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further agreed that these premium payments would be made upon the
occurrence of certain events.
B. Structure and Funding of ASA
On April 18, 1990, AlliedSignal formed AlliedSignal
Investment Corp. (ASIC), a wholly owned subsidiary. On the same
day, Barber Corp. N.V. (Barber) and Dominguito Corp. N.V.
(Dominguito) were formed. Each corporation was owned by two
Netherlands Antilles foundations controlled by ABN Trust: Barber
was owned by the Demian Foundation and the Freya Foundation,
while Dominguito was owned by the Aida Foundation and the Carmen
Foundation. Each foundation contributed $3,000 to its
corporation in exchange for 3,000 shares with a par value of $1
per share. Thus, Barber and Dominguito were each capitalized
with $6,000.
Barber, Dominguito, and ABN entered into revolving credit
agreements that provided for Barber and Dominguito to pay ABN
interest of LIBOR plus 30 b.p. on the loans. These loans would
be secured by the stock held by the foundations and, thus,
indirectly by Barber's and Dominguito's partnership interests.
Barber, Dominguito, and ABN also entered into subordinated loan
agreements that provided for interest-free loans from ABN to
Barber and Dominguito. In addition, each foundation granted ABN
an irrevocable option to acquire, at par value, the shares of the
respective corporation that each foundation owned.
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