Merrill Lynch Professional Clearing Corp. Supplemental ... · Merrill Lynch Professional Clearing...

Current as of: September 15, 2018

Merrill Lynch Professional Clearing Corp. One Bryant Park, New York, New York 10036

Merrill Lynch Professional Clearing Corp. Supplemental Data for Private Placement of

Floating Rate Preferred Stock

TABLE OF CONTENTS

# of pages

MERRILL LYNCH PROFESSIONAL CLEARING CORP

CERTIFICATE OF INCORPORATION 16

MERRILL LYNCH PROFESSIONAL CLEARING CORP BY-LAWS 20

MERRILL LYNCH PROFESSIONAL CLEARING CORP FORM OF

FLOATING RATE PREFERRED STOCK PURCHASE AGREEMENT 13

MERRILL LYNCH PROFESSIONAL CLEARING CORP FORM

OF STOCK CERTIFICATE 2



Merrill Lynch Professional Clearing Corp

Certificate of Incorporation

DelawareThe First State

Page 1

2050978 8100 Authentication: 202789004SR# 20184481173 Date: 05-30-18You may verify this certificate online at corp.delaware.gov/authver.shtml

I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF

DELAWARE, DO HEREBY CERTIFY THE ATTACHED IS A TRUE AND CORRECT

COPY OF THE RESTATED CERTIFICATE OF “MERRILL LYNCH PROFESSIONAL

CLEARING CORP.”, FILED IN THIS OFFICE ON THE TWENTY-NINTH DAY

OF MAY, A.D. 2018, AT 12:30 O`CLOCK P.M.

A FILED COPY OF THIS CERTIFICATE HAS BEEN FORWARDED TO THE

NEW CASTLE COUNTY RECORDER OF DEEDS.

ARTICLE III

CORPORATE PURPOSES

The purpose of the Corporation is to engage in any lawful act or activity for which corporations may be organized under the General Corporation Law of the State of Delaware.

ARTICLE IV

CAPITAL STOCK

SECTION 1. Shares, Classes and Series Authorized. The total number of shares of all classes of capital stock which the Corporation shall have authority to issue is sixty thousand (60,000) shares, of which fifty thousand (50,000) shares shall be Common Stock, par value of one dollar ($1.00) per share (hereinafter called "Common Stock"), and ten thousand (10,000) shares shall be preferred stock, of which two thousand five hundred (2,500) shares shall be considered 5% Preferred Stock, par value of one dollar ($1.00) per share, liquidation preference $1,000 per share (hereinafter called "Preferred Stock"), five thousand (5,000) shares shall be considered Floating Rate Preferred Stock, par value of one dollar ($1.00) per share, liquidation preference $1,000 per share (hereinafter called "Floating Rate Preferred Stock"), and the remaining two thousand five hundred (2,500) shares have yet to have terms designated.

SECTION 2. Description of Capital Stock. The following is a description of each of the classes of capital stock which the Corporation has authority to issue with the designations, preferences, voting powers and participating, optional or other special rights and the qualifications, limitations or restrictions thereof:

5% PREFERRED STOCK

(a) Voting Rights. Shares of Preferred Stock shall have no voting rights with respectto election of directors of the Corporation, amendment of the Certificate of Incorporation of the Corporation, increase, decrease or other adjustment of the authorized shares of any class or series of shares of the capital stock of the Corporation or otherwise, except as affirmatively required by law.

(b) Dividends. Each share of Preferred Stock shall be entitled to a cumulative cashdividend rate of 5% per annum of the liquidation preference thereof, and the holder thereof on each March 1 shall be entitled to receive payment thereof, when and as declared payable by the Board of Directors, in the amount of $50.00 on March 15 of each year, and no more, and such holder shall not be entitled to receive or participate in any other or additional dividend, whether payable in cash, property or securities of the Corporation or otherwise, declared and paid by the Corporation. No dividend may be paid on any shares of the Common Stock of the Corporation as long as any dividend on any share of Preferred Stock is payable but unpaid. Dividends on the Preferred Stock need not enjoy any priority of payment with respect to the dividend rights of any shares of any other class or series of preferred or special stock of the Corporation and may be or become inferior in priority of payment with respect to the dividend rights of any such shares issued by the Corporation.

2



By-Laws



Merrill Lynch Professional Clearing Corp Form of Floating Rate Preferred Stock Purchase

Agreement


Rev. September 15, 2018

MERRILL LYNCH PROFESSIONAL CLEARING CORP.

FLOATING RATE PREFERRED STOCK PURCHASE AGREEMENT

(MLPCC Form No. FRPSPA2)

i Rev. September 15, 2018

TABLE OF CONTENTS

UPage

ARTICLE I

PURCHASE AND SALE

SECTION 1.1 Purchase and Sale .................................................................................... 1 SECTION 1.2 Closing ..................................................................................................... 1 SECTION 1.3 Regulatory Approval ................................................................................ 1

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF MLPCC

SECTION 2.1 Corporate Organization ............................................................................ 2 SECTION 2.2 Corporate Authority ................................................................................. 2 SECTION 2.3 Due Authorizations of Shares .................................................................. 2 SECTION 2.4 Governmental Consents ........................................................................... 2 SECTION 2.5 Licenses.................................................................................................... 2 SECTION 2.6 Representations and Warranties at Closing ............................................. 2

ARTICLE III

COVENANTS OF MLPCC

SECTION 3.1 Financial Statements ................................................................................ 3

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER

SECTION 4.1 Existence .................................................................................................. 3 SECTION 4.2 Requisite Authority .................................................................................. 3 SECTION 4.3 Ability to Bear Risk ................................................................................. 3 SECTION 4.4 Evaluation of Risks .................................................................................. 3 SECTION 4.5 Accredited Investor .................................................................................. 3 SECTION 4.6 Purchase for Investment ........................................................................... 4 SECTION 4.7 Opportunity to Question .......................................................................... 4 SECTION 4.8 Reliance on Private Placement Memorandum ......................................... 4 SECTION 4.9 No Government Review. ......................................................................... 4 SECTION 4.10 Representations and Warranties at Closing ............................................. 4 SECTION 4.11 Ownership Interest in MLPCC; Minimum Liquidating Equity ............... 4

ii Rev. September 15, 2018

ARTICLE V

COVENANTS OF THE PURCHASER

SECTION 5.1 Transfers of Floating Rate Preferred Stock; Right of First Refusal ......... 5 SECTION 5.2 Transfers to Comply With Certain Requirements ................................... 7 SECTION 5.3 Status as a Registered Broker-Dealer or a Member of a National

Securities Exchange ................................................................................. 7

ARTICLE VI

OTHER PROVISIONS

SECTION 6.1 Restrictive Legend ................................................................................... 7 SECTION 6.2 Assignment .............................................................................................. 8 SECTION 6.3 Governing Law. ....................................................................................... 8 SECTION 6.4 Captions ................................................................................................... 8 SECTION 6.5 Entire Agreement ..................................................................................... 8 SECTION 6.6 Counterparts ............................................................................................. 8 SECTION 6.7 Amendments; Waivers ............................................................................. 8 SECTION 6.8 Notices ..................................................................................................... 8 SECTION 6.9 Confidentiality ......................................................................................... 9

Rev. September 15, 2018

FLOATING RATE PREFERRED STOCK PURCHASE AGREEMENT

AGREEMENT dated as of the date set forth on the signature page hereof, between Merrill Lynch Professional Clearing Corp., a Delaware corporation (“MLPCC”), and that party identified as the purchaser on the signature page hereof (the “Purchaser”).

MLPCC is a broker-dealer offering for sale to broker-dealers clearing securities transactions through MLPCC shares of its floating rate preferred stock, par value $1.00 per share and liquidation preference $1,000 per share (the “Floating Rate Preferred Stock”), pursuant to the Floating Rate Private Placement Memorandum of MLPCC provided to you (the “Private Placement Memorandum”). The Purchaser desires to purchase from MLPCC and MLPCC desires to sell to the Purchaser shares of the Floating Rate Preferred Stock. The parties desire to provide for such purchase and sale of the Floating Rate Preferred Stock on the terms and conditions set forth herein and in the Private Placement Memorandum.

Accordingly, the parties hereto do hereby agree as follows:

ARTICLE I

PURCHASE AND SALE

SECTION 1.1 Purchase and Sale. The Purchaser hereby agrees to purchase from MLPCC at $1,000/share, and MLPCC hereby agrees to issue and sell to the Purchaser, on the terms and conditions set forth in this Agreement, 50 shares of the Floating Rate Preferred Stock of MLPCC (the “Shares”) on a date mutually agreeable to MLPCC and Purchaser, provided that such date shall be no later than 6 months from the date of this Agreement, as set forth on the signature page hereof, and further provided that: (i) such date shall be the date upon which the stock certificate representing Shares purchased by the Purchaser is issued and (ii) the regulatory approval described in Section 1.3 has been obtained (the “Closing Date”). If the Closing Date is not agreed to by the parties hereto within the 6 month period after the date of this Agreement, including because the regulatory approval described in Section 1.3 has not been obtained, then this Agreement shall terminate with no obligation for the Shares to be issued and sold by MLPCC or purchased by the Purchaser.

SECTION 1.2 Closing. The closing of the purchase and sale of the number of Shares set forth on the signature page hereof (the “Closing”) shall take place at the offices of MLPCC, One Bryant Park, 6th fl., New York, New York 10036 on the Closing Date. At the Closing, MLPCC shall deliver to the Purchaser a receipt evidencing the Shares being purchased by the Purchaser against payment by the Purchaser to MLPCC of the purchase price therefor in cash or other immediately available funds. At the Closing, the Purchaser will supply MLPCC with executed stock powers necessary to effectuate the transfer as required hereunder and in the Certificate of Incorporation of MLPCC. All stock certificates representing Shares shall bear a restrictive legend as set forth in Section 6.1 below. All Shares shall be retained by the secretary of MLPCC.

SECTION 1.3 Regulatory Approval. The consummation and closing of the transaction contemplated by this Agreement, and MLPCC’s issuance of the Shares to Purchaser,

2 Rev. September 15, 2018

is contingent upon, MLPCC’s receipt of approval from the Financial Industry Regulatory Authority, Inc. (“FINRA”), which MLPCC shall make all reasonable efforts to obtain.

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF MLPCC

MLPCC hereby represents and warrants to the Purchaser as follows:

SECTION 2.1 Corporate Organization. MLPCC is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and as a broker-dealer will remain duly licensed and in good standing under all Laws and Regulations applicable to its business. The Certificate of Incorporation, Amendments to the Certificate of Incorporation, and By-Laws of MLPCC are in the form previously delivered to the Purchaser as part of the Private Placement Memorandum.

SECTION 2.2 Corporate Authority. MLPCC has all requisite power and authority to execute and deliver this Agreement and to perform its obligations hereunder, and the execution and delivery of this Agreement by MLPCC has been duly authorized by all necessary action on its part.

SECTION 2.3 Due Authorizations of Shares. The Shares to be issued by MLPCC to the Purchaser hereunder have been duly authorized by MLPCC and will, upon delivery of the receipt therefor to the Purchaser against delivery of the purchase price therefor as provided in Article I, be validly issued, fully paid and non-assessable.

SECTION 2.4 Governmental Consents. On or before the Closing, MLPCC will have obtained the approval of FINRA as to the issuance of the Shares, as described in Section 1.3. No other consent, authorization or approval of any governmental or regulatory agency, board or commission is required to be obtained by MLPCC in connection with the issuance of the Shares.

SECTION 2.5 Licenses. MLPCC is duly registered with the Securities and Exchange Commission as a broker-dealer under the Securities Exchange Act of 1934, as amended (“Exchange Act”), and duly admitted to membership as a member corporation of the New York Stock Exchange (“NYSE”) and other major U.S. securities exchanges.

SECTION 2.6 Representations and Warranties at Closing. The representations and warranties contained in this Article II shall be true and complete on and as of the date of the Closing with the same force and effect as if such representations and warranties had been made on and as of such date.


ARTICLE III

COVENANTS OF MLPCC

SECTION 3.1 Financial Statements. MLPCC will furnish or make available to the Purchaser:

(a) as soon as available and in any event within 120 days after the end of each fiscal year of MLPCC, a balance sheet of MLPCC as at the end of such fiscal year audited by an independent certified public accountant of nationally recognized standing;

(b) as soon as available and in any event within 65 days after the end of each semi-annual fiscal period of MLPCC, an unaudited balance sheet of MLPCC as at the end of such fiscal period; and

(c) from time to time, upon reasonable prior notice, such other relevant investment-related information concerning the business and affairs of MLPCC as the Purchaser may reasonably request.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES OF THE STOCKHOLDER

The Purchaser hereby represents and warrants to MLPCC as follows:

SECTION 4.1 Existence. The Purchaser is a corporation, partnership or limited liability company duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is organized or incorporated.

SECTION 4.2 Requisite Authority. The Purchaser is (i) duly registered with the Securities and Exchange Commission (“SEC”) as a broker-dealer under the Exchange Act; (ii) subject to Rule 15c3-1 under the Exchange Act; and (iii) a “creditor” as defined in Regulation T, “Credit by Brokers and Dealers” promulgated by the Board of Governors of the Federal Reserve System (“Regulation T”).

SECTION 4.3 Ability to Bear Risk. The Purchaser has the financial ability to bear the economic risk of an investment in the Shares it is purchasing hereunder, has no need for liquidity in such investment and could afford a complete loss of such investment.

SECTION 4.4 Evaluation of Risks. The Purchaser has such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of an investment in MLPCC.

SECTION 4.5 Accredited Investor. The Purchaser is an “accredited investor” as defined in Rule 501(a) under the Securities Act of 1933, as amended (the “Securities Act”).


SECTION 4.6 Purchase for Investment. The Purchaser is purchasing Shares hereunder for investment purposes only and not with a view to, or for offer or sale in connection with, any distribution thereof.

SECTION 4.7 Opportunity to Question. The Purchaser has been given a full opportunity to ask questions of and to receive answers from MLPCC concerning the terms and conditions of the offering of the Shares and the business of MLPCC and to obtain additional information necessary to verify the accuracy of the information contained in the Private Placement Memorandum or such other information as it desired in order to evaluate an investment in the Shares, and all such questions have been answered to the full satisfaction of the Purchaser.

SECTION 4.8 Reliance on Private Placement Memorandum. The Purchaser has received a copy of the Private Placement Memorandum and has read and understands the terms thereof. In making its decision to purchase the Shares herein subscribed for, the Purchaser has relied solely upon the information contained in, and incorporated by reference into, the Private Placement Memorandum and upon independent investigation made by it. It has received no representation or warranty (other than any contained in the Private Placement Memorandum) from MLPCC or any of its affiliates, employees or agents. In addition, it is not subscribing for any Shares as a result of or subsequent to (i) any advertisement, article, notice or other communication published in any newspaper, magazine or similar media or broadcast over television or radio, or (ii) any seminar or meeting whose attendees, including the Purchaser, had been invited as a result of, subsequent to or pursuant to any of the foregoing.

SECTION 4.9 No Government Review. The Purchaser understands that no federal or state agency has made any finding or determination as to the fairness of an investment in, or any recommendation or endorsement of, the Shares.

SECTION 4.10 Representations and Warranties at Closing. The representations and warranties contained in this Article IV shall be true and complete on and as of the date of the Closing with the same force and effect as if such representations and warranties had been made on and as of such date.

SECTION 4.11 Ownership Interest in MLPCC; Minimum Liquidating Equity. The Purchaser will at all times maintain (i) an ownership interest in MLPCC pursuant to Regulation T Section 220.7 and (ii) a minimum liquidating equity of $1,000,000 in MLPCC’S Joint Back Office ("JBO"), exclusive of the ownership interest in Section 4.11(i), above. Purchaser understands and agrees that, pursuant to FINRA Rule 4210, if the minimum liquidating equity described in Section 4.11(ii), above, decreases below the minimum $1,000,000 requirement, or such other amount that is authorized by FINRA and agreed to by MLPCC, the Purchaser must deposit an amount sufficient to eliminate this deficiency within 5 business days or Purchaser will lose its JBO participant status and be subject to the margin account requirements pursuant to the other provisions of FINRA Rule 4210.


ARTICLE V

COVENANTS OF THE PURCHASER

The Purchaser hereby agrees to the following terms and conditions with respect to its purchase of the Shares:

SECTION 5.1 Transfers of Floating Rate Preferred Stock; Right of First Refusal.

(a) In no event shall the Purchaser sell, assign, transfer or otherwise dispose of any Shares which it may now or hereafter own or grant any option or right to purchase such Shares or any beneficial interest therein, and MLPCC shall not recognize any such sale, assignment, transfer or other disposition upon its books, except as expressly permitted in this Article V.

(b) The Purchaser agrees that MLPCC shall have the sole right and option to purchase the Shares at an amount equal to the Federal Funds Rate (as defined in the Private Placement Memorandum) plus 50 basis points as of each Determination Date (as defined in the Private Placement Memorandum) of the liquidation value of the Shares plus accumulated dividends, if any, upon the occurrence of any of the following events: (i) without the prior consent of MLPCC the Purchaser ceases to clear a substantial portion of its securities transactions through MLPCC, (ii) death, adjudication of incompetency, bankruptcy or insolvency of the Purchaser, (iii) any violation by the Purchaser of any agreement made by such Purchaser with MLPCC or if the Purchaser has been determined by any of the exchanges or associations or other institutions with which MLPCC has or may have membership privileges or other privileges to have violated any agreement made by the Purchaser therewith, (iv) the Purchaser shall have been suspended or expelled from any of the exchanges or associations or other institutions with which MLPCC has membership privileges, (v) the Purchaser ceases to be considered (A) registered with the SEC as a broker-dealer or (B) a “creditor”’ as defined in Regulation T, promulgated by the Board of Governors of the Federal Reserve System pursuant to the Exchange Act, or (vi) MLPCC shall determine in good faith that it is necessary or desirable for the welfare of MLPCC or the attainment of a corporate objective that the Purchaser shall cease to be such a holder. The Purchaser further agrees that the Shares may not be transferred without the prior written consent of MLPCC and only after the Shares have been offered to MLPCC at a price equal to the liquidation value plus accumulated dividends, if any.

(c) MLPCC shall promptly notify the Purchaser in writing of its intention to exercise its option to purchase the Shares upon the occurrence of any event enumerated in (b) above; provided however, that failure to notify the Purchaser in accordance herewith shall not be deemed a waiver by MLPCC of its right and option to purchase the Shares.

(d) Upon the exercise by MLPCC of its right to purchase the shares pursuant to (b) above, MLPCC shall be legally obligated to consummate the purchase and sale contemplated thereby and shall use its best efforts to secure any approvals required in connection therewith.

(e) The closing of the purchase of the Shares pursuant to (b) shall take place on such date within 30 days after MLPCC exercises its right to purchase such shares. At such closing, the Purchaser shall sell to MLPCC all of the Purchaser’s right, title and interest in and to the


Shares, free and clear of all liens, claims, charges or encumbrances of any kind or nature, provided that any subsequent transfer of such Shares shall again be subject to compliance with the requirements of this Article V, and shall deliver to MLPCC, a receipt evidencing the Shares sold to MLPCC, accompanied by appropriate stock transfer powers duly endorsed and bearing the legend set forth in Section 6.1 hereof, and with all necessary transfer tax stamps affixed thereto (or other evidence of the payment of any applicable transfer taxes) at the expense of the Seller. MLPCC shall deliver to the Seller, in full payment of the purchase price for the Shares purchased thereby, cash or other immediately available funds in the full amount of the purchase price.

(f) If at any time after the date hereof the Purchaser (the “Seller”) desires to cease clearing operations through MLPCC and receives an offer to purchase any or all of its shares of Floating Rate Preferred Stock (the “Offered Shares”) from an entity (the “Prospective Purchaser”) that desires to begin or increase its clearing operations through MLPCC, and if the Seller desires to accept such offer, the Seller shall give prompt written notice (a “Notice of Offer”) to MLPCC which Notice of Offer shall include the terms of the prospective sale and the name of the Prospective Purchaser. The Notice of Offer shall be deemed to be an irrevocable offer to sell the Offered Shares to MLPCC, and MLPCC will have the irrevocable and exclusive option, as hereinafter provided, to buy all but not less than all of the Offered Shares at a price equal to the liquidation value plus accumulated dividends, if any.

(g) Within ninety (90) days following the date on which the Corporation receives the Notice of Offer (“Notice Date”), MLPCC shall notify the Seller whether MLPCC elects to purchase the Offered Shares (a “Company Acceptance”). If the Seller does not receive a Company Acceptance within such 90-day period, MLPCC shall be deemed to have declined to purchase any of the Offered Shares and within 10 days of the expiration of such 90-day period shall furnish the Purchaser with a written consent approving the sale of Offered Shares to the Prospective Purchaser. A Company Acceptance shall be deemed to be an irrevocable commitment to purchase the Offered Shares from the Seller.

(h) Upon the exercise by MLPCC of its right of first refusal in accordance with (f) above, MLPCC and the Seller shall be legally obligated to consummate the purchase and sale contemplated thereby and shall use their best efforts to secure any approvals required in connection therewith. If MLPCC does not exercise its right of first refusal hereunder with respect to all of the Offered Shares within the time specified for such exercise, the Seller shall be free upon the receipt of a written consent from MLPCC, during a period of ninety (90) days following the expiration of the last day for such exercise, to sell the Offered Shares, but only to the Prospective Purchaser specified in the Notice of Offer. Proceeds of such sale shall be deposited in the Seller’s clearing account with MLPCC. If the Seller does not complete such sale within the 90-day period, the provisions of this Section 5.1 shall again apply, and no sale of any Shares of Floating Rate Preferred Stock shall be made other than in accordance with the terms of this Agreement.

(i) The closing of the purchase of any Shares by MLPCC pursuant to (f) shall take place on such date no sooner than six months from the Notice Date, unless prior written approval of FINRA allows for an earlier closing. At such closing, the Seller shall sell to MLPCC all of the Seller’s right, title and interest in and to the Shares, free and clear of all liens, claims, charges


or encumbrances of any kind or nature, provided that any subsequent transfer of such Shares shall again be subject to compliance with the requirements of this Article V, and shall deliver to MLPCC, a receipt evidencing the Shares sold to MLPCC, accompanied by appropriate stock transfer powers duly endorsed and bearing the legend set forth in Section 6.1 hereof, and with all necessary transfer tax stamps affixed thereto (or other evidence of the payment of any applicable transfer taxes) at the expense of the Seller. MLPCC shall deliver to the Seller, in full payment of the purchase price for the Shares purchased thereby, cash or other immediately available funds in the full amount of the purchase price or, at the option of MLPCC, a fixed income security of MLPCC acceptable to FINRA and with a notional amount equal to the purchase price and such other commercially reasonable terms as determined by MLPCC.

(j) Any option to purchase Shares of Floating Rate Preferred Stock granted to MLPCC under this Section 5.1 may be exercised by any designee of MLPCC.

SECTION 5.2 Transfers to Comply With Certain Requirements. The Purchaser agrees that it will not, directly or indirectly, offer, transfer, sell, pledge, hypothecate or otherwise dispose of any Shares of Floating Rate Preferred Stock (or solicit any offers to purchase or otherwise acquire or take a pledge of any Shares), except in compliance with (a) the Securities Act and the rules and regulations promulgated thereunder, (b) any applicable state securities laws and the rules and regulations promulgated thereunder, (c) the rules of FINRA and any other self-regulatory organization of which MLPCC from time to time may be a member and (d) the provisions of this Agreement and the Certificate of Incorporation of MLPCC.

SECTION 5.3 Status as a Registered Broker-Dealer or a Member of a National Securities Exchange. The Purchaser agrees that it shall promptly notify MLPCC once it is no longer registered as a broker-dealer under the Exchange Act, or a member of any U.S. national securities exchange.

ARTICLE VI

OTHER PROVISIONS

SECTION 6.1 Restrictive Legend. Each certificate evidencing Shares which are subject to the restrictions of this Agreement shall bear the following restrictive legend:

“The sale, assignment, transfer, pledge, encumbrance, or other disposition of the shares evidenced by this certificate, or any interest in such shares, is restricted by the terms of the Floating Rate Preferred Stock Purchase Agreement between MLPCC and the holder of the shares, and the Certificate of Incorporation of the Corporation, copies of which are on file at the principal office of the Corporation. No such sale, assignment, transfer, pledge, encumbrance or other disposition shall be effective unless and until the terms and conditions of the aforesaid Floating Rate Preferred Stock Purchase Agreement and Certificate of Incorporation and all applicable laws and regulations shall have been complied with in full.”

“The shares evidenced by this certificate have not been registered under the Securities Act of 1933, as amended (the “Securities Act”), and the rules and regulations


thereunder, or under the securities laws of any state, and may not be pledged, hypothecated, sold, transferred or assigned in the absence of an effective registration statement for the shares under the Securities Act or an exemption therefrom.”

SECTION 6.2 Assignment. This Agreement shall be binding upon and inure to the benefit of MLPCC and its respective successors and assigns. This Agreement shall be binding upon and, except as provided by the law of the State in which it is organized, inure to the benefit of the Purchaser and its successors but shall not be assignable by the Purchaser, except as provided herein with the prior written consent of MLPCC.

SECTION 6.3 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York applicable to agreements made and to be performed wholly in such State. For the purposes of resolving any dispute under this Agreement, the parties accept the jurisdiction of the federal and New York state courts located in New York County on behalf of themselves and their transferees.

SECTION 6.4 Captions. Section headings are inserted herein for convenience only and do not form a part of this Agreement.

SECTION 6.5 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties in respect of the subject matter hereof and supersedes all prior agreements, arrangements and understandings related to the subject matter hereof.

SECTION 6.6 Counterparts. This Agreement may be executed simultaneously in two counterparts, each of which shall be deemed an original, but both of which together shall constitute one and the same instrument.

SECTION 6.7 Amendments; Waivers. This Agreement may be amended, modified, superseded or canceled, and any of the terms herein may be waived, only by a written instrument executed by the parties hereto or, in the case of a waiver, by the party waiving compliance. The failure of either party at any time or times to require performance of any provision hereof shall in no manner affect the rights of such party at a later time to enforce the same. No waiver by either party of the breach of any term contained in this Agreement, whether by conduct or otherwise, in any one or more instances, shall be deemed to be or construed as a further or continuing waiver of any such breach or of the breach of any other term of this Agreement.

SECTION 6.8 Notices. All notices, statements, instructions or other documents required to be given hereunder shall be in writing and shall be given either personally, by electronic mail or by certified or registered mail, postage prepaid, return receipt requested, as follows: (i) if to MLPCC, One Bryant Park, 6th fl., New York, New York 10036, attention: Secretary, [email protected], and (ii) if to the Purchaser, at the address set forth on the signature page of this Agreement. Either party may, by written notice given in accordance with this Section, change the address to which notices, statements, instructions or other documents are to be sent to such party. All notices, statements, instructions and other documents hereunder that are mailed shall, except as otherwise set forth herein, be deemed to have been given upon receipt.


SECTION 6.9 Confidentiality. The Purchaser shall keep confidential any information that it acquires as a result of this Agreement regarding the business and affairs of MLPCC, unless such disclosure is required by a court of competent jurisdiction or by a regulatory or self-regulatory body with jurisdiction over the Purchaser.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly executed by their respective authorized officers as of the date set forth below.

DATED:

___________________


By: Name: Title:

PURCHASER:

By: Name: Title:

UAddress of PurchaserU:




Form of Stock Certificate

THE SALE, ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE, OR OTHER

DISPOSITION OF THE SHARES EVIDENCED BY THIS CERTIFICATE, OR ANY INTEREST

IN SUCH SHARES, IS RESTRICTED BY THE TERMS OF THE FLOATING RATE

PREFERRED STOCK PURCHASE AGREEMENT BETWEEN MLPCC AND THE HOLDER

OF THE SHARES, AND THE CERTIFICATE OF INCORPORATION OF THE

CORPORATION, COPIES OF WHICH ARE ON FILE AT THE PRINCIPAL OFFICE OF THE

CORPORATION. NO SUCH SALE, ASSIGNMENT, TRANSFER, PLEDGE, ENCUMBRANCE

OR OTHER DISPOSITION SHALL BE EFFECTIVE UNLESS AND UNTIL THE TERMS AND

CONDITIONS OF THE AFORESAID FLOATING RATE PREFERRED STOCK PURCHASE

AGREEMENT AND CERTIFICATE OF INCORPORATION AND ALL APPLICABLE LAWS

AND REGULATIONS SHALL HAVE BEEN COMPLIED WITH IN FULL.

THE SHARES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN

REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES

ACT”), AND THE RULES AND REGULATIONS THEREUNDER, OR UNDER THE

SECURITIES LAWS OF ANY STATE, AND MAY NOT BE PLEDGED, HYPOTHECATED,

SOLD, TRANSFERRED OR ASSIGNED IN THE ABSENCE OF AN EFFECTIVE

REGISTRATION STATEMENT FOR THE SHARES UNDER THE SECURITIES ACT OR AN

EXEMPTION THEREFROM.


INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

This certifies that [Participant’s Name] is the owner of fifty (50) fully paid and non-assessable

shares, liquidation preference $1,000 per share, par value $1.00 per share, of Floating Rate Preferred

Stock of Merrill Lynch Professional Clearing Corp. (sometimes referred to herein as the “Corporation” or

“MLPCC”) transferable on the books of the Corporation by the holder hereof in person or by duly

authorized attorney upon surrender of this certificate properly endorsed.

Witness the seal of the Corporation and the facsimile or manual signature of its duly authorized

officers.

__________________________

PRESIDENT & COO

[Seal]

___________________________________

ASSISTANT CORPORATE SECRETARY

Dated:

The Corporation will furnish to any stockholder on request and without charge a full statement of

the powers, designations, preferences and relative, participating, optional or other special rights of each

class of stock or series thereof and the qualifications, limitations or restrictions of such preferences and/or

rights. Such request may be made to the Secretary of the Corporation.

Merrill Lynch Professional Clearing Corp. Supplemental ... · Merrill Lynch Professional Clearing...

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