Refco Finance Inc, et al. ˇ 8-K ˇ For 9/15/06 ˇ EX-10
Filed On 9/18/06 6:01am ET ˇ SEC Files 1-32604, 333-119701, -23 ˇ Accession Number 1341004-6-2546
As Of Filer Filing As/For/On Docs:Pgs Issuer Agent
9/18/06 Refco Finance Inc 8-K{1,9} 9/15/06 2:87 Skadden/FA
Refco Inc
Refco Group Ltd/LLC
Document/Exhibit Description Pages Size
1: 8-K Current Report HTML 21K
2: EX-10 Exhibit 10.1 - Plan Support Agreement 83 239K
Exhibit 10.1
EXECUTION VERSION
PLAN SUPPORT AGREEMENT
PLAN SUPPORT AGREEMENT (this "Agreement"), dated September 14, 2006, by
and among (i) the Official Committee of Unsecured Creditors of Refco Inc., et
al. (the "Official Committee"); (ii) the Additional Committee of Unsecured
Creditors of Refco Inc., et al. (the "Additional Committee"); (iii) the chapter
11 trustee (the "RCM Trustee") in his capacity as chapter 11 trustee for Refco
Capital Markets Ltd. ("RCM"); (iv) Refco Inc. and affiliated debtors in
possession (the "Debtors"); (v) non-debtor affiliates of Refco Inc. that are
controlled, directly or indirectly, by Refco Inc. (the "Non-Debtor Affiliates");
(vi) each of the individual customers and creditors of RCM that are signatories
hereto on or become signatories after the date hereof (the "RCM Creditors");
(vii) each of the individual creditors of the Debtors or Refco, LLC ("LLC") that
are signatories hereto on or become signatories after the date hereof (the
"Refco Creditors" and, together with the Official Committee, the Additional
Committee, the RCM Trustee, the Debtors, the Non-Debtor Affiliates, and the RCM
Creditors, the "Parties"); and (viii) solely for purposes of clauses (ii) and
(iii) of Section 4, clause (vi) of Section 6 and clause (iii) of Section 7 and
for no other purpose, the chapter 7 trustee (the "LLC Trustee") for LLC in his
capacity as chapter 7 trustee for LLC;
WHEREAS, RCM and the Debtors filed petitions for relief under chapter
11 of the United States Bankruptcy Code (as amended, the "Bankruptcy Code")
beginning on October 17, 2005, with the United States Bankruptcy Court for the
Southern District of New York (the "Bankruptcy Court");
WHEREAS, the Official Committee was appointed by the United States
Trustee in the chapter 11 cases of the Debtors (the "Chapter 11 Cases") on
October 28, 2005, and was reconstituted on March 29 and July 21, 2006;
WHEREAS, by Order dated April 13, 2006, the Bankruptcy Court appointed
Marc S. Kirschner as the RCM Trustee;
WHEREAS, on August 3, 2006, the U.S. Trustee filed Notices of
Bifurcation of Official Committee of Unsecured Creditors by Further
Reconstitution And Amended Appointment, further reconstituting the Official
Committee and establishing the Additional Committee;
WHEREAS, the RCM Trustee entered into (i) a settlement agreement with
certain customers and creditors of RCM dated as of June 29, 2006 (as amended and
in effect from time to time, the "RCM Settlement Agreement"); and (ii) a
settlement agreement with Rogers Raw Materials Fund, L.P. and Rogers
International Raw Materials Fund, L.P. (the "Rogers Funds") dated as of July 20,
2006 (the "Rogers Settlement Joinder," and, together with the RCM Settlement
Agreement, the "RCM Settlement");
WHEREAS, the Parties have negotiated that certain "Summary Terms Of
Global Chapter 11 Plan for Refco Inc., et al. (the "Global Term Sheet," a copy
of which
is annexed hereto as Exhibit A) for a proposed global chapter 11 plan for the
Debtors and RCM (the "Global Plan");
WHEREAS, the Parties now seek to enter into this Agreement to
memorialize their support for the Global Plan, subject to the terms hereof and
the Global Term Sheet;
NOW THEREFORE, in consideration of the promises and the mutual
covenants and agreements set forth herein, the Parties hereby agree as follows:
1. Support of Global Plan. Provided that the terms and conditions of
the Plan Documents (as defined below) are consistent with the Global Term Sheet
and all other terms and conditions of this Agreement have been satisfied or
waived, then:
i. the Debtors and the RCM Trustee and, to the extent that
the Official Committee, the Additional Committee, or both,
elect to do so before the hearing before the Bankruptcy
Court on the adequacy of the disclosure statement (the
"Disclosure Statement") for the Global Plan, the Official
Committee, the Additional Committee, or both, will act as
the co-proponents (the "Co-Proponents") of the Global
Plan;
ii. each Party shall refrain from proposing or supporting any
chapter 11 plan for the Debtors other than the Global
Plan; and
iii. no Party will object to the Global Plan or take any action
directly or indirectly inconsistent with the terms and
conditions of this Agreement or that would unreasonably
delay confirmation or consummation of the Global Plan or
approval of the Disclosure Statement.
Upon the execution and delivery of this Agreement by the Debtors, the Non-Debtor
Affiliates, the Official Committee, the Additional Committee, those RCM
Creditors listed on Schedule 1, and the Refco Creditors consisting of D.E. Shaw
Laminar Portfolios, L.L.C. and Esopus Creek Advisors LLC (collectively, the
"Requisite Parties"), the Co-Proponents will file a copy of this Agreement with
the Bankruptcy Court.
2. Preparation and Filing of Global Plan. The Co-Proponents, in
consultation with the other Parties, shall pursue the preparation and filing
with the Bankruptcy Court of all documents necessary or appropriate for the
Global Plan (the "Plan Documents") in a manner that is consistent with the terms
and conditions set forth in the Global Term Sheet.
3. Confirmation and Consummation of Global Plan. The Co-Proponents
shall use their reasonable best efforts to seek the confirmation and
consummation of the Global Plan and its effectiveness in accordance with the
terms and conditions set forth in the Global Term Sheet in a manner that
satisfies each of the deadlines set forth in the Global Term Sheet and the RCM
Settlement (unless such terms, conditions or deadlines are waived, extended or
modified in accordance with the Global Term Sheet and the RCM Settlement
Agreement, as applicable).
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4. Provisions Concerning the Lenders and the LLC Trustee. Clause (i) of
this Section shall be effective immediately upon the execution of this Agreement
by the Requisite Parties and those RCM Creditors constituting a Super Majority
(as defined in the RCM Settlement Agreement). Clauses (ii) and (iii) of this
Section shall be immediately effective upon execution of this Agreement by the
LLC Trustee.
i. The Parties irrevocably confirm that, if the Order substantially
and in all material respects in the form attached hereto as
Exhibit B (with such changes thereto that are not materially
adverse to the Co-Proponents, the RCM Creditors or the Refco
Creditors or are otherwise reasonably acceptable to the Parties,
the "Lender Settlement Order"), approving the settlement and
compromise pursuant to Rule 9019 of the Bankruptcy Rules of
certain controversies and disputes under the Credit Agreement
dated as of August 5, 2004, as amended (the "Credit Agreement"),
among inter alia certain of the Debtors, Bank of America, N.A.
as administrative agent (in its capacity as such, the "Agent")
and the lenders (the "Lenders") from time to time party thereto,
is entered by the Bankruptcy Court, then the Parties will be
irrevocably bound by all of the terms and conditions of the
Lender Settlement Order (including, without limitation, the
releases of the Agent and the Lenders and related injunctions
contained therein), in each case regardless of whether any
Global Plan or any other plan or plans are agreed upon or
confirmed in the chapter 11 cases of the Debtors or RCM or any
of such cases is converted to chapter 7. The Co-Proponents
further irrevocably agree, if the Lender Settlement Order is
entered, to use their reasonable best efforts to ensure that any
plan confirmed in the chapter 11 cases of the Debtors or RCM is
a Qualifying Plan (as defined in the Lender Settlement Order).
Furthermore, the Parties irrevocably agree not to (A) object to
the entry of the Lender Settlement Order or, if the Lender
Settlement Order is entered, the provisions set forth in
paragraph 10 of the Lender Settlement Order to the extent that
those provisions are contained in any plan proposed in the
Chapter 11 Cases, or (B) if the Lender Settlement Order is
entered, propose any plan in the Chapter 11 Cases that does not
contain the provisions of paragraph 10 of the Lender Settlement
Order. The obligations of the Parties under this paragraph (i)
shall terminate if the Lender Settlement Order ceases to be in
effect pursuant to paragraph 16 thereof.
ii. The LLC Trustee shall use his reasonable best efforts to file
objections, if appropriate, by September 15, 2006, to (A) the
ten largest timely-filed claims against LLC excluding claims
identified on the Schedule 2 (the "LLC Claims Schedule")
attached hereto and (B) any unliquidated timely-filed claims
against LLC excluding claims identified on the LLC Claims
Schedule. In addition, on or before 10 days after receipt by the
LLC Trustee from the RCM Trustee of a list
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(the "RCM Non-Signatory List") identifying any claims on the LLC
Claims Schedule as to which in the RCM Trustee's opinion the LLC
Trustee will not be receiving an executed LLC Claim
Subordination and Waiver (an "LLC Claim Subordination and
Waiver") satisfactory to the LLC Trustee in the form attached
hereto as Exhibit C, the LLC Trustee shall use his reasonable
best efforts to file objections, if appropriate, to such claims.
iii. The LLC Trustee shall use his reasonable best efforts to file,
by September 15, 2006, (A) a stipulation allocating the proceeds
of the sale of the Debtors' regulated commodity broker
businesses if, on or before September 14, 2006, the
Co-Proponents and the LLC Trustee have agreed to the
stipulation, and (B) a motion to pay the amounts owed to Refco
Capital LLC related to loans from Refco Capital LLC to Refco LLC
Customers.
5. Conditions. The effectiveness of the remaining provisions of this
Agreement shall be subject to the following conditions precedent, all of which
shall have occurred on or prior to September 14, 2006:
i. this Agreement shall have been executed by the Requisite
Parties;
ii. the RCM Trustee shall have modified the proposed order (such
modification being herein called the "RCM Settlement Order
Modification") approving the RCM Settlement Agreement to include
the provision set forth on Exhibit D; and
iii. subject to the LLC Trustee's right to object to the RCM
Settlement as preserved under clause (iii) of Section 7, each of
the Parties that filed or joined in an objection with respect to
the pending motions for approval of the RCM Settlement shall
have rested on the pleadings filed, without oral argument other
than in response to questions from the Bankruptcy Court, and
without the adducing of evidence, for purposes of the Bankruptcy
Court hearing scheduled to commence on September 14, 2006,
seeking an order or orders approving the RCM Settlement as
contemplated by ss. 14(b)(iv) of the RCM Settlement Agreement
(the "Initial Approval Order").
6. Covenants. The Parties make the following covenants as applicable to
them:
i. each of the Co-Proponents shall (a) support entry of the order
or orders approving the stipulation and motion referred to in
clause (iii) of Section 4 and (b) take all reasonable steps
necessary to meet the deadlines contemplated by this Agreement
and in the Global Term Sheet;
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ii. each of the Parties negotiating the terms and other provisions
of the Plan Documents shall negotiate in good faith;
iii. each of the Parties shall forbear from asserting or supporting
the assertion by others of inter-company and other claims
against other Parties to this Agreement to be resolved as
contemplated by the Global Term Sheet, and shall cease all
litigation preparation for and prosecution of any such claims
and all inter-company and related forensic analysis, except as
may be necessary to prepare for the confirmation hearing on the
Global Plan;
iv. the RCM Trustee and the RCM Creditors shall not amend the RCM
Settlement in any manner inconsistent with this Agreement or the
Global Term Sheet exclusive of extending deadlines in the RCM
Settlement;
v. the RCM Trustee shall use his reasonable best efforts to enter
into arrangements satisfactory to himself and the LLC Trustee,
including the provision of any agreed indemnification, to enable
the LLC Trustee to set reserves with respect to any claims filed
against LLC by the Rogers Funds, or any of their affiliates, or
any entities claiming derivatively or for the same or similar
claims (collectively, the "Rogers Claims"), at no more than $75
million (if acceptable to the LLC Trustee) for purposes of
facilitating LLC's distributions to the Debtors as contemplated
by the Global Term Sheet, subject to the right of the Rogers
Funds to challenge any such arrangements as preserved under
clause (iii) of Section 7;
vi. the LLC Trustee shall use his reasonable best efforts to
conclude litigation in the Bankruptcy Court over allowance and
amount, if any, of the Rogers Claims against LLC on or prior to
October 15, 2006;
vii. If at any time the RCM Creditors constitute the Super Majority
(as defined in the RCM Settlement Agreement), then, on the
earlier to occur of the date of entry of the Lender Settlement
Order and one business day prior to the hearing before the
Bankruptcy Court seeking an order or orders contemplated by
ss.14(c)(ii) of the RCM Settlement Agreement (the "Final
Approval Order"), (A) each of the Parties that filed objections
with respect to the pending motions for approval of the RCM
Settlement will withdraw such objections, (B) each of the
Debtors, the Official Committee and the Additional Committee
shall support the Final Approval Order other than for any
ownership disputes arising out of the Rogers Claims as to
securities deposited by the Rogers Funds and (C) each of the
Refco Creditors shall not object to such approval;
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viii. the RCM Trustee shall provide the RCM Non-Signatory List to the
LLC Trustee on or prior to September 26, 2006; and
ix. the RCM Trustee shall not (a) except with respect to claims for
which specific reserves were established in the Initial Order
and for any ownership disputes arising out of the Rogers Claims
as to securities deposited by the Rogers Funds, commence the
hearing before the Bankruptcy Court seeking the Final Approval
Order prior to October 3, 2006, or (b) make any distributions to
pre-petition creditors or customers of RCM on account of their
prepetition claims against RCM prior to December 1, 2006.
7. Other Agreements and Reservations.
i. Each RCM Creditor other than the Rogers Funds agrees to execute
and deliver to the LLC Trustee an LLC Claim Subordination and
Waiver.
ii. Each RCM Creditor agrees to (a) elect to receive its pro rata
share of the proceeds, contemplated by the Global Term Sheet, of
the RCM BAWAG Proceeds (as defined in the Global Term Sheet),
and (b) upon tender to it of a certificate or certificates
evidencing its interest or interests in the Private Action Trust
contemplated by the Global Term Sheet, contribute its private
Refco related causes of action to the Private Actions Trust.
iii. Nothing contained in this Agreement (a) except as provided in
clause (i) of Section 4, prevents any Party from objecting to
the exculpation provisions of the Global Plan in favor of any
person for the person's acts or omissions during the course of
the Debtors' and RCM's bankruptcy cases, (b) imposes any duty
on the LLC Trustee to agree to any arrangements to lower the
reserves at LLC with respect to the Rogers Claims as
contemplated by clause (v) of Section 6, (c) prevents the
Rogers Funds from challenging any lowered reserves with respect
to the Rogers Claims that may be sought to be established at
LLC as contemplated by clause (v) of Section 6, (d) otherwise
prejudices the claims or rights of the Rogers Funds with
respect to the Rogers Claims, (e) impairs the LLC Trustee's
right to object to any aspect of the RCM Settlement or the
Global Plan that purports to resolve any of the Rogers Claims
against RCM or the RGL Debtors, or purports to allocate any
securities or cash (or proceeds thereof) in which the Rogers
Funds have asserted an interest, without a release of all
claims that the Rogers Funds may assert against LLC or other
resolution of the Rogers Claims acceptable to the LLC Trustee
or (f) except as provided in clause (vii) of Section 6, impairs
the right of any Party who has filed or joined in an objection
to the RCM Settlement to appeal from the
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Initial Approval Order or to maintain its objection or
joinder to an objection to any and all orders approving
the RCM Settlement.
iv. Neither the execution or delivery of this Agreement by any Party
nor the occurrence of any Cause (as defined in Section 8) shall
constitute any ground to challenge the Initial Approval Order or
any other Order or Orders of the Bankruptcy Court approving the
RCM Settlement Agreement.
8. Withdrawal. Any Party may, subject to Section 9, withdraw from this
Agreement without recourse for Cause (as defined below) effective upon
providing written notice thereof to counsel to each of the Debtors, the
Official Committee, the Additional Committee and the RCM Trustee, provided that
such Cause was not the result of such Party's own act or omission. "Cause"
shall mean:
i. any covenant or other material term or provision of this
Agreement shall have been breached in any material respect by
any Party and (A) the breach shall not have been cured within
five business days following notice by any Party to all of the
other Parties of the breach or (B) within such five-business
day period one or more of the Co-Proponents shall not have
commenced an action against the breaching Party for specific
performance of this Agreement;
ii. the action against the breaching party referred to in clause
(i)(B) shall be dismissed or shall not be resolved in favor the
plaintiff Co-Proponent or Co-Proponents within ten business
days after having been commenced;
iii. on or prior to September 15, 2006, (A) the Bankruptcy Court
shall not have issued the Initial Approval Order, or (B) the
Global Plan and Disclosure Statement shall not have been filed
with the Bankruptcy Court;
iv. on or prior to September 19, 2006, (A) this Agreement shall not
have been executed by the Super Majority (as defined in the RCM
Settlement Agreement), or (B) the LLC Trustee shall not have
received an executed LLC Claim Subordination and Waiver
satisfactory to the LLC Trustee, for purposes of facilitating
LLC's distributions to the Debtors as contemplated by the
Global Term Sheet, from the holders of at least the Super
Majority (as defined in the RCM Settlement Agreement but
excluding the Rogers Funds for purposes of determining the
Super Majority if the Bankruptcy Court has by then approved the
Rogers Settlement Joinder);
v. on or prior to September 27, 2006, the Lender Settlement Order
shall not have been issued by the Bankruptcy Court;
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vi. on or prior to October 5, 2006, an Order allocating the BAWAG
Proceeds (as defined in the Global Term Sheet), as contemplated
by the Global Term Sheet, shall not have been issued by the
Bankruptcy Court;
vii. on or prior to October 16, 2006, (A) the Bankruptcy Court shall
not have issued the Final Approval Order other than for those
claims for which specific reserves were established under the
Initial Approval Order, (B) the "Payment Date" under and as
defined in the Lender Settlement Order shall not have occurred,
(C) the Disclosure Statement shall not have been approved by
the Bankruptcy Court, or (D) the Disclosure Statement, if
approved on or prior to October 16, 2006, shall refer to and be
accompanied by a plan that is either (1) not consistent with
the terms and conditions set forth in the Global Term Sheet, or
(2) adds one or more terms that materially reduce the economic
return or the timing of the economic return reasonably
anticipated by RCM Creditors or the Refco Creditors under the
Global Plan;
viii. on or prior to December 15, 2006, the Global Plan shall not
have been confirmed by the Bankruptcy Court; or
ix. on or prior to December 31, 2006, the Effective Date of the
Global Plan shall not have occurred.
9. Effect of Withdrawal. In the event of a Party's withdrawal from
this Agreement, neither the existence (including any term or provision) of this
Agreement, the Global Term Sheet, the Global Plan, the Disclosure Statement,
nor any related documents may be deemed, asserted, or construed as an admission
or evidence of any issue. The provisions of Section 4 applicable to a
withdrawing Party, and any of this Section and Sections 10 through 22 to the
extent relating to Section 4, shall survive the Party's withdrawal, but no
other rights or obligations of the withdrawing Party shall survive the
withdrawal.
10. Remedies; Specific Performance. If a Party breaches any covenant
or other term or provision of this Agreement, the Party shall not be liable for
money damages. This Agreement, including, without limitation, the Parties'
agreement herein to support the Global Plan and to facilitate its confirmation
and consummation as provided herein, is intended as a binding commitment
enforceable in accordance with its terms. It is understood and agreed by each
of the Parties hereto that (i) money damages would not be a sufficient remedy
for any breach of this Agreement by any Party and in any event is not a remedy
available under this Agreement, (ii) each non-breaching Party shall be entitled
to specific performance and injunctive or other equitable relief as a remedy of
any such breach, and (iii) the right to withdraw from this Agreement is a
cumulative remedy to specific performance so long as such Party has not
withdrawn from this Agreement.
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11. No Solicitation. This Agreement is not and shall not be deemed to
be a solicitation for votes in favor of any chapter 11 plan for the Debtors. No
votes for any chapter 11 plan shall be solicited except in accordance with the
terms and conditions of a disclosure statement that has been approved by the
Bankruptcy Court.
12. Further Disposition or Acquisition of Claims. This Agreement shall
in no way be construed to preclude any Party from disposing of or acquiring
claims against the Debtors, RCM or LLC. However, as a condition to any claim
being disposed of, the transferee of the claim shall execute and deliver to the
Co-Proponents a writing in form and substance satisfactory to the Co-Proponents
to the effect that the transferee is bound by the terms of this Agreement or
the disposition shall be void, and any claim acquired by a Party shall
automatically be subject to all of the terms of this Agreement.
13. Notices. All notices, requests, elections, and demands under or in
connection with this Agreement shall be in writing and shall be delivered by
hand, sent by recognized overnight courier, or sent by facsimile or similar
electronic means to the party as set forth under its signature hereto, or to
such other address or facsimile number as such party shall provide to all other
parties hereto in writing, and shall be deemed sent or given hereunder, in the
case of personal delivery or delivery by recognized overnight courier, on the
date of actual receipt, and in the case of transmission by facsimile or similar
electronic means, on the date of actual transmission.
14. Entire Agreement. This Agreement and the Global Plan Term Sheet
(the provisions of which are expressly incorporated herein) constitute the
entire agreement among the Parties as to the subject matter hereof and
supersede all prior and contemporaneous agreements, representations,
warranties, and understandings of the parties, whether oral, written, or
implied, as to the subject matter hereof.
15. Modification; Waiver. No modification or amendment of this
Agreement shall be binding unless executed in writing by (a) the Debtors, (b)
the Official Committee, (c) the Additional Committee, (d) the RCM Trustee, (e)
the RCM Creditors holding at least 75% in amount of the claims of all RCM
Creditors at such date, (f) the Refco Creditors constituting Bondholders (as
such term is defined in the Global Term Sheet), holding a majority in amount of
the claims of all such Refco Creditors at such date and (g) the Refco
Creditors, exclusive of the Indenture Trustee (as such term is defined in the
Global Term Sheet) and Bondholders, holding 75% in amount of the claims of all
Refco Creditors, exclusive of the Indenture Trustee and Bondholders, at such
date. However, (i) the consent of an RCM Creditor or Refco Creditor that holds
a claim of a particular class or type is required if the modification or
amendment treats the claim in a different manner than a claim that another RCM
Creditor or Refco Creditor holds of that class or type, (ii) the consent of the
Super Majority (as defined in the RCM Settlement Agreement) is required if the
RCM Creditors constitute a Super Majority and the modification or amendment
would materially reduce the economic return reasonably anticipated by the RCM
Creditors under the Global Plan, and (iii) the consent of the Lenders and the
Agent is required to modify or amend clause (i) of Section 4, or any of this
Section, Sections 9 through 14 or Sections 16 through 22 to the extent that the
Section relates to clause (i) of Section 4. No waiver of any of the provisions
9
of this Agreement shall be deemed or constitute a waiver of any other
provision, whether or not similar, nor shall any waiver constitute a continuing
waiver. No waiver shall be binding unless executed in writing by the Party
making the waiver.
16. Third-Party Beneficiaries. The Lenders and the Agent are third
party beneficiaries of clause (i) of Section 4, and of this Section, Sections 9
through 15 and Sections 17 through 22 to the extent that the Section relates to
clause (i) of Section 4, without the consent of the Lenders and the Agent.
Except for such rights of the Lenders and the Agent as third party
beneficiaries, nothing contained in this Agreement shall confer any rights or
remedies under or by reason of this Agreement on any person or entity other
than the Parties hereto, nor shall anything in this Agreement relieve or
discharge the obligation or liability of any third party to any Party to this
Agreement.
17. Successors And Assigns. This Agreement shall be binding upon, and
shall inure to the benefit of, each Party hereto and their respective legal
representatives, successors, and assigns, including (in the case of any estate
representative, any successor representative, whether in chapter 11 or chapter
7 of the Bankruptcy Code).
18. Headings. The descriptive headings of the several sections of this
Agreement are inserted for convenience of reference only and do not constitute
a part of this agreement.
19. Interpretation. This Agreement is the product of negotiations
among the parties, and in the enforcement or interpretation hereof, is to be
interpreted in a neutral manner, and any presumption with regard to
interpretation for or against any party by reason of that party having drafted
or caused to be drafted this Agreement, or any portion hereof, shall not be
effective in regard to the interpretation hereof. In case of a conflict between
this Agreement and the Global Term Sheet, the Global Term Sheet shall govern;
provided, however, that the covenants set forth in Section 6 of this Agreement
shall override any inconsistent provision.
20. Counterparts; Fax Signatures. This Agreement may be executed in
two or more counterparts, each of which shall be deemed an original, but all of
which together shall constitute one and the same instrument. Delivery of an
executed counterpart of a signature page by facsimile transmission shall be
effective as delivery of a manually executed counterpart.
21. Governing Law. Except to the extent that the Bankruptcy Code or
Bankruptcy Rules are applicable, the rights and obligations arising under this
Agreement shall be governed by, and construed and enforced in accordance with,
the laws of the State of New York applicable to contracts made and performed
entirely within such state.
22. Jurisdiction. By its execution and delivery of this Agreement,
each of the Parties hereto irrevocably and unconditionally agrees that any
legal action, suit, or proceeding against it with respect to any dispute
arising under this Agreement or
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for recognition or enforcement (including specific performance) of any judgment
rendered in any such action, suit or proceeding, shall be brought in the
Bankruptcy Court. By its execution and delivery of this Agreement, each of the
Parties hereto irrevocably accepts and submits itself to the jurisdiction of the
Bankruptcy Court for such purposes and agrees that any such legal action, suit,
or proceeding shall constitute a core proceeding within the meaning of 28 U.S.C.
ss. 157(b)(2).
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed and delivered as of the date first above written.
Remainder of Page Left Intentionally Blank
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SKADDEN, ARPS, SLATE, MEAGHER Non-Debtor Affiliates of REFCO
& FLOM LLP INC.
By: /s/ J. Gregory Milmoe
------------------------------
J. Gregory Milmoe (JGM 0919)
Sally McDonald Henry (SMH 0839)
Four Times Square
New York, New York 10036 By: /s/ Harrison J. Goldin
(212) 735-3000 -------------------------------
Name: Harrison J. Goldin
Attorneys for Refco Inc. and Affiliated
Debtors in Possession
MARC S. KIRSCHNER, RCM ALBERT TOGUT, LLC TRUSTEE, not
TRUSTEE, not individually but in his individually but in his capacity as chapter 7
capacity as chapter 11 trustee of REFCO trustee of REFCO, LLC, solely for
CAPITAL MARKETS, LTD. purposes of clauses (ii) and (iii) of Section
4, clause (vi) of Section 6 and clause (iii) of
Section 7 and for no other purpose
By: /s/ Marc S. Kirschner
------------------------------ By: /s/ Albert Togut, as Trustee
-----------------------------
Name: Marc S. Kirschner, Trustee
------------------------------ Name:
----------------------------
MILBANK, TWEED, HADLEY & McCLOY LLP KASOWITZ, BENSON, TORRES &
FRIEDMAN LLP
By: /s/ Susheel Kirpalani
---------------------------------
Luc A. Despins (LD 7543) By: /s/ David S. Rosner
Susheel Kirpalani (SK 8926) ---------------------------
Dennis C. O'Donnell (DO 3648) David S. Rosner (DR-4214)
Andrew M. Leblanc (AL 8935) Andrew K. Glenn (AG-9934)
1 Chase Manhattan Plaza Howard W. Schub (HS-1600)
New York, New York 10005-1413 Jeffrey R. Gleit (JG-8710)
Tel: (212) 530-5000 Daniel A. Fliman (DF-2236)
1633 Broadway
Attorneys for Official Committee of New York, New York 10019
Unsecured Creditors of Refco Inc., et al. Phone: 212-506-1700
Attorneys for Additional Committee of
Unsecured Creditors of Refco Inc., et al.
LOEB & LOEB LLP
By: /s/ Walter H. Curchack
-----------------------------
Walter H. Curchack (WH-3177)
William M. Hawkins (WH-1865)
Vadim J. Rubinstein (VR-5896)
345 Park Avenue
New York, New York 10154
(212) 407-4000
Attorneys for Wells Fargo Bank, National
Association, as Indenture Trustee,
solely in its capacity as a member
of the Official Committee
STROOCK & STROOCK & LAVAN LLP STROOCK & STROOCK & LAVAN LLP
By: /s/ Michael J. Sage By: /s/ Michael J. Sage
------------------------ ------------------------------
Michael J. Sage (MS 6998) Michael J. Sage (MS 6998)
Gerald C. Bender (GB 5849) Gerald C. Bender (GB 5849)
Joseph G. Minias (JM 6530) Joseph G. Minias (JM 6530)
180 Maiden Lane 180 Maiden Lane
New York, New York 10038 New York, New York 10038
Telephone: (212) 806-5400 Telephone: (212) 806-5400
Facsimile: (212) 806-6006 Facsimile: (212) 806-6006
Attorneys for D.E. Shaw & Co., LP Attorneys for Esopus Creek Advisors
CLEARY GOTTLIEB STEEN
& HAMILTON LLP
By: /s/ Thomas J. Moloney
-------------------------
Thomas J. Moloney (TM-9775)
Jane Kim
One Liberty Plaza
New York, New York
10006-1470
(212) 225-2000
Attorneys for Inter
Financial Services, Ltd.
CAPITAL MANAGEMENT SELECT
FUND LTD.
/s/ Vytenis Rasutis
---------------------------
By: Vytenis Rasutis
Title: Director
Address for notices:
DICKSTEIN SHAPIRO LLP
Daniel M. Litt (DL-9227;
admitted pro hac vice)
Paul B. Bran (PB-5659;
admitted pro hac vice)
1825 Eye Street, N.W.
Washington, DC 20006-5403
Tel: (202) 420-3144
Fax: (202)-420-2201
Attorneys for Capital
Management Select Fund Ltd.
COLE, SCHOTZ, MEISEL,
FORMAN & LEONARD, P.A.
A Professional Corporation
By: /s/ Joshua Angel
----------------------------
Joshua Angel (JA-3288)
Laurence May, Esq. (LM-9714)
Seth F. Kornbluth, Esq. (SK-4911)
460 Park Avenue
New York, NY 10022-1906
(212) 752-8000
Attorneys for Global
Management Worldwide
Limited; Arbat Equity
Arbitrage Fund Limited;
Russian Investors
Securities Limited; and
Garden Ring Fund Limited
SHUTTS & BOWEN LLP SHUTTS & BOWEN LLP and
LARRY I. GLICK, P.C.
By: /s/ Robert Fracasso
----------------------------
Robert Fracasso (RF-2538) By:
Peter E. Shapiro (PES-4795) ------------------------------
201 South Biscayne Boulevard As attorneys for Altima Capital
1500 Miami Center Management, Inc.
(305) 379-9102
LARRY I. GLICK, P.C.
Larry I. Glick (LG-8665)
1305 Franklin Avenue, Suite 180
Garden City, New York 11530 SHUTTS & BOWEN LLP and
(516) 739-1111 LARRY I. GLICK, P.C.
As attorneys for IDC Financial By:
S.A.; Investment & Development -----------------------------
Finance Corp.; Oslo As attorneys for Banco Uno S.A.-
International S.A.; Alfredo Panama; Banco Uno S.A.- El
Skinner Klee and Alexandra Sol Salvador; Banco Uno, S.A.
de Skinner-Klee; Ernesto Ruiz Nicaragua; and Banco Uno S.A.-
Sinibaldi; Christian Klose Guatemala
Pieters and Aida Margarita Rosales
de Klose; Ballery Holdings; and
Bilston International Inc.
SHUTTS & BOWEN LLP and SHUTTS & BOWEN LLP and
LARRY I. GLICK, P.C. LARRY I. GLICK, P.C.
By: By:
-------------------------------- -----------------------------
As attorneys for Servicios Generales As attorneys for INS-Bancredito
Bursatiles, S.A. de C.V. Valores Puesto de Bolsa, S.A.
HUGHES HUBBARD & REED LLP
By: /s/ James W. Giddens
------------------------
James W. Giddens (JG-0235)
James B. Kobak, Jr. (JK-1218)
Christopher K. Kiplok (CK-5039)
Jeffrey S. Margolin (JM-4853)
One Battery Park Plaza
New York, New York 10004
Telephone: (212) 837-6000
Facsimile: (212) 422-4726
Attorneys for Mrs.
Josefina Franco Siller
KATTEN MUCHIN ROSENMAN LLP
By: /s/ Jeff J. Friedman
-----------------------------
Jeff J. Friedman (JF-7661)
575 Madison Avenue
New York, New York
10022-2585
Telephone: (212) 940-8800
Facsimile: (212) 940-8776
Attorneys for
Lyxor/Estlander & Ronnlund
Fund Ltd.; Lyxor/Beach
Discretionary Fund
Ltd.; and Societe Generale S.A.
CHADBOURNE & PARKE LLP
By: /s/ Christy L. Rivera
-------------------------
Howard Seife (HS 7995)
Christy L. Rivera (CR 8895)
30 Rockefeller Plaza
New York, NY 10112
Tel: (212) 408-5100
Fax: (212) 408-5369
Attorneys for Carlos
Sevilleja; Cosmorex, Ltd.;
and Creative Finance Limited
FAEGRE & BENSON LLP
By: /s/ Stephen M. Mertz
--------------------------
Michael B. Fisco (#175341)
Stephen M. Mertz (#212131)
Abby E. Wilkinson (#0313981)
2200 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-3901
Telephone: (612) 766-7000
Facsimile: (612) 766-1600
Attorneys for Cargill
Financial Services
Corporation; Cargill
Global Funding PLC;
Cargill, Incorporated; and Cargill
Meat Solutions Corporation
(formerly Excel Corporation)
EVEREST ASSET MANAGEMENT INC.
/s/ Peter Lamoureux
---------------------------
By: Peter Lamoureux
Title: President
Address for notices:
HENDERSON & LYMAN
Douglas E. Arend
175 West Jackson Boulevard
Suite 240
Chicago, IL 60604
Tel: (312) 986-6960
Fax: (312) 986-6960
Attorneys for Everest Asset
Management Inc.
SIDLEY AUSTIN LLP
By: /s/ Guy S. Neal
-------------------
Guy Neal
1501 K Street, N.W.
Washington, D.C. 20005
Tel: (202) 736-8041
Fax: (202) 736-8711
Brian Krakauer
One South Dearborn Street
Chicago, IL 60603
Tel: (312) 853-7515
Fax: (312) 853-7036
Attorneys for Rogers Raw Materials
Fund, L.P. and Rogers
International Raw Materials
Fund, L.P.
HOGAN & HARTSON L.L.P.
By: /s/ Ira S. Greene
----------------------
Ira S. Greene (IG-2315)
Scott A. Golden (SG-6663)
875 Third Avenue
New York, NY 10022
Telephone: (212) 918-3000
Facsimile: (212) 918-3100
Attorneys for Premier Bank
International N.V. and Banco de
Hipotecario de Inversion Turistica
de Venezuela as trustee of
Fideicomiso Federal Forex
Investment
CHADBOURNE & PARKE LLP
By: /s/ Joseph H. Smolinsky
---------------------------
Joseph H. Smolinsky (JS-8408)
30 Rockefeller Plaza
New York, NY 10112
Tel: (212) 408-5100
Fax: (212) 408-5369
Attorneys for Markwood
Investments Ltd.
EXECUTION VERSION
SCHEDULE 1
RCM CREDITORS
Inter Financial Services, Ltd.
Capital Management Select Fund Ltd.
Global Management Worldwide Limited
Arbat Equity Arbitrage Fund Limited
Russian Investors Securities Limited
Garden Ring Fund Limited
VR Global Partners, L.P.
Paton Holdings Ltd.
VR Capital Group Ltd.
VR Argentina Recovery Fund, Ltd.
Mrs. Josefina Franco Siller
Lyxor/Estlander & Ronnlund Fund Ltd.
Lyxor/Beach Discretionary Fund Ltd.
Societe Generale S.A.
Carlos Sevilleja
Cosmorex, Ltd.
Creative Finance Limited
Cargill Financial Services Corporation
Cargill Global Funding PLC
Cargill, Incorporated
Cargill Meat Solutions Corporation (formerly Excel Corporation)
Everest Asset Management Inc.
Rogers Raw Materials L.P.
Rogers International Raw Materials Fund, L.P.
SCHEDULE 2
LLC CLAIMS SCHEDULE
[Enlarge/Download Table]
RCM Proofs of Claim
Chart 1
Refco, LLC
Potential RCM Settlement Parties
Data as of: August 30, 2006
Claim Creditor Claim Amount Counsel
Number -------- ------------ -------
------
I. RCM Customers
----------------
-------------------------------------------------------------------------------------------------------------------------
498 MULTI CREDIT BANK INC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
499 LATIN AMERICA CONSULTING LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
500 ACUROB INVESTMENT AG Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
501 LEBO CAPITAL MANAGEMENT LLC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
502 KEYWAY INVESTMENTS LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
503 INVESDEX CAPITAL LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
504 INVERSIONES Y VALORES SA Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
505 GOREY FINANCE INC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
506 GRUPO INTERBOLSA SA Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
507 GLOBAL OARTNERS EMERGING MARKETS SA Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
508 FONDO COMUN CASA DE BOLSA CA Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
509 DUFIL INVESTMENT SA Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
510 DRESDEN DEVELOPMENT INC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
511 DOVER COMMODITIES CORPORATION Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
512 COSMOREX LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
513 CLAU CORPORATION CLAU CORPORATION OVERSEAS LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
514 BANESCO HOLDING CA (SEE NOTES) Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
515 AFC ALMIRON ALMIRON FIANCE CORPORATION Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
516 ARCADIA HILL INC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
517 LA PRIMERA CASA DE BOLSA CA (SEE NOTES) Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
518 NBK INVESTMENT LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
519 TWOKAY HOLDING INC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
520 WISDOM GLOBAL INVESTMENT LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
521 UNION HOLDING COMPANY INC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
522 TRANS-EUROPA TRANSLATIONS NETWORK LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
523 TOTALBANK CURACAO NV Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
524 BRADLEY C REIFLER Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
525 CARLOS ALBERTO NAGEL MARKOVIC Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
526 MISTYRISE INTERNATIONAL LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
527 MARKWOOD INVESTMENTS LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
528 MULTIPLICAS CASA DE BOLSA Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
529 MULTI CREDIT BANK INC $71,906.00 Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
530 MIURA FINANCIAL SERVICES Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
531 INTERSEC CASA DE BOLSA CA Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
532 JAVIER LOPEZ AND JULIETA JURADO Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
533 ALTERNATIVE INVESTMENTS FUND LTD Chadbourne & Parke
-------------------------------------------------------------------------------------------------------------------------
263 ODYSSEA FUND BV $315,501.13 Halperin Battaglia Raicht, LLP
-------------------------------------------------------------------------------------------------------------------------
264 CHADWICK FOUNDATION $118,545.67 Halperin Battaglia Raicht, LLP
-------------------------------------------------------------------------------------------------------------------------
395 BANCO DE AMERICA CENTRAL SA $5,830,717.66 Hogan & Hartson
-------------------------------------------------------------------------------------------------------------------------
396 BAC INTERNATIONAL BANK INC $10,912,823.78 Hogan & Hartson
-------------------------------------------------------------------------------------------------------------------------
429 SLAYDEN TRADING COMPANY LLC $463,895.09 Jeff J. Friedman, Esq.
-------------------------------------------------------------------------------------------------------------------------
418 DEPOSITORY INC $69,877.93 Josh Angel
-------------------------------------------------------------------------------------------------------------------------
419 NEWCASTLE BUSINESS HOLDING INC $5,328,480.26 Josh Angel
-------------------------------------------------------------------------------------------------------------------------
387 PCMG TRADING PARTNERS XII LP $17,196,802.95 Katten Muchin
-------------------------------------------------------------------------------------------------------------------------
388 LYXOR/BEACH DISCRETIONARY FUND LTD $7,696,965.14 Katten Muchin
-------------------------------------------------------------------------------------------------------------------------
427 KALKHOVEN/PETTIT #2 TRADING PARTNERS LP $10,320,069.44 Katten Muchin
-------------------------------------------------------------------------------------------------------------------------
428 LYXOR/ESTLANDER & RONNLUND FUND LTD $5,029,269.03 Katten Muchin
-------------------------------------------------------------------------------------------------------------------------
426 ABADI & CO SECURITIES $41,288,820.08 Kaye Scholer
-------------------------------------------------------------------------------------------------------------------------
299 FIMEX INTERNATIONAL LIMITED N/A
-------------------------------------------------------------------------------------------------------------------------
316 MIGUEL SAUMA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
317 VICTOR MANUEL HOYOS Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
246 IDS MANAGED FUTURES II LP Stephen D. Lerner, Esq.
-------------------------------------------------------------------------------------------------------------------------
490 IDS MANAGED FUND LLC $3,267,928.79 Stephen D. Lerner, Esq.
-------------------------------------------------------------------------------------------------------------------------
493 JWH GLOBAL TRUST $56,544,205.40 Stephen D. Lerner, Esq.
-------------------------------------------------------------------------------------------------------------------------
495 IDS MANAGED FUTURES LP $8,326,047.12 Stephen D. Lerner, Esq.
-------------------------------------------------------------------------------------------------------------------------
410 ROVIDA HOLDINGS LTD $31,004,999.00 White & Case
-------------------------------------------------------------------------------------------------------------------------
411 RR INVESTMENT COMPANY LTD $41,953,550.00 White & Case
-------------------------------------------------------------------------------------------------------------------------
489 REFCO ADVANTAGE MULTI-MANAGER FUND $41,711,139.00 William Sugden, Esq.
-------------------------------------------------------------------------------------------------------------------------
492 TAU 28 FUND LTD $4,238,735.00 William Sugden, Esq.
-------------------------------------------------------------------------------------------------------------------------
(cont'd on page 2)
Notes
-----
PLEASE SEE PAGE 3 FOR NOTES
Preliminary work product. Not to be relied upon. Confidential Pagem 1/3
[Enlarge/Download Table]
RCM Proofs of Claim
Chart 1
Refco, LLC
Potential RCM Settlement Parties
Data as of: August 30, 2006
Claim Creditor Claim Amount Counsel
Number -------- ------------ -------
------
--------------------------------------------------------------------------------------------------------------------
494 REFCO DIVERSIFIED FUTURES FUND $27,328,612.00 William Sugden, Esq.
--------------------------------------------------------------------------------------------------------------------
249 CATAMOUNT DIVERSIFIED MANAGERS FUND II LTD $997,188.68 Arnold & Porter
--------------------------------------------------------------------------------------------------------------------
250 RPM RISK & PORTFOLIO MANAGEMENT AB $33,677.21 Arnold & Porter
--------------------------------------------------------------------------------------------------------------------
287 BAYERISCHE HYPO-UND VEREINSBANK AG $534,570.49 Arnold & Porter
--------------------------------------------------------------------------------------------------------------------
288 EUROPEAN SICAV ALLIANCE-INSULATE $12,996,097.32 Arnold & Porter
--------------------------------------------------------------------------------------------------------------------
291 NIKKO FUTURES FUND $1,355,107.71 Arnold & Porter
--------------------------------------------------------------------------------------------------------------------
294 WINTERBOTHAM TRUST CO LTD $550,735.00 Arnold & Porter
--------------------------------------------------------------------------------------------------------------------
382 DENIZBANK AS $332,743.00 Arnold & Porter
--------------------------------------------------------------------------------------------------------------------
169 COUNTACH INVESTMENTS LTD $72,829.72 Braun & Goldberg
--------------------------------------------------------------------------------------------------------------------
170 COUNTACH INVESTMENTS LTD $117.42 Braun & Goldberg
--------------------------------------------------------------------------------------------------------------------
425 BOLTON INVESTMENT GROUP LP $1,588,736.82 Jeff J. Friedman, Esq.
--------------------------------------------------------------------------------------------------------------------
195 YMC BOND ENHANCED YIELD FUND LTD $2,248,592.40 N/A
--------------------------------------------------------------------------------------------------------------------
248 BOSTON FINANS AS $121,088.94 N/A
--------------------------------------------------------------------------------------------------------------------
$339,850,375.18
II. Sphinx
------------
412 MASONIC MEDICAL RESEARCH LABORATORY $3,600,000.00 N/A
485 TRUSTEES OF MASONIC HALL & ASYLUM FUND AND $34,860,937.00 Bond Schoenick & King PLLC
486 SPHINX MANAGED FUTURES INDEX FUND LP $39,005,537.00 Bond Schoenick & King PLLC
Pillsbury Winthrop Shaw Pittman
391 SPHINX MANAGED FUTURES FUND SPC AND EACH Pillsbury Winthrop Shaw Pittman
392 EACH ENTITY LISTED ON EXHIBIT 1 TO ATTACHMENT A Pillsbury Winthrop Shaw Pittman
406 SPHINX MANAGED FUTURES FUND SPC AND SPHINX 4,312,945.43 Pillsbury Winthrop Shaw Pittman
407 SPHINX MANAGED FUTURES FUND ET AL Pillsbury Winthrop Shaw Pittman
$ 81,779,419.43
Total $421,629,794.61
==============================================================================
Notes
-----
PLEASE SEE PAGE 3 FOR NOTES
Preliminary work product. Not to be relied upon. Confidential Pagem 2/3
[Enlarge/Download Table]
RCM Proofs of Claim
Chart 2
Refco, LLC
Potential RCM Settlement Parties
Data as of: August 30, 2006
Claim Creditor Claim Amount Counsel
Number -------- ------------ -------
------
I. Settlement RCM Parties
--------------------------
-------------------------------------------------------------------------------------------------------------------------
466 PATON HOLDINGS LTD Akin Gump
-------------------------------------------------------------------------------------------------------------------------
467 VR ARGENTINA RECOVERY FUND LTD Akin Gump
-------------------------------------------------------------------------------------------------------------------------
468 VR CAPITAL GROUP LTD Akin Gump
-------------------------------------------------------------------------------------------------------------------------
469 VR GLOBAL PARTNERS LP Akin Gump
-------------------------------------------------------------------------------------------------------------------------
383 INTER FINANCIAL SERVICES LTD $154,818,649.00 Cleary Gottlieb Steen & Hamilton, LLP
-------------------------------------------------------------------------------------------------------------------------
267 CAPITAL MANAGEMENT SELECT FUND LTD $116,271,904.69 Dickstein Shapiro, LLP
-------------------------------------------------------------------------------------------------------------------------
393 PREMIER BANK INTERNATIONAL NV $243,696,260.52 Hogan & Hartson, LLP
-------------------------------------------------------------------------------------------------------------------------
394 BANCO DE HIPOTECARIO DE INVERSION TURISTICA $750,808.18 Hogan & Hartson, LLP
-------------------------------------------------------------------------------------------------------------------------
399 HEPTAGON FINANCIAL PLANNERS LTD Holland & Knight
-------------------------------------------------------------------------------------------------------------------------
400 BROOKE FINANCIAL SERVICES LTD Holland & Knight
-------------------------------------------------------------------------------------------------------------------------
401 LATINA SEGUROS Y REASEGUROS SA Holland & Knight
-------------------------------------------------------------------------------------------------------------------------
402 HEPTAGON FINANCIAL SERVICES INC Holland & Knight
-------------------------------------------------------------------------------------------------------------------------
403 SUL AMERICA COMPANIA DE SEGUROS DEL ECUADOR CA Holland & Knight
-------------------------------------------------------------------------------------------------------------------------
404 SUD AMERICA DE SEGUROS CA Holland & Knight
-------------------------------------------------------------------------------------------------------------------------
405 TURISOL CASA DE CAMBIO CA Holland & Knight
-------------------------------------------------------------------------------------------------------------------------
389 RUSSIAN INVESTORS SECURITIES LIMITED $9,920,505.00 Josh Angel
-------------------------------------------------------------------------------------------------------------------------
415 GLOBAL MANAGEMENT WORLDWIDE LIMITED $35,264,313.00 Josh Angel
-------------------------------------------------------------------------------------------------------------------------
416 GARDEN RING FUND LIMITED $9,991,727.09 Josh Angel
-------------------------------------------------------------------------------------------------------------------------
417 ARBAT EQUITY ARBITRAGE FUND LIMITED $19,421,841.00 Josh Angel
-------------------------------------------------------------------------------------------------------------------------
289 CORPOREX INVESTMENTS LLC $331,223.00 N/A Paul Hemsath
-------------------------------------------------------------------------------------------------------------------------
384 RB SECURITIES LIMITED $63,541,275.00 Pillsbury Winthrop Shaw Pittman
-------------------------------------------------------------------------------------------------------------------------
318 ALTIMA CAPITAL MANAGEMENT INC Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
319 INS BANCREDITO VALORES PUESTO DE BOLSA SA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
320 SERVICIOS GENERALES BURSATILES SA DE CV Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
453 BANCO REFORMADOR SA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
454 TRANSCOM BANK BARBADOS LTD Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
455 BANCO UNO SA - NICARAGUA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
456 BANCO UNO SA - PANAMA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
457 BANCO UNO SA - EL SALVADOR Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
474 INVESTMENT & DEVELOPMENT FINANCE CORP Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
475 BALLERY HOLDINGS LTD Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
476 ALFREDO & ALEXANDRA SOL DE SKINNER-KLEE Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
477 IDC FINANCIAL SA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
478 OSLO INTERNATIONAL SA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
479 BILSTON INTERNATIONAL INC Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
480 ERNESTO RUIZ SINIBALDI Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
481 CHRISTIAN KLOSE PIETERS & AIDA MARGARITA Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
488 GTC BANK INC Shutts & Bowen
-------------------------------------------------------------------------------------------------------------------------
$654,008,506.48
II. Intercompany Claims
-----------------------
-------------------------------------------------------------------------------------------------------------------------
290 REFCO CAPITAL MARKETS LTD BY MARC S KIRSCHNER Bingham, McCutchen LLP
-------------------------------------------------------------------------------------------------------------------------
413 REFCO TRADING SERVICES LLC Togut, Segal & Segal
-------------------------------------------------------------------------------------------------------------------------
414 REFCO INC ET AL $138,266,382.00 Skadden
-------------------------------------------------------------------------------------------------------------------------
458 REFCO SINGAPORE PTE LTD $96,125.94 N/A
-------------------------------------------------------------------------------------------------------------------------
459 REFCO INVESTMENT SERVICES PTE LTD $114,235.38 N/A
-------------------------------------------------------------------------------------------------------------------------
$138,476,743.32
-------------------------------------------------------------------------------------------------------------------------
III. Bank/Bondholder Debt
-------------------------
-------------------------------------------------------------------------------------------------------------------------
292 BANK OF AMERICA NA, ON BEHALF OF ITSELF AND N/A
-------------------------------------------------------------------------------------------------------------------------
300 WELLS FARGO BANK, NATIONAL ASSOCIATION $397,413,324.50 N/A
-------------------------------------------------------------------------------------------------------------------------
$397,413,324.50
IV. RCM Brokerage Customer Securities Litigation Class Claim
------------------------------------------------------------
-------------------------------------------------------------------------------------------------------------------------
293 PLAINTIFF CLASS $2,000,000,000.00 Josh Angel
-------------------------------------------------------------------------------------------------------------------------
Total $3,189,898,574.30
===================================================================
Notes
-----
(1) The above charts are a breakdown of the claims Refco, LLC's Trustee has
identified as (Chart 1) Non-joinder parties who may be part of settling
group or support the plan who filed claims, and (Chart 2) Joinder parties
who filed claims. This list is not a comprehensive list of all claims filed
against LLC's
(2) The claims register is still being changed and added to by Omni Management
Group, LLC (Omni). The above "as of" date reflects the latest information
provided by Omni. Receipt, review and analysis of proofs of claim (POC)
data as provided by Omni is occurring on an on-going basis. Data is
continually under review and is changing regularly to account for
discrepancies, errors, updates, additions, withdrawals, deletions, amended
claims, duplicate claims, settled claims, allowed claims etc. As such, the
above data and any related analyses, summaries etc. should be considered
incomplete and a work-in-progress (i.e. not final). Please also note:
included in the claims population are a number of unliquidated claims, the
amounts of which are to be determined.
(3) Where no claim amounts are shown, the claim is unliquidated.
Preliminary work product. Not to be relied upon. Confidential Page 3/3
EXHIBIT A
[Global Term Sheet]
------------------
NOT AN OFFER
NOT A SOLICITATION
SUBJECT TO BANKRUPTCY PROCESS
CORE TERMS ONLY ARE DESCRIBED HEREIN
SUMMARY TERMS OF CHAPTER 11 PLAN FOR
REFCO INC., ET AL. (the "Term Sheet")(1)
September 14, 2006
1. Premises of Plan.
----------------
a. Consensual Global Plan. All of the major constituencies (i.e.,
representatives of the Bondholders, the Indenture Trustee, the
Official Committee, the Additional Committee, the RCM Trustee, the
Super Majority, FXA and the RGL Debtors) have agreed on the primary
terms of a global resolution of the Refco cases (the "Global Plan"),
as set forth herein, subject to documentation, including customary
conditions precedent, reasonably acceptable to all such parties and
compliance with the Bankruptcy Code's approval process. The Global
Plan includes a total incorporation of the terms of the RCM
Settlement Agreements. The RGL Debtors, FXA, the RCM Trustee, the
Official Committee and the Additional Committee intend to be
co-proponents of the Global Plan in accordance with the terms of the
Plan Support Agreement.
b. Plan Support Agreement: The major constituencies referenced in
section 1.a. hereof anticipate executing a Global Plan support
agreement (the "Plan Support Agreement") to which this Term Sheet
will be attached. The Plan Support Agreement shall also constitute an
irrevocable "Participating Party Agreement", as that term is defined
in the Lender Settlement Order.
c. Settlement of Claims. All claims of holders of RCM Securities
Customer Claims and RCM FX/Unsecured Claims against RCM will be
completely settled and resolved through treatment and distribution on
account of such claims pursuant to the RCM Settlement Agreements. All
intercompany claims among RCM, Refco LLC, FXA, the RGL Debtors, and
the Non-Debtor Affiliates will be completely settled and resolved
through the provisions of the Global Plan and, with respect to
intercompany claims by or against Refco LLC, pursuant to one or more
orders entered in the Refco LLC Chapter 7 case. All other claims of
creditors of RCM, FXA, and the RGL Debtors against Refco LLC and the
Non-Debtor Affiliates will be completely settled and resolved through
treatment of such claims pursuant to the provisions of the Global
Plan, or, to the extent necessary with respect to claims by or
against Refco LLC, pursuant to one or more orders entered in the
Refco LLC Chapter 7 case. The Rogers LLC Claims will be resolved
pursuant to one or more orders entered in the Refco LLC Chapter 7
case. The precise structure and mechanisms for these
______________________________
(1) Capitalized terms used herein, and not otherwise defined, shall have
the meanings ascribed to them in Schedule 1 hereto or, if not defined herein,
the RCM Settlement Agreements (as defined in Schedule 1).
1
resolutions (including the preservation of the claims of the Debtors
and the holders of RCM Securities Customer Claims, RCM FX/Unsecured
Claims, FXA Unsecured Claims and RGL Unsecured Claims against third
parties and the allowance and off-setting of claims between
Non-Debtor Affiliates and Debtors) will be determined by consultation
among the RCM Trustee, the RGL Debtors, FXA, the Refco LLC Trustee,
the Official Committee, the Additional Committee, and the RCM Plan
Negotiating Committee, in light of, among other things, maximizing
feasibility of the Global Plan, tax effects and corporate governance
aspects of the treatments, with any release language being
appropriately limited so as not to prejudice the claims and causes of
action of the Debtors, or any customer or creditor of any Debtor
against third parties to the extent not otherwise released as
expressly contemplated in this Term Sheet. However, such resolutions
shall not affect the timing and amounts of distributions contemplated
herein.
d. Timing. The Global Plan's effective date (the "Plan Effective Date")
is anticipated to be on or before December 29, 2006.
2. Treatment of Claims.
-------------------
a. Administrative and Priority Claims Against RCM, FXA and the RGL
Debtors. Each allowed administrative claim (to the extent not
previously paid) will be paid in cash on the later to occur of the
Plan Effective Date and the date on which the claim is allowed
(unless a holder of an allowed administrative claim agrees to be paid
later or in another manner). Administrative claims shall include the
substantial contribution claims of the MCG Members and the Joinder
Parties (up to the amounts set forth in the Settlement Agreement plus
amounts up to $40,000 in the aggregate in respect of the preparation
of the MCG Members' and Joinder Parties' substantial contribution
application) and counsel to the Ad Hoc Bondholders' Committee (up to
the amount set forth in section 2.c. below), as allowed by the
Bankruptcy Court. Subject to section 2.c. below, all parties hereto
agree not to object to such substantial contribution claims as filed.
Priority claims will be treated and paid in accordance with the
requirements of the Bankruptcy Code.
Allowed priority claims and allowed administrative claims accrued
from the Petition Date through the Plan Effective Date (excluding any
amounts paid as of the date hereof) against RCM, FXA and the RGL
Debtors, including any professional fees and substantial contribution
awards, will be borne by the estates as follows: (i) $60 million will
be borne by RCM, (ii) the remainder will be borne by the RGL Debtors
up to an amount of $120 million, and (iii) in the event that
administrative and priority claims exceed $180 million in the
aggregate, RCM and the RGL Debtors shall bear equally the expense of
such claims exceeding $180 million (the "Excess Claims"). RCM's share
of the Excess Claims shall be funded out of distributions otherwise
available to RCM from RGL Assets pursuant to section 2.i. below. FXA
shall be responsible for all of its allowed priority and
administrative claims, including administrative claims in respect of
its claims resolution process; provided, however, that professional
services (other than those related to FXA's claims resolution process
2
and issues unique to FXA after the date of this Term Sheet) and
overhead allocable to FXA through the Plan Effective Date shall be
borne by RCM and the RGL Debtors in accordance with the above sharing
formula.
Administrative claims for the post-Plan Effective Date wind down of
the RGL Debtors (and the Non-Debtor Affiliates, other than
subsidiaries of RCM) shall be borne by the RGL Debtors out of cash or
value that would otherwise be paid to holders of allowed RGL
Unsecured Claims. Administrative claims for the post-Plan Effective
Date wind down of RCM (and those Non-Debtor Affiliates who are
subsidiaries of RCM) shall be borne by RCM out of the RCM Wind Down
Reserve, and, to the extent the RCM Wind Down Reserve is not
sufficient to cover such administrative claims, such claims shall be
paid directly by RCM out of cash or value that would otherwise be
paid to holders of allowed RCM Implied Deficiency Claims and RCM
FX/Unsecured Claims.
Costs and expenses of administering the Litigation Trust shall be
separately funded by the Litigation Trust and shall not be counted in
the calculations above.
b. Lender Group. The treatment of the Lender Group will be as provided
in the Order Pursuant to Section 105(a) of the Bankruptcy Code and
Bankruptcy Rule 9019 Approving Settlement of Controversies and
Disputes Among the Debtors, the RCM Trustee, the Committees, the
Pre-Petition Secured Lenders and Certain Other Parties attached to
the Plan Support Agreement (as may be modified in accordance
therewith, the "Lender Settlement Order") if and when such order is
entered by the Bankruptcy Court.
c. Bondholders. The bond debt claims will be allowed, and will be
completely resolved and satisfied through a cash payment from RGL
Assets to the Indenture Trustee, for the benefit of the Bondholders
pursuant to the Indenture, in an amount equal to the sum of (i)
83.42% of $397,413,324.50, which is the sum of the principal and
prepetition interest of the bond debt, plus (ii) up to $6.0 million
in payment of the allowed fees and expenses of the Indenture Trustee,
its counsel and financial advisor, and counsel to the Ad Hoc
Bondholders' Committee, subject to application for approval as a
substantial contribution to these cases pursuant to section 503(b) of
the Bankruptcy Code. The parties to the Plan Support Agreement, other
than the RGL Debtors, agree not to object to such substantial
contribution application. The RGL Debtors reserve the right to review
and object to the application, but solely with respect to the
reasonableness, compensability and allocation of the fees and
expenses incurred. The consideration described in clause (i) above
shall not be subject to reduction, setoff or recoupment of any kind
or for any reason. The cash payment will be made to the Indenture
Trustee on the Plan Effective Date to the extent of available cash,
net of reasonable reserves for administrative and priority claims of
the RGL Debtors, from RGL Assets, with any balance of the payment to
be paid to the Indenture Trustee from time to time from available
cash. Beginning January 1, 2007, interest shall accrue on any unpaid
balance at the same rate of interest which Refco
3
LLC earns on its invested cash and cash equivalents. Nothing in the
Global Plan shall limit the charging lien of the Indenture Trustee
under the Indenture.
d. RGL Unsecured Claims. The general unsecured claims against the RGL
Debtors (the "RGL Unsecured Claims") consist of (i) all non-priority
general unsecured claims, other than claims asserted by the
Bondholders and the Indenture Trustee (in each case, pursuant to the
Indenture), RCM Securities Customers, RCM FX/Unsecured Creditors and
FXA Creditors in such capacity, against RGL Debtors, and (ii) all
non-priority general unsecured claims of RCM Securities Customers,
RCM FX/Unsecured Creditors and FXA Creditors against any RGL Debtor
based on contractual guarantees or other direct contractual
undertakings. Each holder of an allowed RGL Unsecured Claim will
receive from RGL Assets, on the latest to occur of the Plan Effective
Date, a date that is as soon as practicable thereafter, or the date
at which such holder's claim is allowed, (a) a pro rata share of an
amount of cash or cash equivalents equal to the sum of $94 million
(as adjusted by section 2.d.v. below and as adjusted for payment of
administrative claims for the post-Plan Effective Date wind down of
the RGL Debtors and the Non-Debtor Affiliates other than subsidiaries
of RCM) plus 50% of the Specified Difference (positive or negative),
plus (b) a pro rata share of 50% of the value of RGL's 35% interest
in FXCM. Any RGL Asset (exclusive of interests in FXCM) that is not
cash or a cash equivalent shall be liquidated prior to its
distribution under section 2.d. or 2.i. of this Term Sheet. No
distributions on RGL Unsecured Claims will be made from RGL Assets
pursuant to this section 2.d. until such time as all payments set
forth in section 2.c. above have been made in full. Each holder of an
allowed RGL Unsecured Claim shall also receive a ratable interest in
the Litigation Trust described in section 3.e. below.
i. FXCM: Promptly following the date of this Term Sheet, a five
person committee comprised of four RGL/RCM creditors and the
RCM Trustee (and chaired by the RCM Trustee) shall be formed
to coordinate on all matters relating to the FXCM interests.
The RGL Debtors shall consult fully with this committee in
making all determinations related to FXCM.
ii. Capped Recoveries & Additional RCM Claim. Notwithstanding
the above, the recovery on allowed RGL Unsecured Claims
against RGL Debtors shall be capped at 40% excluding
recoveries from the Litigation Trust referred to in section
3.e. below (with recoveries in respect of FXCM to be valued
as set forth in the last sentence of this section 2.d.ii.).
If, at the conclusion of the claims reconciliation process,
(x) total allowed RGL Unsecured Claims are less than $394
million and (y) the distributions to be made from RGL Assets
on account of such allowed claims exceeds 35%, then RCM
shall receive an allowed claim against the RGL Debtors in an
amount equal to the difference between $394 million and the
amount of allowed RGL Unsecured Claims (the "Additional RCM
Claim"). The Additional RCM Claim shall participate pro rata
in all distributions from RGL Assets to holders of RGL
Unsecured Claims that exceed the 35% recovery threshold;
provided, however, that the
4
Additional RCM Claim shall not be subject to the 40% limit
on distributions provided in this section. Solely for
purposes of the calculations set forth in this section
2.d.ii., RGL's 35% interest in FXCM shall have a value equal
to (i) if liquidated prior to the Plan Effective Date, the
value obtained through liquidation and (ii) if not
liquidated prior to the Plan Effective Date, a deemed value
of $90 million.
iii. Cap Calculations. In calculating the caps set forth in this
section 2.d., amounts reserved for any reason shall not
count against the cap until actually paid.
iv. VR / Leuthold Guarantees: No party, other than the RGL
Debtors, shall be authorized to object to or otherwise
challenge the guarantee claims of VR and Leuthold against
RGL (the "Guarantee Claims"). The RGL Debtors will not
object to or otherwise challenge the Guarantee Claims based
on or related to any of the following theories or issues:
the corporate structure or business practices of any of the
Debtors; alter ego; substantive consolidation; fraud; or any
other theories or causes of action similar to the foregoing.
The RGL Debtors, however, may object to the Guarantee Claims
based on facts specific to a particular Guarantee Claim,
including, but not limited to, objections based on
Bankruptcy Code avoidance theories or challenges to the
purported dollar amount of the asserted claims. The Global
Plan shall provide that the Guarantee Claims shall be deemed
allowed (subject to allowance of the primary claims against
RCM) unless an objection to the Guarantee Claims is filed by
the RGL Debtors on or before confirmation of the Global
Plan.
v. Risk Sharing in Respect of Cargill: In the event that
Cargill receives an allowed administrative claim against any
RGL Debtor (the "Cargill Administrative Claim"), the amount
of such Cargill Administrative Claim shall be borne by RCM
and the RGL Debtors as follows: (a) to the extent the
allowance of the Cargill Administrative Claim reduces the
amount that would otherwise have been allowed on any RCM/FX
Unsecured Claims of Cargill against RCM (with the amount of
such difference being the "RCM Difference"), RCM shall pay
to the RGL Debtors (for payment to Cargill) an amount equal
to the RCM Difference multiplied by the Estimated FX
Recovery Percentage; (b) the RGL Debtors shall next pay an
amount up to the remainder of the Cargill Administrative
Claim, provided that payment pursuant to this clause (b)
shall be capped at the amount that would cause recoveries of
holders of RGL Unsecured Claims from RGL Assets to fall
below 30%; and (c) if not yet paid in full, the remainder of
the Cargill Administrative Claim will be borne by the RGL
Debtors and RCM equally (with RCM's share to be paid to the
RGL Debtors for payment to Cargill). Any "payment" by RCM to
the RGL Debtors pursuant to this section 2.d.v. shall be
made by netting against amounts (exclusive of amounts
5
attributable to FXCM) payable to RCM by the RGL Debtors under
section 2.i. below.
e. Penalty Claims: Any claim asserted against RCM, FXA or the RGL
Debtors on account of a fine, penalty, disgorgement, forfeiture,
multiple, exemplary or punitive damages, or otherwise not predicated
upon compensatory damages, and that would be subordinated in a
chapter 7 case pursuant to section 726(a)(4) of the Bankruptcy Code
(the "Penalty Claims") or otherwise shall be subordinated and shall
receive the distribution set forth in section 3.e. below.
f. FXA Unsecured Claims. The general unsecured claims against FXA (the
"FXA Unsecured Claims") consist of (i) all non-priority general
unsecured claims, other than claims asserted by RCM Securities
Customers, RCM FX/Unsecured Creditors and RGL Creditors in such
capacity, against FXA, and (ii) all non-priority general unsecured
claims asserted by RCM Securities Customers, RCM FX/Unsecured
Creditors and RGL Creditors against FXA based on contractual
guarantees or other direct contractual undertakings. Each holder of
an allowed FXA Unsecured Claim will receive on the latest to occur of
the Plan Effective Date, a date that is as soon as practicable
thereafter, or the date at which such holder's claim is allowed, a
pro rata share of the FXA Assets. Each holder of an allowed FXA
Unsecured Claim shall also receive a ratable interest in the
Litigation Trust described in section 3.e. below.
g. Single Distribution / Single Satisfaction. Any holder of a claim
asserted against more than one Debtor shall be entitled to a
distribution only from its primary contractual obligor (whether that
results in distribution from RCM, FXA, Refco LLC or the RGL Debtors);
provided, however, that any holder of an RCM Securities Customer
Claim or an RCM FX/Unsecured Claim with a claim against any RGL
Debtor based on a contractual guarantee or other direct contractual
undertaking may also recover once based on a full pro rata claim
distribution from the RGL Debtors to the extent of such guarantee or
other direct contractual undertaking. In addition, subject to the
provisions of section 3.e. below pertaining to interest accrual, no
holder of such a claim against one or more Debtor shall receive
distributions under the Global Plan (taking into account any
distribution from Refco LLC and Non-Debtor Affiliates) that result in
greater than a 100% recovery on such holder's claim. Notwithstanding
the above, the Rogers Funds may assert the Rogers Settled Claims
against RCM and the Rogers LLC Claims against Refco LLC; provided,
however, that the Rogers Funds shall neither (i) recover from RCM
more than the applicable recovery percentage on the Rogers Settled
Claims as more fully set forth in the Rogers Agreement, nor (ii)
recover from RCM and Refco LLC, in the aggregate, more than the
asserted amount of the Rogers Claim Total.
h. Convenience Classes. The plan proponents may establish convenience
classes for the Debtors other than Refco LLC. The beneficiaries of
any such convenience class will not participate in the Litigation
Trust described in section 3.e. below.
6
i. Claims of RCM against other Debtors and Non-Debtor Affiliates. Other
than the cash and other assets used or reserved from RGL Assets for
treatment of (i) administrative and priority claims of the RGL
Debtors, (ii) the Lender Group debt, (iii) the bond debt, and (iv)
the RGL Unsecured Claims, all remaining RGL Assets and 50% of RGL's
35% interest in FXCM, will be transferred to RCM in settlement of all
claims of RCM, the RCM Securities Customers and the RCM FX/Unsecured
Creditors against the RGL Debtors, Refco LLC and the Non-Debtor
Affiliates. The sum of cash or cash equivalents to be so transferred
to RCM shall be (a) $460 million (as adjusted by section 2.d.v above)
plus 50% of the Specified Difference (positive or negative) plus (b)
50% of the value of RGL's 35% interest in FXCM. All assets so
transferred to RCM will be distributed in accordance with the RCM
Settlement Agreements; provided, however, that RCM shall establish a
reserve (the "RCM Wind Down Reserve") of $15 million from the cash or
value to be paid to RCM in accordance with clause (a) of the
preceding sentence. Any RGL Asset (exclusive of interests in FXCM)
that is not cash or a cash equivalent shall be liquidated prior to
its distribution under section 2.i. or 2.d. of this Term Sheet. No
transfers to RCM will be made from RGL Assets pursuant to this
section 2.i. until such time as all payments set forth in section
2.c. above have been made in full. For the avoidance of doubt,
receipt of RCM BAWAG Proceeds by RCM, even if received directly from
BA WAG, shall constitute a transfer of RGL Assets to RCM in
accordance with clause (a) of this section 2.i.
j. RCM Securities Customers Claims. Except as set forth herein, these
claims will be treated pursuant to the RCM Settlement Agreements (and
the distributions available pursuant to such RCM Settlement
Agreements, and section 2.d. above, as applicable, will be the sole
source of recovery from the Debtors for the holders of such claims),
including with respect to the assets transferred to RCM pursuant to
section 2.i. above and RCM's ratable interest in the Litigation Trust
described in section 3.e. below.
k. RCM FX/Unsecured Claims. Except as set forth herein, these claims
will be treated pursuant to the RCM Settlement Agreements (and the
distributions available pursuant to such RCM Settlement Agreements,
and section 2.d., above, as applicable, will be the sole source of
recovery from the Debtors for the holders of such claims), including
with respect to the assets transferred to RCM pursuant to section
2.i. above and RCM's ratable interest in the Litigation Trust
described in section 3.e. below.
l. RCM Leuthold Metals Claims. These claims will be treated pursuant to
the RCM Settlement Agreements.
3. Means of Implementation.
-----------------------
a. Incorporation of RCM Settlement Agreements. The Global Plan will
expressly incorporate all of the terms and conditions of the RCM
Settlement Agreements, as amended. Approval of the RCM Settlement
Agreements by the Bankruptcy Court shall be a condition precedent to
confirmation of the Global Plan.
7
b. Potential Conversion of RCM Case to Chapter 7. The Global Plan will
be structured as both a plan and a settlement agreement among RCM,
FXA and the RGL Debtors, with the RCM Trustee reserving the right
(after consultation with the RCM Plan Negotiating Committee and the
Additional Committee) to convert the case to a subchapter III,
chapter 7 case at any time, whether before or upon the Plan Effective
Date, but with the timing and amount of distributions contemplated
herein not being affected. In the event of a conversion of the RCM
case to subchapter III of chapter 7, all references herein to the
Additional Committee will be treated as references to any chapter 7
creditors' committee appointed therein, and, if no such committee is
appointed, such references shall be disregarded. Prior to the
conversion, the RCM Trustee shall be entitled to set aside
appropriate reserves for administrative expenses incurred or to be
incurred prior to conversion, with the amounts of such fees to be
payable from the reserves upon allowance of the claims therefor so
long as the RCM Trustee has determined that there are or will be
sufficient funds available to pay all allowed administrative claims
in the chapter 7 case.
c. Refco LLC Administration. Refco LLC's estate will be administered as
expeditiously as practicable.
d. Non-Debtor Affiliates. All Non-Debtor Affiliates will be wound up and
dissolved as soon as practicable and all available cash, after
appropriate wind-up activities, will be distributed to RCM, the RGL
Debtors and Refco LLC on account of intercompany balances (or equity
dividends where applicable) for purposes of achieving the
distributions set forth herein.
e. Litigation Trust. The Global Plan will establish a litigation trust
(the "Litigation Trust") for pursuit of all of the Debtors' causes of
action, including, without limitation, avoidance causes of action,
against third parties (not otherwise released pursuant to the Global
Plan), all of which shall be contributed to the Litigation Trust,
except for preference claims against holders of RCM Securities
Customer Claims and RCM FX/Unsecured Claims, which are to be pursued,
funded and governed in accordance with the RCM Settlement Agreements.
To the extent that any recovery of the Litigation Trust results in a
claim under section 502(h) of the Bankruptcy Code, the Litigation
Trust shall be responsible for satisfying (out of the recoveries
otherwise collected from the holder of the 502(h) claim), the
distribution that would have been made on such 502(h) claim if it
had been allowed against a Debtor, without dilution for such claim.
Mechanics in respect of the payment of such 502(h) claims shall be
determined in final Global Plan and Litigation Trust documents. The
Litigation Trust shall be structured in a manner that provides for a
senior Tranche A and a junior Tranche B (which, itself, shall be
composed of preferred and common interests). No payments will be made
in respect of either class of Tranche B interests until Tranche A has
been fully and indefeasibly paid. On the Plan Effective Date (and as
adjusted from time to time to reflect claims allowance processes),
Tranche A shall have a balance equal to the aggregate amount of
allowed and unpaid RGL Unsecured Claims, FXA Unsecured Claims, RCM
Implied Deficiency Claims and RCM FX/Unsecured Claims (all such
claims to include post-petition interest through the
8
Plan Effective Date and to be adjusted appropriately to reflect no
greater than a 100% recovery per asserting party) plus any amount
incurred in respect of funding the Litigation Trust pursuant to
sub-section vi below. Tranche A shall earn interest from the Plan
Effective Date at the rate of 10% per annum, compounding quarterly,
until paid in full.
i. Tranche A. Beneficiaries of Tranche A will be RCM (for
distribution in accordance with the RCM Settlement
Agreements), holders of FXA Unsecured Claims, and holders of
RGL Unsecured Claims (which, for the sake of clarity, shall
not include the Lender Group, the Bondholders or the
Indenture Trustee), in each case, pro rata based on the
amount of (a) in the case of RCM, the aggregate amount of
the allowed RCM Implied Deficiency Claims and the allowed
RCM FX/Unsecured Claims and (b) in the case of holders of
RGL Unsecured Claims and FXA Unsecured Claims, the amount of
each such holder's allowed claim (which, in the case of RGL
Unsecured Claims shall not be subject to the 35% or 40%
limitations contained in section 2.d.ii.).
ii. IPO Underwriter Litigation. Refco Inc. shareholders shall be
entitled to receive the greater of (a) a pro rata share of
10% of the IPO Underwriter Recovery or (b) a pro rata share
of Tranche B as more particularly set forth below; provided,
however, that the Debtors and all parties in interest
reserve the right to assert that the interests of insider
Refco Inc. shareholders' should not be entitled to any
distribution under the Global Plan.
iii. Tranche B Preferred Interests. Beneficiaries of Tranche B
preferred interests will be holders of Penalty Claims,
holders of allowed claims arising from or relating to debt
securities issued by the Debtors subordinated pursuant to
section 510(b), and holders of allowed claims that are
equitably subordinated pursuant to section 510(c) of the
Bankruptcy Code, who will receive their pro rata share of
the proceeds of the Litigation Trust after Tranche A has
been paid in full; provided, however, that the Debtors and
all parties in interest reserve the right to assert that any
creditor whose claim is equitably subordinated pursuant to
section 510(c) of the Bankruptcy Code should not be entitled
to any distribution under the Global Plan.
iv. Tranche B Common Interests. Subject to sub-section ii above,
beneficiaries of Tranche B common interests will be Refco
Inc. shareholders and holders of allowed claims arising from
or relating to equity securities subordinated pursuant to
section 510(b) of the Bankruptcy Code, who will receive
their pro rata share of the Litigation Trust proceeds after
the holders of Tranche B preferred interests have been paid
in full; provided, however, that the Debtors and all parties
in interest reserve the right to assert that the interests
of insider Refco Inc.
9
shareholders' should not be entitled to any distribution
under the Global Plan.
v. Management. The Litigation Trust will be managed and
operated by one or more litigation trustees identified on or
before the date of the hearing before the Bankruptcy Court
on the disclosure statement for the Global Plan. A committee
of the largest Tranche A beneficiaries will have certain
approval rights on key issues relating to the operation and
management of the Litigation Trust until Tranche A has been
paid in full. Tranche B beneficiaries will have no such
approval rights in respect of management and operation of
the Litigation Trust unless and until Tranche A has been
paid in full. Once Tranche A has been paid in full, a
committee of the largest Tranche B beneficiaries will have
like approval rights.
vi. Funding. The trust may be funded from a non-recourse
Litigation Trust loan from one or more lenders who agree to
make such a loan on terms acceptable to the RCM Trustee, the
Committees and the Super Majority or with up to $25 million
drawn from the RGL Debtors' assets, deducted pro rata from
the cash distributions that otherwise would be made (x) to
holders of RGL Unsecured Claims under section 2.d above and
(y) to RCM under section 2.i. above. Any inability for the
trust to obtain the funding will not affect the consummation
of the Global Plan.
vii. Pro Rata Distributions. All recoveries, whether applicable
to Tranche A or Tranche B, will be distributed pro rata
according to beneficial interests in the applicable Tranche.
viii. Trust Interests. Terms related to the beneficial interests
in the Litigation Trust, such as transferability,
sub-classification and cancellation will be addressed in the
Global Plan or the applicable trust agreement.
f. Private Actions Trust: The Global Plan will establish a litigation
trust (the "Private Actions Trust"), the beneficiaries and terms of
which will be as more particularly set forth in the attached Annex A
to this Term Sheet.
g. Claims Resolution. The Global Plan will contain customary provisions
governing the allowance of claims, including a disputed claims
resolution process with agreed and specified claims and wind-down
reserves. The RCM Settlement Agreements will govern the claims
allowance process concerning RCM Securities Customer Claims and RCM
FX/Unsecured Claims.
h. BAWAG. Pursuant to an allocation order to be entered prior to
consummation of the Lender Settlement Order, $30 million of the BAWAG
Proceeds will be paid to and received by RCM (the "RCM BAWAG
Proceeds"). The remainder of the BAWAG Proceeds will be paid to and
received by the RGL Debtors (the "RGL BAWAG Proceeds"). The RGL
Debtors will use (or will be deemed to have used) the RGL
10
BAWAG Proceeds to make the distributions to the Lender Group and
Bondholders referenced in sections 2.b. and 2.c. of this Term Sheet.
Holders of allowed RCM Securities Customer Claims and RCM
FX/Unsecured Claims that receive distributions in accordance with
sections 2.j. and 2.k. above will be entitled to elect whether to
receive RCM BAWAG Proceeds as part of their RCM distribution. Parties
who sign the Plan Support Agreement or who do not notify the Global
Plan co-proponents in writing of their decision to opt out of the
BAWAG Stipulation and Order, on or before the voting deadline for the
Global Plan, will be deemed to have elected to receive a pro rata
share of the RCM BAWAG Proceeds as part of their RCM distribution,
when and to the extent their claims are allowed. Other parties who
timely notify the Global Plan co-proponents in writing of their
decision to opt out of receiving RCM BAWAG Proceeds will forfeit
their right to receive such proceeds. Such an opt-out election will
constitute an election by any such party to have its pro rata claim
recovery from RCM reduced by an amount equal to its pro rata interest
in the RCM BAWAG Proceeds. Pursuant to the BAWAG Stipulation and
Order, any BAWAG Proceeds not distributed to any holder of an allowed
claim on account of such holder's election to opt out will be
returned to BAWAG.
i. Liquidity Facility/Managed Fund. The Global Plan may or may not
include provisions for a liquidity facility, such as proposed by DE
Shaw, which would enable a cash out option for electing creditors in
exchange for their beneficial interests in the Litigation Trust.
Provisions under the RCM Settlement Agreements for a possible in-kind
distribution or a managed fund or other mechanism to enhance
recoveries, such as proposed by Abadi & Co., will be determined by
the RCM Trustee and the RCM Plan Negotiating Committee, subject to
Bankruptcy Court approval.
j. Exculpation and Releases. The Global Plan will contain customary
exculpation provisions for chapter 11 and plan related activities,
for all parties involved in the plan process (including the Refco LLC
Trustee) to be effective in any subsequent chapter 7 case(s) as well.
The Global Plan will also contain releases of the Lender Group as
provided in respect of a "Qualifying Plan" as defined in the Lender
Settlement Order. In addition, the Global Plan will contain releases
of the Bondholders (past as well as present holders, in their
capacities as Bondholders) and the Indenture Trustee for any and all
claims relating to the bond debt. Any releases of parties other than
the Lender Group, the Bondholders and the Indenture Trustee shall not
affect defenses asserted by way of setoff or recoupment.
k. Reservations.
i. Limit on Precedential Effect. The Global Plan and disclosure
statement shall provide that the structure of the Global
Plan and the classification of creditors or groups of
creditors within any one class in the Global Plan shall have
no evidentiary or precedential effect if the Global Plan is
not confirmed and consummated.
11
ii. Claims Preserved Pending Consummation. In the event the
Global Plan is not consummated, parties expressly reserve
their claims and rights, as well as all defenses to such
claims and rights and causes of action against such parties,
including, without limitation, (i) the subrogation claim of
any Refco Debtor against any other Refco Debtor arising out
of the payment to the Lender Group, (ii) all claims of RCM
and holders of RCM Securities Customer Claims and RCM
FX/Unsecured Claims against the RGL Debtors, Refco LLC and
third parties, (iii) all claims of the RGL Debtors and Refco
LLC and their respective creditors against RCM and third
parties and (iv) avoidance and other causes of action
against creditors of RCM and the RGL Debtors; provided,
however, that such reservation of rights shall not apply to
any claims, rights or defenses against the Administrative
Agent or any Lender (in such capacities) to the extent all
claims, rights, defenses and causes of action against the
Administrative Agent or any Lender are released in
accordance with the Lender Settlement Order.
iii. Walk Away for Insufficient RCM Distributions. On or about
seven (7) days in advance of the voting deadline in respect
of the Global Plan, each of Houlihan and Capstone shall
issue a projection as to how much cash or value is
anticipated, under the Global Plan, to be paid or
distributed from MAC RCM Assets to RCM (each a "RCM
Projected Number"). Solely for purposes of calculating the
RCM Projected Number, any amounts reserved in the RCM Wind
Down Reserve shall be treated as though paid or distributed
to RCM. If only one of the RCM Projected Numbers is below
$430 million, the Bankruptcy Court will be asked to rule on
the issue of the appropriate RCM Projected Number (after
reviewing the RCM Projected Numbers and the assumptions
therein). The parties to the Plan Support Agreement who are
RCM FX/Unsecured Creditors or RCM Securities Customers shall
no longer be bound to proceed with the Global Plan if (x)
both RCM Projected Numbers are below $430 million, or (y)
the Bankruptcy Court, in accordance with the preceding
sentence, has ruled that the appropriate RCM Projected
Number is below $430 million. Neither Houlihan nor Capstone
(nor the parties they advise or counsel from whom they seek
assistance in this matter) shall have any liability in
making such projections absent bad faith or gross
negligence.
iv. Walk Away for Insufficient RGL Unsecured Distributions. On
or about seven (7) days in advance of the voting deadline in
respect of the Global Plan, each of Houlihan and Capstone
shall issue a projection as to how much cash or value is
anticipated, under the Global Plan, to be paid from MAC RGL
Assets to RGL Unsecured Creditors (each a "RGL Projected
Number"). If only one of the RGL Projected Numbers is below
$64 million, the Bankruptcy Court will be asked to rule on
the issue of the appropriate RGL Projected Number (after
reviewing the RGL Projected Numbers and the assumptions
therein). The parties to the Plan Support
12
Agreement who are RGL Unsecured Creditors shall no longer be
bound to proceed with the Global Plan if (x) both RGL
Projected Numbers are below $64 million, or (y) the
Bankruptcy Court, in accordance with the preceding sentence,
has ruled that the appropriate RGL Projected Number is below
$64 million. Neither Houlihan nor Capstone (nor the parties
they advise or counsel from whom they seek assistance in
this matter) shall have any liability in making such
projections absent bad faith or gross negligence.
v. Walk Away Related to Professional Expenses. On or about
seven (7) days in advance of the voting deadline in respect
of the Global Plan, the RGL Debtors and the RCM Trustee
shall issue, for their respective estates, a projection of
the administrative claims accrued from the Petition Date
through the Plan Effective Date that are anticipated to be
paid as part of the Global Plan, excluding any amounts in
respect of (a) ordinary operating expenses of the Debtors,
(b) fees and commissions of the RCM Trustee, (c) fees and
commissions of the Refco LLC Trustee, and (d) administrative
expenses otherwise paid prior to August 31, 2006 (the
"Anticipated Professional Claims"). If the Anticipated
Professional Claims exceed $180 million, the parties to the
Plan Support Agreement shall no longer be bound to proceed
with the Global Plan. Neither the RGL Debtors, the RCM
Trustee nor any of their professionals shall have any
liability in making such projections absent bad faith or
gross negligence.
vi. Continuation of RCM Settlement Agreements. The failure of
the Global Plan to proceed or be confirmed or consummated,
will not in any way affect the terms or effectiveness of the
RCM Settlement Agreements.
l. Transferability: The Global Plan will not, in respect of any
interests or rights distributed under the Global Plan, contain any
restrictions on transfer beyond restrictions imposed by applicable
law.
m. Role of Committees, Examiner and Certain Professionals: On the Plan
Effective Date, the Committees shall be dissolved and their members
shall be deemed released of all their duties, responsibilities and
obligations in connection with the Chapter 11 Cases or the Plan and
its implementation, and the retention or employment of the
Committees' attorneys, accountants, professionals and other agents
shall terminate as more fully set forth in final Global Plan
documentation. Following the Plan Effective Date, such professional
and other agents may, if retained, render services to any fiduciaries
of the estate or Litigation Trust. On the Plan Effective Date, the
Examiner and the professional retained by the Examiner shall be
released and discharged from their respective obligations outstanding
pursuant to the Examiner Order as more fully set forth in final
Global Plan documentation. On the Plan Effective Date, a plan
committee for the RGL Debtors (the "RGL Plan Committee") shall be
formed, which shall include, among others, Cargill, Leuthold and VR
to the extent they choose to
13
serve. The RGL Plan Committee shall, among other things, have the
right to approve settlements and to direct litigation in respect of
the allowance of claims against the RGL Debtors. The Global Plan may
provide for plan committees for other estates as determined in final
Global Plan documentation.
14
NOT AN OFFER
NOT A SOLICITATION
SUBJECT TO BANKRUPTCY PROCESS
CORE TERMS ONLY ARE DESCRIBED HEREIN
SCHEDULE 1
DEFINITIONS
-----------
Additional Committee: shall mean the Additional Committee of Unsecured
Creditors of Refco Inc., et al.
Additional RCM Claim: shall have the meaning set forth in section 2.d.ii of
this Term Sheet.
Administrative Agent: shall mean Bank of America, N.A., in its capacity as
Administrative Agent under the Credit Agreement.
Anticipated Professional Claims: shall have the meaning set forth in section
3.k.iv of this Term Sheet.
Assets Schedule: shall mean the schedule attached hereto as Annex B, dated
August 31, 2006, and prepared by Houlihan.
Bankruptcy Court: shall mean the United States Bankruptcy Court for the
Southern District of New York.
BAWAG: shall mean Bawag P.S.K. Fur Arbeit Wirtschaft Und Osterreichische
Postsparkasse Aktiengesellschaft.
BAWAG Proceeds: shall mean the aggregate of all cash proceeds to be received by
any of the Debtors, whether guaranteed or contingent, including any payments
from the United States, but excluding any consideration in the form of waiver of
claims, pursuant to that certain settlement among the Committees, BAWAG and
certain of the Debtors as approved by the Bankruptcy Court by order dated July
5, 2006.
Bondholders: shall mean the holders from time to time of the 9% Senior
Subordinated Notes.
Capstone: shall mean Capstone Advisory Group, LLC.
Cargill: means Cargill, Incorporated and any of Cargill, Incorporated's
affiliates who filed proofs of claim in any of the Debtors' cases.
Credit Agreement: shall mean Credit Agreement dated as of August 5, 2004, as
amended, among inter alia Refco Group LTD., as borrower, Bank of America, N.A.
as Administrative Agent and the Lenders from time to time party thereto.
Committees: shall mean the Additional Committee and the Official Committee.
Debtors: shall mean RCM, the RGL Debtors, FXA and Refco LLC.
15
Examiner: shall mean Joshua R. Hochberg, the examiner appointed by the United
States Trustee pursuant to 11 U.S.C. ss. 1104(c)(2) and approved by the
Bankruptcy Court in accordance with the Examiner Order.
Examiner Order: shall mean the order granting the motion of the United States
Trustee for appointment of an examiner entered on March 16, 2006 (Docket No.
1487).
Excess Claims: shall have the meaning set forth in section 2.a. of this Term
Sheet.
Estimated FX Recovery Percentage: shall mean 40%.
FXA: shall mean Refco F/X Associates, LLC.
FXA Assets: shall mean (i) those certain cash accounts set forth in Exhibit B-2
of FXA's Schedules (as such schedules exist as of the date of this Term Sheet),
allocated as agreed or otherwise resolved between FXA and KK Japan, plus (ii)
proceeds, if any, of the sale of the customer list of FXA.
FXA Creditors: shall mean holders of FXA Unsecured Claims.
FXA Unsecured Claims: shall have the meaning set forth in section 2.f. of this
Term Sheet.
FXCM: shall mean Forex Capital Markets, LLC.
Global Plan: shall have the meaning set forth in Section 1.a. of this Term
Sheet.
Houlihan: shall mean Houlihan Lokey Howard & Zukin.
Houlihan Claims Schedule: shall have the meaning set forth in the RCM
Settlement Agreements.
Indenture: shall mean that certain Senior Subordinated Note Indenture dated
August 5, 2004 among Refco Finance Holding, LLC (now Refco Group Ltd., LLC),
Refco Finance Inc. and Wells Fargo Bank, N.A.
Indenture Trustee: shall mean Wells Fargo Bank, National Association, as
indenture trustee for the Bondholders.
IPO Underwriter Recovery: shall mean any recovery from a claim brought by the
Litigation Trust against an Underwriter in connection with the initial public
offering of Refco Inc., net of fees and expenses incurred in pursuing such
recovery.
KK Japan: shall mean RefcoFX Japan KK.
16
Lender Group: shall mean the Administrative Agent and the Lenders party from
time to time to the Credit Agreement.
Lender Settlement Order: shall have the meaning set forth in section 2.b of
this Term Sheet. Litigation Trust: shall have the meaning set forth in section
3.e. of this Term Sheet.
MAC Estimated Reductions: shall mean a reduction, without duplication, for (A)
the estimated priority claims and administrative claims accrued from the
Petition Date through the Plan Effective Date (exclusive of amounts paid prior
to August 31, 2006) that are to be borne by the RGL Debtors in accordance with
section 2.a. of this Term Sheet (including RGL's portion of any Excess Claims
and RGL's obligations under clause (b) of section 2.d.v. of this Term Sheet),
(B) the estimated RCM portion of any Excess Claims, (C) payments made or to be
made in accordance with section 2.b. of this Term Sheet, (D) payments made or to
be made in accordance with section 2.c. of this Term Sheet, and (E) estimated
payments to be made by RCM to the RGL Debtors in accordance with clause (c) of
section 2.d.v. of this Term Sheet, provided that for purposes of making the
estimate in this sub-section (E), total allowed RGL Unsecured Claims will be
assumed to be $502 million (unless the actual total amount of allowed RGL
Unsecured Claims are known at that time).
MAC RCM Assets: shall mean (i) the estimated value of RGL Assets (exclusive of
interests in FXCM), less (ii) the sum of, without duplication, (A) the MAC
Estimated Reductions and (B) the estimated distributions to be made pursuant to
clause (a) of section 2.d. without adjustment for wind down costs.
MAC RGL Assets: shall mean (i) the estimated value of RGL Assets (exclusive of
interests in FXCM), less (ii) the sum of, without duplication, (A) the MAC
Estimated Reductions and (B) the estimated distribution to be made to RCM
pursuant to clause (a) of section 2.i. to this Term Sheet.
Non-Debtor Affiliates: shall mean Refco Canada Finance Inc., Refco Commodity
Management Inc., Refco Administrative Services Inc., EasyScreen Inc., Refco
Mortgage Services LLC, Refco Securities LLC, Refco Clearing LLC, Refco
EasySolutions LLC, RefcoFund Management LLC, Haut Commodities LLC, Refco Local
Divisions LLC, RefcoFund Holdings LLC, Refco Alternative Investments LLC, Refco
Trading Services LLC, Refco Screens Trustees Ltd. (in liquidation), Refco
Screens Link Ltd. (in liquidation), Refco MF Ltd. (in liquidation), Refco
Securities Ltd. (in liquidation), Refco Screens Employee Services Ltd., Refco
Energy (UK) Ltd., Refco TC Ltd., RGE Ltd., Refco MT Limited, Refco Ltd.,
Westminster Clearing Ltd., Refco Screens Ltd., Refco Trading Services Ltd.,
Refco Trading Services (UK) Ltd., CI Investor Services Ltd., Refco Equity
Derivatives Ltd., Refco Europe Ltd., Refco Overseas Ltd., Refco East Services
Ltd. (in liquidation), Just Commodity Inc., Just (Dalian) Trading Co Ltd.,
Refco Capital Singapore Pte Ltd, Refco India Pvt Ltd, Easy Tiger Pte Ltd,
EasyScreen Pty Ltd, Refco Singapore Pte Ltd, Refco Investment Services Pte Ltd,
Refco Forex Ltd (in liquidation), Refco Securities SA, Refco Futures (HK)
Limited, Refco Trading Services (Gibraltar) Ltd., Refco Capital Markets
International Ltd, Refco Capital Markets International Services Ltd, ACM
Advanced Currency Markets SA
17
Official Committee: shall mean the Official Committee of Unsecured Creditors of
Refco Inc., et al.
Penalty Claims: shall have the meaning set forth in section 2.e. of this Term
Sheet.
Petition Date: shall mean, with respect to a Debtor, the date on which such
Debtor filed its petition for relief under the Bankruptcy Code.
Plan Effective Date: shall have the meaning set forth in section 1.d. of this
Term Sheet.
RCM: shall mean Refco Capital Markets, Ltd.
RCM Approving Parties: shall mean those RCM FX/Unsecured Creditors and RCM
Securities Customers holding at least 75% in amount of the RCM FX/Unsecured
Claims held by parties to the Plan Support Agreement and holding at least 75% in
amount of the RCM Securities Customer Claims held by parties to the Plan Support
Agreement. Solely for purposes of determining the RCM Approving Parties, the
amount of a creditor's RCM Securities Customer Claim or RCM/FX Unsecured Claim
shall be the amount of the claims set forth on the Houlihan Claims Schedule.
RCM BAWAG Proceeds: shall have the meaning set forth in section 3.h. of this
Term Sheet. RCM Difference: shall have the meaning set forth in section 2.d.v
of this Term Sheet.
RCM FX/Unsecured Claims: shall have the same meaning as the term "FX/Unsecured
Claims" in the RCM Settlement Agreements, exclusive of claims against RCM by any
of the Lender Group, the Bondholders, the Indenture Trustee, the other Debtors
and the Non-Debtor Affiliates.
RCM FX/Unsecured Creditors: shall mean holders of RCM FX/Unsecured Claims.
RCM Implied Deficiency Claims: shall have the same meaning as the term "Implied
Deficiency Claim" in the Settlement Agreement.
RCM Leuthold Metals Claim: shall have the meaning given to the term Leuthold
Metals Claim in the RCM Settlement Agreements.
RCM Plan Negotiating Committee: shall have the same meaning as the term "Plan,
Negotiation and Litigation Advisory Committee" in the RCM Settlement
Agreements.
RCM Projected Number: shall have the meaning set forth in section 3.k.iii of
this Term Sheet.
RCM Securities Customers: shall mean holders of RCM Securities Customer Claims.
RCM Securities Customer Claims: shall have the same meaning as the term
"Securities Customer Claims" in the RCM Settlement Agreements.
18
RCM Settlement Agreements: shall mean the Rogers Agreement and the Settlement
Agreement.
RCM Trustee: shall mean Marc S. Kirschner, not individually, but as the chapter
11 trustee appointed in the RCM chapter 11 case. The term shall include any
successor chapter 11 trustee or, if the RCM chapter 11 case is converted to a
chapter 7 case to be administered under subchapter III of chapter 7, the chapter
7 trustee.
RCM Wind Down Reserve: shall have the meaning set forth in section 2.i. of this
Term Sheet. For the avoidance of doubt, the RCM Trustee shall have the right to
cause funds to be released from the RCM Wind Down Reserve to RCM as and when the
RCM Trustee deems appropriate, based on anticipated wind down expenses of RCM
and its subsidiaries.
Refco LLC: shall mean Refco, LLC.
Refco LLC Trustee: shall mean Albert Togut, not individually, but as chapter 7
trustee of Refco LLC, or any successor chapter 7 trustee appointed in the Refco
LLC case.
RGL: shall mean Refco Group Ltd., LLC.
RGL Assets: shall mean all assets of the RGL Debtors, including but not limited
to (i) those assets of the RGL Debtors listed on the Assets Schedule, (ii) to
the extent not inconsistent with the assumptions underlying the Assets Schedule
(without duplication) (A) any amounts paid to RCM or any RGL Debtors from Refco
LLC on or after September 1, 2006, (B) the BAWAG Proceeds, and (C) any amounts
paid to RCM or any RGL Debtor from Non-Debtor Affiliates on or after September
1, 2006; provided, however, that any amounts distributed to RCM from direct or
indirect subsidiaries of RCM shall not be treated as RGL Assets. Causes of
action assigned to the Litigation Trust pursuant to section 3 .e. of this term
sheet shall not constitute RGL Assets.
RGL BAWAG Proceeds: shall have the meaning set forth in section 3.h. of this
Term Sheet.
RGL Creditors: shall mean holders of RGL Unsecured Claims.
RGL Debtors: shall mean Refco Inc., Bersec International LLC, Kroeck &
Associates, LLC, Marshall Metals, LLC, New Refco Group Ltd., LLC, Refco
Administration, LLC, Refco Capital LLC, Refco Capital Holdings, LLC, Refco
Capital Management, LLC, Refco Capital Trading, LLC, Refco Finance Inc., Refco
Financial, LLC, Refco Fixed Assets Management, LLC, Refco Global Capital
Management LLC, Refco Global Finance Ltd., Refco Global Futures, LLC, Refco
Global Holdings, LLC, Refco Group Ltd., LLC, Refco Information Services, LLC,
Refco Mortgage Securities, LLC, Refco Regulated Companies, LLC, Summit
Management, LLC, Lind-Waldock Securities LLC, Refco Managed Futures LLC, and
Westminster-Refco Management LLC. The term does not include RCM, FXA or Refco
LLC.
RGL Difference: shall have the meaning set forth in section 2.d.v of this Term
Sheet.
RGL Plan Committee: shall have the meaning set forth in section 3.m. of
this Term Sheet.
19
RGL Projected Number: shall have the meaning set forth in section 3.k.iv. of
this Term Sheet.
RGL Unsecured Claims: shall have the meaning set forth in section 2.d. of this
Term Sheet.
RGL Unsecured Creditors: shall mean the holders of RGL Unsecured Claims.
Rogers Agreement: shall mean the Settlement Agreement dated as of July 20,
2006, between the Rogers Funds and the RCM Trustee.
Rogers Claim Total: shall mean (a) the asserted amount of the Rogers LLC
Claims, plus (b) the amount agreed to be treated as allowed RCM FX/Unsecured
Claims pursuant to paragraph 1 of the Rogers Agreement.
Rogers Funds: shall mean Rogers Raw Material Fund, L.P. and Rogers
International Raw Materials Fund, L.P.
Rogers LLC Claims: shall mean the proofs of claim filed by the Rogers Funds
against Refco LLC.
Rogers Settled Claims: means the claims of the Rogers Funds against RCM as set
forth in paragraph 1 of the Rogers Agreement.
Settlement Agreement: shall mean the Settlement Agreement dated as of June 29,
2006, as amended, among the RCM Trustee and certain customers and creditors of
RCM.
Specified Difference: shall mean the difference (positive or negative) between
(i) $554 million and (ii) the value of RGL Assets (exclusive of interests in
FXCM) less the sum of, without duplication, (A) the cash paid on account of the
allowed amount of priority claims and administrative claims accrued from the
Petition Date through the Plan Effective Date (exclusive of such amounts paid as
of August 31, 2006) that are to be borne by the RGL Debtors in accordance with
section 2.a. of this Term Sheet, (B) the cash paid on account of RCM's portion
of the allowed amount of Excess Claims, if any, (C) the cash paid in accordance
with section 2.b. of this Term Sheet, and (D) the cash paid in accordance with
section 2.c. of this Term Sheet.
20
Annex A to Global Plan Term Sheet
[Private Actions Trust]
LITIGATION TRUST AGREEMENT TERM SHEET
1. There shall be at least two separate litigation trusts, one of which (the
"Non-Estate Litigation Trust") shall consist exclusively of certain creditors'
(the "Refco Creditors") of Refco Inc. and its debtor affiliates (collectively
"Refco") non-estate causes of action arising from any matter involving Refco
Inc. and/or its affiliates as described on Exhibit "A" annexed hereto, or, as
the parties determine best maximizes the value thereof, the proceeds of such
non-estate causes of action (the non-estate causes of action or the proceeds,
the "Non-Estate Refco Claims").
2. Each Refco Creditor that owns, including by assignment of litigation rights,
Non-Estate Refco Claims, but excluding the bondholders and the Banks, shall have
the option to assign its Non-Estate Refco Claims to the Non-Estate Litigation
Trust for settlement, prosecution as a class action or for prosecution on other
terms provided the creditor and the Non-Estate Litigation Trust agree. Such
other terms may include expense reimbursement, but may not include any other
financial inducement to the creditor. Each Refco Creditor making an assignment
shall reasonably cooperate with the Non-Estate Litigation Trust (at the
Non-Estate Litigation Trust's expense, including, without limitation, reasonable
attorneys fees incurred) in the investigation and prosecution of any assigned
Non-Estate Refco Claims. Any Refco Creditor making a request for prosecution of
a Non-Estate Refco Claim under paragraph 4 hereof shall be deemed, so long as
the Non-Estate Litigation Trust agrees in advance to pay all costs and expenses
of such prosecution, to consent to the Non-Estate Litigation Trust being
entitled to all benefits of such Non-Estate Refco Claim.
3. All creditors who elect to assign their Non-Estate Refco Claims to the
Non-Estate Litigation Trust (together, the "Beneficiaries") shall receive in
exchange certificates (the "Certificates") evidencing the right to receive the
proceeds of the Non-Estate Litigation Trust (the "Proceeds") which Certificates
and Proceeds shall be distributed directly to the Beneficiaries. A Beneficiary's
share in the Non-Estate Litigation Trust shall be calculated to mirror its
interest in the trust that holds estate causes of action arising from matters
involving Refco Inc. and its affiliates (the "Estate Litigation Trust") adjusted
upwards to take into account any non-participating creditors.
4. No earlier than 90 days after the Non-Estate Litigation Trust begins
operation, any Beneficiary may formally request in writing that the Non-Estate
Litigation Trust commence litigation against a particular target. If, within 90
days of such request, the Non-Estate Litigation Trust does not confirm its
then-present intention to pursue action against such target, the private causes
of action in respect of such target shall be returned to the requesting
Beneficiary whom may thereafter commence private action against such target.
Further, if within 180 days of confirming its intention, the Non-Estate
Litigation Trust does not actually commence litigation against such target or
enter into active settlement discussions with such target, the private causes of
action in respect of such target shall be returned to the requesting Beneficiary
whom may thereafter commence private action against such target, provided,
however, that the Non-Estate Litigation Trust shall be entitled to a one-time
90-day extension of either the 90-day period or the 180-day period if the
Oversight Board shall confirm in writing within the
applicable period that the Non-Estate Litigation Trust is actively researching
whether to bring claims against such target.
5. Notwithstanding the foregoing time periods, the Non-Estate Litigation Trust
must, if requested in writing by a Beneficiary, advise such requesting
Beneficiary whether the Non-Estate Litigation Trust has decided to pursue any
such Non-Estate Refco Claim against any specific target or to return such
claim/right to Proceeds back to the requesting Beneficiary no later than 30 days
before the running of any applicable statute of limitations for any such
Non-Estate Refco Claim against any such target. The requesting Beneficiary must
demonstrate to the reasonable satisfaction of the trustee/Oversight Board the
specific date that any such statute of limitations will expire with respect to a
specific Non-Estate Refco Claim to trigger this 30-day override provision.
6. The Non-Estate Litigation Trust shall report to a board consisting of five
(5) Beneficiaries (or their designees) including one member designated by VR
Global Partners, L.P. and the other four members designated by Beneficiaries who
have claims against Refco Capital Markets Ltd. but do not assert guaranty or
indemnity claims against Refco Group Ltd., LLC or any other Refco entity (the
"Oversight Board").
7. The trustee(s) for the Non-Estate Litigation Trust may be the same
individual(s) as those serving as trustee(s) for the Estate Litigation Trust.
The members of the Oversight Board may be the same individual(s) as those
serving as members of the oversight board, if any, for the Estate Litigation
Trust.
8. The Non-Estate Litigation Trust may not provide to a third-party a release of
a Non-Estate Refco Claim if two members of the Oversight Board oppose such
release.
9. The Non-Estate Litigation Trust shall work with the Estate Litigation Trust
to maximize the overall recovery to creditors. To the extent there is a
settlement or court ruling that involves the contemporaneous release or
resolution of the claims of both Trusts, the proceeds of any such settlement or
resolution (except for proceeds of litigation that is exclusively estate claims
or exclusively private claims, the proceeds of which shall go 100% to the
respective Trust) presumptively will be shared equally by each Trust subject to
any party-in-interest's right to request a different allocation as between the
Trusts from the Court, in which case the challenging party shall have the burden
of rebutting such presumption.
10. If (a) the Non-Estate Litigation Trust is unable or unwilling to prosecute
any Non-Estate Refco Claim or (b) each creditor has received 100% of its
pre-petition claim plus post-petition interest, then the Non-Estate Litigation
Trust shall re-assign such Non-Estate Refco Claim to the appropriate
Beneficiary.
3
Exhibit "A" to Litigation Trust Agreement Term Sheet
----------------------------------------------------
Non-estate causes of action arising from matters involving Refco, Inc., and/or
its affiliates (i) exclude contract claims against third-parties and (ii)
include, without limitation, causes of action against the following parties:
o All current and former officers, directors, or employees of Refco,
Inc. and/or its affiliates;
o All persons or entities that conducted transactions with Refco, Inc.
and/or its affiliates; and
o All persons or entities that provided services to Refco, Inc. and/or
its affiliates including, without limitation, all attorneys,
accountants, financial advisors, and parties providing services to
Refco, Inc. and/or its affiliates in connection with the public
issuance of debt or equity including, without limitation, all
underwriters.
The foregoing list includes, without limitation, causes of action against the
parties identified on Schedule "1" annexed hereto, which Schedule shall remain
confidential and will only be shared among members and ex officio members of the
Official Committees of Unsecured Creditors of Refco, Inc. and its affiliates,
subject to the confidentiality provisions of the Official Committees' bylaws.
Annex B to Global Plan Term Sheet
[Assets Schedule]
[Enlarge/Download Table]
Refco et al - Draft, Attorney Work Product For Settlement Purposes Only - Subject to FRE 408
==========================================================================================================
Estimated Asset Value - As of August 31, 2006
($ in millions)
8/31/2006
Estimate
--------
Refco Group Ltd. (Bank Obligor)
-------------------------------
Beginning Cash $11.6
Repayment of Interco from Refco Sing Pte 1.0
Distribution Refco LLC - Sub Debt Repaid 16.3
Distribution Refco Securities LLC - Sub Debt Repaid -
Repayment of RTS (UK) Intercompany Loans 5.5
Remaining Estimated Proceeds from Sale of Art Collection 0.3
Bawag Settlement 506.3
Estimated Value of FXCM Shares 60.0
Tradeworx 0.1
Xinhua Financial Network -
Partners Capital Investment Group, LLC -
Refco Alternative Investments, LLC 0.3
Refco Commodity Management, Inc -
Proceeds from Interest in Dendreon 0.7
Estimated Book Value of Cantor Index Holdings (10%) Interest 1.0
--------
Total $603.1
Refco LLC
---------
Beginning Cash $794.0
Estimate of additional proceeds, net of items due to Man under APA 33.3
Preliminary estimate of claims (60.0)
Repayment of Refco Group sub debt (16.3)
Seat Loan Repayment to Refco Capital LLC (120.5)
Repayment of intercompany loan from ROL 22.0
Repayment of intercompany loan from RTS (UK) 0.5
Repayment of Interco from Refco Sing Pte 0.7
Liquidation of Refco Taiwan Branch Office 3.0
Repayment of Interco from Refco Hong Kong -
I/C Receivable from Refco Capital -
I/C Receivable from Refco Capital Markets -
I/C Receivable from Refco F/X Associates LLC -
I/C Receivable from Refco Group Ltd., LLC -
I/C Payable to Kroeck & Associates, LLC -
I/C Payable to Refco Fixed Assets Management LLC -
--------
Total $656.7
Refco Global Holdings, LLC (Guarantor)
--------------------------------------
Beginning Cash $ 31.1
Distribution from Refco Canada (from Tax Refunds) 0.3
Repayment of Net Capital from Refco Sing Pte 62.0
Repayment of Interco from Refco Singapore Pte
Estimated Proceeds from Refco India winddown 0.2
Repayment from Refco Securities SA (France) sub debt 2.5
Repayment of Loan from REL 31.9
Estimated Equity proceeds from REL sale 3.6
I/C Payable to Refco Capital Markets -
I/C Payable to Refco Group Ltd., LLC -
Cargill Investor Services Ltd. -
Refco Japan, Ltd -
--------
Total $131.6
[Enlarge/Download Table]
Refco et al - Draft, Attorney Work Product For Settlement Purposes Only - Subject to FRE 408
==========================================================================================================
Estimated Asset Value - As of August 31, 2006
($ in millions)
8/31/2006
Estimate
--------
Refco F/X Associates (Guarantor)
--------------------------------
Beginning Cash $ 52.4
Post Petition Deposits (2.0)
Payment of Refco Forex interco -
Sale of Assets to potential buyer -
Assumed Estimated ACM Value 0.9
--------
Total $51.3
Refco Capital Corp. (Guarantor)
-------------------------------
Beginning Cash $128.1
Recovery on Kessler Loan 8.5
Recovery of PlusFunds Loan -
Seat Loan Repayment from Refco LLC 120.5
I/C Payable to Refco LLC -
Repayment of Interco from Refco Singapore Pte 0.5
Repayment of Interco from RSL 26.1
Repayment of Interco from ROL 0.9
Proceeds from Refco Forex sale (through interco with Refco East Services) 3.0
--------
Total $287.6
Kroeck & Assoc. (Guarantor)
---------------------------
Estimated assets available for distribution to intercos and equity $0.3
--------
Total $0.3
Refco Global Futures (Guarantor)
--------------------------------
Beginning Cash $ 8.8
Distribution of proceeds from Refco HK -
Man Refco HK Take or Pay Fee -
--------
Total $ 8.8
Refco Capital Holdings, LLC (Guarantor)
---------------------------------------
Beginning Cash $0.0
Repayment of Interco from RSL 3.5
--------
Total 3.5
Refco Fixed Asset Management (Guarantor)
----------------------------------------
Beginning Cash 0.1
Miscellaneous Asset Sales -
Repayment of Interco from RSL 0.2
--------
Total $ 0.3
Refco Capital Markets
---------------------
Beginning Cash $1,289.8
Equities, Bonds, Other Securities 1,076.3
Collection of Cash Due from Brokers 30.3
Repayments from RTS (UK) Interco -
Tradeworx interest -
Lonestar investment 6.2
Dendreon interest -
Assumed Estimated ACM Value 4.3
I/C Payable to Various Entities -
I/C Receivable from Various Entities Total -
--------
Total $2,406.9
[Enlarge/Download Table]
Refco et al - Draft, Attorney Work Product For Settlement Purposes Only - Subject to FRE 408
==========================================================================================================
Estimated Asset Value - As of August 31, 2006
($ in millions)
8/31/2006
Estimate
--------
Refco Global Finance Ltd.
-------------------------
Beginning Cash $2.3
Estimated Proceeds from sale of Bank Frick equity interest 0.9
Distribution from Refco Canada (from Tax Refund) 0.3
--------
Total $3.5
Refco Alternative Investments LLC/Fund Holdings
-----------------------------------------------
Beginning Cash $0.8
Repayment of Interco from RSL 0.4
Recovery from ROL intercompany 0.5
Recovery from wind-down of RAI/fund holdings 0.6
--------
Total $2.3
Refco Resources Ltd
-------------------
Repayment of Interco from ROL $0.3
--------
Total $0.3
Refco Canada Finance
--------------------
Beginning Cash $9.1
Distribution from Refco Canada (through sub debt) 1.3
--------
Total $10.4
Refco Clearing LLC (owned by Refco Regulated Cos.)
Beginning Cash $1.3
Repayment of Interco from RSL 0.4
--------
Total $1.7
Refco Trading Services
----------------------
Beginning Cash $1.6
Potential tax liability (0.9)
--------
Total $0.7
Commodity Management Inc.
------------------------
Beginning Cash $1.5
Projected collections 1.4
--------
Total $2.9
Refco, Inc.
-----------
Beginning Cash $0.1
--------
Total $0.1
Refco Easy Solutions
--------------------
Beginning Cash/estimated assets available for Distribution $0.2
--------
Total $0.2
-----------------------------------------------------------------------------------------------
Total All Entities $4,172.3
===============================================================================================
Additional RSL Value $41.7
-----------------------------------------------------------------------------------------------
Total Including RSL $4,214.0
===============================================================================================
Additional FXCM Value Assumption per Settlement Discussions $ 30.0
-----------------------------------------------------------------------------------------------
Adjusted Total $4,244.0
===============================================================================================
EXHIBIT B
---------
[Lender Settlement Order]
-------------------------
UNITED STATES BANKRUPTCY
COURT SOUTHERN DISTRICT OF NEW YORK
---------------------------------------)
In re )
) Chapter 11
REFCO INC., et al., )
) Case No. 05-60006 (RDD)
Debtors. ) Jointly Administered
)
---------------------------------------
ORDER PURSUANT TO SECTION 105(a) OF THE BANKRUPTCY
CODE AND BANKRUPTCY RULE 9019 APPROVING SETTLEMENT
OF CONTROVERSIES AND DISPUTES AMONG THE DEBTORS,
THE RCM TRUSTEE, THE PRE-PETITION SECURED LENDERS
AND CERTAIN OTHER PARTIES
-------------------------
Upon the motion (the "Motion") of Refco Group, Inc. ("Refco") and its
affiliated chapter 11 debtors in the above captioned cases (the "Debtors"), and
the Chapter 11 trustee (the "RCM Trustee," and collectively with the Debtors,
the "Movants") of Refco Capital Markets, Ltd. ("RCM"), seeking approval of a
compromise and settlement pursuant to Rule 9019 of the Federal Rules of
Bankruptcy Procedure (the "Bankruptcy Rules") of certain controversies and
disputes among the Movants, other parties-ininterest, the Agent (as hereinafter
defined) and the lenders from time to time (in their capacities as such, the
"Lenders") under that certain Credit Agreement dated as of August 5, 2004 (as
amended, supplemented or otherwise modified, the "Credit Agreement") among
Refco Finance Holdings LLC (now Refco Group Ltd., LLC), the Lenders, Banc of
America Securities LLC, Credit Suisse First Boston and Deutsche Bank Securities
Inc., as co-lead arrangers and joint book running managers, Credit Suisse First
Boston, as syndication agent, Deutsche Bank Securities Inc., as documentation
agent and Bank of America, N.A. as administrative agent, swing line lender and
L/C issuer (in its capacity as administrative agent for the Lenders, the
"Agent") (the Credit Agreement, all related mortgages, security agreements,
guarantees and other related agreements and documentation executed in
connection with the Credit Agreement, hereinafter collectively referred to as
the "Loan Documents"); and
The Movants and certain other parties-in-interest in these cases (as
identified in Schedule I attached hereto, along with any other Releasing Party
(as hereinafter defined) that executes and delivers a Participating Party
Agreement, the "Participating Parties") having agreed to settle and compromise
disputes with the Agent and the Lenders, and be bound by the terms of this
Order; and
The Agent and the Required Lenders (as defined in the Credit
Agreement, the "Required Lenders") having agreed to the terms of this Order;
and
Each of the Movants and the Participating Parties having executed and
delivered an agreement (the "Participating Party Agreement"), in form and
substance satisfactory to the Agent, in which (i) each Movant agrees to use its
reasonable best efforts to ensure that any plan confirmed in these cases is a
Qualifying Plan (as defined below), (ii) each Participating Party agrees not to
object to the provisions referred to in paragraph 10 to the extent they are
contained in any plan proposed in these cases, or propose any plan that does
not contain all such provisions and (iii) each Movant and Participating Party
confirms that it is bound by the terms and conditions of this Order (including,
without limitation, the releases contained herein), regardless of whether any
plan or plans of reorganization are agreed upon or confirmed in these cases or
any of the Debtors' cases is converted to chapter 7; and
2
A hearing on the Motion (the "Hearing") having taken place before the
Court on September 27, 2006 and the Court having found the proposed settlement
and compromise as set forth in this Order to be fair and reasonable, in the
best interests of the estates of the respective Debtors and their respective
creditors and other parties-in-interest, and necessary and essential for the
successful negotiation and implementation of a global plan in these cases;
NOW, THEREFORE, upon the Motion and the evidence presented at the
Hearing and the agreement among the parties to the terms and conditions of this
Order, and there being due and sufficient cause for entry of this Order by the
Court;
IT IS HEREBY DETERMINED, FOUND, ADJUDGED AND ORDERED THAT:
1. The Motion is a "core proceeding," and this Court has jurisdiction
over the parties and property affected hereby pursuant to 28 U.S.C.
ss.ss.157(b) and 1334.
2. Due and sufficient notice of the Motion and Hearing has been given.
3. This Order shall, on the terms and conditions hereinafter set
forth, and to the extent provided herein, settle all disputes, controversies,
claims and causes of action between the Movants and the Participating Parties
on the one hand, and the Agent and the Lenders on the other, and shall be
binding on all such estates and parties-in-interest and any successor or assign
thereof (including, without limitation, any Chapter 7 or Chapter 11 trustee
appointed in any of the cases and any litigation trust or similar vehicle
established in connection with these cases), and shall not be modified or
otherwise affected by any chapter 11 plan confirmed in these cases or any order
3
of the Court, except as contemplated by this Order or as otherwise agreed in
writing by all of the parties affected thereby.
4. The compromises and settlements contained herein, including,
without limitation, those that would become effective at the time of the
effectiveness of, and pursuant to, a Qualifying Plan, are in the best interest
of the Debtors and their estates, and confer substantial benefit on the estates
and their creditors by, among other things, limiting potentially substantial
secured claims for additional interest, fees and indemnities in favor of the
Agent and/or the Lenders. Such compromises and settlements, and the
contemplated consideration therefor as set forth in this Order, are the result
of arm'slength bargaining, and are necessary and essential to permit the
negotiation and implementation of a global plan in these cases.
5. The provisions of this paragraph 5 shall take effect and become
binding on the Trigger Date (as hereinafter defined). Except to the extent
compromised and settled pursuant hereto, the claims of the Agent and the
Lenders under the Loan Documents (the "Secured Claims"), as filed in the
respective Debtors' cases, are allowed in full as secured claims in the cases
of Refco and the Debtors who are Guarantors (as defined in the Loan Documents).
The Secured Claims are secured by valid and perfected liens (the "Liens") on
the collateral identified in the Loan Documents and in that certain order dated
October 20, 2005, as subsequently amended, relating to adequate protection of
the Lenders (collectively, the "Collateral"), which Collateral had on the date
of the filing of each Debtor's respective chapter 11 or chapter 7 case (the
"Petition Date"), and continues to have, a value in excess of the amount of the
Secured Claims. The Secured Claims and Liens are not subject to avoidance under
4
the Bankruptcy Code or under otherwise applicable law, and shall be paid in
cash in accordance with this Order as promptly as possible after this Order
becomes binding on the parties pursuant to paragraph 15 hereof.
6. Unless the Other Trigger Date (as hereinafter defined) has by then
occurred, on or before the latest of (i) October 16, 2006, (ii) such other date
not later than October 31, 2006 as may be agreed to by the Agent in its sole
discretion, and (iii) such other date as may be designated by the Agent and the
Required Lenders, in their sole discretion, and, if the Other Trigger Date has
been declared and as soon as such payment can be made in accordance with the
last sentence of this paragraph 6, the following amounts shall be irrevocably
paid to the Agent by the Debtors in respect of the Secured Claims to be applied
by the Agent in accordance with the Loan Documents (the date on which payment
of such amounts in full and in cash has been made being referred to herein as
the "Payment Date"):
(a) $642,000,000, constituting the full outstanding principal
amount of the Loans (as defined in the Loan Documents, the "Loans");
(b) $1,693,276.42, calculated as set forth on Schedule II
hereto, and constituting the full amount of interest accrued and
unpaid under the Loan Documents as of the Petition Date;
(c) all interest accrued on principal and interest payable
under the Loan Documents from the Petition Date through the Payment
Date, payable at the Post-Petition Interest Rate and compounded daily
from the Petition Date through the Payment Date (the "Post-Petition
Interest Rate" for purposes hereof being the Base Rate in effect from
time to time plus the Applicable Rate applicable to Base Rate Loans,
as each such term is defined in the Credit Agreement, but without the
5
additional 2% per annum ("Default Interest") provided for in clause
(c) of the definition of "Default Rate" in the Credit Agreement);
(d) all fees and expenses (including, without limitation,
fees and expenses of counsel and financial advisors to the Agent
and/or the Lenders) reimbursable under the Loan Documents through
September 30, 2006; provided, however, that the fees and expenses
through September 30, 2006 payable pursuant to this paragraph 6(d)
shall not exceed $13,500,000 unless (i) the Hearing is contested or
any discovery is taken with respect to the Motion or (ii) any motion,
demand, claim, cause of action, lawsuit or discovery against the Agent
and/or any Lender, or with respect to any matter(s) in which the Agent
and/or any Lender has a material interest, is commenced or threatened
by any party-in-interest prior to September 30, 2006, in which case
the amount to be paid under this paragraph 6(d) shall be the actual
amount of fees and expenses (including, without limitation, fees and
expenses of counsel and financial advisors to the Agent and/or the
Lenders) reimbursable under the Loan Documents through September 30,
2006; and
(e) all fees, expenses and other amounts (exclusive of
principal and interest on the Loans) reimbursable or payable under the
Loan Documents through the Payment Date, including, without
limitation, fees and expenses of counsel and financial advisors to the
Agent and/or the Lenders incurred from October 1, 2006 through the
Payment Date.
6
For purposes of this Order, the "Trigger Date" shall occur upon the earlier to
occur of (i) the Payment Date and (ii) the date (the "Other Trigger Date") on
which the Agent, with the written consent of the Required Lenders, notifies
Refco, the RCM Trustee and the Committees in writing that a Trigger Date has
occurred. Upon occurrence of a Trigger Date, all provisions of this Order that
become binding upon occurrence of the Trigger Date shall become binding. Whether
or not a Trigger Date has occurred, the Debtors party to the Loan Documents
shall use their reasonable best efforts to raise the funds required to pay the
amounts required to be paid pursuant to this paragraph 6 as promptly as
possible, and the RCM Trustee shall support the efforts by such Debtors. In
furtherance of and without limiting the generality of the foregoing, if the
Other Trigger Date is declared, the Debtors party to the Loan Documents shall
from time to time irrevocably pay all such unpaid amounts from whatever funds
may be available for such purpose, provided that such payments shall be made in
increments of no less than $1 million.
7. Upon the occurrence of the Trigger Date, and in consideration for
each Releasing Party being bound by its respective release pursuant to
paragraph 8, the Agent and the Lenders, and each of their successors and
assigns, shall be permanently enjoined from taking, or benefiting from, any
action or commencing any legal proceedings to seek recovery of any losses in
respect of principal and/or interest on the Loans not payable pursuant to
paragraph 6 above (including, without limitation, for recovery of Default
Interest) against (a) the Debtors or any of their respective properties and (b)
each such other Releasing Party or Released Party, including, without
limitation, the holders of Securities under and as defined in that certain
7
Indenture, dated as of August 5, 2004 (the "Indenture") among Refco Finance
Holdings LLC (now Refco Group Ltd., LLC), Refco Finance Inc. and Wells Fargo
Bank, N.A. as trustee.
8. In consideration of the waivers and compromises made by the Agent
and the Lenders as set forth herein, the parties have agreed and it is hereby
ordered that upon the Trigger Date, each of the Lenders and the Agent and its
successors and assigns, and, in their capacities acting on behalf of such
Lender or the Agent with respect to the Loans, each of their directors,
officers, employees, agents, professionals, properties, and advisors
(collectively, the "Lender Releasees") shall be fully and forever released by
the Debtors, their respective estates, their creditors and all other
parties-in-interest in these cases, and the respective successors and assigns
of each of the foregoing, including, without limitation, any Chapter 7 or
Chapter 11 trustee appointed in any of the cases and any litigation trust or
similar vehicle established in connection with these cases (collectively, the
"Releasing Parties") from, against and with respect to any and all actual or
potential demands, claims, causes of action (including, without limitation,
derivative causes of action), suits, assessments, liabilities, losses, costs,
damages, penalties, fees, charges, expenses and all other forms of liability
whatsoever, in law or equity (including, without limitation, actions seeking to
recharacterize, avoid, subordinate, set aside or disallow the liens or claims
of any Lender Releasee, or seeking turnover of property, damages or any other
affirmative recovery from any Lender Releasee, including, without limitation,
any claim for contribution), whether asserted or unasserted, known or unknown,
foreseen or unforeseen, pending or anticipated, arising under the Bankruptcy
Code or under otherwise applicable law, that any Releasing Party ever had, now
has or hereafter may have (whether by assignment or otherwise) based in whole
8
or in part upon any act or failure to act by any of the Lender Releasees, on or
prior to the Payment Date, in contemplation of the execution of the Loan
Documents, in connection with the execution of the Loan Documents or the making
or repayment of the Loans, or in connection with any transactions directly or
indirectly related or connected in any way to the Loan Documents, the
Collateral, the use of proceeds of Loans made under the Loan Documents, or any
other transactions related to or in connection with any of the foregoing
(collectively, the "Released Claims"); provided, however, that the Lender
Releasees shall not include any person who is or was a director, officer,
employee, shareholder, affiliate, professional, or advisor of or acting or
having acted for a Debtor or any affiliate of a Debtor, in such capacity.
Furthermore, upon the Trigger Date, (a) each Releasing Party shall be deemed to
expressly waive any and all defenses to the foregoing releases, including,
without limitation, any rights conferred upon it by any statute, law, equitable
principle or otherwise that provides that a release does not extend to claims
of which the releasing party does not know or suspect to exist in its favor at
the time of executing the release, which if known by the releasing party would
have materially affected the releasing party's settlement with the released
parties; (b) the releases granted pursuant to this paragraph 8 shall be full
and final, whether or not a Qualifying Plan becomes effective, and shall
constitute a complete defense against the Released Claims with respect to any
and all parties who may seek to assert such claims derivatively or otherwise on
behalf of or in the name or stead of the Debtors or their estates or any
successor thereto, or any other Releasing Party; (c) each Releasing Party shall
be permanently enjoined from seeking recovery of any amounts sought to be
recovered from the Lender Releasees by any party through any cross-claim in any
9
action brought by any Releasing Party against any party; and (d) each Releasing
Party shall be permanently enjoined from taking any action or commencing any
proceeding against the Lender Releasees or their property with respect to any
of the Released Claims.
9. If and only if a Qualifying Plan becomes effective in these cases
(the date on which such a Qualifying Plan becomes effective being referred to
herein as the "Plan Effective Date") and such Qualifying Plan (and any related
confirmation or other order implementing such Qualifying Plan) remains in full
force and effect (including, without limitation, with respect to the releases
thereunder or required pursuant to paragraph 10(b)) as it relates to the
treatment of the Agent and the Lenders:
(a) any claims of the Agent and/or the Lenders for
indemnification and other amounts payable under the Credit Agreement
(other than fees and expenses of counsel and financial advisors) (the
"Unsatisfied Credit Agreement Claims") shall be deemed estimated at $0
(the "Estimated Unsatisfied Credit Agreement Claims") for purposes of
allowance in the respective Debtors' cases pursuant to Section 502(c)
of the Bankruptcy Code, but, in the case of indemnification claims,
only to the extent they arise out of claims released by the Qualifying
Plan as provided in paragraph 10(b);
(b) the claims of the Agent and/or the Lenders that are not
Secured Claims arising out of the Loan Documents, including, without
limitation, claims asserted for fraud and misrepresentation allegedly
perpetrated by any Debtor, shall be deemed estimated at $0 for
purposes of allowance pursuant to Section 502(c) of the Bankruptcy
Code; and
10
(c) the Agent and the Lenders shall be deemed to waive their
right to seek recovery of any Estimated Unsatisfied Credit Agreement
Claims under the subordination provisions of the Indenture against the
holders of the Securities (as defined in the Indenture).
Each Movant shall use its reasonable best efforts to ensure that any chapter 11
plan confirmed in these cases is a Qualifying Plan.
10. For purposes hereof, "Qualifying Plan" means a chapter 11 plan for
all of the Debtors, or, if any Debtor's chapter 11 case is converted to a
chapter 7 case, a binding settlement or like arrangement as to that Debtor and
all other parties-in-interest (together with a plan for all of the other
Debtors) that:
(a) provides that the terms and conditions of this Order
shall govern the treatment of the Agent, the Lenders and the other
Lender Releasees, and does not contain any term or condition
inconsistent with the terms and conditions of this Order;
(b) specifies that in addition to the releases provided in
this Order, the Lender Releasees shall be generally released by all
third parties (the "Plan Releasing Parties") to the same extent as the
releases described in paragraph 8;
(c) permanently enjoins the Releasing Parties and the Plan
Releasing Parties from taking, or benefiting from, any action or
commencing any legal proceedings against the Agent or any Lender with
respect to any matters released under this Order or under such
Qualifying Plan (the "Released Matters");
(d) permanently enjoins the Agent and the Lenders from
taking, or benefiting from, any action or commencing any legal
11
proceedings against any Releasing Party or Plan Releasing Party to
recover for any losses in respect of principal and/or interest on the
Loans; and
(e) is confirmed pursuant to a binding confirmation order
and, in the case of a Debtor converted to chapter 7, other binding
order that (i) expressly confirms and approves the releases of the
Agent, the Lenders and other Lender Releasees referred to in clause
(b) of this paragraph 10 and (ii) includes injunctions comparable in
scope to the injunctions referred to in clauses (c) and (d) of this
paragraph 10.
11. For the avoidance of doubt, and notwithstanding paragraphs 7 and
10(d), in the event the Agent or any Lender is not released by any party to the
full extent contemplated in paragraph 10(b) (including, without limitation, as
a consequence of conversion of the case of any Debtor to chapter 7), (a) the
claims of each of the Agent and such Lenders, as the case may be, under the
Loan Documents for indemnification arising from the failure of such release to
be provided (whether such claims are fixed, liquidated, contingent or
unliquidated) shall be allowed in full as Secured Claims against the Debtors
party to the Loan Documents (it being understood that RCM is not a party to the
Loan Documents), and shall be provided for in full under any plan or plans in
respect of such Debtors and (b) the Agent and the Lenders shall be entitled to
take any actions they deem necessary or appropriate to recover such Secured
Claims.
12. It is the intention of the Agent and/or the Lenders to continue to
employ professionals to assure enforcement of the terms of this Order and
implementation of a Qualifying Plan in accordance with the terms set forth
above, and the Debtors are authorized and directed without further order of the
12
Court to pay the fees and expenses of the Agent and such Lenders incurred after
the Payment Date, which shall continue to be payable in accordance with the
Loan Documents, promptly upon receipt of invoices therefor. Consistent with the
foregoing, all documents and pleadings filed by any Movant in connection with
the enforcement of the terms and conditions of this Order, or the
implementation of a Qualifying Plan, shall be reasonably acceptable to the
Agent as to matters affecting the Agent or the Lenders, and the Agent and the
Lenders reserve the right to object to any action or proceeding that is not
consistent with the terms of this Order or any plan that is not a Qualifying
Plan. In addition, the Agent and the Lenders reserve all of their rights
(including, without limitation, the right to enforce and vote on any plan) with
respect to any Secured Claims that are not satisfied or extinguished pursuant
to this Order.
13. Upon the Payment Date,
(a) the Debtors shall be authorized to use cash collateral of
the Lenders to pay allowed administrative expenses of the respective
estates (subject to any applicable requirements of the Bankruptcy Code
or orders of the Court) and to make other payments under an effective
Qualified Plan or as permitted by the Bankruptcy Court without any
further consent of or provision of adequate protection to the Agent or
the Lenders;
(b) the adequate protection motion currently before the Court
shall be postponed to the date of the hearing on confirmation of a
plan;
(c) so long as any plan proposed or confirmed and consummated
in any of these cases is a Qualifying Plan, and such plan (and the
order confirming such plan) remains in full force and effect, the
13
Agent and the Lenders shall not seek any additional adequate
protection; and
(d) the Agent and the Lenders shall be deemed to consent to
the granting by the Debtors to RCM of security interests and liens to
secure credit obligations incurred by one or more of the Debtors for
(but only for) the purpose of funding or refinancing the funding of
the payments to the Agent made on the Payment Date pursuant to
paragraph 6 to the extent that the principal amount of the credit
obligations does not exceed the total sum of $200 million, which
security interests and liens shall be subject and subordinate to any
unsatisfied Secured Claims of the Agent and/or the Lenders (other than
for Default Interest) in an amount equal to the amount of the Default
Interest accrued through the Payment Date, and shall otherwise have
priority over the Liens.
14. This Order shall not be subject to modification or amendment by
further order of the Court without the written consent of all of the Movants
and the Agent.
15. This Order shall become binding on the parties, and the Trigger
Date may occur, only upon satisfaction of the following conditions:
(a) this Order and an order (the "LLC Order") satisfactory to
Refco, LLC ("LLC"), the Agent and the Required Lenders binding LLC,
the Agent and the Lenders to the terms, conditions and other
provisions in this Order as if LLC were a Releasing Party under
paragraphs 7 and 8 of this Order, shall have been entered by the Court
and, unless otherwise waived by the Agent and the Required Lenders,
shall have become final orders in full force and effect, not subject
to any further appeal, rehearing, modification or amendment, provided
14
that the possibility that a motion under Rule 60 of the Federal Rules
of Civil Procedure, or any analogous rule under the Bankruptcy Rules
or applicable state court rules of civil procedure, may be filed with
respect to this Order or the LLC Order will not cause this Order or
the LLC Order not to be a final order;
(b) unless otherwise waived by the Agent and the Required
Lenders, each Participating Party shall have executed and delivered
the Participating Party Agreement, which shall be in full force and
effect; and
(c) the Agent and the Required Lenders shall have agreed in
writing to the terms and conditions of this Order, which shall be in
full force and effect.
16. In the event that, prior to the occurrence of the Trigger Date,
the Debtors have failed to timely make any payment contemplated to be made
under paragraph 6 above (as the dates for such payments may be extended from
time to time in accordance with such paragraph), including, without limitation,
by virtue of this Order not having become binding pursuant to paragraph 15,
then this Order shall cease to be in effect and shall no longer be binding on
the Agent, the Lenders, the Debtors, the RCM Trustee, the Committees, the
Participating Parties or any other parties-in-interest.
17. In the event that this Order does not become binding or, pursuant
to paragraph 16 above, ceases to be binding, it shall not constitute an
admission by any party-in-interest of any determination or finding stated
herein.
15
18. This Court shall retain jurisdiction to enforce the terms of this
Order, and any releases, injunctions or further determinations provided for or
contemplated hereby.
New York, New York
_________ __, 2006
____________________________
Honorable Robert D. Drain
United States Bankruptcy Judge
16
Schedule I
Participating Parties
(a) Debtors
Refco Inc.
Bersec International LLC
Kroeck & Associates, LLC
Marshall Metals LLC
New Refco Group Ltd., LLC
Refco Administration LLC
Refco Capital LLC
Refco Capital Holdings LLC
Refco Capital Management LLC
Refco Capital Markets, Ltd. (including the chapter 11 trustee thereof)
Refco Capital Trading LLC
Refco Finance Inc.
Refco Financial LLC
Refco Fixed Assets Management LLC
Refco F/X Associates LLC
Refco Global Capital Management LLC
Refco Global Finance Ltd.
Refco Global Futures LLC
Refco Global Holdings LLC
Refco Group Ltd., LLC
Refco Information Services LLC
Refco Mortgage Securities, LLC
Refco Regulated Companies LLC
Summit Management LLC
Westminster-Refco Management LLC
Refco Managed Futures LLC
Lind-Waldock Securities LLC
(b) Committees
The Official Committee of Unsecured Creditors of Refco Inc., et al.
The Additional Official Committee of Unsecured Creditors of Refco Inc., et al.
The Joint Subcommittee of the Official Committee of Unsecured Creditors of
Refco Inc., et al. and the Additional Official Committee of Unsecured Creditors
of Refco Inc., et al.
(c) Committee members
Members of the Official Committee of Unsecured Creditors of Refco Inc., et al.
o D.E. Shaw & Co., LP
o Esopus Creek Advisors
o Wells Fargo Bank, N.A., as Indenture Trustee
o Cargill, Incorporated
Members of the Additional Official Committee of Unsecured Creditors of Refco
Inc., et al.
o VR Global Partners, L.P.
o Markwood Investments Ltd.
o Premier Bank International N.V.
o Everest Asset Management, Inc.
(d) MCG Members
Inter Financial Services, Ltd.
Capital Management Select Fund Ltd.
Global Management Worldwide Limited
Arbat Equity Arbitrage Fund Limited
Russian Investors Securities Limited
Garden Ring Fund Limited
RB Securities Limited
GTC Bank Inc.
IDC Financial S.A.
Investment & Development Finance Corp.
Ernesto Ruiz Sinibaldi
Christian Klose Pieters
Aida Margarita Rosales de Klose
Banco Reformador S.A.
Transcom Bank (Barbados) Ltd.
(e) RCM Settlement Joinder Parties
Sul America Compania de Seguros del Ecuador C.A.
Brooke Financial Services Ltd.
VR Global Partners, L.P.
Paton Holdings Ltd.
VR Capital Group Ltd.
VR Argentina Recovery Fund, Ltd.
Premier Bank International N.V.
Markwood Investments Ltd.
(f) Other
Fintech Advisory Inc.
VR Advisory Services, Ltd.
Josefina Franco Siller
Banco Uno S.A. Nicaragua
(g) a Super Majority under and as defined in the RCM Settlement Agreement as
filed with the Court on August 23, 2006 (inclusive of persons listed above).
and
(h) a majority in number of the following entities:
2
Oslo International S.A.
Alfredo Skinner-Klee and Alexandra Sol de Skinner-Klee
Ballery Holdings
Bilston International Inc.
Banco Uno S.A. - Panama
Banco Uno S.A. - El Salvador
Banco Uno S.A. - Guatemala
INS-Bancredito Valores Puesto de Bolsa, S.A.
Servicios Generales Bursatiles, S.A. de C.V.
Altima Capital Management, Inc.
Turisol Casa de Cambio, C.A.
Heptagon Financial Services, Inc., f/k/a Interfin Capital Inc.
Sud America de Seguros C.A.
Latina de Seguros, f/k/a Generali Peru Compania de Seguros y Reseguros
Heptagon Financial Planners, Ltd.
Banco de Hipotecario de Inversion Turistica de Venezuela as trustee of
Fideicomiso Federal Forex Investment
3
Schedule II
Calculation of Interest Accrued and Unpaid Under the
Loan Documents as of the Petition Date
[Enlarge/Download Table]
Accrual Days
------------------------- Principal
From To Days Outstanding Rate Accrual Interest
-----------------------------------------------------------------------------------------------------------
9/30/2005 10/10/2005 10 $ 642,000,000.00 5.84063% 360 $ 1,041,579.02
10/10/2005 10/16/2005 6 642,000,000.00 6.09063% 360 651,697.40
-------- -----------------
16 $ 1,693,276.42
4
EXHIBIT C
---------
UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
------------------------------
In re
Chapter 7
REFCO, LLC, Case No. 05-60134 (RDD)
Debtor.
------------------------------
CLAIM SUBORDINATION AND WAIVER
------------------------------
In consideration of the pleadings contemplated to be filed by Albert
Togut, not individually but as chapter 7 trustee (the "Chapter 7 Trustee") for
the estate of Refco, LLC (the "Chapter 7 Debtor"), seeking approval of the
allocation of proceeds from the sale of the regulated commodity broker
businesses of the Chapter 7 Debtor and Refco Inc. and/or its affiliates other
than Refco, LLC ("Refco") and the payment of amounts owed to Refco Capital LLC
on account of loans made by Refco Capital LLC to the Chapter 7 Debtor's
customers, and in consideration of the distributions on account of intercompany
claims contemplated to be made after timely-filed non-intercompany claims
against the Chapter 7 Debtor's estate are paid or reserved, as more fully
described and contemplated in the Global Term Sheet attached as Exhibit A
to that certain Plan Support Agreement dated September 14, 2006 (the "Plan
Support Agreement"), Claimant (as defined below) hereby agrees as follows:
A. Commencing upon the date of execution of this Claim Subordination
and Waiver, Claimant permanently and irrevocably agrees: (i) to subordinate any
and all right to payment or distribution on account of its Claim (as described
below) to (x) all costs of administration of the Chapter 7 Debtor's estate
(including but not limited to administrative costs paid to date), and (y) all
costs and claims entitled to payment or distribution under Sections 766(h),
726(a)(1) and 726(a)(2) of the Bankruptcy Code; and (ii) that the Chapter 7
Trustee need not and shall not reserve any amounts on account of the Claim in
making distributions or establishing reserves on account of the costs and
claims (including any intercompany claims asserted by the RGL Debtors and RCM,
each as defined in the Plan Term Sheet) specified in the foregoing
subparagraph, and may disregard the Claim in calculating such reserves and
making such distributions.
B. Upon the effective date (consummation) of the global plan of
reorganization or liquidation for the Chapter 11 Debtors (the "Global Plan")
described and contemplated in the Plan Support Agreement, Claimant shall be
deemed to have irrevocably transferred its Claim to Refco or such other entity
as is specified in the Global Plan, and this Claim Subordination and Waiver
shall constitute consent to entry of an order, without further notice,
disallowing and expunging the Claim for purposes of Claimant receiving
distributions from the Chapter 7 Debtor's estate, but without affecting the
right of the transferee specified in the Global Plan to receive distributions
under the Global Plan. In the event that the Global Plan does not provide for
the assignment and transfer of the Claim to Refco or another entity, the Claim
shall be deemed waived and discharged upon the effective date (consummation) of
the Global Plan, and this Claim Subordination and Waiver shall constitute
consent to entry of an order, without further notice, disallowing and expunging
the Claim for all purposes.
C. Claimant recognizes that the Chapter 7 Trustee intends to and will
rely upon this Claim Subordination and Waiver in order to make payments and
distributions without reserve to the Chapter 7 Debtor's creditors, including
(to the extent their claims are allowed) the RGL Debtors and RCM. Claimant
forever waives, releases and discharges the Chapter 7 Trustee and the Chapter 7
Debtor's estate, and their respective agents, representatives and
professionals, from any and all claims or causes of action that might be
asserted against any or all of them, whether now existing or arising in the
future, arising from or relating to payments or distributions made by the
Chapter 7 Trustee to the Chapter 7 Debtor's creditors, including if applicable
the RGL Debtors or RCM, in reliance (whether or not justified) on this Claim
Subordination and Waiver.
The undersigned individual hereby agrees and warrants that he or she
is fully authorized and empowered to execute this Claim Subordination and
Waiver on behalf of Claimant.
Claimant: ________________
Claim No: ________________
__________________________
By: __________________________
Its: __________________________
EXHIBIT D
[RCM Settlement Order Modification]
-----------------------------------
If the chapter 7 trustee of Refco, LLC (the "LLC Trustee") pays any Rogers
Funds Claims, with the result that the Rogers Funds have received and been paid
and satisfied in full the total amount, without duplication, of all of the
Rogers Funds Claims allowed in favor of the Rogers Funds in both the Refco LLC
and the RCM cases, then, to the extent of such payment by the LLC Trustee, (a)
the LLC Trustee shall thereby become subrogated to any rights of the holders of
the Rogers Funds Claims to be treated as holders of Securities Customer Claims
under the Settlement Agreement, and (b) the LLC Trustee shall thereupon be
entitled to the same treatment as the holders of the Rogers Funds Claims would
have had to be treated as a holder of Securities Customer Claims under the
Settlement Agreement without subordination or other disallowance of his
subrogation claim as a Securities Customer Claim. If the RCM Case is converted
to a chapter 7 case to be administered under subchapter III of chapter 7, Refco
LLC's status as an affiliate of RCM will not affect the priority of the Rogers
Funds Claims, whether asserted by the holders of the Rogers Funds Claims or, to
the extent subrogated under clause (a) above, by the LLC Trustee. Under no
circumstance may RCM's aggregate liability to the LLC Trustee in respect of the
LLC Trustee's subrogation exceed what would have been RCM's liability to the
holders of the Rogers Funds Claims, including with respect to post-petition
interest and attorneys' fees, in the absence of such subrogation. Nothing in
this paragraph shall prevent or affect (i) the LLC Trustee's rights to claim
that any amounts are owed to the LLC Trustee by the RCM estate under any theory
of recovery arising from or relating to any securities deposited by the Rogers
Funds or any claims allowed against Refco, LLC in favor of the Rogers Funds or
(ii) the RCM Trustee's rights to object to or defend against any such claims.
The term "Rogers Funds Claims", as used in the foregoing provisions of this
paragraph, includes, to the extent allowed, any Rogers Funds Claims for
post-petition interest and attorneys' fees.
Dates Referenced Herein and Documents Incorporated By Reference
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