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EXHIBIT 4(g)
AMERICAN HERITAGE LIFE INVESTMENT CORPORATION,
THE FIRST NATIONAL BANK
OF CHICAGO
AND
THE CHASE MANHATTAN BANK
FORM OF PLEDGE AGREEMENT
Dated as of ________ __, 1997
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TABLE OF CONTENTS
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Section 1. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Section 2. Pledge; Control and Perfection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.1. The Pledge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Section 2.2. Control and Perfection . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Section 3. Distributions on Pledged Collateral . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Section 4. Substitution, Release, Repledge and Settlement of Preferred Securities . . . . . . . . . . . . . . . 12
Section 4.1. Substitution of Preferred Securities and the Establishment of Growth PRIDES . . . . . . . . . . . . 12
Section 4.2. Pledge of Preferred Securities and Re-establishment of Income PRIDES . . . . . . . . . . . . . . . . 12
Section 4.3. Termination Event . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 4.4. Cash Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Section 4.5. Early Settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 4.6. Application of Proceeds Settlement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 5. Voting Rights -- Preferred Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 6. Rights and Remedies; Investment Company Event; Tax Event etc. . . . . . . . . . . . . . . . . . . . 17
Section 6.1. Rights and Remedies of the Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Section 6.2. Tax Event, Investment Company Event, etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
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Section 7. Representation and Warranties; Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.1. Representations and Warranties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Section 7.2. Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Section 8. The Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.1. Appointment, Powers and Immunities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Section 8.2. Instructions of the Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.3. Reliance by Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Section 8.4. Rights in Other Capacities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.5. Non-Reliance on Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.6. Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Section 8.7. Failure to Act . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.8. Resignation of Collateral Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Section 8.9. Right to Appoint Agent or Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Section 8.10. Survival . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 8.11. Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9. Amendment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.1. Amendment Without Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Section 9.2. Amendment with Consent of Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Section 9.3. Execution of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.4. Effect of Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 9.5. Reference to Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Section 10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
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Section 10.1. No Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.2. Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.3. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Section 10.4. Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.5. Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.6. Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.7. Expenses, etc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Section 10.8. Security Interest Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
EXHIBIT A INSTRUCTION TO COLLATERAL AGENT
EXHIBIT B INSTRUCTION TO PURCHASE CONTRACT AGENT
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PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of ________, 1997 (this "Agreement"), among
American Heritage Life Investment Corporation, a Florida corporation (the
"Company"), The Chase Manhattan Bank, a New York banking corporation, not
individually but solely as collateral agent (in such capacity, together with
its successors in such capacity, the "Collateral Agent") and in its capacity as
a "securities intermediary" as defined in Section 8-102(a)(14) of Revised
Article 8 (as defined herein) (in such capacity, together with its successors
in such capacity, the "Securities Intermediary"), and The First National Bank
of Chicago, not individually but solely as purchase contract agent and as
attorney-in-fact of the Holders (as defined in the Purchase Contract Agreement)
from time to time of the Securities (as hereinafter defined) (in such capacity,
together with its successors in such capacity, the "Purchase Contract Agent")
under the Purchase Contract Agreement (as hereinafter defined).
RECITALS
The Company and the Purchase Contract Agent are parties to the
Purchase Contract Agreement, dated as of the date hereof (as modified and
supplemented and in effect from time to time, the "Purchase Contract
Agreement"), pursuant to which there may be issued up to 1,725,000 FELINE
PRIDES (the "Securities").
Each Security, at issuance, consists of a unit (the "Income PRIDES")
comprised of (a) one stock purchase contract (the "Purchase Contract") under
which (i) the Holder will purchase from the Company on ______ __, 2000, for an
amount equal to the Stated Amount, a number of shares of Common Stock equal to
the Settlement Rate or the Cash Settlement Rate, as applicable, and (ii) the
Company will pay the Holder Contract Adjustment Payments, and (b) beneficial
ownership of a ___% Trust Originated Preferred Security (a "Preferred
Security") issued by AHL Financing (the "Trust"), having a liquidation amount
equal to $50 (the "Stated Amount") and maturing on _______ __, 2002, unless
settled earlier.
Pursuant to the terms of the Purchase Contract Agreement and the
Purchase Contracts, the Holders, from time to time, of the Securities have
irrevocably
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authorized the Purchase Contract Agent, as attorney-in-fact of such
Holders, among other things, to execute and deliver this Agreement on behalf of
such Holders and to grant the pledge provided hereby of the Preferred
Securities and any Treasury Securities (as defined below) delivered in exchange
therefor to secure each Holder's obligations under the related Purchase
Contract, as provided herein and subject to the terms hereof. Upon such pledge
the Preferred Securities will be beneficially owned by the Holders but will be
owned of record by the Purchase Contract Agent subject to the Pledge hereunder.
Accordingly, the Company, the Collateral Agent and the Purchase
Contract Agent, on its own behalf and as attorney-in-fact of the Holders from
time to time of the Securities, agree as follows:
Section 1.
Definitions. For all purposes of this Agreement, except as
otherwise expressly provided or unless the context otherwise requires:
(a) the terms defined in this Article have the meanings
assigned to them in this Article and include the plural as well as the
singular;
(b) the words "herein," "hereof" and "hereunder" and other
words of similar import refer to this Agreement as a whole and not to
any particular Article, Section or other subdivision;
(c) the following terms have the meanings assigned to them in
the Purchase Contract Agreement: (i) Act, (ii) Agent, (iii) Board
Resolution, (iv) Cash Settlement, (v) Cash Settlement Rate, (vi)
Certificate, (vii) Collateral Settlement, (viii) Common Stock, (ix)
Contract Adjustment Payments, (x) Early Settlement, (xi) Early
Settlement Amount, (xii) Early Settlement Date, (xiii) Junior
Subordinated Debentures, (xiv) Opinion of Counsel, (xv) Outstanding
Securities, (xvi) Purchase Contract, (xvii) Purchase Contract
Settlement Date, (xviii) Purchase Price, (xix) Repayment Price, (xx)
Settlement Rate, (xxi) Termination Event, and (xxii) Underwriting
Agreement;
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(d) the following terms have the meanings assigned to them in the
Declaration: (i) Investment Company Event, (ii) Liquidation
Distribution, (iii) Institutional Trustee, and (iv) Tax Event.
"Agreement" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more agreements
supplemental hereto entered into pursuant to the applicable provisions hereof.
"Bankruptcy Code" means title 11 of the United States Code, or any
other law of the United States that from time to time provides a uniform system
of bankruptcy laws.
"Business Day" means any day other than a Saturday, a Sunday or any
other day on which banking institutions in The City of New York (in the State
of New York) are permitted or required by any applicable law to close.
"Cash" means any coin or currency of the United States as at the time
shall be legal tender for payment of public and private debts.
"Code" has the meaning specified in Section 6.1 hereof.
"Collateral" has the meaning specified in Section 2.1 hereof.
"Collateral Account" means the trust account (number ___________)
maintained at The Chase Manhattan Bank in the name "The First National Bank of
Chicago, as Purchase Contract Agent on behalf of the holders of certain
securities of AHL Financing, Collateral Account subject to the security
interest of The Chase Manhattan Bank, as Collateral Agent, for the benefit of
American Heritage Life Investment Corporation, as pledgee" and any successor
account.
"Collateral Agent" has the meaning specified in the first paragraph of
this instrument.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor
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shall have become such, and thereafter "Company" shall mean such successor.
"Declaration" means the Amended and Restated Declaration of Trust of
the Trust, dated as of __________ __, 1997, among the Company as sponsor, the
trustees named therein and the holders from time to time of undivided
beneficial interests in the assets of the Trust.
"Growth PRIDES" means a Purchase Contract with respect to which
Treasury Securities have been substituted for Preferred Securities as
collateral to secure the Holder's obligations under such Purchase Contract.
"Holder" when used with respect to a Security, or a Purchase Contract
constituting a part thereof, means The Depository Trust Company (or its
nominee) as the registered holder of an Income PRIDES or a Growth PRIDES, as
the case may be.
"Intermediary" means any entity that in the ordinary course of its
business maintains securities accounts for others and is acting in that
capacity.
"Permitted Investments" means any one of the following which shall
mature on the next succeeding Business Day (i) any evidence of indebtedness
with an original maturity of 365 days or less issued, or directly and fully
guaranteed, or insured by the United States of America or any agency or
instrumentality thereof (provided that the full faith and credit of the United
States of America is pledged in support thereof or such indebtedness
constitutes a general obligation of it); (ii) deposits, certificates of deposit
or acceptances with an original maturity of 365 days or less of any institution
which is a member of the Federal Reserve System having combined capital and
surplus and undivided profits of not less than US$ 200.0 million at the time of
deposit; (iii) investments with an original maturity of 365 days or less of any
Person that is fully and unconditionally guaranteed by a bank referred to in
clause (ii); (iv) repurchase agreements and reverse repurchase agreements
relating to marketable direct obligations issued or unconditionally guaranteed
by the United States Government or issued by any agency thereof
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and backed by the full faith and credit of the United States Government; (v)
investments in commercial paper, other than commercial paper issued by the
Company or its affiliates, of any corporation incorporated under the laws of the
United States or any State thereof, which commercial paper has a rating at the
time of purchase at least equal to "A-1" by Standard & Poor's Ratings Services
or at least equal to "P-1" by ▇▇▇▇▇'▇ Investors Service, Inc.; and (vi)
investments in money market funds registered under the Investment Company Act of
1940, as amended, which have net assets of at least $200.0 million and at least
85.0% of whose assets consist of securities and other obligations of the types
described in clauses (i) through (v) above.
"Person" means any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political
subdivision thereof.
"Pledge" has the meaning specified in Section 2.1 hereof.
"Pledged Preferred Securities" has the meaning specified in Section
2.1 hereof.
"Pledged Treasury Securities" has the meaning specified in Section
2.1 hereof.
"Preferred Securities" has the meaning specified in the Recitals.
"Proceeds" means all interest, dividends, cash, instruments,
securities, financial assets (as defined in Section 8-102(a)(9) of Revised
Article 8) and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of the
Collateral.
"Purchase Contract" has the meaning specified in the Recitals.
"Purchase Contract Agent" has the meaning specified in the first
paragraph of this instrument.
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"Purchase Contract Agreement" has the meaning specified in the
Recitals.
"Revised Article 8" means the 1994 Official Text of Revised Article 8
of the Uniform Commercial Code, together with conforming and miscellaneous
amendments to Articles 1, 3, 4, 5, 9 and 10, 1994 Official Text, as adopted
by the American Law Institute and the National Conference of Commissioners on
Uniform State Laws and approved by the American Bar Association on February 14,
1995.
"Securities" has the meaning specified in the Recitals.
"Securities Intermediary" has the meaning specified in the preamble to
this Agreement.
"Security Entitlement" has the meaning set forth in Section
8.102(a)(7) of Revised Article 8.
"Stated Amount" has the meaning specified in the Recitals.
"TRADES" means the Treasury/Reserve Automated Debt Entry System
maintained by the Federal Reserve Bank of New York pursuant to the TRADES
Regulations.
"TRADES Regulations" means the regulations of the United States
Department of the Treasury, published at 31 C.F.R. Part 357, as amended from
time to time. Unless otherwise defined herein, all terms defined in the TRADES
Regulations are used herein as therein defined.
"Transfer" means, with respect to the Collateral and in accordance
with the instructions of the Collateral Agent, the Purchase Contract Agent or
the Holder, as applicable:
(i) in the case of Collateral consisting of securities which
cannot be delivered by book-entry or which the parties agree
are to be delivered in physical form, delivery in
appropriate physical form to the recipient accompanied by
any duly executed instruments of transfer, assignments in
blank, transfer tax stamps and any other documents necessary
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to constitute a legally valid transfer to the recipient;
(ii) in the case of Collateral consisting of securities
maintained in book-entry form (other than Treasury
Securities) by (A) causing such securities to be credited to
a book-entry securities account of the recipient or an
Intermediary and (B) causing such Intermediary, if any, (i)
to send to the recipient confirmation of the transfer of the
relevant interest in such Collateral to the recipient and
(ii) to identify by book-entry or otherwise such Collateral
as subject to the relevant interest in favor of the
recipient or such other method as may be effective under
applicable law; and
(iii) in the case of Treasury Securities in book-entry form, by
causing a "securities intermediary" (as defined in Section
8-102(a)(14) of Revised Article 8) to (i) credit a
"securities entitlement" (as defined in Section 8-102(a)(17)
of Revised Article 8) with respect to such securities to a
securities account maintained by or on behalf of the
recipient; (ii) to issue a confirmation to the Collateral
Agent with respect to such credit and (iii) to make
appropriate notations in its books to reflect the security
interest of the Collateral Agent in such Treasury
Securities.
"Treasury Security" means a zero-coupon U.S. Treasury Security
maturing on _______ __, 2000 (Cusip Number ___________) which are the principal
strips of the ___% U.S. Treasury Securities which mature on ______ __, 2000.
"Trust" has the meaning specified in the Recitals.
"Value" with respect to any item of Collateral on any date means, as
to (i) a Preferred Security, the Stated Amount, (ii) Cash, the face amount
thereof and (iii) Treasury Securities, the aggregate principal amount thereof
at maturity.
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Section 2. Pledge; Control and Perfection.
Section 2.1. The Pledge. The Holders from time to time acting through
the Purchase Contract Agent, as their attorney-in-fact, hereby pledge and grant
to the Collateral Agent, for the benefit of the Company, as collateral security
for the performance when due by such Holders of their respective obligations
under the related Purchase Contracts, a security interest in (i) all of the
right, title and interest of such Holders (a) in the Preferred Securities
constituting a part of the securities and all Proceeds thereof (including any
Proceeds from the repayment of the Preferred Securities by the Trust) and any
Treasury Securities delivered in exchange for such Preferred Securities in
accordance with Section 4 hereof, in each case that have been Transferred to or
received by the Collateral Agent and not released by the Collateral Agent to
such Holders under the provisions of this Agreement (the "Collateral"); (b) in
payments made by Holders pursuant to Section 4.4; (c) in the Collateral Account
and all securities, financial assets and other property credited thereto and all
security entitlements related thereto; and (d) in any Junior Subordinated
Debentures delivered to the Collateral Agent upon the occurrence of a Tax Event
or an Investment Company Event or a liquidation of the Trust as provided in
Section 6.3. Prior to or concurrently with the execution and delivery of this
Agreement, the Purchase Contract Agent, on behalf of the initial Holders of the
Income PRIDES, shall cause the Preferred Securities comprising a part of the
Income PRIDES to be delivered to the Collateral Agent for the benefit of the
Company by physically delivering such securities to the Securities Intermediary
endorsed in blank and causing the Securities Intermediary to credit the
Collateral Account with such securities and send the Collateral Agent a
confirmation of the deposit of such securities. In the event a Holder of Income
PRIDES so elects, such Holder may Transfer Treasury Securities to the Collateral
Agent for the benefit of the Company in exchange for the release by the
Collateral Agent on behalf of the Company of Preferred Securities to the
Purchase Contract Agent on behalf of such Holder. Treasury Securities shall be
Transferred to the Collateral Account maintained by the Collateral Agent at the
Securities Intermediary by book-entry transfer to the Collateral Account in
accordance with the TRADES Regulations and by the notation by the
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Securities Intermediary on its books that a Security Entitlement with respect to
such Treasury Securities has been credited to the Collateral Account. For
purposes of perfecting the Pledge under applicable law, including, to the extent
applicable, the TRADES Regulations, the Uniform Commercial Code as adopted and
in effect in any applicable jurisdiction or Revised Article 8 as made applicable
by the TRADES Regulations, the Collateral Agent shall be the agent of the
Company as provided herein. The pledge provided in this Section 2.1 is herein
referred to as the "Pledge" and the Preferred Securities or Treasury Securities
subject to the Pledge, excluding any Preferred Securities or Treasury Securities
released from the Pledge as provided in Section 4 hereof, are hereinafter
referred to as "Pledged Preferred Securities" or the "Pledged Treasury
Securities," respectively. Subject to the Pledge and the provisions of Section
2.2 hereof, the Holders from time to time shall have full beneficial ownership
of the Collateral. Whenever directed by the Collateral Agent acting on behalf of
the Company, the Securities Intermediary shall have the right to reregister the
Preferred Securities or any other securities held in physical form in its name.
Except as may be required in order to release Preferred Securities in
connection with a Holder's election to convert its investment from an Income
Pride to a Growth Pride, or except as otherwise required to release securities
as specified herein, the Collateral Agent shall not relinquish physical
possession of any certificate evidencing a Preferred Security prior to the
termination of this Agreement. If it becomes necessary for the Collateral
Agent to relinquish physical possession of a certificate in order to release a
portion of the Preferred Securities evidenced thereby from the Pledge, the
Collateral Agent shall use its best efforts to obtain physical possession of a
replacement certificate evidencing any Preferred Securities remaining subject
to the Pledge hereunder registered to it or indorsed in blank within fifteen
days of the date it relinquished possession. The Collateral Agent shall
promptly notify the Company of its failure to obtain possession of any such
replacement certificate as required hereby.
Section 2.2. Control and Perfection. In connection with the Pledge
granted in Section 2.1, and subject to
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the other provisions of this Agreement, the Holders from time to time acting
through the Purchase Contract Agent, as their attorney-in-fact, hereby authorize
and direct the Securities Intermediary (without the necessity of obtaining the
further consent of the Purchase Contract Agent or any of the Holders), to comply
with and follow any instructions and entitlement orders (as defined in Section
8-102(a)(8) of Revised Article 8) that the Collateral Agent on behalf of the
Company may give in writing with respect to the Collateral Account, the
Collateral credited thereto and any security entitlements with respect to any
thereof. Such instructions and entitlement orders may, without limitation,
direct the Securities Intermediary to transfer, redeem, sell, liquidate, assign,
deliver or otherwise dispose of the Preferred Securities, the Treasury
Securities and any security entitlements with respect thereto and to pay and
deliver any income, proceeds or other funds derived therefrom to the Company.
The Holders from time to time acting through the Purchase Contract Agent hereby
further authorize and direct the Collateral Agent, as agent of the Company, to
itself issue instructions and entitlement orders, and to otherwise take action,
with respect to the Collateral Account, the Collateral credited thereto and any
security entitlements with respect to any thereof, pursuant to the terms and
provisions hereof, all without the necessity of obtaining the further consent of
the Purchase Contract Agent or any of the Holders. In addition, to further
protect and perfect the Pledge, the Securities Intermediary agrees that it will,
until New York adopts Revised Article 8, at all times ▇▇▇▇ its books with
respect to the Collateral Account to show that all securities credited thereto
are subject to the Pledge in favor of the Collateral Agent for the benefit of
the Company. The Collateral Agent shall be the Agent of the Company and shall
act as directed in writing by the Company. Without limiting the generality of
the foregoing, the Collateral Agent shall issue entitlement orders to the
Securities Intermediary when and as directed by the Company.
Section 3. Distributions on Pledged Collateral. So long as the Purchase
Contract Agent is the registered owner of the Pledged Preferred Securities it
shall receive all payments thereon. If the Pledged Preferred Securities are
reregistered, such that the Collateral Agent becomes the registered holder, all
payments of the
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Stated Amount of, or cash distributions on, any Pledged Preferred Securities and
all payments of the principal of, or cash distributions on, any Pledged Treasury
Securities received by the Collateral Agent and that are properly payable
hereunder shall be paid by the Collateral Agent by wire transfer in same day
funds:
(i) In the case of (A) cash distributions with respect to
Pledged Preferred Securities and (B) any payments of the Stated Amount
with respect to any Preferred Securities that have been released from
the Pledge pursuant to Section 4.3 hereof, to the Purchase Contract
Agent, for the benefit of the relevant Holders of Securities, to the
account designated by the Purchase Contract Agent for such purpose, no
later than 2:00 p.m., New York City time, on the Business Day such
payment is received by the Collateral Agent (provided that in the
event such payment is received by the Collateral Agent on a day that
is not a Business Day or after 12:30 p.m., New York City time, on a
Business Day, then such payment shall be made no later than 10:30
a.m., New York City time, on the next succeeding Business Day);
(ii) In the case of any principal payments with respect to
any Treasury Securities that have been released from the Pledge
pursuant to Section 4.3 hereof, to the Holders of the Growth PRIDES to
the accounts designated by them in writing for such purpose no later
than 2:00 p.m., New York City time, on the Business Day such payment
is received by the Collateral Agent (provided that in the event such
payment is received by the Collateral Agent on a day that is not a
Business Day or after 12:30 p.m., New York City time, on a Business
Day, then such payment shall be made no later than 10:30 a.m., New
York City time, on the next succeeding Business Day); and
(iii) In the case of payments of the Stated Amount of any
Pledged Preferred Securities or the principal of any Pledged Treasury
Securities, to the Company on the relevant Payment Date in accordance
with the procedure set forth in Section 6.2(a) or 6.2(b) hereof, in
full satisfaction of the respective obligations of the Holders under
the related Purchase Contracts.
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All payments received by the Purchase Contract Agent as provided
herein shall be applied by the Purchase Contract Agent pursuant to the
provisions of the Purchase Contract Agreement. If, notwithstanding the
foregoing, the Purchase Contract Agent shall receive any payments of
the Stated Amount on account of any Preferred Security that, at the
time of such payment, is a Pledged Preferred Security or a Holder of a
Growth PRIDES shall receive any payments of principal on account of
any Treasury Securities that, at the time of such payment, are Pledged
Treasury Securities, the Purchase Contract Agent or such Holder shall
hold the same as trustee of an express trust for the benefit of the
Company (and promptly deliver the same over to the Company) for
application to the obligations of the Holders under the related
Purchase Contracts, and the Holders shall acquire no right, title or
interest in any such payments of Stated Amount or principal so
received.
Section 4. Substitution, Release, Repledge and Settlement of
Preferred Securities.
Section 4.1. Substitution of Preferred Securities and the
Establishment of Growth PRIDES. At any time on or prior to the second
Business Day immediately preceding the Purchase Contract Settlement
Date, a Holder of Income PRIDES shall have the right to substitute
Treasury Securities for the Pledged Preferred Securities securing such
Holder's obligations under the Purchase Contract(s) comprising a part
of its Income PRIDES in integral multiples of 20 Income PRIDES by (a)
Transferring to the Collateral Agent Treasury Securities having a
Value equal to the Stated Amount of the Pledged Preferred Securities
to be released and (b) delivering the related Income PRIDES to the
Purchase Contract Agent, accompanied by a notice, substantially in the
form of Exhibit B hereto, to the Purchase Contract Agent stating that
such Holder has Transferred Treasury Securities to the Collateral
Agent pursuant to clause (a) above (stating the Value of the Treasury
Securities Transferred by such Holder) and requesting that the
Purchase Contract Agent instruct the Collateral Agent to release from
the Pledge the Pledged Preferred Securities related to such Income
PRIDES. The Purchase Contract Agent shall instruct the Collateral
Agent in the form provided in Exhibit A. Upon receipt of Treasury
Securities from a Holder of Income PRIDES and the related instruction
from the Purchase Contract Agent,
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the Collateral Agent shall release the Preferred Securities and shall
promptly Transfer such Preferred Securities, free and clear of any
lien, pledge or security interest created hereby, to the Purchase
Contract Agent.
Section 4.2. Pledge of Preferred Securities and
Re-establishment of Income PRIDES. At any time on or prior to the
second Business Day immediately preceding the Purchase Contract
Settlement Date, a Holder of Growth PRIDES shall have the right to
establish or reestablish Income PRIDES consisting of the Purchase
Contracts and Preferred Securities in integral multiples of 20 Income
PRIDES by (a) Transferring to the Collateral Agent Preferred
Securities having a Value equal to the Stated Amount of the Pledged
Treasury Securities to be released and (b) delivering the related
Growth PRIDES to the Purchase Contract Agent, accompanied by a
notice, substantially in the form of Exhibit B hereto, to the
Purchase Contract Agent stating that such Holder has Transferred
Preferred Securities to the Collateral Agent pursuant to clause (a)
above and requesting that the Purchase Contract Agent instruct the
Collateral Agent to release from the Pledge the Pledged Treasury
Securities related to such Growth PRIDES. The Purchase Contract
Agent shall instruct the Collateral Agent in the form provided in
Exhibit A. Upon receipt of the Preferred Securities from such Holder
and the instruction from the Purchase Contract Agent, the Collateral
Agent shall release the Treasury Securities and shall promptly
Transfer such Treasury Securities, free and clear of any lien, pledge
or security interest created hereby, to the Purchase Contract Agent.
Section 4.3. Termination Event. Upon receipt by the Collateral
Agent of written notice from the Company or the Purchase Contract
Agent that there has occurred a Termination Event, the Collateral
Agent shall release all Collateral from the Pledge and shall promptly
Transfer any Pledged Preferred Securities and Pledged Treasury
Securities to the Purchase Contract Agent for the benefit of the
Holders of the Income PRIDES and the Growth PRIDES, respectively,
free and clear of any lien, pledge or security interest created
hereby.
If such Termination Event shall result from the Company's
becoming a debtor under the Bankruptcy Code,
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and if the Collateral Agent shall for any reason fail promptly to
effectuate the release and Transfer of all Pledged Preferred
Securities or of the Pledged Treasury Securities, as the case may be,
as provided by this Section 4.3, the Purchase Contract Agent shall (i)
use its best efforts to obtain an opinion of a nationally recognized
law firm reasonably acceptable to the Collateral Agent to the effect
that, as a result of the Company's being the debtor in such a
bankruptcy case, the Collateral Agent will not be prohibited from
releasing or Transferring the Collateral as provided in this Section
4.3, and shall deliver such opinion to the Collateral Agent within ten
days after the occurrence of such Termination Event, and if (y) the
Purchase Contract Agent shall be unable to obtain such opinion within
ten days after the occurrence of such Termination Event or (z) the
Collateral Agent shall continue, after delivery of such opinion, to
refuse to effectuate the release and Transfer of all Pledged Preferred
Securities or of the Pledged Treasury Securities, as the case may be,
as provided in this Section 4.3, then the Purchase Contract Agent
shall within fifteen days after the occurrence of such Termination
Event commence an action or proceeding in the court with jurisdiction
of the Company's case under the Bankruptcy Code seeking an order
requiring the Collateral Agent to effectuate the release and transfer
of all Pledged Preferred Securities or of the Pledged Treasury
Securities, as the case may be, as provided by this Section 4.3 or
(ii) commence an action or proceeding like that described in
subsection (i)(z) hereof within ten days after the occurrence of such
Termination Event.
Section 4.4. Cash Settlement. Upon receipt by the Collateral
Agent of (a) notice from the Purchase Contract Agent prior to the
Purchase Contract Settlement Date, as provided in the Purchase
Contract Agreement, that a Holder elects to effect a Cash Settlement
with respect to some or all of such Holder's Purchase Contracts in
accordance with the terms of the Purchase Contracts and the Purchase
Contract Agreement and (b) payment by such Holder on or prior to 5:00
p.m., New York City time, on the second Business Day immediately
preceding the Purchase Contract Settlement Date, of the Purchase Price
of such Purchase Contracts by certified or cashiers check payable to
or upon the order of the Company, or wire transfer in immediately
available funds, then the Collateral Agent shall, upon the written
direction of the
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Purchase Contract Agent, promptly invest any Cash received from a
Holder in connection with a Cash Settlement in Permitted Investments
that will mature on the Purchase Contract Settlement Date. Upon the
receipt of any such funds, the Collateral Agent shall pay such funds
to the Company on the Purchase Contract Settlement Date and the
Collateral Agent shall, after payment of the Purchase Price to the
Company on the Purchase Contract Settlement Date, release from the
Pledge and promptly Transfer to the Purchase Contract Agent Pledged
Preferred Securities or Pledged Treasury Securities with a principal
amount equal to the product of the Stated Amount and the number of
Purchase Contracts as to which such Holder has elected to effect a
Cash Settlement. The Collateral Agent shall distribute, when received,
any funds in respect of the interest earned from any such investment
to the Purchase Contract Agent, for payment to the relevant Holders.
Section 4.5. Early Settlement. Upon written notice to the
Collateral Agent by the Purchase Contract Agent that one or more
Holders of Securities have elected to effect Early Settlement of their
respective obligations under the Purchase Contracts forming a part of
such Securities in accordance with the terms of the Purchase Contracts
and the Purchase Contract Agreement (setting forth the number of such
Purchase Contracts as to which such Holders have elected to effect
Early Settlement), and that the Purchase Contract Agent has received
from such Holders, and paid to the Company as confirmed in writing by
the Company, the related Early Settlement Amounts pursuant to the
terms of the Purchase Contracts and the Purchase Contract Agreement
and that all conditions to such Early Settlement have been satisfied,
then the Collateral Agent shall release from the Pledge, (a) Pledged
Preferred Securities in the case of a holder of Income PRIDES or (b)
Pledged Treasury Securities in the case of a holder of Growth PRIDES,
as the case may be, with a principal amount equal to the product of
(i) the Stated Amount times (ii) the number of such Purchase Contracts
as to which such Holders have elected to effect Early Settlement and
shall Transfer all such Pledged Preferred Securities or Pledged
Treasury Securities, as the case may be, free and clear of the Pledge
created hereby, to the Purchase Contract Agent for the benefit of the
Holders.
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Section 4.6. Application of Proceeds Settlement. (a) In the
event a Holder of Income PRIDES has not made an effective Cash
Settlement or an Early Settlement of the Purchase Contract(s),
underlying its Income PRIDES, such Holder shall be deemed to have
elected to pay for the shares of Common Stock to be issued under such
Purchase Contract(s) from the Proceeds of the related Pledged
Preferred Securities. The Collateral Agent shall, by 10:00 a.m., New
York City time, on the Business Day immediately preceding the Purchase
Contract Settlement Date, without any instruction from such Holder of
Income PRIDES, present the related Preferred Securities to the
Institutional Trustee for repayment at the Repayment Price. The
Collateral Agent shall, at the written direction of the Purchase
Contract Agent, promptly invest any Cash received in respect of the
repayment of the Pledged Preferred Securities in overnight Permitted
Investments. On the Purchase Contract Settlement Date, the Collateral
Agent shall apply the proceeds of any such funds to pay to the Company
an amount equal to the product of the Stated Amount and the number of
Preferred Securities repaid by the Institutional Trustee at the
Purchase Price. The Collateral Agent shall distribute any funds
received in respect of the investment earnings from such investment
when received to the Purchase Contract Agent for payment to the
relevant Holders.
(b) In the event a holder of Growth PRIDES has not made an Early
Settlement of the Purchase Contract(s) underlying its Growth PRIDES,
such holder shall be deemed to have elected to pay for the shares of
Common Stock to be issued under such Purchase Contract(s) from the
Proceeds of the related Pledged Treasury Securities. On the Business
Day immediately prior to the Purchase Contract Settlement Date, the
Collateral Agent shall, at the written direction of the Purchase
Contract Agent, invest the Cash proceeds of the maturing Pledged
Treasury Securities in overnight Permitted Investments. Without
receiving any instruction from the Holder of Growth PRIDES, the
Collateral Agent shall apply the Proceeds of the related Pledged
Treasury Securities to the settlement of such Purchase Contracts on
the Purchase Contract Settlement Date.
In the event the sum of the Proceeds from the related Pledged
Treasury Securities and the investment
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earnings from the investment in overnight Permitted Investments is in
excess of the aggregate Purchase Price of the Purchase Contracts being
settled thereby, the Collateral Agent shall distribute such excess,
when received, to the Purchase Contract Agent for the benefit of the
holder of the related Purchase Contracts.
Section 5. Voting Rights -- Preferred Securities. The Purchase
Contract Agent may exercise, or refrain from exercising, any and all
voting and other consensual rights pertaining to the Pledged Preferred
Securities or any part thereof for any purpose not inconsistent with
the terms of this Agreement and in accordance with the terms of the
Purchase Contract Agreement; provided, that the Purchase Contract
Agent shall not exercise or, as the case may be, shall not refrain
from exercising such right if, in the judgment of the Company, such
action would impair or otherwise have a material adverse effect on the
value of all or any of the Pledged Preferred Securities; and provided,
further, that the Purchase Contract Agent shall give the Company and
the Collateral Agent at least five days' prior written notice of the
manner in which it intends to exercise, or its reasons for refraining
from exercising, any such right. Upon receipt of any notices and other
communications in respect of any Pledged Preferred Securities,
including notice of any meeting at which holders of Preferred
Securities are entitled to vote or solicitation of con- sents, waivers
or proxies of holders of Preferred Securities, the Collateral Agent
shall use reasonable efforts to send promptly to the Purchase Contract
Agent such notice or communication, and as soon as reasonably
practicable after receipt of a written request therefor from the
Purchase Contract Agent, execute and deliver to the Purchase Contract
Agent such proxies and other instruments in respect of such Pledged
Preferred Securities (in form and substance satisfactory to the
Collateral Agent) as are prepared by the Purchase Contract Agent with
respect to the Pledged Preferred Securities.
Section 6. Rights and Remedies; Investment Company Event; Tax
Event etc.
Section 6.1. Rights and Remedies of the Collateral Agent. (a)
The Collateral Agent shall have all of the rights and remedies with
respect to the Collateral of a secured party under the Uniform
Commercial Code as in
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effect in the State of New York (the "Code") (whether or not the Code
is in effect in the jurisdiction where the rights and remedies are
asserted), Revised Article 8 and the TRADES Regulations and such
additional rights and remedies to which a secured party is entitled
under the laws in effect in any jurisdiction where any rights and
remedies hereunder may be asserted.
(b) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, in the event the Collateral
Agent is unable to make payments to the Company on account of
principal payments of any Pledged Treasury Securities as provided in
Section 3 hereof in satisfaction of the obligations of the Holder of
the Securities of which such Pledged Treasury Securities is a part
under the related Purchase Contracts, the Collateral Agent shall have
and may exercise, with reference to such Pledged Treasury Securities
and such obligations of such Holder, any and all of the rights and
remedies available to a secured party under the Code, Revised Article
8 and the TRADES Regulations after default by a debtor, and as
otherwise granted herein or under any other law.
(c) Without limiting any rights or powers otherwise granted by
this Agreement to the Collateral Agent, the Collateral Agent is hereby
irrevocably authorized to receive and collect all payments of (i) the
Stated Amount of, or cash distributions on, the Pledged Preferred
Securities, or (ii) the principal of the Pledged Treasury Securities,
subject, in each case, to the provisions of Section 3, and as
otherwise granted herein.
(d) The Purchase Contract Agent and each Holder of Securities, in
the event such Holder becomes the holder of a Growth PRIDES, agrees
that, from time to time, upon the written request of the Collateral
Agent, the Purchase Contract Agent or such Holder shall execute and
deliver such further documents and do such other acts and things as
the Collateral Agent may reasonably request in order to maintain the
Pledge, and the perfection and priority thereof, and to confirm the
rights of the Collateral Agent hereunder. The Purchase Contract Agent
shall have no liability to any Holder for executing any documents or
taking any such acts requested by the Collateral Agent hereunder,
except for liability for its own negligent
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act, its own negligent failure to act or its own willful misconduct.
Section 6.2. Tax Event, Investment Company Event, etc. Upon the
occurrence of a Tax Event or an Investment Company Event or a
liquidation of the Trust, a principal amount of the Junior
Subordinated Debentures constituting the assets of the Trust and
underlying the Preferred Securities equal to the aggregated Stated
Amount of the Pledged Preferred Securities shall be delivered to the
Collateral Agent in exchange for the Pledged Preferred Securities. In
the event the Collateral Agent receives such Junior Subordinated
Debentures in respect of Pledged Preferred Securities upon the
occurrence of a Tax Event, Investment Company Event or liquidation of
the Trust, the Collateral Agent shall Transfer the Junior Subordinated
Debentures to the Collateral Account in the manner specified herein
for Pledged Preferred Securities to secure the obligations of the
Holders of Income PRIDES to purchase the Company's Common Stock under
the related Purchase Contracts. Thereafter, the Collateral Agent shall
have such security interests, rights and obligations with respect to
the Junior Subordinated Debentures as it had in respect of the Pledged
Preferred Securities as provided in Articles II, III, IV, V and VI
hereof.
Section 7. Representation and Warranties; Covenants.
Section 7.1. Representations and Warranties. The Holders from
time to time, acting through the Purchase Contract Agent as their
attorney-in-fact (it being understood that the Purchase Contract Agent
shall not be liable for any representation or warranty made by or on
behalf of a Holder), hereby represent and warrant to the Collateral
Agent, which representations and warranties shall be deemed repeated
on each day a Holder Transfers Collateral that:
(a) such Holder has the power to grant a security
interest in and lien on the Collateral;
(b) such Holder is the sole beneficial owner of the
Collateral and, in the case of Collateral delivered in
physical form, is
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the sole holder of such Collateral and is the sole
beneficial owner of, or has the right to Transfer,
the Collateral it Transfers to the Collateral Agent,
free and clear of any security interest, lien,
encumbrance, calls, liabilities to pay money or other
restrictions other than the security interest and lien
granted under Section 2 hereof;
(c) upon the Transfer of the Collateral to the
Collateral Account, the Collateral Agent, for the
benefit of the Company, will have a valid and perfected
first priority security interest therein (assuming that
any central clearing operation or any Intermediary or
other entity not within the control of the Holder
involved in the Transfer of the Collateral, including
the Collateral Agent, gives the notices and takes the
action required of it hereunder and under applicable law
for perfection of that interest and assuming the
establishment and exercise of control pursuant to
Section 2.2 hereof); and
(d) the execution and performance by the Holder of its
obligations under this Agreement will not result in the
creation of any security interest, lien or other
encumbrance on the Collateral other than the security
interest and lien granted under Section 2 hereof or
violate any provision of any existing law or regulation
applicable to it or of any mortgage, charge, pledge,
indenture, contract or undertaking to which it is a
party or which is binding on it or any of its assets.
Section 7.2. Covenants. The Holders from time to time, acting
through the Purchase Contract Agent as their attorney-in-fact (it being
understood that the Purchase Contract Agent shall not be liable for any
covenant made by or on behalf of a Holder), hereby covenant to the
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Collateral Agent that for so long as the Collateral remains subject to the
Pledge:
(a) neither the Purchase Contract Agent nor such Holders
will create or purport to create or allow to subsist any
mortgage, charge, lien, pledge or any other security
interest whatsoever over the Collateral or any part of
it other than pursuant to this Agreement; and
(b) neither the Purchase Contract Agent nor such Holders
will sell or otherwise dispose (or at- tempt to dispose)
of the Collateral or any part of it except for the
beneficial interest therein, subject to the pledge
hereunder, transferred in connection with the Transfer
of the Securities.
Section 8. The Collateral Agent. It is hereby agreed as follows:
Section 8.1. Appointment, Powers and Immunities. The Collateral Agent
shall act as agent for the Company hereunder with such powers as are
specifically vested in the Collateral Agent by the terms of this Agreement,
together with such other powers as are reasonably incidental thereto. The
Collateral Agent: (a) shall have no duties or responsibilities except those
expressly set forth in this Agreement and no implied covenants or obligations
shall be inferred from this Agreement against the Collateral Agent, nor shall
the Collateral Agent be bound by the provisions of any agreement by any party
hereto beyond the specific terms hereof; (b) shall not be responsible for any
recitals contained in this Agreement, or in any certificate or other document
referred to or provided for in, or received by it under, this Agreement, the
Securities or the Purchase Contract Agreement, or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement
(other than as against the Collateral Agent), the Securities or the Purchase
Contract Agreement or any other document referred to or provided for herein or
therein or for any failure by the Company or any other Person (except the
Collateral Agent) to perform any of its obligations hereunder or thereunder or
for the perfection, priority
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or, except as expressly required hereby, maintenance of any security interest
created hereunder; (c) shall not be required to initiate or conduct any
litigation or collection proceedings hereunder (except pursuant to directions
furnished under Section 8.2 hereof, subject to Section 8.6 hereof); (d) shall
not be responsible for any action taken or omitted to be taken by it hereunder
or under any other document or instrument referred to or provided for herein or
in connection herewith or therewith, except for its own negligence or willful
misconduct; and (e) shall not be required to advise any party as to selling or
retaining, or taking or refraining from taking any action with respect to, any
securities or other property deposited hereunder. Subject to the foregoing,
during the term of this Agreement, the Collateral Agent shall take all
reasonable action in connection with the safekeeping and preservation of the
Collateral hereunder.
No provision of this Agreement shall require the Collateral Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder. In no event shall the Collateral
Agent be liable for any amount in excess of the Value of the Collateral.
Notwithstanding the foregoing, the Collateral Agent and Securities Intermediary
in its individual capacity hereby waive any right of setoff, bankers lien, liens
or perfection rights as securities intermediary or any counterclaim with respect
to any of the Collateral.
Section 8.2. Instructions of the Company. The Company shall have the
right, by one or more instruments in writing executed and delivered to the
Collateral Agent, to direct the time, method and place of conducting any
proceeding for the realization of any right or remedy available to the
Collateral Agent, or of exercising any power conferred on the Collateral Agent,
or to direct the taking or refraining from taking of any action authorized by
this Agreement; provided, however, that (i) such direction shall not conflict
with the provisions of any law or of this Agreement and (ii) the Collateral
Agent shall be adequately indemnified as provided herein. Nothing in this
Section 8.2 shall impair the right of the Collateral Agent in its discretion to
take any action or omit to take any action which it deems proper and which is
not inconsistent with such direction.
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Section 8.3. Reliance by Collateral Agent. Each of the Securities
Intermediary and the Collateral Agent shall be entitled to rely upon any
certification, order, judgment, opinion, notice or other communication
(including, without limitation, any thereof by telephone, telecopy, telex or
facsimile) believed by it to be genuine and correct and to have been signed or
sent by or on behalf of the proper Person or Persons (without being required to
determine the correctness of any fact stated therein), and upon advice and
statements of legal counsel and other experts selected by the Collateral Agent
and the Securities Intermediary. As to any matters not expressly provided for
by this Agreement, the Collateral Agent and the Securities Intermediary shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder in accordance with instructions given by the Company in accordance
with this Agreement.
Section 8.4. Rights in Other Capacities. The Collateral Agent and the
Securities Intermediary and their affiliates may (without having to account
therefor to the Company) accept deposits from, lend money to, make their
investments in and generally engage in any kind of banking, trust or other
business with the Purchase Contract Agent and any Holder of Securities (and any
of their respective subsidiaries or affiliates) as if it were not acting as the
Collateral Agent, and the Collateral Agent and its affiliates may accept fees
and other consideration from the Purchase Contract Agent and any Holder of
Securities without having to account for the same to the Company; provided that
each of the Securities Intermediary and the Collateral Agent covenants and
agrees with the Company that it shall not accept, receive or permit there to be
created in favor of itself and shall take no affirmative action to permit there
to be created in favor of any other person, any security interest, lien or
other encumbrance of any kind in or upon the Collateral.
Section 8.5. Non-Reliance on Collateral Agent. Neither the Securities
Intermediary nor the Collateral Agent shall be required to keep itself informed
as to the performance or observance by the Purchase Contract Agent or any
Holder of Securities of this Agreement, the Purchase Contract Agreement, the
Securities or any other document referred to or provided for herein or therein
or to inspect the properties or books of the Purchase
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Contract Agent or any Holder of Securities. The Collateral Agent shall not have
any duty or responsibility to provide the Company with any credit or other
information concerning the affairs, financial condition or business of the
Purchase Contract Agent or any Holder of Securities (or any of their respective
affiliates) that may come into the possession of the Collateral Agent or the
Securities Intermediary or any of their respective affiliates.
Section 8.6. Compensation and Indemnity. The Company agrees: (i) to
pay the Collateral Agent from time to time such compensation as shall be agreed
in writing between the Company and the Collateral Agent for all services
rendered by it hereunder and (ii) to indemnify the Collateral Agent and the
Securities Intermediary for, and to hold each of them harmless from and
against, any loss, liability or expense incurred without negligence, willful
misconduct or bad faith on its part, arising out of or in connection with the
acceptance or administration of its powers and duties under this Agreement,
including the costs and expenses (including reasonable fees and expenses of
counsel) of defending itself against any claim or liability in connection with
the exercise or performance of such powers and duties.
Section 8.7. Failure to Act. In the event of any ambiguity in the
provisions of this Agreement or any dispute between or conflicting claims by or
among the parties hereto and/or any other Person with respect to any funds or
property deposited hereunder, the Collateral Agent shall be entitled, after
prompt notice to the Company and the Purchase Contract Agent, at its sole
option, to refuse to comply with any and all claims, demands or instructions
with respect to such property or funds so long as such dispute or conflict
shall continue, and the Collateral Agent shall not be or become liable in any
way to any of the parties hereto for its failure or refusal to comply with such
conflicting claims, demands or instructions. The Collateral Agent shall be
entitled to refuse to act until either (i) such conflicting or adverse claims
or demands shall have been finally determined by a court of competent
jurisdiction or settled by agreement between the conflicting parties as
evidenced in a writing, satisfactory to the Collateral Agent or (ii) the
Collateral Agent shall have received security or an indemnity satisfactory to
the Collateral
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Agent sufficient to save the Collateral Agent harmless from and against any and
all loss, liability or expense which the Collateral Agent may incur by reason
of its acting. The Collateral Agent may in addition elect to commence an
interpleader action or seek other judicial relief or orders as the Collateral
Agent may deem necessary. Notwithstanding anything contained herein to the
contrary, the Collateral Agent shall not be required to take any action that is
in its opinion contrary to law or to the terms of this Agreement, or which
would in its opinion subject it or any of its officers, employees or directors
to liability.
Section 8.8. Resignation of Collateral Agent. Subject to the
appointment and acceptance of a successor Collateral Agent as provided below,
(a) the Collateral Agent may resign at any time by giving notice thereof to the
Company and the Purchase Contract Agent as attorney-in-fact for the Holders of
Securities, (b) the Collateral Agent may be removed at any time by the Company
and (c) if the Collateral Agent fails to perform any of its material
obligations hereunder in any material respect for a period of not less than 20
days after receiving written notice of such failure by the Purchase Contract
Agent and such failure shall be continuing, the Collateral Agent may be removed
by the Purchase Contract Agent. The Purchase Contract Agent shall promptly
notify the Company of any removal of the Collateral Agent pursuant to clause
(c) of the immediately preceding sentence. Upon any such resignation or
removal, the Company shall have the right to appoint a successor Collateral
Agent. If no successor Collateral Agent shall have been so appointed and shall
have accepted such appointment within 30 days after the retiring Collateral
Agent's giving of notice of resignation or such removal, then the retiring
Collateral Agent may petition any court of competent jurisdiction for the
appointment of a successor Collateral Agent. The Collateral Agent shall be a
bank which has an office in New York, New York with a combined capital and
surplus of at least $50,000,000. Upon the acceptance of any appointment as
Collateral Agent hereunder by a successor Collateral Agent, such successor
Collateral Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Collateral Agent, and the
retiring Collateral Agent shall take all appropriate action to transfer any
money and property held by it hereunder
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(including the Collateral) to such successor Collateral Agent. The retiring
Collateral Agent shall, upon such succession, be discharged from its duties and
obligations as Collateral Agent hereunder. After any retiring Collateral
Agent's resignation hereunder as Collateral Agent, the provisions of this
Section 8 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as the Collateral Agent.
Section 8.9. Right to Appoint Agent or Advisor. The Collateral Agent
shall have the right to appoint agents or advisors in connection with any of
its duties hereunder, and the Collateral Agent shall not be liable for any
action taken or omitted by, or in reliance upon the advice of, such agents or
advisors selected in good faith. The appointment of agents pursuant to this
Section 8.9 shall be subject to prior consent of the Company, which consent
shall not be unreasonably withheld.
Section 8.10. Survival. The provisions of this Section 8 shall survive
termination of this Agreement and the resignation or removal of the Collateral
Agent.
Section 8.11. Indemnity. Anything in this Agreement to the contrary
notwithstanding, in no event shall the Collateral Agent or the Securities
Intermediary or their officers, employees or agents be liable under this
Agreement to any third party for indirect, special, punitive, or consequential
loss or damage of any kind whatsoever, including lost profits, whether or not
the likelihood of such loss or damage was known to the Collateral Agent or the
Securities Intermediary, or any of them, incurred without any act or deed that
is found to be attributable to gross negligence on the part of the Collateral
Agent or the Securities Intermediary.
Section 9. Amendment.
Section 9.1. Amendment Without Consent of Holders. Without the consent
of any Holders, the Company, the Collateral Agent and the Purchase Contract
Agent, at any time and from time to time, may amend this Agreement, in form
satisfactory to the Company, the Collateral Agent and the Purchase Contract
Agent, for any of the following purposes:
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(1) to evidence the succession of another Person to the
Company, and the assumption by any such successor of the covenants of
the Company; or
(2) to add to the covenants of the Company for the benefit of
the Holders, or to surrender any right or power herein conferred upon
the Company so long as such covenants or such surrender do not
adversely affect the validity, perfection or priority of the security
interests granted or created hereunder; or
(3) to evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent, Securities Intermediary or
Purchase Contract Agent; or
(4) to cure any ambiguity, to correct or supplement any
provisions herein which may be inconsistent with any other such
provisions herein, or to make any other provisions with respect to
such matters or questions arising under this Agreement, provided such
action shall not adversely affect the interests of the Holders.
Section 9.2. Amendment with Consent of Holders. With the consent of
the Holders of not less than 66 2/3% of the Purchase Contracts at the time
outstanding, by act of said Holders delivered to the Company, the Purchase
Contract Agent or the Collateral Agent, as the case may be, the Company, when
authorized by a Board Resolution, the Purchase Contract Agent and the
Collateral Agent may amend this Agreement for the purpose of modifying in any
manner the provisions of this Agreement or the rights of the Holders in respect
of the Securities; provided, however, that no such supplemental agreement
shall, without the consent of the Holder of each Outstanding Security affected
thereby,
(1) change the amount or type of Collateral underlying a
Security (except for the rights of holders of Income PRIDES to
substitute the Treasury Securities for the Trust Preferred Securities
or the rights of holders of Growth PRIDES to substitute Trust
Preferred Securities for the Treasury Securities), impair the right of
the Holder of any Security to receive distributions on the underlying
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Collateral or otherwise adversely affect the Holder's rights in or to
such Collateral; or
(2) otherwise effect any action that would require the
consent of the Holder of each Outstanding Security affected thereby
pursuant to the Purchase Contract Agreement if such action were
effected by an agreement supplemental thereto; or
(3) reduce the percentage of Purchase Contracts the consent
of whose Holders is required for any such amendment; or
(4) materially and adversely alter the rights of the holders
of Preferred Securities.
It shall not be necessary for any Act of Holders under this Section to approve
the particular form of any proposed amendment, but it shall be sufficient if
such Act shall approve the substance thereof.
Section 9.3. Execution of Amendments. In executing any amendment
permitted by this Section, the Collateral Agent and the Purchase Contract Agent
shall be entitled to receive and (subject to Section 6.1 hereof, with respect
to the Collateral Agent, and Section 7.1 of the Purchase Contract Agreement,
with respect to the Purchase Contract Agent) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execution of such
amendment is authorized or permitted by this Agreement and that all conditions
precedent, if any, to the execution and delivery of such amendment have been
satisfied.
Section 9.4. Effect of Amendments. Upon the execution of any amendment
under this Section, this Agreement shall be modified in accordance therewith,
and such amendment shall form a part of this Agreement for all purposes; and
every Holder of Certificates theretofore or thereafter authenticated, executed
on behalf of the Holders and delivered under the Purchase Contract Agreement
shall be bound thereby.
Section 9.5. Reference to Amendments. Security Certificates
authenticated, executed on behalf of the Holders and delivered after the
execution of any amendment pursuant to this Section may, and shall if
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required by the Collateral Agent or the Purchase Contract Agent, bear a
notation in form approved by the Purchase Contract Agent and the Collateral
Agent as to any matter provided for in such amendment. If the Company shall so
determine, new Security Certificates so modified as to conform, in the opinion
of the Collateral Agent, the Purchase Contract Agent and the Company, to any
such amendment may be prepared and executed by the Company and authenticated,
executed on behalf of the Holders and delivered by the Purchase Contract Agent
in accordance with the Purchase Contract Agreement in exchange for Outstanding
Security Certificates.
Section 10. Miscellaneous.
Section 10.1. No Waiver. No failure on the part of the Collateral
Agent or any of its agents to exercise, and no course of dealing with respect
to, and no delay in exercising, any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise by the
Collateral Agent or any of its agents of any right, power or remedy hereunder
preclude any other or further exercise thereof or the exercise of any other
right, power or remedy. The remedies herein are cumulative and are not
exclusive of any remedies provided by law.
Section 10.2. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. Without
limiting the foregoing, the above choice of law is expressly agreed to by the
Securities Intermediary, the Collateral Agent and the Holders from time to time
acting through the Purchase Contract Agent, as their attorney-in-fact, in
connection with the establishment and maintenance of the Collateral Account.
The Company, the Collateral Agent and the Holders from time to time of the
Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, hereby submit to the nonexclusive jurisdiction of the United
States District Court for the Southern District of New York and of any New York
state court sitting in New York City for the purposes of all legal proceedings
arising out of or relating to this Agreement or the transactions contemplated
hereby. The Company, the Collateral Agent and the Holders from time to time of
the Securities, acting through the Purchase Contract Agent as their
attorney-in-fact, irrevocably waive, to
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the fullest extent permitted by applicable law, any objection which they may
now or hereafter have to the laying of the venue of any such proceeding brought
in such a court and any claim that any such proceeding brought in such a court
has been brought in an inconvenient forum.
Section 10.3. Notices. All notices, requests, consents and other
communications provided for herein (including, without limitation, any
modifications of, or waivers or consents under, this Agreement) shall be given
or made in writing (including, without limitation, by telecopy) delivered to
the intended recipient at the "Address for Notices" specified below its name on
the signature pages hereof or, as to any party, at such other address as shall
be designated by such party in a notice to the other parties. Except as
otherwise provided in this Agreement, all such communications shall be deemed
to have been duly given when transmitted by telecopier or personally delivered
or, in the case of a mailed notice, upon receipt, in each case given or
addressed as aforesaid.
Section 10.4. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the respective successors and assigns of the
Company, the Collateral Agent and the Purchase Contract Agent, and the Holders
from time to time of the Securities, by their acceptance of the same, shall be
deemed to have agreed to be bound by the provisions hereof and to have ratified
the agreements of, and the grant of the Pledge hereunder by, the Purchase
Contract Agent.
Section 10.5. Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and
the same instrument, and any of the parties hereto may execute this Agreement
by signing any such counterpart.
Section 10.6. Severability. If any provision hereof is invalid and
unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be liberally construed in order to carry out the
intentions of the parties hereto as nearly as may be possible and (ii) the
invalidity or unenforceability of any provision hereof in
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any jurisdiction shall not affect the validity or enforceability of such
provision in any other jurisdiction.
Section 10.7. Expenses, etc. The Company agrees to reimburse the
Collateral Agent for: (a) all reasonable out-of-pocket costs and expenses of
the Collateral Agent (including, without limitation, the reasonable fees and
expenses of counsel to the Collateral Agent), in connection with (i) the
negotiation, preparation, execution and delivery or performance of this
Agreement and (ii) any modification, supplement or waiver of any of the terms
of this Agreement; (b) all reasonable costs and expenses of the Collateral
Agent (including, without limitation, reasonable fees and expenses of counsel)
in connection with (i) any enforcement or proceedings resulting or incurred in
connection with causing any Holder of Securities to satisfy its obligations
under the Purchase Contracts forming a part of the Securities and (ii) the
enforcement of this Section 10.7; and (c) all transfer, stamp, documentary or
other similar taxes, assessments or charges levied by any governmental or
revenue authority in respect of this Agreement or any other document referred
to herein and all costs, expenses, taxes, assessments and other charges
incurred in connection with any filing, registration, recording or perfection
of any security interest contemplated hereby.
Section 10.8. Security Interest Absolute. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Holders from
time to time hereunder, shall be absolute and unconditional irrespective of:
(a) any lack of validity or enforceability of any provision
of the Purchase Contracts or the Securities or any other agreement or
instrument relating thereto;
(b) any change in the time, manner or place of payment of, or
any other term of, or any increase in the amount of, all or any of the
obligations of Holders of Securities under the related Purchase
Contracts, or any other amendment or waiver of any term of, or any
consent to any departure from any requirement of, the Purchase
Contract Agreement or any Purchase Contract or
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any other agreement or instrument relating thereto; or
(c) any other circumstance which might otherwise constitute a
defense available to, or discharge of, a borrower, a guarantor or a
pledgor.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
AMERICAN HERITAGE LIFE INVESTMENT
CORPORATION
By:
------------------------------------
Name:
Title:
Address for Notices:
American Heritage Life Investment
Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention:
Telecopy:
The First National Bank of Chicago
as Purchase Contract Agent and as
attorney-in-fact of the Holders
from time to time of the Securities
By:
------------------------------------
Name:
Title:
Address for Notices:
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Trust Services
Division
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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The Chase Manhattan Bank
as Collateral Agent and as
Securities Intermediary
By:
----------------------------
Name: ▇. ▇'▇▇▇▇▇
Title: Senior Trust Officer
Address for Notices:
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust Administration
Department
Telecopy: (▇▇▇) ▇▇▇-▇▇▇▇
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39
EXHIBIT A
INSTRUCTION FROM PURCHASE CONTRACT AGENT TO COLLATERAL AGENT
The Chase Manhattan Bank
▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of American Heritage Life Investment
Corporation (the "Company"), and AHL
Financing
We hereby notify you in accordance with Section 4.1 of the
Pledge Agreement, dated as of ______ __, 1997, (the "Pledge Agreement") among
the Company, yourselves, as Collateral Agent, and ourselves, as Purchase
Contract Agent and as attorney-in-fact for the holders of [Income PRIDES]
[Growth PRIDES] from time to time, that the holder of securities listed below
(the "Holder") has elected to substitute [$_____ aggregate principal amount of
Treasury Securities] [$_______Stated Amount of Preferred Securities] in
exchange for an equal Value of [Pledged Preferred Securities] [Pledged Treasury
Securities] held by you in accordance with the Pledge Agreement and has
delivered to us a notice stating that the Holder has Transferred [Treasury
Securities] [Preferred Securities] to you, as Collateral Agent. We hereby
instruct you, upon receipt of such [Pledged Treasury Securities] [Pledged
Preferred Securities], to release the Preferred Securities] [Treasury
Securities] related to such [Income PRIDES] [Growth PRIDES] to us in accordance
with the Holder's instructions. Capitalized terms used herein but not defined
shall have the meaning set forth in the Pledge Agreement.
Date: THE FIRST NATIONAL BANK OF CHICAGO
--------------
By:
-------------------------------
Name:
Title:
Please print name and address of Registered Holder electing to substitute
[Treasury Securities] [Preferred Securities] for the [Pledged Preferred
Securities] [Pledged Treasury Securities]:
--------------------------- -------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
---------------------------
Address
---------------------------
---------------------------
A-1
40
EXHIBIT B
INSTRUCTION TO PURCHASE CONTRACT AGENT
The First National Bank of Chicago
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Corporate Trust
Administration Department
Re: FELINE PRIDES of American Heritage Life
Investment Corporation (the "Company"), and AHL
Financing
The undersigned Holder hereby notifies you that it has
delivered to The Chase Manhattan Bank, as Collateral Agent, $_______ aggregate
principal amount of [Treasury Securities] [Preferred Securities] in exchange
for an equal Value of [Pledged Preferred Securities] [Pledged Treasury
Securities] held by the Collateral Agent (the "Pledge Agreement"), in
accordance with Section 4.1 of the Pledge Agreement, dated ________ __, 1997,
between you, the Company and the Collateral Agent. The undersigned Holder
hereby instructs you to instruct the Collateral Agent to release to you on
behalf of the undersigned Holder the [Pledged Preferred Securities] [Pledged
Treasury Securities] related to such [Income PRIDES] [Growth PRIDES].
Capitalized terms used herein but not defined shall have the meaning set forth
in the Pledge Agreement.
Dated:
------------- --------------------------
Signature
Please print name and address of Registered Holder:
------------------------- -------------------------
Name Social Security or other
Taxpayer Identification
Number, if any
-------------------------
Address
-------------------------
-------------------------
-------------------------
B-1