Exhibit 10.26
TRUST AGREEMENT
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THIS AGREEMENT dated as of December 13, 1995, among PECHINEY
CORPORATION, a Delaware corporation, (the "Settlor"), PECHINEY INTERNATIONAL
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S.A., a societe anonyme organized under the laws of the Republic of France
("Pechiney International"), and The First National Bank of Chicago, a national
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banking association organized under the laws of the United States of America
(the "Trustee").
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PRELIMINARY STATEMENTS:
WHEREAS, Pechiney International owns all of the issued and outstanding
shares of common stock, par value $1.00 per share (the "Pechiney Corporation
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Shares"), of the Settlor;
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WHEREAS, the Settlor is the obligor on its Series A, Series B and
Series C promissory notes (as amended), originally payable to the order of
▇▇▇▇▇▇ ▇▇▇▇▇ and ▇▇▇▇▇ ▇. May (together with their successors and assigns, the
"Noteholders"), in an aggregate outstanding principal amount as of the date
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hereof of $716,386,477.12 (the "Pechiney Corporation Notes") (as set forth on
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Schedule 1 attached hereto);
WHEREAS, the Settlor has agreed to create a trust of property (the
"Trust") for the purpose of making payments owing under, with respect to, or in
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connection with the Pechiney Corporation Notes, including, without limitation,
payments of principal, interest, fees, penalties, if any, expenses and any
indemnification obligations (all such obligations being, collectively, the "Note
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Obligations");
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NOW, THEREFORE, the Settlor hereby irrevocably assigns transfers and
conveys all right, title and interest in, to and under the Trust Assets (as such
term is defined in Section 1.02 of this Agreement) for the following purposes
and subject to the terms hereof:
ARTICLE I
ORGANIZATIONAL MATTERS
SECTION 1.01. Purpose. The purpose of the Trust is to hold and collect
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the Trust Assets and to make payments as specified herein. The Trustee shall not
have the power to engage in any activity or perform any act except in pursuit of
the foregoing purpose and any activity that is necessary or incidental to the
foregoing purpose.
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SECTION 1.02. Trust Property. The Settlor has irrevocably
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transferred or caused to be transferred to the Trust the following property (all
such property, together with all proceeds, earnings, accretions and additions
thereon or thereto, being the "Trust Assets"): (i) a Note due 1999 dated
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December 12, 1995, made by Pechiney International to the order of the Settlor
and endorsed by the Settlor to the Trustee in the aggregate principal amount of
$716,386,477.12 (the "Trust Note"), (ii) a Standby Letter of Credit dated
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December 13, 1995, letter of credit number S703104, issued by Banque Nationale
de Paris ("BNP") for the benefit of the Trustee and the Settlor (the "Mirror
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Letter of Credit"), (iii) a Standby Letter of Credit dated December 13, 1995,
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letter of credit number S703105, issued by BNP for the benefit of the Trustee
and the Settlor (the "Additional Letter of Credit"), and (iv) two Standby
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Letters of Credit, each dated December 13, 1995, letter of credit numbers FBI
101 and FBI 102, respectively, and each issued by Caisse des Depots et
Consignations ("CDC") and having substantially the same terms and conditions as
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the Mirror Letter of Credit and the Additional Letter of Credit, respectively
(together, the "Secondary Letters of Credit," and together with the Mirror
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Letter of Credit, the Additional Letter of Credit, and any Substitute Letters of
Credit (as defined hereinafter) actually issued and deposited in the Trust, the
"Letters of Credit"). Neither the Settlor nor any other party shall transfer
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additional property (other than payments on the Trust Note, funds drawn under
the Letters of Credit, Permitted Investments and proceeds of Permitted
Investments hereunder) to the Trust or, except in the case of a Substitute
Letter of Credit pursuant to Section 4.02(c) of this Agreement, substitute
property for any or all of the Trust Assets.
SECTION 1.03. Appointment of the Trustee: Acceptance of Trust. The
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Settlor hereby appoints The First National Bank of Chicago as Trustee of the
Trust effective as of the date hereof to have all rights, powers and duties set
forth herein. The Trustee accepts the Trust on the terms set forth herein and
acknowledges receipt in the trust from the Settlor of the Trust Note and the
Letters of Credit, together constituting the initial Trust Assets.
SECTION 1.04. Trust Account. The Trustee shall deposit the initial
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Trust Assets at The First National Bank of Chicago, ABA number ▇▇▇▇▇▇▇▇▇,
Corporate Trust Clearing Account ▇▇▇▇▇▇▇▇, for credit to trust number 19-203310
(the "Trust Account").
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SECTION 1.05. Declaration of Trustee. The Trustee hereby declares
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that it will hold, invest and preserve the Trust Assets and will use Trust
Assets and the proceeds thereof only as contemplated by this Agreement.
SECTION 1.06. Beneficiaries. The Settlor agrees that, in
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consideration of transferring the Trust Assets to the Trust, the Settlor shall
have a 99.999% beneficial interest in the Trust and Pechiney International shall
have a 0.001% beneficial interest in the Trust. Pechiney International and the
Settlor collectively shall be "Beneficiaries" and individually shall be a
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"Beneficiary" under this Agreement.
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SECTION 1.07. BNP. References herein to "BNP" shall mean, unless the
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context otherwise requires, the issuer of the Letter of Credit on which a
drawing has been made.
ARTICLE II
DISTRIBUTIONS
SECTION 2.01. Payment of Note Obligations. (a) Set forth on Schedule
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2 attached hereto are the dates on which payments of principal and interest are
scheduled to be due and owing under the Pechiney Corporation Notes. Interest
payments are due and owing in accordance with the Rate Quotation Agreement,
dated as of December 27, 1991, as amended, (the "Citibank Rate Quotation
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Agreement"), by and between Citibank, N.A. and the Settlor (a copy of which is
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attached hereto as Exhibit A) under the Note Obligations. Any notice provided to
a Beneficiary by a Noteholder regarding acceleration of payments under any
Pechiney Corporation Note shall be immediately forwarded by such Beneficiary to
the Trustee and to the other Beneficiary. Each principal and interest payment
obligation with respect to the Pechiney Corporation Notes, whether payable due
to acceleration or otherwise, hereinafter is referred to as a "Scheduled
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Obligation." Any notice provided to a Beneficiary through the Citibank Rate
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Quotation Agreement regarding the interest payment due and owing under the Note
Obligations, or any other notification of payment information or instructions
provided to a Beneficiary by the Noteholders (or their pledgees and assigns, or
anyone acting on their behalf) under the Note Obligations, shall be immediately
forwarded by such Beneficiary to the Trustee and to the other Beneficiary.
Subject to Section 2.01(c), to the extent that proceeds of payments on the Trust
Note have been transferred to the Trust Account and are available to the
Trustee, the Trustee shall pay each Scheduled Obligation, on behalf of the
Settlor, when due with such proceeds. If, and to the extent that, proceeds of
payments on the Trust Note are not available as of the fourth Banking Day (as
defined in the Mirror Letter of Credit) prior to the next Scheduled Obligation
becoming due, the Trustee shall , to the extent available, draw under the Mirror
Letter of Credit an amount sufficient to pay such Scheduled Obligation, and the
Trustee shall use the proceeds of such drawing to pay such Scheduled Obligation,
on behalf of the Settlor, when due; provided, however, that no drawing on the
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Mirror Letter of Credit by the Trustee to pay the final scheduled principal
payment (absent an acceleration thereof) under the Pechiney Corporation Notes
shall be made prior to January 4, 1999. To the extent that Trust Assets or draw
proceeds under the Mirror Letter of Credit are insufficient to make full payment
of a Scheduled Obligation comprising interest, the Trustee shall, upon the
written direction of the Settlor and in the Settlor's sole discretion (but not
otherwise), draw under the Additional Letter of Credit in the amount of such
insufficiency so as to make full payment under such Scheduled Obligation. If the
Trustee receives proceeds of payments on the Trust Note from Pechiney
International for payment of any Scheduled Obligation after paying such
Scheduled Obligation with the
PAGE>
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proceeds of a drawing of the Mirror Letter of Credit or Additional Letter of
Credit as described above, the Trustee shall promptly remit such proceeds to
BNP, unless Pechiney International and BNP have notified the Trustee that BNP
has been reimbursed by Pechiney International for such draw of the Mirror Letter
of Credit or Additional Letter of Credit, as the case may be, in which case the
Trustee shall promptly remit such proceeds to Pechiney International. If the
Trustee receives proceeds of payments on the Trust Note, or draws under the
Mirror Letter of Credit or Additional Letter of Credit, for payment of any
Scheduled Obligation, and has not made payment to the Noteholders or reimbursed
the Settlor, and subsequently receives evidence reasonably satisfactory to the
Settlor from Pechiney International or BNP that such Scheduled Obligation has
been paid through a draw or draws on the Standby Letters of Credit dated
December 22, 1988, issued by BNP for the benefit of the Noteholders (the
"Existing Letters of Credit"), the Trustee shall promptly remit the proceeds of
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such payment to Pechiney International in the case of payment on the Trust Note
or to BNP in the case of a draw under the Mirror Letter of Credit or Additional
Letter of Credit, unless Pechiney International and BNP have notified the
Trustee that BNP has been reimbursed by Pechiney International for such draw of
the Mirror Letter of Credit or Additional Letter of Credit, as the case may be,
in which case the Trustee shall promptly remit such proceeds to Pechiney
International.
(b) The Trustee shall pay all amounts other than the Scheduled
Obligations in respect of the Note Obligations (such amounts being the
"Unscheduled Obligations") after receiving (i) a written notice from Pechiney
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International that an Unscheduled Obligation is due and owing and specifying in
such notice the amount that is due and the date on which such payment is due or
(ii) a written notice from the Settlor stating that (x) it has received a
demand for payment of an Unscheduled Obligation from a Noteholder and has
determined in good faith that such demand (or the specified portion thereof) is
not without merit and that satisfaction of such demand (or the specified portion
thereof) is necessary to protect the Settlor from loss, (y) specifying a date
for the Trustee to make payment of such Unscheduled Obligation, and (z)
certifying that the Settlor has furnished to Pechiney International the written
materials required to be delivered pursuant to Section 8.06(a) at least six
Banking Days prior to the specified payment date. Unless instructed in writing
to the contrary by Pechiney International, the Trustee shall make any payment
pursuant to clause (ii) of this sub-paragraph (b) expressly without prejudice
and with reservation of all rights. The Trustee shall pay the Unscheduled
Obligation at such time as directed by Pechiney International or the settlor, as
the case may be, with the proceeds of payments on the Trust Note. If, and to the
extent that, proceeds of payments on the Trust Note are not available when the
Trustee is required to make any payment of an Unscheduled Obligation, the
Trustee shall, to the extent available, draw under the Additional Letter of
Credit an amount sufficient to pay such Unscheduled Obligation, and the Trustee
shall use the proceeds of such drawing to pay such Unscheduled Obligation. If
the Trustee receives proceeds of payments on the Trust Note from Pechiney
International for payment of any Unscheduled Obligation after paying such
Unscheduled Obligation with the proceeds of a drawing on the Additional Letter
of Credit as
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described above, the Trustee shall promptly remit such Trust Note proceeds to
BNP, unless Pechiney International and BNP have notified the Trustee that BNP
has been reimbursed by Pechiney International for such draw of the Additional
Letter of Credit, in which case the Trustee shall promptly remit to Pechiney
International such proceeds. If the Trustee receives proceeds of payments on
the Trust Note, or draws under the Additional Letter of Credit, for payment of
any Unscheduled Obligation, and has not made payment to the Noteholders or
reimbursed the Settlor, and subsequently receives evidence reasonably
satisfactory to the Settlor from Pechiney International or BNP that such
Unscheduled Obligation has been paid through a draw on the Existing Letters of
Credit, the Trustee shall promptly remit the proceeds of such payment to
Pechiney International in the case of payment on the Trust Note or to BNP in the
case of a draw under the Additional Letter of Credit, unless Pechiney
International and BNP have notified the Trustee that BNP has been reimbursed by
Pechiney International for such draw of the Additional Letter of Credit, in
which case the Trustee shall promptly remit such proceeds to Pechiney
International. Pechiney International shall promptly provide the notice
specified in clause (i) of the first sentence of this section 2.01(b) whenever
it has determined in good faith that an Unscheduled Obligation has become due
and owing. Pechiney International shall promptly furnish the Settlor, and the
Settlor shall promptly furnish Pechiney International, with a copy of any notice
given to the Trustee under this Section 2.01(b).
(c) (i) Not less than 90 days before the scheduled due date, or
within 10 days after the acceleration, of any Applicable Principal Amount (as
defined below), Pechiney International may furnish to the Settlor such evidence
and legal opinions as, in the view of Pechiney International, are sufficient to
establish that Pechiney International is not, as of such time, insolvent, will
not be rendered insolvent by the payment of the Applicable Principal Amount, and
that there would be no basis for a payment of such Applicable Principal Amount
made by Pechiney International to be recovered by Pechiney International
or any receiver, trustee or other person or entity in an insolvency or similar
proceeding of, by, or relating to Pechiney International (the "Solvency
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Evidence"). The Settlor shall consider the Solvency Evidence in good faith. The
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Settlor shall determine, in its sole discretion, whether the evidence is
sufficient to establish that (A) Pechiney International is not, as of the time
of such determination, insolvent and will not be rendered insolvent by making
payment of the Applicable Principal Amount and/or any other payment then due and
owing by Pechiney International, and (B) there would be no basis for a payment
of such Applicable Principal Amount made by Pechiney International to be
recovered by Pechiney International or any receiver, trustee or other person
or entity in an insolvency or similar proceeding of, by, or relating to Pechiney
International (a "Determination," and any Determination that the evidence is
sufficient to establish both (A) and (B) above being an "Affirmative
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Determination"). The Settlor shall notify Pechiney International and the Trustee
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as promptly as practicable, and in any event 10 days prior to the scheduled due
date of the Applicable Principal Amount, or, in the event of a due date
resulting from an acceleration, within 10 days after the Solvency Evidence was
supplied to Settlor, of its
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Determination (the "Applicable Principal Payment Notification"). Until the
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applicable time period for providing the Applicable Principal Payment
Notification has expired, the parties shall act as if such an Applicable
Principal Payment Notification was provided without an Affirmative
Determination.
(ii) In the event that (A) the Settlor has furnished Pechiney
International and the Trustee with an Affirmative Determination, or (B) Pechiney
International has provided the Solvency Evidence and the Settlor has not given
an Applicable Principal Payment Notification, in each case within the
applicable time period referenced in sub-paragraph (c)(i) above, then Pechiney
International shall make payment of the Applicable Principal Amount to the
Trustee when due.
(iii) In the event that either (A) Pechiney International has not
provided the Solvency Evidence within the time period set forth in sub-paragraph
(c)(i) above or (B) an Applicable Principal Payment Notification shall have been
delivered within the time period set forth in sub-paragraph (c)(i) above and the
Settlor has not made an Affirmative Determination, then (w) Pechiney
International shall not make direct payment of the Applicable Principal Amount,
(x) if Pechiney International proffers or attempts to make a payment on the
Trust Note, the Trustee shall reject such payment and shall promptly return to
Pechiney International any proceeds received by the Trustee with respect to such
proffered or attempted payment, (y) regardless of such proffered or attempted
payment, the Trustee shall be entitled to certify in a draw certificate with
respect to a Letter of Credit that such payment has not been made and is due and
owing, and (z) the Trustee shall draw on the Mirror Letter of Credit in
satisfaction of the Applicable Principal Amount due and owing under the Trust
Note. Pechiney International shall reimburse BNP for any such draw on the Mirror
Letter of Credit pursuant to the Reimbursement Agreement dated as of December
13, 1995 between Pechiney International and BNP.
(iv) In the event that a payment is made by Pechiney International
in violation of Section 2.01(c)(iii)(w), the Settlor shall be entitled to have
the expiry date of the Letters of Credit extended for a period of six months.
(v) The term "Applicable Principal Amount" means (A) so long as the
covenant contained in Section 8(h) of the Substituted, Amended and Restated
Reimbursement Agreement dated as of December 13, 1995 (the "Reimbursement
Agreement") among Pechiney International, the Settlor and BNP has not been
violated, or would not be violated as such covenant was originally in effect, if
there has been any modification or termination thereof, any payment of principal
on the Trust Note which would cause all payments of principal in any period of
12 consecutive months to exceed US$100 million, or (B) otherwise, any payment of
principal which would cause all payments of principal in any period of 12
consecutive months to exceeds US$25 million.
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(vi) The Trustee shall follow the instructions of the Settlor in
regard to drawing under the Mirror Letter of Credit to make payments of
principal as provided in Section 2.01(c)(i) - (v) above.
(d) Except as provided in this subsection, the Settlor shall not
pay any of the Note Obligations. Only in the event that the Trustee shall
have failed to make the payment of a Note Obligation, the Settlor shall, subject
to Section 2.01(c) and the last sentence of this subsection (d), be entitled
to pay directly or indirectly (i) any Scheduled Obligation that becomes due and
owing or (ii) any Unscheduled Obligation for which a demand has been made by a
Noteholder if the Settlor has determined in good faith that such demand (or the
specified portion thereof) is not without merit and the satisfaction of such
demand (or the specified portion thereof) is necessary to protect the Settlor
from loss, upon giving the Trustee and Pechiney International not less than two
Banking Days written notice of its intention to make such payment; provided,
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however, that no such notice shall be provided with respect to payments
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under clause (i) of this subsection (d) until two Banking Days prior to the
due date; no such payment under clause (i) of this subsection (d) shall be
made prior to 3:00 p.m. (New York City time) on the due date under the Note
Obligations; and payment under clause (i) of this subsection (d) shall be
made by the Settlor only if the Settlor has not received notice from the
Trustee by 1:30 p.m. (New York City time) on the due date that payment on the
Note Obligation has been made; provided, futher, however, that no payment
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under clause (ii) shall be made unless the Settlor has complied with Section
2.01(b)(ii). Notwithstanding the above, the Settlor shall not pay any Scheduled
Obligation comprising principal until two Banking Days following the due date of
such Scheduled Obligation on such date, the Settlor may not pay such Scheduled
Obligation prior to 3:00 p.m. (New York City time), and may pay such Scheduled
Obligation only if it has not received notice from the Trustee by 1:30 p.m. (New
York City time) on such date that payment on such Scheduled Obligation has been
made. If the Trustee has received payment of an Applicable Principal Amount from
Pechiney International in accordance with Section 2.01(c)(ii), and has not made
payment to the Noteholders, and subsequently receives (x) notice from the
Settlor pursuant to Section 2.01(e) that the Settlor has made payment of such
Applicable Principal Amount and (y) evidence reasonably satisfactory to the
Settlor from Pechiney International or BNP that the Settlor has been reimbursed
for the payment of such Applicable Principal through a draw on the Mirror Letter
of Credit, the Trustee shall promptly remit the proceeds of the payment by
Pechiney International of the Applicable Principal Amount to BNP, unless
Pechiney International and BNP have notified the Trustee that BNP has been
reimbursed by Pechiney International for such draw of the Mirror Letter of
Credit, in which case the Trustee shall promptly remit such proceeds to Pechiney
International.
(e) Upon payment by the Settlor of any Note Obligations, the
Settlor shall provide prompt notice to the Trustee and Pechiney International
of such payment. The Trustee shall reimburse the Settlor from the Trust
Assets for any amount of the Note Obligations actually paid by the Settlor
except to the extent that such reimbursement has been
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made through a drawing by the Settlor on a Letter of Credit. In the event that
the Trust Assets are insufficient to make such reimbursement, the Trustee shall,
to the extent permitted thereunder, make a draw under the appropriate Letter of
Credit for such purpose. The Trustee shall so reimburse the Settlor upon
written demand made by the Settlor with a copy to Pechiney International.
(f) Pechiney International shall provide prompt notice to the
Trustee, the Settlor, and BNP that it has transferred payments on the Trust Note
to the Trust Account.
(g) The Trustee shall provide prompt notice to the Beneficiaries and
BNP that the proceeds of payments on the Trust Note have been received by it in
the Trust Account; that the Trustee has drawn on any of the Letters of Credit;
and immediate notice (prior to 1:30 p.m. (New York City time) in the case of
payment of Note Obligations) that the payment of (or reimbursement of the
Settlor for) each Note Obligation has been made.
(h) All payments made by the Trustee or the Settlor, as the case may
be, to the Noteholders shall be made without offset or reduction of any kind.
(i) In the circumstances described in paragraph 7 of the form of
drawing certificate attached to the applicable Secondary Letter of Credit, at
the time a draw under the Mirror Letter of Credit or Additional Letter of
Credit, as the case may be, is permitted or required to be made under this
Section 2.01, the Trustee shall, to the extent permitted under the applicable
Secondary Letter of Credit, make such draw under such Secondary Letter of
Credit.
SECTION 2.02. Beneficiaries Authorization. Each Beneficiary hereby
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authorizes and directs the Trustee to use the proceeds of the Trust Assets to
pay the Note Obligations or to reimburse the Settlor as provided in Section 2.01
of this Agreement.
SECTION 2.03. Trustee Not Liable for Note Obligations. All payments to
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be made by the Trustee under this Agreement shall be made only from the proceeds
of the Trust Assets. The Trustee shall not be personally liable for any Note
Obligation payment.
SECTION 2.04. Method of Payment. All amounts payable to or for the
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account of the Noteholders under this Agreement shall be paid by the Trustee by
wire transfer to such account or accounts of the Noteholders in the continental
United States as either Beneficiary may designate from time to time in
accordance with Section 3.02 of this Agreement, accompanies by such
certifications as may be reasonably requested by the Trustee. The initial bank
accounts into which the Trustee shall make or cause to be made wire transfers of
the payment of Note Obligations are set forth on Schedule 3.
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ARTICLE III
CONCERNING THE TRUSTEE
SECTION 3.01. In General. It shall be the duty of the Trustee, and the
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Trustee is authorized and directed:
(a) to enforce its rights under the Trust Note;
(b) to make drawings under the Letters of Credit to the extent
obligated to do so under this Agreement, or permitted to do so under the terms
of the Letters of Credit;
(c) to pay or cause to be paid the Note Obligations when the same
shall become due and payable (except as otherwise specified herein) and to
reimburse the Settlor as contemplated by Section 2.01 of this Agreement;
(d) to present the necessary certificate and to take or cause to be
taken all other action required to be taken so as to enable the Trustee to draw
on any of the Letters of Credit, as and to the extent necessary to pay the Note
Obligations or to reimburse the Settlor;
(e) to discharge or cause to be discharged all other responsibilities
assigned to it pursuant to the terms of this Agreement;
(f) to invest any cash, including any income on investments, that
comprises the Trust Assets in Permitted Investments (as defined in Section 3.05
of this Agreement) as directed by the Beneficiaries from time to time, provided,
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however, that such Permitted Investments shall be held until maturity or until
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any sale thereof is required to pay any amounts payable on the Note Obligations
or to reimburse the Settlor; provided, further, however, that (i) if the
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Beneficiaries are unable to agree on how such cash shall be invested, the
Trustee shall invest such cash in the Permitted Investments identified in clause
(a) of the definition of "Permitted Investments," and (ii) upon default under
the Trust Note or the Trust Agreement or the Letters of Credit by any party
other than the Settlor, the Settlor shall have the exclusive right to direct the
Trustee's investment in Permitted Investments; and
(g) to sell any Permitted Investments, to the extent needed, to pay
any amounts due on the Note Obligations. Any loss of principal or otherwise
resulting from the sale of Permitted Investments shall be borne by the Trust
Assets.
SECTION 3.02. Action upon Instructions. (a) In addition to (but not in
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limitation of) the duties of the Trustee to take certain actions and/or to
respond to the directions of Pechiney International or the Settlor as set forth
elsewhere in this Agreement, the Beneficiaries jointly and not severally may
direct the Trustee in the administration of the
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Trust by giving the Trustee written instructions duly signed by an officer of
each Beneficiary, with evidence of the authority of such officer in the form of
an incumbency certificate. No such instructions shall be inconsistent with the
purpose of the Trust. Each of the Beneficiaries agrees to in good faith provide
such instructions as may be necessary to enable the Trustee to carry out the
purpose of this Trust.
(b) The Trustee will take or refrain from taking such action or
actions as may be specified in any joint written instructions delivered to the
Trustee by the Beneficiaries, provided that the Trustee shall not be required to
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take or refrain from taking any such action if the Trustee shall reasonably
determine, or shall have been advised by counsel, that such action or inaction
is likely to result in personal liability on the part of the Trustee, or is
contrary to the terms hereof or of any document contemplated hereby to which the
Trustee is a party or otherwise contrary to law.
(c) Whenever the terms of this Agreement do not require the Trustee
to pursue a specific course of action and the Trustee is unable to decide
between alternative courses of action or conflicting instructions from the
Beneficiaries, the Trustee may give notice to the Beneficiaries requesting
instructions or clarification (to be given in such form as shall be appropriate
under the circumstances) as to the course of action to be adopted and, to the
extent the Trustee acts in good faith in accordance with instructions received
from the Beneficiaries, the Trustee shall not be liable to any person, provided
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that in the event the Trustee does not receive such instructions within ten days
of such notice (or within such shorter period of time as may be specified in
such notice) or continues to receive conflicting instructions, it may, but shall
be under no duty to, take or refrain from taking such action, not inconsistent
with this Agreement, as it shall deem to be in the best interests of the
Beneficiaries, or seek instructions from a court of competent jurisdiction.
(d) The Trustee may consult with counsel and the written advice of
such counsel shall be full and complete authorization and protection in respect
of any action taken, suffered or omitted by it hereunder in good faith and in
reliance thereon.
SECTION 3.03. No Action Except Under Agreement or Instructions. The
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Trustee agrees that it will not manage, control, use, sell, pledge, encumber,
dispose or otherwise deal with the Trust Assets, except as permitted or required
by the terms of this Agreement.
SECTION 3.04. Further Assurances. The Trustee shall execute and
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deliver all such other instruments, documents or certificates as the
Beneficiaries may deem necessary or advisable in connection with the
transactions contemplated hereby.
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SECTION 3.05. Restrictions. Except as may otherwise be required under
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this Agreement, or pursuant to the joint written instructions of the
Beneficiaries as provided in Section 3.02 above, the Trustee shall take no
action or cause any action to be taken:
(a) to modify, waive, repeal, supplement, alter, amend or terminate
any of the terms and conditions of the Trust Note;
(b) to create, incur, assume or suffer to exist any lien, security
interest or other charge or encumbrance, or any other type of preferential
arrangement, upon or with respect to the Trust or any of the Trust Assets
or assign any right to receive income, in each case to secure or provide
for the payment of any debt of any person or entity (other than proper
charges against the Trust Assets for fees and expenses for administering
the Trust);
(c) to create, incur, assume or suffer to exist any Debt (as
hereinafter defined) of the Trust or with recourse to the Trust Assets,
whether directly or indirectly;
(d) to create, incur, assume or suffer to exist any obligations of
any trust created hereunder for the payment of rental for any property
under leases or agreements to lease; or
(e) to institute any proceeding by or against the Trust seeking to
adjudicate it a bankrupt or insolvent, or seeking liquidation,
rehabilitation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking
the entry of an order for relief or the appointment of a receiver, trustee,
custodian or other similar official for it or all or any substantial part
of its property, or making a general assignment for the benefit of its
creditors.
"Debt" shall mean (A) all indebtedness for borrowed money, (B) all
----
obligations evidenced by notes, bonds, debentures or other similar instruments,
(C) all obligations for the deferred purchase price of property or services, (D)
all obligations created or arising under any conditional sale or other title
retention agreement with respect to property acquired by any trust created
hereunder (even though the rights and remedies of the seller or lender under
such agreement in the event of default are limited to repossession or sale of
such property), (E) all obligations as lessee under leases that have been or
should be, in accordance with generally accepted accounting principles, recorded
as capital leases, (F) all obligations, contingent or otherwise, under
acceptance, letter of credit or similar facilities, (G) all Debt of others
referred to in clauses (A) through (F) above guaranteed directly or indirectly
by any trust created hereunder through an agreement (I) to pay or purchase such
Debt or to advance or supply funds for the payment or purchase of such Debt,
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(II) to purchase, sell or lease (as lessee or lessor) property, or to purchase
or sell services, primarily for the purpose of enabling the debtor to make
payment of such Debt or to assure the holder of such Debt against loss, (III) to
supply funds to or in any other manner invest in the debtor (including any
agreement to pay for property or services irrespective of whether such property
is received or such services are rendered) or (IV) otherwise to assure a
creditor against loss, and (H) all Debt referred to in clauses (A) through (F)
above secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any lien on property (including,
without limitation, accounts and contract rights) owned by any trust created
hereunder, even though it has not assumed or become liable for the payment of
such Debt; and
"Permitted Investment" shall mean any of the following: (a) readily
--------------------
marketable direct obligations of the Government of the United States or any
agency or instrumentality thereof supported by, or other obligations
unconditionally guaranteed by, the full faith and credit of the United States;
(b) certificates of deposit or bankers' acceptances of, or time deposits with,
any commercial bank (which may include the Trustee individually if it otherwise
qualifies hereunder) that (i) is a member of the Federal Reserve System, (ii)
issues (or the parent of which issues) commercial paper rated as described in
clause (c) below, (iii) is organized under the laws of the United States or any
State thereof and (iv) has combined capital and surplus of at least
U.S.$500,000,000; or (c) commercial paper issued by any corporation organized
under the laws of any State of the United States and rated at least "Prime-1"
(or the then equivalent grade) by ▇▇▇▇▇'▇ Investor Service, Inc. or "A-1" (or
the then equivalent grade) by Standard & Poor's Corporation Rating Group, each
of (a) through (c) having a remaining maturity of less than 180 days.
SECTION 3.06. Power and Authority. (a) The Trustee shall have all the
-------------------
requisite power, authority and discretion as shall be necessary or appropriate
to enable it to take all such actions as it is required to take pursuant to this
Agreement. The Trustee shall have no liability hereunder except for its own bad
faith, gross negligence or willful misconduct.
(b) The Trustee shall be protected and shall incur no liability for
or in respect of any action taken or omitted to be taken or anything suffered by
it in reliance upon any notice, direction, consent, certificate, affidavit,
statement or other paper or document reasonably believed by it to be genuine and
to have been presented or signed by the proper parties.
(c) The Trustee shall be obligated to perform such duties and only
such duties as are herein specifically set forth, and no implied duties or
obligations shall be read into this Agreement. The Trustee shall not be under
any obligation to take any action hereunder which may tend to involve it in any
expense or liability the payment of which within a reasonable time is not, in
its reasonable opinion, assured to it.
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(d) The provisions of this Agreement, to the extent they restrict the
duties and liabilities of a trustee at law or in equity, are agreed by the
parties hereto to replace such other duties and liabilities of the Trustee.
SECTION 3.07 Trustee Reports. On the last day of each calendar
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quarter, the Trustee shall furnish to each Beneficiary and BNP a written report
setting forth the receipt of payments by the Trustee under the Trust Note, the
payments made by the Trustee on the Pechiney Corporation Notes, drawings under
any of the Letters of Credit, if any, during such quarter, and a statement of
cash on hand and Permitted Investments as of the end of each quarter. At any
time at the request of either Beneficiary, the Trustee shall report to each
Beneficiary and BNP the Available Amounts (as defined in the Letters of Credit)
and such other information as is reasonably requested by either Beneficiary.
SECTION 3.08. Trustee Notice. The Trustee shall promptly forward to
--------------
each Beneficiary and BNP a copy of any notices it receives under this Agreement.
ARTICLE IV
LETTERS OF CREDIT
SECTION 4.01. Conditions to Drawing. If the Trustee shall be required
---------------------
to draw on any of the Letters of Credit under this Agreement or shall be
permitted to draw under any such Letter of Credit and directed to do so by the
Settlor, the Trustee shall take or cause to be taken all actions necessary to
satisfy any condition to drawing under such Letter of Credit. Each Beneficiary
shall, to the extent available to such Beneficiary, furnish the Trustee with
such certificates, documents or other information required by any of the Letters
of Credit in connection with any drawing under such Letter of Credit. The
Trustee shall be entitled to rely on a certificate of any officer of either
Beneficiary as to any factual matter required to be set forth in a certificate
to be presented to the issuer of any of the Letters of Credit as a condition to
drawing.
SECTION 4.02. Drawings. (a) Subject to Section 4.02(b) below, the
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Trustee shall draw on the Letters of Credit to pay the Note Obligations or to
reimburse the Settlor as provided in Section 2.01 of this Agreement, and shall
not draw on the Letters of Credit for any other purpose.
(b) If and when the Trustee receives written notice from either
Beneficiary that the conditions for drawing by the Trustee under any Letter of
Credit have been satisfied, the Trustee shall make a drawing under such Letter
of Credit to the extent permitted thereunder.
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(c) Should an acceptable Substitute Letter of Credit (as defined in
Section 5.16 of the Stock Purchase Agreement, dated as of October 12, 1995,
among Pechiney International, Pechiney, a societe anonyme organized under the
laws of the Republic of France ("Pechiney"), Howmet Cercast S.A., a societe
--------
anonyme organized under the laws of the Republic of France, and Blade
Acquisition Corp., a Delaware corporation, hereinafter referred to as the "Stock
Purchase Agreement") be provided by Pechiney or Pechiney International to the
Settlor, the Settlor shall deposit such Substitute Letter of Credit into the
Trust Account. Upon its receipt of such Substitute Letter of Credit, the Trustee
shall promptly return the Letter of Credit for which the Substitute Letter of
Credit was provided to the issuer of such Letter of Credit. Should such
Substitute Letter of Credit be deposited after a drawing has been made on a
Letter of Credit in accordance with the penultimate sentence of Section 5.16 of
the Stock Purchase Agreement but prior to the payment of such funds by the
Trustee, the Trustee shall remit the proceeds of such drawing to the issuer of
such Letter of Credit, unless Pechiney International and the issuer of such
Letter of Credit have notified the Trustee that such issuer has been reimbursed
by Pechiney International for such draw of such Letter of Credit, in which case
the Trustee shall remit such proceeds to Pechiney International.
(d) If the Trustee receives notice from the Settlor that the Settlor
intends to draw on any of the Letters of Credit, the Trustee shall draw on such
Letter of Credit to the extent permitted thereunder.
(e) The Trustee and Pechiney International acknowledge and agree that
if, for any reason, the Trustee fails to draw on any Letter of Credit in the
circumstances and on the terms and conditions therein, the Settlor shall be
entitled to make such drawing on behalf of the Trustee. The Settlor shall give
prompt notice to the Trustee and Pechiney International that the Settlor has
drawn upon any Letter of Credit. The Settlor agrees that it will cause any
funds drawn under any Letter of Credit to pay Note Obligations to be deposited
directly into the Trust for the sole purpose of making payment of the Note
Obligations as the Note Obligations become due and payable.
ARTICLE V
TERMINATION OF TRUST AGREEMENT
SECTION 5.01. Termination of Trust Agreement. (a) This Agreement and
------------------------------
the trust created hereby are irrevocable and shall terminate, and the Trust
Assets (other than the Letter of Credit) shall be, subject to any obligation of
the Trustee to return funds to the issuer of a Letter of Credit or to Pechiney
International as provided herein, distributed to the Settlor (99.999%) and
Pechiney International (0.001%), and this Agreement shall be of no further force
or effect, solely upon the earlier of (i) a date which is not earlier than the
date
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that all of the Note Obligations shall have been indefeasibly paid in full,
provided that in no event shall the Trust Agreement terminate prior to a date 10
--------
days after the expiry of all Letters of Credit, (ii) upon receipt by the Trustee
of a notice terminating this Agreement duly signed by each of the Beneficiaries,
and (iii) upon the expiration of a period ending twenty-one (21) years after the
death of the survivor of the directors of Pechiney International as of the date
of this Agreement. The bankruptcy or incapacity of the Beneficiaries or the
Trustee shall not operate to terminate this Agreement, nor entitle the
Beneficiaries' legal representatives to claim an accounting or to take any
action or proceeding in any court for a partition or winding up of the Trust, or
otherwise affect the rights, obligations and liabilities of the parties hereto.
(b) Upon return of the Pechiney Corporation Notes to the Settlor for
cancellation, upon payment in full, the Settlor shall promptly provide copies of
such cancelled Pechiney Corporation Notes to Pechiney International.
(c) Upon termination of the Trust, the Trustee shall promptly return
each Letter of Credit to its issuer for cancellation.
ARTICLE VI
SUCCESSOR TRUSTEES AND ADDITIONAL TRUSTEES
SECTION 6.01. Resignation of Trustee; Appointment of Successor. (a)
------------------------------------------------
The Trustee may resign at any time without cause by giving at least 60 days'
prior written notice to the Beneficiaries, such resignation to be effective on
the acceptance of appointment by a successor Trustee under Section 6.01(b). In
case of the resignation of the Trustee, Pechiney International and the Settlor
shall jointly appoint a successor Trustee by an instrument signed by the Settlor
and Pechiney International. If a successor Trustee shall not have been appointed
within 30 days after the giving of written notice of such resignation, the
Settlor may appoint a successor Trustee; if the Settlor does not make such an
appointment within an additional 60 days, then Pechiney International or the
Trustee may apply to any court of competent jurisdiction to appoint a successor
Trustee to act until such time, if any, as a successor shall have been appointed
as above provided. Any successor Trustee so appointed by such court shall
immediately and without further act be superseded by any successor Trustee
appointed as above provided within one year from the date of the appointment by
such court.
(b) Any successor Trustee, however appointed, shall execute and
deliver to the predecessor Trustee an instrument accepting such appointment, and
thereupon such successor Trustee, without further act, shall become vested with
all the estates, properties, rights, powers, duties and trusts of the
predecessor Trustee in the trusts hereunder with like
16
effect as if originally named the Trustee herein; but nevertheless, upon the
written request of such successor Trustee, such predecessor Trustee shall
execute and deliver an instrument transferring to such successor Trustee, upon
the trusts herein expressed, all the estates, properties, rights, powers, duties
and trusts of such predecessor Trustee, and such predecessor Trustee shall duly
assign, transfer, deliver and pay over to such successor Trustee all moneys or
other property then held or subsequently received by such predecessor Trustee
upon the trusts herein expressed.
(c) Any successor Trustee, however appointed, shall be a bank or
trust company incorporated under the laws of the United States or any state
thereof, having a combined capital and surplus of at least US$500,000,000, and
rated at least "A-3" (or the then equivalent grade) by ▇▇▇▇▇'▇ Investor Service,
Inc. or "A-" (or the then equivalent grade) by Standard & Poor's Corporation
Rating Group, in each case at the time of appointment.
(d) Any corporation into which the Trustee may be merged or converted
or with which it may be consolidated, or any corporation resulting from any
merger, conversion or consolidation to which the Trustee shall be a party, or
any corporation to which substantially all the corporate trust business of the
Trustee may be transferred, shall, be the Trustee under this Agreement without
further act; provided, however, that if such resulting corporation does not
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conform to the requirements of Section 6.01(c), such Trustee shall give notice
of resignation pursuant to Section 6.01(a) effective upon such merger,
conversion or consolidation.
SECTION 6.02. Removal of Trustee. At any time Pechiney International
------------------
and the Settlor may jointly agree to remove the Trustee for any reason, with or
without cause, and appoint a successor trustee of the kind described in Section
6.01(c) of this Agreement, such removal to be effective on the acceptance of
appointment by a successor Trustee under Section 6.01(b). The Settlor shall have
the right unilaterally to remove the Trustee in the event that the Settlor
determines in good faith that the Trustee has not acceptably performed its
duties under this Agreement and appoint a successor Trustee of the kind
described in Section 6.01(c) of this Agreement, such removal to be effective on
the acceptance of appointment by a successor Trustee under Section 6.01(b). Upon
acceptance in writing by a successor trustee of the appointment as trustee
hereunder, such successor Trustee shall succeed to and become vested with, all
of the rights, powers, privileges and duties of the removed Trustee, and the
removed Trustee shall pay to the successor Trustee any unearned compensation
that had been prepaid to the removed Trustee. Upon such acceptance, the removed
Trustee shall be discharged from further responsibilities under this Agreement.
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ARTICLE VII
INDEMNIFICATION BY PECHINEY INTERNATIONAL
SECTION 7.01. Trust Expense. Pechiney International shall pay (or
-------------
reimburse the Trustee for) all reasonable expenses of the Trustee hereunder,
including, without limitation, the reasonable compensation, expenses and
disbursements of such agents, representatives experts and counsel as the Trustee
may employ in connection with the exercise and performance of its rights and
duties under this Agreement.
SECTION 7.02. Indemnification. Pechiney International hereby agrees to
---------------
assume liability for, and indemnify the Trustee and its successors, assigns, and
agents, against and from, any and all liabilities, obligations, losses, damages,
taxes, claims, actions, suits, costs, expenses and disbursements (including
legal fees and expenses) of any kind and nature whatsoever (collectively,
"Expenses") which may be imposed on, incurred by or asserted at any time against
--------
the Trustee (whether or not indemnified against by other parties) in any way
relating to or arising out of this Agreement, the administration of the Trust or
the action or inaction of the Trustee hereunder, except that Pechiney
International shall not be required to indemnify the Trustee for Expenses
arising or resulting from (i) its own bad faith, gross negligence or willful
misconduct in the performance of its duties hereunder or (ii) for taxes, fees or
other charges on, based on or measured by any fees, commissions or compensation
received by the Trustee in connection with any of the transactions contemplated
by this Agreement.
SECTION 7.03. Compensation. The Trustee shall receive as compensation
------------
for the Trustee's services hereunder such ordinary fees as are fair, reasonable
and customary for the performance of such services and as may heretofore and
from time to time hereafter be agreed upon between Pechiney International and
the Trustee; provided, that in the absence of such an agreement, the Trustee's
--------
standard rates shall apply.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.01. Supplements and Amendments. (a) At the written request
--------------------------
of each Beneficiary, this Agreement shall be amended by a written instrument
signed by the Trustee and each Beneficiary; provided, however, that if in the
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opinion of the Trustee any instrument required to be so executed adversely
affects any right, duty or liability of, or immunity or indemnity in favor or,
the Trustee under this Agreement or any of the documents contemplated hereby to
which the Trustee is a party, or would cause or result in any conflict with or
breach of any terms, conditions or provisions of, or default under, the
18
charter documents or by-laws of the Trustee or any document contemplated hereby
to which the Trustee is a party, the Trustee may in its sole discretion decline
to execute such instrument. Nothing herein shall imply that either Beneficiary
has any obligation to consent to any request for an amendment by the other
Beneficiary, and either Beneficiary may, if it should choose to consider any
such request, require such other Beneficiary to furnish assurances, opinions and
indemnities in connection with such proposed amendment as a condition to its
consent thereto.
(b) The Trustee shall furnish the Settlor, Pechiney International,
and any Settlor Transferee (as defined in the Letters of Credit) with certified
copies of any supplements or amendments to any Letters of Credit pursuant to the
provisions of Section 8.09(c).
SECTION 8.02. No Legal Title to Trust Estate in Beneficiaries. The
-----------------------------------------------
Beneficiaries shall not have legal title to any part of the Trust Assets and
shall not be entitled to receive any distributions from the Trust, except the
Beneficiaries will be entitled to receive any residual Trust Assets pursuant to
Section 5.01 of this Agreement and the Settlor shall be entitled to
reimbursement for payments made by it on the Note Obligations.
SECTION 8.03. Limitations on Rights of Others. Except as otherwise
-------------------------------
provided herein with respect to the issuer of any Letter of Credit, nothing in
this Agreement, whether express or implied, shall be construed to give to any
person other than the Trustee, and the Beneficiaries any legal or equitable
right in the Trust Assets or under or in respect of this Agreement or any
covenants, conditions or provisions contained herein.
SECTION 8.04. Tax Reporting. The parties hereto agree that the
-------------
Settlor shall include in its gross income all taxable income earned on Trust
Assets and any gain therefrom in accordance with Treasury Regulation 1.61-13(b).
SECTION 8.05. Notices. (a) Each Beneficiary shall promptly furnish to
-------
the Trustee and the other Beneficiary copies of all written materials relating
to the Pechiney Corporation Notes received from the Noteholders or persons
acting on their behalf.
(b) Unless otherwise expressly specified or permitted by the terms
hereof, all notices shall be in writing and delivered by hand or mailed by
certified mail, postage prepaid or by facsimile with telephonic confirmation by
the designated recipient, if to the Trustee, at its office at The First National
Bank of Chicago, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Administration, Fax: (▇▇▇)▇▇▇-▇▇▇▇ or to
such other address or facsimile number as the Trustee may have set forth in a
written notice to each Beneficiary; if to Settlor, at its address at Pechiney
Corporation, ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention:
General Counsel and Chief Financial Officer, Fax: (▇▇▇) ▇▇▇-▇▇▇▇; if to Pechiney
International at its address at
19
Pechiney International S.A., ▇▇, ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇▇▇ ▇▇▇▇▇ La
Defense, France, Attention: Directeur Financier, Fax: ▇▇▇-▇▇▇-▇▇▇▇-▇▇▇▇; if to
BNP at its New York Branch at its address at One World Financial Center, 20th
Floor, Tower A, ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇-▇▇▇▇, Attention:
Vice President-Standby Letters of Credit, Fax: (▇▇▇)▇▇▇-▇▇▇▇ or, in each case,
such other address or facsimile number as set forth in a written notice to the
other Beneficiary and to the Trustee. Whenever any notice in writing is required
to be given by the Trustee or either Beneficiary, such notice shall be deemed
given and such requirement satisfied if such notice is received within the
required notice period.
SECTION 8.06. Certain Matters Regarding Noteholders. (a) Pechiney
-------------------------------------
International shall have the sole right to control the resolution of any dispute
with the Noteholders relating to the Pechiney Corporation Notes and the Note
Obligations, provided, however, that nothing in this Section will affect the
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right of the Trustee or Settlor to make payments to the Noteholders or
reimbursements to the Settlor for such payments, and to make drawings under the
Letters of Credit for such purpose, as set forth in this Agreement. The Settlor
agrees that any payment made by the Settlor of a Note Obligation pursuant to
Section 2.01(d)(ii) shall be made expressly without prejudice and with
reservation of all rights. In connection with any demand for payment by the
Noteholders, the Settlor shall furnish to Pechiney International all written
materials relating to such demand received from the Noteholders (or their
pledgees and assigns, or anyone acting in their behalf) at the time of their
initial demand, as soon as practicable after the Settlor shall have received
such materials, but in any event not less than six Banking Days before
satisfaction of such demand (or the specified portion thereof) by the Settlor
pursuant to Section 2.01(d)(ii).
(b) In addition, the Settlor shall promptly furnish to Pechiney
International all written materials received from the Noteholders from time to
time after the initial demand referred to in Section 8.06(a).
(c) (i) In the event that Pechiney International desires that Settlor
exercise rights of offset under the Pechiney Corporation Series B Notes (the
"Series B Notes"), it shall so notify Settlor and the Trustee no later than 60
days prior to the maturity date of the Series B Notes, specifying (x) the
aggregate amount that Pechiney International proposes to offset against the
Series B Notes (the "Offset Amount"), which Offset Amount shall in no event
exceed $12 million, (y) the specific Notes against which Pechiney International
proposes to make such offset and amount proposed to be offset against each such
Note and (z) in reasonable detail, the basis for such proposed offset (the
"Offset Notification"). Concurrent with the delivery of the Offset Notification,
Pechiney International will deliver to Settlor and the Trustee an opinion of
counsel of national repute that Settlor is entitled to claim the proposed offset
under the terms of the Series B Notes (the "Offset Opinion").
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(ii) If (x) Pechiney International has delivered the Offset
Notification and the Offset Opinion within the time period set forth above, (y)
Pechiney International has not failed to pay to Settlor any amount then due to
Settlor from Pechiney International under the Stock Purchase Agreement and (z)
Pechiney International has delivered to Settlor a letter of credit in the form
described in subsection (iii) below (the "Offset Letter of Credit"), then,
subject to the provisions of this Section 8.06(c), upon payment in full of the
Trust Note, the Trustee shall retain in the Trust (and not pay to the
Noteholders of the Series B Notes specified in the Offset Notification except
pursuant to the provisions of subsection (v) or (vi) below) an amount equal to
the Offset Amount (such retained amount, together with increases thereto under
Section 8.06(c)(v) and earnings thereon, the "Retained Amount").
(iii) The Offset Letter of Credit shall (x) name Settlor as the
beneficiary, be in an amount equal to one-third of the Offset Amount and support
the payment of all obligations of Pechiney International to Settlor under this
Section 8.06(c), (y) be issued by a financial institution meeting the Credit
Standard (as defined in the Letters of Credit), and (z) contain terms and
conditions substantially similar to the Letter of Credit issued pursuant to
Section 7.09 of the Stock Purchase Agreement, except that (A) the obligations of
Pechiney International under this Section 8.06(c) shall be substituted for the
"Tax Indemnity Obligations" therein, (B) there shall be no requirement for the
proceeds of draws under Option Three thereof to be placed into escrow pursuant
to an escrow agreement, (C) there shall be no requirement for consultation with
a law firm prior to draws under Options One or Two thereof and (D) the
beneficiary shall be entitled to make draws under the circumstances specified in
subsection (v) below.
(iv) Pechiney International shall attempt in good faith and
consistent with its own interests to resolve any disputes with the Noteholders
concerning the offset made pursuant to subsection (ii) above and will provide
the Noteholders with all materials as may be necessary to establish Settlor's
entitlement to make such offset. Pechiney International shall promptly reimburse
Settlor for all costs and expenses of compliance with the provisions of this
Section 8.06(c), and indemnify and hold harmless Settlor, its affiliates and
their respective officers, directors, representatives and agents ("Settlor
Indemnities") from and against any and all losses, liabilities, damages, claims
awards, judgments, costs and expenses (including, without limitation, attorneys'
fees and expenses) arising out of or relating to any actions taken pursuant to
this Section 8.06(c) or any claims by the Noteholders in connection with the
offset against the Series B Notes.
(v) In the event that Settlor determines in good faith that the
Retained Amount and the Offset Letter of Credit are insufficient to cover (x)
the principal amount of any offset against the Series B Notes that is disputed
by the Noteholders, (y) the interest that would have accrued on such amount
under the Series B Notes had such offset not been made and (z) any unpaid
amounts owing or reasonably likely to become owing under Section 8.06(c) (iv)
above, it shall so notify Pechiney International and request an increase in
21
the amount of the Offset Letter of Credit and/or an increase in the Retained
Amount. If Pechiney International does not provide such increase(s) within ten
(10) Banking Days following such request, Settlor shall be entitled to request
the Trustee to pay to the appropriate Noteholders such portion of the Retained
Amount as is then sought by such Noteholders (and upon receipt of such notice,
the Trustee shall make such payment); and if such amount is insufficient to pay
the full amount demanded by such Noteholders, Settlor shall be entitled to draw
on the Offset Letter of Credit for purposes of paying such deficiency.
(vi) In the event Pechiney International determines that any portion
of the Retained Amount is payable to the Noteholders under the Series B Notes,
it shall so notify the Trustee and the Trustee shall make payments to the
Noteholders in accordance with such notice. Upon receipt of joint instructions
of the Beneficiaries prior to the termination of this Trust Agreement, the
Trustee shall promptly remit the Retained Amount (or the specified portion
thereof) in accordance with such instructions. The Settlor shall respond in good
faith to a request from Pechiney International to instruct the Trustee jointly
to so remit the Retained Amount (or the specified portion thereof).
(vii) Until final resolution of any and all disputes with the holders
of the Series B Notes regarding the offsets under this Section 8.06(c), the
Series B Notes shall not be deemed to have been indefeasibly paid in full and
this Trust Agreement shall not terminate.
(d) Prompt written notice shall be given to the Trustee and the
Settlor by Pechiney International in the event of any reduction in the Note
Obligations.
SECTION 8.07. Severability. Any provision of this Agreement which is
------------
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not be invalidate or render
unenforceable such provision in any other jurisdiction.
SECTION 8.08. Separate Counterparts. This Agreement may be executed
---------------------
by the parties hereto in separate counterparts, each of which when so executed
and delivered shall be an original, but all such counterparts shall together
constitute but one and the same instrument.
SECTION 8.09. Successors. (a) All covenants and agreements contained
----------
herein shall be binding upon, and inure to the benefit of, the Trustee and its
successors and each Beneficiary and its successors. Any request, notice,
direction, consent, waiver or other instrument or action by such Beneficiary
shall bind the successors of such Beneficiary. It is acknowledged and agreed
that the Settlor may assign its rights hereunder to a Settlor
22
Transferee as described below as collateral security, and in such event, the
Settlor Transferee may, to the extent provided in the respective security
documents, directly exercise any or all rights of the Settlor hereunder.
(b) The Letters of Credit are not transferable by either Beneficiary,
except by the Trustee to a successor Trustee as provided in Section 6.01(b), and
by the Settlor as a whole and not in part to a lender or an agent acting on
behalf of one or more lenders to Settlor or any of its affiliates as collateral
security (a "Settler Transferee"), and a Settlor Transferee may further transfer
------------------
any Letter of Credit back to the Settlor or to another Settlor Transferee. The
transfer described above may be made successively without limitation as to the
number of transfers.
(c) The Trustee and Pechiney International acknowledge that the
Settlor intends to initially assign its beneficial interest in the Letters of
Credit to The First National Bank of Chicago, as agent and as collateral agent
(the "Agent"), for its own benefit and for the benefit of the lenders that will
be party to a Credit Agreement among the Settlor, such lenders and the Agent,
and agree that the Agent is a Settlor Transferee. The Trustee and Pechiney
International further agree that the Settlor Transferee shall be permitted, upon
delivery of a valid Transfer Certificate (as defined in the Letters of Credit)
to the Trustee and Pechiney International, to draw under the Letters of Credit
in the place and stead of the Settlor and on the same terms and conditions that
the Settlor would have been entitled to draw. No Settler Transferee will have
any greater rights under or with respect to any of the Letters of Credit than
the Settlor would have had. The Settlor Transferee shall not receive any of the
Letters of Credit, which shall be held at all times by the Trustee, but shall be
entitled to rely for purposes of drawing on any of the Letters of Credit on a
photocopy thereof certified by the Trustee to be a true and correct copy
thereof. The Trustee shall furnish to the Settlor, Pechiney International and
the Settlor Transferee, and to any successor identified in a written notice from
the Settlor to the Trustee (with a copy to Pechiney International), certified
copies of each of the Letters of Credit and certified copies of all amendments
to any of the Letters of Credit promptly after receipt by the Trustee thereof.
(d) If a Settlor Transferee or successor Trustee shall deliver a
valid Transfer Certificate to an issuer of a Letter of Credit, such issuer shall
issue replacement Letters of Credit (the "Replacement Letters of Credit") to the
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Trustee modified to reflect the relevant Settlor Transferee or successor
Trustee, as the case may be, with otherwise identical terms and conditions as
the Letters of Credit. Simultaneously with its receipt of and in exchange for
such Replacement Letters of Credit, the Trustee shall return each Letter of
Credit to the issuer of such Letter of Credit.
SECTION 8.10. Headings. The headings of the various Articles and
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Sections herein are for convenience of reference only and shall not define or
limit any of the terms or provisions hereof.
23
SECTION 8.11. Governing Law. This Agreement shall in all respect be
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governed by, and construed in accordance with, the laws of the State of New
York, including all matters of construction, validity and performance.
SECTION 8.12. Entire Agreement. This Trust Agreement embodies the
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final, entire agreement of the Settlor, the Trustee and Pechiney International
with respect to the Trust and supersedes any and all prior commitments,
agreements, representations, and understandings, whether written or oral,
relating to the subject matter hereof and may not be contradicted or varied by
evidence of prior, contemporaneous or subsequent oral agreements or discussions
of the parties hereto; provided, however, that nothing herein supersedes the
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commitments, agreements, representations, and understandings set forth in the
Stock Purchase Agreement (other than Section 5.08 and Exhibits 5.08(a) and (b),
and such Section 5.08 and Exhibits 5.08(a) and (b) are expressly superseded), as
amended, and as may be modified and amended from time to time. There are no oral
agreements among the parties hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed by their respective officers hereunto duly
authorized, as of the day and year first above written.
The Settlor
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PECHINEY CORPORATION
By /s/
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Title:
PECHINEY INTERNATIONAL S.A.
By /s/
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Title:
The Trustee
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THE FIRST NATIONAL BANK OF
CHICAGO
By /s/
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Title: