High River Limited Partnership
000 Xxxxx Xxxxxxx Xxxx
Xx. Xxxxx, Xxx Xxxx 00000
December 28, 1995
Tortoise Corp.
Xxx Xxxx Xxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Internationale Nederlanden (U.S.) Capital Corporation
000 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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 Xxxxxx Brothers
Inc. ("Xxxxxx Brothers") for the account of Lender.
Borrower distributed a dividend to Chelonian in the amount
of the Proceeds. Chelonian instructed Borrower to pay such
amount to Xxxxxx Brothers for the account of Lender.
Borrower caused an amount equal to the Proceeds to be paid
to Xxxxxx Brothers, and Xxxxxx 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
a financial intermediary (as defined in section 8-313(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
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.
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 000 Xxxxx Xxxxxxx Xxxx, Xx.
Xxxxx, Xxx Xxxx 00000 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.
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.
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
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.
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.
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
____________________________________
Xxxxxx X. Xxxxxxx
President
Accepted and Agreed
this 28th day of December, 1995
TORTOISE CORP.
By:_________________________
Xxxxxx X. Xxxxxxx
President
INTERNATIONALE NEDERLANDEN (U.S.)
CAPITAL CORPORATION
By:_________________________
Name:
Title:
[Signature Page to Amended and Restated Letter Agreement
between High River Limited Partnership, Tortoise Corp. and
Internationale Nederlanden (U.S.) Capital Corporation]
