not be
undertaken at the present time. Registrants believe that, especially after
the recent loss by another tobacco company in a smoking damage case,
Issuer's stockholders would be best served if the spin-off was accomplished
immediately rather than waiting for some future date or event.
In light of the foregoing, Registrants are continuing to consider
their future course of action with respect to the Issuer. They remain of
the belief that it is incumbent upon management of the Issuer to act in the
best interests of stockholders and immediately spin-off Nabisco during the
window of opportunity that now exists, but may not continue to exist, for
the spin-off. The Non-AREP Registrants have been engaged in discussions
with third parties, including but not limited to several large shareholders
of the Issuer, to determine the feasibility of forming a slate of persons
totally independent of Registrants and the Brooke Entities (as defined more
fully in Item 6 herein) (whose nominees for directors were supported by the
Non-AREP Registrants at the most recent annual meeting of Issuer's
stockholders) who would call for a special meeting of stockholders of the
Issuer as well as run for election as directors of the Issuer and who are
committed to the idea of the spin-off of Nabisco. No determination has
been made as to the feasibility of such a course of action. No agreements,
arrangements or understandings exist between Registrants and third persons
with respect to the foregoing.
Registrants reserve the right to continue to acquire securities
of the Issuer from time to time in the open market or otherwise. In
addition, they reserve to right to sell any securities of the Issuer at any
time and from time to time in the open market or otherwise.
Item 5. Interest in Securities of the Issuer
(a) As of the close of business on August 22, 1996, Registrants
may be deemed to beneficially own in the aggregate $15,914,300 Shares
representing approximately 5.8% of the Issuer's outstanding Shares (based
upon the 272,108,434 Shares stated to be outstanding as of June 30, 1996,
by the Issuer in the Issuer's 10-Q filing filed with the Securities and
Exchange Commission (the "SEC") on July 31, 1996.)
PAGE
<PAGE>
High River has sole voting power and sole dispositive power with
regard to 13,964,300 Shares. Riverdale has shared voting power and shared
dispositive power with regard to 13,964,300 Shares. Barberry has sole
voting power and sole dispositive power with regard to 140,000 Shares.
AREH has sole voting power and sole dispositive power with regard to
1,810,000 Shares. Both AREP and API have shared voting power and shared
dispositive power with regard to 1,810,000 Shares. Carl C. Icahn has
shared voting power and shared dispositive power with regard to 15,914,300
Shares.
Transactions in the Shares by any of the Registrants effected
during the past sixty (60) days are described in Schedule B, attached
hereto and are incorporated herein by reference. All such transactions
were effected in the open market on national securities exchanges.
Item 6. Contracts, Arrangements, Understandings or Relationship with
Respect to Securities of the Issuer
On October 17, 1995, Registrants (not including API, AREP and
AREH; the "Non-AREP" Registrants") entered into an agreement, (the "High
River Agreement") which was amended on November 5, 1995, with Brooke Group
Ltd. ("Brooke Group") and BGLS, Inc. ("BGLS"). In addition, on October 17,
1995, Non-AREP Registrants entered into an agreement (the "New Valley
Agreement"), which was amended by a letter agreement dated October 17,
1995, and further amended by a letter agreement dated November 5, 1995,
with the New Valley Corporation ("New Valley") and ALKI Corp. The High
River Agreement and New Valley Agreement (collectively, the "Agreements")
related to, among other things, (1) the parties acquisition of not less
than a specified number of Shares of the Issuer (2) the parties' agreement
not to sell Shares prior to specified dates (3) the parties' agreement not
to enter into certain transactions with respect to the Shares or with the
Issuer and (4) the Non-AREP Registrants' support of the solicitation of
consents by Brooke, New Valley, ALKI and BGLS, (the "Brooke Entities") to
stockholder action without a meeting as well as the Brooke Entities'
solicitation of proxies from the Issuer's stockholder. The description of
the Agreements herein are qualified in their entirety by the Agreements
themselves which are appended hereto as Exhibits 3 and 4.
On June 5, 1996, the Agreements were terminated by all parties to
the Agreements by mutual consent through an agreement of termination (the
"Termination Agreement"). The termination leaves in effect for one year
certain provisions of the Agreements concerning payments to be made to High
River in the event that New Valley achieves a profit (after deducting
certain expenses) on the sale of Shares of the Issuer which are held by it
or if they are valued at the end of such year at higher than their purchase
price or in the event that Brooke or its affiliates engage in certain
transactions with the Issuer. Registrants believe that they do not
constitute a "group" with the Brooke Entities within the meaning of Section
13(d)(3) promulgated under the Securities Exchange Act of 1934, as amended.
A copy of the Termination Agreement is attached hereto as Exhibit 5, and
incorporated herein by reference in its entirety.
PAGE
<PAGE>
In addition, Tortoise Corp. and Internationale Nederlanden Bank
N.V. entered into an Amended and Restated Credit Agreement ("Credit
Agreement") dated as of May 20, 1993, under which ING, as lender, agreed
according to the terms of the Credit Agreement, to make loans to Tortoise
and Tortoise agreed to perfect the security interests pledged pursuant to
the Security Agreement between Tortoise and ING, and, to act in accordance
with the terms of the Credit Agreement. A copy of the Credit Agreement,
(giving effect to Amendment Numbers 1-11) dated as of January 12, 1994, is
attached hereto as Exhibit 6, and incorporated herein by reference.
On December 28, 1995, Tortoise and ING entered into an agreement
(the "Letter Agreement") with High River, whereby High River became a party
to the Original Letter Agreement between Tortoise and Internationale
Nederlanden U.S. Capital Corporation dated December 21, 1995. On December
21, 1995 High River lent (the "Loan") 2,951,000 Shares to Tortoise whereby
Tortoise had the right to transfer the Shares to its own name or to the
name of ING, as its designee. In consideration of the Loan, Tortoise
delivered a fee in the amount of $45,000 and further agreed that if the
Loan was still outstanding on December 21, 1996, to deliver to High River,
on such date, as consideration for the continued extension of the Loan, a
fee in the amount of $45,000. In addition, under this agreement, Tortoise
has the right to pledge the securities to ING, pursuant to the Credit
Agreement to secure the payment of all loans and other amounts then due or
due in the future by Tortoise to ING arising in connection with, or
pursuant to, the Credit Agreement. A copy of the Letter Agreement is
attached hereto as Exhibit 7 and incorporated herein by reference.
Except as described herein, neither any of the Registrants nor
any person referred to in Schedule A attached hereto, has any contracts,
arrangements, understandings or relationships (legal or otherwise) with any
person with respect to any securities of the Issuer, included but not
limited to the transfer or voting of any of the securities, finder's fees,
joint ventures, loan or option arrangements, puts or calls, guarantees or
profits, division of profits or losses, or the giving or withholding of
proxies.
Item 7. Material to be Filed as Exhibits
1. Joint Filing Agreement of the Registrants
2. Forms of Margin Agreements between the Registrants and Smith Barney,
Shearson Lehman, Merrill Lynch, Reynders Grey, Wagner Stott, NFSC and
Spear Leeds.
3. Agreement, dated October 17, 1995, between Brooke Group Ltd., BGLS
Inc. and High River Limited Partnership, as amended by the letter
agreement dated November 5, 1995.
4. Agreement, dated October 17, 1995, between New Valley Corporation,
ALKI Corp. and High River Limited Partnership, as amended by the
letter agreement dated October 17, 1995 and as further amended by the
letter agreement dated November 5, 1995.
PAGE
<PAGE>
5. Agreement of Termination, dated as of June 5, 1996, between
Registrants and the Brooke Entities.
6. Agreement, dated as of May 20, 1993, between Tortoise Corp. and
Internationale Nederlanden Bank N.V., regarding Amendment and
Restatement of Original Credit Agreement to Tortoise Corp.
7 Agreement, dated December 28, 1995, between Tortoise Corp.,
Internationale Nederlanden (U.S.) Capital Corporation and High River
Limited Partnership regarding Loan to Tortoise Corp. by High River
Limited Partnership.
PAGE
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: August 22, 1996
RIVERDALE LLC
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC
Its: General Partner
By: /s/Carl C. Icahn
Carl C. Icahn
Its: Member
BARBERRY CORP.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE PARTNERS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
<PAGE>
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
By: /s/ Carl C. Icahn
Carl C. Icahn
(Signature Page of Schedule 13D with respect to RJR Nabisco
Holdings Corp.)<PAGE>
SCHEDULE A
DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS
Name, Business Address and Principal Occupation of
Each Member of Riverdale and Each Officer and Director
of Barberry and API
The following sets forth the name, position, and
principal occupation of each member of Riverdale and executive
officer and director of Barberry. Each such person is a
citizen of the United States of America. Except as otherwise
indicated, the business address of each director and officer
is c/o Icahn Associates Corp., 114 West 47th Street, 19th
floor, New York, New York, 10036. To the best of Registrants'
knowledge, except as set forth in this statement on Schedule
13D, none of the directors or executive officers of the
Registrants own any shares of the Issuer.
RIVERDALE LLC
Name Position Principal Occupation
Carl C. Icahn Member See Item 2 herein
Gail Golden Member Officer of various
Icahn affiliated
entities
BARBERRY CORP.
Name Position Principal Occupation
Carl C. Icahn Director, Chairman See Item 2 herein
of the Board and
President
Richard T. Buonato<F1> Director Controller of
Starfire
Edward E. Mattner Vice President Securities Trader for
various Icahn
affiliated entities
Gail Golden Vice President and See above
Secretary
Robert J. Mitchell Treasurer Chief Financial
Officer of various
Icahn affiliated
entities
[FN]
<F1> Business address is a 1 Wall Street Court, Suite 980, New York,
New York 1005
<PAGE>
AMERICAN PROPERTY INVESTORS, INC.
Name Position Principal Occupation
Carl C. Icahn Director and See above
Chairman of
the Board
Alfred D. Kingsley Director Senior Managing
Director of Greenway
Partners, L.P.
William A. Leidesdorf Director Independent real
estate investment
banker
Jack G. Wasserman Director Attorney and member of
NYS Bar; Senior
partner at Wasserman,
Schneider and Babb
John P. Salderelli Vice president, Officer of American
Secretary and Property Investors,
Treasurer Inc.
Gail Golden Assistant See above
Secretary
<PAGE>
SCHEDULE B
Schedule of Transactions in the Shares
Name Date No. of Shares Other Price
Purchased Transactions Per Share<F1>
High River 8/12/96 500,000 28.625
Limited 100,000 28
Partnership 14,000 27.750
8/13/96 25,000 27.5
25,000 27.375
25,000 27.250
25,000 27.125
50,000 27
25,000 26.750
125,000 26.5
2,000 26.250
8/14/96 100,000 26.750
8/16/96 N/A 533,500<F2> N/A
American 8/21/96 1,560,000 26
Real Estate
Holdings, L.P.
8/22/96 100,000 25.5
125,000 25.375
25,000 25.250
[FN]
<F1>
Does not include Brokerage commission
<F2>
Represents capital contribution from Riverdale Investors to High
River.
EXHIBIT 1
JOINT FILING AGREEMENT
In accordance with Rule 13D-1(f) under the Securities Exchange
Act of 1934, as amended, the undersigned agree to the joint filing
on behalf of each of them of a statement on Schedule 13D (including
amendments thereto) with respect to the shares of common stock, par
value $.01 per share, of RJR Nabisco Holdings Corp., and further
agree that this Joint Filing Agreement be included as an Exhibit to
such joint filings. In evidence thereof, the undersigned, being
duly authorized, have executed this Joint Filing Agreement this
22nd day of August, 1996.
RIVERDALE LLC
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Member
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE LLC
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Member
BARBERRY CORP.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN PROPERTY INVESTORS, INC.
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
<PAGE>
AMERICAN REAL ESTATE PARTNERS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
AMERICAN REAL ESTATE HOLDINGS, L.P.
By: AMERICAN PROPERTY INVESTORS, INC.
Its: General Partner
By: /s/ Carl C. Icahn
Carl C. Icahn
Its: Chairman of the Board
By: /s/ Carl C. Icahn
Carl C. Icahn
(Joint Filing Agreement for Schedule 13D - RJR Nabisco Holdings
Corp.)<PAGE>
CORPORATION ACCOUNT
Authorizing Trading in Securities and Commodities and
Permitting Margin Transactions and Short Sales
Please read carefully, sign and return to
Smith Barney Inc.
Client Documentation Services
388 Greenwich Street
New York, NY 10013-2396
The undersigned Corporation, by its president named herein,
pursuant to the resolutions annexed hereto and certified by
the Secretary, hereby authorizes you to open an account in
the name of said Corporation, and represents that no one
other than the Corporation has any interest in such account.
We also enclose herewith your Client Agreement with Consent
to Loan of Securities duly executed on behalf of the
Corporation and acknowledge receipt of a copy of the Client
Agreement. This authorization shall continue in force until
revoked by the Corporation by a written notice, addressed to
the branch office servicing this account.
Further, I do hereby certify that the Secretary of this
Corporation, whose name appears in the attached
Certification, has been duly elected to and now holds that
office and that the signature appearing opposite his or her
name is his or her true signature.
____________________________________________________________
Signature of Secretary
CPI 0014
SMITH BARNEY
A Member of Travelers Group
Account Number
Branch___ ___ ___ Account___ ___ ___ ___ ___ T__ C__ FC___
___ ___
PAGE
<PAGE>
____________________________________________________________
Name of Corporation
____________________________________________________________
Name of President (print name)
____________________________________________________________
Signature of President
____________________________________________________________
Date
____________________________________________________________
Address of Corporation
____________________________________________________________
PAGE
<PAGE>
CERTIFICATION
I, being the Secretary of the Corporation named herein, do
hereby certify that the following is a full, true and
correct copy of Resolutions adopted by a vote of the board
of Directors of said Corporation at a meeting thereof and
held on the date specified below, a quorum being present,
and acting throughout, that they are in accord with and
pursuant to the charter and by-laws of said Corporation, and
that the same have not been rescinded or modified and are in
full force and effect. I further certify that the persons
herein designated as officers of this Corporation have been
duly elected to and now hold the offices in this Corporation
set forth at their respective names.
____________________________________________________________
Date of Corporate Meeting Month Day
Year
____________________________________________________________
PRESIDENT'S NAME (print name)
____________________________________________________________
VICE PRESIDENT'S NAME (print name)
____________________________________________________________
TREASURER'S NAME (print name)
____________________________________________________________
IN WITNESS WHEREOF, I have hereunto affixed my hand (and the
seal of said Corporation) this ______day
of______________________, 19__.
PAGE
<PAGE>
Secretary's Signature
____________________________________________________________
NOTE: If the Secretary is empowered to act by the following
resolutions, the President of this Corporation must execute
this supplemental certification.
I, being the President of the Corporation named herein, do
hereby certify that the Secretary (whose signature appears
above) is empowered to act on behalf of the Corporation in
accordance with the following resolutions.
President's Signature
____________________________________________________________
PAGE
<PAGE>
CLIENT AGREEMENT SMITH
BARNEY
Account Number
Branch___ ___ ___ Account___ ___ ___ ___ ___ T__ C__ FC___
___ ___
Before you sign this Agreement, please read it carefully.
Instructions for the completion of this Agreement are
contained in the accompanying booklet entitled "Important
New Account Information". After you have completed and
signed this Agreement, please return it in the enclosed
postage-paid envelope. Note: Signatures are MANDATORY in
either Sections A and C OR Sections B and C.
____________________________________________________________
Account Title/Name
____________________________________________________________
Account Owner's Name Account Owner's Name
____________________________________________________________
Street Address Apt. City State Zip
Code
In consideration of Smith Barney Inc. accepting an account
for me (us), I (we) hereby acknowledge that I (we) have
read, understand and agree to the terms of this Agreement
contained in the sections numbered 1 through 11. If this is
a margin account, I (we) further acknowledge that I (we)
have read, understand and agree to the terms of this
Agreement contained in the sections numbered 15 through 17.
If this is a joint account, we further acknowledge that we
have read, understand and agree to the terms of this
Agreement contained in the sections numbered 12 through 14.
Note: Texas residents with joint accounts must also execute
a Texas Joint Account Supplement agreement (form 3882).
A. CASH ACCOUNTS. I (We) acknowledged that I (we) have
received a copy of this Agreement which contains a pre-
dispute arbitration clause at section 5.
If this is a joint account, all parties must sign.
________________________ ____
_____________________________ ____
PAGE
<PAGE>
Account Owner's Signature Date Joint Account Owner's
Signature Date
B. MARGIN ACCOUNTS. By signing this Agreement, I (we)
acknowledge that my (our) securities may be loaned to you or
loaned out to others. I (We) acknowledge that I (we) have
received a copy of this Agreement which contains a pre-
dispute arbitration clause at section 6.
If this is a joint account, all parties must sign.
________________________ ____
_____________________________ ____
Account Owner's Signature Date Joint Account Owner's
Signature Date
C. TAX CERTIFICATION. (See Instructions on the last page
of this form). UNDER PENALTIES OF PERJURY, I CERTIFY THAT
THE NUMBER SHOWN BELOW IS MY CORRECT TAXPAYER IDENTIFICATION
NUMBER OR IF NOT, THEN THE NUMBER I HAVE ENTERED BELOW IS MY
CORRECT TAX IDENTIFICATION NUMBER, AND THAT I AM NOT SUBJECT
TO BACKUP WITHHOLDING BECAUSE: (A) I HAVE NOT BEEN NOTIFIED
BY THE INTERNAL REVENUE SERVICE (IRS) THAT I AM SUBJECT TO
BACKUP WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL
INTEREST OR DIVIDENDS, OR (B) THE IRS HAS NOTIFIED ME THAT I
AM NO LONGER SUBJECT TO BACKUP WITHHOLDING (SEE BELOW), OR
(C) I AM EXEMPT FROM BACKUP WITHHOLDING (SEE BELOW). NOTE:
YOU MUST CROSS OUT (B) ABOVE IF YOU ARE CURRENTLY SUBJECT TO
BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
For those exempt from backup withholding, write the word
"EXEMPT" here: ___________________________________.
<PAGE>
The Social Security Number or The Social Security
Number or
Tax Identification Number on Tax Identification Number
Smith Barney's records is: shown to the left is
incorrect
The CORRECT number is:
______________________________
- - - - - - - - - - - - - - - -
- - -
PAGE
<PAGE>
____________________________
______________________________
Note for joint accounts: The Social Security Number of this
account is the number of the client whose name appears first
in the account title. Do not enter the number of any other
account owner.
________________________ ____
_____________________________ ____
Account Owner's Signature Date Joint Account Owner's
Signature Date
D. NAME DISCLOSURE. Please indicate your choice as to the
release or withholding of your name, address and securities
positions to issuing corporations.
____ NO, I do not want my name, address and securities
disclosed to any companies, upon their request, in
which I own securities that are being held for me at
Smith Barney Inc.
____ YES, I do want.
E. MONEY MARKET FUND AGREEMENT. Available cash in your
account will automatically be invested or "swept" into the
money market fund of your choice. If you do NOT elect to
have the automatic money market fund sweep, please check the
"NO" box below, If you wish to change your choice of money
market fund, please contact your Financial Consultant.
(Note to Wisconsin residents: You must indicate below
specifically whether or not you wish to have a money market
sweep for your account).
____ NO, I do not want cash balances in my account to be
automatically swept into a money market fund.
____ YES, I would like the cash balances in my account to be
automatically swept into the fund of my choice.
F. TENANCY IN COMMON. DO NOT Complete this Section if You
Wish To Establish A Joint Account With Rights of
Survivorship. In the event of the death of either or any of
the undersigned, the interests in the account as of the
close of business on the date of the death of the decedent,
PAGE
<PAGE>
or on the following business day if the date of death is not
a business day shall be as follows: Note: Texas residents
with joint accounts must also execute a Texas Joint Account
Supplement agreement (form 3882).
Name of Participant __________________ or his or her estate
_____%.
Signature of Participant
__________________________________________
PAGE
<PAGE>
Lehman Brothers
Customer Account Services
P.O. Box 3760
New York, NY 10008-3760
________________
Client Agreement CPI 3025
BEFORE YOU SIGN THIS AGREEMENT, READ IT THOROUGHLY AND
RETURN THIS COMPLETED AND SIGNED AGREEMENT TO LEHMAN
BROTHERS AT THE ADDRESS ON THE LEFT SIDE OF THIS PAGE.
SUBSEQUENTLY YOU WILL RECEIVE LITERATURE CONTAINING
IMPORTANT INFORMATION ABOUT NEW ACCOUNTS. READ THE
INFORMATION CAREFULLY AND RETAIN IT FOR FUTURE REFERENCE.
Account Number
Branch___ ___ ___ Account___ ___ ___ ___ ___ T__ C__ IR___
___ ___
____________________________________________________________
Account Title/Name
____________________________________________________________
Account Title/Name
____________________________________________________________
Mailing Address
A. CLIENT ACKNOWLEDGEMENT. I (we) hereby acknowledge that
I (we) have read, understand and agree to the terms of this
agreement. If this is a joint account, we further
acknowledge that we have read, understand and agree to the
terms of this agreement contained in paragraph 21. Note:
Texas residents must execute a Texas Joint Account
Supplement agreement (form 3882). I (WE) ACKNOWLEDGE THAT I
(WE) HAVE RECEIVED A COPY OF THE AGREEMENT WHICH CONTAINS A
PRE-DISPUTE ARBITRATION CLAUSE AT PARAGRAPH 22; I (WE) HAVE
READ IT AND AGREE TO ITS TERMS.
________________________ ____ ________________________
Account Owner's Signature Date Account Owner's Signature
Date
________________________ ____ ________________________
Account Owner's Signature Date Account Owner's Signature
Date
B. NAME DISCLOSURE. Please indicate your choice as to the
release or withholding of your name, address and securities
positions to issuing corporations.
____ NO, I do not want my name, address and securities
positions disclosed to any companies, upon their
request, in which I own securities that are being held
for me at Lehman Brothers Inc. ("Lehman") or any firm
acting as a clearing broker for Lehman.
____ YES, I do want.
C. MONEY MARKET FUND AGREEMENT. Lehman will be authorized
(but not required) to invest or "sweep" available cash in
your account into one of its money market funds unless you
elect otherwise below. If you want to choose a particular
money market fund or you do not want available cash swept
into a money market fund, please indicate below. If you
wish to discuss or change your choice of money market funds,
please contact your Investment Representative.
(Note to Wisconsin residents: You must indicate below
specifically whether or not you wish to have a money market
sweep for your account).
____ NO, I do not want cash balances in my account to be
automatically swept into a money market fund.
____ YES, I want the cash balances in my account
automatically swept into the fund of my choice.
D. JOINT ACCOUNT WITH RIGHTS OF SURVIVORSHIP. If the
account has more than one owner, this agreement establishes
a Joint Account With Rights of Survivorship. If you and the
other account owners wish to establish a
<PAGE>
<PAGE>
Tenancy in Common instead, each of you must execute a Joint
Account Agreement As Tenants in Common in addition to this
Client Agreement. Note: Texas residents must execute a
Texas Joint Account Supplement agreement (form 3882).
E. MARGIN ACCOUNT AGREEMENT. Complete this section only if
you accept the margin agreement described in paragraph 16
through 19 of this agreement.
In consideration of your opening and maintain in one or more
margin accounts on my behalf, I (we) hereby acknowledge that
I (we) have read, understand and agree to the terms of a
margin account contained in paragraphs 16 through 19 of this
agreement. BY SIGNING THIS AGREEMENT, I (WE) ACKNOWLEDGE
THAT MY (OUR) SECURITIES MAY BE LOANED TO YOU OR LOANED OUT
TO OTHERS. If this is a joint account, all parties must
sign.
________________________ ____ ________________________
Account Owner's Signature Date Account Owner's Signature
Date
________________________ ____ ________________________
Account Owner's Signature Date Account Owner's Signature
Date
F. TAX CERTIFICATION. UNDER PENALTIES OF PERJURY, I
CERTIFY THAT THE NUMBER SHOW BELOW (AND TO THE LEFT) IS MY
CORRECT TAXPAYER IDENTIFICATION NUMBER OR IF NOT, THEN THE
NUMBER I HAVE ENTERED BELOW (AND TO THE RIGHT) IS MY CORRECT
TAX IDENTIFICATION NUMBER, AND THAT I AM NOT SUBJECT TO
BACKUP WITHHOLDING BECAUSE (A) I HAVE NOT BEEN NOTIFIED BY
THE INTERNAL REVENUE SERVICE (IRS) THAT I AM SUBJECT TO
BACKUP WITHHOLDING AS A RESULT OF FAILURE TO REPORT ALL
INTEREST OR DIVIDENDS, OR (B) THE IRS HAS NOTIFIED ME THAT I
AM NO LONGER SUBJECT TO BACKUP WITHHOLDING (SEE BELOW), OR
(C) I AM EXEMPT FROM BACKUP WITHHOLDING (SEE BELOW). NOTE:
YOU MUST CROSS OUT (B) ABOVE IF YOU ARE CURRENTLY SUBJECT TO
BACKUP WITHHOLDING BECAUSE OF UNDERREPORTING INTEREST OR
DIVIDENDS ON YOUR TAX RETURN.
FOR THOSE EXEMPT FROM BACKUP WITHHOLDING (SEE INSTRUCTIONS
ON PAGE 4), WRITE THE WORD "EXEMPT" HERE:
______________________
PAGE
<PAGE>
Note for joint accounts: The Social Security Number of this
account is the number of the client whose name appears first
in the account title. Do not enter the number of any other
account owner.
The Social Security Number or Tax Identification Number on
Lehman Brothers' records is:
Taxpayer Identification Number
The Social Security Number or Tax Identification Number
shown to the left is incorrect. The CORRECT number is:
Taxpayer Identification Number
______________________________
<PAGE>
<PAGE>
The Investor CreditLine* Service Client Agreement
Note: CMA*, CBA*, and WCMA* clients who have already signed
this agreement need not return this form.
In consideration of your accepting and carrying one or more
accounts for the undersigned, the undersigned hereby
consents and agrees that:
Applicable Rules and Regulations
1. All transactions shall be subject to the constitutions,
rules, regulations, customs and usages of the exchange or
market and its clearinghouse, if any, on which such
transactions are executed by you (Merrill Lynch, Pierce,
Fenner & Smith, Inc.) or your agents, including your
subsidiaries and affiliates.
Definition
2. For purposes of this agreement, "securities and other
property" shall include but not be limited to, money,
securities, financial instruments and commodities of every
kind and nature and all contracts and options relating
thereto, whether for present or future delivery.
Collateral Requirement and Credit Charges for the Investor
CreditLine* Service
3. The undersigned will maintain such securities and other
property in the accounts of the undersigned for collateral
purposes as you shall require from time to time; and the
monthly debt balance of such accounts shall be charged, in
accordance with your usual custom, with interest at a rate
permitted by the laws of the State of New York. It is
understood that the interest charge made to the
undersigned's account at the close of a charge period will,
unless paid, be added to the opening balance for the next
charge period and that interest will be charged upon such
opening balance, including all interest so added.
Security Interest
4. All securities and other property now or hereafter held,
carried or maintained by you or by any of your affiliates in
your possession or control, or in the possession or control
of any such affiliate, for any purpose, in or for any
account of the undersigned now or hereafter opened,
PAGE
<PAGE>
including any account in which the undersigned may have an
interest, shall be subject to a lien for the discharge of
all the indebtedness and other obligations of the
undersigned to you, and are to be held by you as security
for the payment of any liability or indebtedness of the
undersigned to you in any of said accounts. You shall have
the right to transfer securities and other property so held
by you from or to any other of the accounts of the
undersigned whenever in your judgment you consider such a
transfer necessary for your protection. In enforcing your
lien, you shall have the discretion to determine which
securities and property are to be sold and which contracts
are to be closed.
Representations as to Beneficial Ownership and Control
5. The undersigned represents that, with respect to
securities against which credit is or may be extended by
you:**(b) does not control, is not controlled by, and is not
under common control with, the issuer of any such
securities. In the event that any of the foregoing
representations are inaccurate or become inaccurate, the
undersigned will promptly so advise you in writing.
Calls for Additional Collateral--Liquidation Rights
6. (a) You shall have the right to require additional
collateral:
(1) in accordance with your general policies for
the Investor CreditLine* service maintenance
requirements, as such may be modified,
amended or supplemented from time to time; or
(2) if in your discretion you consider it
necessary for your protection at any earlier
or later point in time than called for by
said general policies; or
(3) in the event that a petition in bankruptcy or
for appointment of a receiver is filed by or
against the undersigned; or
(4) if an attachment is levied against the
accounts of the undersigned; or
(5) in the event of the death of the undersigned.
PAGE
<PAGE>
(b) If the undersigned does not provide you with
additional collateral as you may require in accordance with
(a)(1) or (2), or should an event described in (a)(3), (4)
or (5) occur (whether or not you elect to require additional
collateral), you shall have the right:
(1) to sell any or all securities and other
property in the accounts of the undersigned
with you or with any of your affiliates,
whether carried individually or jointly with
others;
(2) to buy any or all securities and other
property which may be short in such accounts;
and
(3) to cancel any open orders and to close any or
all outstanding contracts.
You may exercise any or all of your rights under (b)(1), (2)
or (3) without further demand for additional collateral, or
notice of sale or purchase, or other notice or
advertisement. Any such sales or purchases may be made at
your discretion on any exchange or other market where such
business is usually transacted, or at public auction or
private sale; and you may be the purchaser for your own
account. It is understood that your giving of any prior
demand or call or prior notice of the time and place of such
sale or purchase shall not be considered a waiver of your
right to sell or buy without any such demand, call or notice
as herein provided.
Payment of Indebtedness Upon Demand
7. The undersigned shall at all times be liable for the
payment upon demand of any debit balance or other
obligations owing in any of the accounts of the undersigned
with you, and the undersigned shall be liable to you for any
deficiency remaining in any such accounts in the event of
the liquidation thereof, in whole or in part, by your or by
the undersigned; and the undersigned shall make payment of
such obligations and indebtedness upon demand.
Liability for Costs of Collection
PAGE
<PAGE>
8. To the extent permitted by the laws of the State of New
York, the reasonable costs and expenses of collection of the
debit balance and any unpaid deficiency in the accounts of
the undersigned with you, including but not limited to
attorney's fees incurred and payable or paid by you, shall
be payable to you by the undersigned.
Pledge of Securities and Other Property
9. All securities and other property now or hereafter held,
carried or maintained by you in your possession or control
in any of the accounts of the undersigned may be pledged and
repledged by you from time to time without notice to the
undersigned, either separately or in common with other such
securities and other property, for any amount due in the
accounts of the undersigned, or for any greater amount, and
you may do so without retaining in your possession or under
your control for delivery a like amount of similar
securities or other property.
Lending Agreement
10. In return for the extension or maintenance of any
credit by you, the undersigned acknowledges and agrees that
the securities in the undersigned's account, together with
all attendant rights of ownership, may be lent to you out to
others to the extent not prohibited by applicable laws,
rules and regulations. In connection with such securities
loans, you may receive and retain certain benefits to which
the undersigned will not be entitled. The undersigned
understands that, in certain circumstances, such loans could
limit the undersigned's ability to exercise voting rights,
in whole or in part, with respect to the securities lent.
Presumption of Receipt of Communications
11. Communications may be sent to the undersigned at the
address of the undersigned or at such other address as the
undersigned may hereafter give you in writing. All
communications so sent, whether by mail, telegraph,
messenger or otherwise, shall be deemed given to the
undersigned personally, whether actually received or not.
Accounts Carried as Clearing Broker
12. If you are carrying the account of the undersigned as
clearing broker by arrangement with another broker through
whose courtesy the account of the undersigned has been
PAGE
<PAGE>
introduced to you, then until receipt from the undersigned
of written notice to the contrary, you may accept from such
other broker, without inquiry or investigation by you (a)
orders for the purchase or sale in said account of
securities and other property on credit or otherwise, and
(b) any other instructions concerning said account. You
shall not be responsible or liable for any acts or omissions
of such other broker or its employees.
Agreement to Arbitrate Controversies
13. - Arbitration is final and binding on the parties.
- The parties are waiving their right to seek
remedies in court, including the right to jury
trial.
- Prearbitration discovery is generally more limited
than and different from court proceedings.
- The arbitrator's award is not required to include
factual findings or legal reasoning and any
party's right to appeal or to seek modification of
rulings by the arbitrators is strictly limited.
- The panel of arbitrators will typically include a
minority of arbitrators who were or are affiliated
with the securities industry.
The undersigned agrees that all controversies which may
arise between us, including but not limited to those
involving any transaction or the construction, performance
or breach of this or any other agreement between us, whether
entered into prior, on or subsequent to the date hereof,
shall be determined by arbitration. Any arbitration under
this agreement shall be conducted only before the New York
Stock Exchange, Inc., the American Stock Exchange, Inc. or
arbitration facility provided by any other exchange of which
you are a member, the National Association of Securities
Dealers, Inc. or the Municipal Securities Rulemaking Board,
and in accordance with its arbitration rules then in force.
The undersigned may elect in the first instance whether
arbitration shall be conducted before the New York Stock
Exchange, Inc., the American Stock Exchange, Inc. or
PAGE
<PAGE>
arbitration facility provided by any other exchange of which
you are a member, the National Association of Securities
Dealers, Inc. or the Municipal Securities Rulemaking Board,
but if the undersigned fails to make such election, by
registered letter or telegram addressed to you at the office
where the undersigned maintains the account, before the
expiration of five days after receipt of a written request
from you to make such election, then you may make such
election. Judgment upon the award of the arbitrators may be
entered in any court, state or federal, having jurisdiction.
No person shall bring a putative or certified class action
to arbitration, nor seek to enforce any pre-dispute
arbitration agreement against any person who has initiated
in court a putative class action, or who is a member of a
putative class who has not opted out of the class with
respect to any claims encompassed by the putative class
action until: (i) the class certification is denied; (ii)
the class is decertified; or (iii) the customer is excluded
from the class by the court. Such forbearance to enforce an
agreement to arbitrate shall not constitute a waiver of any
rights under this agreement except to the extent stated
herein.
Joint and Several Liability
14. If the undersigned shall consist of more than one
person, their obligations under this agreement shall be
joint and several.
Representation as to Capacity to Enter Into Agreement
15. The undersigned represents that no one except the
undersigned has an interest in the account or accounts of
the undersigned with you. If a natural person, the
undersigned represents that the undersigned is of full age,
is not an employee of any exchange, nor of any corporation
of which any exchange owns a majority of the capital stock,
nor of a member of any exchange, nor of a member firm or
member corporation registered on any exchange, nor of a
bank, trust company, insurance company or any corporation,
firm or individual engaged in the business of dealing either
as broker or as principal in securities, bills of exchange,
acceptances or other forms of commercial paper. If any of
the foregoing representations is inaccurate or becomes
inaccurate, the undersigned will promptly so advise you in
writing.
PAGE
<PAGE>
Extraordinary Events
16. You shall not be liable for loss caused directly or
indirectly by government restrictions, exchange or market
rulings, suspension or trading, war, strikes or other
conditions beyond your control.
The Laws of the State of New York Government
17. This agreement and its enforcement shall be governed by
the laws of the State of New York; and shall cover
individually and collectively all accounts which the
undersigned may open or reopen with you; shall inure to the
benefit of your successors, whether by merger, consolidation
or otherwise, and assigns, and you may transfer the accounts
of the undersigned to your successors and assigns; and this
agreement shall be binding upon the heirs, executors,
administrators, successors and assigns of the undersigned.
Amendments
18. The undersigned agrees that you shall have the right to
amend this Agreement, by modifying or rescinding any of its
existing provisions or by adding any new provision. Any
such amendment shall be effective as of a date to be
established by you, which shall not be earlier than thirty
days after you send notification of any such amendment to
the undersigned.
Separability
19. If any provision or condition of this agreement shall
be held to be invalid or unenforceable by any court, or
regulatory or self-regulatory agency or body, such
invalidity or unenforceability shall attach only to such
provision or condition. The validity of the remaining
provisions and conditions shall not be affected thereby and
this agreement shall be carried out as if such invalid or
unenforceable provision or condition were not contained
herein.
Headings are Descriptive
20. The heading of each provision hereof is for descriptive
purposes only and shall not be deemed to modify or qualify
any of the rights or obligations set forth in each such
provision.
PAGE
<PAGE>
CMA, CBA, and WCMA clients may have already signed and
returned this agreement. If so, please disregard.
BY SIGNING THIS AGREEMENT, THE UNDERSIGNED ACKNOWLEDGES (1)
THAT, IN ACCORDANCE WITH PARAGRAPH 13, THE UNDERSIGNED IS
AGREEING IN ADVANCE TO ARBITRATE ANY CONTROVERSIES THAT MAY
ARISE WITH YOU; (2) THAT, PURSUANT TO PARAGRAPH 10 ABOVE,
CERTAIN OF THE UNDERSIGNED'S SECURITIES MAY BE LOANED TO YOU
OR LOANED OUT TO OTHERS; AND (3) RECEIPT OF A COPY OF THIS
AGREEMENT.
Signature: Date:
Title
(For special accounts, example: Trustee)
Signature: Date:
(Second party if joint account; Co-Trustee)
Title
(For special accounts, example: Co-Trustee)
Account No.:
* Copyright 1995
Merrill Lynch, Pierce, Fenner & Smith Incorporated.
Printed in U.S.A. All rights reserved. April 1995.
Member Securities Investor Protection Corporation (SIPC).
"CMA," "CBA" and "WCMA" are registered service marks of
Merrill Lynch & Co., Inc.
"Investor CreditLine" is a service mark of Merrill Lynch &
Co., Inc.
**5A Stricken (Client currently owns more than 3%)
PAGE
<PAGE>
ADDENDUM TO CUSTOMER AGREEMENT
This agreement made the 2nd day of November, 1995,
between High River Limited Partnership, a Delaware Limited
Partnership, hereinafter called the Pledgor, and Wagner
Stott Clearing Corp., hereinafter called the Pledgee. The
"issuer" in this Agreement is defined as any corporation
whose securities are pledged by the Pledgor to obtain margin
credit.
The line of credit grated to the Pledgor pursuant to
this Agreement shall be canceled upon the Pledgor becoming
an affiliate of the issuer as that term is defined in
paragraph (a)(1) of Rule 144 promulgated under the
Securities Act of 1933. It shall be presumed that the
Pledgor has become an affiliate of the issuer if one or more
of the following events occur: (1) one or more
representatives of the Pledgor become members of the board
of directors of the issuer, or (2) the Pledgor acquires more
than ten percent (10%) of the number of outstanding shares
of the issuer. If any of the foregoing events occur, the
presumption that the Pledgor is an affiliate may be negated
by the Pledgor supplying a legal opinion, which is adequate
in the opinion of counsel for the Pledgee, that it is
nevertheless a non-affiliate. In the event that counsel for
the Pledgee determines that the legal opinion supplied on
behalf of the Pledgor is inadequate with respect to negating
affiliate status, or the Pledgor concedes that it is an
affiliate of the issuer, the Pledgor hereby agrees that it
will pay the full amount of the outstanding indebtedness
owed the Pledgee within five (5) business days of receipt of
notice of such determination or concession. The Pledgee may
also request the issuance of a legal opinion, in regard to
the affiliate status of the Pledgor, at any time the Pledgor
becomes obligated to file an amendment to its Schedule 13D
under the Rules promulgated under the Securities Exchange
Act of 1934.
PAGE
<PAGE>
In consideration for the Pledgee extending the line of
credit pursuant to this Agreement, the Pledgor represents to
the Pledgee that the Pledgor shall either (1) secure
alternate financing for this loan in the event that the
Pledgee cancels the line of credit, or (2) deposit
sufficient cash or marginable securities such that the
relationship between the Pledgor and Pledgee is in
compliance with all applicable regulations and internal
policies of the Pledgee.
When and if in the Pledgor's opinion, the Pledgor's
status has changed from non-affiliate to affiliate, or
becomes obligated to file an amendment to its Schedule 13D,
the Pledgor shall notify as soon as practicable the Pledgee
of such change of status or of such obligation to file.
The Pledgor additionally agrees that during any period
in which the Pledgor is extending credit to the Pledgee
secured by marginable securities, the Pledgor shall be
obligated to meet any margin maintenance call in full within
forty-eight (48) hours after the receipt of such margin
maintenance call in Fed Funds, in cash or in non-control
non-
PAGE
<PAGE>
restricted securities, which have been approved or margin
credit by the Board of Governors of the Federal Reserve
System. In addition, the certificates representing such
securities shall be presented in a form such that the
transfer thereof shall require no more than the endorsement
of the registered owner and, if necessary, a corporate
resolution. The running of said forty-eight (48) hour
period shall be tolled by a period of twenty-four (24) hours
for each succeeding calendar day during which the New York
Stock Exchange is not open during normal trading hours.
While held at Wagner Stott Clearing Corp., the account will
be subject to a minimum maintenance requirement of 45%. All
presently existing internal policies on margin account
maintenance, as well as the regulation of the Federal
Reserve Board and New York Stock Exchange, shall also apply
at all times. The Pledgor shall be required to sign a
standard lending agreement, if not already signed upon the
date of this agreement.
Upon the discharge by Pledgor of all indebtedness and
obligations owned to Pledgee, Pledgee shall forthwith
deliver to Pledgor all securities or other property in the
account of Pledgor. Prior to such discharge, Pledgor shall
have the right to demand prompt delivery by Pledgee,
provided that other securities, or property remaining in
such account are sufficient to satisfy all applicable margin
requirements.
PAGE
<PAGE>
SIGNATURES
HIGH RIVER LIMITED PARTNERSHIP WAGNER STOTT CLEARING
CORP.
By:___________________________
By:________________________
Title:________________________
Title:_____________________
Dated:________________________
Dated:_____________________
PAGE
<PAGE>
Margin Account Agreement
To: National Financial Services Corporation ("NFSC" or
"you").
1. I agree as follows with respect to all of my
accounts, in which I have an interest alone or with others,
which I have opened or will open in the future, with you for
the purchase and sale of securities. I hereby acknowledge
that I have read, understand and agree to the terms set
forth below. Upon acceptance of my application(s), I
understand NFSC will maintain an account for me and, as my
broker, buy or sell securities or other products according
to my instructions. All decisions relating to my investment
or trading activity shall be made by me or my duly
authorized representative. Any information I give NFSC on
this account agreement will be subject to verification, and
I authorize you to obtain a credit report about me at any
time. Upon written request, NFSC will provide the name and
address of the credit reporting agency used. I authorized
NFSC, and my Broker/Dealer to exchange credit information
about me. My Broker/Dealer also may tape record
conversations with me in order to verify data concerning any
transactions I request, and I consent to such recording. I
also understand that my account(s) is carried by National
Financial Services Corporation (NFSC), and that all terms of
this agreement also apply between me and NFSC. I have
carefully examined my financial resources, investment
objectives, tolerance for risk along with the terms of the
margin agreement, and have determined that margin financing
is appropriate for me. I understand that investing on
margin involves the extension of credit to me and that my
financial exposure could exceed the value of my securities.
PAGE
<PAGE>
2. I am of legal age in the state in which I reside
and represent that, except as otherwise disclosed to you in
writing, I am not an employee of any Exchange or of a Member
Firm of any Exchange or the NASD, or of a bank, trust
company, or insurance company and that I will promptly
notify you if I become so employed.
3. All transactions through NFSC are subject to the
constitution, rules, regulations, customs, and usages of the
exchange, market or clearing house where executed, as well
as to any applicable federal or state laws, rules and
regulations.
4. Any and all credit balances, securities, or
contracts relating thereto, and all other property of
whatsoever kind belonging to me or in which I may have an
interest held by you or carried for my accounts shall be
subject to a general lien for the discharge of my
obligations to you (including unmatured and contingent
obligations) however arising and without regard to whether
or not you have made advances with respect to such property
and without notice to me may be carried in your general
loans and all securities may be pledged, repledged,
hypothecated or rehypothecated, separately or in common with
other securities or any other property, for the sum due to
you thereon or for a greater sum and without retaining in
your possession and control for delivery a like amount of
similar securities or other property. At any time and from
time to time you may, in your discretion, without notice to
me, apply and/or transfer any securities, contracts relating
thereto, cash or any other property therein, interchangeably
between any of my accounts, whether individual or joint from
any of my accounts to any account guaranteed by me. You are
specifically authorized to transfer to my cash account, on
the settlement day following a purchase made in that
account, excess funds available in any of my other accounts,
PAGE
<PAGE>
including but not limited to any free balances in any margin
account, sufficient to make full payment of this cash
purchase. I agree that any debit occurring in any of my
accounts may be transferred by you at your option to my
margin account.
5. I will maintain such margins as you may in your
discretion require from time to time and will pay on demand
any debit balance owing with respect to any of my accounts.
I will be liable to you for any deficiencies in such account
in the event of the liquidation of such accounts, in whole
or in part, by you or the undersigned. Whenever in your
discretion you deem it desirable for your protection (and
without the necessity of a margin call), including but not
limited to extreme market volatility or trading volumes, an
instance where a petition in bankruptcy
<PAGE>
or for the appointment of a receiver is filed by or against
me, or an attachment is levied against my account, or in the
event of notice of my death or incapacity, or in compliance
with the orders of any Exchange, you may, without prior
demand, tender, and without any notice of the time or place
of sale, all of which are expressly waived, sell any or all
securities, or contracts relating thereto which may be your
possession, or which you may be carrying for me, or by any
securities, or contracts relating thereto of which my
account or accounts may be short, in order to close out in
whole or in part any commitment in my behalf or you may
place stop orders with respect to such securities and such
sale or purchase may be made at your discretion on any
Exchange or other market where such business is then
transacted, or at public auction or private sale, with or
without advertising and neither any demands, calls, tenders
or notices which you may make or give in any one or more
PAGE
<PAGE>
instances nor any prior course of conduct or dealings
between us shall invalidate the aforesaid waivers on my
part. You shall have the right to purchase for your own
account any or all of the aforesaid property at such sale,
discharged of any right of redemption which is hereby
waived. I understand that my financial exposure could
exceed the value of securities in my account.
6. In the absence of a specific demand, all
transactions in any of my accounts are to be paid for,
securities delivered or required margin deposited, no later
than 2 p.m. Eastern Time on the settlement date. NFSC
reserves the right to cancel or liquidate at my risk any
transaction not timely settled. Margin calls are due on the
date indicated regardless of the settlement date of the
transaction. For most stocks and bonds, the settlement date
is the fifth business day following the trade date.
Settlement dates for U.S. government issues vary. Options
settle on the next business day. Interest will be charged
on any debit balance which remains in my account past the
settlement date as explained in the Disclosure of Credit
Terms section of this Agreement.
7. I agree to be charged interest on any credit
extended to or maintained for me by you for the purpose of
purchasing, carrying or trading in any security. The annual
rate of interest which will be charged on net debit balances
will be calculated by means of a formula based on the rate
for brokers' call money published in financial sections of
newspapers. The annual rate of interest is subject to
change without prior notice in accordance with changes in
the brokers' call money rate. With the exception of a
credit balance in the short account, all other credit
balances in all cash and margin accounts are combined and
interest is charged to the margin account on any resulting
debit balance. Interest is computed monthly on the net
debit balances during the month. If during the month, there
PAGE
<PAGE>
is a change in interest rates, separate charges will be
shown for each interest period under he different rate. The
combining of balances, as well as the actual interest
calculations, are done by computer, but interest is arrived
at by multiplying the net debit balance by the effective
rate of interest divided by 360, times the number of days.
In the event there is a decline in the market value of the
securities in the margin account, you may have to request
additional collateral. Generally, such a request for
additional collateral will be made by you when the equity in
the account falls below 30%. However, you retain the right
to require additional margin at any time you deem it
necessary or advisable. Any such call for additional
collateral may be met by delivery of additional marginable
securities or cash. Any securities in any of the accounts
of the undersigned are collateral for any debit balances in
the account with you. A lien is created by these debits to
secure the amount of money owed you. This means that, in
accordance with the terms of this agreement, securities in
the said accounts can be sold by you to redeem or to
liquidate any debit balances in these accounts.
8. I agree that, in giving orders to sell, all "short"
sale orders will be designated as "short" and all "long"
sale orders will be designated as "long" and that the
designation of a sell order as "long" is a representation on
my part than I own the security and, unless otherwise waived
by you in your discretion that I have delivered such
security to you.
PAGE
<PAGE>
9. Reports of the execution of orders and statements
of my account shall be conclusive if not objected to in
writing within five days and ten days, respectively, after
transmittal to me by mail or otherwise.
10. All communications including margin calls may be
sent to me at my address given you, or at such other address
as I may hereafter give you in writing, and all
communications so sent, whether in writing or otherwise,
shall be deemed given to me personally, whether actually
received or not.
11. I am liable for payment upon demand of any debit
balance or other obligation owed in any of my accounts or
any deficiencies following a whole or partial liquidation,
and I agree to satisfy any such demand or obligation.
Interest will accrue on any such deficiency at prevailing
margin rates until paid. I agree to reimburse NFSC for al
reasonable costs and expenses incurred int he collection of
any debit balance or unpaid deficiency in any of my
accounts, including, but not limited to, attorneys' fees.
12. NFSC is not liable for any losses caused directly
or indirectly by government restrictions, exchange or market
rulings, suspension of trading or other conditions beyond
its control, including, but not limited to, extreme market
volatility or trading volumes.
13. No waiver of any provision of this Agreement shall
be deemed a waiver of any other provision, nor a continuing
waiver of the provision or provisions so waived.
PAGE
<PAGE>
14. I understand that no provision of this Agreement
can be amended or waived except by an officer of your
Company, and that this Agreement shall continue in force
until its termination by me is acknowledged in writing by an
officer of your Company; or until written notice of
termination by you shall have been mailed to me at my
address last given you.
15. This contract shall be governed by the laws of the
Commonwealth of Massachusetts, and shall inure to the
benefit of your successors and assigns, and shall be binding
on the undersigned, his heirs, executors, administrators,
successors, and assigns.
16. If any provision hereof is or at any time should
become inconsistent with any present or future law, rule or
regulation of any securities exchange, or of any sovereign
government or a regulatory body thereof and of these bodies
have jurisdiction over the subject matter of this Agreement,
said provision shall be deemed to be superseded or modified
to confirm to such law, rule or regulation, but in all other
respect this Agreement shall continue and remain in full
force and effect.
17. If the undersigned shall consist of more than one
individual, their obligations under Agreement shall be joint
and several.
18. I understand that you may deliver margin calls and
other notices to my agent,
___________________________________ or the sole purpose of
collection of obligations of mine under this agreement. I
agree to the foregoing and further understand that
________________________________ may act on your behalf with
respect to margin calls in your discretion.
PAGE
<PAGE>
19. I represent that I have read and understand the
Disclosure of Credit Terms on Transactions, I further
understand that they may be amended from time to time.
20. YOU ARE HEREBY AUTHORIZED TO LEND SEPARATELY OR
TOGETHER WITH THE PROPERTY OF OTHERS EITHER TO YOURSELVES OR
TO OTHERS AND PROPERTY WHICH YOU MAY BE CARRYING FOR ME ON
MARGIN. THIS AUTHORIZATION SHALL APPLY TO ALL ACCOUNTS
CARRIED BY YOU FOR ME AND SHALL REMAIN IN FULL FORCE UNTIL
WRITTEN NOTICE OF REVOCATION IS RECEIVED BY YOU AT YOUR
PRINCIPAL OFFICE IN BOSTON, MASSACHUSETTS.
I REPRESENT THAT I HAVE READ THE TERMS AND CONDITIONS AS
CURRENTLY IN EFFECT AND AGREE TO BE BOUND BY SUCH TERMS AND
CONDITIONS AS CURRENTLY IN EFFECT AND AS MAY BE AMENDED FROM
TIME TO TIME. THIS ACCOUNT IS GOVERNED
<PAGE>
BY A PRE-DISPUTE ARBITRATION CLAUSE WHICH IS ENCLOSED. I
ACKNOWLEDGE RECEIPT OF THE PRE-DISPUTE ARBITRATION CLAUSE.
Date: _______________________________
Customer's Signature/Date:
________________________________________
Signature of Joint Tenant (if any)/Date:
__________________________
____________________________________________________________
PAGE
<PAGE>
Spear, Leeds & Kellogg
CUSTOMER AGREEMENT
This Agreement sets forth the terms and conditions under
which Spear, Leeds & Kellogg ("SLK") will accept and main-
tain one or more accounts of the undersigned ("Customer").
1. All transactions under this Agreement shall be subject to
applicable laws, rules and regulations of all federal and
state and regulatory agencies and the constitution, rules
and customs of the exchange or market (and its clearing
house) where transactions are executed.
2. Confirmations of transactions and statements for the
Customer's Account(s) shall be binding upon the Customer if
the Customer does not object, in writing,within ten days
after receipt by the Customer. Notice or other
communications including margin and maintenance calls
delivered or mailed to the address given below shall, until
SLK has received notice in writing of a different address,
be deemed to have been personally delivered to the Customer
whether actually received or not.
3. If SLK carries Customer's account as clearing broker by
arrangement with another broker through whose courtesy the
account has been introduced, this Agreement shall also apply
to and inure to the benefit of such broker. Unless SLK
receives a written notice to the contrary, SLK shall accept
from such other broker, without any inquiry or investigation
by it (i) orders for the purchase or sale in Customer's
account of securities and other property on mar;gin or
otherwise, and (ii) any other instructions concerning said
account. Customer understands that SLK shall have no
responsibility or liability for any acts or omissions of
such other broker, its officers, employees or agents.
PAGE
<PAGE>
4. In the event SLK holds on behalf of Customer bonds or
preferred stocks in street or bearer form which are callable
in part by the issuer, such securities shall be subject to
an impartial lottery allocation system in accordance with
the rules of the New York Stock Exchange, Inc.
5. Customer agrees to provide SLK with information and
documentation to enable SLK to comply with tax laws appli-
cable to Customer's account and Customer agrees to reimburse
SLK for any loss or penalty assessed against SLK resulting
from Customer's non-compliance with such laws and arising
out of transactions in, or the maintenance of Customer's
account at SLK.
6. Customer agrees that Customer's property (including but
not limited to securities, commodity futures contracts,
commercial paper, monies, and any after acquired property)
held by SLK or carried in Customer's accounts shall be
subject to a continuing security interest for payment of all
of Customer's obligations and liabilities to SLK. In the
event of a breach or default under this Agreement, SLK shall
have all rights and remedies available to a secured creditor
under the Uniform Commercial Code of New York in addition to
the rights and remedies provided herein or otherwise by law.
If at any time SLK considers it necessary for its protection
it may require Customer to deposit cash or collateral with
SLK to assure due performance of open contractual
commitments.
7. Any breach of this Agreement or the filing of a petition
in bankruptcy or for the appointment of a receiver by or
against Customer or the levy of an attachment against
Customer's account(s) with SLK, or the death, mental
incompetence or dissolution of Customer, shall constitute,
at SLK's election, Customer's default under all agreements
with SLK. SLK reserves the right to sell any property in
PAGE
<PAGE>
Customer's account (including Customer's jointly held
accounts, if any), to buy any property which may be short in
such accounts and/or to cancel all outstanding transactions
and to offset any indebtedness in such accounts against any
other of Customer's accounts (either individually or jointly
with others) and Customer shall be liable to SLK for any
loss or costs sustained. Such purchases and/or sales may be
public or private and may be made without notice or
advertisement and in such manner as SLK may in its
discretion determine. At any such sale or purchase SLK may
purchase or sell the property free of any right of
redemption. Customer agrees that SLK is entitled to the
reasonable costs of collection including
attorney's fees, court costs and expenses incurred by SLK in
collecting Customer's unpaid debit balances.
8. No term or provision of this Agreement may be waived or
modified unless in writing and signed by the party against
whom such waiver or modification is sought to be enforced.
SLK's failure to insist upon complete compliance with any
term of this Agreement shall in no event be considered a
waiver by SLK of its rights or privileges. This Agreement
contains the entire understanding between Customer and SLK
concerning the subject matter of this Agreement. Customer
may not assign any rights and obligations hereunder without
first obtaining the prior written consent of SLK. Notice or
other communications including margin calls delivered or
mailed to the address given below, or such other address as
is provided in writing to SLK by Customer, shall be deemed
to have been personally delivered.
9. Customer hereby agrees that this Agreement and all the
terms thereof shall be binding upon its heirs, executors,
administrators, personal representatives and assigns. This
Agreement shall be binding upon and inure to the benefit of
SLK, its successors and assigns.
PAGE
<PAGE>
10. This Agreement shall be governed and construed by the
laws of the State of New York and the rights and liabilities
of the parties shall be determined in accordance with such
laws.
11. All orders for the purchase or sale of securities and
other property will be authorized by the Customer and
executed with the understanding that an actual purchase or
sale is intended and that it is the Customer's intention and
obligation in every case to deliver certificates or
commodities to cover any and all sales or to receive and pay
for certificates or commodities upon SLK's demand. If SLK
makes a short sale of any securities and other property at
the Customer's direction or if the Customer fails to deliver
to SLK any securities and other property that SLK has sold
at the Customer's direction. SLK is authorized to borrow
the securities and other property necessary to enable SLK to
make delivery and the Customer agrees to be responsible for
any cost or loss SLK may incur, or the cost of obtaining the
securities and other property if SLK is unable to borrow it.
SLK is the Customer's agent to complete all such
transactions and is authorized to make advances and expend
monies as are required.
12. Customer agrees that, in giving orders to sell, all
"short" sales orders will be designated as "short" and all
"long" sale orders will be designated as "long" and that the
designation of a sell order as "long" is a representation on
the part of Customer that Customer owns the security.
13. If any provisions herein are deemed inconsistent with
any present or future law, rule or regulation of any
government or regulatory body having jurisdiction over the
subject matter of this Agreement, such provision only shall
be considered rescinded or modified in accordance with any
such law, rule or regulation.
PAGE
<PAGE>
14. . ARBITRATION IS FINAL AND BINDING ON THE PARTIES.
. THE PARTIES ARE WAIVING THEIR RIGHT TO SEEK REMEDIES IN
COURT, INCLUDING THE RIGHT TO JURY TRIAL.
. PRE-ARBITRATION DISCOVERY IS GENERALLY MORE LIMITED THAN
AND DIFFERENT FROM COURT PROCEEDINGS.
. THE ARBITRATORS' AWARD IS NOT REQUIRED TO INCLUDE FACTUAL
FINDINGS OR LEGAL REASONING AND ANY PARTY'S RIGHT TO APPEAL
OR TO SEEK MODIFICATION OF RULINGS BY THE ARBITRATORS IS
STRICTLY LIMITED.
. THE PANEL OF ARBITRATORS WILL TYPICALLY INCLUDE A
MINORITY OF ARBITRATORS WHO WERE OR ARE AFFILIATED WITH THE
SECURITIES INDUSTRY.
15. THE CUSTOMER AGREES, AND BY CARRYING AN ACCOUNT FOR THE
CUSTOMER SLK AGREES THAT ALL CONTROVERSIES WHICH MAY ARISE
BETWEEN US CONCERNING ANY TRANSACTION OR THE CONSTRUCTION,
PERFORMANCE, OR BREACH OF THIS OR ANY OTHER AGREEMENT
BETWEEN US PERTAINING TO SECURITIES AND OTHER PROPERTY,
WHETHER ENTERED INTO PRIOR, ON OR SUBSEQUENT TO THE DATE
HEREOF, SHALL BE DETERMINED BY ARBITRATION. ANY ARBITRATION
UNDER THIS AGREEMENT SHALL BE CONDUCTED PURSUANT TO THE
FEDERAL ARBITRATION ACT AND THE LAWS OF THE STATE OF NEW
PAGE
<PAGE>
YORK, BEFORE THE AMERICAN STOCK EXCHANGE, INC., THE NEW YORK
STOCK EXCHANGE, INC. OR THE NATIONAL ASSOCIATION OF
SECURITIES DEALERS, INC. AND IN ACCORDANCE WITH THE RULES
OBTAINING OF THE SELECTED ORGANIZATION. THE CUSTOMER MAY
ELECT IN THE FIRST INSTANCE WHETHER ARBITRATION SHALL BE AT
THE AMERICAN STOCK EXCHANGE, INC., THE NEW YORK STOCK
EXCHANGE, INC. OR THE NATIONAL ASSOCIATION OF SECURITIES
DEALERS, INC., BUT IF THE CUSTOMER FAILS TO MAKE SUCH
ELECTION, BY REGISTERED LETTER OR TELEGRAM ADDRESSED TO SLK
AT SLK'S MAIN OFFICE, BEFORE THE EXPIRATION OF TEN DAYS
AFTER RECEIPT OF A WRITTEN REQUEST FROM SLK TO MAKE SUCH
ELECTION, THEN SLK MAY MAKE SUCH ELECTION. THE AWARD OF THE
ARBITRATORS, OR OF THE MAJORITY OF THEM, SHALL BE FINAL, AND
JUDGMENT UPON THE AWARD RENDERED MAY BE ENTERED IN ANY
COURT, STATE OR FEDERAL, HAVING JURISDICTION.
16. Under Rule 14b-1(c) of the Securities Exchange Act, we
are required to disclose to an issuer the name, address, and
securities position of our Customers who are beneficial
owners of that issuer's securities unless the Customer
objects. Therefore, please check one of the boxes below:
__ Yes, I do not object to the disclosure of such
information.
__ No, I do not object to the disclosure of such
information.
PAGE
<PAGE>
17. APPLICABLE TO MARGIN ACCOUNTS ONLY:
(a) The Customer agrees to maintain in all accounts with
SLK such positions and margins as required by all applicable
statutes, rules, regulations, procedures and custom, or as
SLK deems necessary or advisable. The Customer agrees to
promptly satisfy all margin and maintenance calls, and to
pay promptly on demand any debit balance owing with respect
to any margin accounts. Any nonpayment shall be a breach of
this Agreement and SLK may take such action as it considers
necessary for its protection.
(b) The Customer should clearly understand that,
notwithstanding a general policy of giving Customers notice
of a margin deficiency, SLK is not obligated to request
additional margin from the Customer in the event the
Customer's account falls below minimum maintenance
requirements. More importantly, there may/will be
circumstances where SLK will liquidate securities and/or
other property in the account without notice to the Customer
to ensure that minimum maintenance requirements are
satisfied.
(c) Customer hereby authorizes SLK to lend either to itself
or to others any of Customer's securities held by SLK in a
margin account and to carry all such property in its general
loans. Such property may be pledged, repledged,
hypothecated or rehypothecated either separately or in
common with other such property for any amounts due to SLK
thereon or for a greater sum, and SLK shall have no
obligation to retain a like amount of similar property in
its possession and control.
(d) Customer hereby acknowledges receipt of SLK's Truth-in-
Lending disclosure statement. Customer understands that
interest will be charged on any debit balances in accordance
with the methods described in this statement or in any
amendment or revision thereto which may be provided to
Customer.
<PAGE>
BY SIGNING THIS AGREEMENT THE CUSTOMER ACKNOWLEDGES THAT:
1. THE SECURITIES IN THE CUSTOMER'S MARGIN ACCOUNT MAY BE
LOANED TO SLK OR LOANED OUT TO OTHERS AND;
2. THE CUSTOMER HAS RECEIVED A COPY OF THIS AGREEMENT.
THIS AGREEMENT CONTAINS A PRE-DISPUTE ARBITRATION CLAUSE ON
THIS PAGE AT PARAGRAPH 15.
. . .
Persons signing on behalf of others must indicate title or
capacity. If joint account both parties must sign.
____________________________________________________________
Date
____________________________________________________________
PAGE
<PAGE>
(Typed or Printed Name(s))
____________________________________________________________
(Signature(s) Two (2) Signatures if Joint Account)
____________________________________________________________
(Mailing Address)
____________________________________________________________
Acct.
No.:_________________________________________________________
PAGE
<PAGE>
AGREEMENT
This AGREEMENT among Brooke Group Ltd., a
Delaware corporation ("BGL"), BGLS Inc., a Delaware
corporation and a direct wholly owned subsidiary of BGL
("BGLS"), and High River Limited Partnership, a
Delaware limited partnership ("High River"), dated
October 17, 1995
W I T N E S S E T H:
WHEREAS, High River, directly or indirectly,
and BGL and BGLS, indirectly through their ownership of
stock of New Valley Corporation, a New York corporation
("New Valley"), are stockholders of RJR Nabisco
Holdings Corp., a Delaware corporation ("RJRN");
WHEREAS, the parties hereto believe that the
value of RJRN stockholders' investment can be
substantially increased through a spinoff (the
"Spinoff") of all or substantially all of RJRN's
remaining investment in Nabisco Holding Corp., a
Delaware corporation ("Nabisco");
WHEREAS, BGL and BGLS desire to obtain the
assistance and advice of High River with respect to
measures designed to effectuate the Spinoff at the
earliest possible date;
WHEREAS, High River is willing to give such
assistance and advice to BGL and BGLS in consideration
of the agreements by BGL and BGLS set forth herein;
NOW, THEREFORE, in consideration of the
foregoing and of the mutual promises set forth herein,
the parties hereto, intending to be legally bound,
agree as follows:
Section 1. Solicitation of Other Investors
and RJRN Stockholders. (a) Each of the parties hereto
intends to use its best efforts to encourage other
investors to acquire shares of common stock, par value
$.01 per share ("Shares"), of RJRN and to persuade such
investors and other major stockholders of RJRN to
<PAGE>
cooperate with the parties hereto in order to cause
RJRN to effectuate the Spinoff. The parties hereto
anticipate that, as an inducement to such investors and
stockholders, the parties hereto may enter into binding
contractual arrangements with such investors and
stockholders on terms which may but need not be similar
to the terms of this Agreement, and that this Agreement
may be amended or supplemented from time to time to
reflect such arrangements. The parties hereto agree
that, in the event any party hereto proposes to enter
into any such contractual arrangement or so to amend or
supplement this Agreement, the parties hereto shall
attempt in good faith to reach mutually acceptable
terms with respect to any such proposed arrangement,
amendment or supplement.
(b) BGL and BGLS intend to seek RJRN
stockholder approval, either at RJRN's 1996 annual
meeting of stockholders (the "1996 Annual Meeting") or
at a special meeting of RJRN stockholders (a "Special
Meeting") or through action by written consent of the
RJRN stockholders without a meeting, of any or all of
the following proposals (the "Proposals"): (i) a
proposal to recommend that the Board of Directors of
RJRN (the "RJRN Board") cause RJRN to effectuate the
Spinoff (the "Spinoff Proposal"), (ii) a proposal to
remove the entire RJRN Board and to elect as directors
of RJRN a slate of nominees who shall be selected by
BGL (the "BGL Nominees") and who shall pledge to carry
out the Spinoff as promptly as practicable following
their election (the "Election Proposal"), (iii) a
proposal for the combination, incident to the Spinoff,
of the tobacco business of Liggett Group Inc., a
Delaware corporation ("Liggett"), with the tobacco
business of RJRN and (iv) a proposal to amend the by-
laws of RJRN in any manner that may be necessary in
order to ensure that RJRN stockholders are permitted to
call a Special Meeting and to vote freely at such
Special Meeting or at the 1996 Annual Meeting on any or
all of the Proposals, or in any other way necessary to
facilitate the Proposals (the "By-Law Amendment
Proposal"). In connection with the foregoing, BGL and
BGLS may seek written demands or requests from RJRN
stockholders ("Stockholder Demands") that a Special
Meeting be held for the purpose of voting on any or all
of the Proposals. BGL and BGLS may also seek written
consents from RJRN stockholders ("Written Consents") to
adopt any or all of the Proposals.
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(c) Prior to the 1996 Annual Meeting, BGL or
BGLS shall solicit Written Consents in favor of the
Spinoff Proposal and the By-Law Amendment Proposal.
BGL or BGLS may also, in its sole discretion, conduct
solicitations, in addition to the solicitation
described in the preceding sentence, of Stockholder
Demands or Written Consents in favor of the other
Proposals, or of proxies to be voted in favor of one or
more of the Proposals at the 1996 Annual Meeting or a
Special Meeting ("Proxies"). In respect of any such
solicitation of Stockholder Demands, Written Consents
or Proxies:
(i) BGL or BGLS shall prepare and file with
the Securities and Exchange Commission (the "SEC") and
mail to RJRN stockholders, a solicitation statement
under Regulation 14A of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), relating to such
solicitation (the "Solicitation Statement");
(ii) the Solicitation Statement relating to
any solicitation of Written Consents or Proxies seeking
RJRN stockholder approval of the Election Proposal, or
of Stockholder Demands for a Special Meeting at which
RJRN stockholder approval of the Election Proposal will
be sought, shall contain a pledge (the "BGL Pledge") by
BGL and BGLS stating, in substance, that (A) BGL, BGLS
and their affiliates (the "BGL Group") will not engage
in any Business Combination (as defined below in
Section 3(a)) other than a Permitted Business
Combination (as defined below in Section 3(b)) at any
time (I) prior to the earlier of (x) the 1996 Annual
Meeting and (y) the occurrence of a Termination Event
(as defined below in Section 3(c)) described in Section
3(c)(iii) (in the case of a solicitation of Stockholder
Demands), Section 3(c)(iv) (in the case of a
solicitation of Written Consents) or Section 3(c)(v)
(in the case of a solicitation of Proxies), or (II)
when BGL Nominees constitute a majority of the RJRN
Board, (B) the BGL Group will not exercise any
management control over Nabisco prior to the
consummation of the Spinoff and (C) the BGL Group will
halt its solicitation of Stockholder Demands, Written
Consents or Proxies, as the case may be, if the RJRN
Board takes any action described in Section 3(c)(vi);
and
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(iii) if BGL and BGLS take the actions
described in clause (ii) with respect to any
solicitation described in clause (i), then (A) promptly
upon the request of BGL or BGLS, High River shall (and
shall cause each of its affiliates to) execute and
deliver to BGL or BGLS a valid Stockholder Demand,
Written Consent or Proxy, as the case may be (and not
withdraw such Stockholder Demand, Written Consent or
Proxy), with respect to all of the Shares and all of
the depositary shares representing Series C Conversion
Preferred Stock, par value $.01 per share ("Series C
Depositary Shares"), of RJRN beneficially owned by it
and (B) each of BGL and BGLS shall (and shall cause
each of its affiliates to) vote in favor of such
Proposal all Shares and all Series C Depositary Shares
beneficially owned by it.
Section 2. Termination. (a) This Agreement
shall automatically terminate upon the earlier of (i)
the first anniversary of the date hereof and (ii) the
termination of the Agreement dated as of October 17,
1995 among New Valley, ALKI Corp., a Delaware
corporation ("NV Sub"), and High River (the "New Valley
Agreement") by High River, and any party hereto may
terminate this Agreement sooner at any time in its sole
discretion by written notice to the other parties
hereto, provided, however, that if New Valley or NV Sub
terminates the New Valley Agreement, then BGL and BGLS
shall be deemed to have simultaneously terminated this
Agreement.
(b) If this Agreement is terminated pursuant
to this Section 2, this Agreement shall forthwith
become null and void, and there shall be no liability
or obligation on the part of any party hereto, except
for the obligations of the parties hereto pursuant to
Section 4, Section 5 and Section 8, which shall remain
in full force and effect for the periods set forth
therein.
Section 3. Certain Definitions. For
purposes of this Agreement, the following terms shall
have the meanings indicated below:
(a) "Business Combination," with respect to
any party hereto, means:
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(i) Any material sale of capital stock or
other equity interests of RJRN beneficially owned
by such party or any of such party's affiliates to
RJRN or any of RJRN's affiliates, other than a
sale effected on a registered securities exchange
or through the NASDAQ system that satisfies the
following conditions: (A) such sale is not
pursuant to any agreement, understanding or
arrangement with RJRN or any of its affiliates,
agents or representatives, (B) either (I) such
party and its affiliates do not know that RJRN or
one of its affiliates is the buyer or (II) such
sale is pursuant to a market repurchase program
which has previously been publicly announced by
RJRN or one of its affiliates and (C) such party
has given notice to the other parties at least one
day prior to such sale of its intention to sell
such Shares (which notice shall describe the
approximate number of Shares to be sold and the
approximate time period in which such sales will
be made, but need not specify the exact number of
Shares to be sold or the exact timing of such
sales);
(ii) Any material sale of capital stock
or other equity interests of such party or any of
such party's affiliates to RJRN or any of RJRN's
affiliates, other than pursuant to a sale effected
on a registered securities exchange or through the
NASDAQ system which is not pursuant to any
agreement, understanding or arrangement with RJRN
or any of its affiliates, agents or
representatives and such party and its affiliates
do not know that RJRN or one of its affiliates is
the buyer;
(iii) Any merger, consolidation or
combination of such party or any of such party's
material affiliates with RJRN or any of RJRN's
affiliates;
(iv) Any material borrowings by such
party or any of such party's affiliates from RJRN
or any of RJRN's affiliates, or by RJRN or any of
RJRN's affiliates from such party or any of such
party's affiliates, other than credit in the
ordinary course of business substantially in
accordance with industry practice or past
practice;
<PAGE>
(v) Any sale or other disposition of
any material assets or properties of such party or
any of such party's affiliates to RJRN or any of
RJRN's affiliates, or of any material assets or
properties of RJRN or any of RJRN's affiliates to
such party or any of such party's affiliates,
other than in the ordinary course of business
substantially in accordance with industry practice
or past practice; or
(vi) Any receipt by such party or any
of such party's affiliates of any material
benefit, including any material payment in cash or
in kind from RJRN, other than benefits or payments
in the ordinary course of business substantially
in accordance with industry practice or past
practice;
except, in each case, for a transaction that is made
available to all other holders of Shares substantially
at the same time on substantially equivalent terms.
(b) "Permitted Business Combination" means
any Business Combination which is either (i)
consummated substantially simultaneously with or
subsequently to (A) a dividend or other distribution to
RJRN's stockholders of all or substantially all of
RJRN's remaining equity interest in Nabisco or (B)
another transaction with respect to RJRN's investment
in Nabisco which would provide substantially equivalent
value to RJRN's stockholders or (ii) approved by the
holders of a majority of the outstanding Shares not
then beneficially owned by the BGL Group or by New
Valley and its affiliates (the "New Valley Group").
(c) "Termination Event" means any of the
following events:
PAGE
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(i) Any judgment, ruling, order or
decree of any court or any other governmental
agency or authority prohibiting, enjoining or
restraining, or which has the effect of
prohibiting, enjoining or restraining, any party
to this Agreement or the New Valley Agreement from
fulfilling its material obligations under this
Agreement or the New Valley Agreement, or which
would otherwise render unlawful, the fulfillment
of any party's material obligations under this
Agreement or the New Valley Agreement, except any
judgment, ruling, order or decree (A) arising out
of a breach of any representation contained in
Section 7 of this Agreement or in Section 8 of the
New Valley Agreement or (B) prohibiting, enjoining
or restraining, or which has the effect of
prohibiting, enjoining or restraining, or
otherwise rendering unlawful any Business
Combination other than a Permitted Business
Combination (an "Order") is in effect and such
party has not appealed such Order by appropriate
proceedings prior to or on the tenth day after
such Order is entered, or any Order has been in
effect for at least 30 days and has not been
vacated or reversed, or any governmental agency or
authority has indicated to any party, orally or in
writing, its intention to issue or to seek to
obtain an Order (an "Order Threat"); provided,
however, that any such event shall be a
Termination Event only if (x) in the case of any
party which is (or a member of whose Group is) the
subject of an Order or Order Threat, such party
gives prompt notice thereof to the other party and
thereafter terminates this Agreement or the New
Valley Agreement prior to or on the tenth day
after such event occurs and (y) in the case of a
party which is not (and all of the members of
whose Group are not) the subject of such an Order
or Order Threat, such party thereafter terminates
this Agreement or the New Valley Agreement prior
to or on the tenth day following the time such
party receives notice thereof from the subject
party;
PAGE
<PAGE>
(ii) The Federal Trade Commission (the
"FTC") or the Antitrust Division of the Department
of Justice (the "Antitrust Division") has
instituted any action or proceeding seeking to
prohibit, enjoin or restrain any party to this
Agreement or the New Valley Agreement from
fulfilling its material obligations under this
Agreement or the New Valley Agreement or to
require any such party or any of its affiliates to
make any material divestitures as a condition to
the fulfillment of such obligations, or otherwise
to impose any conditions or restrictions which
could have a material adverse effect on any party
hereto or on the transactions contemplated by this
Agreement or the New Valley Agreement, or the FTC
or the Antitrust Division has indicated to any
such party, orally or in writing, its intention to
institute any such action or proceeding, in each
case other than any action, proceeding,
requirement, condition or restriction with respect
to any Business Combination except a Permitted
Business Combination; provided, however, that any
such event shall be a Termination Event only if
the party which is the subject of such action,
proceeding, requirement, condition or restriction
thereafter terminates this Agreement or the New
Valley Agreement prior to or on the tenth day
after such event occurs;
(iii) BGL or BGLS has commenced a
solicitation of Stockholder Demands and has failed
to receive within 120 days after the date of
commencement the number of validly executed and
unwithdrawn Stockholder Demands necessary to
require RJRN to hold a Special Meeting, unless (A)
the Special Meeting has otherwise been called or
held or (B) on or prior to such 120th day, BGL and
BGLS have taken all actions necessary to cause one
or more of the Proposals to be brought before the
1996 Annual Meeting;
PAGE
<PAGE>
(iv) BGL or BGLS has commenced a
solicitation of Written Consents with respect to
one or more Proposals and has failed to receive
within 120 days after the date of commencement the
number of validly executed and unwithdrawn Written
Consents necessary to approve at least one such
Proposal, unless (A) at least one such Proposal
has been otherwise approved at the 1996 Annual
Meeting or a Special Meeting or (B) on or prior to
such 120th day, BGL and BGLS have taken all
actions necessary to cause at least one such
Proposal to be submitted for a stockholder vote at
the 1996 Annual Meeting or a Special Meeting;
(v) A Special Meeting or the 1996
Annual Meeting has been held, and one or more of
the Proposals has been voted upon thereat, the BGL
Nominees have not been elected to constitute a
majority of the RJRN directors then in office and
either (A) BGL and BGLS have determined not to
pursue any further judicial review of the results
of the vote at the Special Meeting or the 1996
Annual Meeting, as the case may be, or (B) no such
further judicial review is available;
(vi) The RJRN Board has irrevocably
declared a dividend or other distribution to
RJRN's stockholders of all or substantially all of
RJRN's remaining equity interest in Nabisco or has
made any other legally binding commitment to
engage in a transaction with respect to RJRN's
investment in Nabisco which would provide
substantially equivalent economic benefits to
RJRN's stockholders;
(vii) Any event has occurred, or RJRN
has taken any action, which is reasonably likely
to have a material adverse effect on the business,
operations or financial condition of RJRN and its
subsidiaries, taken as a whole;
PAGE
<PAGE>
(viii) BGL or BGLS determines,
reasonably and in good faith, that any event has
occurred as a result of which no solicitation of
Stockholder Demands, Written Consents or Proxies
with respect to the Proposals would have a
reasonable chance of success; provided, however,
that any such event shall be a Termination Event
only if BGL or BGLS notifies High River of such
determination (which notice shall specify in
reasonable detail the nature of the event which
has occurred and the reasons for such
determination) at least five business days prior
to terminating this Agreement or the New Valley
Agreement and thereafter BGL or BGLS terminates
this Agreement, and New Valley or NV Sub
terminates the New Valley Agreement, on such fifth
business day; and provided that in any challenge
by High River of a termination under this subpart
(viii), High River shall bear the burden, in order
to prevail, of establishing that BGL's or BGLS's
determination as first set forth in this subpart
(viii) was unreasonable or was made in bad faith;
PAGE
<PAGE>
(ix) BGL and BGLS (A) fail to nominate
the BGL Nominees prior to November 20, 1995, or
such later date as may be designated by RJRN as
the final date for such nominations to be made,
for election to the RJRN Board at the 1996 Annual
Meeting in accordance with the procedures set
forth in the most recent version of the by-laws of
RJRN filed with the SEC prior to such date, (B)
fail to mail to RJRN stockholders a Solicitation
Statement relating to a solicitation of Written
Consents with respect to the Spinoff Proposal
and/or the By-Law Amendment Proposal prior to
December 15, 1995, (C) fail to file the
Solicitation Statement relating to the Annual
Meeting preliminarily with the SEC prior to the
earlier of (I) February 15, 1996 and (II) the date
on which a Solicitation Statement described in
clause (B) of this Section 3(c)(ix) is first
mailed to RJRN stockholders, (D) fail to make the
BGL Pledge in any Solicitation Statement relating
to any solicitation of Written Consents or Proxies
seeking RJRN stockholder approval of the Election
Proposal, or of Stockholder Demands for a Special
Meeting at which RJRN stockholder approval of the
Election Proposal will be sought, or (E) take any
action in violation of the BGL Pledge after it is
made; provided, however, that any such event shall
be a Termination Event only if High River
thereafter terminates this Agreement or the New
Valley Agreement prior to or on the tenth day
after the first date that High River becomes aware
that such event has occurred, but in no event
shall the failure to terminate this Agreement
after the occurrence of any such event prohibit
the termination of this Agreement upon the
subsequent occurrence of any other such event; or
PAGE
<PAGE>
(x) Either Group sells any Shares under
the circumstances described in clause (x) of the
first proviso to the first sentence of Section
1(d)(i) of the New Valley Agreement, or is
required to offer any Shares to another party
pursuant to the first sentence of Section 1(d)(ii)
of the New Valley Agreement; provided, however,
that any such event shall be a Termination Event
only if a party to the New Valley Agreement which
is not a member of such Group thereafter
terminates the New Valley Agreement prior to or on
the tenth day after the first date that such party
becomes aware that such event has occurred.
Section 4. Certain Fees and Percentage
Payments. (a) BGLS shall pay or cause to be paid to
High River the sum of $50 million promptly upon:
(i) any termination of this Agreement
by BGL or BGLS at a time when (A) no Termination
Event has occurred and (B) High River is not in
material breach of its obligations (the "High
River Obligations") under Section 1(c)(iii) or
Section 8 of this Agreement or Section 1(a), the
fourth sentence of Section 1(c)(v), the ninth
sentence of Section 1(c)(v) or Section 1(d)(i) of
the New Valley Agreement;
(ii) any termination of this Agreement
by High River at a time when (A) no Termination
Event has occurred, (B) BGL or BGLS is in material
breach of its obligations (the "BGL Obligations")
under Section 1(c)(iii) of this Agreement and (C)
High River is not in material breach of the High
River Obligations; or
(iii) the consummation of any Business
Combination (including any Permitted Business
Combination) with respect to the BGL Group, if:
PAGE
<PAGE>
(A) such Business Combination is
consummated prior to the later of (I) the
date of RJRN's annual meeting of stockholders
for 1997 and (II) the first anniversary of
the date of termination of this Agreement
(the later of such dates being referred to
herein as the "Reference Date");
(B) a legally binding agreement to
enter into such Business Combination or any
other Business Combination is entered into
prior to the Reference Date and such Business
Combination is consummated prior to the
second anniversary of the date of such
agreement; or
(C) the BGL Nominees are elected to
constitute a majority of the RJRN Board prior
to the Reference Date and such Business
Combination is consummated prior to the fifth
anniversary of the date of such election;
provided, however, that (x) High River shall not be
entitled to more than one fee under this Section 4(a),
(y) High River shall not be entitled to any fee under
this Section 4(a) if BGL shall have previously or shall
concurrently become entitled to the fee described in
Section 4(b) of this Agreement or if New Valley shall
have previously become entitled to the fee described in
Section 5(b) of the New Valley Agreement and (z) the
amount of any fee to which High River may be entitled
at any time pursuant to this Section 4(a) shall be
reduced by the amount of any fee (the "New Valley Fee")
which High River shall theretofore have been paid
pursuant to Section 5(a) of the New Valley Agreement
and by any percentage payment (the "New Valley
Percentage Payment") which High River shall theretofore
have been paid pursuant to Section 5(d) of the New
Valley Agreement, in either of which events BGL or BGLS
shall promptly upon request by New Valley reimburse New
Valley for all or any part of the New Valley Fee or the
New Valley Percentage Payment paid by or on behalf of
New Valley.
(b) High River shall pay or cause to be paid
to BGL the sum of $50 million promptly upon:
PAGE
<PAGE>
(i) any termination of this Agreement by
High River at a time when (A) no Termination Event
has occurred, (B) BGL and BGLS are not in material
breach of any of the BGL Obligations and (C) New
Valley and NV Sub are not in material breach of
any of their obligations (the "New Valley
Obligations") under Section 1(a), the fourth
sentence of Section 1(c)(v), the ninth sentence of
Section 1(c)(v), Section 1(d)(i) or Section 2 of
the New Valley Agreement;
(ii) any termination of this Agreement
by BGL or BGLS at a time when (A) no Termination
Event has occurred, (B) High River is in material
breach of its obligations under Section 1(c)(iii)
or Section 8 of this Agreement, (C) BGL and BGLS
are not in material breach of the BGL Obligations
and (D) New Valley and NV Sub are not in material
breach of the New Valley Obligations;
provided, however, that (x) BGL shall not be entitled
to more than one fee under this Section 4(b), (y) BGL
shall not be entitled to any fee under this Section
4(b) if High River shall have previously or shall
concurrently become entitled to the fee described in
Section 4(a) of this Agreement or the fee described in
Section 5(a) of the New Valley Agreement and (z) the
amount of any fee to which BGL may be entitled at any
time pursuant to this Section 4(b) shall be reduced by
the amount of any fee which New Valley shall
theretofore have been paid pursuant to Section 5(b) of
the New Valley Agreement.
(c) Notwithstanding anything in this
Agreement or the New Valley Agreement to the contrary,
PAGE
<PAGE>
(i) if the New Valley Group (as such
term is defined in the New Valley Agreement) or
the BGL Group sells any Shares or any Other
Securities (as such term is defined in the New
Valley Agreement) of any class or series prior to
the Reference Date, then BGLS shall pay or cause
to be paid to High River promptly upon the
consummation of such sale a percentage payment
equal to the product of (A) the Net Profit
Override (as such term is defined in the New
Valley Agreement) realized in such sale,
multiplied by (B) a fraction (the "Sale Fraction,"
which shall be calculated separately for the
Shares and for each class or series of Other
Securities), the numerator of which is the number
of Shares or such Other Securities (as the case
may be) held as of the date hereof, or hereafter
acquired prior to such sale, by the BGL Group and
the denominator of which is the number of Shares
or such Other Securities (as the case may be) held
as of the date hereof, or hereafter acquired prior
to such sale, by the BGL Group and the New Valley
Group; and
(ii) if the New Valley Group or the BGL
Group holds any Shares or any Other Securities of
any class or series on the Reference Date, then
New Valley shall pay or cause to be paid to High
River promptly upon the Reference Date a
percentage payment equal to the product of (A) the
Net Profit Override existing on the Reference Date
in respect of such Shares or such Other
Securities, multiplied by (B) a fraction (the
"Holdings Fraction," which shall be calculated
separately for the Shares and for each class or
series of Other Securities), the numerator of
which is the number of Shares or such Other
Securities (as the case may be) held as of the
date hereof, or hereafter acquired prior to the
Reference Date, by the BGL Group and the
denominator of which is the number of Shares or
such Other Securities (as the case may be) held as
of the date hereof, or hereafter acquired prior to
the Reference Date, by the BGL Group and the New
Valley Group;
PAGE
<PAGE>
provided, however, that (x) the amount of any
percentage payment to which High River is entitled at
any time under this Section 4(c) shall be reduced by
the product of (1) the amount of any fee which High
River shall have theretofore been paid by or on behalf
of New Valley under Section 5(a) of the New Valley
Agreement or by BGLS under Section 4(a) of this
Agreement, multiplied by (2) the Sale Fraction or the
Holdings Fraction, as the case may be, (y) High River
shall not be entitled to any percentage payment under
this Section 4(c) if BGL shall have previously become
entitled to the fee described in Section 4(b) of this
Agreement or if New Valley shall have previously become
entitled to the fee described in Section 5(b) of the
New Valley Agreement and (z) in the event that the New
Valley Group or the BGL Group realizes a Net Loss (as
defined in the New Valley Agreement) on any sale of any
Shares or any Other Securities of any class or series,
or that any Net Loss exists on the Reference Date in
respect of any Shares or any Other Securities of any
class or series held by the New Valley Group or the BGL
Group on the Reference Date, then in each such event
High River shall repay or cause to be repaid to BGLS
promptly upon receipt of notice from BGLS an amount
equal to the product of (1) the excess, if any, of (X)
20% of such Net Loss over (Y) the aggregate amount of
such percentage payments theretofore received by High
River, multiplied by (2) a fraction, the numerator of
which is the aggregate amount of such percentage
payments theretofore paid by or on behalf of BGLS and
the denominator of which is the aggregate amount of
such percentage payments theretofore paid by or on
behalf of New Valley and BGLS. BGL and BGLS shall use
their reasonable best efforts to provide to High River
(x) once each calendar week, commencing from the date
of this Agreement, a report containing a reasonably
detailed calculation of the number of Shares and the
amount of Other Securities then held by the BGL Group
and the Weighted-Average Cost (as defined in the New
Valley Agreement) of such Shares and Other Securities
and (y) promptly after the close of business on each
business day on which any Shares are sold by the BGL
Group, a report setting forth the number of Shares or
Other Securities sold since the close of business on
the previous business day, the aggregate price realized
in such sales and the aggregate commissions paid in
such sales; provided, however, that BGL and BGLS shall
<PAGE>
not incur any liability or suffer any prejudice as a
result of its provision of any such estimate.
(d) The parties hereto hereby acknowledge
and agree that the arrangements in Section 4(c) with
respect to percentage payments constitute a partnership
for Federal income tax purposes and that the parties
hereto shall file income tax returns in a consistent
manner.
(e) Each of BGL and High River shall give
notice to the other promptly upon becoming aware that a
Termination Event has occurred or that any event has
occurred that would be a Termination Event but for the
giving of notice or the termination of this Agreement.
Section 5. Costs and Expenses. (a) Except
as set forth in Section 5(b), the BGL Group shall be
responsible for all out-of-pocket costs and expenses of
soliciting Stockholder Demands, Written Consents and
Proxies from the stockholders of RJRN, including
without limitation, to the extent related thereto, (i)
all registration and filing fees under the Exchange Act
or the Securities Act of 1933, as amended (the
"Securities Act"), (ii) all printing, messenger,
telephone and delivery expenses, (iii) all fees and
disbursements of counsel and (iv) all fees and
disbursements of public relations firms, proxy
solicitation firms, investment bankers and other
financial advisors.
(b) Notwithstanding the provisions of
Section 5(a), each party hereto shall be solely
responsible for (i) all costs and expenses relating to
the acquisition of the Shares beneficially owned or
hereafter acquired by such party and its affiliates,
(ii) its internal expenses (including, without
limitation, all salaries and expenses of its officers
and employees performing duties relating to the
transactions contemplated by this Agreement) and (iii)
all other expenses incurred by it, other than expenses
described in Section 5(a), all of which shall be the
sole responsibility of the BGL Group.
PAGE
<PAGE>
Section 6. Required Filings; Publicity. (a)
Each of the parties hereto shall (and shall cause each
of its affiliates to) (i) take all actions necessary to
comply promptly with all legal requirements which may
be imposed on such party (or its affiliates) as a
result of this Agreement or any of the transactions
contemplated hereby, and (ii) without limiting the
foregoing, make all required filings pursuant to the
Securities Act and the Exchange Act.
(b) To the extent reasonably practicable,
the parties hereto shall consult with each other prior
to all public statements or filings to be issued or
made by any of them or their affiliates with respect to
this Agreement and the transactions contemplated
hereby.
Section 7. Representations and Warranties.
(a) Each of the parties hereto hereby represents and
warrants to the other parties hereto as follows:
(i) Such party is a corporation or
partnership duly organized, validly existing and
in good standing under the laws of the state of
its incorporation or organization, and has full
corporate or partnership power and authority to
execute and deliver this Agreement and to perform
its obligations hereunder and to consummate the
transactions contemplated hereby.
(ii) The execution and delivery by such
party of this Agreement and the performance by
such party of its obligations hereunder have been
duly and validly authorized by all necessary
corporate or partnership action. This Agreement
has been duly and validly executed and delivered
by such party and constitutes a legal, valid and
binding obligation of such party enforceable
against such party in accordance with its terms.
PAGE
<PAGE>
(iii) The execution and delivery by
such party of this Agreement do not, and the
performance by such party of its obligations under
this Agreement will not, conflict with or result
in a violation or breach of any of the provisions
of the certificate of incorporation, bylaws or
other organizational documents of such party, any
law or order applicable to such party or any of
such party's contractual obligations to other
persons, in each case, in any manner that would
prevent or materially impede such party from
fulfilling its obligations hereunder.
(b) BGL and BGLS hereby represent and
warrant to High River that as of the date hereof the
BGL Group owns beneficially and of record 200 Shares,
free and clear of all liens and encumbrances
whatsoever, which Shares were purchased by the BGL
Group at an aggregate cost (including all brokerage
fees and commissions incurred in the acquisition of
such Shares) of $5,675, and in respect of which the BGL
Group has not received any dividends, except dividends
of $75 received on July 3, 1995 and dividends of $75
received on October 2, 1995.
(c) High River represents and warrants to
BGL and BGLS that High River has as of the date hereof,
and will have on each date prior to the termination of
this Agreement, net partners' equity of at least $22
million.
Section 8. Certain Actions. High River
shall not (and shall cause its affiliates not to)
engage in, agree to engage in or propose (either
publicly or to RJRN or any of its affiliates) to engage
in, individually or in combination with any other
person, any Business Combination at any time prior to
the earliest of (a) the Reference Date, (b) any
termination of this Agreement that occurs at or after
the time when a Termination Event has occurred and (c)
any termination of this Agreement by BGL or BGLS, or of
the New Valley Agreement by New Valley or NV Sub, at a
time when High River is not in material breach of the
High River Obligations.
PAGE
<PAGE>
Section 9. Miscellaneous. (a) For purposes
of this Agreement, (i) the terms "affiliate" and
"associate" have the meanings assigned to them in Rule
12b-2 promulgated under the Exchange Act, provided,
however, that New Valley and NV Sub shall not be deemed
to be "affiliates" or "associates" of the BGL Group for
any purpose of this Agreement, (ii) Liggett shall be
deemed to be a material affiliate of BGL and BGLS,
(iii) the term "shall" is used herein to refer to
actions which are compulsory and thus to create binding
obligations among the parties hereto, (iv) the terms
"will," "expect," "expectation," "intend" and
"intention," and other terms of similar import, are
used herein solely to refer to the aspirations and
objectives of the parties hereto and thus are not used
herein to create binding obligations among the parties
hereto and (v) the term "may" is used herein to refer
solely to conduct which is optional and not compulsory
and thus is not used herein to create binding
obligations among the parties hereto.
(b) The parties hereto shall have no rights,
power or duties except as specified herein, and no such
rights, powers or duties shall be implied. Nothing
herein shall give any party hereto the power to bind
any other party hereto to any contract, agreement or
obligation to any third party.
(c) All notices and other communications
hereunder shall be in writing and shall be deemed given
when received by the parties hereto at the following
addresses (or at such other address for any party
hereto as shall be specified by like notice):
PAGE
<PAGE>
If to BGL or BGLS:
100 S.E. Second Street
Miami, Florida 33131
Attention: Bennett S. LeBow
Telecopy: (305) 579-8001
With a copy to:
Michael L. Hirschfeld, Esq.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, NY 10005-1413
Telecopy: (212) 530-5219
If to High River:
c/o Icahn Associates Corp.
114 West 47th Street-19th Floor
New York, New York 10036
Attention: Carl C. Icahn
Telecopy: (212) 921-3359
With a copy to:
Marc Weitzen, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street-20th Floor
New York, NY 10036
Telecopy: (212) 626-0799
(d) This Agreement may be executed in two or
more counterparts, all of which shall be considered one
and the same agreement.
(e) This Agreement constitutes the entire
agreement among the parties hereto and supersedes all
prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.
(f) This Agreement shall be governed and
construed in accordance with the laws of the state of
New York applicable to a contract executed and
performed in such State, without giving effect to the
conflicts of laws principles thereof.
PAGE
<PAGE>
(g) Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior
written consent of the other parties hereto; provided,
however, that High River may assign any of its rights
and interests hereunder to (i) any corporation
incorporated in any state of the United States or in
the District of Columbia if at least 98.5% of the
shares of each class of capital stock of such
corporation are owned by Carl C. Icahn (a "wholly-owned
Icahn subsidiary"), either directly or through one or
more wholly-owned Icahn subsidiaries or (ii) any
partnership whose partners are all wholly-owned Icahn
subsidiaries; and provided further that no such
assignment shall relieve High River of any of its
obligations hereunder. Subject to the preceding
sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns.
(h) This Agreement may be amended,
supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto. No
waiver of any term or condition
in this Agreement shall be effective unless set forth
in writing and signed by or on behalf of the waiving
party. No waiver by any party hereto of any term or
condition of this Agreement shall be deemed to be or
construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.
(i) The terms and provisions of this
Agreement are intended solely for the benefit of the
parties hereto and their successors and permitted
assigns and are not intended to confer upon any other
person any rights or remedies hereunder, except that
the provisions of clause (z) of the proviso to Section
4(a), as they relate to the reimbursement obligations
of BGL and BGLS, are expressly for the benefit of New
Valley and shall be enforceable by New Valley against
BGL and BGLS (but not against High River) by
appropriate proceedings in any court of competent
jurisdiction.
PAGE
<PAGE>
(j) In the event that any party hereto
prevails in any action or proceeding alleging a breach
of this Agreement, such party shall be entitled to
recover all reasonable attorney's fees and other costs
of prosecuting such action or proceeding and, in
addition, shall be entitled to receive simple interest
on any damages awarded in such action or proceeding at
the rate of 10% per annum from the date of such breach.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be signed by their
representatives thereunto duly authorized, all as of
the date first above written.
BROOKE GROUP LTD.
By:
BGLS INC.
By:
HIGH RIVER LIMITED
PARTNERSHIP
By:
[Signature page to Agreement among Brooke Group Ltd.,
BGLS Inc. and High River Limited Partnership dated
October 17, 1995]
PAGE
<PAGE>
High River Limited Partnership
100 South Bedford Road
Mount Kisco, New York 10549
November 5, 1995
Brooke Group Ltd.
BGLS Inc.
100 S.E. Second Street
Miami, Florida 33131
Attn: Bennett S. LeBow
Dear Bennett:
By executing this letter in the space provided below,
Brooke Group Ltd., a Delaware corporation ("BGL"), BGLS
Inc., a Delaware corporation and a direct wholly-owned
subsidiary of BGL ("BGLS") and High River Limited
Partnership, a Delaware limited partnership ("High
River"), each hereby agree as follows:
1.All capitalized terms used herein and not otherwise
defined shall have the meanings ascribed to such terms
in the Agreement by and among BGL, BGLS and High River,
dated October 17, 1995 (the "BGL Agreement").
2. Section 1(a) of the BGL Agreement is
deleted in its entirety and all reference thereto in
the BGL Agreement is likewise deleted.
3. Section 1(c)(ii)(B) of the BGL Agreement
is hereby amended to delete the subsection in its
entirety and to substitute in lieu thereof the
following:
PAGE
<PAGE>
"(B) Prior to the consummation of the Spinoff, the
BGL Group will (I) not directly or indirectly
exercise any management control over Nabisco or
Nabisco, Inc., a Delaware corporation ("Nabisco,
Inc."), (II) refrain from becoming involved in the
ordinary course of business of Nabisco or Nabisco,
Inc. and (III) use its best efforts to ensure that
a majority of the directors of Nabisco and
Nabisco, Inc. consists of individuals who are
presently members of the board of directors of
Nabisco and Nabisco, Inc., respectively and"
4. Section 3(c)(ix)(C) of the BGL Agreement
is hereby amended to delete the subsection in its
entirety and to substitute in lieu thereof the
following:
"(C) fail to file the Solicitation Statement
relating to the Annual Meeting preliminarily with
the SEC prior to the earlier of (I) February 15,
1996 and (II) sixty (60) days following the record
date for the solicitation of Written Consents with
respect to the Spinoff Proposal and the By-Law
Amendment Proposal,"
5. In the event that prior to February 1,
1996 (i) the BGL Group provides High River Group with
notice of termination of the BGL Agreement or New
Valley Group (as defined below) provides High River
Group with notice of termination of the Agreement by
and among New Valley Corporation, ALKI Corp. and High
River, dated October 17, 1995 (the "New Valley
Agreement") at a time when a Termination Event set
forth in Section 3(c)(vii) or 3(c)(viii) of the BGL
Agreement has occurred or (ii) High River Group
provides BGL Group with notice of termination of the
BGL Agreement or provides New Valley Group with notice
of termination of the New Valley Agreement at a time
when a Termination Event set forth in Section
3(c)(ix)(A) of the BGL Agreement has occurred, BGL
Group shall not transfer any Shares beneficially owned
by BGL Group until February 1, 1996 in consequence of
or in reliance upon such notice of termination. If the
<PAGE>
notice of termination specified in clause (i) of the
preceding sentence is provided after January 16, 1996,
and the aggregate number of shares of common stock, par
value $.01 per share, of RJR Nabisco Holdings Corp.
("Shares") beneficially owned by High River Group
exceeds the aggregate number of Shares beneficially
owned by (A) New Valley Corporation, ALKI Corp. and any
assignee of the foregoing ("New Valley Group") plus (B)
BGL Group (collectively, the "Aggregate LeBow Shares"),
BGL Group shall not Transfer any Shares beneficially
owned by BGL Group for fifteen (15) days following
receipt by High River Group of BGL Group's or New
Valley Group's notice of termination; provided,
however, that on such date not before February 1, 1996
that the aggregate number of Shares beneficially owned
by High River Group is equal to or less than the
Aggregate LeBow Shares, and thereafter, BGL Group may
Transfer any Shares beneficially owned by BGL Group.
6. In the event that High River Group
provides BGL Group with notice of termination of the
BGL Agreement or provides New Valley Group with notice
of termination of the New Valley Agreement at a time
when a Termination Event under any of Sections
3(c)(ix)(B) through (E) of the BGL Agreement has
occurred and the aggregate number of shares
beneficially owned by High River Group exceeds the
Aggregate LeBow Shares, BGL Group shall not Transfer
any Shares beneficially owned by BGL Group in
consequence of or in reliance upon such notice of
termination until the earlier of (i) fifteen (15) days
following receipt by BGL Group or New Valley Group of
High River Group's notice of termination specified in
the preceding sentence and (ii) the date that the
aggregate number of Shares beneficially owned by High
River Group is equal to or less than the Aggregate
LeBow Shares.
7. BGLS shall promptly make any payments
due under Section 4(c) of the BGL Agreement. In the
event that High River Group believes that BGLS has
breached any of its obligations under Section 4(c) of
the BGL Agreement, the parties shall promptly follow
the procedures set forth in Section 1(c)(v) of the New
<PAGE>
Valley Agreement in order to resolve the dispute. If
the Arbitrator (as defined in the New Valley Agreement)
determines that BGLS is required to make a payment
pursuant to Section 4(c) of the BGL Agreement, BGLS
shall make or cause to be made to High River Group such
payment within twenty (20) days after receiving the
Arbitrator's notice of decision. In the event that
BGLS fails to make such payment within twenty (20) days
after receipt of the Arbitrator's notice of decision,
BGLS shall immediately pay or cause to be paid to High
River Group an additional sum in the amount of $50
million.
8. Section 9(k) shall be added to the BGL
Agreement to read as follows:
"(k) Anything in this Agreement to the
contrary notwithstanding, High River shall have no
obligation with respect to the selection of the
BGL Nominees or the solicitation of Written
Consents or Proxies."
9. Nothing herein contained shall be
construed to otherwise abrogate the rights and
obligations of the parties to this letter agreement
with respect to all other provisions of the BGL
Agreement, the New Valley Agreement and the letter
agreement by and among New Valley, ALKI Corp. and High
River, dated October 17, 1995 (the "Letter Agreement").
If the foregoing reflects your understanding,
please sign this letter below. Upon your execution
hereof, this letter agreement will become a binding
contract between us.
Very truly yours,
HIGH RIVER LIMITED
PARTNERSHIP
By: RIVERDALE INVESTORS
CORP., INC.
Its: General Partner
PAGE
<PAGE>
By:
Name:
Title:
Agreed to and Accepted:
BROOKE GROUP LIMITED
By:
Name:
Title:
BGLS INC.
By:
Name:
Title:
[Signature page for letter agreement by and among
Brooke Group Limited, BGLS Inc. and High River Limited
Partnership, dated November __, 1995]
<PAGE>
AGREEMENT
This AGREEMENT among New Valley Corporation,
a New York corporation ("New Valley"), ALKI Corp., a
Delaware corporation and a direct wholly owned
subsidiary of New Valley ("NV Sub"), and High River
Limited Partnership, a Delaware limited partnership
("High River"), dated October 17, 1995.
W I T N E S S E T H:
WHEREAS, each of the parties hereto, directly
or indirectly, is a stockholder of RJR Nabisco Holdings
Corp., a Delaware corporation ("RJRN");
WHEREAS, the parties hereto believe that the
value of RJRN stockholders' investment can be
substantially increased through a spinoff (the
"Spinoff") of all or substantially all of RJRN's
remaining investment in Nabisco Holding Corp., a
Delaware corporation ("Nabisco");
WHEREAS, New Valley and NV Sub desire to
obtain the assistance and advice of High River with
respect to measures designed to effectuate the Spinoff
at the earliest possible date;
WHEREAS, High River is willing to give such
assistance and advice to New Valley and NV Sub (the
"New Valley Group") in consideration of the agreements
by the New Valley Group set forth herein;
NOW, THEREFORE, in consideration of the
foregoing and of the mutual promises set forth herein,
the parties hereto, intending to be legally bound,
agree as follows:
Section 1. Investment. (a) High River
hereby agrees to purchase from New Valley and NV Sub,
and New Valley and NV Sub hereby agree to sell, assign,
transfer and deliver to High River, at the Closing (as
defined below), 1,611,550 shares of common stock, par
value $.01 per share ("Shares"), of RJRN (the
<PAGE>
"Purchased Shares"). The closing of the purchase and
sale of the Purchased Shares (the "Closing") shall
occur at 10:00 a.m. on October 23, 1995 (the "Closing
Date") at the offices of Milbank, Tweed, Hadley &
McCloy, One Chase Manhattan Plaza, New York, New York.
At the Closing, High River will pay to New Valley
$50,976,921 (the "Purchase Price"), by wire transfer of
immediately available funds to an account designated by
New Valley, against delivery to High River of the
Purchased Shares in a commercially customary manner
such that, upon the payment of the Purchase Price for
such Purchased Shares, High River shall have acquired
good and marketable title to such Shares, free and
clear of all encumbrances and liens whatsoever.
(b) It is the intention of the New Valley
Group and High River to cooperate to invest a minimum
of at least $300 million ($150 million each) in Shares,
and they may further increase their investment to a
minimum of at least $500 million in Shares ($250
million each), in accordance with the following plan:
(i) Each of the New Valley Group and High
River and its affiliates (the "High River Group") is
expected to make a minimum equity investment in Shares
of $75 million (the "First Stage Equity Investments").
PAGE
<PAGE>
(ii) In addition to their respective First
Stage Equity Investments, each of the New Valley Group
and the High River Group is expected to invest in
Shares at least a minimum additional amount (the "First
Stage Margin Investments" and, together with the First
Stage Equity Investments, the "First Stage
Investments") equal to the lesser of (A) $75 million
and (B) the maximum additional amount that such group
would lawfully have been able to invest in Shares if
(I) the Shares acquired pursuant to such group's First
Stage Equity Investment had been acquired with funds
not obtained from the proceeds of "purpose credit"
secured directly or indirectly by "margin stock" (as
such terms are defined in Regulation T and Regulation U
promulgated by the Board of Governors of the Federal
Reserve System (the "Margin Rules")) ("Margin Loans")
and (II) such group had used its best efforts to borrow
additional funds by pledging the Shares so acquired as
collateral to secure Margin Loans to the extent that
such Margin Loans could have been obtained lawfully and
on reasonable commercial terms and had used the
proceeds of such Margin Loans to acquire additional
Shares, which had been similarly pledged to secure
additional Margin Loans and to acquire further Shares,
and so forth until no further such Margin Loans had
been lawfully available.
(iii) Following the completion of the First
Stage Investments, each of the New Valley Group and the
High River Group may make a further investment in
Shares of up to the sum of (A) $50 million of equity
(the "Second Stage Equity Investment") plus (B) an
additional amount (the "Second Stage Margin
Investments" and, together with the Second Stage Equity
Investments, the "Second Stage Investments") equal to
the lesser of (I) $50 million and (II) the maximum
amount that such group would lawfully have been able to
invest in Shares, in the manner described in Section
1(b)(ii)(B), using the Shares acquired through the
Second Stage Equity Investment as collateral.
PAGE
<PAGE>
(c) In order to effectuate the objectives of
the parties hereto described in Section 1(b), each of
the New Valley Group and High River agrees that it
shall (or shall cause its affiliates to) make the
following investments in Shares:
(i) Promptly after the close of business on
each business day during the term of this Agreement,
each of New Valley and High River shall notify the
other of (A) the number of Shares acquired or sold by
the New Valley Group and the High River Group,
respectively, since the last such notice, (B) the
purchase price or sale price of each Share so acquired
or sold and (C) the amount of brokerage fees or
commissions incurred in acquiring or selling each such
Share.
(ii) On the last business day of each second
calendar week (commencing with the end of the second
full calendar week following the date of this
Agreement) prior to such time as the High River Group
has made an investment in Shares equal to at least the
Second Stage Investment (the "Second Stage Completion
Date"), promptly after the exchange of notices
described in Section 1(c)(i), the parties hereto shall
calculate the aggregate number and the average price of
all Shares acquired during such two calendar weeks by
either the New Valley Group or the High River Group at
a price per Share equal to the Hurdle Price (as defined
below in this paragraph (ii)) or less (exclusive of
brokerage fees and commissions incurred in such
acquisition) ("Qualifying Shares"). Thereupon, each
party shall make or cause to be made to the other party
(or the other party's designee) such transfers of
Shares and such payments in immediately available funds
(in each case in the manner described in Section
1(c)(iv)) as would have been necessary so that, after
giving effect to such transfers and payments, the New
Valley Group and the High River Group would have
acquired the same number of Qualifying Shares during
such two calendar weeks and the aggregate investment
(excluding brokerage fees and commissions incurred in
the acquisition of Shares) of the New Valley Group and
the High River Group in Qualifying Shares during such
week would have been identical. For purposes of this
PAGE
<PAGE>
Agreement, "Hurdle Price" means (x) prior to the time
that both the new Valley Group and the High River Group
have made investments in Shares equal to at least the
First Stage Investment (the "First Stage Completion
Date"), $35.50 per Share and (y) at all times from and
after the First Stage Completion Date and prior to the
Second Stage Completion Date, $31.00 per Share.
(iii) In addition to the obligations of the
parties hereto under Section 1(c)(ii), for each
business day prior to the Second Stage Completion Date,
New Valley may, in its sole discretion, by notice to
High River promptly after the exchange of the notices
with respect to such business day described in Section
1(c)(i), put to High River a number of Shares equal to
or less than one-half of the excess, if any, of (A) the
aggregate number of Shares other than Qualifying Shares
("Non-Qualifying Shares") acquired by the New Valley
Group since the close of business on the previous
business day over (B) the number of Non-Qualifying
Shares acquired by the High River Group since the close
of business on the previous business day. The put
price per Share shall be equal to the Hurdle Price.
Thereupon, the New Valley Group shall sell and transfer
or cause to be sold and transferred to High River or
another member of the High River Group designated by
High River the number of Shares so put to High River,
and High River shall purchase or cause such designee to
purchase such Shares and shall pay or cause to be paid
to New Valley or New Valley's designee a purchase price
equal to the put price of such Shares, in each case in
the manner described in Section 1(c)(iv).
(iv) All payments required to be made under
Section 1(c)(ii) or Section 1(c)(iii) shall be made in
immediately available funds before the opening of
business on the fourth New York Stock Exchange trading
day after (A) in the case of Section 1(c)(ii), the last
business day of each second calendar week in which the
exchange of notices referred to therein is made and (B)
in the case of Section 1(c)(iii), the last business day
of the calendar week in which New Valley delivers the
notice referred to therein. All transfers of Shares
required by Section 1(c)(ii) and Section 1(c)(iii)
shall be made simultaneously with such payment in a
<PAGE>
commercially customary manner such that upon the
payment of the purchase price for such Shares, the
transferee shall have acquired good and marketable
title to such Shares, free and clear of all
encumbrances and liens whatsoever.
(v) As promptly as practicable following the
close of business on November 27, 1995 (in the case of
the First Stage Investments) and January 11, 1996 (in
the case of the Second Stage Investments), but in each
case prior to the close of business on the next
business day, each of New Valley and High River shall
notify the other of (A) the date of purchase of any
Shares acquired by the New Valley Group and the High
River Group, respectively, since the date of this
Agreement, (B) the number of Shares purchased on each
such date and (C) the purchase price of each Share so
acquired. If prior to January 17, 1996, either New
Valley or High River believes that the other has
breached any of its obligations under Section 1(c)(ii)
or Section 1(c)(iii), such party (the "Notifying
Party") shall deliver to the other party (the
"Receiving Party") a notice setting forth in reasonable
detail the nature of the breach and the reasons for
such belief (the "Notice of Breach"). The Notice of
Breach shall specifically describe the number of Shares
that the Receiving Party must transfer to the Notifying
Party, or that the Notifying Party must transfer to the
Receiving Party, and the amount of the payments that
the Receiving Party must make to the Notifying Party,
or that the Notifying Party must make to the Receiving
Party, in order to cure such breach, and shall demand
performance of such transfers and payments. Prior to
the close of business on the third business day after
receiving the Notice of Breach, the Receiving Party
shall either (x) pay the amounts and transfer the
Shares described in the Notice of Breach, against
receipt of the amounts to be paid and/or the Shares to
be transferred by the Notifying Party as described in
the Notice of Breach or (y) deliver to the Notifying
Party a notice stating that the Receiving Party
disputes the demand made in the Notice of Breach (the
"Notice of Dispute"). In the event that the Receiving
Party delivers a Notice of Dispute, then prior to the
close of business on the next business day, the parties
hereto shall by mutual agreement choose an independent,
nationally recognized public accounting firm, which
PAGE
<PAGE>
shall be retained by the parties hereto to arbitrate
the dispute (the "Arbitrator"), or if they cannot
agree, each of New Valley and High River shall choose
one such accounting firm, and such firms shall choose a
third such accounting firm to serve as Arbitrator. The
fees and expenses of the Arbitrator shall be shared
equally by New Valley and High River. The parties
hereto shall make available to the Arbitrator all
information which the Arbitrator may reasonably request
for the purpose of arbitrating the dispute. Prior to
the close of business on the fifth business day after
being retained, the Arbitrator shall make its own
independent calculations and shall notify New Valley
and High River in writing of its decision, indicating
the amounts to be paid and the number of Shares to be
transferred by each of the parties hereto to cure any
breach of Section 1(c)(ii) or 1(c)(iii), identified by
the Arbitrator as having occurred. Prior to the close
of business on the third business day after receiving
the notice of such decision, each party hereto shall
make payments and transfer Shares in accordance with
such decision. In each case where a party is required
to make any payment pursuant to this Section 1(c)(v) by
reason of any breach by such party of Section 1(c)(ii)
or Section 1(c)(iii), the amount of such payment shall
be based on a purchase price per Share, without
interest, equal to the Hurdle Price in effect at the
time that the relevant transfer of Shares would have
originally occurred if not for the relevant breach.
(d) (i) Except as provided in subpart (ii) of
this subparagraph (d), until the termination of this
Agreement, (i) the New Valley Group shall not make or
agree to make any sale, transfer or other disposition
(a "Transfer") of Shares beneficially owned by it, if
following such Transfer the New Valley Group's total
investment in Shares would be less than the sum of the
First Stage Investment plus the Second Stage Investment
and (ii) High River shall not (and shall cause the High
River Group not to) make or agree to make any Transfer
of Shares beneficially owned by it, if following such
Transfer the High River Group's total investment in
Shares would be less than the sum of the First Stage
Investment plus the Second Stage Investment; provided,
however, that (x) the New Valley Group and the High
River Group may sell Shares to an unaffiliated third
<PAGE>
party on an arms'-length basis if (1) such sale is made
solely in response to a demand for repayment or
additional collateral (other than Shares) of the sort
usually made by a lender extending Margin Loans secured
by such Shares, which demand results from a decline in
the market price of the Shares so that the account with
the lender falls below the lender's pre-established
maintenance requirement for the New Valley Group or the
High River Group, as the case may be, (2) the proceeds
of such sale are used solely to repay Margin Loans, (3)
the total number of Shares sold does not exceed the
minimum number that must be sold in order to satisfy
such demand and (y) in the event the New Valley Group
or the High River Group (each, a "Group") sells any
Shares pursuant to clause (x) of this proviso and
following such sale such first Group's investment in
Shares is less than the second Group's investment in
Shares, then the second Group may Transfer Shares so
long as following such Transfer the second Group's
investment in Shares is equal to or greater than the
first Group's investment in Shares; and provided
further that each member of the New Valley Group and
the High River Group may Transfer Shares to any other
member of the New Valley Group or the High River Group
(but only if, in the case of a Transfer to another
member of the High River Group, such member agrees to
be bound by the provisions of this Agreement to the
same extent as High River). Following a sale by either
the New Valley Group or the High River Group pursuant
to clause (x) of the first proviso to the preceding
sentence, neither Group shall be obligated to purchase
any additional Shares pursuant to Section 1(c)(ii) or
Section 1(c)(iii), but the provisions of Section
1(c)(v) shall continue to be applicable with respect to
any purchases that were required to be made prior to
such sale pursuant to Section 1(c)(ii) or Section
1(c)(iii).
(ii) In addition, notwithstanding the terms
of subpart (i) of this subparagraph (d), in the event
that the lender extending Margin Loans to a member of
the New Valley Group or the High River Group, as the
case may be (the "Borrower"), for any reason other than
as set forth in clause (x) of the first proviso to the
first sentence of subpart (i) of this subparagraph (d),
terminates or reduces the loan facility or otherwise
requires the sale of Shares by Borrower (such Shares
<PAGE>
required as a result to be sold, together with a number
of Shares equal to the number of Shares (if any) sold
pursuant to such clause (x), during the thirty
consecutive calendar days immediately following the
date that the Borrower is informed of such required
sale, being hereinafter referred to as the "Selloff
Shares") and after exercise of best efforts to replace
such loan facility Borrower is unable to do so, then
the Borrower shall irrevocably offer to the other party
hereto the right for a five business day period, at the
election of the other party, either (A) to acquire the
Selloff Shares at a price equal to the lower (such
lower price being referred to herein as the "Selloff
Price") of (I) 90% of the Weighted-Average Cost
(calculated as set forth in Section 4(h) but without
giving effect to the interest factor described in
Section 4(h)(i) or Section 4(h)(ii)(B)) of the Selloff
Shares, and (II) 90% of the then current market price
of the Selloff Shares, as measured by the average
closing sales price of Shares on the New York Stock
Exchange in the five business days preceding said
offer, or (B) to receive payment from the Borrower in
immediately available funds in an amount equal to the
excess of the then current market price of the Selloff
Shares, as so measured, over the Selloff Price. In the
event the other party exercises its right to acquire
the Selloff Shares, the closing shall take place prior
to the close of business on the third business day
after such party exercises its right to purchase the
Selloff Shares, and the party electing to exercise its
right to purchase shall be entitled to an order of
specific performance in the event of a failure by the
Borrower to close as hereinabove provided. In the
event the other party does not exercise its right to
acquire the Selloff Shares within such five business
day period, or shall affirmatively elect to receive
payment from the Borrower, the Borrower shall
thereafter have the right to sell the Selloff Shares to
an unaffiliated third party on an arms'-length basis.
In the event the other party exercises its right to
receive payment from the Borrower, such payment shall
be made within five business days of notice to the
Borrower of the other party's election to exercise its
right thereto.
(e) For purposes of this Section 1 and
Section 4(c), in calculating the amount of the
<PAGE>
investment in Shares by the New Valley Group and the
High River Group at any time, (i) each Group's
acquisition of Shares shall be deemed to increase such
Group's investment by the actual cost, including all
brokerage fees and commissions incurred in the
acquisition of such Shares, and (ii) each Group's sale
of Shares shall be deemed to decrease such Group's
investment by the actual price realized, net of all
brokerage fees and commissions incurred in such sale.
(f) In addition to the investments required
by Section 1(c), each of the parties hereto and its
affiliates may, in its sole discretion, invest
additional amounts from time to time to acquire
additional Shares. Notwithstanding any other provision
of this Agreement, the funds invested by any party
hereto or its affiliates in Shares, either pursuant to
Section 1(c) or to this Section 1(f), may be obtained
through any lawful method, including, without
limitation, Margin Loans and other loans or borrowings
subject to the Margin Rules.
(g) Notwithstanding anything in this
Agreement to the contrary, (i) all Shares acquired by
any party hereto shall be held by it for its own
account and not for the account of any other party
hereto, (ii) except as set forth in Section 5(d), no
party hereto shall have any right or obligation to
share in the profits or losses of any other party
hereto arising from the acquisition, holding or
disposition of Shares beneficially owned by such other
party or its affiliates and (iii) all transfers of
Shares pursuant to Section 1(c)(ii) or Section
1(c)(iii), and all payments in respect of such Shares
pursuant to Section 1(c)(ii) or Section 1(c)(iii),
shall be made simultaneously on the respective dates
such transfers and payments are required to be made
pursuant to Section 1(c)(iv), and no party hereto shall
be deemed to own or to have any rights of ownership in
any such Shares (including, without limitation, any
right to vote such Shares or to receive dividends paid
in respect of such Shares) until such transfer and
payment are made.
PAGE
<PAGE>
Section 2. Agreement to Vote. In the event
that Brooke Group Ltd. ("BGL") or BGLS Inc. ("BGLS")
determines to solicit Stockholder Demands, Written
Consents or Proxies (as such terms are defined in the
Agreement dated as of October 17, 1995 among BGL, BGLS
and High River (the "BGL Agreement")), the New Valley
Group shall execute and deliver to BGL or BGLS a valid
Stockholder Demand, Written Consent or Proxy, as the
case may be (and not withdraw such Stockholder Demand,
Written Consent or Proxy) with respect to all of the
Shares, and all of the depositary shares representing
Series C Conversion Preferred Stock, par value $.01 per
share, of RJRN, that it beneficially owns or has the
right to vote.
Section 3. Termination. (a) This Agreement
shall automatically terminate upon the earlier of (i)
the first anniversary of the date hereof and (ii) the
termination of the BGL Agreement by High River, and any
party hereto may terminate this Agreement sooner at any
time in its sole discretion by written notice to the
other parties hereto; provided, however, that if BGL or
BGLS terminates the BGL Agreement, then New Valley and
NV Sub shall be deemed to have simultaneously
terminated this Agreement.
(b) If this Agreement is terminated pursuant
to this Section 3, this Agreement shall forthwith
become null and void, and there shall be no liability
or obligation on the part of any party hereto, except
that (i) the obligations of the parties hereto pursuant
to Section 5 and Section 6 shall remain in full force
and effect following any termination of this Agreement
for the periods set forth therein and (ii) if (A)
either the New Valley Group or the BGL Group sells any
Shares under the circumstances described in clause (x)
of the first proviso to the first sentence of Section
1(d)(i) of this Agreement, or is required to offer any
Shares to another party pursuant to the first sentence
of Section 1(d)(ii) of this Agreement, and (B) a party
hereto which is not a member of such Group thereafter
terminates this Agreement prior to or on the tenth day
after the first date that such party becomes aware that
such event has occurred, then the obligations of any
member of such Group pursuant to Section 1(d)(ii) shall
remain in full force and effect following such
<PAGE>
termination until the later of (I) the end of the 30-
day period set forth in Section 1(d)(ii) or (II) the
time that the Selloff Shares are delivered at the
closing described in the second sentence of Section
1(d)(ii), or the time when payment is made pursuant to
the fourth sentence of Section 1(d)(ii), as the case
may be.
Section 4. Certain Definitions. For
purposes of this Agreement, the following terms shall
have the meanings indicated below:
(a) "Termination Event" shall have the
meaning assigned to it in the BGL Agreement.
(b) "Other Securities" means any securities
or assets (other than cash) received by the New Valley
Group from RJRN in respect of any Shares held by the
New Valley Group, whether by way of a dividend or other
distribution in respect of such Shares, in exchange for
such Shares, pursuant to a reclassification of such
Shares, or otherwise.
(c) The "Trading Profit" realized in any
sale of any Shares or any Other Securities of any class
or series by any member of the New Valley Group or by
BGL, BGLS or any of their affiliates (the "BGL Group")
means the excess, if any, of the actual price realized
in such sale, net of all brokerage fees and commissions
incurred in such sale, over the Weighted-Average Cost
(as defined below in Section 4(h) and Section 4(i)) of
the Shares or the Other Securities of such class or
series sold. The "Trading Profit" existing on the
Reference Date (as defined below in Section 5(a)) in
respect of any Shares or Other Securities of any class
or series held by the New Valley Group or the BGL Group
as of such date means the excess, if any, of the Market
Value (as defined below in Section 4(j) and Section
4(k)) as of the Reference Date of the Shares or the
Other Securities of such class or series so held over
the Weighted-Average Cost of such Shares or such Other
Securities. Notwithstanding the foregoing, if the
aggregate investment in Shares and Other Securities
made at any time, either before or after the date of
termination of this Agreement, by the New Valley Group,
before giving effect to any sales of Shares and Other
PAGE
<PAGE>
Securities held by the New Valley Group (the "Aggregate
New Valley Investment"), exceeds the greater of (x) the
sum of the First Stage Investment plus the Second Stage
Investment and (y) the aggregate investment of the High
River Group in Shares and Other Securities made prior
to the date of the termination of this Agreement (the
greater of such amounts being referred to herein as the
"Target Investment"), then the "Trading Profit"
realized on any sale of Shares or any Other Securities
of any class or series, or existing on the Reference
Date in respect of any Shares or any Other Securities
of any class or series held by the New Valley Group on
the Reference Date, means the product of (x) the
"Trading Profit," calculated as set forth in the
previous two sentences, multiplied by (y) a fraction,
the numerator of which is the Target Investment and the
denominator of which is the Aggregate New Valley
Investment.
(d) The "New Valley Expenses" means the out-
of-pocket costs and expenses incurred by the New Valley
Group or the BGL Group in connection with the
preparation, negotiation and execution of this
Agreement and the BGL Agreement, the consummation of
the transactions contemplated hereby or thereby and the
solicitation of Stockholder Demands, Written Consents
and Proxies from the stockholders of RJRN (including
without limitation, to the extent incurred in
connection therewith, (i) all registration and filing
fees under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), or the Securities Act of
1933, as amended (the "Securities Act"), (ii) all
printing, messenger, telephone and delivery expenses,
(iii) all fees and disbursements of counsel and (iv)
all fees and disbursements of public relations firms,
proxy solicitation firms, investment bankers and other
financial advisors), plus an amount equivalent to
simple interest on each such cost and expense at the
rate of 10% per annum from the date of payment thereof;
provided, however, that "New Valley Expenses" shall
exclude, without duplication, (x) all costs and
expenses relating to the acquisition of the Shares
beneficially owned or hereafter acquired by the New
Valley Group, (y) all internal costs and expenses
(including, without limitation, all salaries and
expenses of its officers and employees performing
PAGE
<PAGE>
duties relating to the transactions contemplated by
this Agreement and the BGL Agreement) and (z) all costs
and expenses paid to the New Valley Group, or the BGL
Group, except as reimbursement for out-of-pocket costs
and expenses incurred by the New Valley Group or the
BGL Group to unaffiliated third parties.
(e) The "Net Profit" realized on any sale of
Shares or any Other Securities of any class or series,
or existing on the Reference Date in respect of any
Shares or any Other Securities of any class or series
held by the New Valley Group or the BGL Group on the
Reference Date, means the excess, if any, of (i) the
Trading Profit realized on such sale or existing on the
Reference Date with respect to such Shares or such
class or series of Other Securities, as the case may
be, together with the aggregate Trading Profit realized
on all previous or simultaneous sales (if any) of any
Shares or any Other Securities of such class or series,
over (ii) the sum of (A) the aggregate New Valley
Expenses incurred on or prior to such sale or the
Reference Date, as the case may be, and (B) five times
the excess, if any of (I) the aggregate percentage
payments (if any) that High River would have been
entitled to receive under Section 5(d) of this
Agreement and Section 4(c) of the BGL Agreement with
respect to such previous or simultaneous sales if not
for the effect of clauses (x) and (y) of the provisos
to such Sections over (II) any repayment that New
Valley or BGLS would have been entitled to receive
under clause (z) of such provisos.
(f) The "Net Loss" realized on any sale of
Shares or any Other Securities of any class or series,
or existing on the Reference Date in respect of any
Shares or any Other Securities of any class or series
held by the New Valley Group or the BGL Group on the
Reference Date, means the excess, if any, of (i) the
sum of (A) the aggregate New Valley Expenses incurred
on or prior to such sale or the Reference Date, as the
case may be, and (B) five times the excess, if any of
(I) the aggregate percentage payments (if any) that
High River would have been entitled to receive under
Section 5(d) of this Agreement and Section 4(c) of the
BGL Agreement with respect to any previous or
simultaneous sale of Shares or any Other Securities of
such class or series if not for the effect of clauses
PAGE
<PAGE>
(x) and (y) of the provisos to such Sections over (II)
any repayment that New Valley or BGLS would have been
entitled to receive under clause (z) of such provisos
over (ii) the Trading Profit realized on such sale or
existing on the Reference Date with respect to such
Shares or such class or series of Other Securities, as
the case may be, together with the aggregate Trading
Profit realized on all previous or simultaneous sales
(if any) of any Shares or any Other Securities of such
class or series, as the case may be.
(g) The "Net Profit Override" on any sale of
Shares or any Other Securities of any class or series,
or existing on the Reference Date in respect of any
Shares or any Other Securities of any class or series
held by the New Valley Group or the BGL Group on the
Reference Date, means 20% of the Net Profit, if any, on
such sale or existing on such date.
(h) The "Weighted-Average Cost" of any
Shares means (i) the weighted-average cost of all
Shares owned by the New Valley Group and the BGL Group
as of the date hereof, or acquired by the New Valley
Group and the BGL Group hereafter prior to or at the
time that the aggregate investment of the New Valley
Group in Shares first exceeds the Target Investment
(including in each case all brokerage fees and
commissions incurred in the acquisition of such Shares
and including an amount equivalent to simple interest
on the cost of any Shares at the rate of 8-1/2% per
annum from the date of payment for such Shares, but
excluding any other interest, fees, premiums and other
costs of any loans or borrowings incurred or maintained
to acquire or carry such Shares), calculated in
accordance with generally accepted accounting
principles, reduced by (ii) the sum of (A) the amount
of any cash dividends or distributions received in
respect of such Shares and the Market Value (as of the
date received) of any Other Securities received in
respect of such Shares by way of any dividend or
distribution, plus (B) an amount equivalent to simple
interest on such amount and such Market Value at the
rate of 8-1/2% per annum from such date received;
provided, however, that any exchange of Shares for
Other Securities or reclassification of Shares into
Other Securities shall be treated for purposes of
calculating the Weighted-Average Cost of the remaining
<PAGE>
Shares as a sale of the Shares so exchanged or
reclassified at a price equal to their Weighted-Average
Cost.
(i) The "Weighted-Average Cost" of any Other
Securities received by the New Valley Group and the BGL
Group means (i) in the case of any Other Securities
received by way of any dividend or distribution, the
Market Value of such Other Securities as of the date
received, plus an amount equivalent to simple interest
on such Market Value at the rate of 8-1/2% per annum
from the date of receipt of such Other Securities, but
excluding any other interest, fees, premiums and other
costs of any loans or borrowings incurred or maintained
to carry such Other Securities and (ii) in the case of
any Other Securities received by the New Valley Group
and the BGL Group by way of any exchange of Shares for
Other Securities or reclassification of Shares into
Other Securities, an amount equal to the Weighted-
Average Cost of the Shares so exchanged or
reclassified, plus an amount equivalent to simple
interest on such amount at the rate of 8-1/2% per annum
from the date of receipt of such Other Securities, but
excluding any other interest, fees, premiums and other
costs of any loans or borrowings incurred or maintained
to carry such Other Securities; provided, however, that
the Weighted-Average Cost of any Other Securities shall
be reduced by the sum of (A) the amount of any cash
dividends or distributions received by the New Valley
Group and the BGL Group in respect of such Other
Securities and the Market Value (as of the date
received) of any securities or assets (other than cash)
received by the New Valley Group and the BGL Group in
respect of such Other Securities by way of any dividend
or distribution plus (B) an amount equivalent to simple
interest on the amount of such cash or the Market Value
of such securities or other assets at the rate of 8-
1/2% per annum from the date received.
(j) The "Market Value" of any securities as
of any date means the product obtained by multiplying
(i) the number or amount of such securities by (ii) the
average of the daily closing prices per share or other
unit of such securities for the ten consecutive trading
days (or, if such securities have not traded for ten
consecutive trading days, such lesser number of trading
days as they have traded) on or prior to such date.
For this purpose, the "closing price" of any securities
<PAGE>
as of any date means, the closing sale price, regular
way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices per
share or other unit for such securities, regular way,
in either case as reported in the principal
consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New
York Stock Exchange or, if such securities are not then
listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities
listed on the principal national securities exchange on
which such securities are listed or admitted to trading
or, if such securities are not then listed or admitted
to trading on any national securities exchange, the
last quoted price or, if not so quoted, the average of
the high bid and low asked prices, per share or other
unit for such securities in the over-the-counter
market, as reported by the NASDAQ system or, if such
system is not in use, any other similar system then in
use, or, if on any such date such securities are not
then quoted by any such system, the average of the
closing bid and asked prices per share or other unit
for such securities as furnished by a professional
market maker making a market in such securities
selected by mutual agreement of New Valley and High
River or, if no such person then makes a market in such
securities, the fair market value of such securities,
as determined by an independent, nationally recognized
investment banking or appraisal firm selected by mutual
agreement of New Valley and High River; provided,
however, that if any dividend or distribution shall
have been declared but not paid in respect of such
securities as of the date in question, and the ex-
dividend date for the determination of the holders of
securities entitled to receive such dividend or
distribution shall occur prior to the date of
valuation, the "Market Value" of such securities shall
be appropriately increased by the value of such
dividend or distribution (as determined by mutual
agreement of New Valley and High River, or if they
cannot agree, by an independent, nationally recognized
investment banking or appraisal firm selected by mutual
agreement of New Valley and High River, or if they
cannot agree, selected by the American Arbitration
Association).
<PAGE>
(k) The "Market Value" of any assets other
than securities means the fair market value of such
assets, as determined by an independent, nationally
recognized investment banking or appraisal firm
selected by mutual agreement of New Valley and High
River, or if they cannot agree, selected by the
American Arbitration Association).
Section 5. Certain Fees and Percentage
Payments. (a) Subject to Section 5(c), New Valley
shall pay or cause to be paid to High River the sum of
$50 million promptly upon
(i) any termination of this Agreement by
High River at a time when (A) no Termination Event has
occurred, (B) New Valley or NV Sub is in material
breach of its obligations (the "New Valley
Obligations") under Section 1(a), the fourth sentence
of Section 1(c)(v), the ninth sentence of Section
1(c)(v), Section 1(d)(i) or Section 2 of this Agreement
and (C) High River is not in material breach of its
obligations (the "High River Obligations") under
Section 1(a), the fourth sentence of Section 1(c)(v),
the ninth sentence of Section 1(c)(v) or Section
1(d)(i) of this Agreement or Section 1(c)(iii) or
Section 8 of the BGL Agreement;
(ii) any termination of this Agreement by
New Valley or NV Sub at a time when (A) no Termination
Event has occurred and (B) High River is not in
material breach of the High River Obligations; or
(iii) the consummation of any Business
Combination (as defined in the BGL Agreement),
including any Permitted Business Combination (as
defined in the BGL Agreement), with respect to the New
Valley Group, if (A) such Business Combination is
consummated prior to the later of (I) the date of
RJRN's annual meeting of stockholders for 1997 and (II)
the first anniversary of the date of termination of
this Agreement (the later of such dates being referred
to herein as the "Reference Date"), or (B) a legally
binding agreement to enter into such Business
Combination or any other Business Combination is
entered into prior to the Reference Date and such
Business Combination is consummated prior to the second
anniversary of the date of such agreement or (C) the
BGL Nominees (as such term is defined in the BGL
PAGE
<PAGE>
Agreement) are elected to constitute a majority of the
Board of Directors of RJRN and such Business
Combination is consummated prior to the fifth
anniversary of the date of such election;
provided, however, that (x) High River shall not be
entitled to more than one fee under this Section 5(a),
(y) High River shall not be entitled to any fee under
this Section 5(a) if New Valley shall have previously
or shall concurrently become entitled to the fee
described in Section 5(b) of this Agreement or if BGL
shall have previously become entitled to the fee
described in Section 4(b) of the BGL Agreement and (z)
the amount of any fee to which High River may be
entitled at any time pursuant to this Agreement shall
be reduced by the amount of any fee which High River
shall theretofore have been paid pursuant to Section
4(a) of the BGL Agreement and by the amounts of any
percentage payments which High River shall theretofore
have been paid pursuant to Section 5(d) of this
Agreement or pursuant to Section 4(c) of the BGL
Agreement.
(b) Subject to Section 5(c), High River
shall pay or cause to be paid to New Valley the sum of
$50 million promptly upon:
(i) any termination of this Agreement by
High River at a time when (A) no Termination Event
has occurred, (B) New Valley and NV Sub are not in
material breach of the New Valley Obligations and
(C) BGL and BGLS are not in material breach of
their obligations under Section 1(c)(iii) of the
BGL Agreement (the "BGL Obligations"); or
(ii) any termination of this Agreement
by New Valley or NV Sub at a time when (A) no
Termination Event has occurred, (B) High River is
in material breach of its obligations under
Section 1(a), the fourth sentence of Section
1(c)(v), the ninth sentence of Section 1(c)(v) or
Section 1(d)(i) of this Agreement, (C) New Valley
and NV Sub are not in material breach of the New
Valley Obligations and (D) BGL and BGLS are not in
material breach of the BGL Obligations;
<PAGE>
provided, however, that (x) New Valley shall not be
entitled to more than one fee under this Section 5(b),
(y) New Valley shall not be entitled to any fee under
this Section 5(b) if High River shall have previously
or shall concurrently become entitled to the fee
described in Section 5(a) of this Agreement or the fee
described in Section 4(a) of the BGL Agreement and (z)
the amount of any fee to which New Valley may be
entitled at any time pursuant to this Agreement shall
be reduced by the amount of any fee which BGL shall
theretofore have been paid pursuant to Section 4(b) of
the BGL Agreement.
(c) Each of New Valley and High River shall
give notice to the other promptly upon becoming aware
that any Termination Event has occurred, or that any
event has occurred that would be a Termination Event
but for the giving of notice or the termination of this
Agreement. Such notice shall specify in reasonable
detail the facts giving rise to such Termination Event.
(d) Notwithstanding anything in this
Agreement or the BGL Agreement to the contrary,
(i) if the New Valley Group or the BGL Group
sells any Shares or any Other Securities of any class
or series prior to the Reference Date, then New Valley
shall pay or cause to be paid to High River promptly
upon the consummation of such sale a percentage payment
equal to the product of (A) the Net Profit Override
realized in such sale, multiplied by (B) a fraction
(the "Sale Fraction," which shall be calculated
separately for the Shares and for each class or series
of Other Securities), the numerator of which is the
number of Shares or such Other Securities (as the case
may be) held as of the date hereof, or hereafter
acquired prior to such sale, by the New Valley Group
and the denominator of which is the number of Shares or
such Other Securities (as the case may be) held as of
the date hereof, or hereafter acquired prior to such
sale, by the New Valley Group and the BGL Group; and
(ii) if the New Valley Group or the BGL Group
holds any Shares or any Other Securities of any class
or series on the Reference Date, then New Valley shall
pay or cause to be paid to High River promptly upon the
PAGE
<PAGE>
Reference Date a percentage payment equal to the
product of (A) the Net Profit Override existing on the
Reference Date in respect of such Shares or such Other
Securities, multiplied by (B) a fraction (the "Holdings
Fraction," which shall be calculated separately for the
Shares and for each class or series of Other
Securities), the numerator of which is the number of
Shares or such Other Securities (as the case may be)
held as of the date hereof, or hereafter acquired prior
to the Reference Date, by the New Valley Group and the
denominator of which is the number of Shares or such
Other Securities (as the case may be) held as of the
date hereof, or hereafter acquired prior to the
Reference Date, by the New Valley Group and the BGL
Group;
provided, however, that (x) the amount of any
percentage payment to which High River is entitled at
any time under this Section 5(d) shall be reduced by
the product of (1) the amount of any fee which High
River shall have theretofore been paid by New Valley
under Section 5(a) of this Agreement or by BGLS under
Section 4(a) of the BGL Agreement, multiplied by (2)
the Sale Fraction or the Holdings Fraction, as the case
may be, (y) in the event that (1) the New Valley Group
or the BGL Group realizes a Net Loss on any sale of
Shares or any Other Securities of any class or series,
or a Net Loss exists on the Reference Date in respect
of any Shares or any Other Securities of any class or
series held by the New Valley Group or the BGL Group on
the Reference Date, and (2) High River has theretofore
received any percentage payments from New Valley
pursuant to this Section 5(d) or from BGLS pursuant to
Section 4(c) of the BGL Agreement, then in each such
event High River shall repay or cause to be repaid to
New Valley promptly upon receipt of notice from New
Valley an amount equal to the product of (1) the
excess, if any, of (X) 20% of such Net Loss over (Y)
the aggregate amount of such percentage payments
theretofore received by High River, multiplied by (2) a
fraction, the numerator of which is the aggregate
amount of such percentage payments theretofore paid by
New Valley and the denominator of which is the
aggregate amount of such percentage payments
theretofore paid by New Valley and BGLS and (z) High
<PAGE>
River shall not be entitled to any percentage payment
under this Section 5(d) if New Valley shall have
previously become entitled to the fee described in
Section 5(b) of this Agreement or if BGL shall have
previously become entitled to the fee described in
Section 4(b) of the BGL Agreement. New Valley and NV
Sub shall use their reasonable best efforts to provide
to High River (x) once each calendar week, commencing
with the date of this Agreement, a report containing a
reasonably detailed calculation of the number of Shares
and the amount of Other Securities then held by the New
Valley Group and the Weighted-Average Cost of such
Shares and Other Securities, as well as a reasonably
detailed estimate prepared in good faith of the New
Valley Expenses incurred to that date and (y) promptly
after the close of business on each business day on
which any Shares are sold by the New Valley Group, a
report setting forth the number of Shares or Other
Securities sold since the close of business on the
previous business day, the aggregate price realized in
such sales and the aggregate commissions paid in such
sales; provided, however, that New Valley and NV Sub
shall not incur any liability or suffer any prejudice
as a result of its provision of any such estimate.
(e) The parties hereto hereby acknowledge
and agree that the arrangements in Section 5(d) with
respect to percentage payments constitute a partnership
for Federal income tax purposes and that the parties
hereto shall file income tax returns in a consistent
manner.
Section 6. Costs and Expenses. Each party
hereto shall be solely responsible for all of its costs
and expenses relating to this Agreement and the
transactions contemplated hereby.
Section 7. Required Filings; Publicity. (a)
Each of the parties hereto shall (and shall cause each
of its affiliates to) (i) take all actions necessary to
comply promptly with all legal requirements which may
be imposed on such party (or its affiliates) as a
result of this Agreement or any of the transactions
contemplated hereby, and (ii) without limiting the
foregoing, make all required filings pursuant to the
Securities Act and the Exchange Act.
<PAGE>
(b) To the extent reasonably practicable,
the parties hereto shall consult with each other prior
to all public statements or filings to be issued or
made by any of them or their affiliates with respect to
this Agreement and the transactions contemplated
hereby.
Section 8. Representations and Warranties.
(a) Each of the parties hereto hereby represents and
warrants to the other parties hereto as follows:
(i) Such party is a corporation or
partnership duly organized, validly existing and
in good standing under the laws of the state of
its incorporation or organization, has full
corporate or partnership power and authority to
execute and deliver this Agreement and to perform
its obligations hereunder and to consummate the
transactions contemplated hereby.
(ii) The execution and delivery by such
party of this Agreement and the performance by
such party of its obligations hereunder have been
duly and validly authorized by all necessary
corporate or partnership action. This Agreement
has been duly and validly executed and delivered
by such party and constitutes a legal, valid and
binding obligation of such party enforceable
against such party in accordance with its terms.
(iii) The execution and delivery by
such party of this Agreement do not, and the
performance by such party of its obligations under
this Agreement will not, conflict with or result
in a violation or breach of any of the provisions
of the certificate of incorporation, bylaws or
other organizational documents of such party, any
law or order applicable to such party or any of
such party's contractual obligations to other
persons, in each case, in any manner that would
prevent or materially impede such party from
fulfilling its obligations hereunder.
PAGE
<PAGE>
(b) New Valley and NV Sub hereby represent
and warrant to High River that as of the date hereof
the New Valley Group owns beneficially and of record
4,278,700 Shares, free and clear of all liens and
encumbrances whatsoever, which Shares were purchased by
the New Valley Group at an aggregate cost (exclusive of
all brokerage fees and commissions incurred in the
acquisition of such Shares) of $129,572,796, and in
respect of which New Valley and NV Sub received
dividends of $37,500 on July 3, 1995 and dividends of
$298,387.50 on October 2, 1995. New Valley and NV Sub
further represent that, upon the consummation of the
purchase and sale of Purchased Shares contemplated by
Section 1(a), High River will acquire title to the
Purchased Shares, free and clear of all encumbrances
and liens whatsoever.
(c) High River hereby represents and
warrants to New Valley and NV Sub that as of the date
hereof the High River Group owns beneficially and of
record 1,205,900 Shares, free and clear of all liens
and encumbrances whatsoever, which Shares were
purchased by the High River Group at an aggregate cost
(including all brokerage fees and commissions incurred
in the acquisition of such Shares) of $33,173,434.30,
and in respect of which High River received dividends
of $452,212.50 on October 2, 1995. High River further
represents and warrants that it has as of the date
hereof, and will have on each date prior to the
termination of this Agreement, net stockholders' or
partners' equity of at least $22 million.
Section 9. Miscellaneous. (a) For purposes
of this Agreement, (i) the terms "affiliate" and
"associate" have the meanings assigned to them in Rule
12b-2 promulgated under the Exchange Act, provided that
the BGL Group shall not be deemed to be "affiliates" or
"associates" of the New Valley and NV Sub for any
purpose of this Agreement, (ii) the term "shall" is
used herein to refer to actions which are compulsory
and thus to create binding obligations among the
parties hereto, (iii) the terms "will," "expect,"
"expectation," "intend" and "intention," and other
terms of similar import, are used herein solely to
refer to the aspirations and objectives of the parties
<PAGE>
hereto and thus are not used herein to create binding
obligations among the parties hereto and (iv) the term
"may" is used herein solely to refer to conduct which
is optional and not compulsory and thus is not used
herein to create binding obligations among the parties
hereto.
(b) The parties hereto shall have no rights,
powers or duties except as specified herein, and no
such rights, powers or duties shall be implied.
Nothing herein shall give any party hereto the power to
bind any other party hereto to any contract, agreement
or obligation to any third party.
(c) All notices and other communications
hereunder shall be in writing and shall be deemed given
when received by the parties hereto at the following
addresses (or at such other address for a party as
shall be specified by like notice):
If to New Valley or NV Sub:
100 S.E. Second Street
Miami, Florida 33131
Attention: Bennett S. LeBow
Telecopy: (305) 579-8001
With a copy to:
Michael L. Hirschfeld, Esq.
Milbank, Tweed, Hadley & McCloy
1 Chase Manhattan Plaza
New York, New York 10005-1413
Telecopy: (212) 530-5219
If to High River:
c/o/ Icahn Associates Corp.
114 West 47th Street - 19th Floor
New York, New York 10036
Attention: Carl C. Icahn
Telecopy: (212) 921-3359
With a copy to:
PAGE
<PAGE>
Marc Weitzen, Esq.
Gordon Altman Butowsky
Weitzen Shalov & Wein
114 West 47th Street-20th Floor
New York, New York 10036
Telecopy: (212) 626-0799
(d) This Agreement may be executed in two or
more counterparts, all of which shall be considered one
and the same agreement.
(e) This Agreement constitutes the entire
agreement among the parties hereto and supersedes all
prior agreements and understandings among the parties
hereto with respect to the subject matter hereof.
(f) This Agreement shall be governed and
construed in accordance with the laws of the state of
New York applicable to a contract executed and
performed in such State, without giving effect to the
conflicts of laws principles thereof.
(g) Neither this Agreement nor any of the
rights, interests or obligations hereunder shall be
assigned by any of the parties hereto (whether by
operation of law or otherwise) without the prior
written consent of the other parties hereto; provided,
however, that High River may assign any of its rights
and interests hereunder to (i) any corporation
incorporated in any state of the United States or in
the District of Columbia if at least 98.5% of the
shares of each class of capital stock of such
corporation are owned by Carl C. Icahn (a "wholly-owned
Icahn subsidiary"), either directly or through one or
more wholly-owned Icahn subsidiaries or (ii) any
partnership, the partners of which are all wholly-owned
Icahn subsidiaries; and provided further that no such
assignment shall relieve High River of any of its
obligations hereunder. Subject to the preceding
sentence, this Agreement shall be binding upon, inure
to the benefit of and be enforceable by the parties
hereto and their respective successors and assigns.
PAGE
<PAGE>
(h) This Agreement may be amended,
supplemented or modified only by a written instrument
duly executed by or on behalf of each party hereto. No
waiver of any term or condition
in this Agreement shall be effective unless set forth
in writing and signed by or on behalf of the waiving
party. No waiver by any party hereto of any term or
condition of this Agreement shall be deemed to be or
construed as a waiver of the same or any other term or
condition of this Agreement on any future occasion.
(i) The terms and provisions of this
Agreement are intended solely for the benefit of the
parties hereto and their successors and permitted
assigns and are not intended to confer upon any other
person any rights or remedies hereunder.
(j) In the event that any party hereto
prevails in any action or proceeding alleging a breach
of this Agreement, such party shall be entitled to
recover all reasonable attorney's fees and other costs
of prosecuting such action or proceeding and, in
addition, shall be entitled to receive simple interest
on any damages awarded in such action or proceeding at
the rate of 10% per annum from the date of such breach.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be signed by their
representatives thereunto duly authorized, all as of
the date first above written.
NEW VALLEY CORPORATION
By:
ALKI CORP.
By:
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE INVESTORS
CORP., INC.
General Partner
By:
[Signature page to Agreement among New Valley
Corporation, ALKI Corp. and High River Limited
Partnership dated October 17, 1995]
PAGE
<PAGE>
NEW VALLEY CORPORATION
ALKI CORP.
100 S.E. Second Street
Miami, Florida 33131
October 17, 1995
High River Limited Partnership
100 South Bedford Road
Mount Kisco, New York 10549
Attn: Carl C. Icahn
Dear Carl:
By executing this letter in the space provided
below, New Valley Corporation, a New York corporation ("New
Valley"), ALKI Corp., a Delaware corporation and a direct
wholly owned subsidiary of New Valley ("NV Sub") and High
River Limited Partnership, a Delaware limited partnership
("High River"), each hereby agree as follows:
1. Notwithstanding the terms of Sections
1(c)(ii)-(iv) of the Agreement by and among New Valley,
NV Sub and High River, dated October 17, 1995 (the "New
Valley Agreement"), New Valley and NV Sub ("New Valley
Group") and High River and its affiliates ("High River
Group") will calculate the aggregate number and the
average price of all shares of common stock, par value
$.01 per share, of RJR Nabisco Holding Corp. ("Shares")
owned by New Valley Group and High River Group,
respectively, on a periodic basis, with emphasis on
doing so when the parties own a similar number of
Shares, and make payments to one another in immediately
available funds, so that after giving effect to such
payments, the New Valley Group and the High River Group
will have invested the same amount in Shares (exclusive
of brokerage fees and commissions incurred in such
acquisitions).
PAGE
<PAGE>
2. Strict compliance with Section 1(c)(ii)-(iv)
of the New Valley Agreement is not required,
notwithstanding the terms thereof.
3. Nothing herein contained shall be construed
to otherwise abrogate the rights and obligations of the
parties to this letter agreement with respect to all
other provisions of the New Valley Agreement.
If the foregoing reflects your understanding,
please sign this letter below. Upon your execution hereof,
this letter agreement will become a binding contract between
us.
Very truly yours,
Bennett S. LeBow
Accepted and Agreed to:
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE INVESTORS CORP., INC.
General Partner
By:_________________________
Edward E. Mattner
President
[Signature page for letter agreement by and among New Valley
Corporation, ALKI Corp. and High River Limited Partnership]
PAGE
<PAGE>
High River Limited Partnership
100 South Bedford Road
Mount Kisco, New York 10549
November 5, 1995
New Valley Corporation
ALKI Corp.
100 S.E. Second Street
Miami, Florida 33131
Attn: Bennett S. LeBow
Dear Bennett:
By executing this letter in the space provided
below, New Valley Corporation, a New York corporation ("New
Valley"), ALKI Corp., a Delaware corporation and a direct
wholly-owned subsidiary of New Valley ("NV Sub") and High
River Limited Partnership, a Delaware limited partnership
("High River"), each hereby agree as follows:
1. All capitalized terms used herein and not
otherwise defined shall have the meanings ascribed to such
terms in the Agreement by and among New Valley, NV Sub and
High River, dated October 17, 1995 (the "New Valley
Agreement").
2. Section 1(b)(iii) of the New Valley Agreement
is hereby amended to add the following to the end of the
subsection:
"; provided, however, that neither High River nor
the New Valley Group shall have obligation to make
a Second Stage Investment unless and until the New
Valley Group gives notice ("Second Stage Notice")
to High River of the New Valley Group's intention
to proceed with and make its Second Stage
Investment."
PAGE
<PAGE>
3. Notwithstanding the terms of Sections
1(c)(ii)-(iv) of the New Valley Agreement and the letter
agreement by and among New Valley, NV Sub and High River,
dated October 17, 1995 (the "Letter Agreement"), following
the first Stage Completion Date and prior to the earlier of
(i) such time that New Valley, NV Sub and any assignee of
the foregoing ("New Valley Group") beneficially own a number
of shares of common stock, par value $.01 per share, of RJR
Nabisco Holdings Corp. ("Shares") equal to or greater than
the number of Shares beneficially owned by High River and
its affiliates ("High River Group") (the "Catch Up Date")
and (ii) both New Valley Group and High River Group have
made investments in Shares equal to at least the Second
Stage Investment (the "Second Stage Completion Date"),
neither High River Group nor New Valley Group shall be
obligated to make or cause to be made to the other party:
(i) such transfer of Shares and such
payments as would have been necessary so
that, after giving effect to such transfers
and payments, New Valley Group and High River
Group would have acquired the same number of
Qualifying Shares;
(ii) such payments as would have been
necessary so that, after giving effect to
such payments, New Valley Group and High
River Group would have invested the same
amount in Qualifying Shares (exclusive of
brokerage fees and commissions incurred in
such acquisitions); or
(iii) such transfer of Non-Qualifying Shares
or payment for Non-Qualifying Shares in
accordance with Section 1(c)(iii) of the New
Valley Agreement.
In the event that the Catch Up Date precedes the Second
Stage Completion Date and following the Catch Up Date (but
prior to the Second Stage Completion Date) New Valley Group
purchases Shares, then (x) the parties shall calculate the
aggregate number and the average price of all Qualifying
Shares acquired after the Catch Up Date by New Valley Group
and High River Group, respectively, on a periodic basis,
with emphasis on doing so when the parties own a similar
number of Shares, and make payments to one another in
immediately available funds, to that after giving effect to
PAGE
<PAGE>
such payments, New Valley Group and High River Group will
have invested the same amount in Qualifying Shares acquired
after the Catch Up Date (exclusive of brokerage fees and
commissions incurred in such acquisitions); (y) New Valley
Group may, in accordance with Section 1(c)(iii) of the New
Valley Agreement, put to High River Non-Qualifying Shares at
the Hurdle Price; and (z) the parties shall follow the even
up procedures set forth in Section 1(c)(v) of the New Valley
Agreement. In the event that following the Catch Up Date,
New Valley does not purchase Shares, then clauses (i)-(iii)
of this Paragraph 3 shall remain in effect.
4. Section 1(d)(i) of the New Valley Agreement
is hereby amended to delete the first two lines in their
entirety and to substitute in lieu thereof the following:
"Except as provided in subpart (ii) of this
subparagraph (d) and except as provided in Section 9(g) of
this Agreement, until the termination of this Agreement,"
5. Notwithstanding Section 1(d) of the New
Valley Agreement, if at any time subsequent to the First
Stage Completion Date but prior to the Second Stage
Completion Date, High River Group beneficially owns more
Shares than New Valley Group, then High River Group may
sell, transfer or otherwise dispose of ("Transfer") Shares
beneficially owned by it, provided that following such
Transfer, the number of Shares beneficially owned by High
River Group would not be less than the number of Shares
beneficially owned by New Valley Group, as reflected in New
Valley Group's last written notice to High River Group in
accordance with Section 1(c)(i) of the New Valley Agreement.
6. Section 3(b)(ii)(B) of the New Valley
Agreement is hereby amended date delete the subsection in
its entirety and to substitute in lieu thereof the
following:
"(B) a party hereto which is not a member of
such selling or offering Group thereafter
terminates this Agreement prior to or on the
tenth day after the first date that such
party becomes aware that such event has
occurred,"
PAGE
<PAGE>
7. New Valley Group shall promptly make any
payments due under Section 5(d) of the New Valley Agreement
and Section 4(c) of the Agreement among Brooke Group Ltd.,
BGLS Inc. and High River dated October 17, 1995 (the "BGL
Agreement"). In the event that High River Group believes
that New Valley Group has breached any of its obligations
under Section 5(d) of the New Valley Agreement or Section
4(c) of the BGL Agreement, the parties shall promptly follow
the procedures set forth in Section 1(c)(v) of the New
Valley Agreement in order to resolve the dispute. If the
Arbitrator determines that (i) New Valley Group is required
to make a payment pursuant to Section 5(d) of the New Valley
Agreement and/or Section 4(c) of the BGL Agreement, New
Valley Group shall make or cause to be made such payment,
within twenty (20) days after receiving the Arbitrator's
notice of decision. In the event that New Valley Group
fails to make such payment within twenty (20) days after
receipt of the Arbitrator's notice of decision, New Valley
Group shall immediately pay or cause to be paid to High
River Group an additional sum in the amount of $50 million.
8. The first sentence of Section 9(g) of the New
Valley Agreement is hereby amended to add the following to
the end of the sentence:
"; and provided, however, that the New Valley
Group may assign any of its rights and
interests hereunder to (i) any corporation
incorporated in any state of the United
States or in the District of Columbia if 100%
of the shares of each class of capital stock
of such corporation are owned by New Valley
(a "wholly-owned New Valley subsidiary"),
either directly or through one or more
wholly-owned New Valley subsidiaries or (ii)
any partnership, the partners of which are
all wholly-owned New Valley subsidiaries; and
provided, further, that no such assignment
shall relieve the New Valley Group of any of
its obligations hereunder."
PAGE
<PAGE>
9. In the event that prior to February 1, 1996
(i) New Valley Group provides High River Group with notice
of termination of the New Valley Agreement or BGL Group
provides High River with notice of termination of the BGL
Agreement at a time when a Termination Event (as defined in
the BGL Agreement) set forth in Section 3(c)(vii) or
3(c)(viii) of the BGL Agreement has occurred or (ii) High
River Group provides New Valley Group with notice of
termination of the New Valley Agreement or provides BGL
Group with notice of termination of the BGL Agreement at a
time when a Termination Event set forth in Section
3(c)(ix)(A) of the BGL Agreement has occurred, New Valley
Group shall not transfer any Shares beneficially owned by
New Valley Group until February 1, 1996 in consequence of or
in reliance upon such notice of termination. If the notice
of termination specified in clause (i) of the preceding
sentence is provided after January 16, 1996, and the
aggregate number of Shares beneficially owned by High River
Group exceeds the aggregate number of Shares beneficially
owned by New Valley Group plus BGL Group (collectively, the
"Aggregate LeBow Shares"), New Valley Group shall not
Transfer any Shares beneficially owned by New Valley Group
for fifteen (15) days following receipt by High River Group
of new Valley Group's or BGL Group's notice of termination;
provided, however, that on such date not before February 1,
1996 that the aggregate number of Shares beneficially owned
by High River Group is equal to or less than the Aggregate
Lebow Shares, and thereafter, New Valley Group may Transfer
any Shares beneficially owned by New Valley Group.
10. In the event that High River Group provides
New Valley group with notice of termination of the New
Valley Agreement or provides BGL Group with notice of
termination of the BGL Agreement at a time when a
Termination Event under any of Sections 3(c)(ix)(B) through
(E) of the New Valley Agreement has occurred and the
aggregate number of shares beneficially owned by High River
Group exceeds the Aggregate LeBow Shares, New Valley Group
shall not Transfer any Shares beneficially owned by New
Valley Group in consequence of or in reliance upon such
notice of termination until the earlier of (i) fifteen (15)
days following receipt by New Valley Group or BGL Group of
High River Group's notice of termination specified in the
preceding sentence and (ii) the date that the aggregate
number of Shares beneficially owned by High River Group is
equal to or less than the Aggregate LeBow Shares.
PAGE
<PAGE>
11. Nothing herein contained shall be construed
to otherwise abrogate the rights and obligations of the
parties to this letter agreement with respect to all other
provisions of the New Valley Agreement, the BGL Agreement
and the Letter Agreement.
If the foregoing reflects your understanding,
please sign the letter below. Upon your execution hereof,
this letter agreement will become a binding contract between
us.
Very truly yours,
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE INVESTORS
CORP., INC.
Its: General Partner
By:
Name:
Title:
Agreed to and Accepted:
NEW VALLEY CORPORATION
By:
Name: Bennett S. LeBow
Title: Chairman and Chief Executive Officer
ALKI CORP.
By:
Name: Bennett S. LeBow
Title: Chairman, President and
Chief Executive Officer
[Signature page for letter agreement by and among New Valley
Corporation, ALKI Corp. and High River Limited Partnership,
dated November 5, 1995]
EXHIBIT 5
AGREEMENT OF TERMINATION
THIS AGREEMENT (the "Termination Agreement") is made as
of the 5th day of June, 1996, by and among New Valley Corporation,
a New York corporation ("New Valley"), ALKI Corp., a Delaware
corporation and a direct wholly owned subsidiary of New Valley
("ALKI"), High River Limited Partnership, a Delaware limited
partnership ("High River"), Brooke Group Ltd., a Delaware
corporation ("BGL"), and BGLS Inc. ("BGLS"), a Delaware corporation
and a direct wholly-owned subsidiary of BGL (collectively, the
"Parties").
BGL, BGLS and High River are parties to an agreement
dated October 17, 1995, as amended by the letter agreement dated
November 5, 1995 (the "High River Agreement"). New Valley, ALKI and
High River are parties to an agreement dated October 17, 1995, as
amended by the letter agreement dated October 17, 1995, and as
further amended by the letter agreement dated November 5, 1995 (the
"New Valley Agreement") (the High River Agreement and the New
Valley Agreement are collectively referred to as the "Agreements").
Each of the Parties hereby agrees to terminate each of the
Agreements to which it is a party.
Despite the termination of the Agreements by the mutual
consent as provided herein, the Parties hereto agree that the
effect of such termination shall be as if any of the Parties to
either of the Agreements terminated such Agreement following a
Termination Event applicable to such terminating person.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of this 5th day of June, 1996.
BROOKE GROUP LTD.
By: /s/Bennett S. Lebow
Name: Bennett S. Lebow
Its: Chief Executive Officer<PAGE>
ALKI CORP.
By: /s/Bennett S. Lebow
Name: Bennett S. Lebow
Its: Chief Executive Officer<PAGE>
BGLS INC.
By: /s/Bennett S. Lebow
Name: Bennett S. Lebow
Its: Chief Executive Officer
NEW VALLEY CORPORATION
PAGE
<PAGE>
HIGH RIVER LIMITED PARTNERSHIP
By: RIVERDALE INVESTORS CORP.,
INC.
By: /s/Edward E. Mattner
Name: Edward E. Mattner
Its: President<PAGE>
By: /s/Bennett S. Lebow
Name: Bennett S. Lebow
Its: Chief Executive Officer<PAGE>
`
EXHIBT 6
[COMPOSITE COPY
GIVING EFFECT
TO AMENDMENT
NOS. 1-11 AND TO
TERMINATION AND
AMENDMENT
AGREEMENT DATED
AS OF
JANUARY 12, 1994]
**************************************************************
TORTOISE CORP.
_________________________________
AMENDED AND RESTATED CREDIT AGREEMENT
Dated as of May 20, 1993
_________________________________
INTERNATIONALE NEDERLANDEN BANK N.V., NEW YORK BRANCH
**************************************************************
PAGE
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT dated as of May 20,
1993, between: TORTOISE CORP., a corporation duly organized
and validly existing under the laws of New York (the
"Company"); and INTERNATIONALE NEDERLANDEN BANK N.V., NEW YORK
BRANCH (together with any assignee thereof, the "Bank"),
formerly known as NMB Postbank Groep N.V., New York Branch.
WHEREAS, the Company and the Bank have heretofore entered
into a certain Credit Agreement, dated as of January 10, 1991,
as successively amended (the "Original Credit Agreement"); and
WHEREAS, the Company and the Bank now desire to amend and
restate the Original Credit Agreement;
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, (i) the Company and the Bank agree that the
Original Credit Agreement is hereby amended and restated in
its entirety as provided for herein, and (ii) the Company and
the Bank further agree as follows:
Section 1. Definitions and Accounting Matters.
1.01 Certain Defined Terms. As used herein, the following
terms shall have the following meanings (all terms defined in
this Section 1.01 or in other provisions of this Agreement in
the singular to have the same meanings when used in the plural
and vice versa):
"ACF" shall mean ACF Industries, Incorporated, a New Jersey
corporation, and its successors and assigns.
"ACF Holding" shall mean ACF Industries Holding Corp., a
Delaware corporation, and its successors and assigns.
"ACF Holding Guaranty" shall mean that certain Guaranty,
dated June 17, 1994, as the same may be modified and
supplemented and in effect from time to time, from ACF Holding
in favor of the Bank.
"ACL II C" shall mean American Car Line II Company, a
Delaware corporation.
"ACL II C Guaranty" shall mean the Guaranty substantially in
the form of Exhibit C-2 from ACL II C to the Bank, as the same
shall be modified and supplemented and in effect from time to
time. ACL II C is being compensated by the Company for
executing and delivering the ACL II C Guaranty.
<PAGE>
"ACL II C Security Agreement" shall mean the security
agreement-trust deed dated May 20, 1993 between ACL II C and
the Bank, as the same shall be modified and supplemented and
in effect from time to time.
"Advances" shall mean (i) loans made under credit or loan
agreements between or among one or more borrowers and one or
more financial institutions of which loans the Company is the
direct beneficial owner and the owner of record and
(ii) participations in loans made under credit or loan
agreements between or among one or more borrowers and one or
more financial institutions which participations the Company
holds pursuant to participation agreements satisfactory to the
Bank in form and substance with one or more financial
institutions.
"Affiliate" shall mean any person which directly or
indirectly controls, or is under common control with, or is
controlled by, the Company and, if such Person is an
individual, any member of the immediate family (including
parents, spouse and children) of such individual and any trust
whose principal beneficiary is such individual or one or more
members of such immediate family and any Person who is
controlled by any such member or trust. As used in this
definition, "control" (including, with its correlative
meanings, "controlled by" and "under common control with")
shall mean possession, directly or indirectly, of power to
direct or cause the direction of management or policies
(whether through ownership of securities or partnership or
other ownership interests, by contract or otherwise), provided
that, in any event, any Person which owns directly or
indirectly 5% or more of the securities having ordinary voting
power for the election of directors or other governing body of
a corporation or 5% or more of the partnership or other
ownership interests of any other Person (other than as a
limited partner of such other Person) will be deemed to
control such corporation or other Person. Notwithstanding the
foregoing, no individual shall be deemed to be an Affiliate
solely by reason of his or her being a director, officer or
employee of the Company.
"Agreement" shall mean, on any date, this Credit Agreement as
originally in effect and as thereafter from time to time
amended, supplemented, amended and restated, or otherwise
modified and in effect.
"AKF" shall mean AKF Corp., a Delaware corporation.
<PAGE>
"AKF Railcar Credit Agreement" shall mean that certain Credit
Agreement, dated as of December 21, 1994, between AKF and the
Bank, as the same shall be amended, supplemented, amended and
restated, or otherwise modified from time to time.
"AKF Security Agreement" shall mean that certain Security
Agreement-Trust Deed, dated as of December 21, 1994, between
AKF and the Bank, as the same shall be modified and
supplemented and in effect from time to time.
"Applicable Lending Office" shall mean the Principal Office
or, with respect to any Type of Loan, such other office of the
Bank (or of an affiliate of the Bank) as the Bank may from
time to time specify to the Company as the office by which the
Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean: (a) with respect to Base
Rate Loans, 1-1/2% per annum; and (b) with respect to
Eurodollar Loans, 3-1/2% per annum.
"AREP" shall mean American Real Estate Partners, L.P., a
Delaware limited partnership.
"Assets" shall mean Advances and Securities.
"Base Rate" shall mean, for any day, the higher of (a) the
Federal Funds Rate for such day plus 1/2 of 1% per annum and
(b) the Prime Rate for such day. Each change in any interest
rate provided for herein based upon the Base Rate resulting
from a change in the Base Rate shall take effect at the time
of such change in the Base Rate.
"Base Rate Loans" shall mean Loans which bear interest at
rates based upon the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement,
the Letters of Credit and all applications therefor, the Note,
the ARAC Guaranty, the Bayswater Guaranty, the Tortoise
Guaranty and the Security Documents.
"Bayswater Guaranty" shall mean the Guaranty, dated as of
December 22, 1993, from the Company to the Bank, as the same
shall be modified and supplemented and in effect from time to
time.
"BGLS" means BGLS Inc., a Delaware corporation.
<PAGE>
"Brooke Partners" means Brooke Partners, L.P., a Delaware
limited partnership.
"Borrowing Base" shall mean, at any time, an amount equal to
the sum at such time of (i) 50% of the Portfolio Value plus
(ii) the aggregate amount of cash and Permitted Investments on
deposit in the Collateral Account.
"Borrowing Value" shall mean, with respect to any Asset at
any time, an amount equal to 50% of the Fair Market Value of
such Asset at such time.
"Business Day" shall mean any day on which commercial banks
are not authorized or required to close in New York City and,
if such day relates to a borrowing of, a payment or prepayment
of principal of or interest on, or a Conversion of or into, or
an Interest Period for, a Eurodollar Loan or a notice by the
Company with respect to any such borrowing, payment,
prepayment, Conversion or Interest Period, which is also a day
on which dealings in Dollar deposits are carried out in the
London interbank market.
"Capital Lease Obligations" shall mean, for any Person, the
obligations of such Person to pay rent or other amounts under
a lease of (or other agreement conveying the right to use)
real and/or personal Property which obligations are required
to be classified and accounted for as a capital lease on a
balance sheet of such Person under GAAP (including Statement
of Financial Accounting Standards No. 13 of the Financial
Accounting Standards Board).
"Closing Date" shall mean the date hereof.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral Account" shall have the meaning assigned that
term in the Security Agreement.
"Commitment" shall mean the obligation of the Lender to make
Loans to and to issue Letters of Credit for the account of the
Company in an aggregate amount at any one time outstanding up
to but not exceeding $200,000,000 (as the same may be reduced
at any time or from time to time pursuant to Section 2.04
hereof).
"Commitment Termination Date" shall mean December 19, 1996.
<PAGE>
"Consolidated Subsidiary" shall mean, for any Person, each
Subsidiary of such Person (whether now existing or hereafter
created or acquired) the financial statements of which shall
be (or should have been) consolidated with the financial
statements of such Person in accordance with GAAP.
"Continue", "Continuation" and "Continued" shall refer to the
continuation pursuant to Section 2.08 hereof of a Eurodollar
Loan from one Interest Period to the next Interest Period.
"Contract" is defined in Section 3.06.
"Convert", "Conversion" and "Converted" shall refer to a
conversion pursuant to Section 2.08 hereof of Base Rate Loans
into Eurodollar Loans or of Eurodollar Loans into Base Rate
Loans, which may be accompanied by the transfer by the Bank
(at its sole discretion) of a Loan from one Applicable Lending
Office to another.
"Credit Extension" shall mean, as the context may require,
(a) the making of a Loan; or
(b) the issuance or extension of any Letter of Credit.
"Default" shall mean an Event of Default or an event which
with notice or lapse of time or both would become an Event of
Default.
"Disbursement" shall mean any payment made under a Letter of
Credit by the Bank to the beneficiary (or its assignee or
transferee) of such Letter of Credit.
"Disbursement Date" is defined in Section 3.04.
"Dividend Payment" shall mean dividends (in cash, Property
or obligations) on, or other payments or distributions on
account of, or the setting apart of money for a sinking or
other analogous fund for, or the purchase, redemption,
retirement or other acquisition of, any shares of any class of
stock of the Company, but excluding dividends payable solely
in shares of capital stock of the Company.
"Dollars" and "$" shall mean lawful money of the United
States of America.
"Eligible Pledged Advances" shall mean all Pledged Advances
other than (i) Pledged Advances owing by any Person to the
<PAGE>
extent that the Fair Market Value of all Pledged Assets issued
or otherwise owing by such Person exceeds 15% (or such higher
or lower percentage, if any, specified by the Bank to the
Company at the time (or from time to time as the Bank and the
Company may mutually agree) it initially accepted Assets
issued or otherwise owing by such Person as Eligible Pledged
Assets) of the Portfolio Value as at the time of determination
and (ii) Pledged Advances as to which there exists any
restriction (including, without limitation, any requirement
that prior consent of any Person be obtained, but excluding
any limitation that has been waived to the satisfaction of the
Bank) in the documentation relating thereto limiting the right
of any holder thereof to assign or pledge the same or the
right of any pledgee thereof to exercise foreclosure remedies
with respect thereto, unless the Bank has otherwise agreed in
writing.
"Eligible Pledged Assets" shall mean Eligible Pledged
Advances and Eligible Pledged Securities.
"Eligible Pledged Securities shall mean (a) all Pledged
Securities constituting RJR Common Stock and (b) all other
Pledged Securities other than Pledged Securities issued by any
Person (other than RJR with respect to the RJR Common Stock)
to the extent that the Fair Market Value of all Pledged Assets
issued or otherwise owing by such Person exceeds (i) in the
case of AREP limited partnership interests, 20% of the
Portfolio Value as at the time of determination, (ii) in the
case of the aggregate of (a) the 14.5% notes due April 1, 1998
issued by Brooke Partners, (b) the 13.75% notes due March 1,
1997 issued by BGLS, (c) the 11.50% notes due February 1, 1999
issued by Liggett and (d) the class A and class B preferred
stock, par value $0.01 per share and par value $0.10 per
share, respectively, of New Valley, collectively, 15% of the
Portfolio Value as at the time of determination and (iii) in
all other cases (other than with respect to the RJR Common
Stock), 15% of the Portfolio Value as at the time of
determination (or such higher or lower percentage, if any,
specified by the Lender to the Company at the time (or from
time to time as the Lender and the Company may mutually agree)
it initially accepted Assets issued or otherwise owing by such
Person as Eligible Pledged Assets).
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or
<PAGE>
business which is a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the
Code) as the Company or is under common control (within the
meaning of Section 414(c) of the Code) with the Company.
"Escrow Instructions" shall mean escrow instructions from
each of ACF, Tortoise, Unicorn Associates Corporation, a New
York corporation, and Chelonian Corp., a New York corporation,
each substantially in the form of Exhibit C-1 hereto, as each
may be amended, restated or otherwise modified, from time to
time, each executed pursuant to this agreement.
"Eurodollar Base Rate" shall mean, with respect to any
Eurodollar Loan for any Interest Period therefor, the rate per
annum (rounded upwards, if necessary, to the nearest 1/16 of
1%) quoted by the Bank at approximately 11:00 a.m. London time
(or as soon thereafter as practicable) on the date two
Business Days prior to the first day of such Interest Period
for the offering by the Bank to leading banks in the London
interbank market of Dollar deposits having a term comparable
to such Interest Period and in an amount comparable to the
principal amount of the Eurodollar Loan to be made by the Bank
for such Interest Period.
"Eurodollar Loans" shall mean Loans interest rates on which
are determined on the basis of rates referred to in the
definition of "Eurodollar Base Rate" in this Section 1.01.
"Eurodollar Rate" shall mean, for any Eurodollar Loan for any
Interest Period therefor, a rate per annum (rounded upwards,
if necessary, to the nearest 1/100 of 1%) determined by the
Bank to be equal to the Eurodollar Base Rate for such Loan for
such Interest Period divided by 1 minus the Reserve
Requirement for such Loan for such Interest Period.
"Event of Default" shall have the meaning assigned to such
term in Section 9 hereof.
"Excess Equity" shall mean at any time, the difference
between (but not less than zero) (A) the sum of (x) the
aggregate Fair Market Value of Eligible Pledged Securities at
such time, plus (y) the aggregate Fair Market Value of
Eligible Pledged Advances at such time, plus (z) the aggregate
amount of cash and Permitted Investments on deposit in the
Collateral Account at such time, and (B) the sum of (x) the
aggregate outstanding principal amount of the Loans at such
time, plus (y) the aggregate amount of all Letter of Credit
Outstandings at such time.
<PAGE>
"Fair Market Value" shall mean at any time:
(a) with respect to any Security, the arithmetic mean of
the bid prices quoted by the Valuation Sources for such
Security to the Bank for the purchase of such Security at such
time; provided that (i) if any Valuation Source for such
Security does not timely furnish such information, the Bank
may determine such Fair Market Value by reference to the
arithmetic mean of bid prices quoted by the remaining
Valuation Sources for such Security, (ii) if no Valuation
Source for such Security timely furnished such information,
the "Fair Market Value" of such Security at such time shall
mean the fair market value thereof at such time as determined
by the Bank in its sole discretion, and (iii) the "Fair Market
Value" of any Security proposed by the Company to be a Pledged
Security shall mean, at the time such Security becomes a
Pledged Security, the cash purchase price paid by the Company
for such Security in an open market transaction not with an
Affiliate where the purchase is substantially contemporaneous
with the pledge of such Security to the Bank under the
Security Agreement (or with an order for delivery to the Bank
against payment according to customary business terms).
Notwithstanding clauses (i) and (ii), but subject to clause
(iii), of the preceding sentence, the Company may complete
each Valuation Certificate and make each Credit Extension
request hereunder on the basis of quotes of bid prices for the
relevant Securities at the relevant time from sources
reasonably believed by it to be reliable and the Bank may (but
shall not be required to) rely upon such determinations by the
Company; provided that, through and including the second
Business Day following the date of such Valuation Certificate
or Credit Extension request, as the case may be, the Bank may
notify the Company that the amount of such determination by
the Company exceeded the Fair Market Value of the relevant
Securities, in which case (i) if such Valuation Certificate
incorrectly showed the Company to be in compliance with
Section 8.14 hereof on any date, the Fair Market Value of such
Securities on the date the Bank furnishes such notice to the
Company shall for all purposes of the Basic Documents be
deemed to be the lower of Fair Market Value of such Securities
as at the date of such Valuation Certificate or such Fair
Market Value on the date of such notice and (ii) if the amount
of such Credit Extension exceeded the amount to which the
Company was entitled by reason of clause (a) of the second
sentence of Section 2.01 hereof, the Bank shall be entitled to
demand at any time through and including such second Business
Day that the Company immediately pay or prepay Loans and/or
pay funds into the Collateral Account in an aggregate
principal amount equal to such excess;
<PAGE>
(b) with respect to any Advance, (i) at the time such
Advance becomes a Pledged Advance until the first Valuation
Event (as defined in the following clause (ii)), the amount
agreed upon by the Bank and the Company at such time or
(ii) at any time after the provision by the Company of a
Valuation Certificate with respect to any Advance (each such
disclosure being referred to herein as a "Valuation Event")
the value of such Advance most recently disclosed by the
Company in a Valuation Certificate; provided that through and
including the third Business Day following the date of any
Valuation Event, the Bank may notify the Company that it
disagrees with the value so disclosed (the date of such notice
being referred to herein as a "Notification Date"), specifying
a value that it believes is the appropriate Fair Market Value
for such Advance, in which case (A) the Company and the Bank
shall negotiate in good faith with a view toward reaching
agreement on the Fair Market Value of such Advance or on the
identity of an independent third Person to determine such Fair
Market Value, (B) if the Company and the Bank do not so agree
on or before the third Business Day following such
Notification Date, the Company and the Bank shall on such
third Business Day each appoint any one of Bear, Stearns &
Co., Inc., Goldman, Sachs & Co., Jefferies & Co., Inc.,
Oppenheimer & Co., Inc. and Credit Research & Trading, Inc.
(each, an "Acceptable Appraiser") to select a third Acceptable
Appraiser (the "Appointed Appraiser") to determine the fair
market value of such Advance on or before the sixth Business
Day after the Notification Date, provided that if the Bank
does not, on such third Business Day, appoint an Acceptable
Appraiser to select a third Acceptable Appraiser, the
Acceptable Appraiser appointed by the Company shall be the
Appointed Appraiser, (C) if an Appointed Appraiser determines
the fair market value of an Advance as contemplated by the
preceding clause (B) on or before the sixth Business Day
following a Notification Date, such fair market value shall be
the Fair Market Value of such Advance until the next Valuation
Event and (D) if the Fair Market Value of an Advance is not
determined on or before the sixth Business Day following a
Notification Date, such Fair Market Value shall thereafter be
determined by the Bank from time to time thereafter in its
sole discretion. The fees and expenses of the independent
Persons referred to in clause (B) above shall be shared 50/50
by the Bank and the Company.
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upwards, if necessary, to the nearest 1/100 of
1%) equal to the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve
<PAGE>
System arranged by Federal funds brokers on such day, as
published by the Federal Reserve Bank of New York on the
Business Day next succeeding such day; provided that (i) if
the day for which such rate is to be determined is not a
Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and
(ii) if such rate is not so published for any day, the Federal
Funds Rate for such day shall be the average rate charged to
the Bank on such day on such transactions as determined by the
Bank.
"GAAP" shall mean generally accepted accounting principles as
in effect from time to time.
"Guarantee" shall mean a guarantee, an endorsement, a
contingent agreement to purchase or to furnish funds for the
payment or maintenance of, or otherwise to be or become
contingently liable under or with respect to, the
Indebtedness, other obligations, net worth, working capital or
earnings of any Person, or a guarantee of the payment of
dividends or other distributions upon the stock or equity
interests of any Person, or an agreement to purchase, sell or
lease (as lessee or lessor) Property, products, materials,
supplies or services primarily for the purpose of enabling a
debtor to make payment of his, her or its obligations or an
agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial
institution to issue a letter of credit or other similar
instrument for the benefit of another Person, but excluding
endorsements for collection or deposit in the ordinary course
of business. The terms "Guarantee" and "Guaranteed" used as a
verb shall have a correlative meaning.
"High Coast" shall mean High Coast Limited Partnership, a
Delaware limited partnership.
"High Coast Letter Agreement" shall mean a letter agreement,
in the form of Exhibit G attached hereto, among the Company,
High Coast and the Lender, as the same shall be amended,
supplemented, amended and restated, or otherwise modified from
time to time.
"High River" means High River Limited Partnership, a Delaware
limited partnership.
"High River Letter Agreement" means a letter agreement, in
<PAGE>
the form of Exhibit H attached hereto, among the Company, High
River and the Lender, as the same shall be amended,
supplemented, amended and restated, or otherwise modified from
time to time with the prior consent of the Lender.
"IHC" shall mean Icahn Holding Corporation, a Delaware
corporation.
"IHC Indemnification Agreement" shall mean that certain
Indemnification Agreement, dated as of December 30, 1993, made
by IHC in favor of the Bank, as the same shall be modified and
supplemented and in effect from time to time.
"Indebtedness" shall mean, for any Person: (a) indebtedness
created, issued or incurred by such Person for borrowed money
(whether by loan or the issuance and sale of debt securities
or the sale of Property to another Person subject to an
understanding or agreement, contingent or otherwise, to
repurchase such Property from such Person); (b) obligations of
such Person to pay the deferred purchase or acquisition price
of Property or services, other than trade accounts payable
(other than for borrowed money) arising, and accrued expenses
incurred, in the ordinary course of business so long as such
trade accounts payable are payable within 90 days of the date
the respective goods are delivered or the respective services
are rendered; (c) Indebtedness of others secured by a Lien on
the Property of such Person, whether or not the respective
indebtedness so secured has been assumed by such Person; (d)
obligations of such Person in respect of letters of credit or
similar instruments issued or accepted by banks and other
financial institutions for the account of such Person; (e)
Capital Lease Obligations of such Person; and (f) Indebtedness
of others Guaranteed by such Person.
"Indemnification Agreement" shall mean that certain
Indemnification Agreement, dated as of May 20, 1993, as the
same shall be modified and supplemented and in effect from
time to time, from IHC.
"Indemnified Liabilities" is defined in Section 3.08.
"Indemnified Parties" is defined in Section 3.08.
"Interest Period" shall mean, with respect to any Eurodollar
Loan, each period commencing on the date such Eurodollar Loan
is made or Converted from a Base Rate Loan or the last day of
the next preceding Interest Period for such Loan and ending on
the numerically corresponding day in the first, second or
<PAGE>
third calendar month thereafter, as the Company may select as
provided in Section 4.04 hereof, except that each Interest
Period which commences on the last Business Day of a calendar
month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar
month) shall end on the last Business Day of the appropriate
subsequent calendar month. Notwithstanding the foregoing: (i)
if any Interest Period would otherwise end after the
Commitment Termination Date, such Interest Period shall end on
the Commitment Termination Date; (ii) each Interest Period
which would otherwise end on a day which is not a Business Day
shall end on the next succeeding Business Day (or, if such
next succeeding Business Day falls in the next succeeding
calendar month, on the next preceding Business Day); and (iii)
notwithstanding clause (i) above, no Interest Period shall
have a duration of less than one month and, if the Interest
Period for any Eurodollar Loan would otherwise be a shorter
period, such Loan shall not be available hereunder.
"Interest Rate Protection Agreement" shall mean, for any
Person, an interest rate swap, cap or collar agreement or
similar arrangement between such Person and a financial
institution providing for the transfer or mitigation of
interest risks either generally or under specific
contingencies.
"Investment" shall mean, for any Person: (a) the acquisition
(whether for cash, Property, services or securities or
otherwise) of capital stock, bonds, notes, debentures,
partnership or other ownership interests or other securities
of any other Person or any agreement to make any such
acquisition (including, without limitation, any "short sale"
or any sale of any securities at a time when such securities
are not owned by the Person entering into such short sale);
(b) the making of any deposit with, or advance, loan or other
extension of credit to, any other Person (including the
purchase of Property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell
such Property to such Person, but excluding any such advance,
loan or extension of credit having a term not exceeding
90 days representing the purchase price of inventory or
supplies sold in the ordinary course of business); (c) the
entering into of any Guarantee of, or other contingent
obligation with respect to, Indebtedness or other liability of
any other Person and (without duplication) any amount
committed to be advanced, lent or extended to such Person; or
(d) the entering into of any Interest Rate Protection
Agreement.
<PAGE>
"Issuance Date" is defined in Section 3.03.
"Issuance Request" shall mean an issuance request duly
completed and executed by an authorized officer of the Company
substantially in the form of Exhibit F hereto.
"Letter of Credit" shall mean any irrevocable stand-by letter
of credit issued pursuant to an Issuance Request by the Bank
for the account of the Company in a form acceptable to the
Bank and the Company and in a Stated Amount requested by the
Company.
"Letter of Credit Outstandings" shall mean, on any date, an
amount equal to the sum of
(a) the then aggregate amount which is undrawn and
available under all issued and outstanding Letters of Credit
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations.
"Lien" shall mean, with respect to any Property, any
mortgage, lien, pledge, charge, security interest or
encumbrance of any kind in respect of such Property. For
purposes of this Agreement, the Company shall be deemed to own
subject to a Lien any Property which it has acquired or holds
subject to the interest of a vendor or lessor under any
conditional sale agreement, capital lease or other title
retention agreement (other than an operating lease) relating
to such Property.
"Liggett" means Liggett Group Inc., a Delaware corporation.
"Loans" shall mean the loans provided for by Section 2.01
hereof.
"Maintenance Base" shall mean, at any time, an amount equal
to the sum at such time of (i) 60% of the Portfolio Value at
such time plus (ii) the aggregate amount of cash and Permitted
Investments on deposit in the Collateral Account.
"Margin Stock" shall mean margin stock within the meaning of
Regulations U and X.
"Material Adverse Effect" shall mean a material adverse
effect on (a) the Property, business, operations, financial
<PAGE>
condition, liabilities or capitalization of the Company, the
Parent Corporation, ACF or AKF, (b) the ability of the Company
to perform its obligations under any of the Basic Documents,
(c) the validity or enforceability of any of the Basic
Documents, (d) the rights and remedies of the Bank under any
of the Basic Documents, or (e) the Company's ability to make
timely payment of the principal of or interest on or fees
relating to the Credit Extensions or other amounts payable in
connection therewith; provided that a decline in the Portfolio
Value to an amount equal to or exceeding the Maintenance Base
shall not by itself be deemed to constitute a Material Adverse
Effect.
"Monthly Dates" shall mean the last Business Day of each
calendar month.
"Multiemployer Plan" shall mean a multiemployer plan defined
as such in Section 3(37) of ERISA to which contributions have
been made by the Company or any ERISA Affiliate and which is
covered by Title IV of ERISA.
"New Valley" means New Valley Corporation, a Delaware
corporation.
"Note" shall mean the promissory note provided for by Section
2.07 hereof.
"Outstanding Amount" is defined in Section 2.09.
"Original Credit Agreement" is defined in the first recital.
"Parent Corporation" shall mean such corporation as may from
time to time own all of the issued and outstanding shares of
capital stock of the Company.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or
any entity succeeding to any or all of its functions under
ERISA.
"Permitted Investments" shall have the meaning assigned that
term in the Security Agreement.
"Person" shall mean any individual, corporation, company,
voluntary association, partnership, joint venture, trust,
unincorporated organization or government (or any agency,
instrumentality or political subdivision thereof).
<PAGE>
"Plan" shall mean an employee benefit or other plan
established or maintained by the Company or any ERISA
Affiliate and which is covered by Title IV of ERISA, other
than a Multiemployer Plan.
"Pledged Advances" shall have the meaning assigned to that
term in the Security Agreement.
"Pledged Assets" shall have the meaning assigned to that term
in the Security Agreement.
"Pledged Securities" shall have the meaning assigned to that
term in the Security Agreement.
"Portfolio Value" shall mean, at any time, the sum at such
time of (i) the aggregate Fair Market Value of Eligible
Pledged Securities plus (ii) the lesser of (x) $200,000,000 or
(y) the aggregate Fair Market Value of Eligible Pledged
Advances.
"Post-Default Rate" shall mean, in respect of any principal
of any Loan or any other amount under this Agreement, the
Note, or any other Basic Document that is not paid when due
(whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise), a rate per annum during the period
from and including the due date to but excluding the date on
which such amount is paid in full equal to 2% above the Base
Rate as in effect from time to time plus the Applicable Margin
(if any) (provided that, if the amount so in default is
principal of a Eurodollar Loan and the due date thereof is a
day other than the last day of an Interest Period therefor,
the "Post-Default Rate" for such principal shall be, for the
period from and including such due date to but excluding the
last day of such Interest Period, 2% above the interest rate
for such Loan as provided in Section 3.02(b) hereof and,
thereafter, the rate provided for above in this definition).
"Prime Rate" shall mean the rate of interest from time to
time announced by the Bank at the Principal Office as its
prime commercial lending rate; provided that if the Bank shall
cease to announce a prime commercial lending rate, then "Prime
Rate" shall mean the arithmetic average of the rates of
interest publicly announced by The Chase Manhattan Bank
(National Association), Citibank, N.A. and Morgan Guaranty
Trust Company of New York (or their respective successors) as
their respective prime commercial lending rates (or, as to any
such bank that does not announce such a rate, such bank's
<PAGE>
"prime" or other rate determined by the Bank to be the
equivalent rate announced by such bank), except that, if any
such bank shall, for any period, cease to announce publicly
its prime commercial lending (or equivalent) rate, the Bank
shall, during such period, determine the "Prime Rate" based
upon the prime commercial lending (or equivalent) rates
announced publicly by the other such banks.
"Principal Office" shall mean the principal office of the
Bank, presently located at 135 East 57th Street, New York,
New York 10022-2101.
"Property" shall mean any right or interest in or to property
of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible.
"Railcar Credit Agreement" shall mean that certain Credit
Agreement, dated as of May 20, 1993, as from time to time
amended, supplemented, amended and restated, or otherwise
modified, between ACL II C and the Bank.
"Regulations D, U and X" shall mean, respectively,
Regulations D, U and X of the Board of Governors of the
Federal Reserve System (or any successor), as the same may be
amended or supplemented from time to time.
"Regulatory Change" shall mean any change after the date of
this Agreement in United States Federal, state or foreign law
or regulations (including, without limitation, Regulation D)
or the adoption or making after such date of any
interpretation, directive or request applying to a class of
banks including the Bank of or under any United States
Federal, state or foreign law or regulations (whether or not
having the force of law and whether or not failure to comply
therewith would be unlawful) by any court or governmental or
monetary authority charged with the interpretation or
administration thereof.
"Reimbursement Obligation" is defined in Section 3.06.
"Reporting Parent" shall mean a direct or indirect parent
corporation of the Company whose consolidated financial
statements include the Company as a Consolidated Subsidiary
provided that such corporation is not a direct or indirect
parent of Highcrest Investors Corp., a Delaware corporation.
"Reserve Requirement" shall mean, for any Interest Period for
any Eurodollar Loan, the average maximum rate at which
<PAGE>
reserves (including any marginal, supplemental or emergency
reserves) are required to be maintained during such Interest
Period under Regulation D by member banks of the Federal
Reserve System in New York City with deposits exceeding one
billion Dollars against "Eurocurrency liabilities" (as such
term is used in Regulation D). Without limiting the effect of
the foregoing, the Reserve Requirement shall include any other
reserves required to be maintained by such member banks by
reason of any Regulatory Change against (i) any category of
liabilities which includes deposits by reference to which the
Eurodollar Base Rate is to be determined as provided in the
definition of "Eurodollar Base Rate" in this Section 1.01 or
(ii) any category of extensions of credit or other assets
which includes Eurodollar Loans.
"RJR" means RJR Nabisco Holdings Corp., a Delaware
corporation.
"RJR Common Stock" means the common stock, par value $0.01
per share, of RJR.
"Securities" shall mean high-yield bonds, or securities
received therefor as a result of reorganization, exchanges or
conversions in each case that are "securities" as defined in
Section 8-102(l)(c) of the Uniform Commercial Code of the State of
New York.
"Security Agreement" shall mean the Amended and Restated
Security Agreement substantially in the form of Exhibit C-1
hereto between the Company and the Bank, as the same shall be
modified and supplemented and in effect from time to time.
"Security Documents" shall mean, the Security Agreement and
all Uniform Commercial Code financing statements required by
this Agreement or the Security Agreement to be filed with
respect to the security interests in personal Property and
fixtures created pursuant to the Security Agreement.
"Settlement Plan" shall mean that certain Settlement
Agreement, dated as of January 5, 1993, as the same may be
modified and supplemented and in effect from time to time,
among Trans World Airlines, Inc., Official Unsecured
Creditors' Committee of Trans World Airlines, Inc., Pension
Benefit Guaranty Corporation, The Icahn Entities described
therein and various other parties.
"Stated Amount" shall mean the face amount of a Letter of
<PAGE>
Credit as such amount is in effect on the issuance date
thereof.
"Stated Expiration Date" is defined in Section 3.03.
"Subsidiary" shall mean, for any Person, any corporation,
partnership or other entity of which at least a majority of
the securities or other ownership interests having by the
terms thereof ordinary voting power to elect a majority of the
board of directors or other persons performing similar
functions of such corporation, partnership or other entity
(irrespective of whether or not at the time securities or
other ownership interests of any other class or classes of
such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any
contingency) is at the time directly or indirectly owned or
controlled by such Person or one or more Subsidiaries of such
Person or by such Person and one or more Subsidiaries of such
Person. "Wholly-Owned Subsidiary" shall mean any such
corporation, partnership or other entity of which all of such
securities or other ownership interests (other than, in the
case of a corporation, directors' qualifying shares) are so
owned or controlled.
"Tangible Net Worth" shall mean, as at any date, the sum for
the Company of the following, determined in accordance with
GAAP (except that Securities shall be carried at current
market value):
(a) the amount of capital stock, plus
(b) the amount of surplus and retained earnings (or, in the
case of a surplus or retained earnings deficit, minus the
amount of such deficit), minus
(c) the sum of the following: cost of treasury shares and
the book value of all assets which should be classified as
intangibles (without duplication of deductions in respect of
items already deducted in arriving at surplus and retained
earnings) but in any event including goodwill, research and
development costs, trademarks, trade names, copyrights,
patents and franchises, unamortized debt discount and expense,
and all reserves.
"Tortoise Guaranty" shall mean that certain Guaranty, dated
as of December 31, 1994, from the Company to the Bank, as the
same shall be modified and supplemented and in effect from
time to time.
<PAGE>
"Type" shall have the meaning assigned that term in Section
1.03 hereof.
"Valuation Certificate" shall mean a certificate of the chief
financial officer of the Company, substantially in the form of
Exhibit B hereto and appropriately completed.
"Valuation Sources" shall mean, for any Pledged Security,
three of the Persons listed on Annex I hereto specified by the
Bank in a notice to the Company at or before the time such
Pledged Security is pledged to the Bank under the Security
Agreement; provided that the Bank may at any time or from time
to time designate another Person listed on Annex I hereto to
replace a Valuation Source for such Pledged Security upon
three Business Days' notice to the Company (or such shorter
period as the Company may agree).
1.02 Accounting Terms and Determinations. Unless otherwise
specified herein, all accounting terms used herein shall be
interpreted, all determinations with respect to accounting
matters hereunder shall be made, and all financial statements
and certificates and reports as to financial matters required
to be furnished to the Bank hereunder shall be prepared, in
accordance with generally accepted accounting principles as in
effect from time to time, applied on a basis consistent with
that used in the audited consolidated financial statements of
the Company and the consolidated Subsidiaries referred to in
Section 7.02 hereof. To enable the ready and consistent
determination of compliance with the covenants set forth in
Section 8 hereof, the Company will not change the last day of
its fiscal year from December 31 of each year, or the last
days of the first three fiscal quarters in each of its fiscal
years from March 31, June 30 and September 30 of each year,
respectively.
1.03 Types of Loans. Loans hereunder are distinguished by
"Type". The "Type" of a Loan refers to whether such Loan is a
Base Rate Loan or a Eurodollar Loan, each of which constitutes
a Type.
Section 2. The Commitments.
2.01 Loans. The Bank agrees, on the terms of this
Agreement, to make loans (the "Loans") to the Company in
Dollars during the period from and including the date hereof
to but not including the Commitment Termination Date (or any
<PAGE>
earlier date of termination of the Commitment) in an aggregate
principal amount at any one time outstanding, together with
the aggregate amount of all Letter of Credit Outstandings, up
to but not exceeding the amount of the Commitment as in effect
from time to time. Subject to the terms of this Agreement,
during such period the Company may borrow, repay and reborrow
the Loans by means of Base Rate Loans and Eurodollar Loans and
may Convert Loans of one Type into Loans of another Type (as
provided in Section 2.08 hereof) or Continue Loans of one Type
as Loans of the same Type; provided that (a) the Company shall
not be entitled to make any borrowing unless either (i) the
Borrowing Base is at least equal to the aggregate principal
amount of the Loans outstanding and Letter of Credit
Outstandings after giving effect thereto or (ii) substantially
simultaneously with such borrowing Assets with a Borrowing
Value equal to or more than the principal amount of such
borrowing (excluding Advances to the extent that, when
included as Eligible Pledged Advances, the aggregate Fair
Market Value of all Eligible Pledged Advances would exceed
$200,000,000 when any obligations are outstanding under the
AKF Railcar Credit Agreement and the AKF Railcar Credit
Agreement is in full force and effect, or $200,000,000
thereafter), become Eligible Pledged Assets in accordance with
Section 2.10 hereof (and the Bank shall be satisfied with the
manner and timing of the creation and perfection of its
security interest in any Eligible Pledged Assets), and (b) no
more than three separate Interest Periods in respect of
Eurodollar Loans may be outstanding at any one time, and (c)
the Bank shall not be required to make and the Company shall
not be permitted to borrow, any Loan if, after giving effect
thereto, the aggregate principal amount of the sum of all
Loans outstanding hereunder, all Letter of Credit Outstandings
hereunder, and all loans and letter of credit outstandings
under the AKF Railcar Credit Agreement would exceed
$200,000,000.
2.02 Borrowings. The Company shall give the Bank notice of
each borrowing hereunder as provided in Section 4.04 hereof.
On the date specified for each borrowing hereunder, the Bank
shall, subject to the terms and conditions of this Agreement,
make available the amount of such borrowing to the Company by
depositing the same, in immediately available funds, in an
account of the Company maintained with the Bank at the
Principal Office designated by the Company.
2.03 Letters of Credit. The Bank agrees, on the terms of
this Agreement, to issue Letters of Credit for the account of
<PAGE>
the Company in Dollars during the period from and including
the date hereof to but not including the Commitment
Termination Date (or any earlier date of termination of the
Commitment) in an aggregate Stated Amount at any one time
outstanding, together with all other Letter of Credit
Outstandings and the aggregate principal amount of the Loans
then outstanding, up to but not exceeding the amount of the
Commitment as in effect from time to time; provided that the
Bank shall not be obligated to issue any Letter of Credit (a)
unless either (i) the Borrowing Base is at least equal to the
aggregate principal amount of the Loans outstanding and Letter
of Credit Outstandings after giving effect thereto or (ii)
substantially simultaneously with such Credit Extension Assets
with a Borrowing Value equal to or more than the amount of
such Credit Extension (excluding Advances to the extent that,
when included as Eligible Pledged Advances, the aggregate Fair
Market Value of all Eligible Pledged Advances would exceed
$200,000,000 when any obligations are outstanding under the
AKF Railcar Credit Agreement and the AKF Railcar Credit
Agreement is in full force and effect, or $200,000,000
thereafter), become Eligible Pledged Assets in accordance with
Section 2.10 hereof (and the Bank shall be satisfied with the
manner and timing of the creation and perfection of its
security interest in any Eligible Pledged Assets), and (b) if,
after giving effect thereto, the aggregate amount of the sum
of all Letter of Credit Outstandings hereunder, the aggregate
principal amount of all Loans then outstanding hereunder, and
all letters of credit and loan outstandings under the AKF
Railcar Credit Agreement would exceed $200,000,000.
2.04 Changes of Commitment.
(a) The Commitment shall be automatically reduced to zero on
the Commitment Termination Date.
(b) The Company shall have the right at any time or from
time to time (i) so long as there are no Letter of Credit
Outstandings and no Loans are outstanding, to terminate the
Commitment and (ii) to reduce the unused amount of the
Commitment; provided that (x) the Company shall give notice of
each such termination or reduction as provided in Section 4.04
hereof, and (y) each partial reduction shall be in an amount
at least equal to $5,000,000 and in multiples of $1,000,000 in
excess thereof.
(c) The Commitment once terminated or reduced may not be
reinstated.
<PAGE>
2.05 Fees.
(a) The Company shall pay to the Bank a non-refundable
commitment fee on the daily average unused amount of the
Commitment, for the period from and including the date of this
Agreement to but not including the earlier of the date the
Commitment is terminated and the Commitment Termination Date,
at a rate per annum equal to 1/2 of 1%. Accrued commitment
fee shall be payable on each Monthly Date and on the earlier
of the date the Commitment is terminated and the Commitment
Termination Date.
(b) If, during the period commencing on February 28, 1992
and ending on the earlier of the date the Commitment is
terminated and the Commitment Termination Date, there shall
not have occurred 180 days (whether or not such days are
consecutive)
during which the sum of (x) the daily average aggregate
outstanding principal amount of the Loans plus (y) the daily
average aggregate face amount of all outstanding Letters of
Credit is at least $75,000,000, the Company shall pay to the
Bank a utilization fee in the amount of $1,000,000 on the
earlier of the date the Commitment is terminated and the
Commitment Termination Date; provided that such fee shall not
be payable if, during such period, the Bank requests
compensation under Section 5.01(c) hereof and the Company pays
or prepays the principal of and interest on the Loans in full,
pays all Letter of Credit Outstandings and terminates the
Commitment after such request.
(c) The Company agrees to pay to the Bank, with respect to
each Letter of Credit, a non-refundable Letter of Credit fee
in the amount of 3% per annum of the undrawn amount of such
Letter of Credit, such fee to commence on the issuance of such
Letter of Credit and to be payable monthly in arrears on each
Monthly Date thereafter until the earlier of (x) the date the
undrawn amount of such Letter of Credit is reduced to zero and
(y) the Stated Expiration Date thereof, and on such earlier
date.
(d) The Borrower shall pay to the Lender a non-refundable
facility fee in the amount of $3,000,000, which shall be
payable on the following dates and in the following amounts:
(i) on the Closing Date, in an amount equal to $500,000
(1/4 of 1% of the Lender's Commitment);
(ii) on January 10, 1996, in an amount equal to $1,500,000
(3/4 of 1% of the Lender's Commitment); and
<PAGE>
(iii) on each of April 1, 1996 and July 1, 1996, in each
case in an amount equal to $500,000 (1/4 of 1% of the
Lender's Commitment).
2.06 Lending Offices. The Loans of each Type shall be made
and maintained at the Bank's Applicable Lending Office for
Loans of such Type.
2.07 Note.
(a) The Loans shall be evidenced by a single promissory note
of the Company substantially in the form of Exhibit A hereto,
dated the date hereof, payable to the Bank in a principal
amount equal to the amount of the Commitment and otherwise
duly completed.
(b) The date, amount, Type, interest rate, and duration of
Interest Period (if applicable) of each Loan made by the Bank
to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Bank on its books
and, prior to any transfer of the Note, endorsed by the Bank
on the schedule attached to the Note or any continuation
thereof; provided that the failure of the Bank to make any
such recordation or endorsement shall not affect the
obligations of the Company to make a payment when due of any
amount owing under the Note.
2.08 Optional Prepayments and Conversions or Continuations
of Loans. Subject to Section 4.03 hereof, the Company shall
have the right to prepay Loans, or to Convert Loans of one
Type into Loans of another Type or Continue Loans of one Type
as Loans of the same Type, at any time or from time to time,
provided that: (i) the Company shall give the Bank notice of
each such prepayment, Conversion or Continuation as provided
in Section 4.04 hereof; and (ii) a Eurodollar Loan may be
prepaid or Converted only on the last day of an Interest
Period for such Loan. Notwithstanding the foregoing, and
without limiting the rights and remedies of the Bank under
Section 9 hereof, in the event that any Event of Default shall
have occurred and be continuing, the Bank may suspend the
right of the Company to Convert any Loan into a Eurodollar
Loan, or to Continue any Loan as a Eurodollar Loan, in which
event all Loans shall be Converted into (on the last day(s) of
the respective Interest Periods therefor) or continued, as the
case may be, as Base Rate Loans.
2.09 Mandatory Prepayments. The Company shall, within one
Business Day following each date when the sum of (x) the
<PAGE>
aggregate outstanding principal amount of the Loans plus (y)
the aggregate amount of all Letter of Credit Outstandings
(with the sum of such amounts being referred to as the
"Outstanding Amount") exceeds the Maintenance Base in effect
on such date, make a mandatory prepayment of Loans and/or pay
over to the Lender to be held by the Lender in the Collateral
Account for application to Reimbursement Obligations an
aggregate amount equal to the amount by which the Outstanding
Amount exceeds the Borrowing Base then in effect; provided,
that the Company may also satisfy its obligations under this
Section by pledging additional Assets as Eligible Pledged
Assets in accordance with Section 2.10 with a Fair Market
Value such that, after giving effect to such pledge, the
Outstanding Amount on such date shall not exceed the Borrowing
Base then in effect.
2.10 Additional Pledged Assets. The Company may from time
to time after the Closing Date by one Business Day prior
notice to the Bank, in connection with a Credit Extension
hereunder or otherwise, request that it be permitted to pledge
additional Assets under the Security Agreement (whether in
addition to or in substitution for existing Pledged Assets)
and thereby constitute such additional Assets "Eligible
Pledged Assets" hereunder. Such notice shall specify in
detail reasonably acceptable to the Bank such additional
Assets, the Company's opinion (and the source of such opinion)
as to the fair market value thereof, the date such additional
Assets are proposed to be pledged to the Bank and the proposed
manner and source of consideration for the purchase thereof,
and (in the case of Advances) shall be accompanied by (1) a
true, complete and current copy certified by a senior officer
of the Company of the loan or credit agreement and (if
applicable) participation agreement relating thereto and any
other documentation relating thereto containing provisions
relating to the right of any holder thereof to assign or
pledge the same, the right of any pledgee thereof to exercise
foreclosure remedies with respect thereto or the obligation to
provide notice to any Person relating to any of the foregoing
and (2) a certificate of a senior officer of the Company which
shall certify that no Pension Event shall have occurred. The
Bank shall respond to such request not later than the close of
business on the second Business Day following the date of
receipt by it of such request, and (subject to the following
sentence) it shall be in the Bank's sole discretion whether to
accept such additional Assets as "Eligible Pledged Assets".
The Bank shall be required so to accept Assets of the same
issue or borrowed under the same loan or credit agreement and
<PAGE>
(if applicable) purchased under an identical participation
agreement, as the case may be, as Assets previously accepted
and then held by it in pledge under the Security Agreement as
Eligible Pledged Assets so long as: (a) after giving effect
to such acceptance the aggregate Fair Market Value of all
Eligible Pledged Assets issued or otherwise owing by the same
Person would not exceed a percentage of the Portfolio Value
specified by the Bank to the Company at the time it initially
accepted Assets issued or otherwise owing by such Person and
(b) if such Assets are Advances, (i) such acceptance would not
result in the aggregate Fair Market Value of all Eligible
Pledged Advances exceeding $115,000,000 when any obligations
are outstanding under the AKF Railcar Credit Agreement and the
AKF Railcar Credit Agreement is in full force and effect, or
$200,000,000 thereafter and (ii) no restriction (including,
without limitation, any requirement that prior consent of any
Person be obtained, but excluding any limitation that has been
waived to the satisfaction of the Bank) exists in the
documentation relating thereto limiting the right of any
holder thereof to assign or pledge the same or the right of
any pledgee thereof to exercise foreclosure remedies with
respect thereto, unless the Bank otherwise agrees in writing.
If the Bank does not so accept such additional Assets, such
additional Assets shall not constitute "Eligible Pledged
Assets"; provided that, if and until the Bank declines the
Company's request so to accept such additional Assets, such
additional Assets shall be deemed to constitute "Eligible
Pledged Assets" to the extent that they are pledged under and
in accordance with the terms of the Security Agreement having
a fair market value as determined by the Company reasonably
and in good faith and notified by the Company to the Bank at
the time of such pledge (and, if the Bank declines so to
accept any such additional Assets that are so pledged, it
shall promptly release such Assets from the pledge created by
the Security Agreement). Notwithstanding anything contained
herein to the contrary, the Bank shall not be required to
accept additional Pledged Assets under the Security Agreement
(whether in addition to or in substitution for existing
Pledged Assets) after the occurrence of a Pension Event. In
no event shall any addition to or substitution of Eligible
Pledged Assets pursuant to this Section 2.10 be permitted on a
date when the Outstanding Amount on such date exceeds the
Borrowing Base in effect on such date unless the Company shall
pledge additional Assets as Eligible Pledged Assets in
accordance with this Section 2.10 with a Fair Market Value
such that, after giving effect to such pledge, the Outstanding
Amount on such date shall not exceed the Borrowing Base then
in effect.
<PAGE>
Section 3. Payments of Principal and Interest; Issuance of
Letters of Credit.
2.01 Repayment of Loans. The Company hereby promises to pay
to the Bank the entire outstanding principal amount of the
Loans, and each Loan shall mature, on the Commitment
Termination Date (or the earlier date of termination of the
Commitment).
3.02 Interest. The Company hereby promises to pay to the
Bank interest on the unpaid principal amount of each Loan for
the period from and including the date of such Loan to but
excluding the date such Loan shall be paid in full, at the
following rates per annum:
(a) during such periods as such Loan is a Base Rate Loan,
the Base Rate (as in effect from time to time) plus the
Applicable Margin and
(b) during such periods as such Loan is a Eurodollar Loan,
for each Interest Period relating thereto, the Eurodollar Rate
for such Loan for such Interest Period plus the Applicable
Margin.
Notwithstanding the foregoing, the Company hereby promises to
pay to the Bank interest at the applicable Post-Default Rate
on any principal of any Loan and on any other amount payable
by the Company hereunder or under the Note which shall not be
paid in full when due (whether at stated maturity, by
acceleration, by mandatory prepayment or otherwise), for the
period from and including the due date thereof to but
excluding the date the same is paid in full. Accrued interest
on each Loan shall be payable (i) in the case of each Base
Rate Loan, monthly on the Monthly Dates, (ii) in the case of
each Eurodollar Loan, on the last day of each Interest Period
therefor and (iii) in the case of each Loan, upon the payment
or prepayment thereof or the Conversion of such Loan to a Loan
of another Type (but only on the principal amount so paid,
prepaid or Converted) and, except that interest payable on any
amount at the Post-Default Rate shall be payable from time to
time on demand. Promptly after the determination of any
interest rate provided for herein or any change therein, the
Bank shall give notice thereof to the Company.
3.03 Issuing the Letters of Credit. Not later than
11:00 a.m., New York City time, on the third Business Day
prior to the date of a requested initial issuance of a Letter
of Credit, and on not less than 30 nor more than 60 days'
<PAGE>
prior notice in the case of a request for an extension of the
Stated Expiration Date of a Letter of Credit (in each case, an
"Issuance Date"), the Company may, by delivery to the Bank of
an Issuance Request specifying (i) the Issuance Date, (ii) the
Stated Amount of the Letter of Credit, (iii) the stated
expiration date thereof not to exceed one year, or, if
earlier, the Commitment Termination Date (the "Stated
Expiration Date") and (iv) the beneficiary of such Letter of
Credit, request that the Bank issue, or extend the Stated
Expiration Date of, a Letter of Credit. Each Issuance Request
shall be revocable by delivery of written notice to the Bank
prior to 10:00 a.m., New York City time, on the proposed
Issuance Date, at which time it shall become irrevocable. On
the Issuance Date and upon fulfillment of the applicable
conditions set forth in Section 6, the Bank will issue (or
extend, as the case may be) such Letter of Credit in
accordance with its terms.
3.04 Drawing under the Letters of Credit. In the event
there occurs one or more drawings under any Letter of Credit,
the Bank shall, not later than 12:30 p.m., New York City time,
on the Business Day on which such drawing is required to be
honored pursuant to such Letter of Credit (the "Disbursement
Date"), and provided that the conditions to drawing in such
Letter of Credit have been strictly complied with, make
available to the beneficiary under such Letter of Credit, in
same day funds, the amount drawn on the Bank pursuant to such
drawing.
3.05 Reimbursement on Demand. On (or promptly after) each
Disbursement Date the Bank shall notify the Company of a
drawing under a Letter of Credit, and the Bank will promptly
thereafter furnish to the Company copies of (i) each draft
drawn under such Letter of Credit and (ii) each certificate
accompanying any such draft; provided, however, that the
failure to give such notice or to provide such copies shall
not affect the obligations of the Company hereunder. The
Company will, as reimbursement for such payment by the Bank,
immediately and unconditionally pay to the Bank the amount of
each payment made under each Letter of Credit, provided that
so long as no Default shall have occurred and be continuing,
or would result therefrom, and subject to the provisions of
Section 2.01, the Reimbursement Obligations in respect of such
Letter of credit shall, on the Disbursement Date, without
regard to the minimum prior notice provisions of Section 4.04,
convert to a Base Rate Loan hereunder unless the Company shall
have notified the Bank on such date of the Company's intention
directly to reimburse the Bank. Interest will accrue on any
<PAGE>
amount remaining unpaid by the Company to the Bank under this
Section which has not been converted to a Base Rate Loan
pursuant to clause (ii) of the preceding sentence, from the
date of demand until such amount is paid in full at an
interest rate per annum equal to the Base Rate in effect from
time to time plus the Applicable Margin plus 2%.
3.06 Obligations Absolute. The obligation (a "Reimbursement
Obligation") of the Company to reimburse the Bank with respect
to each drawing under each Letter of Credit shall be
unconditional and irrevocable, and shall be paid strictly in
accordance with the terms of this Agreement under all
circumstances, including, without limitation, the following
circumstances:
(a) any lack of validity or enforceability of any Letter of
Credit or any related contract, instrument or other agreement
in support of which the Letter of Credit has been issued
(collectively referred to as a "Contract");
(b) any amendment or waiver of or any consent to departure
from all or any of the Letters of Credit or any Contract
agreed to in each case by the Company;
(c) the existence of any claim, set-off, defense or other
right which the Company may have at any time against any
beneficiary of any Letter of Credit (or any Person for whom
any such beneficiary may be acting), the Bank or any other
Person, whether in connection with this Agreement, the
transactions contemplated herein or in such Letter of Credit
or any Contract or any unrelated transaction; or
(D) any certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent or
insufficient in any respect or any statement therein being
untrue or inaccurate in any respect;
provided, however, that nothing herein shall affect the right
of the Company to commence any proceeding against the Bank for
any wrongful Disbursement made by the Bank as a result of acts
or omissions constituting gross negligence on the part of the
Bank.
3.07 Action in Respect of the Letters of Credit. The
Company assumes all risks of the acts or omissions of the
beneficiaries under the Letters of Credit with respect to
<PAGE>
their use of the Letters of Credit. Except to the extent of
its own gross negligence, neither the Bank nor any of its
officers, employees, agents or directors shall be liable or
responsible for:
(a) the use which may be made of any Letter of Credit;
(b) the form, sufficiency, accuracy or genuineness of
certificates or other documents delivered under or in
connection with any Letter of Credit, even if such
certificates or other documents should prove to be
insufficient, fraudulent or forged;
(c) errors, omissions, interruptions or delays in
transmission or delivery of any messages, by mail, cable,
telex, telecopy, telegraph, wireless or otherwise; or
(d) errors in translation or for errors in interpretation
of technical terms.
The Bank may accept certificates or other documents that
appear on their face to be in order, without responsibility
for further investigation, regardless of any notice or
information to the contrary. In furtherance and not in
limitation of the foregoing provisions, the Company agrees
that any action, inaction or omission taken or suffered by the
Bank in good faith in connection with any Letter of Credit, or
the relative drafts, certificates or other documents, shall be
binding on the Company and shall not result in any liability
of the Bank to the Company.
3.08 Indemnification. The Company hereby indemnifies,
exonerates and holds free and harmless the Bank and each of
its officers, directors, employees and agents (collectively,
the "Indemnified Parties") from and against any and all
actions, causes of action, suits, losses, costs, liabilities
and damages, and expenses incurred in connection therewith
(irrespective of whether any such Indemnified Party is a party
to the action for which indemnification hereunder is sought),
including reasonable attorneys' fees and disbursements
(collectively, the "Indemnified Liabilities") incurred by the
Indemnified Parties or any of them by reason of or in
connection with the execution and delivery of, or payment or
failure to make payment under, any Letter of Credit; provided,
however, that the Company shall not be required to indemnify
any Indemnified Party pursuant to this Section for any
Indemnified Liabilities to the extent caused by (i) such
<PAGE>
Indemnified Party's wilful misconduct or gross negligence in
determining whether documents presented under any Letter of
Credit comply with the terms of such Letter of Credit or
(ii) the Bank's wilful failure to make lawful payment under
any Letter of Credit after presentation to it by a beneficiary
of a draft and certificate strictly complying with the terms
and conditions of such Letter of Credit. If and to the extent
that the foregoing undertaking may be unenforceable for any
reason, the Company hereby agrees to make the maximum
contribution to the payment and satisfaction of each of the
Indemnified Liabilities which is permissible under applicable
law.
3.09 Deemed Disbursements. Upon the occurrence and during
the continuation of a Default of the nature set forth in
Section 9(f) or (g) or any other Event of Default
(a) an amount equal to the then aggregate amount of each
Letter of Credit which is undrawn and available under all
issued and outstanding Letters of Credit shall, without demand
upon or notice to the Company, be deemed to have been paid or
disbursed by the Bank under such Letter of Credit
(notwithstanding that such amount may not in fact have been so
paid or disbursed); and
(b) upon notification by the Bank to the Company of its
obligations under this Section, the Company shall be
immediately obligated to reimburse the Bank for the amount
deemed to have been so paid or disbursed by the Bank.
Any amounts so payable by the Company pursuant to this Section
shall be deposited in immediately available funds in the
Collateral Account, and held as collateral security for the
Reimbursement Obligations. At such time when all Events of
Default shall have been cured or waived, the Bank shall return
to the Company all amounts then on deposit with the Bank
pursuant to this Section which have not been applied towards
satisfaction of the obligations of the Company under this
Agreement.
Section 4. Payments; Computations; etc.
4.01 Payments.
(a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made
by the Company under this Agreement, the Note or with respect
<PAGE>
to any Letter of Credit, and, except to the extent otherwise
provided therein, all payments to be made by the Company under
any other Basic Document, shall be made in Dollars, in
immediately available funds, without deduction, set-off or
counterclaim, to the Bank at the Principal Office, not later
than 1:00 p.m. New York time on the date on which such payment
shall become due (each such payment made after such time on
such due date to be deemed to have been made on the next
succeeding Business Day).
(b) The Bank may (but shall not be obligated to) debit the
amount of any such payment which is not made by such time to
any ordinary deposit account of the Company with the Bank
(with notice to the Company).
(c) The Company shall, at the time of making each payment
under this Agreement, the Note or with respect to any Letter
of Credit, specify to the Bank the Loans or other amounts
payable by the Company hereunder to which such payment is to
be applied (and in the event that it fails to so specify, or
if an Event of Default has occurred and is continuing, the
Bank may apply the amount of such payment received by it in
such manner as the Bank may determine to be appropriate).
(d) If the due date of any payment under this Agreement, the
Note or with respect to any Letter of Credit, would otherwise
fall on a day which is not a Business Day, such date shall be
extended to the next succeeding Business Day and interest
shall be payable for any principal so extended for the period
of such extension.
4.02 Computations. Interest on Eurodollar Loans and fees
shall be computed on the basis of a year of 360 days and
actual days elapsed (including the first day but excluding the
last day) occurring in the period for which payable and
interest on Base Rate Loans shall be computed on the basis of
a year of 365 or 366 days, as the case may be, and actual days
elapsed (including the first day but excluding the last day)
occurring in the period for which payable.
4.03 Minimum Amounts. Each borrowing, Conversion and
prepayment of principal of Loans shall be in an amount at
least equal to $5,000,000 and in multiples of $1,000,000 in
excess thereof (borrowings, Conversions or prepayments of or
into Loans of different Types or, in the case of Eurodollar
Loans, having different Interest Periods at the same time
hereunder to be deemed separate borrowings, Conversions and
<PAGE>
prepayments for purposes of the foregoing, one for each Type
or Interest Period). Anything in this Agreement to the
contrary notwithstanding, the aggregate principal amount of
Eurodollar Loans having the same Interest Period shall be in
an amount at least equal to $5,000,000 and in multiples of
$1,000,000 in excess thereof and, if any Eurodollar Loans
would otherwise be in a lesser principal amount for any
period, such Loans shall be Base Rate Loans during such
period.
4.04 Certain Notices. Notices by the Company to the Bank of
terminations or reductions of the Commitment, of borrowings,
Conversions, Continuations and optional prepayments of Loans,
and of Types of Loans and of the duration of Interest Periods
shall be irrevocable and shall be effective only if received
by the Bank not later than 10:00 a.m. New York time on the
number of Business Days prior to the date of the relevant
termination, reduction, borrowing, Conversion, Continuation or
prepayment or the first day of such Interest Period specified
below:
Number of
Business
Notice Days Prior
Termination or reduction
of the Commitment 1
Borrowing or prepayment of,
or Conversions into,
Base Rate Loans 2
Borrowing or prepayment of,
Conversions into, Continuations
as, or duration of Interest
Period for, Eurodollar Loans 3
Each such notice of termination or reduction shall specify the
amount of the Commitment to be terminated or reduced. Each
such notice of borrowing, Conversion, Continuation or optional
prepayment shall specify the Loans to be borrowed, Converted,
Continued or prepaid and the amount (subject to Section 4.03
hereof) and Type of each Loan to be borrowed, Converted,
Continued or prepaid and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business
Day) and, if Securities are to pledged to the Bank in order to
satisfy the condition to such borrowing contained in clause
<PAGE>
(a) of the last sentence of Section 2.01 hereof, shall specify
the fair market value of such Securities and the source used
by the Company to determine such fair market value. Each such
notice of the duration of an Interest Period shall specify the
Loans to which such Interest Period is to relate. In the
event that the Company fails to select the Type of Loan, or
the duration of any Interest Period, for any Eurodollar Loan
within the time period and otherwise as provided in this
Section 4.04, such Loan (if outstanding as a Eurodollar Loan)
will be automatically Converted into a Base Rate Loan on the
last day of the then current Interest Period for such Loan or
(if outstanding as a Base Rate Loan) will remain as, or (if
not then outstanding) will be made as, a Base Rate Loan.
4.05 Set-off. The Company agrees that, in addition to (and
without limitation of) any right of set-off, banker's lien or
counterclaim the Bank may otherwise have, the Bank shall be
entitled, at its option, to offset balances held by it for the
account of the Company at any of its offices, in Dollars or in
any other currency, against any principal of or interest on
any of the Loans or any other amount payable to the Bank
hereunder, that is not paid when due (regardless of whether
such balances are then due to the Company), in which case it
shall promptly notify the Company thereof, provided that the
Bank's failure to give such notice shall not affect the
validity thereof.
Section 5. Yield Protection, etc.
5.01 Additional Costs.
(a) The Company shall pay to the Bank from time to time such
amounts as the Bank may determine to be necessary to
compensate it for any costs which the Bank determines are
attributable to its issuing Letters of Credit or making or
maintaining of any Eurodollar Loans or its obligation to make
any Eurodollar Loans hereunder or to issue Letters of Credit
hereunder, or any reduction in any amount receivable by the
Bank hereunder in respect of any of such Letters of Credit,
Loans or such obligation (such increases in costs and
reductions in amounts receivable being herein called
"Additional Costs"), resulting from any Regulatory Change
which:
(i) changes the basis of taxation of any amounts payable to
the Bank under this Agreement or the Note in respect of any of
<PAGE>
such Letters of Credit or Loans (other than (x) taxes on or
measured by the overall gross or net income or receipts of the
Bank or its Applicable Lending Office for any of such Loans
(or other taxes in lieu of such taxes) imposed by the
jurisdiction in which the Bank has its principal office or
such Applicable Lending Office or is engaged in business and
(y) withholding taxes imposed by or on behalf of the United
States or any taxing authority thereof or therein on amounts
received by the Bank from sources in the United States); or
(ii) imposes or modifies any reserve, special deposit or
similar requirements (other than the Reserve Requirement
utilized in the determination of the Eurodollar Rate for such
Loan) relating to any extensions of credit or other assets of,
or any deposits with or other liabilities of, the Bank
(including any of such Loans or any deposits referred to in
the definition of "Eurodollar Base Rate" in Section 1.01
hereof), or any commitment of the Bank (including the
Commitment of the Bank hereunder); or
(iii) imposes any other condition affecting this Agreement,
any Letter of Credit or the Note (or any of such extensions of
credit or liabilities) or the Commitment.
If the Bank requests compensation from the Company under this
Section 5.01(a), the Company may, by notice to the Bank,
suspend the obligation of the Bank to issue Letters of Credit
or to make or Continue Eurodollar Loans, or to Convert Base
Rate Loans into Eurodollar Loans, until the Regulatory Change
giving rise to such request ceases to be in effect).
(b) Without limiting the effect of the provisions of
paragraph (a) of this Section 5.01, in the event that, by
reason of any Regulatory Change, the Bank either (i) incurs
Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or
other liabilities of the Bank which includes deposits by
reference to which the interest rate on Eurodollar Loans is
determined as provided in this Agreement or a category of
extensions of credit or other assets of the Bank which
includes Eurodollar Loans or (ii) becomes subject to
restrictions on the amount of such a category of liabilities
or assets which it may hold, then, if the Bank so elects by
notice to the Company, the obligation of the Bank to make or
Continue, or to Convert Base Rate Loans into, Eurodollar Loans
hereunder shall be suspended until such Regulatory Change
ceases to be in effect.
<PAGE>
(c) Without limiting the effect of the foregoing provisions
of this Section 5.01 (but without duplication), the Company
shall pay to the Bank from time to time on request such
amounts as the Bank may determine to be necessary to
compensate the Bank (or, without duplication, the bank holding
company of which the Bank is a subsidiary) for any costs which
it determines are attributable to the maintenance by the Bank
(or any Applicable Lending Office or such bank holding
company), pursuant to any law or regulation or any
interpretation, directive or request (whether or not having
the force of law) of any court or governmental or monetary
authority (i) following any Regulatory Change or
(ii) implementing any risk-based capital guideline or
requirement (whether or not having the force of law and
whether or not the failure to comply therewith would be
unlawful) heretofore or hereafter issued by any government or
governmental or supervisory authority implementing at the
national level the Basle Accord (including, without
limitation, the Final Risk-Based Capital Guidelines of the
Board of Governors of the Federal Reserve System (12 CFR Part
208, Appendix A; 12 CFR Part 225, Appendix A) and the Final
Risk-Based Capital Guidelines of the Office of the Comptroller
of the Currency (12 CFR Part 3, Appendix A)), of capital in
respect of the Commitment, Letters of Credit or Loans (such
compensation to include, without limitation, an amount equal
to any reduction of the rate of return on assets or equity of
the Bank (or any Applicable Lending Office or such bank
holding company) to a level below that which the Bank (or any
Applicable Lending Office or such bank holding company) could
have achieved but for such law, regulation, interpretation,
directive or request). For purposes of this Section 5.01(c),
"Basle Accord" shall mean the proposals for risk-based capital
framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled
"International Convergence of Capital Measurement and Capital
Standards" dated July 1988, as amended, modified and
supplemented and in effect from time to time or any
replacement thereof.
(d) The Bank shall notify the Company of any event occurring
after the date of this Agreement that will entitle the Bank to
compensation under paragraph (a) or (c) of this Section 5.01
as promptly as practicable, but in any event within 30 days,
after the Bank obtains actual knowledge thereof; provided,
that (i) if the Bank fails to give such notice within 30 days
after it obtains actual knowledge of such an event, the Bank
shall, with respect to compensation payable pursuant to this
Section 5.01 in respect of any costs resulting from such
<PAGE>
event, only be entitled to payment under this Section 5.01 for
costs incurred from and after the date 30 days prior to the
date that the Bank does give such notice and (ii) the Bank
will designate a different Applicable Lending Office for the
Loans affected by such event if such designation will avoid
the need for, or reduce the amount of, such compensation and
will not, in the sole opinion of the Bank, be disadvantageous
to the Bank, except that the Bank shall have no obligation to
designate an Applicable Lending Office located in the United
States of America. The Bank will furnish to the Company a
certificate setting forth the basis and amount of each request
by the Bank for compensation under paragraph (a) or (c) of
this Section 5.01. Determinations and allocations by the Bank
for purposes of this Section 5.01 of the effect of any
Regulatory Change pursuant to paragraph (a) or (b) of this
Section 5.01, or of the effect of capital maintained pursuant
to paragraph (c) of this Section 5.01, on its costs or rate of
return of maintaining Loans or Letters of Credit or its
obligation to make Loans or issue Letters of Credit , or on
amounts receivable by it in respect of Loans or Letters of
Credit, and of the amounts required to compensate the Bank
under this Section 5.01, shall (absent manifest error) be
conclusive, provided that such determinations and allocations
are made in good faith and on a reasonable basis.
5.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination
of any Eurodollar Base Rate for any Interest Period, the Bank
determines (which determination shall be conclusive) that:
(a) quotations of interest rates for the relevant deposits
referred to in the definition of "Eurodollar Base Rate" in
Section 1.01 hereof are not being provided in the relevant
amounts or for the relevant maturities for purposes of
determining rates of interest for Eurodollar Loans as provided
herein; or
(b) the relevant rates of interest referred to in the
definition of "Eurodollar Base Rate" in Section 1.01 hereof
upon the basis of which the rate of interest for Eurodollar
Loans for such Interest Period is to be determined are not
likely adequately to cover the cost to the Bank of making or
maintaining Eurodollar Loans for such Interest Period;
then the Bank shall give the Company prompt notice thereof,
and so long as such condition remains in effect, the Bank
shall be under no obligation to make additional Eurodollar
<PAGE>
Loans, to Continue Eurodollar Loans or to Convert Base Rate
Loans into Eurodollar Loans and the Company shall, on the last
day(s) of the then current Interest Period(s) for the
outstanding Eurodollar Loans, either prepay such Loans or
Convert such Loans into Base Rate Loans in accordance with
Section 2.08 hereof.
5.03 Illegality. Notwithstanding any other provision of
this Agreement, in the event that it becomes unlawful for the
Bank or its Applicable Lending Office to honor its obligation
to make or maintain Eurodollar Loans hereunder, then the Bank
shall promptly notify the Company thereof and the Bank's
obligation to make or Continue, or to Convert Loans of any
other Type into, Eurodollar Loans shall be suspended until
such time as the Bank may again make and maintain Eurodollar
Loans and the Company shall, upon the request of the Bank,
prepay any of such Loans then outstanding hereunder together
with accrued interest thereon.
5.04 Compensation. The Company shall pay to the Bank, upon
the request of the Bank, such amount or amounts as shall be
sufficient (in the reasonable opinion of the Bank) to
compensate it for any loss, cost or expense which the Bank
determines is attributable to:
(a) any payment, prepayment or Conversion of a Eurodollar
Loan for any reason (including, without limitation, the
acceleration of the Loans pursuant to Section 9 hereof, but
excluding any prepayment of Loans pursuant to Section 5.03
hereof) on a date other than the last day of the Interest
Period for such Loan; or
(b) any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions
precedent specified in Section 6 hereof to be satisfied) to
borrow a Eurodollar Loan on the date for such borrowing
specified in the relevant notice of borrowing given pursuant
to Section 2.02 hereof (provided that, if a portion of a
borrowing would cause the aggregate outstanding principal
amount of the Loans and the aggregate Letter of Credit
Outstandings to exceed the Borrowing Base, such compensation
for a failure to borrow shall cover only the principal amount
of Loans not borrowed).
Without limiting the effect of the preceding sentence, such
compensation shall include an amount equal to the excess, if
any, of (i) the amount of interest which otherwise would have
<PAGE>
accrued on the principal amount so paid, prepaid or Converted
or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of
the then current Interest Period for such Loan (or, in the
case of a failure to borrow, the Interest Period for such Loan
which would have commenced on the date specified for such
borrowing) at the applicable rate of interest for such Loan
provided for herein over (ii) the amount of interest which
otherwise would have accrued on such principal amount at a
rate per annum equal to the interest component of the amount
the Bank would have bid in the London interbank market for
Dollar deposits of leading banks in amounts comparable to such
principal amount and with maturities comparable to such period
(as reasonably determined by the Bank).
5.05 Withholding Taxes. The Company may withhold the
appropriate percentage (as determined in accordance with
Section 1441 or 1442 of the Code, or comparable successor
provisions) of payments to the Bank hereunder; provided,
however, that the Company will not so withhold if the Bank
delivers to the Company such valid certificates, documents, or
other evidence as may be required from time to time, including
any certificate or statement of exemption required by Treasury
Regulation Section 1.1441-4(a) or Section 1.1441-6(c) or any
subsequent version thereof, properly completed and duly
executed by the Bank, to establish that payments hereunder to
the Bank are not subject to withholding under Section 1441 or
1442 of the Code, or comparable successor provisions, because
such payments to the Bank are effectively connected with the
conduct by the Bank of a trade or business in the United
States or are exempt from United States tax under a provision
of an applicable tax treaty.
Section 6. Conditions Precedent.
6.01 Initial Credit Extension. The obligation of the Bank
to make the initial Credit Extension hereunder is subject to
the receipt by the Bank of the following items, each of which
shall be satisfactory to the Bank in form and substance:
(a) Corporate Documents. The following documents, each
certified as indicated below:
<PAGE>
(i) a copy of the charter, as amended, of the Company
certified by the Secretary of State of New York, and a
certificate as to the good standing of and charter documents
filed by the Company from such Secretary of State, dated as of
a recent date;
(ii) a certificate of the Secretary or an Assistant
Secretary of the Company, dated the Closing Date and
certifying (A) that attached thereto is a true and complete
copy of the by-laws of the Company as in effect on the date of
such certificate, (B) that attached thereto is a true and
complete copy of resolutions duly adopted by the board of
directors of the Company authorizing the execution, delivery
and performance of such of the Basic Documents to which the
Company is or is intended to be a party and the extensions of
credit hereunder, and that such resolutions have not been
modified, rescinded or amended and are in full force and
effect, (C) that the charter of the Company has not been
amended since the date of the certification thereto furnished
pursuant to clause (i) above, and (D) as to the incumbency and
specimen signature of each officer of the Company executing
such of the Basic Documents to which the Company is intended
to be a party and each other document to be delivered by the
Company from time to time in connection therewith (and the
Bank may conclusively rely on such certificate until it
receives notice in writing from such Person);
(iii) a certificate of another officer of the Company as
to the incumbency and specimen signature of the Secretary or
Assistant Secretary, as the case may be, of the Company; and
(iv) the same documents as listed in the preceding
paragraphs (i) - (iii) but with respect to ACL II C and the
ACL II C Guaranty.
(b) Officer's Certificate. A certificate of a senior
officer of the Company to the effect set forth in the first
sentence of Section 6.02 hereof.
(c) Opinion of Counsel to the Company. An opinion of
Gordon Altman Butowsky Weitzen Shalov & Wein, counsel to the
Company, substantially in the form of Exhibit D hereto.
(d) Note. The Note, duly completed and executed by the
Company.
(e) Security Agreement. The Security Agreement, duly
executed and delivered by the Company and the Bank and
<PAGE>
evidence that the Company shall have taken such other action
(including delivering to the Bank, for filing, appropriately
completed and duly executed copies of Uniform Commercial Code
financing statements) as the Bank shall have requested in
order to perfect the security interests created pursuant to
the Security Agreement.
(f) Tortoise Guaranty. The Tortoise Guaranty, duly
completed and executed.
(g) ACL II C Guaranty. The ACL II C Guaranty, duly
completed and executed.
(h) ACL II C Security Agreement. The ACL II C Security
Agreement, duly executed and delivered by ACL II C and the
Bank and evidence that ACL II C shall have taken such other
action (including delivering to the Bank, for filing,
appropriately completed and duly executed copies of Uniform
Commercial Code financing statements) as the Bank shall have
requested in order to perfect the security interests created
pursuant to the ACL II C Security Agreement.
(i) The Railcar Credit Agreement. The Railcar Credit
Agreement, duly executed and delivered by ACL II C and the
Bank and all conditions to the effectiveness thereof or to the
Bank's obligations to make credit extensions thereunder shall
be fully satisfied or waived.
(j) Indemnification Agreement. The Indemnification
Agreement, duly completed and executed.
(k) Initial Eligible Pledged Securities. The Bank shall be
satisfied in its sole discretion with the initial Eligible
Pledged Securities.
(l) Payment of Expenses. Evidence that the Company shall
have paid all fees and expenses then payable under Section
10.3 hereof (to the extent that bills for such fees and
expenses have been delivered to the Company).
(m) Other Documents. Such other documents as the Bank or
counsel to the Bank may reasonably request.
6.02 Initial and Subsequent Credit Extensions. The
obligation of the Bank to make any Credit Extension to the
Company is subject to the further conditions precedent that:
(i) both immediately prior to the making of such Credit
<PAGE>
Extension and also after giving effect thereto (a) no Default
shall have occurred and be continuing and (b) the
representations and warranties made by the Company in Section
7 hereof, and in each of the other Basic Documents, shall be
true and complete on and as of the date of the making of such
Credit Extension with the same force and effect as if made on
and as of such date and (ii) immediately prior to the making
of such Credit Extension, the Bank shall receive a Valuation
Certificate as to the Portfolio Value and Excess Equity at the
opening of business on the date such Credit Extension is to be
made, including pro forma adjustments reflecting additions to
and withdrawals from the portfolio of Eligible Pledged Assets
to take place on such date. Each notice of a Credit Extension
by the Company hereunder shall constitute a certification by
the Company to the effect set forth in clause (i) of the
preceding sentence (both as of the date of such notice and,
unless the Company otherwise notifies the Bank prior to the
date of such Credit Extension, as of the date of such Credit
Extension).
Section 7. Representations and Warranties. The Company
represents and warrants to the Bank that:
7.01 Corporate Existence. The Company: (a) is a
corporation, duly organized and validly existing under the
laws of the jurisdiction of its organization; (b) has all
requisite corporate or other power, and has all material
governmental licenses, authorizations, consents and approvals
necessary to own its assets and carry on its business as now
being or as proposed to be conducted; and (c) is qualified to
do business in all jurisdictions in which the nature of the
business conducted by it makes such qualification necessary
and where failure so to qualify would have a Material Adverse
Effect.
7.02 Financial Condition. The consolidated and
consolidating balance sheets of ACF and its Consolidated
Subsidiaries as at December 31, 1992 and the related
consolidated and consolidating statements of income, retained
earnings and changes in financial position (or of cash flow,
as the case may be) of ACF and its Consolidated Subsidiaries
for the fiscal year ended on said date, with the opinion
thereon (in the case of said consolidated balance sheet and
statements) of KPMG Peat Marwick, are complete and correct
and fairly present the consolidated financial condition of ACF
and its Consolidated Subsidiaries as at said date and the
consolidated and unconsolidated results of their operations
<PAGE>
for the fiscal year ended on said date, all in accordance with
generally accepted accounting principles and practices applied
on a consistent basis. The Company did not have on said date
any material contingent liabilities, liabilities for taxes,
unusual forward or long-term commitments or unrealized or
anticipated losses from any unfavorable commitments, except as
referred to or reflected or provided for in said balance
sheets as at said date. Since December 31, 1992, there has
been no material adverse change in the financial condition,
operations, business or prospects of the Company from that set
forth in said financial statements as at said date.
7.03 Litigation. Except as disclosed to the Bank in writing
prior to the date of this Agreement, there are no legal or
arbitral proceedings, or any proceedings by or before any
governmental or regulatory authority or agency, now pending or
(to the knowledge of the Company) threatened against the
Company which, if adversely determined, could have a Material
Adverse Effect.
7.04 No Breach. None of the execution and delivery of this
Agreement and the Note and the other Basic Documents to which
the Company is a party, the consummation of the transactions
herein and therein contemplated and compliance with the terms
and provisions hereof and thereof will conflict with or result
in a breach of, or require any consent under, the charter or
by-laws of the Company, or any applicable law or regulation,
or any order, writ, injunction or decree of any court or
governmental authority or agency, or any agreement or
instrument to which the Parent Corporation, the Company or any
other Subsidiary of the Parent Corporation is a party or by
which any of them is bound or to which any of them is subject,
or constitute a default under any such agreement or
instrument, or (except for the Liens created pursuant to the
Security Documents) result in the creation or imposition of
any Lien upon any Property of the Company pursuant to the
terms of any such agreement or instrument.
7.05 Action. The Company has all necessary corporate power
and authority to execute, deliver and perform its obligations
under each of the Basic Documents to which the Company is a
party; the execution, delivery and performance by the Company
of each of the Basic Documents have been duly authorized by
all necessary corporate action on its part; and this Agreement
has been duly and validly executed and delivered by the
Company and constitutes, and each of the other Basic Documents
<PAGE>
to which the Company is a party when executed and delivered
(in the case of the Notes, for value) will constitute, its
legal, valid and binding obligation, enforceable in accordance
with its terms.
7.06 Approvals. No authorizations, approvals or consents
of, and no filings or registrations with, any governmental or
regulatory authority or agency are necessary for the
execution, delivery or performance by the Company of the Basic
Documents to which the Company is a party or for the validity
or enforceability thereof, except for filings and recordings
in respect of the Liens created pursuant to the Security
Documents.
7.07 No Margin Stock. The Pledged Securities do not include
any Margin Stock other than by reason of having been issued to
the Company in exchange for other Pledged Securities in a
bankruptcy case or other restructuring of indebtedness of the
relevant issuer.
7.08 ERISA. The Company and the ERISA Affiliates have
fulfilled their respective obligations under the minimum
funding standards of ERISA and the Code with respect to each
Plan and are in compliance in all material respects with the
presently applicable provisions of ERISA and the Code, and
have not incurred any liability to the PBGC or any Plan or
Multiemployer Plan (other than to make contributions in the
ordinary course of business and other than contingent
liabilities that would arise upon the termination of any Plan
or Multiemployer Plan (no such termination being reasonably
foreseen by the Company)).
7.09 Taxes. The Parent Corporation and its Subsidiaries
have filed all United States Federal income tax returns and
all other material tax returns which are required to be filed
by them and have paid all taxes due pursuant to such returns
or pursuant to any assessment received by the Parent
Corporation or any of its Subsidiaries. The charges, accruals
and reserves on the books of the Parent Corporation and its
Subsidiaries in respect of taxes and other governmental
charges are, in the opinion of the Company, adequate.
7.10 Investment Company Act. The Company is not an
"investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment
Company Act of 1940, as amended.
<PAGE>
7.11 Public Utility Holding Company Act. The Company is not
a "holding company", or an "affiliate" of a "holding company"
or a "subsidiary company" of a "holding company", within the
meaning of the Public Utility Holding Company Act of 1935, as
amended.
7.12 Credit Agreements. As of the date of this Agreement,
the Company does not have any credit agreement, loan
agreement, indenture, purchase agreement, guarantee or other
arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any
extension of credit) to, or Guarantee by, the Company other
than (a) the Basic Documents and (b) as indicated on Schedule
1 hereto.
7.13 Investments. Set forth in Schedule 2 hereto is a
complete and correct list, as of the date of this Agreement,
of all Investments held by the Company in any Person. Except
as disclosed in Schedule 3 hereto, the Company owns all such
Investments free and clear of Liens, provided that the Company
will own all Pledged Securities free and clear of Liens (other
than the Liens created by the Security Agreement).
7.14 Railcar Credit Facility. The representations and
warranties set forth in the AKF Railcar Credit Agreement and
the other "Basic Documents" (as defined in the AKF Railcar
Credit Agreement) are true and accurate on and as of the date
made, unless they relate to an earlier date, in which case
they were true and accurate on and as of such earlier date.
No "Default" (as defined in the AKF Railcar Credit Agreement)
has occurred and is continuing under the AKF Railcar Credit
Agreement or under the "Basic Documents" (as defined therein).
Section 8. Covenants of the Company. The Company covenants
and agrees with the Bank that, so long as the Commitment or
any Loan, Letter of Credit or Reimbursement Obligation is
outstanding and until payment in full of all amounts payable
by the Company hereunder:
8.01 Financial Statements. The Company shall deliver to the
Bank:
(a) as soon as available and in any event within 55 days
after the end of each quarterly fiscal period of each fiscal
year of the Reporting Parent, consolidated statements of
income, retained earnings and cash flow of the Reporting
Parent and its Consolidated Subsidiaries for such period and
<PAGE>
for the period from the beginning of the respective fiscal
year to the end of such period, and the related consolidated
balance sheets as at the end of such period, setting forth in
each case in comparative form the corresponding consolidated
and consolidating figures for the corresponding period in the
preceding fiscal year, accompanied by a certificate of a
senior financial officer of the Reporting Parent, which
certificate shall state that said financial statements fairly
present the consolidated financial condition and results of
operations of the Reporting Parent and its Consolidated
Subsidiaries in accordance with generally accepted accounting
principles, consistently applied, as at the end of, and for,
such period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within 120 days
after the end of each fiscal year of the Reporting Parent,
consolidated statements of income, retained earnings and cash
flow of the Reporting Parent and its Consolidated Subsidiaries
for such year and the related consolidated balance sheets as
at the end of such year, setting forth in each case in
comparative form the corresponding consolidated figures for
the preceding fiscal year, and accompanied by an opinion
thereon of independent certified public accountants of
recognized national standing, which opinion shall state that
said financial statements fairly present the consolidated
financial condition and results of operations of the Reporting
Parent and its Consolidated Subsidiaries as at the end of, and
for, such fiscal year in accordance with generally accepted
accounting principles, and a certificate of such accountants
stating that, in making the examination necessary for their
opinion, they obtained no knowledge, except as specifically
stated, of any Default;
(c) as soon as available and in any event within 30 days
after the end of each calendar month, a statement of income,
retained earnings and cash flow of the Company for such month
and for the period from the beginning of the respective fiscal
year to the end of such month, and the related balance sheet
as at the end of such month, accompanied by a certificate of a
senior financial officer of the Company, which certificate
shall state that said financial statements fairly present the
financial condition and results of operations of the Company
in accordance with generally accepted accounting principles,
consistently applied, as at the end of, and for, such period
(subject to normal-year-end audit adjustments);
<PAGE>
(d) promptly upon their becoming available, copies of all
registration statements and regular periodic reports, if any,
which the Reporting Parent or any of its Subsidiaries shall
have filed with the Securities and Exchange Commission (or any
governmental agency substituted therefor) or any national
securities exchange;
(e) as soon as possible, and in any event within ten days
after the Company knows or has reason to believe that any of
the events or conditions specified below with respect to any
Plan or Multiemployer Plan have occurred or exist, a statement
signed by a senior financial officer of the Company setting
forth details respecting such event or condition and the
action, if any, which the Company or its ERISA Affiliate
proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by
the Company or an ERISA Affiliate with respect to such event
or condition):
(i) any reportable event, as defined in Section 4043(b) of
ERISA and the regulations issued thereunder, with respect to a
Plan, as to which PBGC has not by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified
within 30 days of the occurrence of such event (provided that
a failure to meet the minimum funding standard of Section 412
of the Code or Section 302 of ERISA shall be a reportable
event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code);
(ii) the filing under Section 4041 of ERISA of a notice of
intent to terminate any Plan or the termination of any Plan;
(iii) the institution by PBGC of proceedings under Section
4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Plan, or the receipt by the Company
or any ERISA Affiliate of a notice from a Multiemployer Plan
that such action has been taken by PBGC with respect to such
Multiemployer Plan;
(iv) the complete or partial withdrawal by the Company or
any ERISA Affiliate under Section 4201 or 4204 of ERISA from a
Multiemployer Plan, or the receipt by the Company or any ERISA
Affiliate of notice from a Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245
of ERISA or that it intends to terminate or has terminated
under Section 4041A of ERISA;
<PAGE>
(v) the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate
to enforce Section 515 of ERISA, which proceeding is not
dismissed within 30 days;
(vi) the failure to make a required contribution to a Plan
if such failure is sufficient to give rise to a lien under
Section 302(f) of ERISA or Section 412(n) of the Code.
(f) (i) not later than 10:00 a.m. New York time on the
first Business Day of each week, a Valuation Certificate as to
the Portfolio Value and the Excess Equity as at the close of
business on the last Business Day of the preceding week, (ii)
not later than 10:00 a.m., New York time, on the date of each
Credit Extension hereunder and each withdrawal of collateral
under the Security Agreement, a Valuation Certificate as to
the Portfolio Value and the Excess Equity at the opening of
business on such date, including pro forma adjustments
reflecting additions to and withdrawals from the portfolio of
Pledged Assets to take place on such date and, if applicable,
stating the Fair Market Value of Pledged Assets to be so
withdrawn, and (iii) from time to time upon request of the
Bank, a Valuation Certificate as to the Portfolio Value and
the Excess Equity as at a recent time reasonably specified by
the Bank;
(g) promptly after the Company knows or has reason to
believe that any Default has occurred, a notice of such
Default describing the same in reasonable detail and, together
with such notice or as soon thereafter as possible, a
description of the action that the Company has taken and
proposes to take with respect thereto;
(h) from time to time such other information regarding the
financial condition, operations, business or prospects of the
Company (including, without limitation, any Plan or
Multiemployer Plan and any reports or other information
required to be filed under ERISA) as the Bank may reasonably
request; and
(i) no later than three Business Days prior to any change
in the legal identity of the Parent Corporation, a notice
specifying the proposed change, together with a description of
the Person designated to become the new Parent Corporation and
a diagram showing the position within the corporate structure
of IHC and all of its Subsidiaries that the Company shall hold
immediately prior to and after giving effect to such change.
<PAGE>
The Company will furnish to the Bank, at the time it furnishes
each set of financial statements pursuant to paragraph (a),
(b) or (c) above, a certificate of a senior financial officer
of the Company (i) to the effect that no Default has occurred
and is continuing (or, if any Default has occurred and is
continuing, describing the same in reasonable detail and
describing the action that the Company has taken and proposes
to take with respect thereto) and (ii) setting forth in
reasonable detail the computations necessary to determine
whether the Company is in compliance with Section 8.10 hereof
as of the end of the respective quarterly fiscal period,
fiscal year or calendar month.
8.02 Litigation. The Company will promptly give to the Bank
notice of all legal or arbitral proceedings, and of all
proceedings by or before any governmental or regulatory
authority or agency, and any material development in respect
of such legal or other proceedings, affecting the Company,
except proceedings which, if adversely determined, would not
have a Material Adverse Effect.
8.03 Existence, etc. The Company will: preserve and
maintain its legal existence and all of its material rights,
privileges and franchises; comply with the requirements of all
applicable laws, rules, regulations and orders of governmental
or regulatory authorities if failure to comply with such
requirements would have a Material Adverse Effect; pay and
discharge all taxes, assessments and governmental charges or
levies imposed on it or on its income or profits or on any of
its property prior to the date on which penalties attach
thereto, except for any such tax, assessment, charge or levy
the payment of which is being contested in good faith and by
proper proceedings and against which adequate reserves are
being maintained; maintain all of its Properties used or
useful in its business in good working order and condition,
ordinary wear and tear excepted; and permit representatives of
the Bank, during normal business hours, to examine, copy and
make extracts from its books and records, to inspect its
Properties, and to discuss its business and affairs with its
officers, all to the extent reasonably requested by the Bank.
8.04 Insurance. The Company will keep insured by
financially sound and reputable insurers all Property of a
character usually insured by corporations engaged in the same
or similar business similarly situated against loss or damage
of the kinds and in the amounts customarily insured against by
such corporations and carry such other insurance as is usually
carried by such corporations.
<PAGE>
8.05 Prohibition of Fundamental Changes. The Company will
not enter into any transaction of merger or consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution). The Company will not
acquire any business or Property from, or capital stock of, or
be a party to any acquisition of, any Person except for
purchases of Property to be used in the ordinary course of
business and Investments permitted under Section 8.08 hereof.
The Company will not, and will not permit any of its
Subsidiaries to, convey, sell, lease, transfer or otherwise
dispose of, in one transaction or a series of transactions,
all or a substantial part of its business or Property, whether
now owned or hereafter acquired (including, without
limitation, receivables and leasehold interests, but excluding
obsolete or worn-out property no longer used or useful in its
business), except that the Company may transfer cash and
Securities (other than collateral pledged under the Security
Agreement) to its Wholly-Owned Subsidiaries. Notwithstanding
the foregoing, the Company may transfer Investments in the
ordinary course of business and on ordinary business terms,
provided that, in the case of Investments consisting of
Pledged Securities, (i) such transfer shall be in exchange for
cash and/or Securities accepted by the Bank pursuant to
Section 2.10 hereof as Eligible Pledged Securities for an
aggregate consideration (equal to the sum of the amount of
such cash plus the fair market value of such Securities) not
less than the fair market value of the Pledged Securities so
transferred, (ii) the consideration to be received by the
Company in such transfer shall be delivered directly by the
transferee to the Bank as collateral under the Security
Agreement (and the Bank shall be satisfied with the manner and
timing of both such delivery and the creation and perfection
of its security interest in such collateral), and (iii) no
Default shall then exist or result therefrom.
8.06 Limitation on Liens. The Company will not create,
incur, assume or suffer to exist any Lien upon any of its
Property (other than Margin Stock), whether now owned or
hereafter acquired, except:
(a) Liens created pursuant to the Security Documents;
(b) Liens imposed by any governmental authority for taxes,
assessments or charges not yet due or which are being
contested in good faith and by appropriate proceedings if,
unless the amount thereof is not material with respect to it
or its financial condition, adequate reserves with respect
<PAGE>
thereto are maintained on the books of the Company in
accordance with GAAP;
(c) pledges or deposits under worker's compensation,
unemployment insurance and other social security legislation;
(d) judgment liens unless the judgments secured thereby
shall not, within 30 days after the entry thereof, have been
discharged or execution thereof stayed pending appeal; and
(e) Liens on securities (other than Pledged Securities)
purchased by the Company securing the repayment of
Indebtedness incurred by the Company to finance or refinance
the purchase of such securities to the extent such
Indebtedness is permitted by Section 8.07(b), (c) or (d)
hereof.
8.07 Indebtedness. The Company will not create, incur or
suffer to exist any Indebtedness of the Company except:
(a) Indebtedness to the Bank hereunder and under the
Tortoise Guaranty;
(b) until the close of business on the date falling 30 days
after Closing Date, the Indebtedness listed on Schedule 1
hereto;
(c) Indebtedness incurred by the Company to finance or
refinance the purchase of securities, provided that the
aggregate outstanding principal amount of such Indebtedness
(excluding the Indebtedness referred to in paragraph (b) of
this Section 8.07 and the Loans and obligations referred to in
paragraph (d) of this Section 8.07) shall not exceed
$5,000,000 at any time;
(d) obligations of the Company to pay the purchase price of
securities outstanding during the settlement of such purchase
in accordance with customary market practice;
(e) Indebtedness owing to Affiliates, provided that the
incurrence of such Indebtedness is permitted by Section 8.12
hereof and such Indebtedness is evidenced written agreements
or instruments; and
(f) Indebtedness to the Bank under the Bayswater Guaranty.
<PAGE>
8.08 Investments. The Company will not make any Investments
other than (a) Assets purchased for fair market value
(determined as at the time made) and (b) loans and capital
contributions to Wholly-Owned Subsidiaries of the Company and
(c) the Tortoise Guaranty and the Bayswater Guaranty and the
collateral security therefor.
8.09 Dividend Payments. The Company will not, and will not
permit any of its Subsidiaries to, declare or make any
Dividend Payment at any time if a Default then exists or would
result therefrom or if the aggregate outstanding principal
amount of the Loans and the aggregate amount of all Letter of
Credit Outstandings then exceeds the Borrowing Base.
8.10 Tangible Net Worth. The Company will not permit
Tangible Net Worth at any time to be less than 60% of the
aggregate outstanding principal amount of the Loans and Letter
of Credit Outstandings at such time.
8.11 Lines of Business. The Company will not engage to any
substantial extent in any line or lines of business activity
other than the business of investing in Securities, provided
that this Section 8.11 shall not be deemed to restrict the
lines of business of Subsidiaries of the Company.
8.12 Transactions with Affiliates. Except as expressly
permitted by this Agreement, the Company will not, directly or
indirectly: (a) make any Investment in an Affiliate (other
than by means of purchases of Securities issued by Affiliates
from Persons who are not Affiliates); (b) transfer, sell,
lease, assign or otherwise dispose of any property to an
Affiliate; (c) merge into or consolidate with or purchase or
acquire Property from an Affiliate; or (d) enter into any
other transaction directly or indirectly with or for the
benefit of an Affiliate (including, without limitation,
guarantees and assumptions of obligations of an Affiliate);
provided that (i) the Company may enter into transactions
(other than extensions of credit by the Company to an
Affiliate) in the ordinary course of business if the monetary
or business consideration arising therefrom would be
substantially as advantageous to the Company as the monetary
or business consideration which would obtain in a comparable
transaction with a Person not an Affiliate, (ii) the Company
may make capital contributions or loans to its Wholly-Owned
Subsidiaries and (iii) so long as no Default or Event of
Default has occurred and is continuing (or would result
<PAGE>
therefrom) and the Company has given the Lender at least one
Business Day's prior written notice, the Company may make
payments to (A) Ichan & Co., Inc. in the form of a management
or advisory fee and (B) Bayswater Realty & Capital Corp.
("Bayswater") in the form of reimbursement for certain payroll
and related expenses incurred by Bayswater with respect to
certain accounting, bookkeeping, tax administration and
similar services to the extent performed for the benefit of
the Company; provided, that in no event shall the aggregate
amount paid or distributed pursuant to this clause in any
twelve-month period exceed $500,000. The Company shall notify
the Bank prior to or promptly after the consummation by it of
any transaction referred to in clause (a), (b), (c), or (d) of
this Section 8.12 describing the same in reasonable detail.
8.13 Use of Proceeds. The Company may not use the proceeds
of the Loans hereunder other than to repay Letter of Credit
drawings pursuant to Section 3.05, to make Investments (other
than to purchase or carry Margin Stock) permitted by Section
8.08 hereof, to pay the principal of and interest on the
Indebtedness referred to in Section 8.07(b) hereof and to pay
fees, expenses and similar transaction costs incurred in
connection with this Agreement (in each case in compliance
with all applicable legal and regulatory requirements);
provided that the Bank shall not have any responsibility as to
the use of any of such proceeds.
8.14 Maintenance Base. The Company will not at any time
permit the sum of (x) the aggregate outstanding principal
amount of the Loans at such time plus (y) the aggregate amount
of all Letter of Credit Outstandings at such time to exceed
the Maintenance Base at such time.
8.15 Minimum Excess Equity. The Company will not, so long
as any obligations are outstanding under the AKF Railcar
Credit Agreement and the AKF Railcar Credit Agreement is in
full force and effect, permit at any time the sum of (x) the
aggregate outstanding principal amount of the "Loans" under
the AKF Railcar Credit Agreement at such time, plus (y) the
aggregate "Letter of Credit Outstandings" under the AKF
Railcar Credit Agreement at such time to exceed Excess Equity
at such time. Should at any time the sum of the amounts
referred to in the preceding clauses (x) and (y) exceed Excess
Equity at such time then, unless in the interim the sum of the
amounts referred to in clauses (x) and (y) shall be reduced by
means of a prepayment under the AKF Railcar Credit Agreement
<PAGE>
so as no longer to exceed Excess Equity, within three Business
Days the Company shall either (i) pledge to the Bank
additional assets pursuant to the provisions of Section 2.10
so that the Company shall be in compliance with the terms of
this Section 8.15, or (ii) prepay the Loans in such amounts
and/or pay over to the Bank such amounts to be held by the
Bank for application against the Letter of Credit Outstandings
so that the Company shall be in compliance with the terms of
this Section 8.15.
8.16 RJR Common Stock. The Company will not at any time
permit RJR Common Stock to comprise less than 20% of the
Portfolio Value for purposes of determining "Eligible Pledged
Securities"; provided, however, that the Company may request
in accordance with Section 2.10 hereof that the Lender permit
the Company to pledge additional Assets under the Security
Agreement of an issuer (other than RJR) of a similar quality
acceptable to the Lender in its discretion (whether in
addition to or in substitution for existing Pledged Assets)
and thereby constitute such additional Assets "Eligible
Pledged Assets", or deposit cash in the Collateral Account, in
each case in order to comply with this Section 8.16.
Section 9. Events of Default. If one or more of the
following events (herein called "Events of Default") shall
occur and be continuing:
(a) the Company shall default in the payment when due of
any principal of or interest on any Loan, any Reimbursement
Obligation, any fee or any other amount payable by it
hereunder or under any other Basic Document to which the
Company is a party; or
(b) the Parent Corporation, ACF Holding, IHC, ACF, the
Company or any Subsidiary of the Company shall default in the
payment when due of any principal of or interest on any of its
Indebtedness (other than Indebtedness referred to in Section
9(a)), or in the payment when due of any amount under any
Interest Rate Protection Agreement and the aggregate principal
amount of the Indebtedness and/or liquidation payments under
such Interest Rate Protection Agreement to which such default
relates is not less than $5,000,000 (in the case of the Parent
Corporation, ACF Holding, IHC or ACF) or $1,000,000 (in the
case of the Company or any such Subsidiary); or any event
specified in any note, agreement, indenture or other document
evidencing or relating to any Indebtedness of the Parent
<PAGE>
Corporation, ACF Holding, IHC or ACF in the aggregate amount
of not less than $5,000,000 shall occur if the effect of such
event is to cause such Indebtedness to become due, or to be
prepaid in full (whether by redemption, purchase, offer to
purchase or otherwise) prior to its stated maturity; or any
event specified in any note, agreement, indenture or other
document evidencing or relating to any Indebtedness of the
Parent Corporation, ACF Holding, IHC or ACF in the aggregate
amount of not less than $10,000,000 or any event specified in
any Interest Rate Protection Agreement to which the Parent
Corporation, ACF Holding, IHC or ACF is party shall occur if
the effect of such event is (with the giving of any notice or
the lapse of time or both) to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such
holder or holders to cause) to cause such Indebtedness to
become due, or to be prepaid in full (whether by redemption,
purchase, offer to purchase or otherwise) prior to its stated
maturity or, in the case of an Interest Rate Protection
Agreement, to permit the payments owing thereunder to be
liquidated; or any event specified in any note, agreement,
indenture or other document evidencing or relating to any such
Indebtedness of the Company or any of its Subsidiaries in the
aggregate amount of not less than $1,000,000 or any event
specified in any Interest Rate Protection Agreement to which
any of the Subsidiaries of the Company is party shall occur if
the effect of such event is to cause, or (with the giving of
any notice or the lapse of time or both) to permit the holder
or holders of such Indebtedness (or a trustee or agent on
behalf of such holder or holders) to cause, such Indebtedness
to become due, or to be prepaid in full (whether by
redemption, purchase, offer to purchase or otherwise), prior
to its stated maturity or, in the case of an Interest Rate
Protection Agreement, to permit the payments owing under such
Interest Rate Protection Agreement to be liquidated; or
(c) any representation, warranty or certification made or
deemed made in any Basic Document (or in any modification or
supplement thereto) by the Company, or any certificate
furnished to the Bank pursuant to the provisions hereof, shall
prove to have been false or misleading as of the time made or
furnished in any material respect; or
(d) the Company shall default in the performance of its
obligation under Section 8.01 (g) and Section 8.16 hereof; the
Company shall default in the performance of its obligation
under Section 8.14 hereof and such default shall continue
<PAGE>
unremedied after 5:00 p.m. New York time on the Business Day
immediately following the day on which such default occurs;
the Company shall default in the performance of any of its
obligations under any of Sections 8.05, 8.06, 8.07, 8.08,
8.09, 8.12, 8.13 or 8.15 hereof or Section 5.01 or Section
5.02 of the Security Agreement and such default shall continue
unremedied for a period of five days; or the Company shall
default in the performance of Section 8.10 hereof and such
default shall continue unremedied for a period of fifteen
days; or the Company shall default in the performance of any
of its other obligations in this Agreement or any other Basic
Document and such default shall continue unremedied for a
period of ten days after notice thereof to the Company by the
Bank; or
(e) the Parent Corporation, ACF Holding, ACF, the Company
or any Subsidiary of the Company shall admit in writing its
inability to, or be generally unable to, pay its debts as such
debts become due; or
(f) the Parent Corporation, ACF Holding, ACF, the Company
or any Subsidiary of the Company shall (i) apply for or
consent to the appointment of, or the taking of possession by,
a receiver, custodian, trustee or liquidator of itself or of
all or a substantial part of its Property, (ii) make a general
assignment for the benefit of its creditors, (iii) commence a
voluntary case under the Bankruptcy Code (as now or hereafter
in effect), (iv) file a petition seeking to take advantage of
any other law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or readjustment of
debts, (v) fail to controvert in a timely and appropriate
manner, or acquiesce in writing to, any petition filed against
it in an involuntary case under the Bankruptcy Code, or (vi)
take any corporate action for the purpose of effecting any of
the foregoing; or
(g) a proceeding or case shall be commenced, without the
application or consent of the Parent Corporation, ACF Holding,
ACF, the Company or any Subsidiary of the Company, in any
court of competent jurisdiction, seeking (i) its liquidation,
reorganization, dissolution or winding-up, or the composition
or readjustment of its debts, (ii) the appointment of a
trustee, receiver, custodian, liquidator or the like of the
Parent Corporation, ACF Holding, ACF, the Company or any
Subsidiary of the Company or of all or any substantial part of
its assets, or (iii) similar relief in respect of the Parent
<PAGE>
Corporation, ACF Holding, ACF, the Company or any Subsidiary
of the Company under any law relating to bankruptcy,
insolvency, reorganization, winding-up, or composition or
adjustment of debts, and such proceeding or case shall
continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered
and continue unstayed and in effect for a period of 60 or more
days; or an order for relief against the Parent Corporation,
ACF Holding, ACF, the Company or any Subsidiary of the Company
shall be entered in an involuntary case under the Bankruptcy
Code; or
(h) a final judgment or judgments for the payment of money
shall be rendered by a one or more courts (regardless of
insurance coverage), administrative tribunals or other bodies
having jurisdiction against the Parent Corporation, ACF
Holding, ACF, the Company and/or any Subsidiary of the Company
in an aggregate amount of not less than $5,000,000 (in the
case of the Parent Corporation, ACF Holding or ACF) or
$1,000,000 (in the case of the Company or any of its
Subsidiaries) and the same shall not be discharged (or
provision shall not be made for such discharge), or a stay of
execution thereof shall not be procured, within 30 days from
the date of entry thereof and the Parent Corporation, ACF
Holding, ACF, the Company or such Subsidiary shall not, within
said period of 30 days, or such longer period during which
execution of the same shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such
appeal; or
(i) an event or condition specified in Section 8.01(e)
hereof shall occur or exist with respect to any Plan or
Multiemployer Plan and, as a result of such event or
condition, together with all other such events or conditions,
the Company or any ERISA Affiliate shall incur or in the
reasonable opinion of the Bank shall be reasonably likely to
incur a liability to a Plan, a Multiemployer Plan or PBGC (or
any combination of the foregoing) which would constitute, in
the reasonable determination of the Bank, a Material Adverse
Effect; or
(j) the Company shall cease at any time to be a Wholly-
Owned Subsidiary of the Parent Corporation; or
(k) the Parent Corporation shall at any time (i) cease to be
a second tier Wholly-Owned Subsidiary of Highcrest Investors
Corp., a Delaware corporation, (ii) cease to be a third tier
<PAGE>
Wholly-Owned Subsidiary of IHC, or (iii) become a subsidiary
of any Person with the result that the Company shall in any
way become liable for, or with respect to, any Indemnified
Liability (as defined in the Indemnification Agreement); or
(l) except for expiration in accordance with its terms, any
of the Security Documents, the Tortoise Guaranty, the
Bayswater Guaranty or the IHC Indemnification Agreement shall
be terminated or shall cease to be in full force and effect or
the legality, validity, binding effect or enforceability of
any such document shall be challenged by the Company or any
other Person, for whatever reason; or
(m) any Event of Default (as so defined therein) shall
occur under the AKF Railcar Credit Agreement; or
(n) ACF Holding shall default in the payment when due of any
amount payable under the ACF Holding Guaranty; or
(o) any representation or warranty made in the ACF Holding
Guaranty shall prove to have been false or misleading as of
the time made in any material respect; or
(p) ACF Holding shall default in the performance of any of
its obligations set forth in the ACF Holding Guaranty (other
than those referred to in paragraph (n) above) and such
default shall continue unremedied for a period of ten days; or
(q) the ACF Holding Guaranty shall be terminated (without
the consent of the Bank) or shall cease to be in full force
and effect (without the consent of the Bank), or the legality,
validity, binding effect or enforceability of the ACF Holding
Guaranty shall be challenged by ACF Holding or any other
Person, for whatever reason;
THEREUPON: (1) in the case of an Event of Default other than
one referred to in clause (f) or (g) of this Section 9 with
respect to the Company, the Bank may, by notice to the
Company, terminate the Commitment and/or declare the principal
amount then outstanding of, and the accrued interest on, the
Loans, all Letter of Credit Outstandings and all other amounts
payable by the Company hereunder and under the Note
(including, without limitation, any amounts payable under
Section 5.04 hereof) to be forthwith due and payable,
whereupon such amounts shall be immediately due and payable
without presentment, demand, protest or other formalities of
any kind, all of which are hereby expressly waived by the
Company; and (2) in the case of the occurrence of an Event of
<PAGE>
Default referred to in clause (f) or (g) of this Section 9
with respect to the Company, the Commitment shall
automatically be terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans, all
Letter of Credit Outstandings and all other amounts payable by
the Company hereunder and under the Note (including, without
limitation, any amounts payable under Section 5.04 hereof)
shall automatically become immediately due and payable without
presentment, demand, protest or other formalities of any kind,
all of which are hereby expressly waived by the Company.
Section 10. Miscellaneous.
10.01 Waiver. No failure on the part of the Bank to
exercise and no delay in exercising, and no course of dealing
with respect to, any right, power or privilege under this
Agreement, the Note or any Letter of Credit shall operate as a
waiver thereof, nor shall any single or partial exercise of
any right, power or privilege under this Agreement, the Note
or any Letter of Credit preclude any other or further exercise
thereof or the exercise of any other right, power or
privilege. The remedies provided herein are cumulative and
not exclusive of any remedies provided by law.
10.02 Notices. All notices and other communications
provided for herein and under the Security Documents
(including, without limitation, any modifications of, or
waivers or consents under, this Agreement) shall be given or
made in writing (including, without limitation, by telecopy)
delivered to the intended recipient at the "Address for
Notices" specified below its name on the signature pages
hereof; or, as to any party, at such other address as shall be
designated by such party in a notice to each other party.
Except as otherwise provided in this Agreement, all such
communications shall be deemed to have been duly given when
transmitted by telecopier or personally delivered or, in the
case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
10.03 Expenses, etc. The Company agrees to pay or reimburse
the Bank for paying: (a) all reasonable out-of-pocket costs
and expenses of the Bank (including, without limitation, the
reasonable fees and expenses of Mayer, Brown & Platt, counsel
to the Bank), in connection with (i) the negotiation,
preparation, execution and delivery of this Agreement and the
other Basic Documents and the making of the Loans and the
issuing of the Letters of Credit hereunder, (ii) due
diligence, communication and travel expenses relating to this
<PAGE>
Agreement and the other Basic Documents and the transactions
contemplated hereby and thereby and (iii) any amendment,
modification or waiver of any of the terms of this Agreement
or any of the other Basic Documents; (b) all reasonable costs
and expenses of the Bank (including reasonable counsels' fees)
in connection with (i) any Default and any enforcement or
collection proceedings resulting therefrom and (ii) the
enforcement of this Section 10.03; (c) all transfer, stamp,
documentary or other similar taxes, assessments or charges
levied by any governmental or revenue authority in respect of
this Agreement or any of the other Basic Documents or any
other document referred to herein or therein and all costs,
expenses, taxes, assessments and other charges incurred in
connection with any filing, registration recording or
perfection of any security interest contemplated by this
Agreement or any other Basic Document or any other document
referred to herein or therein; provided, however, that the
Company shall not be required to pay or reimburse the Bank
with respect to any cost, expense, fee, tax or other charge
arising as a result of the transfer by the Bank of any rights
under this Agreement or the Note.
The Company hereby agrees to indemnify the Indemnified
Parties for, and hold each of them harmless against, any and
all Indemnified Liabilities incurred by any of them arising
out of or by reason of or relating to the extensions of credit
hereunder or under the Original Credit Agreement or any actual
or proposed use by the Company or any of its Subsidiaries of
the proceeds of any of the extensions of credit hereunder or
under the Original Credit Agreement (but excluding any such
Indemnified Liabilities incurred by reason of the gross
negligence or willful misconduct of the Person to be
indemnified). If and to the extent the foregoing undertaking
may be unenforceable for any reason, the Company hereby agrees
to make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
10.04 Amendments, etc. No provision of this Agreement may
be amended or modified except by an instrument in writing
signed by the Company and the Bank.
10.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns.
<PAGE>
10.06 Assignments and Participations.
(a) The Company may not assign its rights or obligations
hereunder, under the Note or in respect of any Letter of
Credit, without the prior consent of the Bank.
(b) The Bank may assign any of the Loans, the Note, the
Letters of Credit and its Commitment (but, in the case of
assignments to other than affiliates of the Bank, only with
the consent of the Company, which consent shall not be
unreasonably withheld); provided that, (i) any such partial
assignment shall be in an amount at least equal to $5,000,000
and (ii) each such assignment by the Bank of its Loans, Note,
Letters of Credit or Commitment shall be made in such manner
so that the same portion of its Loans, Note, Letters of Credit
and Commitment is assigned to the respective assignee. Upon
execution and delivery by the assignee to the Company of an
instrument in writing pursuant to which such assignee agrees
to become a "Bank" hereunder having the Commitment and Loans
specified in such instrument, and upon consent thereto by the
Company to the extent required above, the assignee shall have,
to the extent of such assignment (unless otherwise provided in
such assignment with the consent of the Company), the
obligations, rights and benefits of the Bank hereunder holding
the Commitment, Loans and Letters of Credit (or portions
thereof) assigned to it (in addition to the Commitment and
Loans, if any, theretofore held by such assignee) and the Bank
shall, to the extent of such assignment, be released from the
Commitment (or portion thereof) so assigned; provided that no
such assignee shall be entitled to compensation under Section
5.01 hereof in excess of any such compensation payable to the
Bank.
(c) The Bank may sell or agree to sell to one or more other
Persons a participation in all or any part of any Loans,
Letters of Credit or its Commitment (but, in the case of
participations to other than affiliates of the Bank, only with
the consent of the Company, which consent shall not be
unreasonably withheld), in which event each purchaser of a
participation (a "participant") shall be entitled to the
rights and benefits of the provisions of Section 8.01(h)
hereof with respect to its participation in such Loans and
Commitment as if (and the Company shall be directly obligated
to such Participant under such provisions as if) such
Participant were the "Bank" for purposes of said Section, but
shall not have any other rights or benefits under this
<PAGE>
Agreement or the Note or any other Basic Document (the
participant's rights against the Bank in respect of such
participation to be those set forth in the agreements executed
by the Bank in favor of the Participant). All amounts payable
by the Company to the Bank under Section 5 hereof in respect
of Loans, Letters of Credit and the Commitment, shall be
determined as if the Bank had not sold or agreed to sell any
participations in such Loans, Letters of Credit and
Commitment, and as if the Bank were funding each of such
Loans, Letters of Credit, and Commitment in the same way that
it is funding the portion of such Loans, Letters of Credit,
and Commitment in which no participations have been sold. In
no event shall the Bank agree with the Participant to take or
refrain from taking any action hereunder (including, without
limitation, under Section 2.10 hereof) or under any other
Basic Document except that the Bank may agree with the
Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term, or
extend the time or waive any requirement for the reduction or
termination, of the Commitment, (ii) extend the date fixed for
the payment of principal of or interest on the related Loan or
Loans or any portion of any fee hereunder payable to the
Participant, (iii) reduce the amount of any such payment of
principal, (iv) reduce the rate at which interest is payable
thereon, or any fee hereunder payable to the Participant, to a
level below the rate at which the Participant is entitled to
receive such interest or fee, or (v) alter the rights or
obligations of the Company to prepay the related Loans.
(d) Anything in this Section 10.06 to the contrary
notwithstanding, the Bank may assign and pledge all or any
portion of its Loans, Reimbursement Obligations and its Note
to any Federal Reserve Bank as collateral security pursuant to
Regulation A of the Board of Governors of the Federal Reserve
System and any Operating Circular issued by such Federal
Reserve Bank, and such Loans and Note shall be fully
transferrable as provided therein. No such assignment shall
release the Bank from its obligations hereunder.
(e) The Bank may furnish any information concerning the
Company or any of its Subsidiaries in the possession of the
Bank from time to time to assignees and participants
(including prospective assignees and participants), subject,
however, to the provisions of Section 10.12(b) hereof.
<PAGE>
10.07 Survival. The obligations of the Company under
Sections 3.08, 5.01, 5.04 and 10.03 hereof shall survive the
repayment of the Loans, the Reimbursement Obligations and the
termination of the Commitment. In addition, each
representation and warranty made, or deemed to be made by a
notice of any extension of credit, herein or pursuant hereto
shall survive the making of such representation and warranty,
and the Bank shall be deemed to have waived, by reason of
making any extension of credit hereunder, any Default which
may arise by reason of such representation or warranty proving
to have been false or misleading, notwithstanding that the
Bank may have had notice or knowledge or reason to believe
that such representation or warranty was false or misleading
at the time such extension of credit was made.
10.08 Captions. The table of contents and captions and
section headings appearing herein are included solely for
convenience of reference and are not intended to affect the
interpretation of any provision of this Agreement.
10.09 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall
constitute one and the same instrument, and any of the parties
hereto may execute this Agreement by signing any such
counterpart.
10.10 Governing Law; Submission to Jurisdiction. This
Agreement and the Note shall be governed by, and construed in
accordance with, the law of the State of New York without
giving effect to the choice of law provisions thereof. The
Company hereby submits to the nonexclusive jurisdiction of the
United States District Court for the Southern District of
New York and of any New York state court sitting in New York
City for the purposes of all legal proceedings arising out of
or relating to this Agreement or the transactions contemplated
hereby. The Company irrevocably waives, to the fullest extent
permitted by law, any objection which it may now or hereafter
have to the laying of the venue of any such proceeding brought
in such a court and any claim that any such proceeding brought
in such a court has been brought in an inconvenient forum.
10.11 Waiver of Jury Trial. EACH OF THE COMPANY AND THE
BANK HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY
LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
<PAGE>
10.12 Treatment of Certain Information; Confidentiality.
(a) The Company acknowledges that (i) services may be
offered or provided to it (in connection with this Agreement
or otherwise) by the Bank or by one or more subsidiaries or
affiliates of the Bank and (ii) information delivered to the
Bank by the Company may be provided to each such subsidiary
and affiliate, it being understood that any such subsidiary or
affiliate receiving such information shall be bound by the
provisions of clause (b) below as if it were the Bank
hereunder.
(b) The Bank agrees (on behalf of itself and each of its
affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep
confidential, in accordance with their customary procedures
for handling confidential information of this nature and in
accordance with safe and sound banking practices, any non-
public information supplied to it by the Company pursuant to
this Agreement which is identified by the Company as being
confidential at the time the same is delivered to the Bank,
provided that nothing herein shall limit the disclosure of any
such information (i) to the extent required by statute, rule,
regulation or judicial process, (ii) to counsel for the Bank,
(iii) to bank examiners, auditors or accountants, (iv) in
connection with any litigation to which the Bank is a party,
(v) to a subsidiary or affiliate of the Bank as provided in
clause (a) above or (vi) to any assignee or participant (or
prospective assignee or participant) so long as the Company
shall have consented to such Person becoming an assignee or
participant and such Person first executes and delivers to the
Bank a Confidentiality Agreement substantially in the form of
Exhibit E hereto and (y) in no event shall the Bank be
obligated or required to return any materials furnished by the
Company.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first
above written.
TORTOISE CORP.
By______________________________________
Title:
Address for Notices:
100 South Bedford Road
Mount Kisco, New York 10549
Telecopier No.: (914) 242-4097
Telephone No.: (914) 242-4000
Attention: Robert Mitchell
Edward Mattner
INTERNATIONALE NEDERLANDEN BANK N.V., NEW YORK BRANCH
By______________________________________
Title:
By______________________________________
Title:
Lending Office for all Loans:
135 East 57th Street
New York, New York 10022-2101
Address for Notices:
135 East 57th Street
New York, New York 10022-2101
Telecopier No.: (212) 593-3362
Telephone No.: (212) 446-1525
Attention: Mr. Matthew J. Cooleen<PAGE>
<PAGE>
ANNEX 1
List of Acceptable Valuation Sources
Bear Stearns
First Boston
DLJ
Kidder Peabody
Goldman Sachs
Jefferies
Merrill Lynch
Morgan Stanley
Oppenheimer
Salomon Brothers
R.D. Smith
Shearson Lehman
The American Exchange
The Pacific Exchange
Prudential Bache
PAGE
<PAGE>
SCHEDULE 1
INDEBTEDNESS OF THE COMPANY
SECTION 7.12 AND SECTION 8.07
None.
PAGE
<PAGE>
SCHEDULE 2
Omitted from schedule 13D Filing
PAGE
<PAGE>
SCHEDULE 3
None.
PAGE
<PAGE>
EXHIBIT A
[Form of Note]
PROMISSORY NOTE
$200,000,000
May 20, 1993
New York, New
York
FOR VALUE RECEIVED, TORTOISE CORP., a New York corporation
(the "Company"), hereby promises to pay to the order of
INTERNATIONALE NEDERLANDEN BANK N.V., NEW YORK BRANCH (the
"Bank"), for the account of its respective Applicable
Lending Offices provided for by the Credit Agreement
referred to below, at its principal office at 135 East 57th
Street, New York, New York 10022-2101, the principal sum of
TWO HUNDRED MILLION Dollars (or such lesser amount as shall
equal the aggregate unpaid principal amount of the Loans
made by the Bank to the Company under the Credit Agreement),
in lawful money of the United States of America and in
immediately available funds, on the dates and in the
principal amounts provided in the Credit Agreement, and to
pay interest on the unpaid principal amount of each such
Loan, at such office, in like money and funds, for the
period commencing on the date of such Loan until such Loan
shall be paid in full, at the rates per annum and on the
dates provided in the Credit Agreement.
The date, amount, Type, interest rate, and duration of
Interest Period (if applicable) of each Loan made by the
Bank to the Company, and each payment made on account of the
principal thereof, shall be recorded by the Bank on its
books and, prior to any transfer of this Note, endorsed by
the Bank on the schedule attached hereto or any continuation
thereof.
This Note is the Note referred to in the Amended and
Restated Credit Agreement (as amended, modified and
supplemented and in effect from time to time, the "Credit
Agreement") dated as of May 20, 1993, between the Company
and the Bank, and evidences Loans made by the Bank
thereunder. Capitalized terms used in this Note have the
respective meanings assigned to them in the Credit
Agreement.
<PAGE>
To the extent of $200,000,000, this Note represents a
renewal of the outstanding principal amount of, and a
replacement and substitution for, a certain Promissory Note
of the Company, dated ___________, 19__ (the "Prior Note")
payable to the order of the Bank. The indebtedness
evidenced by the Prior Note is a continuing indebtedness and
nothing contained herein shall be construed to constitute a
novation of the Prior Note, to deem paid the Prior Note or
to release or terminate any lien or security interest given
to secure payment of the Prior Note.
The Credit Agreement provides for the acceleration of the
maturity of this Note upon the occurrence of certain events
and for prepayments of Loans upon the terms and conditions
specified therein.
Except as permitted by paragraphs (b) and (d) of Section
10.6 of the Credit Agreement, this Note may not be assigned
by the Bank to any other Person.
This Note shall be governed by, and construed in accordance
with, the law of the State of New York.
TORTOISE CORP.
By __________________________
Title:
PAGE
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted
under the within-described Credit Agreement to the Company,
on the dates, in the principal amounts, of the Types,
bearing interest at the rates, and having Interest Periods
(if applicable) of the durations set forth below, subject to
the payments, Continuations, Conversions and prepayments of
principal set forth below:
PAGE
<PAGE>
EXHIBIT B
[Form of Valuation Certificate]
CERTIFICATE
Reference is made to the Amended and Restated Credit
Agreement dated as of May 20, 1993 (as modified and
supplemented and in effect from time to time, the "Credit
Agreement"), between Tortoise Corp. (the "Company") and
Internationale Nederlanden Bank N.V., New York Branch. Terms
defined in the Credit Agreement are used herein as defined
therein.
Pursuant to Section 8.1(f) of the Credit Agreement, the
undersigned, the Chief Financial Officer of the Company,
hereby certifies that, to the best of [his/her] knowledge,
attached hereto as Annex 1 is a true and accurate
calculation of the Portfolio Value and Excess Equity as at
the close of business on the date indicated above determined
in accordance with the requirements of the Credit Agreement.
IN WITNESS WHEREOF, the undersigned has caused this
certificate to be duly executed as of the __________ day of
_____________ 199__.
_____________________________________
Title: Chief Financial
Officer
PAGE
<PAGE>
ANNEX 1 to
Valuation
Certificate
Tortoise Corp.
Valuation Certificate as of (Date)
Source
for Issuer
Face Market Market Market Concen-
Description Amount Price Value Price tration %
______ _______
Total
Less Concentration Exclusions (_______)
Portfolio Value _______
Advance Rate .50
Plus Cash in Collateral
Account _______
Borrowing Base
a) Fair Market Value of
Eligible Pledged
Securities ________
<PAGE>
b) Plus Fair Market Value
of Eligible Pledged
Advances ________
c) Total ________
d) Aggregate Outstanding
Loans ________
e) Plus Aggregate Letter of
Credit Outstandings ________
f) Total ________
g) Excess Equity ((c) - (f))
PAGE
<PAGE>
EXHIBIT C-1
AMENDED AND RESTATED SECURITY AGREEMENT
AMENDED AND RESTATED SECURITY AGREEMENT dated as of May 20,
1993 (this "Agreement"), between TORTOISE CORP., a
corporation duly organized and validly existing under the
laws of the State of New York (the "Company") and
INTERNATIONALE NEDERLANDEN BANK N.V., NEW YORK BRANCH (the
"Bank"), formerly known as NMB Postbank Groep N.V., New York
Branch.
The Company and the Bank are parties to a Credit Agreement
dated as of January 10, 1991 (as modified and supplemented
and in effect from time to time, the "Original Credit
Agreement"), providing, subject to the terms and conditions
thereof, for loans to be made by the Bank to the Company in
an aggregate principal amount not exceeding $200,000,000 at
any one time outstanding.
To induce the Bank to enter into the Original Credit
Agreement, the Company has executed and delivered to the
Bank a Security Agreement dated as of January 10, 1991 (as
modified and supplemented and in effect from time to time,
the "Original Security Agreement").
The Company and the Bank have now entered into a certain
Amended and Restated Credit Agreement dated as of May 20,
1993 (as modified and supplemented and in effect from time
to time, the "Credit Agreement"), which amends and restates
the Original Credit Agreement.
The Company and the Bank now desire to amend and restate
the Original Security Agreement.
NOW, THEREFORE, in consideration of the mutual agreements
contained herein, (i) the Company and the Bank agree that
the Original Security Agreement is hereby amended and
restated in its entirety as provided for herein, and (ii)
the Company and the Bank further agree as follows:
Section 1. Definitions. Terms defined in the Credit
Agreement are used herein as defined therein. In addition,
as used herein:
<PAGE>
"Collateral" shall have the meaning ascribed thereto in
Section 3 hereof.
"Collateral Account" shall have the meaning ascribed
thereto in Section 4.1 hereof.
"Permitted Investments" shall mean:
(a) direct obligations of the United States of America, or
of any agency thereof, or obligations guaranteed as to
principal and interest by the United States of America, or
of any agency thereof, in either case maturing not more than
five years from the date of acquisition thereof;
(b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of
America or any state thereof and having capital, surplus and
undivided profits of at least $500,000,000, maturing not
more than 90 days from the date of acquisition thereof;
(c) commercial paper rated A-1 or better or P-1 by
Standard & Poor's Corporation or Moody's Investors Services,
Inc., respectively, maturing not more than 90 days from the
date of acquisition thereof; and
(d) repurchase agreements and reverse repurchase
agreements with any bank having combined capital and surplus
in an amount of not less than $500,000,000, or any primary
dealer of United States government securities, relating to
marketable direct obligations issued or unconditionally
guaranteed or insured by the United States of America or any
agency or instrumentality thereof and backed by the full
faith and credit of the United States of America, in each
case maturing within 30 days from the date of acquisition
thereof, provided that the terms of such agreements comply
with the guidelines set forth in the Federal Financial
Institutions Examination Council Supervisory Policy
Repurchase Agreements of Depository Institutions With
Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
"Pledged Advances" shall have the meaning ascribed thereto
in Section 3(a) hereof.
<PAGE>
"Pledged Assets" shall mean Pledged Advances and Pledged
Securities.
"Pledged Securities" shall have the meaning ascribed
thereto in Section 3(a) hereof.
"Secured Obligations" shall mean the principal of and
interest on the Loans and the Note and all other amounts
from time to time owing to the Bank by the Company under the
Basic Documents.
"Uniform Commercial Code" shall mean the Uniform Commercial
Code as in effect in the State of New York from time to
time.
Section 2. Representations and Warranties. The Company
represents and warrants to the Bank that (a) it is the sole
beneficial owner of the Collateral in which it purports to
grant a security interest pursuant to Section 3 hereof and
no Lien exists or will exist upon any such Collateral at any
time except the pledge and security interest in favor of the
Bank created or provided for herein which pledge and
security interest constitutes a first priority perfected
pledge and security interest in and to all of such
Collateral; and (b) the Company's principal place of
business and the place where its records concerning the
Collateral are kept is 100 South Bedford Road, Mount Kisco,
New York 10549, and the Company will not change such
principal place of business or remove such records unless it
has (i) taken such actions as is necessary to cause the
security interest of the Bank in the Collateral to continue
to be perfected, and (ii) given thirty (30) days' prior
written notice thereof to the Bank.
Section 3. Collateral. As collateral security for the
prompt payment in full when due (whether at stated maturity,
by acceleration or mandatory prepayment or otherwise) of the
Secured Obligations, the Company hereby pledges and grants
to Bank as hereinafter provided, a security interest in all
of its right, title and interest in the following property,
whether now owned by the Company or hereafter acquired and
whether now existing or hereafter coming into existence, and
wherever located (all being collectively referred to herein
as "Collateral"):
<PAGE>
(a) the securities listed on Schedule 1 hereto and all
other securities now or hereafter owned by the Company and
pledged from time to time by the Company hereunder,
excluding securities released by the Bank from the pledge
hereof (collectively, the "Pledged Securities") and all
Advances now or hereafter owned by the Company and pledged
from time to time by the Company hereunder, excluding
Advances released by the Bank from the pledge hereof
(collectively, the "Pledged Advances");
(b) all shares, securities, moneys or property
representing principal of or interest on any of the Pledged
Assets, or representing a distribution in respect of any of
the Pledged Assets, or resulting from reclassification or
other like change of any of the Pledged Assets or otherwise
received in exchange therefor, and any subscription
warrants, rights or options issued to the holders of, or
otherwise in respect of, any of the Pledged Assets;
(c) the balance from time to time in the Collateral
Account;
(d) any policy of insurance on any of the foregoing,
including, without limitation, insurance payable by reason
of loss or damage to any of the Pledged Assets;
(e) all proceeds of and from any of the property of the
Company described in clauses (a) through (d) above in this
Section 3 (including, without limitation, any proceeds of
insurance thereon).
Section 4. Cash Proceeds of Collateral.
4.01 Collateral Account. There has heretofore been
established at the Bank a cash collateral account (the
"Collateral Account") in the name and under the control of
the Bank into which there shall be deposited from time to
time the cash proceeds of any of the Collateral required to
be delivered to the Bank pursuant hereto or pursuant to the
Credit Agreement. The balance from time to time in the
Collateral Account shall constitute part of the Collateral
hereunder and shall not constitute payment of the Secured
Obligations until applied as hereinafter provided. Except
as provided in Section 5.12 hereof, in the next sentence and
<PAGE>
in Section 6 hereof, the balance from time to time in the
Collateral Account shall not be subject to withdrawal by or
upon the order of the Company. If such payment or
prepayment is permitted under the Credit Agreement, the Bank
shall, from time to time upon the request of the Company,
withdraw all or any portion of the balance in the Collateral
Account and apply, or cause to be applied, the same to the
payment or prepayment of the Loans or Reimbursement
Obligations in accordance with the Credit Agreement. At any
time following the occurrence and during the continuance of
an Event of Default, the Bank may in its discretion apply or
cause to be applied (subject to collection) the balance from
time to time outstanding to the credit of the Collateral
Account to the payment of the Secured Obligations in the
manner specified in Section 5.09 hereof. The balance from
time to time in the Collateral Account shall be subject to
withdrawal only as provided herein.
4.02 Investment of Balance in Collateral Account. Amounts
on deposit in the Collateral Account shall be invested from
time to time in such Permitted Investments as the Company
(or, after the occurrence and during the continuance of a
Default, the Bank) shall determine, which Permitted
Investments shall be held in the name and be under the
control of the Bank, provided that at any time after the
occurrence and during the continuance of an Event of
Default, the Bank may in its discretion at any time and from
time to time elect to liquidate any such Permitted
Investments and to apply or cause to be applied the proceeds
thereof to the payment of the Secured Obligations in the
manner specified in Section 5.09 hereof.
Section 5. Further Assurances; Remedies; Waivers. In
furtherance of the grant of the pledge and security interest
pursuant to Section 3 hereof, the Company hereby agrees with
the Bank as follows:
5.01 Delivery and Other Perfection. The Company shall:
(a) do one of the following (as appropriate) with respect
to each of the Pledged Assets owned by it:
(i) deliver or cause to be delivered to the Bank all
Pledged Assets that are certificated securities (as defined
in the Uniform Commercial Code) either (A) registered or
<PAGE>
issued in the name of, or payable or endorsed to bearer or
to the order of, a nominee of the Bank or (B) endorsed in
blank or accompanied by undated stock powers duly executed
in blank, or
(ii) cause the making of the appropriate entries on the
books of a financial intermediary (as defined in Section 8-313(4)
of the Uniform Commercial Code), reducing the account of the
Company or (in the case of a transfer directly from a seller
of securities to the Bank) the seller of such Pledged
Assets, and increasing the account of the Bank, by the
amount or number of such Pledged Assets and cause such
financial intermediary to confirm to the Bank that it is in
the custody of such Pledged Assets for account of the Bank
and that appropriate entries have been made on its books and
records, or
(iii) in the case of uncertificated securities (as
defined in the Uniform Commercial Code), cause the making of
appropriate entries on books maintained by or on behalf of
the issuer for such purpose transferring such uncertificated
securities into the name of the Bank or a nominee of the
Bank;
(b) if any of the above-described shares, securities,
monies or property required to be pledged by the Company
under clauses (a) and (b) of Section 3 hereof are received
by the Company, forthwith either (x) transfer and deliver to
the Bank such shares or securities so received by the
Company (together with any certificates for any such shares
and securities duly endorsed in blank or accompanied by
undated stock powers duly executed in blank) all of which
thereafter shall be held by the Bank, pursuant to the terms
of this Agreement, as part of the Collateral or (y) take
such other action as the Bank shall deem necessary or
appropriate to duly record and perfect the Lien created
hereunder in such shares, securities, monies or property
referred to in said clauses (a) and (b);
(c) give, execute, deliver, file and/or record any
financing statement, notice, instrument, document, agreement
or other papers that may be necessary or desirable (in the
judgment of the Bank) to create, preserve, perfect or
<PAGE>
validate any security interest granted pursuant hereto or to
enable the Bank to exercise and enforce its rights hereunder
with respect to such security interest, including, without
limitation, causing any or all of the Pledged Assets to be
transferred of record into the name of the Bank or its
nominee (and the Bank agrees that if any of the Assets are
transferred into its name or the name of its nominee, the
Bank will thereafter promptly give to the Company copies of
any notices and communications received by it with respect
to the Assets pledged by the Company hereunder);
(d) keep full and accurate books and records relating to
the Collateral, and stamp or otherwise mark such books and
records in such manner as the Bank may reasonably require in
order to reflect the security interests granted by this
Agreement; and
(e) permit representatives of the Bank, upon reasonable
notice, at any time during normal business hours to inspect
and make abstracts from its books and records pertaining to
the Collateral, and permit representatives of the Bank to be
present at the Company's place of business to receive copies
of all communications and remittances relating to the
Collateral, and forward copies of any notices or
communications received by the Company with respect to the
Collateral all in such manner as the Bank may require.
5.02 Other Financing Statements and Liens. Without the
prior written consent of the Bank, the Company shall not
file or suffer to be on file, or authorize or permit to be
filed or to be on file, in any jurisdiction, any financing
statement, or file or authorize any like instrument, with
respect to the Collateral in which the Bank is not named as
the sole secured party.
5.03 Preservation of Rights. The Bank shall not be
required to take steps necessary to preserve any rights
against prior parties to any of the Collateral.
5.04 Special Provisions Relating to Certain Collateral.
(a) So long as no Event of Default shall have occurred
and be continuing, the Company shall have the right to
exercise all voting, consensual and other powers of
<PAGE>
ownership pertaining to Securities for all purposes not
inconsistent with the terms of this Agreement, the Credit
Agreement, the Notes or any other instrument or agreement
referred to herein or therein, provided that the Company
agrees that it will not vote any of the Pledged Securities
in any manner that is inconsistent with the terms of this
Agreement, the Credit Agreement, the Notes or any such other
instrument or agreement; and the Bank shall execute and
deliver to the Company or cause to be executed and delivered
to the Company all such proxies, powers of attorney,
dividend and other orders, and all such instruments, without
recourse, as the Company may reasonably request for the
purpose of enabling the Company to exercise the rights and
powers which they are entitled to exercise pursuant to this
Section 5.04(a).
(b) Unless and until an Event of Default has occurred and
is continuing or would result therefrom, the Company shall
be entitled to any principal of and interest on any
Collateral that is a debt security and any dividends on
capital stock paid out of earnings (such principal, interest
and dividends which the Company is entitled to receive and
retain under this Section 5.04(b) being herein called
"Retained Distributions") and the Bank shall promptly pay
such principal, interest and dividends to the Company if and
when received by the Bank in the form so received.
(c) If any Event of Default shall have occurred, then so
long as such Event of Default shall continue, and whether or
not the Bank exercises any available right to declare any
Secured Obligation due and payable or seeks or pursues any
other relief or remedy available to it under applicable law
or under this Agreement, the Credit Agreement, the Note or
any other agreement relating to such Secured Obligation, all
Retained Distributions on the Collateral shall be paid
directly to the Bank and retained by it in the Collateral
Account as part of the Collateral, subject to the terms of
this Agreement, and, if the Bank shall so request in
writing, the Company agrees to execute and deliver to the
Bank appropriate orders and documents to that end, provided
that if such Event of Default is cured, any such Retained
Distributions theretofore paid to the Bank shall, upon
<PAGE>
request of the Company (except to the extent theretofore
applied to the Secured Obligations) be returned by the Bank
to the Company.
5.05 Events of Default, etc. During the period during
which an Event of Default shall have occurred and be
continuing:
(i) the Bank may make any reasonable compromise or
settlement deemed desirable with respect to any of the
Collateral and may extend the time of payment, arrange for
payment in installments, or otherwise modify the terms of,
any of the Collateral;
(ii) the Bank shall have all of the rights and remedies
with respect to the Collateral of a secured party under the
Uniform Commercial Code (whether or not said Code is in
effect in the jurisdiction where the rights and remedies are
asserted) and such additional rights and remedies to which a
secured party is entitled under the laws in effect in any
jurisdiction where any rights and remedies hereunder may be
asserted, including, without limitation, the right, to the
maximum extent permitted by law, to exercise all voting,
consensual and other powers of ownership pertaining to the
Collateral as if the Bank were the sole and absolute owner
thereof (and the Company agrees to take all such action as
may be appropriate to give effect to such right);
(iii) the Bank in its discretion may, in its name or in
the name of the Company or otherwise, demand, sue for,
collect or receive any money or property at any time payable
or receivable on account of or in exchange for any of the
Collateral, but shall be under no obligation to do so; and
(iv) the Bank may, upon 10 Business Days' prior written
notice to the Company (or upon such shorter notice, or
without notice, as may be permitted under the Uniform
Commercial Code) of the time and place, with respect to the
Collateral or any part thereof which shall then be or shall
thereafter come into the possession, custody or control of
the Bank or any of their respective agents, sell, lease,
assign or otherwise dispose of all or any of such
Collateral, at such place or places as the Bank deems best,
and for cash or on credit or for future delivery (without
<PAGE>
thereby assuming any credit risk), at public or private
sale, without demand of performance or notice of intention
to effect any such disposition or of time or place thereof
(except such notice as is required above or by applicable
statute and cannot be waived) and the Bank or anyone else
may be the purchaser, lessee, assignee or recipient of any
or all of the Collateral so disposed of at any public sale
(or, to the extent permitted by law, at any private sale),
and thereafter hold the same absolutely, free from any claim
or right of whatsoever kind, including any right or equity
of redemption (statutory or otherwise), of the Company, any
such demand, notice or right and equity being hereby
expressly waived and released. The Bank may, without notice
or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may
be made at any time or place to which the same may be so
adjourned.
The proceeds of each collection, sale or other disposition
under this Section 5.05 shall be applied in accordance with
Section 5.09 hereof.
The Company recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as
amended, and applicable state securities laws, the Bank may
be compelled, with respect to any sale of all or any part of
the Collateral, to limit purchasers to those who will agree,
among other things, to acquire the Collateral for their own
account, for investment and not with a view to the
distribution or resale thereof. The Company acknowledges
that any such private sales may be at prices and on terms
less favorable to the Bank than those obtainable through a
public sale without such restrictions, and, notwithstanding
such circumstances, agree that any such private sale of
Collateral subject to the aforesaid prohibitions shall not
be deemed to not have been made in a commercially reasonable
manner because such sale was effected at such a private sale
and that the Bank shall have no obligation to engage in
public sales and no obligation to delay the sale of any
Collateral for the period of time necessary to permit the
respective issuer thereof or obligor thereunder to register
it for public sale.
<PAGE>
5.06 Deficiency. If the proceeds of sale, collection or
other realization of or upon the Collateral pursuant to
Section 5.05 hereof are insufficient to cover the costs and
expenses of such realization and the payment in full of the
Secured Obligations, the Company shall remain liable for any
deficiency.
5.07 Removals, etc. Without at least 30 days prior
written notice to the Bank, the Company shall not (a)
maintain any of its books or records with respect to the
Collateral at any office or maintain its chief executive
office or its principal place of business at any place other
than at the address indicated beneath the signature of the
Company to the Credit Agreement or (b) change its corporate
name, or name under which it does business, from its name
shown on the signature pages hereto.
5.08 Private Sale. The Bank shall incur no liability as a
result of the sale of the Collateral, or any part thereof,
at any private sale pursuant to Section 5.05 hereof
conducted in a commercially reasonable manner. The Company
hereby waives any claims against the Bank arising by reason
of the fact that the price at which the Collateral may have
been sold at such a private sale was less than the price
which might have been obtained at a public sale or was less
than the aggregate amount of the Secured Obligations, even
if the Bank accepts the first offer received and does not
offer the Collateral to more than one offeree.
5.09 Application of Proceeds. Except as otherwise herein
expressly provided, the proceeds of any collection, sale or
other realization of all or any part of the Collateral
pursuant hereto, and any other cash at the time held by the
Bank under Section 4 hereof or this Section 5, shall be
applied by the Bank:
First, to the payment of the costs and expenses of such
collection, sale or other realization, including reasonable
out-of-pocket costs and expenses of the Bank and the fees
and expenses of its agents and counsel, and all expenses,
and advances made or incurred by the Bank in connection
therewith;
<PAGE>
Next, to the payment in full of the Secured Obligations in
such order of application as the Bank shall select; and
Finally, after the payment in full of the Secured
Obligations, to the payment to the Company, or its
successors or assigns, or as a court of competent
jurisdiction may direct, of any surplus then remaining.
As used in this Section 5, "proceeds" of Collateral shall
mean cash, securities and other property realized in respect
of, and distributions in kind of, Collateral, including any
thereto received under any reorganization, liquidation or
adjustment of debt of either the Company or any issuer of or
obligor on any of the Collateral.
5.10 Attorney-in-Fact. Without limiting any rights or
powers granted by this Agreement to the Bank while no Event
of Default has occurred and is continuing, upon the
occurrence and during the continuance of any Event of
Default the Bank is hereby appointed the attorney-in-fact of
the Company for the purpose of carrying out the provisions
of this Section 5 and taking any action and executing any
instruments which the Bank may deem necessary or advisable
to accomplish the purposes hereof, which appointment as
attorney-in-fact is irrevocable and coupled with an
interest. Without limiting the generality of the foregoing,
so long as the Bank shall be entitled under this Section 5
to make collections in respect of the Collateral, the Bank
shall have the right and power to receive, endorse and
collect all checks made payable to the order of the Company
representing any interest, principal or other distribution
in respect of the Collateral or any part thereof and to give
full discharge for the same.
5.11 Perfection. Prior to or concurrently with the
execution and delivery of this Agreement, the Company shall
file such financing statements and other documents in such
offices as the Bank may request to perfect the security
interests granted by Section 3 of this Agreement.
5.12 Termination. When all Secured Obligations shall have
been paid in full and the Commitment of the Bank under the
Credit Agreement shall have expired or been terminated, this
Agreement shall terminate, and the Bank shall forthwith
<PAGE>
cause to be assigned, transferred and delivered, against
receipt but without any recourse, warranty or representation
whatsoever (other than as to there being no Liens resulting
from any act of or claim against the Bank), any remaining
Collateral and money received in respect thereof, to or on
the order of the Company.
5.13 Expenses. The Company agrees to pay to the Bank all
out-of-pocket expenses (including reasonable expenses for
legal services of every kind) of, or incident to, the
enforcement of any of the provisions of this Section 5, or
performance by the Bank of any obligations of the Company in
respect of the Collateral which the Company has failed or
refused to perform, or any actual or attempted sale, or any
exchange, enforcement, collection, compromise or settlement
in respect of any of the Collateral, and for the care of the
Collateral and defending or asserting rights and claims of
the Bank in respect thereof, by litigation or otherwise,
including expenses of insurance, and all such expenses shall
be Secured Obligations to the Bank secured under Section 3
hereof.
5.14 Further Assurances. The Company agrees that, from
time to time upon the written request of the Bank, the
Company will execute and deliver such further documents and
do such other acts and things as the Bank may reasonably
request in order to fully effect the purposes of this
Agreement.
5.15 Amendments. The Company shall not consent to any
modification or supplement to any of any documentation
relating to any Collateral if, in the reasonable judgment of
the Bank, such modification would limit the right of the
Bank to exercise foreclosure remedies with respect thereto.
The Company shall furnish to the Bank promptly after receipt
thereof copies of all modifications and supplements to
documentation relating to Collateral.
Section 6. Release of Collateral. The Bank shall release
the Collateral from time to time as follows:
6.01 Excess Collateral. The Bank shall release Collateral
from time to time upon request of the Company if (a) no
Default exists or would result therefrom and (b) after
<PAGE>
giving effect to such release, the sum of the aggregate Fair
Market Value of the Eligible Pledged Assets plus the balance
of the cash and Permitted Investments in the Collateral
Account is equal to or more than the product of the
aggregate outstanding principal amount of the Loans and
Letter of Credit Outstandings multiplied by 2.0; provided
that (i) the aggregate amount (in the case of cash) and/or
fair market value (in the case of other collateral) of each
such release shall be not less than $5,000,000, (ii) the
Collateral to be so released shall, subject to the foregoing
clause (i), consist of (x) if and to the extent requested by
the Company, cash or Permitted Investments held in the
Collateral Account or Pledged Assets that are not Eligible
Pledged Assets, or (y) Eligible Pledged Assets specified by
the Company and agreed to by the Bank or (if the Bank does
not agree in its sole discretion to release the Pledged
Assets so specified) Eligible Pledged Assets of all issues
determined on a pro rata basis (or as near thereto as
practicable, as determined by the Bank) according to the
respective Fair Market Values thereof.
6.02 Withdrawals Pursuant to Credit Agreement. In
connection with any transfer of Pledged Assets permitted by
Section 8.05 of the Credit Agreement, the Bank shall release
the Lien of this Agreement with respect to such Pledged
Assets so long as the consideration to be received by the
Company in such transfer is delivered directly by the
transferee to the Bank as Collateral hereunder (and the Bank
shall be satisfied with the manner and timing of both such
delivery and the creation and perfection of its security
interest in such Collateral).
6.03 Reinvestment of Cash Collateral. In connection with
any purchase of Assets pursuant to Section 2.10 of the
Credit Agreement that the Bank has agreed are to become
Eligible Pledged Assets, the Bank shall, if no Default
exists or would result therefrom, upon instruction of the
Company, withdraw all or such lesser portion of the balance
in the Collateral Account as may be required and apply, or
cause to be applied, the same to the purchase of such
Assets, provided that (a) the Fair Market Value of such
Assets shall be not less than the amount of such balance and
(b) the Bank shall be satisfied with the manner and timing
of the creation and perfection of its security interest in
such Assets.
<PAGE>
Section 7. Miscellaneous.
7.01 No Waiver. No failure on the part of the Bank or any
of its agents to exercise, and no course of dealing with
respect to, and no delay in exercising, any right, power or
remedy hereunder shall operate as a waiver thereof; nor
shall any single or partial exercise by the Bank or any of
its agents of any right, power or remedy hereunder preclude
any other or further exercise thereof or the exercise of any
other right, power or remedy. The remedies herein are
cumulative and are not exclusive of any remedies provided by
law.
7.02 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK.
7.03 Notices. All notices, requests, consents and demands
hereunder shall be in writing and telecopied, telegraphed,
cabled or delivered to the intended recipient at its address
specified pursuant to Section 10.02 of the Credit Agreement
and shall be deemed to have been given at the times
specified in said Section 10.02.
7.04 Waivers, etc. The terms of this Agreement may be
waived, altered or amended only by an instrument in writing
duly executed by the Company and the Bank. Any such
amendment or waiver shall be binding upon the Bank, each
holder of any Secured Obligation and the Company.
7.05 Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the respective
successors and assigns of the Company, the Bank and each
holder of the Secured Obligations (provided, however, that
the Company shall not assign or transfer its rights
hereunder without the prior written consent of the Bank).
7.06 Counterparts. This Agreement may be executed in any
number of counterparts, all of which together shall
constitute one and the same instrument and any of the
parties hereto may execute this Agreement by signing any
such counterpart.
7.07 Agents. The Bank may employ agents and attorneys-in-
fact in connection herewith and shall not be responsible for
<PAGE>
the negligence or misconduct of any such agents or
attorneys-in-fact selected by it in good faith.
7.08 Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest
extent permitted by law, (a) the other provisions hereof
shall remain in full force and effect in such jurisdiction
and shall be liberally construed in favor of the Bank in
order to carry out the intentions of the parties hereto as
nearly as may be possible and (b) the invalidity or
unenforceability of any provision hereof in any jurisdiction
shall not affect the validity or enforceability of such
provision in any other jurisdiction.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first
above written.
TORTOISE CORP.
By_________________________
Title:
INTERNATIONALE NEDERLANDEN BANK N.V.,
NEW YORK BRANCH
By_________________________
Title:
PAGE
<PAGE>
EXHIBIT C-2
GUARANTY
THIS GUARANTY dated as of May 20, 1993 (this "Guaranty"),
made by AMERICAN CAR LINE II COMPANY, a corporation duly
organized and existing under the laws of Delaware (the
"Guarantor"), in favor of INTERNATIONALE NEDERLANDEN BANK
N.V., New York Branch (the "Lender"),
W I T N E S S E T H:
WHEREAS, pursuant to an Amended and Restated Credit
Agreement, dated as of May 20, 1993 (together with all
amendments and other modifications, if any, from time to
time thereafter made thereto, the "Credit Agreement"),
between Tortoise Corp., a New York corporation (the
"Borrower") and the Lender, the Lender has extended
Commitments to make Loans to and issue Letters of Credit for
the account of the Borrower; and
WHEREAS, as a condition precedent to the making of the
initial Loans and the issuance of the initial Letters of
Credit under the Credit Agreement, the Guarantor is required
to execute and deliver this Guaranty;
WHEREAS, the Borrower is paying to the Guarantor
compensation for executing and delivering this Guaranty; and
WHEREAS, the Guarantor has duly authorized the execution,
delivery and performance of this Guaranty;
NOW, THEREFORE, for good and valuable consideration the
receipt of which is hereby acknowledged, and in order to
induce the Lender to make the Loans (including the initial
Loan) to the Borrower pursuant to the Credit Agreement and
to issue Letters of Credit (including the initial Letter of
Credit) for the account of the Borrower pursuant to the
Credit Agreement, the Guarantor agrees, for the benefit of
the Lender, as follows:
ARTICLE I
<PAGE>
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether
or not underscored) when used in this Guaranty, including
its preamble and recitals, shall have the following meanings
(such definitions to be equally applicable to the singular
and plural forms thereof):
"Borrower" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lender" is defined in the preamble.
"Obligations" means all obligations (monetary or otherwise)
of the Borrower arising under or in connection with the
Credit Agreement and the other Basic Documents (as defined
in the Credit Agreement), other than this Guaranty and the
Tortoise Guaranty (as defined in the Credit Agreement).
"Security Agreement" means the Security Agreement - Trust
Deed, dated as of May 20, 1993, as amended, supplemented or
otherwise modified from time to time, between the Guarantor
and the Lender.
"U.C.C." means the Uniform Commercial Code as in effect in
the State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless
otherwise defined herein or the context otherwise requires,
terms used in this Guaranty, including its preamble and
recitals, have the meanings provided in the Credit
Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined
herein or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this
Guaranty, including its preamble and recitals, with such
meanings.
<PAGE>
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due,
whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise, of all
Obligations of the Borrower whether for principal, interest,
fees, expenses or otherwise (including all such amounts
which would become due but for the operation of the
automatic stay under Section 362(a) of the United States
Bankruptcy Code, 11 U.S.C. Section362(a), and the operation of
Sections 502(b) and 506(b) of the United States Bankruptcy
Code, 11 U.S.C. Section502(b) and Section506(b)), and
(b) indemnifies and holds harmless the Lender and each
holder of any Obligations of the Borrower for any and all
costs and expenses (including reasonable attorney's fees and
expenses) incurred by the Lender or such holder, as the case
may be, in enforcing any rights under this Guaranty.
provided, however, that the Guarantor shall be liable under
this Guaranty for the maximum amount of such liability that
can be hereby incurred without rendering this Guaranty, as
it relates to the Guarantor, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer,
and not for any greater amount. This Guaranty constitutes a
guaranty of payment when due and not of collection, and the
Guarantor specifically agrees that it shall not be necessary
or required that the Lender or any holder of any Obligations
of the Borrower exercise any right, assert any claim or
demand or enforce any remedy whatsoever against the Borrower
(or any other Person) before or as a condition to the
obligations of the Guarantor hereunder.
SECTION 2.2. Acceleration of Guaranty. The Guarantor
agrees that, in the event of the dissolution or insolvency
of the Borrower or the Guarantor, or the inability or
failure of the Borrower or the Guarantor to pay debts as
they become due, or an assignment by the Borrower or the
Guarantor for the benefit of creditors, or the commencement
of any case or proceeding in respect of the Borrower or the
Guarantor under any bankruptcy, insolvency or similar laws,
<PAGE>
and if such event shall occur at a time when any of the
Obligations of the Borrower may not then be due and payable,
the Guarantor will pay to the Lender forthwith the full
amount which would be payable hereunder by the Guarantor if
all such Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall
in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full
force and effect until all Obligations of the Borrower have
been paid in full, all obligations of the Guarantor
hereunder shall have been paid in full and the Commitment
shall have terminated. The Guarantor guarantees that the
Obligations of the Borrower will be paid strictly in
accordance with the terms of the Credit Agreement and each
other Basic Document under which they arise, regardless of
any law, regulation or order now or hereafter in effect in
any jurisdiction affecting any of such terms or the rights
of the Lender or any holder of any Obligations of the
Borrower with respect thereto. The liability of the
Guarantor under this Guaranty shall be absolute,
unconditional and irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of
the Credit Agreement or any other Basic Document;
(b) the failure of the Lender or any holder of any
Obligations of the Borrower
(i) to assert any claim or demand or to enforce any
right or remedy against the Borrower or any other Person
(including any other guarantor) under the provisions of the
Credit Agreement or otherwise, or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligations of the
Borrower;
(c) any change in the time, manner or place of payment
of, or in any other term of, all or any of the Obligations
of the Borrower, or any other extension, compromise or
renewal of any Obligation of the Borrower;
(d) any reduction, limitation, impairment or termination
of the Obligations of the Borrower for any reason, including
any claim of waiver, release, surrender, alteration or
<PAGE>
compromise, and shall not be subject to (and the Guarantor
hereby waives any right to or claim of) any defense or
setoff, counterclaim, recoupment or termination whatsoever
by reason of the invalidity, illegality, nongenuineness,
irregularity, compromise, unenforceability of, or any other
event or occurrence affecting, the Obligations of the
Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of
the terms of the Credit Agreement or any other Basic
Document;
(f) any addition, exchange, release, surrender or
nonperfection of any collateral, or any amendment to or
waiver or release or addition of, or consent to departure
from, any other guaranty, held by the Lender or any holder
of any Obligations of the Borrower; or
(g) any other circumstance which might otherwise
constitute a defense available to, or a legal or equitable
discharge of, the Borrower, any surety or any guarantor.
SECTION 2.4 Reinstatement, etc. The Guarantor agrees that
this Guaranty shall continue to be effective or be
reinstated, as the case may be, if at any time any payment
(in whole or in part) of any of the Obligations of the
Borrower is rescinded or must otherwise be restored by the
Lender or any holder of any Obligations of the Borrower,
upon the insolvency, bankruptcy or reorganization of the
Borrower or otherwise, as though such payment had not been
made.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives
promptness, diligence, notice of acceptance and any other
notice with respect to any of the Obligations of the
Borrower and this Guaranty and any requirement that the
Lender or any holder of any Obligations of the Borrower
protect, secure, perfect or insure any security interest or
Lien, or any property subject thereto, or exhaust any right
or take any action against the Borrower or any other Person
(including any other guarantor) or entity or any collateral
securing payment of the Obligations of the Borrower.
SECTION 2.6. Waiver of Subrogation. The Guarantor hereby
irrevocably waives any claim or other rights which it may
now or hereafter acquire against the Borrower that arise
<PAGE>
from the existence, payment, performance or enforcement of
the Guarantor's obligations under this Guaranty, including
any right of subrogation, reimbursement, exoneration or
indemnification, any right to participate in any claim or
remedy of the Lender against the Borrower or any collateral
which the Lender now has or hereafter acquires, whether or
not such claim, remedy or right arises in equity, or under
contract, statute or common law, including the right to take
or receive from the Borrower, directly or indirectly, in
cash or other property or by set-off or in any manner,
payment or security on account of such claim or other
rights. If any amount shall be paid to the Guarantor in
violation of the preceding sentence and the Obligations of
the Borrower shall not have been paid in cash in full and
the Commitment of the Lender under the Credit Agreement and
any other commitments by the Lender to the Borrower have not
been terminated, such amount shall be deemed to have been
paid to the Guarantor for the benefit of, and held in trust
for, the Lender, and shall forthwith be paid to the Lender
to be credited and applied upon the Obligations of the
Borrower, whether matured or unmatured. The Guarantor
acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by the
Credit Agreement and that the waiver set forth in this
Section is knowingly made in contemplation of such benefits.
SECTION 2.7. Successors, Transferees and Assigns;
Transfers of Notes, etc. This Guaranty shall:
(a) be binding upon the Guarantor, and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the
Lender, each holder of any Obligations of the Borrower and
each of their respective successors, transferees and
assigns.
Without limiting the generality of clause (b), the Lender
may assign or otherwise transfer (in whole or in part) any
Obligations of the Borrower to any other Person or entity,
and such other Person or entity shall thereupon become
vested with all rights and benefits in respect thereof
granted to the Lender under this Guaranty or otherwise,
subject, however, to the provisions of Section 10.06 of the
Credit Agreement.
<PAGE>
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Binding on Successors, Transferees and
Assigns; Assignment of Guaranty. In addition to, and not in
limitation of, Section 2.7, this Guaranty shall be binding
upon the Guarantor and its successors, transferees and
assigns and shall inure to the benefit of and be enforceable
by the Lender and each holder of any Obligations of the
Borrower and their respective successors and assigns (to the
full extent provided pursuant to Section 2.7); provided,
however, that the Guarantor may not assign any of its
obligations hereunder without the prior written consent of
the Lender and each holder of any Obligations of the
Borrower.
SECTION 3.2. Amendments, etc. No amendment to or waiver
of any provision of this Guaranty, nor consent to any
departure by the Guarantor herefrom, shall in any event be
effective unless the same shall be in writing and signed by
the Lender, and then such waiver or consent shall be
effective only in the specific instance and for the specific
purpose for which given.
SECTION 3.3. Addresses for Notices to the Guarantor. All
notices and other communications hereunder to the Guarantor
shall be in writing (including facsimile communication) and
mailed or telecopied or delivered to it, addressed to it at
the address set forth below its signature hereto or at such
other address as shall be designated by the Guarantor in a
written notice to the Lender. All such notices and other
communications shall, when mailed or telecopied,
respectively, be effective when deposited in the mails or
telecopied, respectively, addressed as aforesaid.
SECTION 3.4. No Waiver; Remedies. In addition to, and not
in limitation of, Section 2.3 and Section 2.5, no failure on
the part of the Lender or any holder of any Obligations of
the Borrower to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall
any single or partial exercise of any right hereunder
preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided
are cumulative and not exclusive of any remedies provided by
law.
<PAGE>
SECTION 3.5. Section Captions. Section captions used in
this Guaranty are for convenience of reference only, and
shall not affect the construction of this Guaranty.
SECTION 3.6. Severability. Wherever possible each
provision of this Guaranty shall be interpreted in such
manner as to be effective and valid under applicable law,
but if any provision of this Guaranty shall be prohibited by
or invalid under such law, such provision shall be
ineffective to the extent of such prohibition or invalidity,
without invalidating the remainder of such provision or the
remaining provisions of this Guaranty.
SECTION 3.7.Governing Law. THIS GUARANTY SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH INTERNAL LAWS OF THE
STATE OF NEW YORK.
SECTION 3.8. Waiver of Jury Trial. THE GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS
IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION
WITH, THIS GUARANTY. THE GUARANTOR ACKNOWLEDGES AND AGREES
THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR
THIS PROVISION AND THAT THIS PROVISION IS A MATERIAL
INDUCEMENT FOR THE LENDER ENTERING INTO THE CREDIT
AGREEMENT.
PAGE
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty
to be duly executed and delivered by its officer thereunto
duly authorized as of the date first above written.
AMERICAN CAR LINE II COMPANY
By:____________________________
Title:
Address: 3301 Rider Trail South
(Suite 234)
Earth City, Missouri
63045-1393
Telecopy: (314) 344-4216
Attention: President
with copy to:
Robert Mitchell
100 South Bedford Road
Mount Kisco, New York 10549
Telecopy: (914) 242-4097
PAGE
<PAGE>
EXHIBIT C-3
Escrow No._______
ESCROW INSTRUCTIONS
To: Internationale Nederlanden Bank N.V.,
New York Branch, as Escrowee
135 East 57th Street
New York, New York 10022-2102
Attention: Matthew J. Cooleen
[Name of Company], a ___________ corporation ("XXX") has
deposited with you the amount of $______________ (the
"Escrow Property").
As Escrowee, you are hereby directed to hold, deal with and
dispose of the Escrow Property in the following manner (the
"Instructions") subject, however, to the terms and
conditions (the "Terms and Conditions") hereinafter set
forth:
A. The Escrow Property shall be held by the Escrowee and
invested as provided in Paragraph B below. The Escrow
Property shall be released to the parties set forth below on
the first to occur of the following events:
[a] to ACF Industries, Incorporated on the day that ACF
presents to Escrowee a signed certificate to the effect that
the court having jurisdiction over the chapter 11 case of E-
II Holdings, Inc. has entered an order confirming the plan
of reorganization dated March 3, 1993;
[b] to E-II Holdings, Inc., as debtor and debtor-in-
possession, on the day that the Escrowee is presented with a
signed certificate from E-II Holdings, Inc. in the form of
Attachment 1 hereto, together with an order of the United
States Bankruptcy Court, Southern District of New York, in
the form attached to such certificate; or
<PAGE>
[c] to XXX on June 7, 1993 or such later date as specified
by XXX by written notice to the Escrowee given at any time
on or prior to June 7, 1993.
B. Escrowee shall hold the Escrow Property for the account
of XXX and shall use all reasonable efforts to invest the
Escrow Property; provided, however, that the Escrowee shall
invest the Escrow Property only in such Permitted
Investments (hereinafter defined) as XXX shall direct the
Escrowee from time to time. All earnings on the Escrow
Property shall be for the account of ACF. The
Escrowee shall not be responsible for, or liable to, any
party to these Escrow Instructions for any loss suffered in
connection with any investment of funds made by it in
accordance with these Escrow Instructions. As used herein,
"Permitted Investment" shall mean
(a) direct obligations of the United States of America,
or of any agency thereof, or obligations guaranteed as to
principal and interest by the United States of America, or
of any agency thereof, in either case maturing not more than
270 days from the date of acquisition thereof;
(b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of
America or any state thereof and having capital, surplus and
undivided profits of at least $500,000,000, maturing not
more than 90 days from the date of acquisition thereof;
(c) commercial paper rated A-1 or better or P-1 by
Standard & Poor's Corporation or Moody's Investors Services,
Inc., respectively, maturing not more than 90 days from the
date of acquisition thereof; and
(d) repurchase agreements and reverse repurchase
agreements with any bank having combined capital and surplus
in an amount of not less than $50,000,000, or any primary
dealer of United States government securities, relating to
marketable direct obligations issued or unconditionally
guaranteed or insured by the United States of America or any
agency or instrumentality thereof and backed by the full
faith and credit of the United States of America, in each
case maturing within 30 days from the date of acquisition
thereof, provided that the terms of such agreements comply
<PAGE>
with the guidelines set forth in the Federal Financial
Institutions Examination Council Supervisory Policy
Repurchase Agreements of Depository Institutions With
Securities Dealers and Others, as adopted by the Comptroller
of the Currency on October 31, 1985.
C. In the event that you receive conflicting instructions
pursuant to Paragraphs A or B of these Instructions, you
shall be entitled, but not required, to consult with counsel
of your choosing and to act or omit to act as so advised by
such counsel. Notwithstanding anything to the contrary
contained herein, but not in limitation of the provisions of
Paragraph 2 of the Terms and Conditions, you shall not be
liable in any manner whatsoever to any or all of the
undersigned if you choose to act or omit to act as advised
by such counsel.
Terms and Conditions
1. Your duties and responsibilities shall be limited to
those expressly set forth in these Escrow Instructions, and
you shall not be subject to, nor obliged to recognize, any
other agreement between, or direction or instruction of, any
or all of the parties hereto even though reference thereto
may be made herein; provided, however, with your written
consent, these Escrow instructions may be amended at any
time or times by an instrument in writing signed by all the
then parties in interest.
2. You are authorized in your sole discretion to disregard
any and all notices or instructions given by any of the
undersigned or by any other person, firm or corporation,
except only such notices or instructions as are hereinabove
provided for and orders or process of any court entered or
issued with or without jurisdiction. If any property
subject hereto is at any time attached, garnished, or levied
upon under any court order or in case the payment,
assignment, transfer, conveyance or delivery of any such
property shall be stayed or enjoined by any court order, or
in case any order, writ, judgment or decree shall be made or
entered by any court affecting such property or any part
thereof, then and in any of such events you are authorized,
in your sole discretion, to rely upon and comply with any
<PAGE>
such order, writ, judgment or decree which you are advised
by legal counsel of your own choosing is binding upon you;
and if you comply with any such order, writ, judgment or
decree you shall not be liable to any of the parties hereto
or to any other person, firm or corporation by reason of
such compliance even though such order, writ, judgment or
decree may be subsequently reversed, modified, annulled, set
aside or vacated.
3. You shall not be personally liable for any act taken or
omitted hereunder if taken or omitted by you in good faith
and in the exercise of your own best judgment. You shall
also be fully protected in relying upon any written notice,
demand, certificate or document which you in good faith
believe to be genuine.
4. You shall not be responsible for the sufficiency or
accuracy of the form, execution, validity or genuineness of
documents now or hereafter deposited hereunder, or for any
description therein, nor shall you be responsible or liable
in any respect on account of the identity, authority or
rights of the persons executing or delivering or purporting
to execute or deliver any such document or these Escrow
Instructions.
5. Any notices which you are required or desire to give
hereunder to any of the undersigned shall be in writing and
may be given by mailing the same to the address indicated
below opposite the signature of such undersigned (or to such
other address as such undersigned may have theretofore
substituted therefor by written notification to you), by
United States mail, postage prepaid. For all purposes
hereof any notice so mailed shall be as effectual as though
served upon the person of the undersigned to whom it was
mailed at the time it is deposited in the United States mail
by you whether or not such undersigned thereafter actually
receives such notice. Notices to you shall be in writing
and shall not be deemed to be given until actually received
by your employee or officer who administers this escrow.
Whenever under the terms hereof the time for giving a notice
or performing an act falls upon a Saturday, Sunday or
holiday, such time shall be extended to the next business
<PAGE>
day, but such an extension shall in no manner affect the
rights of the undersigned among and between themselves under
any agreement among and between themselves.
6. If you believe it to be reasonably necessary to consult
with counsel concerning any of your duties in connection
with this escrow, or in case you become involved in
litigation on account of being Escrowee hereunder or on
account of having received property subject hereto, then in
either case, your costs, expenses, and reasonable attorneys'
fees shall be paid by XXX.
7. You shall, from time to time, be paid a reasonable fee
for your services hereunder by XXX, as agreed separately
between you and XXX.
8. It is understood that you reserve the right to resign as
Escrowee at any time by giving written notice of your
resignation, specifying the effective date thereof, to the
undersigned. Within thirty (30) days after receiving the
aforesaid notice, XXX and you agree to appoint a successor
Escrowee to which you may distribute the property then held
hereunder. If a successor Escrowee has not been appointed
and has not accepted such appointment by the end of the
thirty-day period, you may apply to a court of competent
jurisdiction for the appointment of a successor Escrowee,
and the costs, expenses and reasonable attorneys' fees which
you incur in connection with such a proceeding shall be paid
by XXX.
9. XXX hereby agrees to reimburse you, on demand, for all
costs and expenses (including, without limitation,
reasonable attorneys' fees) incurred by you in connection
with the administration of these Escrow Instructions. XXX
hereby indemnifies, exonerates and holds free and harmless
you and each of your officers, directors, employees and
agents (collectively, the "Indemnified Parties") from and
against any and all actions, causes of action, suits,
losses, costs, liabilities and damages, and expenses
incurred in connection therewith (irrespective of whether
any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively,
the "Indemnified Liabilities") incurred by the Indemnified
<PAGE>
Parties or any of them hereunder or in connection herewith
or in connection with the transactions contemplated hereby;
provided however, that XXX shall not be required to
indemnify any Indemnified Party pursuant to this Paragraph
for any Indemnified Liabilities to the extent caused by such
Indemnified Party's wilful misconduct or gross negligence.
If and to the extent that the foregoing undertaking may be
unenforceable for any reason, XXX hereby agrees to make the
maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under
applicable law. The agreements in this Paragraph 9 and in
Paragraphs 6, 7 and 8 relating to payment of fees, costs,
expenses and reasonable attorneys' fees shall survive the
termination of these Escrow Instructions.
10. These Escrow Instructions shall be governed by, and
construed in accordance with, the law of the State of New
York without giving effect to the choice of law provisions
thereof. XXX hereby submits to the nonexclusive
jurisdiction of the United States District Court for the
Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to these Escrow
Instructions or the transactions contemplated hereby. XXX
irrevocably waives, to the fullest extent permitted by law,
any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such
a court has been brought in an inconvenient forum.
11. EACH OF ACF AND YOU HEREBY IRREVOCABLY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL
BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING
TO THESE ESCROW INSTRUCTIONS OR THE TRANSACTIONS
CONTEMPLATED HEREBY.
12. These Escrow Instructions may be executed in any number
of counterparts and by the different parties on separate
counterparts, and each such counterpart shall be deemed to
be an original, but all such counterparts shall together
constitute but one and the same Escrow Instructions.
Dated: May 20, 1993
Parties to Escrow Addresses
<PAGE>
[Name of Company]
By:_____________________________
Title:_______________________
INTERNATIONALE NEDERLANDEN BANK 135 East 57th Street
N.V., NEW YORK BRANCH, New York, New York 10022-2102
as Escrowee Attention: Matthew J. Cooleen
By:_____________________________
Title:_______________________
PAGE
<PAGE>
[Letterhead of E-II Holdings, Inc.]
Internationale Nederlanden Bank N.V.,
New York Branch, as Escrowee
135 East 57th Street
New York, New York 10022-2102
Attention: Matthew J. Cooleen
Gentlemen:
We hereby certify that the United States Bankruptcy Court,
Southern District of New York, has entered an order
authorizing the release to us of the funds maintained in
escrow account number ______, a copy of which is attached to
this certificate, and such order has become final and non-
appealable and is in full force and effect on and as of the
date hereof.
Very truly yours,
E-II HOLDINGS, INC.,
debtor and debtor-in-possession
Dated _________, 1993 _______________________________
Title:
PAGE
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- -----------------------------------x
: Chapter 11
In re: Case No. 92-B-43614 (CB)
:
E-II HOLDINGS, INC.,
:
Debtor.
:
- -----------------------------------x
ORDER APPROVING SALE OF
ASSETS TO ACF INDUSTRIES, INC.
OR ITS DESIGNEE
The Court having directed and authorized the Debtor to sell all
of its assets (other than cash, rights to payment from Unilever,
Inc. and unliquidated claims against third parties) (the
"Assets") to the highest bidder at a sale pursuant to 11 U.S.C.
Section 363(c)(2); and ACF Industries, Inc. and/or its designees
and affiliates (collectively, "ACF") having posted letters of
credit issued by ING Bank (the "L/Cs") and having escrowed cash
at ING Bank (the "Escrow Cash") in an amount aggregating
________________________ to secure the bid made by ACF; and
notice of such sale, and the terms and conditions thereof, having
been given more than 20 days prior to the date thereof in
accordance with Rule Bankruptcy Rules 2002(a)(2) and 6004; and a
sale having been held in accordance with terms prescribed in the
<PAGE>
order authorizing the sale; and the Court having scheduled a
hearing on such sale for _____________; and ACF having made the
highest and best bid for the purchase of the Assets at such sale
that and ACF having purchased the Assets in good faith; and the
Debtor having given the notification required under subsection
(a) of Section 7A of the Clayton Act (15 U.S.C. Section 18a) and
the required waiting period (as shortened to ten days under 11
U.S.C Section 363(b)(2)(B)) having expired without objection by either
the United States Department of Justice or Federal Trade
Commission to the proposed sale of the Assets to ACF; and after
due deliberation and sufficient cause appearing therefor; it is
hereby
FOUND, that ACF has purchased the Assets in good faith; and it
is hereby
FOUND, that the cash paid by ACF out of the proceeds of the L/Cs
and the Escrowed Cash to the Debtor in exchange for the Assets is
good, valuable and fair consideration for the Assets; and it is
hereby
<PAGE>
ORDERED, that all of the Debtor's right, title and interest in
and to the Assets be, and it hereby is, sold, conveyed,
transferred and set over to ACF free and clear of any liens,
security interests, encumbrances or adverse claims of any nature
or description; and it is hereby
ORDERED, that ACF shall be, and it hereby is, granted good and
warrantable title to the Assets, free and clear of any liens,
security interests, encumbrances or adverse claims of any nature
or description; and it is hereby
ORDERED, that the Debtor be, and it hereby is, authorized to
withdraw the Escrow Cash, and it is hereby
ORDERED, that the Debtor be, and it hereby is, authorized to
draw on the L/Cs.
Dated: New York, New York
April 19, 1993
United States Bankruptcy Judge
PAGE
<PAGE>
The Escrowed Funds shall be released to the parties set forth
below on the first to occur of the following events:
[a] to ACF on the day the court having jurisdiction over the
chapter 11 case of E-II Holdings, Inc. enters an order confirming
the plan of reorganization dated
March 3, 1993;
[b] to E-II Holdings, Inc., as debtor and debtor-in-possession,
on the day an order is entered in the form attached hereto; or
[c] to ACF on July 24, 1993.
PAGE
<PAGE>
EXHIBIT D
May __, 1993
Internationale Nederlanden Bank, N.V.
New York Branch
135 East 57th Street
New York, New York 10022
Ladies and Gentlemen:
We have acted as counsel to Tortoise Corp. (the "Company") in
connection with the Amended and Restated Credit Agreement
("Credit Agreement") dated as of May 20, 1993, between the
Company and Internationale Nederlanden Bank N.V., New York
Branch, providing for loans to be made to and letters of credit
to be issued for the account of the Company. Terms defined in
the Credit Agreement are used herein as defined therein.
In furnishing this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of
the Credit Agreement, the other Basic Documents delivered in
connection therewith by the Company, the certificate of
incorporation and all amendments thereto and the by-laws of the
Company, such other corporate records of the Company,
certificates of public officials and of officers and
representatives of the Company, resolutions of the board of
directors of the Company and such matters of law, as we have
deemed appropriate or necessary as the basis for the opinions
hereinafter set forth. As to various questions of fact material
to our opinion (including, without limitation, those factual
matters which are stated to be to the best of our knowledge), we
have relied solely upon representations in the Credit Agreement
and the Basic Documents by the Company and upon certificates of
officers of the Company or oral representations made by such
<PAGE>
officers to us and have made no independent investigation of such
facts.
In making such examinations, we have assumed the genuineness of
all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals and
the conformity to originals of documents submitted to us as
certified or photostatic copies.
In making our examination of documents we have assumed as to
Persons other than the Company: (i) such parties had the power
to enter into such documents and to perform all obligations
thereunder, (ii) the execution and delivery by such parties of
such document has taken place and has been duly authorized by all
requisite action, and (iii) the validity and binding effect of
such documents on such parties. With your consent, we have not
examined any records of any court, administrative tribunal or
other similar entity in connection with our opinion expressed
herein.
Based solely on the foregoing, and subject to the qualifications
and exceptions specified in this letter, we are of the opinion
that:
1. The Company is a corporation duly organized validly existing
and in good standing under the laws of New York and has the
necessary corporate power to make and perform the Basic Documents
and to borrow under the Credit Agreement. To the best of our
knowledge, it is not necessary for the Company to be qualified as
a foreign corporation to transact business outside of New York.
2. The making and performance by the Company of the Basic
Documents and the borrowings under the Credit Agreement have been
duly authorized by all necessary corporate action, and do not and
will not violate any provision of law or regulation or any
provision of its certificate of incorporation or by-laws or
result in the breach of, or constitute a default or require any
consent under, or (except for the Liens created pursuant to the
Security Documents) result in the creation of any Lien upon any
of the properties, revenues or assets of the Company pursuant to
any indenture or any other agreement or instrument known to us to
which the Company is a party, by which the Company or its
<PAGE>
Properties may be bound, pursuant to the indenture of ACF dated
as of February 28, 1986, as amended, the indenture of ACF dated
as of December 15, 1984, as amended, or, to the best of our
knowledge without independent investigation, any other agreement
or instrument to which ACF is a party.
3. The Credit Agreement, the Security Agreement constitute and
the Tortoise Guaranty, and the Note when executed and delivered
will constitute, the valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms,
except as the foregoing may be (i) limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect, relating to or generally affecting creditors
rights, (ii) subject to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (whether enforceability is considered in a
proceeding at law or in equity) and (iii) limited by state or
federal securities laws or public policy relating thereto with
respect to any rights of indemnification. We express no opinion
with respect to those provisions of the Basic Documents relating
to whether or not rights or remedies are exclusive. In addition,
no opinion is expressed herein as to the specific remedy that any
court, governmental authority or arbitrator may grant, impose or
render and as to the legality, validity, binding nature or
enforceability of each and every right, remedy and provision of
the Basic Documents, but, subject to the limitations set forth in
the foregoing clauses (i), (ii) and (iii), it is our opinion that
any such failure will not render the Basic Documents invalid as a
whole or substantially interfere with the realization of the
principal benefits provided thereby through the exercise of the
rights and remedies provided in the Basic Documents and those
otherwise legally available.
4. There are no legal or arbitral proceedings, and no
proceedings by or before any governmental or regulatory authority
or agency, known to us to be pending or threatened against or
affecting the Company or any Properties or rights of the Company
which, if adversely determined, would have a Material Adverse
Effect.
5. No authorizations, consents, approvals, licenses, filings or
registrations with any governmental or regulatory authority,
<PAGE>
bureau or agency are required in connection with the execution,
delivery or performance by the Company of the Basic Documents.
6. Upon the transfer by the Company to the Bank of the Pledged
Securities (within the meaning of Section 8-313 of the New York
Uniform Commercial Code) and upon the execution of the Security
Agreement, there will be created in favor of the Bank a valid
security interest in all Collateral (as defined therein) in which
the Company has rights, in each case as collateral security for
the payment of the Secured Obligations described in the Security
Agreement. We express no opinion as to the validity of the
security interests which may be created by the Security Agreement
with respect to property (other than the Pledged Securities)
distributed on or with respect to the Pledged Securities after
the date hereof. We also express no opinion as to the right,
title or interest of the Company in or to any Properties in which
any Liens are purported to be created by any of the Security
Documents or the perfection or priority of any such Liens.
7. The Company is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
We are members of the bar of the State of New York and are not
licensed or admitted to practice law in any other jurisdiction.
Accordingly, we express no opinion with respect to the laws of
any jurisdiction other than the State of New York and the United
States of America. This opinion is directed to the addressee
hereof and may not be relied on by any other person without the
prior written consent of the undersigned. Our opinion is based
and relies on the current status of the law, and is subject in
all respects to, and may be limited by, further rules,
regulations and legislation, as well as developing case law. We
do not undertake to notify any person of changes in facts or law
occurring or coming to our attention after the delivery of this
opinion.
Very truly yours,
PAGE
<PAGE>
EXHIBIT D
[Form of Opinion]
PAGE
<PAGE>
EXHIBIT E
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Amended and Restated Credit Agreement dated as of May 20,
1993, between Tortoise Corp. (the "Company") and Internationale
Nederlanden Bank N.V., New York Branch.
Dear ____________:
As the Bank party to the above-referenced Amended and Restated
Credit Agreement (the "Credit Agreement"), we have agreed with
Tortoise Corp. (the "Company") pursuant to Section 10.12 of the
Credit Agreement to use reasonable precautions to keep
confidential, except as otherwise provided therein, all non-
public information identified by the Company as being
confidential at the time the same is delivered to us pursuant to
the Credit Agreement.
As provided in said Section 10.12, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as
defined in the Credit Agreement) and Letters of Credit (as
defined in the Credit Agreement)][assignee Bank], with certain of
such non-public information subject to the execution and delivery
by you, prior to receiving such non-public information, of a
Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to
us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors,
officers, employees and representatives) that (A) such
information will not be used by you except in connection with the
proposed [participation] [assignment] mentioned above and (B) you
shall use reasonable precautions, in accordance with your
<PAGE>
customary procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep such
information confidential, provided that nothing herein shall
limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process, (ii)
to your counsel (whom you shall notify of the confidential nature
of such information) or to our counsel, (iii) to bank examiners,
auditors or accountants, (iv) in connection with any litigation
to which you are a party, (v) to a subsidiary or affiliate of
yours as provided in Section 10.12(a) of the Credit Agreement, or
(vi) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers
to you a Confidentiality Agreement substantially in the form
hereof; provided, further, that, unless specifically prohibited
by applicable law or court order, you agree, prior to disclosure
thereof, to notify the Company of (x) any request for disclosure
of any such non-public information by any governmental agency or
representative thereof (other than any such request in connection
with an examination of your financial condition by such
governmental agency) or (y) any disclosure in connection with any
litigation to which you or we are a party; and provided finally
that in no event shall you be obligated to return any materials
furnished to you pursuant to this Confidentiality Agreement.
Please be aware that the Company is an intended third party
beneficiary of your agreements contained herein and has rights
under this Confidentiality Agreement as fully as if it were a
party hereto.
Would you please indicate your agreement to the foregoing by
signing at the place provided below the enclosed copy of this
Confidentiality Agreement.
Very truly yours,
INTERNATIONALE NEDERLANDEN BANK N.V.,
NEW YORK BRANCH
By __________________________________
The foregoing is agreed to
as of the date of this letter.
<PAGE>
[Insert name of prospective
participant or assignee]
By __________________________
PAGE
<PAGE>
EXHIBIT F
ISSUANCE REQUEST
Internationale Nederlanden Bank N.V.,
New York Branch
135 East 57th Street
New York, New York 10022
Attention:
Re: Amended and Restated Credit Agreement, dated as of May 20,
1993 (together with all amendments, if any, thereafter from time
to time made thereto, the "Credit Agreement"), between Tortoise
Corp. (the "Company") and Internationale Nederlanden Bank N.V.
(the "Bank").
Gentlemen/Ladies:
This Issuance Request is delivered to you pursuant to Section
3.03 of the Credit Agreement. Unless otherwise defined herein,
terms used herein have the meanings assigned to them in the
Credit Agreement.
The Company hereby requests that on _________, 19__ (the "Date
of Issuance") you <F1>[issue a Letter of Credit on _________,
19__ in the initial Stated Amount of $________ with a Stated
Expiry Date (as defined therein) of ________, 19__] [extend the
Stated Expiry Date as defined under Irrevocable Standby Letter of
Credit No.__, issued on __________________, 19--, in the initial
Stated Amount of $________) to a revised Stated Expiry Date (as
defined therein of _________, 19__].
The beneficiary of the requested Letter of Credit will be
<F2>__________________ and such Letter of Credit will be in
support of <F3>____________________.
<PAGE>
The Company hereby acknowledges that, pursuant to Section 6.02
of the Credit Agreement, each of the delivery of this Issuance
Request and the [issuance] [extension] of the Letter of Credit
requested hereby constitutes a representation and warranty by the
Company that, on such date of [issuance] [extension] all
statements set forth in Section 6.02 are true and correct in all
material respects.
The Company agrees that if, prior to the time of the
<F4>[issuance] [extension] of the Letter of Credit requested
hereby, any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so
notify the Bank. Except to the extent, if any, that prior to the
time of the issuance or extension requested hereby the Bank shall
receive written notice to the contrary from the Bank, each matter
certified to herein shall be deemed to be certified at the date
of such issuance or extension.
IN WITNESS WHEREOF, the Company has caused this request to be
executed and delivered by its duly Authorized Officer this day of
_________, 19__.
TORTOISE CORP.
By __________________________
Title:
[FN]
<F1>
Insert as appropiate.
<F2>
Insert name and address of beneficiary.
<F3>
Insert description of supported Indebtedness or other obligations
and name of agreement to which it relates.
<F4>
Complete as appropiate.
<PAGE> SCHEDULE 2
INVESTMENTS OF THE COMPANY
SECTION 7.13
PRINCIPAL AMOUNT($)/
NAME OF ISSUER DESCRIPTION OF SECURITY NO. OF SECURITIES
Brooke Partners14.5% Bonds due 4/1/98 $60,875,000
Brooke Partners16.125% Bonds due 4/1/97 $29,910,000
Astrum Int'l. 11.5% Bonds due 2003 $42,335,000
Astrum Int'l. Common Stock 1,848,118
Envirodyne Common Stock 242,372
Farley Inc. Zero Coupon Subordinated
Debentures due 12/30/2012 $5,172,000
Gillett Class 1 Common Stock 194,479
Gillett Class 2 Common Stock 643,934
Lanesborough 12.375% Bonds due 3/15/97 $3,000,000
Liggett 11.5% Bonds due 2/1/99 $13,640,000
Memorex Telex NVNew Common Stock 1,948,995
Memorex Telex NVNew Warrants 129,714
Western Union 19.25% Bonds due 12/15/92$40,000,000
PAGE
<PAGE>
SCHEDULE OF LOANS
This Note evidences Loans made, Continued or Converted under the
within-described Credit Agreement to the Company, on the dates,
in the principal amounts, of the Types, bearing interest at the
rates, and having Interest Periods (if applicable) of the
durations set forth below, subject to the payments,
Continuations, Conversions and prepayments of principal set forth
below:
Amount
Date Paid,
Made, Prin- Duration Prepaid, Unpaid
Continued cipal Type of Continued Prin-
or Amount of Interest Interest or cipal
Converted of Loan Loan Rate Period Converted Amount
Notation
Made by
PAGE
<PAGE>
SCHEDULE 1
LIST OF INITIALLY PLEDGED SECURITIES
PRINCIPAL AMOUNT ($)/
NAME OF ISSUER DESCRIPTION OF SECURITYNO. OF SECURITIES
Brooke Partners14.5% Bonds due 4/1/98$60,875,000
Brooke Partners16.125% Bonds due 4/1/97 $29,910,000
Astrum Int'l. 11.5% Bonds due 2003$42,335,000
Astrum Int'l. Common Stock 1,848,118
EnvirodyneCommon Stock 242,372
Farley Inc. Zero Coupon Subordinated Debentures due 12/30/2012
$5,172,000
Gillett Class 1 Common Stock194,479
Gillett Class 2 Common Stock643,934
Lanesborough 12.375% Bonds due 3/15/97$3,000,000
Liggett 11.5% Bonds due 2/1/99$13,640,000
Memorex Telex NVNew Common Stock1,948,995
Memorex Telex NVNew Warrants 129,714
Western Union 19.25% Bonds due 12/15/92$40,000,000
PAGE
<PAGE>
EXHIBIT C-2
GUARANTY
THIS GUARANTY dated as of May 20, 1993 (this "Guaranty"), made
by AMERICAN CAR LINE II COMPANY, a corporation duly organized and
existing under the laws of Delaware (the "Guarantor"), in favor
of INTERNATIONALE NEDERLANDEN BANK N.V., New York Branch (the
"Lender"),
W I T N E S S E T H:
WHEREAS, pursuant to an Amended and Restated Credit Agreement,
dated as of May 20, 1993 (together with all amendments and other
modifications, if any, from time to time thereafter made thereto,
the "Credit Agreement"), between Tortoise Corp., a New York
corporation (the "Borrower") and the Lender, the Lender has
extended Commitments to make Loans to and issue Letters of Credit
for the account of the Borrower; and
WHEREAS, as a condition precedent to the making of the initial
Loans and the issuance of the initial Letters of Credit under the
Credit Agreement, the Guarantor is required to execute and
deliver this Guaranty;
WHEREAS, the Borrower is paying to the Guarantor compensation
for executing and delivering this Guaranty; and
WHEREAS, the Guarantor has duly authorized the execution,
delivery and performance of this Guaranty;
NOW, THEREFORE, for good and valuable consideration the receipt
of which is hereby acknowledged, and in order to induce the
Lender to make the Loans (including the initial Loan) to the
Borrower pursuant to the Credit Agreement and to issue Letters of
Credit (including the initial Letter of Credit) for the account
of the Borrower pursuant to the Credit Agreement, the Guarantor
agrees, for the benefit of the Lender, as follows:
<PAGE>
ARTICLE I
DEFINITIONS
SECTION 1.1. Certain Terms. The following terms (whether or
not underscored) when used in this Guaranty, including its
preamble and recitals, shall have the following meanings (such
definitions to be equally applicable to the singular and plural
forms thereof):
"Borrower" is defined in the first recital.
"Credit Agreement" is defined in the first recital.
"Guarantor" is defined in the preamble.
"Guaranty" is defined in the preamble.
"Lender" is defined in the preamble.
"Obligations" means all obligations (monetary or otherwise) of
the Borrower arising under or in connection with the Credit
Agreement and the other Basic Documents (as defined in the Credit
Agreement), other than this Guaranty and the Tortoise Guaranty
(as defined in the Credit Agreement).
"Security Agreement" means the Security Agreement - Trust Deed,
dated as of May 20, 1993, as amended, supplemented or otherwise
modified from time to time, between the Guarantor and the Lender.
"U.C.C." means the Uniform Commercial Code as in effect in the
State of New York.
SECTION 1.2. Credit Agreement Definitions. Unless otherwise
defined herein or the context otherwise requires, terms used in
this Guaranty, including its preamble and recitals, have the
meanings provided in the Credit Agreement.
SECTION 1.3. U.C.C. Definitions. Unless otherwise defined
herein or the context otherwise requires, terms for which
meanings are provided in the U.C.C. are used in this Guaranty,
including its preamble and recitals, with such meanings.
<PAGE>
ARTICLE II
GUARANTY PROVISIONS
SECTION 2.1. Guaranty. The Guarantor hereby absolutely,
unconditionally and irrevocably
(a) guarantees the full and punctual payment when due, whether
at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise, of all Obligations of the
Borrower whether for principal, interest, fees, expenses or
otherwise (including all such amounts which would become due but
for the operation of the automatic stay under Section 362(a) of
the United States Bankruptcy Code, 11 U.S.C. Section362(a), and the
operation of Sections 502(b) and 506(b) of the United States
Bankruptcy Code, 11 U.S.C. Section502(b) and Section506(b)), and
(b) indemnifies and holds harmless the Lender and each holder
of any Obligations of the Borrower for any and all costs and
expenses (including reasonable attorney's fees and expenses)
incurred by the Lender or such holder, as the case may be, in
enforcing any rights under this Guaranty.
provided, however, that the Guarantor shall be liable under this
Guaranty for the maximum amount of such liability that can be
hereby incurred without rendering this Guaranty, as it relates to
the Guarantor, voidable under applicable law relating to
fraudulent conveyance or fraudulent transfer, and not for any
greater amount. This Guaranty constitutes a guaranty of payment
when due and not of collection, and the Guarantor specifically
agrees that it shall not be necessary or required that the Lender
or any holder of any Obligations of the Borrower exercise any
right, assert any claim or demand or enforce any remedy
whatsoever against the Borrower (or any other Person) before or
as a condition to the obligations of the Guarantor hereunder.
SECTION 2.2. Acceleration of Guaranty. The Guarantor agrees
that, in the event of the dissolution or insolvency of the
Borrower or the Guarantor, or the inability or failure of the
Borrower or the Guarantor to pay debts as they become due, or an
assignment by the Borrower or the Guarantor for the benefit of
creditors, or the commencement of any case or proceeding in
respect of the Borrower or the Guarantor under any bankruptcy,
<PAGE>
insolvency or similar laws, and if such event shall occur at a
time when any of the Obligations of the Borrower may not then be
due and payable, the Guarantor will pay to the Lender forthwith
the full amount which would be payable hereunder by the Guarantor
if all such Obligations were then due and payable.
SECTION 2.3. Guaranty Absolute, etc. This Guaranty shall in
all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall remain in full force
and effect until all Obligations of the Borrower have been paid
in full, all obligations of the Guarantor hereunder shall have
been paid in full and the Commitment shall have terminated. The
Guarantor guarantees that the Obligations of the Borrower will be
paid strictly in accordance with the terms of the Credit
Agreement and each other Basic Document under which they arise,
regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the
rights of the Lender or any holder of any Obligations of the
Borrower with respect thereto. The liability of the Guarantor
under this Guaranty shall be absolute, unconditional and
irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of the
Credit Agreement or any other Basic Document;
(b) the failure of the Lender or any holder of any Obligations
of the Borrower
(i) to assert any claim or demand or to enforce any right or
remedy against the Borrower or any other Person (including any
other guarantor) under the provisions of the Credit Agreement or
otherwise, or
(ii) to exercise any right or remedy against any other
guarantor of, or collateral securing, any Obligations of the
Borrower;
(c) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations of the
Borrower, or any other extension, compromise or renewal of any
Obligation of the Borrower;
(d) any reduction, limitation, impairment or termination of
the Obligations of the Borrower for any reason, including any
<PAGE>
claim of waiver, release, surrender, alteration or compromise,
and shall not be subject to (and the Guarantor hereby waives any
right to or claim of) any defense or setoff, counterclaim,
recoupment or termination whatsoever by reason of the invalidity,
illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting,
the Obligations of the Borrower or otherwise;
(e) any amendment to, rescission, waiver, or other
modification of, or any consent to departure from, any of the
terms of the Credit Agreement or any other Basic Document;
(f) any addition, exchange, release, surrender or
nonperfection of any collateral, or any amendment to or waiver or
release or addition of, or consent to departure from, any other
guaranty, held by the Lender or any holder of any Obligations of
the Borrower; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, the
Borrower, any surety or any guarantor.
SECTION 2.4 Reinstatement, etc. The Guarantor agrees that this
Guaranty shall continue to be effective or be reinstated, as the
case may be, if at any time any payment (in whole or in part) of
any of the Obligations of the Borrower is rescinded or must
otherwise be restored by the Lender or any holder of any
Obligations of the Borrower, upon the insolvency, bankruptcy or
reorganization of the Borrower or otherwise, as though such
payment had not been made.
SECTION 2.5. Waiver, etc. The Guarantor hereby waives
promptness, diligence, notice of acceptance and any other notice
with respect to any of the Obligations of the Borrower and this
Guaranty and any requirement that the Lender or any holder of any
Obligations of the Borrower protect, secure, perfect or insure
any security interest or Lien, or any property subject thereto,
or exhaust any right or take any action against the Borrower or
any other Person (including any other guarantor) or entity or any
collateral securing payment of the Obligations of the Borrower.
SECTION 2.6. Waiver of Subrogation. The Guarantor hereby
irrevocably waives any claim or other rights which it may now or
hereafter acquire against the Borrower that arise from the
<PAGE>
existence, payment, performance or enforcement of the Guarantor's
obligations under this Guaranty, including any right of
subrogation, reimbursement, exoneration or indemnification, any
right to participate in any claim or remedy of the Lender against
the Borrower or any collateral which the Lender now has or
hereafter acquires, whether or not such claim, remedy or right
arises in equity, or under contract, statute or common law,
including the right to take or receive from the Borrower,
directly or indirectly, in cash or other property or by set-off
or in any manner, payment or security on account of such claim or
other rights. If any amount shall be paid to the Guarantor in
violation of the preceding sentence and the Obligations of the
Borrower shall not have been paid in cash in full and the
Commitment of the Lender under the Credit Agreement and any other
commitments by the Lender to the Borrower have not been
terminated, such amount shall be deemed to have been paid to the
Guarantor for the benefit of, and held in trust for, the Lender,
and shall forthwith be paid to the Lender to be credited and
applied upon the Obligations of the Borrower, whether matured or
unmatured. The Guarantor acknowledges that it will receive
direct and indirect benefits from the financing arrangements
contemplated by the Credit Agreement and that the waiver set
forth in this Section is knowingly made in contemplation of such
benefits.
SECTION 2.7. Successors, Transferees and Assigns; Transfers of
Notes, etc. This Guaranty shall:
(a) be binding upon the Guarantor, and its successors,
transferees and assigns; and
(b) inure to the benefit of and be enforceable by the Lender,
each holder of any Obligations of the Borrower and each of their
respective successors, transferees and assigns.
Without limiting the generality of clause (b), the Lender may
assign or otherwise transfer (in whole or in part) any
Obligations of the Borrower to any other Person or entity, and
such other Person or entity shall thereupon become vested with
all rights and benefits in respect thereof granted to the Lender
under this Guaranty or otherwise, subject, however, to the
provisions of Section 10.06 of the Credit Agreement.
<PAGE>
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1. Binding on Successors, Transferees and Assigns;
Assignment of Guaranty. In addition to, and not in limitation
of, Section 2.7, this Guaranty shall be binding upon the
Guarantor and its successors, transferees and assigns and shall
inure to the benefit of and be enforceable by the Lender and each
holder of any Obligations of the Borrower and their respective
successors and assigns (to the full extent provided pursuant to
Section 2.7); provided, however, that the Guarantor may not
assign any of its obligations hereunder without the prior written
consent of the Lender and each holder of any Obligations of the
Borrower.
SECTION 3.2. Amendments, etc. No amendment to or waiver of any
provision of this Guaranty, nor consent to any departure by the
Guarantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Lender, and then such
waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
SECTION 3.3. Addresses for Notices to the Guarantor. All
notices and other communications hereunder to the Guarantor shall
be in writing (including facsimile communication) and mailed or
telecopied or delivered to it, addressed to it at the address set
forth below its signature hereto or at such other address as
shall be designated by the Guarantor in a written notice to the
Lender. All such notices and other communications shall, when
mailed or telecopied, respectively, be effective when deposited
in the mails or telecopied, respectively, addressed as aforesaid.
SECTION 3.4. No Waiver; Remedies. In addition to, and not in
limitation of, Section 2.3 and Section 2.5, no failure on the
part of the Lender or any holder of any Obligations of the
Borrower to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single
or partial exercise of any right hereunder preclude any other or
further exercise thereof or the exercise of any other right. The
remedies herein provided are cumulative and not exclusive of any
remedies provided by law.
<PAGE>
SECTION 3.5. Section Captions. Section captions used in this
Guaranty are for convenience of reference only, and shall not
affect the construction of this Guaranty.
SECTION 3.6. Severability. Wherever possible each provision of
this Guaranty shall be interpreted in such manner as to be
effective and valid under applicable law, but if any provision of
this Guaranty shall be prohibited by or invalid under such law,
such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of
such provision or the remaining provisions of this Guaranty.
SECTION 3.7.Governing Law. THIS GUARANTY SHALL BE GOVERNED BY
AND CONSTRUED IN ACCORDANCE WITH INTERNAL LAWS OF THE STATE OF
NEW YORK.
SECTION 3.8. Waiver of Jury Trial. THE GUARANTOR HEREBY
KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY RIGHTS IT MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
GUARANTY. THE GUARANTOR ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER
ENTERING INTO THE CREDIT AGREEMENT.
PAGE
<PAGE>
IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to be
duly executed and delivered by its officer thereunto duly
authorized as of the date first above written.
AMERICAN CAR LINE II COMPANY
By:____________________________
Title:
Address: 3301 Rider Trail South
(Suite 234)
Earth City, Missouri
63045-1393
Telecopy: (314) 344-4216
Attention: President
with copy to:
Robert Mitchell
100 South Bedford Road
Mount Kisco, New York 10549
Telecopy: (914) 242-4097
PAGE
<PAGE>
EXHIBIT C-3
Escrow No. _______
ESCROW INSTRUCTIONS
To: Internationale Nederlanden Bank N.V.,
New York Branch, as Escrowee
135 East 57th Street
New York, New York 10022-2102
Attention: Matthew J. Cooleen
[Name of Company], a ___________ corporation ("XXX") has
deposited with you the amount of $______________ (the "Escrow
Property").
As Escrowee, you are hereby directed to hold, deal with and
dispose of the Escrow Property in the following manner (the
"Instructions") subject, however, to the terms and conditions
(the "Terms and Conditions") hereinafter set forth:
A. The Escrow Property shall be held by the Escrowee and
invested as provided in Paragraph B below. The Escrow Property
shall be released to the parties set forth below on the first to
occur of the following events:
[a] to ACF Industries, Incorporated on the day that ACF
presents to Escrowee a signed certificate to the effect that the
court having jurisdiction over the chapter 11 case of E-II
Holdings, Inc. has entered an order confirming the plan of
reorganization dated March 3, 1993;
[b] to E-II Holdings, Inc., as debtor and debtor-in-possession,
on the day that the Escrowee is presented with a signed
certificate from E-II Holdings, Inc. in the form of Attachment 1
hereto, together with an order of the United States Bankruptcy
Court, Southern District of New York, in the form attached to
such certificate; or
[c] to XXX on June 7, 1993 or such later date as specified by
XXX by written notice to the Escrowee given at any time on or
prior to June 7, 1993.
<PAGE>
B. Escrowee shall hold the Escrow Property for the account of
XXX and shall use all reasonable efforts to invest the Escrow
Property; provided, however, that the Escrowee shall invest the
Escrow Property only in such Permitted Investments (hereinafter
defined) as XXX shall direct the Escrowee from time to time. All
earnings on the Escrow Property shall be for the account of
ACF. The Escrowee shall not be responsible for, or liable to,
any party to these Escrow Instructions for any loss suffered in
connection with any investment of funds made by it in accordance
with these Escrow Instructions. As used herein, "Permitted
Investment" shall mean
(a) direct obligations of the United States of America, or of
any agency thereof, or obligations guaranteed as to principal and
interest by the United States of America, or of any agency
thereof, in either case maturing not more than 270 days from the
date of acquisition thereof;
(b) certificates of deposit issued by any bank or trust
company organized under the laws of the United States of America
or any state thereof and having capital, surplus and undivided
profits of at least $500,000,000, maturing not more than 90 days
from the date of acquisition thereof;
(c) commercial paper rated A-1 or better or P-1 by Standard &
Poor's Corporation or Moody's Investors Services, Inc.,
respectively, maturing not more than 90 days from the date of
acquisition thereof; and
(d) repurchase agreements and reverse repurchase agreements
with any bank having combined capital and surplus in an amount of
not less than $50,000,000, or any primary dealer of United States
government securities, relating to marketable direct obligations
issued or unconditionally guaranteed or insured by the United
States of America or any agency or instrumentality thereof and
backed by the full faith and credit of the United States of
America, in each case maturing within 30 days from the date of
acquisition thereof, provided that the terms of such agreements
comply with the guidelines set forth in the Federal Financial
Institutions Examination Council Supervisory Policy Repurchase
Agreements of Depository Institutions With Securities Dealers and
Others, as adopted by the Comptroller of the Currency on October
31, 1985.
<PAGE>
C. In the event that you receive conflicting instructions
pursuant to Paragraphs A or B of these Instructions, you shall be
entitled, but not required, to consult with counsel of your
choosing and to act or omit to act as so advised by such counsel.
Notwithstanding anything to the contrary contained herein, but
not in limitation of the provisions of Paragraph 2 of the Terms
and Conditions, you shall not be liable in any manner whatsoever
to any or all of the undersigned if you choose to act or omit to
act as advised by such counsel.
Terms and Conditions
1. Your duties and responsibilities shall be limited to those
expressly set forth in these Escrow Instructions, and you shall
not be subject to, nor obliged to recognize, any other agreement
between, or direction or instruction of, any or all of the
parties hereto even though reference thereto may be made herein;
provided, however, with your written consent, these Escrow
instructions may be amended at any time or times by an instrument
in writing signed by all the then parties in interest.
2. You are authorized in your sole discretion to disregard any
and all notices or instructions given by any of the undersigned
or by any other person, firm or corporation, except only such
notices or instructions as are hereinabove provided for and
orders or process of any court entered or issued with or without
jurisdiction. If any property subject hereto is at any time
attached, garnished, or levied upon under any court order or in
case the payment, assignment, transfer, conveyance or delivery of
any such property shall be stayed or enjoined by any court order,
or in case any order, writ, judgment or decree shall be made or
entered by any court affecting such property or any part thereof,
then and in any of such events you are authorized, in your sole
discretion, to rely upon and comply with any such order, writ,
judgment or decree which you are advised by legal counsel of your
own choosing is binding upon you; and if you comply with any such
order, writ, judgment or decree you shall not be liable to any of
the parties hereto or to any other person, firm or corporation by
reason of such compliance even though such order, writ, judgment
or decree may be subsequently reversed, modified, annulled, set
aside or vacated.
<PAGE>
3. You shall not be personally liable for any act taken or
omitted hereunder if taken or omitted by you in good faith and in
the exercise of your own best judgment. You shall also be fully
protected in relying upon any written notice, demand, certificate
or document which you in good faith believe to be genuine.
4. You shall not be responsible for the sufficiency or accuracy
of the form, execution, validity or genuineness of documents now
or hereafter deposited hereunder, or for any description therein,
nor shall you be responsible or liable in any respect on account
of the identity, authority or rights of the persons executing or
delivering or purporting to execute or deliver any such document
or these Escrow Instructions.
5. Any notices which you are required or desire to give hereunder
to any of the undersigned shall be in writing and may be given by
mailing the same to the address indicated below opposite the
signature of such undersigned (or to such other address as such
undersigned may have theretofore substituted therefor by written
notification to you), by United States mail, postage prepaid.
For all purposes hereof any notice so mailed shall be as
effectual as though served upon the person of the undersigned to
whom it was mailed at the time it is deposited in the United
States mail by you whether or not such undersigned thereafter
actually receives such notice. Notices to you shall be in
writing and shall not be deemed to be given until actually
received by your employee or officer who administers this escrow.
Whenever under the terms hereof the time for giving a notice or
performing an act falls upon a Saturday, Sunday or holiday, such
time shall be extended to the next business day, but such an
extension shall in no manner affect the rights of the undersigned
among and between themselves under any agreement among and
between themselves.
6. If you believe it to be reasonably necessary to consult with
counsel concerning any of your duties in connection with this
escrow, or in case you become involved in litigation on account
of being Escrowee hereunder or on account of having received
property subject hereto, then in either case, your costs,
expenses, and reasonable attorneys' fees shall be paid by XXX.
7. You shall, from time to time, be paid a reasonable fee for
your services hereunder by XXX, as agreed separately between you
and XXX.
<PAGE>
8. It is understood that you reserve the right to resign as
Escrowee at any time by giving written notice of your
resignation, specifying the effective date thereof, to the
undersigned. Within thirty (30) days after receiving the
aforesaid notice, XXX and you agree to appoint a successor
Escrowee to which you may distribute the property then held
hereunder. If a successor Escrowee has not been appointed and
has not accepted such appointment by the end of the thirty-day
period, you may apply to a court of competent jurisdiction for
the appointment of a successor Escrowee, and the costs, expenses
and reasonable attorneys' fees which you incur in connection with
such a proceeding shall be paid by XXX.
9. XXX hereby agrees to reimburse you, on demand, for all costs
and expenses (including, without limitation, reasonable
attorneys' fees) incurred by you in connection with the
administration of these Escrow Instructions. XXX hereby
indemnifies, exonerates and holds free and harmless you and each
of your officers, directors, employees and agents (collectively,
the "Indemnified Parties") from and against any and all actions,
causes of action, suits, losses, costs, liabilities and damages,
and expenses incurred in connection therewith (irrespective of
whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable
attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities") incurred by the Indemnified Parties or any of them
hereunder or in connection herewith or in connection with the
transactions contemplated hereby; provided however, that XXX
shall not be required to indemnify any Indemnified Party pursuant
to this Paragraph for any Indemnified Liabilities to the extent
caused by such Indemnified Party's wilful misconduct or gross
negligence. If and to the extent that the foregoing undertaking
may be unenforceable for any reason, XXX hereby agrees to make
the maximum contribution to the payment and satisfaction of each
of the Indemnified Liabilities which is permissible under
applicable law. The agreements in this Paragraph 9 and in
Paragraphs 6, 7 and 8 relating to payment of fees, costs,
expenses and reasonable attorneys' fees shall survive the
termination of these Escrow Instructions.
10. These Escrow Instructions shall be governed by, and construed
in accordance with, the law of the State of New York without
giving effect to the choice of law provisions thereof. XXX
<PAGE>
hereby submits to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and
of any New York state court sitting in New York City for the
purposes of all legal proceedings arising out of or relating to
these Escrow Instructions or the transactions contemplated
hereby. XXX irrevocably waives, to the fullest extent permitted
by law, any objection which it may now or hereafter have to the
laying of the venue of any such proceeding brought in such a
court and any claim that any such proceeding brought in such a
court has been brought in an inconvenient forum.
11. EACH OF ACF AND YOU HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THESE ESCROW
INSTRUCTIONS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
12. These Escrow Instructions may be executed in any number of
counterparts and by the different parties on separate
counterparts, and each such counterpart shall be deemed to be an
original, but all such counterparts shall together constitute but
one and the same Escrow Instructions.
Dated: May 20, 1993
Parties to Escrow Addresses
[Name of Company]
By:_____________________________
Title:_______________________
INTERNATIONALE NEDERLANDEN BANK 135 East 57th Street
N.V., NEW YORK BRANCH, New York, New York 10022-2102
as Escrowee Attention: Matthew J. Cooleen
By:_____________________________
Title:_______________________
PAGE
<PAGE>
[Letterhead of E-II Holdings, Inc.]
Internationale Nederlanden Bank N.V.,
New York Branch, as Escrowee
135 East 57th Street
New York, New York 10022-2102
Attention: Matthew J. Cooleen
Gentlemen:
We hereby certify that the United States Bankruptcy Court,
Southern District of New York, has entered an order authorizing
the release to us of the funds maintained in escrow account
number ______, a copy of which is attached to this certificate,
and such order has become final and non-appealable and is in full
force and effect on and as of the date hereof.
Very truly yours,
E-II HOLDINGS, INC.,
debtor and debtor-in-possession
Dated _________, 1993 _______________________________
Title:
PAGE
<PAGE>
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
- -----------------------------------x
: Chapter 11
In re: Case No. 92-B-43614 (CB)
:
E-II HOLDINGS, INC.,
:
Debtor.
:
- -----------------------------------x
ORDER APPROVING SALE OF
ASSETS TO ACF INDUSTRIES, INC.
OR ITS DESIGNEE
The Court having directed and authorized the Debtor to sell all
of its assets (other than cash, rights to payment from Unilever,
Inc. and unliquidated claims against third parties) (the
"Assets") to the highest bidder at a sale pursuant to 11 U.S.C.
Section 363(c)(2); and ACF Industries, Inc. and/or its designees
and affiliates (collectively, "ACF") having posted letters of
credit issued by ING Bank (the "L/Cs") and having escrowed cash
at ING Bank (the "Escrow Cash") in an amount aggregating
________________________ to secure the bid made by ACF; and
notice of such sale, and the terms and conditions thereof, having
been given more than 20 days prior to the date thereof in
accordance with Rule Bankruptcy Rules 2002(a)(2) and 6004; and a
sale having been held in accordance with terms prescribed in the
<PAGE>
order authorizing the sale; and the Court having scheduled a
hearing on such sale for _____________; and ACF having made the
highest and best bid for the purchase of the Assets at such sale
that and ACF having purchased the Assets in good faith; and the
Debtor having given the notification required under subsection
(a) of Section 7A of the Clayton Act (15 U.S.C. Section 18a) and
the required waiting period (as shortened to ten days under 11
U.S.C Section 363(b)(2)(B)) having expired without objection by
either the United States Department of Justice or Federal Trade
Commission to the proposed sale of the Assets to ACF; and after
due deliberation and sufficient cause appearing therefor; it is
hereby
FOUND, that ACF has purchased the Assets in good faith; and it
is hereby
FOUND, that the cash paid by ACF out of the proceeds of the L/Cs
and the Escrowed Cash to the Debtor in exchange for the Assets is
good, valuable and fair consideration for the Assets; and it is
hereby
ORDERED, that all of the Debtor's right, title and interest in
<PAGE>
and to the Assets be, and it hereby is, sold, conveyed,
transferred and set over to ACF free and clear of any liens,
security interests, encumbrances or adverse claims of any nature
or description; and it is hereby
ORDERED, that ACF shall be, and it hereby is, granted good and
warrantable title to the Assets, free and clear of any liens,
security interests, encumbrances or adverse claims of any nature
or description; and it is hereby
ORDERED, that the Debtor be, and it hereby is, authorized to
withdraw the Escrow Cash, and it is hereby
ORDERED, that the Debtor be, and it hereby is, authorized to
draw on the L/Cs.
Dated: New York, New York
April 19, 1993
United States Bankruptcy Judge
PAGE
<PAGE>
The Escrowed Funds shall be released to the parties set forth
below on the first to occur of the following events:
[a] to ACF on the day the court having jurisdiction over the
chapter 11 case of E-II Holdings, Inc. enters an order confirming
the plan of reorganization dated
March 3, 1993;
[b] to E-II Holdings, Inc., as debtor and debtor-in-possession,
on the day an order is entered in the form attached hereto; or
[c] to ACF on July 24, 1993.
PAGE
<PAGE>
EXHIBIT D<F1>
May __, 1993
Internationale Nederlanden Bank, N.V.
New York Branch
135 East 57th Street
New York, New York 10022
Ladies and Gentlemen:
We have acted as counsel to Tortoise Corp. (the "Company") in
connection with the Amended and Restated Credit Agreement
("Credit Agreement") dated as of May 20, 1993, between the
Company and Internationale Nederlanden Bank N.V., New York
Branch, providing for loans to be made to and letters of credit
to be issued for the account of the Company. Terms defined in
the Credit Agreement are used herein as defined therein.
In furnishing this opinion, we have examined originals or
copies, certified or otherwise identified to our satisfaction, of
the Credit Agreement, the other Basic Documents delivered in
connection therewith by the Company, the certificate of
incorporation and all amendments thereto and the by-laws of the
Company, such other corporate records of the Company,
certificates of public officials and of officers and
representatives of the Company, resolutions of the board of
directors of the Company and such matters of law, as we have
deemed appropriate or necessary as the basis for the opinions
hereinafter set forth. As to various questions of fact material
to our opinion (including, without limitation, those factual
[FN]
<F1>
Subject to further review
<PAGE>
matters which are stated to be to the best of our knowledge), we
have relied solely upon representations in the Credit Agreement
and the Basic Documents by the Company and upon certificates of
officers of the Company or oral representations made by such
officers to us and have made no independent investigation of such
facts.
In making such examinations, we have assumed the genuineness of
all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals and
the conformity to originals of documents submitted to us as
certified or photostatic copies.
In making our examination of documents we have assumed as to
Persons other than the Company: (i) such parties had the power
to enter into such documents and to perform all obligations
thereunder, (ii) the execution and delivery by such parties of
such document has taken place and has been duly authorized by all
requisite action, and (iii) the validity and binding effect of
such documents on such parties. With your consent, we have not
examined any records of any court, administrative tribunal or
other similar entity in connection with our opinion expressed
herein.
Based solely on the foregoing, and subject to the qualifications
and exceptions specified in this letter, we are of the opinion
that:
1. The Company is a corporation duly organized validly existing
and in good standing under the laws of New York and has the
necessary corporate power to make and perform the Basic Documents
and to borrow under the Credit Agreement. To the best of our
knowledge, it is not necessary for the Company to be qualified as
a foreign corporation to transact business outside of New York.
2. The making and performance by the Company of the Basic
Documents and the borrowings under the Credit Agreement have been
duly authorized by all necessary corporate action, and do not and
will not violate any provision of law or regulation or any
provision of its certificate of incorporation or by-laws or
<PAGE>
result in the breach of, or constitute a default or require any
consent under, or (except for the Liens created pursuant to the
Security Documents) result in the creation of any Lien upon any
of the properties, revenues or assets of the Company pursuant to
any indenture or any other agreement or instrument known to us to
which the Company is a party, by which the Company or its
Properties may be bound, pursuant to the indenture of ACF dated
as of February 28, 1986, as amended, the indenture of ACF dated
as of December 15, 1984, as amended, or, to the best of our
knowledge without independent investigation, any other agreement
or instrument to which ACF is a party.
3. The Credit Agreement, the Security Agreement constitute and
the Tortoise Guaranty, and the Note when executed and delivered
will constitute, the valid and legally binding obligations of the
Company, enforceable in accordance with their respective terms,
except as the foregoing may be (i) limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws now or
hereafter in effect, relating to or generally affecting creditors
rights, (ii) subject to general principles of equity, including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing (whether enforceability is considered in a
proceeding at law or in equity) and (iii) limited by state or
federal securities laws or public policy relating thereto with
respect to any rights of indemnification. We express no opinion
with respect to those provisions of the Basic Documents relating
to whether or not rights or remedies are exclusive. In addition,
no opinion is expressed herein as to the specific remedy that any
court, governmental authority or arbitrator may grant, impose or
render and as to the legality, validity, binding nature or
enforceability of each and every right, remedy and provision of
the Basic Documents, but, subject to the limitations set forth in
the foregoing clauses (i), (ii) and (iii), it is our opinion that
any such failure will not render the Basic Documents invalid as a
whole or substantially interfere with the realization of the
principal benefits provided thereby through the exercise of the
rights and remedies provided in the Basic Documents and those
otherwise legally available.
4. There are no legal or arbitral proceedings, and no
proceedings by or before any governmental or regulatory authority
<PAGE>
or agency, known to us to be pending or threatened against or
affecting the Company or any Properties or rights of the Company
which, if adversely determined, would have a Material Adverse
Effect.
5. No authorizations, consents, approvals, licenses, filings or
registrations with any governmental or regulatory authority,
bureau or agency are required in connection with the execution,
delivery or performance by the Company of the Basic Documents.
6. Upon the transfer by the Company to the Bank of the Pledged
Securities (within the meaning of Section 8-313 of the New York
Uniform Commercial Code) and upon the execution of the Security
Agreement, there will be created in favor of the Bank a valid
security interest in all Collateral (as defined therein) in which
the Company has rights, in each case as collateral security for
the payment of the Secured Obligations described in the Security
Agreement. We express no opinion as to the validity of the
security interests which may be created by the Security Agreement
with respect to property (other than the Pledged Securities)
distributed on or with respect to the Pledged Securities after
the date hereof. We also express no opinion as to the right,
title or interest of the Company in or to any Properties in which
any Liens are purported to be created by any of the Security
Documents or the perfection or priority of any such Liens.
7. The Company is not an "investment company", or a company
"controlled" by an "investment company", within the meaning of
the Investment Company Act of 1940, as amended.
We are members of the bar of the State of New York and are not
licensed or admitted to practice law in any other jurisdiction.
Accordingly, we express no opinion with respect to the laws of
any jurisdiction other than the State of New York and the United
States of America. This opinion is directed to the addressee
hereof and may not be relied on by any other person without the
prior written consent of the undersigned. Our opinion is based
and relies on the current status of the law, and is subject in
all respects to, and may be limited by, further rules,
regulations and legislation, as well as developing case law. We
do not undertake to notify any person of changes in facts or law
occurring or coming to our attention after the delivery of this
opinion.
Very truly yours,
PAGE
<PAGE>
EXHIBIT D
[Form of Opinion]
PAGE
<PAGE>
EXHIBIT E
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and
Address of Prospective
Participant or Assignee]
Re: Amended and Restated Credit Agreement dated as of May 20,
1993, between Tortoise Corp. (the "Company") and Internationale
Nederlanden Bank N.V., New York Branch.
Dear ____________:
As the Bank party to the above-referenced Amended and Restated
Credit Agreement (the "Credit Agreement"), we have agreed with
Tortoise Corp. (the "Company") pursuant to Section 10.12 of the
Credit Agreement to use reasonable precautions to keep
confidential, except as otherwise provided therein, all non-
public information identified by the Company as being
confidential at the time the same is delivered to us pursuant to
the Credit Agreement.
As provided in said Section 10.12, we are permitted to provide
you, as a prospective [holder of a participation in the Loans (as
defined in the Credit Agreement) and Letters of Credit (as
defined in the Credit Agreement)][assignee Bank], with certain of
such non-public information subject to the execution and delivery
by you, prior to receiving such non-public information, of a
Confidentiality Agreement in this form. Such information will
not be made available to you until your execution and return to
us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on
behalf of yourself and each of your affiliates, directors,
officers, employees and representatives) that (A) such
information will not be used by you except in connection with the
proposed [participation] [assignment] mentioned above and (B) you
shall use reasonable precautions, in accordance with your
<PAGE>
customary procedures for handling confidential information and in
accordance with safe and sound banking practices, to keep such
information confidential, provided that nothing herein shall
limit the disclosure of any such information (i) to the extent
required by statute, rule, regulation or judicial process, (ii)
to your counsel (whom you shall notify of the confidential nature
of such information) or to our counsel, (iii) to bank examiners,
auditors or accountants, (iv) in connection with any litigation
to which you are a party, (v) to a subsidiary or affiliate of
yours as provided in Section 10.12(a) of the Credit Agreement, or
(vi) to any assignee or participant (or prospective assignee or
participant) so long as such assignee or participant (or
prospective assignee or participant) first executes and delivers
to you a Confidentiality Agreement substantially in the form
hereof; provided, further, that, unless specifically prohibited
by applicable law or court order, you agree, prior to disclosure
thereof, to notify the Company of (x) any request for disclosure
of any such non-public information by any governmental agency or
representative thereof (other than any such request in connection
with an examination of your financial condition by such
governmental agency) or (y) any disclosure in connection with any
litigation to which you or we are a party; and provided finally
that in no event shall you be obligated to return any materials
furnished to you pursuant to this Confidentiality Agreement.
Please be aware that the Company is an intended third party
beneficiary of your agreements contained herein and has rights
under this Confidentiality Agreement as fully as if it were a
party hereto.
PAGE
<PAGE>
Would you please indicate your agreement to the foregoing by
signing at the place provided below the enclosed copy of this
Confidentiality Agreement.
Very truly yours,
INTERNATIONALE NEDERLANDEN BANK N.V.,
NEW YORK BRANCH
By __________________________________
The foregoing is agreed to
as of the date of this letter.
[Insert name of prospective
participant or assignee]
By __________________________
PAGE
<PAGE>
EXHIBIT F
ISSUANCE REQUEST
Internationale Nederlanden Bank N.V.,
New York Branch
135 East 57th Street
New York, New York 10022
Attention:
Re: Amended and Restated Credit Agreement, dated as of May 20,
1993 (together with all amendments, if any, thereafter from time
to time made thereto, the "Credit Agreement"), between Tortoise
Corp. (the "Company") and Internationale Nederlanden Bank N.V.
(the "Bank").
Gentlemen/Ladies:
This Issuance Request is delivered to you pursuant to Section
3.03 of the Credit Agreement. Unless otherwise defined herein,
terms used herein have the meanings assigned to them in the
Credit Agreement.
The Company hereby requests that on _________, 19__ (the "Date
of Issuance") you <F1> [issue a Letter of Credit on _________,
19__ in the initial Stated Amount of $________ with a Stated
Expiry Date (as defined therein) of ________, 19__] [extend the
Stated Expiry Date as defined under Irrevocable Standby Letter of
Credit No.__, issued on __________________, 19--, in the initial
Stated Amount of $________) to a revised Stated Expiry Date (as
defined therein of _________, 19__].
The beneficiary of the requested Letter of Credit will be
<F2>__________________ and such Letter of Credit will be in
support of <F3>____________________.
The Company hereby acknowledges that, pursuant to Section 6.02
of the Credit Agreement, each of the delivery of this Issuance
Request and the [issuance] [extension] of the Letter of Credit
requested hereby constitutes a representation and warranty by the
Company that, on such date of [issuance] [extension] all
statements set forth in Section 6.02 are true and correct in all
material respects.
The Company agrees that if, prior to the time of the
<F4> [issuance] [extension] of the Letter of Credit requested
hereby, any matter certified to herein by it will not be true and
correct at such time as if then made, it will immediately so
notify the Bank. Except to the extent, if any, that prior to the
time of the issuance or extension requested hereby the Bank shall
receive written notice to the contrary from the Bank, each matter
certified to herein shall be deemed to be certified at the date
of such issuance or extension.
IN WITNESS WHEREOF, the Company has caused this request to be
executed and delivered by its duly Authorized Officer this day of
_________, 19__.
TORTOISE CORP.
By __________________________
Title:
[FN]
<F1>
Insert as appropriate.
<F2>
Insert name and address of beneficiary.
<F3>
Insert description of supported Indebtedness or other obligations
and name of agreement to which it relates.
<PAGE> TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it
is attached but is inserted for convenience only.
Page
Section 1. Definitions and Accounting
Matters. . . . . . . . . . . . . . . . . . . 1
1.01 Certain Defined Terms . . . . . . . . . . . . . 1
1.02 Accounting Terms and
Determinations . . . . . . . . . . . . . . . 17
1.03 Types of Loans. . . . . . . . . . . . . . . . . 17
Section 2. The Commitments . . . . . . . . . . . . . . . . 17
2.01 Loans . . . . . . . . . . . . . . . . . . . . . 17
2.02 Borrowings. . . . . . . . . . . . . . . . . . . 18
2.03 Letters of Credit . . . . . . . . . . . . . . . 18
2.04 Changes of Commitment . . . . . . . . . . . . . 18
2.05 Fees. . . . . . . . . . . . . . . . . . . . . . 19
2.06 Lending Offices . . . . . . . . . . . . . . . . 20
2.07 Note. . . . . . . . . . . . . . . . . . . . . . 20
2.08 Optional Prepayments and
Conversions or Continuations
of Loans . . . . . . . . . . . . . . . . . . 20
2.09 Mandatory Prepayments . . . . . . . . . . . . . 20
2.10 Additional Pledged Assets . . . . . . . . . . . 21
Section 3. Payments of Principal and
Interest; Issuance of Letters
of Credit. . . . . . . . . . . . . . . . . . 22
3.01 Repayment of Loans. . . . . . . . . . . . . . . 22
3.02 Interest. . . . . . . . . . . . . . . . . . . . 22
3.03 Issuing the Letters of Credit . . . . . . . . . 23
3.04 Drawing under the Letters of
Credit . . . . . . . . . . . . . . . . . . . 23
3.05 Reimbursement on Demand . . . . . . . . . . . . 23
3.06 Obligations Absolute. . . . . . . . . . . . . . 24
3.07 Action in Respect of the Letters
of Credit. . . . . . . . . . . . . . . . . . 24
3.08 Indemnification . . . . . . . . . . . . . . . . 25
3.09 Deemed Disbursements. . . . . . . . . . . . . . 26
Section 4. Payments; Computations; etc.. . . . . . . . . . 26
4.01 Payments. . . . . . . . . . . . . . . . . . . . 26
4.02 Computations. . . . . . . . . . . . . . . . . . 27
<PAGE>
4.03 Minimum Amounts . . . . . . . . . . . . . . . . 27
4.04 Certain Notices . . . . . . . . . . . . . . . . 27
4.05 Set-off . . . . . . . . . . . . . . . . . . . . 28
Section 5. Yield Protection, etc.. . . . . . . . . . . . . 29
5.01 Additional Costs. . . . . . . . . . . . . . . . 29
5.02 Limitation on Types of Loans. . . . . . . . . . 31
5.03 Illegality. . . . . . . . . . . . . . . . . . . 32
5.04 Compensation. . . . . . . . . . . . . . . . . . 32
5.05 Withholding Taxes . . . . . . . . . . . . . . . 33
Section 6. Conditions Precedent. . . . . . . . . . . . . . 33
6.01 Initial Credit Extension. . . . . . . . . . . . 33
6.02 Initial and Subsequent Credit
Extensions . . . . . . . . . . . . . . . . . 35
Section 7. Representations and Warranties. . . . . . . . . 36
7.01 Corporate Existence . . . . . . . . . . . . . . 36
7.02 Financial Condition . . . . . . . . . . . . . . 36
7.03 Litigation. . . . . . . . . . . . . . . . . . . 37
7.04 No Breach . . . . . . . . . . . . . . . . . . . 37
7.05 Action. . . . . . . . . . . . . . . . . . . . . 37
7.06 Approvals . . . . . . . . . . . . . . . . . . . 37
7.07 No Margin Stock . . . . . . . . . . . . . . . . 38
7.08 ERISA . . . . . . . . . . . . . . . . . . . . . 38
7.09 Taxes . . . . . . . . . . . . . . . . . . . . . 38
7.10 Investment Company Act. . . . . . . . . . . . . 38
7.11 Public Utility Holding Company
Act. . . . . . . . . . . . . . . . . . . . . 38
7.12 Credit Agreements . . . . . . . . . . . . . . . 38
7.13 Investments . . . . . . . . . . . . . . . . . . 38
7.14 Railcar Credit Facility . . . . . . . . . . . . 39
Section 8. Covenants of the Company. . . . . . . . . . . . 39
8.01 Financial Statements. . . . . . . . . . . . . . 39
8.02 Litigation. . . . . . . . . . . . . . . . . . . 42
8.03 Existence, etc. . . . . . . . . . . . . . . . . 42
8.04 Insurance . . . . . . . . . . . . . . . . . . . 43
8.05 Prohibition of Fundamental
Changes. . . . . . . . . . . . . . . . . . . 43
8.06 Limitation on Liens . . . . . . . . . . . . . . 44
8.07 Indebtedness. . . . . . . . . . . . . . . . . . 44
8.08 Investments . . . . . . . . . . . . . . . . . . 45
8.09 Dividend Payments . . . . . . . . . . . . . . . 45
8.10 Tangible Net Worth. . . . . . . . . . . . . . . 45
8.11 Lines of Business . . . . . . . . . . . . . . . 45
8.12 Transactions with Affiliates. . . . . . . . . . 45
<PAGE>
8.13 Use of Proceeds . . . . . . . . . . . . . . . . 46
8.14 Maintenance Base. . . . . . . . . . . . . . . . 46
8.15 Minimum Excess Equity . . . . . . . . . . . . . 46
Section 9. Events of Default . . . . . . . . . . . . . . . 47
Section 10. Miscellaneous . . . . . . . . . . . . . . . . . 51
10.01 Waiver. . . . . . . . . . . . . . . . . . . . . 51
10.02 Notices . . . . . . . . . . . . . . . . . . . . 51
10.03 Expenses, etc.. . . . . . . . . . . . . . . . . 51
10.04 Amendments, etc.. . . . . . . . . . . . . . . . 52
10.05 Successors and Assigns. . . . . . . . . . . . . 52
10.06 Assignments and Participations. . . . . . . . . 53
10.07
Survival. . . . . . . . . . . . . . . . . . . . 54
10.08 Captions. . . . . . . . . . . . . . . . . . . . 55
10.09 Counterparts. . . . . . . . . . . . . . . . . . 55
10.10 Governing Law; Submission to
Jurisdiction . . . . . . . . . . . . . . . . 55
10.11 Waiver of Jury Trial. . . . . . . . . . . . . . 55
10.12 Treatment of Certain
Information; Confidentiality . . . . . . . . 55
ANNEX 1 List of Acceptable Valuation Sources
SCHEDULE 1 Indebtedness of The Company Section 7.12 and Section
8.07
SCHEDULE 2 Investment of the Company Section 7.13
SCHEDULE 3
EXHIBIT A - FORM OF NOTE
EXHIBIT B - FORM OF VALUATION CERTIFICATE
EXHIBIT C-1 - SECURITY AGREEMENT
EXHIBIT C-2 - GUARANTY
EXHIBIT C-3 - ESCROW INSTRUCTIONS
EXHIBIT D - OPINION OF COUNSEL
EXHIBIT E - FORM OF CONFIDENTIALITY AGREEMENT
EXHIBIT F - ISSUANCE REQUEST
EXHIBIT G - HIGH COAST LETTER AGREEMENT
EXHIBIT H - HIGH RIVER LETTER AGREEMENT
High River Limited Partnership
100 South Bedford Road
Mt. Kisco, New York 10549
December 28, 1995
Tortoise Corp.
One Wall Street Court
9th Floor
New York, New York 10005
Internationale Nederlanden (U.S.) Capital Corporation
135 East 57th Street
New York, New York 10022
Re: Loan to Tortoise Corp. ("Borrower") by
High River Limited Partnership ("Lender")
Gentlemen:
Reference is made to that certain letter agreement
by and among Borrower and Lender, dated December 21, 1995
(the "Original Letter Agreement"), executed and delivered by
Borrower and Lender. Borrower and Lender desire to amend
and restate the Original Letter Agreement and Internationale
Nederlanden (U.S.) Capital Corporation ("ING") desires to
become a party to such amended and restated agreement (the
"Amended and Restated Agreement"). Therefore, in
consideration of the mutual agreements contained herein,
Borrower and Lender agree that the Original Letter Agreement
is hereby amended and restated in its entirety as provided
for herein, and Borrower, Lender and ING agree as follows:
Background
On December 21, 1995, the following occurred:
Chelonian Corp., a New York corporation ("Chelonian"), made
a capital contribution in the amount of Forty-Five Million
Dollars ($45,000,000) (the "Proceeds") to Lender. Lender
instructed Chelonian to pay such amount to Lehman Brothers
Inc. ("Lehman Brothers") for the account of Lender.
Borrower distributed a dividend to Chelonian in the amount
<PAGE>
of the Proceeds. Chelonian instructed Borrower to pay such
amount to Lehman Brothers for the account of Lender.
Borrower caused an amount equal to the Proceeds to be paid
to Lehman Brothers, and Lehman Brothers released its
security interest in the Securities (as defined below).
On December 21, 1995, Lender desired to lend the
Securities (as defined below) to Borrower in a manner
equivalent to an accommodation pledge. Pursuant to such
objectives, Borrower and Lender entered into the Original
Letter Agreement and have entered into this Amended and
Restated Letter Agreement regarding the lending of the
Securities under circumstances in which Lender's risk of
loss or opportunity for gain with respect to the Securities
will not be reduced, subject to the rights of ING set forth
herein. Also on December 21, 1995, ING made a loan to
Borrower secured (in part) by a pledge by Borrower in favor
of ING of the Securities.
1. The Loan.
1.1 Simultaneously with the execution and
delivery of the Original Letter Agreement, Lender loaned
(the "Loan") to Borrower and Borrower borrowed from Lender
2,951,000 shares of common stock, par value $.01 per share
("Shares"), of RJR Nabisco Holdings Corp. ("RJR") (the
"Securities"). In connection therewith, Borrower had the
right to transfer the Securities to its own name or to the
name of ING, as its designee.
1.2 Simultaneously with the execution of the
Original Letter Agreement, Lender (i) delivered or caused to
be delivered to Borrower all Securities that are
certificated securities (as defined in the Uniform
Commercial Code) either (A) registered or issued in the name
of, or payable or endorsed to bearer or to the order of, a
nominee of Borrower or (B) endorsed in blank or accompanied
by undated stock powers duly executed in blank, or (ii)
caused the making of the appropriate entries on the books of
<PAGE>
a financial intermediary (as defined in Section8-313(4) of the
Uniform Commercial Code), reducing the account of Lender or
(in the case of a transfer directly from a seller of
securities to Borrower) the seller of such Securities, and
increasing the account of Borrower, by the amount or number
of such Securities and caused such financial intermediary to
confirm to Borrower that it is in the custody of such
Securities for the account of Borrower and that appropriate
entries have been made on its books and records.
1.3 In consideration of the Loan contemplated by
the Original Letter Agreement, simultaneously with the
execution of the Original Letter Agreement, Borrower
delivered to Lender, a fee in the amount of $45,000 and, if
the Loan is outstanding on December 21, 1996, Borrower shall
deliver to Lender, on such date, as consideration for the
continued extension of the Loan, a fee in the amount of
$45,000.
1.4 Borrower shall have the right to pledge the
Securities to ING pursuant to the Amended and Restated
Security Agreement, dated May 20, 1993, between Borrower and
ING (as amended from time to time, the "Security
Agreement"), to secure the payment of all loans and other
amounts now or in the future owed by Borrower to ING arising
in connection with or pursuant to the Amended and Restated
Credit Agreement, dated May 20, 1993, between Borrower and
ING (as amended from time to time, the "Credit Agreement").
In connection therewith, Borrower shall have the right to
transfer the Securities into the name of Borrower and, to
the extent the Securities are in certificated form (the
"Certificates"), deliver to ING the Certificates, together
with undated stock powers duly endorsed in blank. If the
Securities are pledged and delivered to ING as provided in
this Section 1.4, Lender specifically acknowledges and
agrees that (i) the direct and incidental rights of Lender
to the Securities (including under Section 1.5 below) and
hereunder against Borrower shall be subject and subordinate
<PAGE>
to the rights of ING, (ii) ING may treat the Securities in
the same manner as other collateral pledged to it under the
Security Agreement, (iii) if an Event of Default (as defined
in the Credit Agreement) occurs, ING may sell or otherwise
dispose of and deliver the Securities in accordance with the
Security Agreement and Credit Agreement, and may apply the
proceeds thereof to all or any amounts due to ING under the
Credit Agreement or the Security Agreement or any other
Basic Document (as defined in the Credit Agreement), (iv) it
waives any and all claims with respect to the ownership
(whether legal or beneficial) of the Securities for so long
as the Securities are pledged to ING (including, without
limitation, if the Securities are sold by ING in accordance
with the terms of the Credit Agreement and the Security
Agreement), and (v) ING will be under no obligation to
separately account to Lender for the proceeds of the sale of
the Securities upon the occurrence of an Event of Default,
or with regard to other actions taken by ING with respect to
the sale or disposition of the Securities pursuant to the
Security Agreement and Credit Agreement.
1.5 During the term of the Loan, Borrower shall
deliver to Lender promptly (but subject to any rights in
favor of ING under the Security Agreement), amounts equal to
any and all amounts (i) paid as distributions by the issuers
of the Securities to the holders thereof, and (ii) paid upon
redemption of any of the Securities to the holders thereof,
regardless of whether any such distributions or amounts paid
upon redemption are received by Borrower. If the Securities
are pledged to ING pursuant to the Security Agreement, (i)
Borrower shall have the right to pledge to ING on the same
basis as the Securities are pledged, any and all dividends
and distributions made in respect of the Securities and all
securities received on account of the Securities which,
pursuant to the Security Agreement, are required to be
pledged to ING, and (ii) Borrower shall promptly transfer to
Lender, securities identical to any securities received on
account of the Securities, whether or not pledged to ING.
<PAGE>
1.6 Within five (5) business days after Lender
has given Borrower and ING written notice of demand
therefor, but in no event more than two (2) years after the
date hereof, Borrower will transfer the Securities,
aggregating 2,951,000 Shares, to the name of Lender and
deliver the Certificates (or an identical number of
identical Shares) to Lender at 100 South Bedford Road, Mt.
Kisco, New York 10549 and the Loan under this agreement
shall terminate. If Borrower defaults under this agreement
and fails to transfer ownership or deliver the Certificates
for any reason, including, without limitation, because the
Securities are pledged to ING in accordance with Section 1.4
hereof, Borrower shall pay to Lender, as liquidated damages,
an amount equal to the then current Market Value of the
Securities (as hereinafter defined) plus a default penalty
in the amount of five percent (5%) of the then current
Market Value of the Securities. For purposes of this
Section 1.6, "Market Value" shall mean, on any date
specified herein, the amount per Share equal to (a) the last
sale price of a Share, regular way, on such date, or if no
such sale takes place on such date, the average of the
closing bid and asked prices thereof on such date, in each
case as officially reported on the principal national
securities exchange on which the Securities are then listed
or admitted to trading, or (b) if the Securities are not
then listed or admitted to trading on any national
securities exchange but are designated as a national market
system security by the NASD, the last trading price of a
Share on such date, or (c) if there shall have been no
trading on such date or if the Securities are not so
designated, the average of the closing bid and asked prices
of a Unit on such date as shown by the NASDAQ system, or (d)
if the Securities are not then listed or admitted to trading
on any national exchange or quoted in the over-the-counter
market, the higher of (x) the book value per Share or (y)
the fair market value thereof determined in good faith by
the Board of Directors of Lender as of a date which is not
more than 15 days prior to the date as of which the
determination is to be made.
<PAGE>
1.7 Borrower shall have the right at any time and
from time to time to prepay the Loan in whole or in part
without penalty.
2. Representations by Borrower.
Borrower represents and warrants to ING and Lender
as set forth in Sections 2.1 through 2.6, and covenants and
agrees with Lender and ING as set forth in Section 2.7,
that, with respect to the Original Letter Agreement, as of
December 21, 1995, and with respect to the Amended and
Restated Letter Agreement, as of the date hereof:
2.1 Borrower is a corporation, duly incorporated,
validly existing and in good standing under the laws of the
State of New York.
2.2 The execution, delivery and performance of
the Original Letter Agreement and this Amended and Restated
Letter Agreement are within Borrower's corporate powers,
have been duly authorized by all necessary corporate action,
and have been fully executed and delivered by Borrower.
2.3 Borrower is not a party to any contract or
agreement or subject to any restriction which materially and
adversely affects its business, assets or financial
condition. Neither the execution, delivery and performance
of the terms and provisions of the Original Letter Agreement
nor this Amended and Restated Letter Agreement will be
contrary to the provisions of, or constitute a default
under, any law, rule or regulation applicable to Borrower,
the Certificate of Incorporation of Borrower or any
agreement to which Borrower is a party or to which any of
its property may be subject.
2.4 Each of the Original Letter Agreement and
this Amended and Restated Letter Agreement constitutes the
legal, valid and binding obligation of Borrower enforceable
against Borrower in accordance with its terms.
<PAGE>
2.5 On December 21, 1995, Borrower, a transferor
who had rights in the Securities within the meaning of
Section 8-321(2) of the Uniform Commercial Code as in effect
in the State of New York (the "UCC"), transferred its
interest in the Securities to ING within the meaning of
Sections 8-313 and 8-301 of the UCC, and accordingly, ING
acquired a perfected security interest in the Securities,
and all proceeds thereof, pursuant to Section 8-321(2) of
the UCC, securing the Obligations (as defined in the Credit
Agreement).
2.6 Promptly following a request by either ING or
Lender, Borrower shall execute, deliver and perform all such
additional documents, instruments and certificates and take
all such other action necessary to enable Lender and ING to
execute or exercise and enforce its rights hereunder or
thereunder.
3. Representations by Lender.
Lender represents and warrants to Borrower and ING
as set forth in Sections 3.1 through 3.4, and covenants and
agrees with Borrower and ING as set forth in Section 3.5,
that with respect to the Original Letter Agreement, as of
December 21, 1995, and with respect to the Amended and
Restated Letter Agreement, as of the date hereof:
3.1 Lender is a Delaware limited partnership,
duly organized, validly existing and in good standing under
the laws of the State of Delaware.
3.2 On December 21, 1995, Lender transferred its
interest in the Securities to Borrower within the meaning of
Sections 8-301 and 8-313 of the UCC.
3.3 Lender is not a party to any contract or
agreement or subject to any restriction which materially
adversely affects its business, assets or financial
<PAGE>
condition. Neither the execution, delivery and performance
of the terms and provisions of the Original Letter Agreement
nor this Amended and Restated Letter Agreement will be
contrary to the provisions of, or constitute a default
under, any law, rule or regulation applicable to Lender,
Lender's organizational documents or any agreement to which
Lender is a party or to which any of its property may be
subject.
3.4 Each of the Original Letter Agreement and
this Amended and Restated Letter Agreement constitutes the
legal, valid and binding obligation of Lender enforceable
against Lender in accordance with its terms.
3.5 Promptly following a request by either ING or
Borrower, Lender shall execute, deliver and perform all such
additional documents, instruments and certificates and take
all such other action necessary to enable Borrower and ING
to execute or exercise and enforce its rights hereunder or
thereunder.
4. Governing Law. THIS AMENDED AND RESTATED LETTER
AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND
LIABILITIES OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE
WITH THE LAWS AND DECISIONS OF THE STATE OF NEW YORK WITHOUT
REGARD TO CONFLICT OF LAWS PRINCIPLES.
5. Consent to Jurisdiction. THE PARTIES HERETO AGREE
THAT ALL DISPUTES BETWEEN THEM ARISING OUT OF, CONNECTED
WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM IN CONNECTION WITH THIS AMENDED AND
RESTATED LETTER AGREEMENT, AND WHETHER ARISING IN CONTRACT,
TORT, EQUITY OR OTHERWISE, SHALL BE RESOLVED ONLY BY STATE
OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, NEW YORK, BUT
SUCH PARTIES ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS
MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF NEW YORK
COUNTY, NEW YORK. EACH PARTY HERETO HEREBY WAIVES ANY
OBJECTION IN ANY DISPUTE THAT IT MAY HAVE TO THE LOCATION OF
THE COURT CONSIDERING SUCH DISPUTE.
<PAGE>
6. Waiver of Jury Trial. EACH OF THE PARTIES
HERETO HEREBY WAIVES ANY RIGHT TO HAVE A JURY PARTICIPATE IN
RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, BETWEEN ANY OF THE PARTIES ARISING OUT OF,
CONNECTED WITH, RELATED TO OR INCIDENTAL TO THE RELATIONSHIP
ESTABLISHED BETWEEN THEM UNDER THIS AMENDED AND RESTATED
LETTER AGREEMENT. INSTEAD, ANY SUCH DISPUTE RESOLVED IN
COURT WILL BE RESOLVED IN A BENCH TRIAL WITHOUT A JURY.
7. Amendments. This Amended and Restated Letter
Agreement may not be amended except in a writing signed by
each of the parties hereto.
8. Successors and Assigns. This Amended and Restated
Letter Agreement shall be binding upon and shall inure to
the benefit of Borrower, Lender and ING and their respective
successors and assigns, provided, that neither Lender nor
Borrower may assign its rights or obligations hereunder
without the prior written consent of ING.
9. Inducement for ING. The parties acknowledge and
agree that this Amended and Restated Letter Agreement is a
material inducement to ING making loans to Borrower, and
that a breach of a representation or covenant hereunder
shall constitute an Event of Default under (and as defined
in) the Credit Agreement.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be signed by their representatives
thereunto duly authorized, all as of the date first above
written.
HIGH RIVER LIMITED PARTNERSHIP
By: Riverdale Investors Corp., Inc.,
general partner
____________________________________
Edward E. Mattner
President
Accepted and Agreed
this 28th day of December, 1995
TORTOISE CORP.
By:_________________________
Edward E. Mattner
President
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By:_________________________
Name:
Title:
<PAGE>
[Signature Page to Amended and Restated Letter Agreement
between High River Limited Partnership, Tortoise Corp. and
Internationale Nederlanden (U.S.) Capital Corporation]
