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PRELIMINARY DRAFT
COLLATERAL AGREEMENT(1)
Among
HDV GRIT HOLDINGS, INC., As Pledgor,
HDV GRANTOR RETAINED INCOME TRUST,
THE BANK OF NEW YORK, As Collateral Agent
and
AJL PEPS TRUST
Dated as of
November __, 1995
___________________
1 This is a form of Collateral Agreement. A substantially identical
Collateral Agreement will be entered into by each Pledgor.
2
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 PAGE
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1. The Security Interests.................................... 1
2. Definitions............................................... 2
3. Representations and Warranties of the
Pledgor and GRIT........................................ 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........................... 15
9. The Collateral Agent...................................... 17
10. Miscellaneous............................................. 21
11. Termination of Collateral Agreement....................... 22
12. No Personal Liability of Trustees......................... 22
Exhibit A - Certificate for Substituted Collateral
Exhibit B - Certificate for Additional Collateral
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COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT, dated as of November __, 1995, among HDV GRIT
Holdings, Inc., a Michigan corporation (the "Pledgor"), HDV Grantor Retained
Income Trust, a trust duly created under the laws of ______ (such trust and the
trustees thereof acting in their capacity as such being referred to herein as
"GRIT"), The Bank of New York, a New York banking corporation, as collateral
agent (the "Collateral Agent") hereunder for the benefit of AJL PEPS Trust, a
trust duly created under the laws of the State of New York (such trust and the
trustees thereof acting in their capacity as such being referred to herein as
the "Trust" or "Purchaser");
WITNESSETH:
WHEREAS, pursuant to the Purchase Agreement (the "Purchase
Agreement"), dated as of November __, 1995, between the Pledgor, GRIT and
Purchaser, the Pledgor has agreed to sell, GRIT has agreed to cause Pledgor to
sell and Purchaser has agreed to purchase American Depositary Shares
(collectively the "ADSs" and each an "ADS"), each representing one half of one
share of common stock, no par value (the "Common Stock"), of Amway Japan
Limited, a Japanese corporation (the "Company"), subject to the terms and
conditions of the Purchase Agreement; and
WHEREAS, concurrently herewith, the Trust and the Collateral
Agent are entering into a collateral agreement (the "Xxx Xxxxx Collateral
Agreement") with the Xxx Xxx Xxxxx Trust (together with the trustee thereof
acting in their capacity as such, the "Xxx Xxxxx Pledgor") and Xxx Xxx Xxxxx, in
order to secure obligations of the Xxx Xxxxx Pledgor and Xxx Xxx Xxxxx under
their purchase agreement (the "Xxx Xxxxx Purchase Agreement") with the Trust;
NOW, THEREFORE, to secure the performance by the Pledgor and
GRIT of their 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.
In order to secure the observance and performance of the
covenants and agreements contained herein and in the Purchase Agreement:
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(a) Effective upon and subject to the receipt by Seller of the
Firm Purchase Price on the Firm Payment Date, the Pledgor hereby grants, sells,
conveys, 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 their right, title and interest in and to
(i) the Pledged Items described in paragraph (b); (ii) all additions to and
substitutions for such Pledged Items; (iii) 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; and (iv) all powers and
rights now owned or hereafter acquired under or with respect to the Pledged
Items (such Pledged Items, additions, substitutions, proceeds, collections,
powers and rights being herein collectively called the "Collateral"). The
Collateral Agent shall have all of the rights, 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) On the Firm Payment Date, the Pledgor shall deliver, and
GRIT shall cause Pledgor to deliver, to the Collateral Agent in pledge hereunder
certificated American Depositary Receipts ("ADRs") representing _____ ADSs,
registered in the name of the Collateral Agent or its nominee.
(c) Effective upon and subject to the receipt by the Pledgor
of the Additional Purchase Price, on the Option Closing Date, the Pledgor shall
deliver, and GRIT shall cause Pledgor to deliver, to the Collateral Agent in
pledge hereunder ADRs representing 1.XX times the Additional ADS Base Amount of
ADSs, registered in the name of the Collateral Agent or its nominee.
2. Definitions.
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 Officer" of the Pledgor or GRIT, as the case may
be, means any trustee or officer as to whom such party shall have delivered
notice to the Collateral Agent that such trustee or officer is authorized to act
hereunder on behalf of such party.
"Business Day" means any day except a Saturday, Sunday
or other day on which banking institutions in New York City are
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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
Reorganization Event shall have occurred prior to such time, zero, and (B) from
and after any Reorganization Event, 1.XX, times each Dilution Adjustment that
shall have been applied to the Exchange Ratio pursuant to Section 6.1 of the
Purchase Agreement at or prior to the Reorganization Event, times the product
of: (i) the Firm ADS Base Amount plus the Additional ADS Base Amount (if any);
and (ii) the Transaction Value of any property other than Marketable Common
Stock received by the Pledgor in such Reorganization Event.
"Collateral" has the meaning specified in the granting
clause hereof.
"Collateral Agent" means the financial institution identified
as such in the preliminary paragraph hereof, or any successor appointed in
accordance with Section 9.
"Collateral Agreement" means this Collateral Agreement
and any exhibits hereto.
"Collateral Event of Default" has the meaning specified
in Section 6(e).
"Collateral Requirement" means, as of any date and with
respect to: (i) any ADSs, 100%; (ii) any Marketable Common Stock, 100%; (iii)
any U.S. Government Securities pledged in respect of Cash Delivery Obligations,
105%; (iv) any other U.S. Government Obligations, 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 next following telephonic notice of such
Insufficiency Determination as described in Section 6(e), the Collateral
Requirement relating to any U.S. Government Securities 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).
"Eligible Collateral" means (i) ADSs, (ii) U.S. Government
Securities, and (iii) from and after any Reorganization Event, Marketable Common
Stock, provided, in each case, that the Pledgor (or, in the case of any
Collateral that may be pledged by GRIT, GRIT) has good and marketable title
thereto, free of all Liens (other than the Liens created by this Collateral
Agreement) and Transfer Restrictions and that 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 Marketable Common
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Stock 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 Section 7(a) or (b) of the Purchase Agreement, (ii) a Collateral
Event of Default, (iii) a failure by Pledgor and GRIT to have caused the
Collateral to meet the requirements described in Section 5(d) on the Exchange
Date, (iv) if a Reorganization Event shall have occurred prior to the Exchange
Date, failure by Pledgor and GRIT 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) any Event of Default as defined in
the Xxx Xxxxx Collateral Agreement (other than in clause (iii) or (iv) of the
definition of "Event of Default" therein).
"Ineligible Collateral" means Collateral that does not
constitute "Eligible Collateral".
"Lien" means any lien, mortgage, security interest, pledge,
charge or encumbrance of any kind.
"Market Value" means, as of any date: (a) with respect to any
ADS (except as otherwise provided in Section 6(e)(2)), the ADS Equivalent 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 as published on the Trading
Day prior to such date in the New York edition of The Wall Street Journal or The
New York Times or, if not so published, (ii) the lowest bid price quoted (which
quotation shall be evidenced in writing) on the Trading Day prior to such 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 security; and (c) with respect to any share of Marketable Common Stock, the
Closing Price thereof on the Trading Day prior to 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 ADSs, the product of: (i) 1.XX; and (ii) the Firm ADS Base Amount plus
the Additional ADS Base Amount (if any); multiplied successively by each number
by which the Exchange Ratio shall have been multiplied on or prior to such date
pursuant to the adjustments provided for under Section 6.1 or Section 6.3 of the
Purchase Agreement. The Maximum Deliverable Number of shares of Marketable
Common Stock means, on any date, the product of: (i) 1.XX; and (ii) the Firm ADS
Base Amount plus the Additional ADS Base Amount (if any); and (iii) one-half of
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the number of shares of Marketable Common Stock received by the Pledgor in the
Reorganization Event for each share of Common Stock; multiplied successively by
each number by which the Exchange Ratio shall have been multiplied on or prior
to such date and after the date of such Reorganization Event pursuant to the
adjustments provided for under Article VI of the Purchase Agreement.
"Person" means an individual, a corporation, a partnership, an
association, 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
particular type of Collateral, an amount equal to the aggregate Market Value of
such Collateral divided by the Collateral Requirement for such Collateral.
"Pledge Value Requirement" means, as of any date, (a) the
aggregate Market Value on such date of the Maximum Deliverable Number of ADSs on
such date or, from and after a Reorganization Event, shares of Marketable Common
Stock, plus (b) from and after a Reorganization Event, the Cash Delivery
Obligations.
"Pledged Items" means, as of any date, any and all securities
and instruments delivered by the Pledgor or GRIT 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).
"Responsible Officer" means, when used with respect to the
Collateral 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.
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"Transfer Restriction" means, with respect to any item of Collateral,
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 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 New York.
"U.S. Government Securities" means direct obligations of the
United 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.
The Pledgor hereby represents and warrants to the Collateral
Agent and the Trust that:
(a) No Transfer Restrictions. 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.
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(b) Title to Collateral; Perfected Security Interest. The
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. Upon delivery of the Collateral to the Collateral Agent hereunder,
the Collateral Agent will obtain a valid, first priority perfected security
interest in, and a first lien upon, such Collateral subject to no other Lien;
none of such Collateral is or shall be pledged by the Pledgor as collateral for
any other purpose.
4. Representations and Warranties of the Collateral
Agent.
The Collateral Agent represents and warrants to the Pledgor,
GRIT and the Trust that:
(a) Corporate Existence and Power. The Collateral Agent is a
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 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 valid and binding agreement of the Collateral Agent
enforceable against the Collateral Agent in accordance with its
terms.
5. Certain Covenants of the Pledgor and GRIT.
The Pledgor and GRIT agree that, so long as any of their
obligations under the Purchase Agreement remain outstanding:
(a) Title to Collateral. Each of the Pledgor and GRIT shall at
all times hereafter have good and marketable title to the Collateral pledged by
it, free of all Liens (other than the Liens created by this Collateral
Agreement) and Transfer
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Restrictions, 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 and GRIT shall cause
the aggregate Pledge Value of the Collateral to be equal to or greater than the
Pledge Value Requirement at all times, and shall pledge additional Collateral in
the manner described in Section 6(f) as necessary to cause such requirement to
be met.
(c) Pledge upon Reorganization Event. Upon the occurrence of a
Reorganization Event, the Pledgor and GRIT 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; and (ii) shares of Marketable Common
Stock in an amount at least equal to the Maximum Deliverable Number thereof, 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 shares of
Marketable Common Stock; in each case to be held as substitute Collateral
hereunder.
(d) Pledge of Purchase Agreement Consideration.
Notwithstanding the Pledgor's right to substitute Collateral pursuant to Section
6(b), the Pledgor and GRIT shall cause the Collateral to include, on the
Exchange Date, unless a Reorganization Event shall have occurred, a number of
ADSs at least equal to the number of ADSs required to be delivered under the
Purchase Agreement on the Exchange Date.
(e) Further Assurances. The Pledgor and GRIT shall, at their
expense and in 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 and GRIT hereby authorize the Collateral Agent to execute and file,
in the name of the Pledgor or GRIT 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
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deem necessary or appropriate to further perfect, or maintain the perfection of
the security interests granted hereby.
6. Administration of the Collateral and Valuation of
the Securities.
(a) Valuation of Collateral. The Collateral Agent shall
determine on 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 ADSs or Marketable Common
Stock 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
Collateral in accordance with the following provisions:
(1) Unless an Event of Default or a failure by the Pledgor or
GRIT 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 Collateral") and to obtain the release from the Lien
hereof of such Prior Collateral.
(2) If a Pledgor wishes to deposit Eligible Collateral with
the Collateral Agent in substitution for Prior Collateral, it shall (i)
give written notice to the Collateral Agent identifying the Prior
Collateral to be released from the Lien hereof, (ii) deliver to the
Collateral Agent concurrently with such Eligible Collateral a
certificate of an Authorized Officer 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 (who may be an employee of the Pledgor) addressed
to the Collateral Agent confirming the representations contained in
paragraph 3(b) of Exhibit A hereto. The Pledgor and GRIT hereby
covenant and agree to take all actions required under Section 6(d) and
any other actions
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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 or GRIT may pledge
additional Collateral hereunder at any time. Concurrently with the delivery of
any additional Eligible Collateral, the Pledgor or GRIT, as the case may be,
shall deliver (i) a certificate of an Authorized Officer of the Pledgor or GRIT,
as the case may be, substantially in the form of Exhibit B hereto and dated the
date of such delivery, (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 hereto are true and correct on and as of the date thereof and
(ii) an opinion, dated the date of such delivery, of counsel (who may be an
employee of the Pledgor or GRIT) addressed to the Collateral Agent confirming
the representations contained in paragraph 2(b) of Exhibit B hereto. The Pledgor
and GRIT hereby covenant and agree 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 and GRIT shall deliver
the Collateral to the Collateral Agent in accordance with the following
provisions:
(1) Pledged ADSs. In the case of Collateral consisting of
ADSs, by delivery to the Collateral Agent of certificated ADRs
representing such ADSs, registered in the name of the Collateral Agent
or its nominee;
(2) Pledged U.S. Government Securities. In the case of
Collateral consisting of U.S. 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 or GRIT) designated by the Collateral Agent; and
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(3) Pledged Marketable Common Stock. In the case of Collateral
consisting of shares of Marketable Common Stock, by delivery of
certificates evidencing such shares, registered in the name of the
Collateral Agent or its nominee or, if such Marketable 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 or GRIT)
designated by the Collateral Agent with The Depository Trust Company.
Each such delivery of Marketable Common Stock shall be accompanied by
an opinion of counsel 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 shares of Marketable
Common Stock.
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) or (c) or otherwise pursuant to
the terms hereof in connection therewith to determine that they comply as to
form with the requirements for Eligible Collateral. 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 such determination, an "Insufficiency
Determination"), the Collateral Agent shall promptly notify the Pledgor
of such determination by telephone call to an Authorized Officer of the
Pledgor followed by a written confirmation of such call.
(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 or GRIT 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, the aggregate Pledge Value
of the Collateral 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:
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(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
ADSs or, after a Reorganization Event, shares of Marketable
Common Stock, as described in the following clause (ii); and
(ii) commence purchases, in the manner described in
paragraph (3) below, of ADSs or, after a Reorganization Event,
shares of Marketable Common Stock, 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 ADSs or shares of Marketable Common Stock 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 ADSs or
shares of Marketable Common Stock shall be: (A) the most recent ask
price as reported in the composite transactions for the principal
securities exchange on which the ADSs or shares of Marketable Common
Stock, 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 ADSs, the most recent
available ADS Equivalent 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. Government
Securities pledged at such time (not including any 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 ADSs (or, from and after any Reorganization Event,
shares of Marketable Common Stock) 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 Reorganization Event,
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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 ADSs or shares of Marketable Common
Stock purchased by the Collateral Agent pursuant to the preceding
paragraphs (e)(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 and GRIT covenant
and agree that they 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 or GRIT 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 Officer of the Pledgor
or GRIT 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 a Reorganization Event shall have occurred prior thereto,
the Collateral Agent shall deliver to the Trust ADRs then held by it hereunder
representing the number of ADSs then required to be delivered under the Purchase
Agreement. If a Reorganization Event shall have occurred prior to the
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Exchange Date, then, if so instructed by the Pledgor by the close of business on
the Business Day preceding the Exchange Date, the Collateral Agent shall deliver
to the Trust, to the extent permitted to be delivered in lieu of cash required
to be delivered on such date under Section 6.2 of the Purchase Agreement, shares
of the Marketable Common Stock then held by the Collateral Agent hereunder. Upon
such delivery, the Trust shall hold such ADSs or shares of Marketable Common
Stock, as the case may be, absolutely and free from any claim or right
whatsoever.
7. Income and Voting Rights on Collateral. (a) Unless an Event
of Default or failure by the Pledgor or GRIT to meet any of its obligations
under Section 5(b) or (c) hereof has occurred and is continuing, the Pledgor
shall be entitled to receive for its 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
or GRIT 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 default or failure shall be retained by the Collateral
Agent, and any such payments which are received by the Pledgor or GRIT shall be
received in trust for the benefit of the Trust, shall be segregated from other
funds of the Pledgor and GRIT 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.
(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, upon receiving a written request from the Pledgor,
deliver to the Pledgor or as specified in such request 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 as shall be specified in such request and be in form and substance
satisfactory to the Collateral Agent.
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 and GRIT 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
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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 Uniform Commercial Code (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 ADSs or shares of Marketable Common Stock (but not, in either
case, in excess of the number thereof deliverable under the Purchase Agreement
at such time) to the Trust on the date of the Acceleration Notice relating to
such Event of Default (or, in the case of an Event of Default described in
clause (iii) or (iv) of the definition thereof, on the Exchange Date) (in either
case, the "Delivery Date"), whereupon the Trust shall hold such ADSs or shares
of Marketable Common Stock absolutely free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor or GRIT which
may be waived, and the Pledgor and GRIT, to the extent permitted by law, hereby
specifically waive all rights of redemption, stay or appraisal which either of
them 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 and GRIT 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 and
GRIT 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 and GRIT covenant and agree that they will 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 or GRIT which may be waived, and the Pledgor and
GRIT, to the extent permitted by law, hereby specifically waive all rights of
redemption, stay or appraisal which either of them has or may have under any law
now existing or hereafter adopted. The notice (if any) of such sale required by
Section 9 of the UCC shall (1) in case of a public
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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. 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, the
Collateral Agent is hereby irrevocably appointed the true and lawful attorney of
the Pledgor and GRIT, in the name and stead of the Pledgor or GRIT, to make all
necessary deeds, bills of sale and instruments of assignment, transfer or
conveyance of the property thus delivered or sold. For that purpose the
Collateral Agent may execute all such documents and instruments. This power of
attorney shall be deemed coupled with an interest, and the Pledgor and GRIT
hereby ratify and confirm all that their respective 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
and GRIT shall further ratify and confirm any such delivery or sale by executing
and delivering to the Collateral Agent, to the
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Trustees or to such purchaser or purchasers at the expense of the Pledgor and
GRIT all proper deeds, bills of sale, instruments of assignment, conveyance of
transfer and releases as may be designated in any such request.
(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 remaining
Collateral shall be applied by the Collateral Agent in the following order of
priorities:
first, to the payment to the Trust of an amount equal to: (A)
the aggregate Market Value of a number of ADSs equal to (1) the number
of ADSs required to be delivered under the Purchase Agreement on the
Delivery Date minus (2) the number of ADSs delivered by the Collateral
Agent to the Trust on the Delivery Date as described above; or (B) from
and after a Reorganization 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 shares of Marketable Common Stock
equal to (x) the number thereof permitted to be delivered on the
Delivery Date under Section 6(b) of the Purchase Agreement minus (y)
the number thereof delivered by the Collateral Agent to the Trust on
the Delivery Date as described above;
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
finally, if all of the obligations of the Pledgor and GRIT
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 or GRIT for the discharge thereof, any remaining
proceeds shall be released to the Pledgor.
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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 wilful 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 any 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 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
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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 GRIT, 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 GRIT or for any
statement or certificate delivered by the Pledgor or GRIT 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
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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.
(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 acting 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
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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, GRIT 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.
(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, GRIT 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
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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.
11. Termination of Collateral Agreement.
This Collateral Agreement and the rights hereby granted by the
Pledgor and GRIT in the Collateral shall cease, terminate and be void upon
fulfillment of all of the obligations of the Pledgor and GRIT under the Purchase
Agreement, and the Pledgor and GRIT 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.
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IN WITNESS WHEREOF, each of the Pledgor and GRIT has caused
this Collateral Agreement to be duly executed on its behalf, and the Collateral
Agent has caused this Collateral Agreement to be duly executed on its behalf,
all as of the date hereof.
PLEDGOR:
HDV GRIT HOLDINGS, INC.
By_______________________________
Name:
Title:
By_______________________________
Name:
Title:
Address for Notices:
[Street]
[City, State & Zip Code]
[Telex No. (specify ITT
or WU) and answerback]
[Telecopier No.]
Attention: [___________]
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GRIT:
_____________, as trustee
Xxxxxxx X. XxXxx, Xx.
_____________, as trustee
Xxxxx X. Xxxxxxxx
each as trustee of
HDV GRANTOR RETAINED INCOME TRUST
Address for Notices:
[Street]
[City, State & Zip Code]
[Telex No. (specify ITT
or WU) and answerback]
[Telecopier No.]
Attention: [___________]
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COLLATERAL AGENT:
THE BANK OF NEW YORK,
as Collateral Agent
By____________________________
Name:
Title:
Address for Notices:
000 Xxxxxxx Xxxxxx - 00X
Xxx Xxxx, Xxx Xxxx 00000
[Telex No. (specify ITT
or WU) and answerback]
Telecopier No.: (000) 000-0000
Attention: Xxxxx Xxxxxxx
THE TRUST:
______________, as trustee
Xxxxxxx X. Xxxxxx III
______________, as trustee
Xxxxx X. X'Xxxxx
______________, as trustee
Xxxxxx X. Xxxxxxx
each as trustee of
AJL PEPS TRUST
Address for Notices:
[Street]
[City, State & Zip Code]
[Telex No. (specify ITT
or WU) and answerback]
[Telecopier No.]
Attention: [___________]
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Exhibit A
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
HDV GRIT HOLDINGS, INC.
The undersigned, a [_______________________] of HDV GRIT
HOLDINGS, INC. (the "Pledgor"), hereby certifies, pursuant to Section 6(b) of
the Collateral Agreement dated as of November __, 1995 among the Pledgor, HDV
Grantor Retained Income Trust, The Bank of New York, as Collateral Agent, and
AJL PEPS Trust (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 Substituted
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
29
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.
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
[__] day of [_______, 199_].
______________________
Name:
Title:
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Exhibit B
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
HDV GRIT HOLDINGS, INC. [/HDV GRANTOR RETAINED INCOME TRUST]
The undersigned, a __________________ of HDV GRIT HOLDINGS,
INC. (the "Pledgor") [/a _____________ of HDV GRANTOR RETAINED INCOME TRUST
("GRIT")], hereby certifies, pursuant to Section 6(c) of the Collateral
Agreement, dated as of November __, 1995, among the Pledgor, GRIT, The Bank of
New York, as Collateral Agent and AJL PEPS Trust (the "Collateral Agreement";
terms defined in the Collateral Agreement being used herein as defined therein),
that:
1. The Pledgor [/GRIT] 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 [/GRIT] 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 [/GRIT] 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 Additional Collateral by
the Collateral Agent pursuant to the terms of the Collateral Agreement.
(b) Title to Collateral; Perfected Security Interest. The
Pledgor [/GRIT] has good and marketable title to the Additional
Collateral, free of all Liens (other than the Lien created by the
Additional 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
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be pledged by the Pledgor [/GRIT] 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.
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this [__] day of [_______, 199_].
______________________
Name:
Title: