EXHIBIT (k)(4)
COLLATERAL AGREEMENT
Among
[ ],
As Pledgor,
THE BANK OF NEW YORK, As Collateral Agent
and
DECS TRUST V
Dated as of
[ ], 1999
The following Table of Contents has been inserted for convenience of
reference only and does not constitute a part of the Collateral Agreement.
TABLE OF CONTENTS
SECTION
1. The Security Interests............................................ 1
2. Definitions....................................................... 2
3. Representations and Warranties of the Pledgor..................... 6
4. Representations and Warranties of the Collateral Agent............ 7
5. Certain Covenants of the Pledgor.................................. 7
6. Administration of the Collateral and Valuation of the Securities.. 9
7. Income and Voting Rights on Collateral............................ 14
8. Remedies upon Events of Default................................... 14
9. The Collateral Agent.............................................. 17
10. Miscellaneous.................................................... 19
11. Termination of Collateral Agreement.............................. 21
12. No Personal Liability of Trustees................................ 21
[Exhibit A - Certificate for Substituted Collateral]
Exhibit B - Certificate for Additional Government Securities
Exhibit C - Certificate for Additional Collateral
COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT (the "Agreement"), dated as of ,
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1999, among [ ], a [ ] organized under
the law of the State of Delaware (the "Pledgor"), The Bank of New York, a New
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York banking corporation, as collateral agent (the "Collateral Agent") hereunder
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for the benefit of DECS Trust V, a statutory business trust organized under the
Business Trust Act of the State of Delaware (such trust and the trustees thereof
acting in their capacity as such being referred to herein as the "Trust" or
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"Purchaser"), and the Trust;
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W I T N E S S E T H:
WHEREAS, pursuant to the Forward Purchase Agreement (the "Purchase
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Agreement"), dated as of , 1999, between Pledgor and Purchaser,
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the Pledgor has agreed to sell and Purchaser has agreed to purchase Common
Stock, $.01 par value (the "Common Stock"), of Crown Castle International Corp.,
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a Delaware corporation (the "Company"), subject to the terms and conditions of
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the Purchase Agreement; and
NOW, THEREFORE, to secure the performance by the Pledgor of its
obligations under the Purchase Agreement and to secure the observance and
performance of the covenants and agreements contained herein and in the Purchase
Agreement, the parties hereto agree as follows:
1. The Security Interests.
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In order to secure the observance and performance of the covenants and
agreements contained herein and in the Purchase Agreement:
(a) Security Interests. The Pledgor hereby grants, sells, conveys,
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assigns, transfers and pledges unto the Collateral Agent, as agent of and for
the benefit of the Trust, a security interest in and to, and a lien upon and
right of set-off against, all of Pledgor's right, title and interest in and to
(i) the Pledged Items described in paragraphs (b), (c) and (d); (ii) all
additions to and substitutions for such Pledged Items; (iii) (subject to the
remittance of certain payments upon satisfaction of the conditions specified in
Section 7(a) hereof) all income, proceeds and collections received or to be
received, or derived or to be derived, now or any time hereafter from or in
connection with the Pledged Items (whether such proceeds arise before or after
the commencement of any proceeding under any applicable bankruptcy, insolvency
or other similar law, by or against the Pledgor with respect to the Pledgor);
and (iv) all powers and rights now owned or hereafter acquired under or with
respect to the Pledged Items (such Pledged Items, additions, substitutions,
income, proceeds, collections, powers and rights being herein collectively
called the "Collateral"). The Collateral Agent shall have all of the rights,
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remedies and recourses with respect to the Collateral afforded a secured party
by the New York Uniform Commercial Code, in addition to, and not in limitation
of, the other rights, remedies and recourses afforded to the Collateral Agent by
this Agreement.
(b) Firm Payment Date. At the Firm Payment Date, the Pledgor shall
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deliver to the Collateral Agent in pledge hereunder one or more certificates in
registered form
representing in the aggregate [ ] shares of the Common Stock,
indorsed in blank or in the name of the Collateral Agent for the benefit of the
Trust (together with all signature guarantees and any other documents necessary
to permit the Collateral Agent to effect the re-registration of such Common
Stock without further action by the Pledgor) or, if such Common Stock is not
issuable in certificated form but is held in book entry form by The Depository
Trust Company, the Pledgor shall transfer such number of shares of Common Stock
to an account of the Collateral Agent or to an account (other than an account of
the Pledgor) designated by the Collateral Agent with The Depository Trust
Company.
(c) Option Closing Date. Effective upon and subject to the receipt by
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the Pledgor of the Additional Purchase Price, at the Option Closing Date, the
Pledgor shall deliver to the Collateral Agent in pledge hereunder one or more
certificates in registered form representing in the aggregate a number of shares
of Common Stock equal to the Additional Share Base Amount, indorsed in blank or
in the name of the Collateral Agent for the benefit of the Trust (together with
all signature guarantees and any other documents necessary to permit the
Collateral Agent to effect the re-registration of such Common Stock without
further action by the Pledgor) or, if such Common Stock is not issuable in
certificated form but is held in book entry form by The Depository Trust
Company, the Pledgor shall transfer such number of shares of Common Stock to an
account of the Collateral Agent or to an account (other than an account of the
Pledgor) designated by the Collateral Agent with The Depository Trust Company.
(d) Extension of Exchange Date. Prior to, or simultaneously with
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Pledgor's election to extend the Exchange Date pursuant to Section 1.3(f) of the
Purchase Agreement Additional Government Securities meeting the requirements of
Section 1.3(f) of the Purchase Agreement.
(e) Reregistration. Immediately following the Firm Payment Date and
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any Option Closing Date, the Collateral Agent shall cause all certificates for
Common Stock delivered pursuant to Section 1(b) or 1(c) above to be re-
registered on the books of the transfer agent for the Common Stock into the name
of the Collateral Agent or its nominee, and shall thereafter maintain them in
such form until the termination of this Agreement; provided, however, that at
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any time following the Firm Payment Date and any Option Closing Date, the
Collateral Agent may cause any such certificates for the Common Stock to be
deposited with The Depository Trust Company and thereafter hold such
certificates in book entry form in an account (other than an account of the
Pledgor) designated by the Collateral Agent.
2. Definitions.
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Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Purchase Agreement. Capitalized terms used
herein shall have the meanings as follows:
"Authorized Representative" of the Pledgor means any trustee, officer
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or other representative as to whom Pledgor shall have delivered notice to the
Collateral Agent that such trustee or other representative is authorized to act
hereunder on behalf of Pledgor.
2
"Business Day" means any day except a Saturday, Sunday or other day on
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which banking institutions in New York City are authorized or obligated by law
or regulation to close or a day on which the New York Stock Exchange, Inc. is
closed.
"Cash Delivery Obligations" means, at any time (A) if no Adjustment
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Event shall have occurred prior to such time, zero, and (B) from and after any
Adjustment Event, the product of: (i) the Firm Share Base Amount plus the
Additional Share Base Amount (if any) and (ii) the Transaction Value of any
property other than Reported Securities received by the Pledgor in such
Adjustment Event, multiplied successively by each number by which the Exchange
Rate shall have been multiplied on or prior to the Adjustment Event pursuant to
the adjustments provided for under Section 6.1 of the Purchase Agreement.
"Collateral" has the meaning specified in Section 1(a).
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"Collateral Agent" means the financial institution identified as such
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in the preliminary paragraph hereof, or any successor appointed in accordance
with Section 9.
"Collateral Agreement" means this Collateral Agreement and any
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exhibits hereto.
"Collateral Event of Default" has the meaning specified in Section
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6(e).
"Collateral Requirement" means, as of any date and with respect to:
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(i) any Common Stock, 100%; (ii) any Reported Securities, 100%; (iii) any U.S.
Government Securities pledged in respect of Cash Delivery Obligations, 105%; and
(iv) any other U.S. Government Securities, 150%, provided that upon and after
any failure to cure an Insufficiency Determination by 4:00 p.m. New York City
time on the Business Day following telephonic notice of such Insufficiency
Determination as described in Section 6(e), which insufficiency shall be
continuing on such Business Day, the Collateral Requirement relating to any U.S.
Government Securities (other than (i) Additional Government Securities and (ii)
U.S. Government Securities pledged in respect of Cash Delivery Obligations)
shall be 200%. The portion of any pledged U.S. Government Securities that shall
be deemed at any time to be in respect of Cash Delivery Obligations shall be as
provided in Section 6(e).
"Delivery Date" has the meaning specified in Section 8(a).
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"Eligible Collateral" means (i) Common Stock, (ii) U.S. Government
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Securities, (iii) from and after Pledgor's election to extend the Exchange Date
pursuant to Section 1.3(f) of the Purchase Agreement, Additional Government
Securities, and (iv) from and after any Adjustment Event, Reported Securities,
provided, in each case, that (A) the Pledgor has good and marketable title
thereto, free of all Liens (other than the Liens created by this Collateral
Agreement) and Transfer Restrictions and (B) the Collateral Agent has a valid,
first priority perfected security interest therein and first lien thereon, and
provided further that to the extent the number of shares of Common Stock or
Reported Securities pledged hereunder exceeds at any time the Maximum
Deliverable Number thereof, such excess shares shall not be Eligible Collateral.
"Event of Default" means the occurrence of: (i) an event described in
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clause (a) or (b) of Article VII of the Purchase Agreement, (ii) a Collateral
Event of Default, (iii) a failure by
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Pledgor to have caused the Collateral to meet the requirements described in
Section 5(d), (iv) if an Adjustment Event shall have occurred prior to the
Exchange Date, failure by Pledgor to cause to be delivered to Purchaser on the
Exchange Date the consideration then required to be delivered pursuant to
Section 6.2 of the Purchase Agreement or (v) if Pledgor shall have exercised its
Cash Delivery Option, a failure by the Pledgor to deliver cash on the Exchange
Date in the amount required under Section 1.3(d) of the Purchase Agreement.
"Ineligible Collateral" means Collateral that does not constitute
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"Eligible Collateral".
"Insufficiency Determination" has the meaning specified in Section
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6(e).
"Lien" means any lien, mortgage, security interest, pledge, charge or
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encumbrance of any kind.
"Market Value" means, as of any date: (a) with respect to any Common
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Stock (except as otherwise provided in Section 6(e)(2)), the Closing Price on
such date; (b) with respect to any U.S. Government Security, the product of
(x)(i) the average unit bid price for such security on the Trading Day prior to
such date as published in the New York edition of The Wall Street Journal or The
New York Times or, if not so published, (ii) the lower bid price quoted (which
quotation shall be evidenced in writing) on such date (or if such date is not a
Trading Date, on the preceding Trading Date) by either of two nationally
recognized dealers making a market in such security which are members of the
National Association of Securities Dealers, Inc. and (y) the number of such
units comprised in the outstanding principal amount of such U.S. Government
Security; and (c) with respect to any unit of Reported Securities, the Closing
Price thereof on such date; provided that the "Market Value" of any Ineligible
Collateral shall be zero.
"Maximum Deliverable Number" means, on any date, with respect to the
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Common Stock, the product of the Firm Share Base Amount plus the Additional
Share Base Amount (if any), multiplied successively by each number by which the
Exchange Rate shall have been multiplied on or prior to such date pursuant to
the adjustments provided for under Section 6.1 of the Purchase Agreement. The
Maximum Deliverable Number of Reported Securities means, on any date, the
product of (i) the Firm Share Base Amount plus the Additional Share Base Amount
(if any) and (ii) the number of Reported Securities received by the Pledgor in
the Adjustment Event for each share of Common Stock, multiplied successively by
each number by which the Exchange Rate shall have been multiplied on or prior to
such date and after the date of such Adjustment Event pursuant to the
adjustments provided for under Article VI of the Purchase Agreement.
"Person" means an individual, a corporation, a partnership, an
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association, a limited liability company, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"Pledge Value" means, as of any date and with respect to any
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particular type of Collateral, an amount equal to the aggregate Market Value of
such Collateral divided by the Collateral Requirement for such Collateral.
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"Pledge Value Requirement" means, as of any date, (a) the aggregate
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Market Value on such date of the Maximum Deliverable Number of shares of Common
Stock or, from and after an Adjustment Event, Reported Securities, on such date
plus (b) from and after an Adjustment Event, the Cash Delivery Obligations plus
(c) from and after the Pledgor's extension of the Exchange Date pursuant to
Section 1.3(f) of the Purchase Agreement, the Additional Government Securities.
"Pledged Items" means, as of any date, any and all securities and
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instruments delivered by the Pledgor to be held by the Collateral Agent under
this Collateral Agreement as Collateral, whether Eligible Collateral or
Ineligible Collateral.
"Prior Collateral" has the meaning specified in Section 6(b)(1).
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"Responsible Officer" means, when used with respect to the Collateral
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Agent, any vice president, assistant vice president, assistant treasurer or
assistant secretary located in the division or department of the Collateral
Agent responsible for performing the obligations of the Collateral Agent under
this Collateral Agreement, or in any other division or department of the
Collateral Agent performing operations substantially equivalent to those
performed by such division or department pursuant hereto, or any other officer
of the Collateral Agent or any successor Collateral Agent customarily performing
functions similar to those performed by any of the aforesaid officers, and also
means, with respect to any matter relating to this Collateral Agreement or the
Collateral, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Transfer Restriction" means, with respect to any item of Collateral,
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any condition to or restriction on the ability of the holder thereof to sell,
assign or otherwise transfer such item of Collateral or to enforce the
provisions thereof or of any document related thereto whether set forth in such
item of Collateral itself or in any document related thereto, including, without
limitation, (i) any requirement that any sale, assignment or other transfer or
enforcement of such item of Collateral be consented to or approved by any
Person, including, without limitation, the issuer thereof or any other obligor
thereon, (ii) any limitations on the type or status, financial or otherwise, of
any purchaser, pledgee, assignee or transferee of such item of Collateral, (iii)
any requirement of the delivery of any certificate, consent, agreement, opinion
of counsel, notice or any other document of any Person to the issuer of, any
other obligor on or any registrar or transfer agent for, such item of
Collateral, prior to the sale, pledge, assignment or other transfer or
enforcement of such item of Collateral and (iv) any registration or
qualification requirement for such item of Collateral pursuant to any federal or
state securities law; provided that the required delivery of any assignment from
the seller, pledgor, assignor or transferor of such item of Collateral, together
with any evidence of the corporate or other authority of such Person, shall not
constitute a "Transfer Restriction."
"Trustee" or "Trustees" means any trustee or trustees of the Trust
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identified on the signature pages hereto, or any successor as such trustee or
trustees.
"UCC" means the Uniform Commercial Code as in effect in the State of
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New York.
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"U.S. Government Securities" means direct obligations of the United
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States of America that mature on a date that is one year or less from the date
such obligations are pledged hereunder, but in any event prior to the Exchange
Date.
3. Representations and Warranties of the Pledgor.
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The Pledgor hereby represents and warrants to the Collateral Agent and
the Trust that:
(a) Power. The Pledgor has full power and authority to execute
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and deliver this Collateral Agreement and to perform and observe the
provisions hereof;
(b) Non-Contravention. The execution, delivery and performance by
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the Pledgor of this Collateral Agreement do not and will not violate,
contravene or constitute a default under any provision of applicable law or
regulation or of any material agreement, judgment, injunction, order,
decree or other instrument binding upon the Pledgor. The Pledgor is not in
default under any agreement by which the Collateral may be bound and no
litigation, arbitration or administrative proceedings are current or
pending, which default, litigation, arbitration or administrative
proceedings are material to the Collateral in the context of this
Collateral Agreement.
(c) Binding Effect. This Collateral Agreement constitutes a
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valid and binding agreement of the Pledgor enforceable against the Pledgor
in accordance with its terms.
(d) Solvency. The Pledgor is presently solvent and able to pay,
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and paying its debts as they become due, and anticipates that it will
continue to be able to pay its debts as they become due for the foreseeable
future.
(e) No Transfer Restrictions. Except for any legend with respect
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to restrictions pursuant to applicable federal and state securities laws on
transfer of the Common Stock pledged by the Pledgor hereunder which appears
on the [face] [back] of the certificates representing such Common Stock
(and which (i) will not be applicable to the delivery of any such Common
Stock to the Trust pursuant to the Purchase Agreement and this Agreement or
to the delivery of any such Common Stock by the Trust to the holders of
DECS pursuant to the DECS and (ii) will be removed at the request of the
Collateral Agent to the transfer agent for the Common Stock prior to any
such delivery to the holders of DECS) no Transfer Restrictions exist with
respect to or otherwise apply to the assignment of, or transfer by the
Pledgor of possession of, any items of Collateral to the Collateral Agent
hereunder, or the subsequent sale or transfer of such items of Collateral
by the Collateral Agent pursuant to the terms hereof.
(f) Title to Collateral; Perfected Security Interest. The
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Pledgor has good and marketable title to the Pledged Items, free of all
Liens (other than the Lien created by this Collateral Agreement) and
Transfer Restrictions (except for any legend as provided in Section 3(e)
hereof). Upon delivery of the Pledged Items described in paragraphs (b)
and (c) of Section 1 to the Collateral Agent hereunder, the Collateral
Agent will obtain a valid, first priority perfected security interest in,
and a first lien upon,
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such Pledged Items subject to no other Lien. None of the Collateral is or
shall be pledged by the Pledgor as collateral for any other purpose.
(g) Control of Seller. [ ] is solely
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controlled by [ ] as the sole trustee of the trust.
(h) Interest in Seller. [ ] owns 100% of
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the beneficial interest in [ ].
4. Representations and Warranties of the Collateral Agent.
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The Collateral Agent represents and warrants to the Pledgor and the
Trust that:
(a) Corporate Existence and Power. The Collateral Agent is a
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banking corporation, duly incorporated, validly existing and in good
standing under the laws of the jurisdiction of its incorporation, and has
all corporate powers and all material governmental licenses,
authorizations, consents and approvals required to enter into, and perform
its obligations under, this Collateral Agreement.
(b) Authorization and Non-Contravention. The execution, delivery
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and performance by the Collateral Agent of this Collateral Agreement have
been duly authorized by all necessary corporate action on the part of the
Collateral Agent (no action by the shareholders of the Collateral Agent
being required) and do not and will not violate, contravene or constitute a
default under any provision of applicable law or regulation or of the
charter or by-laws of the Collateral Agent or of any material agreement,
judgment, injunction, order, decree or other instrument binding upon the
Collateral Agent.
(c) Binding Effect. This Collateral Agreement constitutes a
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valid and binding agreement of the Collateral Agent enforceable against the
Collateral Agent in accordance with its terms.
5. Certain Covenants of the Pledgor.
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The Pledgor agrees that, so long as any of its obligations under the
Purchase Agreement remain outstanding:
(a) Title to Collateral. The Pledgor shall at all times
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hereafter have good and marketable title to the Collateral pledged
hereunder, free of all Liens (other than the Liens created by this
Collateral Agreement) and Transfer Restrictions (except for any legend as
provided in Section 3(e) hereof), and, subject to the terms of this
Collateral Agreement, will at all times hereafter have good, right and
lawful authority to assign, transfer and pledge such Collateral and all
such additions thereto and substitutions therefor under this Collateral
Agreement.
(b) Pledge Value Requirement. The Pledgor shall cause the
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aggregate Pledge Value of the Collateral to be equal to or greater than the
Pledge Value
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Requirement at all times, and shall pledge additional Collateral in the
manner described in Section 6(d) as necessary to cause such requirement to
be met.
(c) Pledge upon Adjustment Event. Upon the occurrence of an
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Adjustment Event, the Pledgor shall immediately cause to be delivered to
the Collateral Agent, in the manner provided in Section 6(d): (i) U.S.
Government Securities having an aggregate Market Value at least equal to
105% of the Cash Delivery Obligations, if any; and (ii) Reported Securities
in an amount at least equal to the Maximum Deliverable Number thereof (if
any), or, at Pledgor's election, U.S. Government Securities having an
aggregate Market Value at least equal to 150% of such Maximum Deliverable
Number of Reported Securities; in each case to be held as [substitute or]
additional Collateral hereunder.
(d) Composition of Pledged Items. [Notwithstanding the Pledgor's
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right to substitute Collateral pursuant to Section 6(b),] the Pledgor shall
cause the Collateral to include, on the Exchange Date, unless Pledgor shall
have exercised its Cash Delivery Option, a number of shares of Common Stock
(and/or, if an Adjustment Event shall have occurred, Reported Securities)
at least equal to the number of shares of Common Stock (and/or, if an
Adjustment Event shall have occurred, Reported Securities) required to be
delivered under the Purchase Agreement on the Exchange Date. If the
Pledgor exercises its Cash Delivery Option, then the Pledgor shall cause
the Collateral for the Cash Delivery Obligations to consist entirely of
U.S. Government Securities or cash at all times from and after the date 25
Business Days prior to the Exchange Date, and, if the Pledgor shall have
extended the Exchange Date pursuant to Section 1.3(f) of the Purchase
Agreement, the Pledgor shall cause Collateral for Pledgor's obligations in
connection with Pledgor's extension of the Exchange Date to consist
entirely of Additional Government Securities or cash.
(e) Further Assurances. The Pledgor shall, at its expense and in
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such manner and form as the Trust or the Collateral Agent may require,
give, execute, deliver, file and record any financing statement, notice,
instrument, document, agreement or other papers that may be necessary or
desirable in order to create, preserve, perfect, substantiate or validate
any security interest granted pursuant hereto or to enable the Collateral
Agent to exercise and enforce its rights and the rights of the Trust
hereunder with respect to such security interest. To the extent permitted
by applicable law, the Pledgor hereby authorizes the Collateral Agent to
execute and file, in the name of the Pledgor or otherwise, Uniform
Commercial Code financing or continuation statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or of a
financing statement relating to this Agreement) which the Collateral Agent
in its sole discretion may deem necessary or appropriate to further
perfect, or maintain the perfection of the security interests granted
hereby.
[(f) Control of [ ] GRAT. [
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] GRAT shall be controlled by [ ] and [
] shall be the sole trustee of such trust so long as [s]he shall have legal
capacity so to act.]
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(g) The Pledgor shall not consolidate with or merge with or into,
or transfer all or substantially of its assets to, any other Person unless:
(i) either (x) the Pledgor shall be the resulting or surviving
entity or (y) such other Person is an entity organized and existing
under the laws of the United States, a State thereof or the District
of Columbia, such other Person expressly assumes by supplemental
agreement executed and delivered to the Trust, in form satisfactory to
counsel to the Trust, all the obligations of the Pledgor under the
Underwriting Agreement, Collateral Agreement, the Reimbursement
Agreement, and this Agreement (in which case all such obligations of
the Pledgor shall terminate); and
(ii) the Pledgor shall deliver to the Trust prior to the proposed
transaction an Officer's Certificate and an Opinion of Counsel, each
of which shall state that such consolidation, merger or transfer and
such supplemental agreement comply with this Section [5(g)] and that
all conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger, or any transfer of all or
substantially all of the assets of the Pledgor in accordance with this
Section [5(g)], the successor entity formed by such consolidation or into
which the Pledgor is merged or to which such transfer is made shall succeed
to, and be substituted for, and may exercise every right and power of the
Pledgor under this Agreement with the same effect as if such successor
entity had been named as the Pledgor herein, and the predecessor entity,
shall be relieved of any further obligation under this Agreement.
6. Administration of the Collateral and Valuation of the Securities.
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(a) Valuation of Collateral. The Collateral Agent shall determine on
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each Business Day whether the Pledge Value is at least equal to the Pledge Value
Requirement and whether an Insufficiency Determination or Collateral Event of
Default shall have occurred and, from and after any substitution of U.S.
Government Securities for pledged Common Stock or Reported Securities pursuant
to paragraph (b) of this Section 6, shall determine the Pledge Value on each
Business Day and shall provide written notice of the Pledge Value to the
Pledgor.
[(b) Substitution of Collateral. The Pledgor may substitute
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Collateral in accordance with the following provisions:
(1) Unless an Event of Default or a failure by the Pledgor to
meet any of its obligations under Section 5(b) or (c) hereof has occurred
and is continuing, the Pledgor shall have the right at any time and from
time to time to deposit Eligible Collateral with the Collateral Agent in
substitution for Pledged Items previously deposited hereunder ("Prior
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Collateral") and to obtain the release from the Lien hereof of such Prior
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Collateral.
(2) If the Pledgor wishes to deposit Eligible Collateral with the
Collateral Agent in substitution for Prior Collateral, the Pledgor shall
(i) give written notice to the Collateral Agent identifying the Prior
Collateral to be released from the Lien
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hereof, (ii) deliver to the Collateral Agent concurrently with such
Eligible Collateral a certificate of the Pledgor substantially in the form
of Exhibit A hereto and dated the date of such delivery, (A) identifying
the items of Eligible Collateral being substituted for the Prior Collateral
and the Prior Collateral that is to be transferred to the Pledgor and (B)
certifying that the representations and warranties contained in such
Exhibit A hereto are true and correct on and as of the date thereof and
(iii) deliver to the Collateral Agent concurrently with such Eligible
Collateral an opinion (dated the date of such delivery) of counsel,
substantially similar to those delivered by ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ at the
Firm Purchase Date with respect to similar matters, addressed to the
Collateral Agent confirming the representations contained in the second
sentence of paragraph 3(b) of Exhibit A hereto. The Pledgor hereby
covenants and agrees to take all actions required under Section 6(d) and
any other actions necessary to create for the benefit of the Collateral
Agent a valid, first priority perfected security interest in, and a first
lien upon, such Eligible Collateral deposited with the Collateral Agent in
substitution for Prior Collateral.
(3) No such substitution shall be made unless and until the
Collateral Agent shall have determined that the aggregate Pledge Value of
all of the Collateral at the time of such proposed substitution, after
giving effect to the proposed substitution, shall at least equal the Pledge
Value Requirement.]
(c) Additional Collateral. The Pledgor may pledge additional
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Collateral (excluding Additional Government Securities) hereunder at any time
and may pledge Additional Government Securities hereunder at any time prior to
or simultaneously with Pledgor's election to extend the Exchange Date pursuant
to Section 1.3(f) of the Purchase Agreement. Concurrently with the delivery of
any additional Eligible Collateral, the Pledgor shall deliver (i) in the case of
Eligible Collateral consisting of Additional Government Securities, a
certificate of the Pledgor substantially in the form of Exhibit B hereto, or in
the case of all other Eligible Collateral, a certificate of the Pledgor
substantially in the form of Exhibit C hereto and dated the date of such
delivery, in each case (A) identifying the additional items of Eligible
Collateral being pledged and (B) certifying that with respect to such items of
additional Eligible Collateral the representations and warranties contained in
such Exhibit B or Exhibit C, as the case may be, hereto are true and correct on
and as of the date thereof and (ii) an opinion, dated the date of such delivery,
of counsel addressed to the Collateral Agent, substantially similar to those
delivered by ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ at the Firm Purchase Date with respect to
similar matters, confirming the representations contained in the second sentence
of paragraph 2(b) of Exhibit B or Exhibit C, as the case may be, hereto. The
Pledgor hereby covenants and agrees to take all actions required under Section
6(d) and any other actions necessary to create for the benefit of the Collateral
Agent a valid, first priority perfected security interest in, and a first lien
upon, such additional Eligible Collateral.
(d) Delivery of Collateral. The Pledgor shall deliver all Collateral
----------------------
to the Collateral Agent in accordance with the following provisions:
(1) Pledged Common Stock. In the case of Collateral consisting
--------------------
of Common Stock, by delivery of certificates evidencing such Common Stock,
indorsed in blank (together with all signature guarantees and any other
documents necessary to
10
permit the Collateral Agent to effect the re-registration thereof without
further action by the Pledgor) or registered in the name of the Collateral
Agent or its nominee or, if such Common Stock is not issuable in
certificated form but is held in book entry form by The Depository Trust
Company, by transfer to an account of the Collateral Agent or to an account
(other than an account of the Pledgor) designated by the Collateral Agent
with The Depository Trust Company;
(2) Pledged Government Securities. In the case of Collateral
-----------------------------
consisting of U.S. Government Securities or Additional Government
Securities, by transfer thereof through the Book Entry System of the
Federal Reserve System to the account of the Collateral Agent or to an
account (other than an account of the Pledgor) designated by the Collateral
Agent; and
(3) Pledged Reported Securities. In the case of Collateral
---------------------------
consisting of Reported Securities, by delivery of certificates evidencing
such Reported Securities, indorsed in blank (together with all signature
guarantees and any other documents necessary to permit the Collateral Agent
to effect the re-registration thereof without further action by the
Pledgor) or registered in the name of the Collateral Agent or its nominee
or, if such Reported Securities are not issuable in certificated form but
are held in book entry form by The Depository Trust Company, by transfer to
an account of the Collateral Agent or to an account (other than an account
of the Pledgor) designated by the Collateral Agent with The Depository
Trust Company. Each such delivery of Reported Securities shall be
accompanied by an opinion of counsel, substantially similar to those
delivered by ▇▇▇▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇ at the Firm Purchase Date with respect
to similar matters, satisfactory to the Collateral Agent that the
Collateral Agent has obtained a valid, first priority perfected security
interest in, and a first lien upon, such Reported Securities.
Upon delivery of any Pledged Item under this Collateral Agreement, the
Collateral Agent shall examine such Pledged Item and any opinions and
certificates delivered pursuant to Sections 6(b), 6(c), 6(d)(3) or otherwise
pursuant to the terms hereof in connection therewith to determine that they
comply as to form with the requirements for Eligible Collateral. Immediately
following the delivery to the Collateral Agent of any Collateral in the form of
certificates indorsed in blank, the Collateral Agent shall cause all such
certificates to be re-registered on the books of the applicable transfer agent
into the name of the Collateral Agent or its nominee, and shall thereafter
maintain all such Collateral in such form until the termination of this
Agreement; provided, however, that at any time following such delivery to the
-----------------
Collateral Agent, the Collateral Agent may cause any such certificates to be
deposited with The Depository Trust Company and thereafter hold such
certificates in book entry form in an account (other than an account of Pledgor)
designated by the Collateral Agent. The Pledgor hereby designates the
Collateral Agent as the person in whose name any Collateral held in book entry
form in the Federal Reserve System shall be registered.
(e) Insufficiency Determination.
---------------------------
(1) If on any Business Day the Collateral Agent determines that
the aggregate Pledge Value of the Collateral is less than the Pledge Value
Requirement (any
11
such determination, an "Insufficiency Determination"), the Collateral Agent
---------------------------
shall, by telephone call to an Authorized Representative of the Pledgor
followed by a written confirmation of such call, promptly notify the
Pledgor of such determination and of the amount of the insufficiency.
(2) If, by 4:00 p.m., New York City time on the Business Day
following the day on which telephonic notice shall have been given pursuant
to the preceding paragraph (e)(1), the Pledgor shall have failed to
deliver, in the manner set forth in paragraphs (c) and (d) of this Section
6, sufficient additional Eligible Collateral so that, after giving effect
to such delivery (and taking into account that Common Stock and Reported
Securities in excess of the Maximum Deliverable Number thereof shall not
constitute Eligible Collateral), the aggregate Pledge Value of the
Collateral, as of such Business Day, is at least equal to the Pledge Value
Requirement, then (x) the Collateral Requirement with respect to any U.S.
Government Securities pledged hereunder (other than in respect of Cash
Delivery Obligations) shall be increased from 150% to 200%, and (y) unless
a Collateral Event of Default shall have occurred and be continuing, the
Collateral Agent shall:
(i) commence sales, in the manner described in paragraph (3)
below, of such portion of the Collateral consisting of U.S. Government
Securities as may be required to be sold in order to generate proceeds
sufficient to purchase Common Stock and/or, after an Adjustment Event,
Reported Securities, as described in the following clause (ii); and
(ii) commence purchases, in the manner described in
paragraph (3) below, of Common Stock and/or, after an Adjustment
Event, Reported Securities, in an amount sufficient to cause the
aggregate Pledge Value of the Collateral to be at least equal to the
Pledge Value Requirement.
Notwithstanding the foregoing, the Collateral Agent shall
discontinue sales and purchases pursuant to the preceding clauses (i) and
(ii), respectively, if at any time a Collateral Event of Default shall have
occurred and be continuing. The Collateral Agent shall determine the
Market Value and the Pledge Value of the Collateral after each purchase of
Common Stock or Reported Securities pursuant to the preceding clause (ii)
in order to determine whether the Pledge Value Requirement is met and
whether a Collateral Event of Default has occurred. Solely for purposes
of such calculation, the Market Value of the Common Stock or Reported
Securities shall be: (A) the most recent sales price as reported in the
composite transactions for the principal securities exchange on which the
Common Stock or Reported Securities, as the case may be, are then listed
or, if such securities are not so listed, the last quoted ask price for
such securities in the over-the-counter market as reported by The NASDAQ
National Market or, if not so reported, by the National Quotation Bureau or
a similar organization; or (B) if higher, in the case of Common Stock, the
most recent available Closing Price.
A "Collateral Event of Default" shall mean, at any time, the
---------------------------
occurrence of any of the following: (A) failure of the aggregate Market
Value of the Collateral to equal or exceed the Pledge Value Requirement;
(B) failure of the Market Value of any U.S.
12
Government Securities pledged at such time (not including any (i)
Additional Government Securities or (ii) U.S. Government Securities pledged
in respect of Cash Delivery Obligations at such time) to have an aggregate
Market Value of at least 105% of the Market Value of a number of shares of
Common Stock (or, from and after any Adjustment Event, Reported Securities)
equal to (x) the Maximum Deliverable Number thereof minus (y) the number
thereof pledged as Collateral hereunder at such time; or (C) from and after
any Adjustment Event, failure of the U.S. Government Securities pledged in
respect of Cash Delivery Obligations to have an aggregate Market Value at
least equal to 105% of the Cash Delivery Obligations at such time, if, in
the case of a failure described in this clause (C), such failure shall
continue to be in effect at 4:00 p.m., New York City time, on the Business
Day following the day on which telephonic notice in respect thereof shall
have been given pursuant to paragraph (e)(1) above. For purposes of this
Agreement, the portion of any pledged U.S. Government Securities that shall
be deemed to be in respect of Cash Delivery Obligations at any time shall
be a portion having a Market Value equal to 105% of the Cash Delivery
Obligations at such time (or, if less, the aggregate Market Value of all
U.S. Government Securities pledged at such time).
(3) Collateral sold and Common Stock or shares of Reported
Securities purchased by the Collateral Agent pursuant to the preceding
paragraphs (e)(2)(i) and (ii) may be sold and purchased on any securities
exchange or in any over-the-counter market or in any private purchase
transaction, and at such price or prices, in each case as the Collateral
Agent may deem satisfactory. The Pledgor covenants and agrees that it will
execute and deliver such documents and take such other action as the
Collateral Agent deems necessary or advisable in order that any such sales
and purchases may be made in compliance with law.
(f) Release of Excess Collateral. If on any Business Day the
----------------------------
Collateral Agent determines that the aggregate Pledge Value of the Pledgor's
Eligible Collateral exceeds the Pledge Value Requirement and no Event of Default
or failure by the Pledgor to meet any of its obligations under Sections 5 or 6
hereof has occurred and is continuing, the Pledgor may obtain the release from
the Lien hereof of any Collateral having an aggregate Pledge Value on such
Business Day less than or equal to such excess, upon delivery to the Collateral
Agent of a written notice from an Authorized Representative of the Pledgor
indicating the items of Collateral to be released. Such Collateral shall be
released only after the Collateral Agent shall have determined that the
aggregate Pledge Value of all of the Collateral remaining after such release as
determined on such Business Day is at least equal to the Pledge Value
Requirement.
(g) Delivery of Purchase Agreement Consideration. On the Exchange
--------------------------------------------
Date, unless Pledgor shall have exercised its Cash Delivery Option, the
Collateral Agent shall deliver to the Trust Common Stock (or, if an Adjustment
Event shall have occurred, Reported Securities) then held by it hereunder
representing the number of shares of Common Stock (or, if an Adjustment Event
shall have occurred, Reported Securities) then required to be delivered under
the Purchase Agreement. Upon such delivery, the Trust shall hold such Common
Stock or Reported Securities, as the case may be, absolutely and free from any
claim or right whatsoever.
13
(h) Investment of Cash Collateral. The Collateral Agent shall invest
-----------------------------
any cash received by it pursuant to Section 6.2 of the Purchase Agreement in
direct obligations of the United States of America maturing on or before the
Exchange Date.
7. Income and Voting Rights on Collateral.
--------------------------------------
(a) Unless an Event of Default or failure by the Pledgor to meet any
of Pledgor's obligations under Section 5(b) or (c) hereof has occurred and is
continuing, the Pledgor shall be entitled to receive for Pledgor's own account
all dividends, interest and, if any, principal and premium relating to all of
the Collateral, unless the payment thereof to the Pledgor would reduce the
aggregate Pledge Value of the Collateral below the Pledge Value Requirement.
The Collateral Agent agrees to remit to the Pledgor on the Business Day received
or the first Business Day thereafter all such payments received by it. If an
Event of Default or failure by the Pledgor to meet any of its obligations under
Section 5(b) or (c) hereof has occurred and is continuing, all such payments
made or accrued after and during the continuance of such Event of Default or
failure shall be retained by the Collateral Agent, and any such payments which
are received by the Pledgor shall be received in trust for the benefit of the
Trust, shall be segregated from other funds of the Pledgor and shall forthwith
be paid over to the Collateral Agent. Any such payments so retained by, or paid
over to, the Collateral Agent shall be held by the Collateral Agent as
Collateral hereunder. If any such Event of Default or failure is no longer
continuing, then the Collateral Agent shall remit any such payments that are so
retained by, or paid to it, on the first Business Day after the Collateral Agent
shall have received notice from the Trust that such Event of Default or failure
is no longer continuing, unless the payment thereof to the Pledgor would reduce
the aggregate Pledge Value of the Collateral below the Pledge Value Requirement.
(b) Unless an Event of Default has occurred and is continuing, the
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral, and the Collateral
Agent shall promptly deliver to the Pledgor such proxies, powers of attorney,
consents, ratifications and waivers in respect of any of the Collateral which is
registered in the name of the Collateral Agent or its nominee and shall further
deliver such documents and instruments as shall be specified in a written
request by the Pledgor.
If an Event of Default shall have occurred and be continuing, the
Collateral Agent shall have the right to the extent permitted by law, and the
Pledgor shall take all such action as may be necessary or appropriate to give
effect to such right, to vote and to give consents, ratifications and waivers,
and take any other action with respect to any or all of the Collateral with the
same force and effect as if the Collateral Agent were the absolute and sole
owner thereof.
8. Remedies upon Events of Default.
-------------------------------
(a) If any Event of Default shall have occurred and be continuing, the
Collateral Agent may exercise on behalf of the Trust all the rights of a secured
party under the UCC (whether or not in effect in the jurisdiction where such
rights are exercised) and, in addition, without being required to give any
notice, except as herein provided or as may be required by mandatory provisions
of law, shall: (i) deliver all Collateral consisting of Common
14
Stock or Reported Securities (but not, in either case, in excess of the number
of shares thereof deliverable under the Purchase Agreement at such time) to the
Trust on the date of the notice delivered to the Collateral Agent pursuant to
the last paragraph of Article VII of the Purchase Agreement relating to such
Event of Default (or, in the case of an Event of Default described in clause
(iii), (iv) or (v) of the definition thereof in this Agreement, on the Exchange
Date) (in either case, the "Delivery Date"), whereupon the Trust shall hold such
-------------
Common Stock or Reported Securities absolutely free from any claim or right of
whatsoever kind, including any equity or right of redemption of the Pledgor
which may be waived, and the Pledgor, to the extent permitted by law, hereby
specifically waives all rights of redemption, stay or appraisal which Pledgor
has or may have under any law now existing or hereafter adopted; and (ii) if
such delivery shall be insufficient to satisfy in full all of the obligations of
Pledgor under the Purchase Agreement, sell all of the remaining Collateral, or
such lesser portion thereof as may be necessary to generate proceeds sufficient
to satisfy in full all of the obligations of Pledgor under the Purchase
Agreement, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery, and at such
price or prices as the Collateral Agent may deem satisfactory. The Pledgor
covenants and agrees to execute and deliver such documents and take such other
action as the Collateral Agent deems necessary or advisable in order that any
such sale may be made in compliance with law. Upon any such sale the Collateral
Agent shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor which may be
waived, and the Pledgor, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which Pledgor has or may have
under any law now existing or hereafter adopted. The notice (if any) of such
sale required by Article 9 of the UCC shall (1) in case of a public sale, state
the time and place fixed for such sale, (2) in case of sale at a broker's board
or on a securities exchange, state the board or exchange at which such sale is
to be made and the day on which the Collateral, or the portion thereof so being
sold, will first be offered for sale at such board or exchange, and (3) in the
case of a private sale, state the day after which such sale may be consummated.
Any such public sale shall be held at such time or times within ordinary
business hours and at such place or places as the Collateral Agent may fix in
the notice of such sale. At any such sale the Collateral may be sold in one lot
as an entirety or in separate parcels, as the Collateral Agent may determine.
The Collateral Agent shall not be obligated to make any such sale pursuant to
any such notice. The Collateral Agent may, without notice or publication,
adjourn any public or private sale or cause the same to be adjourned from time
to time by announcement at the time and place fixed for the sale, and such sale
may be made at any time or place to which the same may be so adjourned. In case
of any sale of all or any part of the Collateral on credit or for future
delivery, the Collateral so sold may be retained by the Collateral Agent until
the selling price is paid by the purchaser thereof, but the Collateral Agent
shall not incur any liability in case of the failure of such purchaser to take
up and pay for the Collateral so sold and, in case of any such failure, such
Collateral may again be sold upon like notice. The Collateral Agent, instead of
exercising the power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the security interests and sell the
Collateral, or any portion thereof, under a judgment or decree of a court or
courts of competent jurisdiction.
(b) Power of Attorney. The Collateral Agent is hereby irrevocably
-----------------
appointed the true and lawful attorney of the Pledgor with full power and
authority, in the name and stead
15
of the Pledgor, to do all of the following: (i) upon any delivery or sale of all
or any part of any Collateral made either under the power of delivery or sale
given hereunder or under judgment or decree in any judicial proceedings for
foreclosure or otherwise for the enforcement of this Collateral Agreement, to
make all necessary deeds, bills of sale and instruments of assignment, transfer
or conveyance of the property thus delivered or sold; (ii) upon the occurrence
of an Adjustment Event while any shares of Common Stock are Pledged Items, to
take any necessary actions with respect to such shares of Common Stock to cause
the Pledged Items to conform to the requirements of this Agreement following the
occurrence of the Adjustment Event, including, without limitation, the tender of
shares of Common Stock and the sale of property (other than Reported Securities)
received in respect of Common Stock. For such purposes the Collateral Agent may
execute all necessary documents and instruments. This power of attorney shall be
deemed coupled with an interest, and the Pledgor hereby ratifies and confirms
all that its attorneys acting under such power, or such attorneys' successors or
agents, shall lawfully do by virtue of this Collateral Agreement. If so
requested by the Collateral Agent, by the Trustees or by any purchaser of the
Collateral or a portion thereof, the Pledgor shall further ratify and confirm
any such delivery or sale by executing and delivering to the Collateral Agent,
to the Trustees or to such purchaser or purchasers at the expense of the Pledgor
all proper deeds, bills of sale, instruments of assignment, conveyance of
transfer and releases as may be designated in any such request. The Pledgor's
obligations and authorizations hereunder shall not be terminated by operation of
law or the occurrence of any event whatsoever, including the death or disability
of the Pledgor, or the occurrence of any other event.
(c) Application of Collateral and Proceeds. In the case of an Event
--------------------------------------
of Default, the Collateral Agent may proceed to realize upon the security
interest in the Collateral against any one or more of the types of Collateral,
at any one time, as the Collateral Agent shall determine in its sole discretion
subject to the foregoing provisions of this Section 8. The proceeds of any sale
of, or other realization upon, or other receipt from, any of the Collateral
remaining after delivery to the Trust pursuant to Section 8(a) shall be applied
by the Collateral Agent in the following order of priorities:
(1) first, to the payment to the Trust of an amount equal to: (A) the
aggregate Market Value of a number of shares of Common Stock equal to
(1) the number of shares of Common Stock required to be delivered
under the Purchase Agreement on the Delivery Date minus (2) the number
of shares of Common Stock delivered by the Collateral Agent to the
Trust on the Delivery Date as described above; or (B) from and after
an Adjustment Event, the sum of (1) the Cash Delivery Obligations on
the Delivery Date and (2) the aggregate Market Value on the Delivery
Date of a number of Reported Securities (and, if applicable, shares of
Common Stock) equal to (x) the number thereof required to be delivered
on the Delivery Date under Section 6.2 of the Purchase Agreement minus
(y) the number thereof delivered by the Collateral Agent to the Trust
on the Delivery Date as described above; or (C) if the Pledgor shall
have exercised its Cash Delivery Option, the amount of cash required
to be delivered under Section 1.3(d) of the Purchase Agreement minus
the amount of cash so delivered; and (D) if the Pledgor shall have
extended the Exchange Date pursuant to Section 1.3(f) of the Purchase
Agreement, the amount of cash required to be delivered under said
Section 1.3(f)
16
(or, if the Pledgor shall have accelerated the Exchange Date pursuant
to Section 1.3(g) thereof, the amount of cash deliverable pursuant to
said Section 1.3(g));
(2) second, to the payment to the Collateral Agent of the expenses of such
sale or other realization, including reasonable compensation to the
Collateral Agent and its agents and counsel, and all expenses,
liabilities and advances incurred or made by the Collateral Agent in
connection therewith, including brokerage fees in connection with the
sale by the Collateral Agent of any Pledged Item; and
(3) finally, if all of the obligations of the Pledgor hereunder and under
the Purchase Agreement have been fully discharged or sufficient funds
have been set aside by the Collateral Agent at the request of the
Pledgor for the discharge thereof, any remaining proceeds shall be
released to the Pledgor.
9. The Collateral Agent.
--------------------
The Collateral Agent accepts its duties and responsibilities hereunder
as agent for the Trust, on and subject to the following terms and conditions:
(a) Performance of Duties. The Collateral Agent undertakes to perform
---------------------
such duties and only such duties as are expressly set forth herein and, beyond
the exercise of reasonable care in the performance of such duties, no implied
covenants or obligations shall be read into this Collateral Agreement against
the Collateral Agent. No provision hereof shall be construed to relieve the
Collateral Agent from liability for its own grossly negligent action, grossly
negligent failure to act or its own willful misconduct, subject to the
following:
(1) The Collateral Agent may consult with counsel, and the advice
or opinion of such counsel shall be full and complete authorization and
protection in respect of an action taken or suffered hereunder in good
faith and in accordance with such advice or opinion of counsel.
(2) The Collateral Agent shall not be liable with respect to any
action taken, suffered or omitted by it in good faith (i) reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred on it by this Collateral Agreement or (ii) in accordance
with any direction or request of the Trustees.
(3) The Collateral Agent shall not be liable for any error of
judgment made in good faith by any of its officers, unless the Collateral
Agent was grossly negligent in ascertaining the pertinent facts.
(4) In the absence of bad faith on its part, the Collateral Agent
may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any note, notice,
resolution, consent, certificate, affidavit, letter, telegram, teletype
message, statement, order or other document believed by it to be genuine
and correct and to have been signed or sent by the proper Person or
Persons.
(5) No provision of this Collateral Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability
17
in the performance of any of its duties hereunder, or in the exercise of
any of its rights or powers, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(6) The Collateral Agent may perform any duties hereunder either
directly or by or through agents or attorneys, and the Collateral Agent
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder. In
furtherance thereof, any subsidiary owned or controlled by the Collateral
Agent, or its successors, as agent for the Collateral Agent, may perform
any or all of the duties of the Collateral Agent relating to the valuation
of securities and other instruments constituting Collateral hereunder.
(7) In no event shall the Collateral Agent be personally liable
for any taxes or other governmental charges imposed upon or in respect of
(i) the collateral or (ii) the income or other distributions thereon.
(8) Unless and until the Collateral Agent shall have received
notice from the Pledgor, or unless and until a Responsible Officer of the
Collateral Agent shall have actual knowledge to the contrary, the
Collateral Agent shall be entitled to deem and treat all Collateral
delivered to it hereunder as Eligible Collateral hereunder, provided that
the Collateral Agent has carried out the duties specified in Section 6 with
respect to such Collateral at the time of delivery thereof.
The Collateral Agent shall not be responsible for the correctness of
the recitals and statements herein which are made by the Pledgor or for any
statement or certificate delivered by the Pledgor pursuant hereto. Except as
specifically provided herein, the Collateral Agent shall not be responsible for
the validity, sufficiency, collectibility or marketability of any Collateral
given to or held by it hereunder or for the validity or sufficiency of the
Purchase Agreement or the Lien on the Collateral purported to be created hereby.
(b) Knowledge. The Collateral Agent shall not be deemed to have
---------
knowledge of any Event of Default (except a Collateral Event of Default), unless
and until a Responsible Officer of the Collateral Agent shall have actual
knowledge thereof or shall have received written notice thereof.
(c) Merger. Any corporation or association into which the Collateral
------
Agent may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its agency business and assets as a whole or
substantially as a whole, or any corporation or association resulting from any
such conversion, sale, merger, consolidation or transfer to which it is a party,
shall, subject to the prior written consent of the Trust, be and become a
successor Collateral Agent hereunder and vested with all of the title to the
Collateral and all of the powers, discretions, immunities, privileges and other
matters as was its predecessor without, except as provided above, the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
18
(d) Resignation. The Collateral Agent and any successor Collateral
-----------
Agent may at any time resign by giving thirty days' written notice by registered
or certified mail to the Pledgor and notice to the Trust in accordance with the
provisions of Section 10(d) hereof. Such resignation shall take effect upon the
appointment of a successor Collateral Agent by the Trust.
(e) Removal. The Collateral Agent may be removed at any time by an
-------
instrument or concurrent instruments in writing delivered to the Collateral
Agent and to the Pledgor and signed by the Trust.
(f) Appointment of Successor. (1) If the Collateral Agent hereunder
------------------------
shall resign or be removed, or be dissolved or shall be in the course of
dissolution or liquidation or otherwise become incapable of action hereunder, or
if it shall be taken under the control of any public officer or officers or of a
receiver appointed by a court, a successor may be appointed by the Trust by an
instrument or concurrent instruments in writing signed by the Trust or by its
attorneys in fact fully authorized a copy of such instrument or concurrent
instruments shall be sent by registered mail to the Pledgor.
(2) Every such temporary or permanent successor Collateral Agent
appointed pursuant to the provisions hereof shall be a trust company or bank in
good standing, having a reported capital and surplus of not less than
$100,000,000 and capable of holding the Collateral in the State of New York, if
there be such an institution willing, qualified and able to accept the duties of
the Collateral Agent hereunder upon customary terms.
(g) Acceptance by Successor. Every temporary or permanent successor
-----------------------
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
its predecessor and also to the Pledgor an instrument in writing accepting such
appointment hereunder, whereupon such successor, without any further act, deed
or conveyance, shall become fully vested with all the estates, properties,
rights, powers, duties and obligations of its predecessors. Such predecessor
shall, nevertheless, on the written request of its successor or the Pledgor,
execute and deliver an instrument transferring to such successor all the
estates, properties, rights and powers of such predecessor hereunder. Every
predecessor Collateral Agent shall deliver all Collateral held by it as the
Collateral Agent hereunder to its successor. Should any instrument in writing
from the Pledgor be required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties, rights, powers,
duties and obligations hereby vested or intended to be vested in the
predecessor, any and all such instruments in writing shall, at the request of
the temporary or permanent successor Collateral Agent, be forthwith executed,
acknowledged and delivered by the Pledgor.
10. Miscellaneous.
-------------
(a) Benefit of Agreement; Successors and Assigns. Whenever any of the
--------------------------------------------
parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party. All the covenants and agreements herein
contained by or on behalf of the Pledgor and the Collateral Agent shall bind,
and inure to the benefit of, their respective successors and assigns whether so
expressed or not, and shall be enforceable by and inure to the benefit of the
Trust and its successors and assigns. [This Agreement will be binding on and
legally enforceable against the Pledgor, despite the death or legal incapacity
of any settlor or beneficiary thereof.]
19
(b) Separability. To the extent permitted by law, the
------------
unenforceability or invalidity of any provision or provisions of this Collateral
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
(c) Amendments and Waivers. Any term, covenant, agreement or
----------------------
condition of this Collateral Agreement may be amended or compliance therewith
may be waived (either generally or in a particular instance and either
retrospectively or prospectively) but only by a writing signed by the Collateral
Agent, the Pledgor and the Trust.
(d) Notices.
-------
(1) Any notice provided for herein, unless otherwise specified,
shall be in writing (including transmittals by telex or telecopier) and
shall be given to a party at the address set forth opposite such party's
name on the signature pages hereto or at such other address as may be
designated by notice duly given in accordance with this Section 10(d) to
each other party hereto.
(2) Each such notice given pursuant to paragraph (1) shall be
effective (i) if sent by certified mail (return receipt requested), 72
hours after being deposited in the United States mail, postage prepaid;
(ii) if given by telex or telecopier, when such telex or telecopied notice
is transmitted; or (iii) if given by any other means, when delivered at the
address specified in this Section 10(d).
(e) Governing Law. This Collateral Agreement shall in all respects be
-------------
construed in accordance with and governed by the laws of the State of New York;
provided that as to Pledged Items located in any jurisdiction other than the
State of New York, the Collateral Agent on behalf of the Trust shall have all of
the rights to which a secured party is entitled under the laws of such other
jurisdiction.
(f) Counterparts. This Collateral Agreement may be executed,
------------
acknowledged and delivered in any number of counterparts and such counterparts
taken together shall constitute one and the same instrument.
(g) Application of Bankruptcy Code. The parties hereto acknowledge and
------------------------------
agree that the Collateral Agent is a "financial institution" within the meaning
of Section 101(22) of Title 11 of the United States Code (the "Bankruptcy Code")
---------------
and is acting as agent and custodian for the Trust in connection with the
Purchase Agreement and that the Trust is a "customer" of the Collateral Agent
within the meaning of said Section 101(22).
(h) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY APPLICABLE LAW,
--------------------
THE PARTIES HERETO HEREBY WAIVE AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER
AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION ARISING OUT OF OR
BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR TORT OR OTHERWISE. EACH
PARTY HERETO ACKNOWLEDGES THAT IT OR HE HAS BEEN INFORMED BY THE OTHER PARTY
HERETO THAT THE PROVISIONS OF THIS
20
SECTION CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH OTHER PARTY HERETO HAS
RELIED, IS RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND ANY
DOCUMENT RELATED THERETO. EACH PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF
THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER
PARTY HERETO TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
11. Termination of Collateral Agreement.
-----------------------------------
This Collateral Agreement and the rights hereby granted by the Pledgor
in the Collateral shall cease, terminate and be void upon fulfillment of all of
the obligations of the Pledgor under the Purchase Agreement, and the Pledgor
shall have no further liability hereunder upon such termination. Any Collateral
remaining at the time of such termination shall be fully released and discharged
from the Lien hereof and delivered to the Pledgor by the Collateral Agent, all
at the expense of the Pledgor.
12. No Personal Liability of Trustees.
---------------------------------
By executing this Collateral Agreement none of the Trustees assumes
any personal liability hereunder.
21
IN WITNESS WHEREOF, each of the Pledgor, the Collateral Agent and the Trust has
caused this Collateral Agreement to be duly executed on its behalf as of the
date hereof.
PLEDGOR:
-----------------------------------
By:
-----------------------------------
Name:
Title:
Address for Notices:
-----------------------------------
Attention:
-----------------------------------
THE TRUST:
DECS TRUST V
By:
--------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇,
as Trustee
By:
--------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, III,
as Trustee
By:
--------------------------------
▇▇▇▇▇ ▇. ▇'▇▇▇▇▇,
as Trustee
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
COLLATERAL AGENT:
The Bank of New York
as Collateral Agent
By:
-----------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Assistant Vice President
Address for Notices:
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
-----------------------------------
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇▇
-----------------------------------
2
Exhibit A
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, _____________ (the "Pledgor"), hereby certifies, pursuant to
-------
Section 6(b) of the Collateral Agreement dated as of , 1999 among
the Pledgor, The Bank of New York, as Collateral Agent, and DECS Trust V (the
"Collateral Agreement"; terms defined in the Collateral Agreement being used
---------------------
herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as substituted Collateral
(the "Substituted Collateral"):
----------------------
2. The Pledgor requests that the Collateral Agent transfer to the
Pledgor the following Prior Collateral, pursuant to Section 6(b) of the
Collateral Agreement:
3. The Pledgor hereby represents and warrants to the Collateral Agent
and the Trust that:
(a) Consents to Transfer. No Transfer Restrictions exist
--------------------
with respect to or otherwise apply to the assignment of, or transfer
by the Pledgor of possession of, any items of Substituted Collateral
to the Collateral Agent under the Collateral Agreement, or the
subsequent sale or transfer of such items of Substituted Collateral by
the Collateral Agent pursuant to the terms of the Collateral
Agreement.
(b) Title to Collateral; Perfected Security Interest. The
------------------------------------------------
Pledgor has good and marketable title to the Substituted Collateral,
free of all Liens (other than the Lien created by the Collateral
Agreement) and Transfer Restrictions. Upon delivery of the Collateral
to the Collateral Agent, the Collateral Agent will obtain a valid,
first priority perfected security interest in, and a first lien upon,
such Substituted Collateral subject to no other Lien. None of such
Substituted Collateral is or shall be pledged by the Pledgor as
collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the
same extent as if this Certificate had been specifically addressed to the Trust.
A-1
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of ______, 1999.
Name:
Title:
A-2
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL GOVERNMENT SECURITIES
The undersigned, __________________ (the "Pledgor"), hereby certifies,
-------
pursuant to Section 6(c) of the Collateral Agreement, dated as of
, 1999, among the Pledgor, The Bank of New York, as Collateral Agent, and DECS
Trust V (the "Collateral Agreement"; terms defined in the Collateral Agreement
--------------------
being used herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as Collateral deliverable in
connection with Pledgor's option to extend the Exchange Date in accordance with
Section 1.3(f) of the Purchase Agreement (the "Additional Government
---------------------
Securities"):
2. The Pledgor hereby represents and warrants to the Collateral Agent
that:
(a) Consents to Transfer. No Transfer Restrictions exist with
--------------------
respect to or otherwise apply to the assignment of, or transfer by the
Pledgor of possession of, any items of Additional Government Securities to
the Collateral Agent under the Collateral Agreement, or the subsequent sale
or transfer of such items of Additional Government Securities by the
Collateral Agent pursuant to the terms of the Collateral Agreement.
(b) Title to Collateral; Perfected Security Interest. The
------------------------------------------------
Pledgor has good and marketable title to the Additional Government
Securities, free of all Liens (other than the Lien created by the
Collateral Agreement) and Transfer Restrictions. Upon delivery of the
Collateral to the Collateral Agent, the Collateral Agent will obtain a
valid, first priority perfected security interest in, and a first lien
upon, such Additional Government Securities subject to no other Lien.
None of such Additional Government Securities is or shall be pledged by the
Pledgor as collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the
same extent as if this Certificate had been specifically addressed to the Trust.
B-1
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of _____ 1999.
Name:
Title:
Exhibit C
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, __________________ (the "Pledgor"), hereby certifies,
-------
pursuant to Section 6(c) of the Collateral Agreement, dated as of
, 1999, among the Pledgor, The Bank of New York, as Collateral Agent, and DECS
Trust V (the "Collateral Agreement"; terms defined in the Collateral Agreement
--------------------
being used herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as additional Collateral
(the "Additional Collateral"):
---------------------
2. The Pledgor hereby represents and warrants to the Collateral Agent
that:
(a) Consents to Transfer. No Transfer Restrictions exist with
--------------------
respect to or otherwise apply to the assignment of, or transfer by the
Pledgor of possession of, any items of Additional Collateral to the
Collateral Agent under the Collateral Agreement, or the subsequent sale or
transfer of such items of Additional Collateral by the Collateral Agent
pursuant to the terms of the Collateral Agreement.
(b) Title to Collateral; Perfected Security Interest. The
------------------------------------------------
Pledgor has good and marketable title to the Additional Collateral, free of
all Liens (other than the Lien created by the Collateral Agreement) and
Transfer Restrictions. Upon delivery of the Collateral to the Collateral
Agent, the Collateral Agent will obtain a valid, first priority perfected
security interest in, and a first lien upon, such additional Collateral
subject to no other Lien. None of such Additional Collateral is or shall
be pledged by the Pledgor as collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the
same extent as if this Certificate had been specifically addressed to the Trust.
C-1
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_____ day of _____ 1999.
Name:
Title:
C-1