COLLATERAL AGREEMENT
Among
[Selling Shareholder],
As Pledgor,
The Bank of New York, As Collateral Agent
and
DECS TRUST
Dated as of
, 1997
The following Table of Contents has been inserted for
convenience of reference only and does not constitute a part of
the Collateral Agreement.
TABLE OF CONTENTS
SECTION
1. The Security Interests.......................................1
2. Definitions..................................................2
3. Representations and Warranties of the Pledgor................5
4. Representations and Warranties of the Collateral Agent.......6
5. Certain Covenants of the Pledgor.............................7
6. Administration of the Collateral and Valuation of
the Securities...............................................8
7. Income and Voting Rights on Collateral......................13
8. Remedies upon Events of Default.............................13
9. The Collateral Agent........................................16
10. Miscellaneous...............................................18
11. Termination of Collateral Agreement.........................19
12. No Personal Liability of Trustees...........................20
Exhibit A - Certificate for Substituted Collateral
Exhibit B - Certificate for Additional Collateral
Exhibit C - Certificate of Spouse
i
COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT (the "Agreement"), dated as
of _________, 1997, among [Selling Shareholder] (the "Pledgor"),
The Bank of New York, a New York banking corporation, as
collateral agent (the "Collateral Agent") hereunder for the
benefit of DECS Trust, a statutory business trust organized under
the Business Trust Act of the State of Delaware (such trust and
the trustees thereof acting in their capacity as such being
referred to herein as the "Trust" or "Purchaser") and the Trust;
W I T N E S S E T H:
WHEREAS, pursuant to the Purchase Agreement (the
"Purchase Agreement"), dated as of _________, 1997, between the
Pledgor and Purchaser, the Pledgor has agreed to sell and
Purchaser has agreed to purchase Common Stock, no par value (the
"Common Stock"), of DIMON Incorporated, a Virginia corporation
(the "Company"), subject to the terms and conditions of the
Purchase Agreement; and
NOW, THEREFORE, to secure the performance by the
Pledgor of its obligations under the Purchase Agreement and to
secure the observance and performance of the covenants and
agreements contained herein and in the Purchase Agreement, the
parties hereto agree as follows:
1. The Security Interests.
In order to secure the observance and performance of
the covenants and agreements contained herein and in the Purchase
Agreement:
(a) Security Interests. The Pledgor hereby grants,
sells, conveys, assigns, transfers and pledges unto the
Collateral Agent, as agent of and for the benefit of the Trust, a
security interest in and to, and a lien upon and right of set-off
against, all of Pledgor's right, title and interest in and to (i)
the Pledged Items described in paragraphs (b) and (c); (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 (whether such proceeds arise
before or after the commencement of any proceeding under any
applicable bankruptcy, insolvency or other similar law, by or
against the Pledgor with respect to the Pledgor); and (iv) all
powers and rights now owned or hereafter acquired under or with
respect to the Pledged Items (such Pledged Items, additions,
substitutions, 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) Firm Payment Date. At the Firm Payment Date, the Pledgor
shall deliver to the Collateral Agent in pledge hereunder one or
more certificates in registered form representing in the aggregate
___________ shares of the Common Stock, indorsed in blank or in
the name of the Collateral Agent for the benefit of the Trust
(together with all signature guarantees and any other documents
necessary to permit the Collateral Agent to effect the
re-registration of such Common Stock without further action by
the Pledgor) or, if such Common Stock is not issuable in
certificated form but is held in book entry form by The
Depository Trust Company, the Pledgor shall transfer such number
of shares of Common Stock to an account of the Collateral Agent
or to an account (other than an account of the Pledgor)
designated by the Collateral Agent with The Depository Trust
Company.
(c) Option Closing Date. Effective upon and subject to
the receipt by the Pledgor of the Additional Purchase Price, at
the Option Closing Date, the Pledgor shall deliver to the
Collateral Agent in pledge hereunder one or more certificates in
registered form representing in the aggregate a number of shares
of Common Stock equal to the Additional Share Base Amount,
indorsed in blank or in the name of the Collateral Agent for the
benefit of the Trust (together with all signature guarantees and
any other documents necessary to permit the Collateral Agent to
effect the re-registration of such Common Stock without further
action by the Pledgor) or, if such Common Stock is not issuable
in certificated form but is held in book entry form by The
Depository Trust Company, the Pledgor shall transfer such number
of shares of Common Stock to an account of the Collateral Agent
or to an account (other than an account of the Pledgor)
designated by the Collateral Agent with The Depository Trust
Company.
(d) Reregistration. Immediately following the Firm
Payment Date and any Option Closing Date, the Collateral Agent
shall cause all certificates for Common Stock delivered pursuant
to Section 1(b) or 1(c) above to be re-registered on the books of
the transfer agent for the Common Stock into the name of the
Collateral Agent or its nominee, and shall thereafter maintain
them in such form until the termination of this Agreement.
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 Representative" of the Pledgor means any
trustee or other representative as to whom Pledgor shall have
delivered notice to the Collateral Agent that such trustee or
other representative is authorized to act hereunder on behalf of
Pledgor.
"Business Day" means any day except a Saturday, Sunday
or other day on which banking institutions in New York City are
authorized or obligated by law or regulation to close or a day on
which the New York Stock Exchange, Inc. is closed.
"Cash Delivery Obligations" means, at any time (A) if
no Adjustment Event shall have occurred prior to such time, zero,
and (B) from and after any Adjustment Event, the product of: (i)
the Firm Share Base Amount plus the Additional Share Base Amount
(if any) and (ii) the Transaction Value of any property other
than Reported Securities received by the Pledgor in such
Adjustment Event, multiplied successively by each number by which
the Exchange Rate shall
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have been multiplied on or prior to the Adjustment Event pursuant
to the adjustments provided for under Section 6.1 of the Purchase
Agreement.
"Collateral" has the meaning specified in Section 1(a).
"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 Common Stock, 100%; (ii) any Reported
Securities, 100%; (iii) any U.S. Government Securities pledged in
respect of Cash Delivery Obligations, 105%; and (iv) any other
U.S. Government Securities, 150%, provided that upon and after
any failure to cure an Insufficiency Determination by 4:00 p.m.
New York City time on the Business Day following telephonic
notice of such Insufficiency Determination as described in
Section 6(e), which insufficiency shall be continuing on such
Business Day, the Collateral Requirement relating to any U.S.
Government Securities (other than U.S. Government Securities
pledged in respect of Cash Delivery Obligations) shall be 200%.
The portion of any pledged U.S. Government Securities that shall
be deemed at any time to be in respect of Cash Delivery
Obligations shall be as provided in Section 6(e).
"Delivery Date" has the meaning specified in Section 8(a).
"Eligible Collateral" means (i) Common Stock, (ii)
U.S. Government Securities, and (iii) from and after any
Adjustment Event, Reported Securities, provided, in each case,
that the Pledgor has good and marketable title thereto, free of
all Liens (other than the Liens created by this Collateral
Agreement) and Transfer Restrictions and 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 Common Stock or Reported
Securities pledged hereunder exceeds at any time the Maximum
Deliverable Number thereof, such excess shares shall not be
Eligible Collateral.
"Event of Default" means the occurrence of: (i) an
event described in clause (a) or (b) of Article VII of the
Purchase Agreement, (ii) a Collateral Event of Default, (iii) a
failure by Pledgor to have caused the Collateral to meet the
requirements described in Section 5(d), (iv) if an Adjustment
Event shall have occurred prior to the Exchange Date, failure by
Pledgor to cause to be delivered to Purchaser on the Exchange
Date the consideration then required to be delivered pursuant to
Section 6.2 of the Purchase Agreement or (v) if Pledgor shall
have exercised its Cash Delivery Option, a failure by the Pledgor
to deliver cash on the Exchange Date in the amount required under
Section 1.3(d) of the Purchase Agreement.
"Ineligible Collateral" means Collateral that does not
constitute "Eligible Collateral".
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"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 Common Stock (except as otherwise provided in Section
6(e)(2)), the Closing Price on such date; (b) with respect to any
U.S. Government Security, the product of (x)(i) the average unit
bid price for such security 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 lower 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 U.S. Government Security; and (c) with
respect to any unit of Reported Securities, 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 Common Stock, the product of the Firm Share Base
Amount plus the Additional Share Base Amount (if any), multiplied
successively by each number by which the Exchange Rate shall have
been multiplied on or prior to such date pursuant to the
adjustments provided for under Section 6.1 of the Purchase
Agreement. The Maximum Deliverable Number of Reported Securities
means, on any date, the product of (i) the Firm Share Base Amount
plus the Additional Share Base Amount (if any) and (ii) the
number of Reported Securities received by the Pledgor in the
Adjustment Event for each share of Common Stock, multiplied
successively by each number by which the Exchange Rate shall have
been multiplied on or prior to such date and after the date of
such Adjustment Event pursuant to the adjustments provided for
under Article VI of the Purchase Agreement.
"Person" means an individual, a corporation, a
partnership, an association, a limited liability company, a trust
or any other entity or organization, including a government or
political subdivision or an agency or instrumentality thereof.
"Pledge Value" means, as of any date and with respect
to any 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 shares of Common Stock or, from and after
an Adjustment Event, Reported Securities, on such date plus (b)
from and after an Adjustment Event, the Cash Delivery
Obligations.
"Pledged Items" means, as of any date, any and all
securities and instruments delivered by the Pledgor to be held by
the Collateral Agent under this Collateral Agreement as
Collateral, whether Eligible Collateral or Ineligible Collateral.
"Prior Collateral" has the meaning specified in Section
6(b)(1).
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"Responsible Officer" means, when used with respect to
the Collateral Agent, any vice president, assistant vice president,
assistant treasurer or assistant secretary located in the
division or department of the Collateral Agent responsible for
performing the obligations of the Collateral Agent under this
Collateral Agreement, or in any other division or department of
the Collateral Agent performing operations substantially
equivalent to those performed by such division or department
pursuant hereto, or any other officer of the Collateral Agent or
any successor Collateral Agent customarily performing functions
similar to those performed by any of the aforesaid officers, and
also means, with respect to any matter relating to this
Collateral Agreement or the Collateral, any other officer to whom
such matter is referred because of his knowledge of and
familiarity with the particular subject.
"Transfer Restriction" means, with respect to any item
of Collateral, 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) Power. Pledgor has full power and authority
to execute and deliver this Collateral Agreement and to perform
and observe the provisions hereof;
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(b) Non-Contravention. The execution, delivery and
performance by the Pledgor of this Collateral Agreement do
not and will not violate, contravene or constitute a
default under any provision of applicable law or regulation
or of any material agreement, judgment, injunction, order,
decree or other instrument binding upon the Pledgor.
Pledgor is not in default under any agreement by which the
Collateral may be bound and no litigation, arbitration or
administrative proceedings are current or pending, which
default, litigation, arbitration or administrative
proceedings are material to the Collateral in the context
of this Collateral Agreement.
(c) Binding Effect. This Collateral Agreement
constitutes a valid and binding agreement of the Pledgor
enforceable against the Pledgor in accordance with its
terms.
(d) Solvency. Pledgor is presently solvent and
able to pay, and paying his, her or its debts as they
become due, and anticipates that it will continue to be
able to pay its debts as they become due for the forseeable
future.
(e) No Transfer Restrictions. Except for any
legend with respect to restrictions pursuant to applicable
federal and state securities laws on transfer of the Common
Stock pledged by the Pledgor hereunder which appears on the
[face] [back] of the certificates representing such Common
Stock (and which (i) will not be applicable to the delivery
of any such Common Stock on the Exchange Date and (ii) will
be removed at the request of the Collateral Agent to the
transfer agent for the Common Stock prior to the Exchange
Date) no Transfer Restrictions exist with respect to or
otherwise apply to the assignment of, or transfer by the
Pledgor of possession of, any items of Collateral to
the Collateral Agent hereunder, or the subsequent sale or
transfer of such items of Collateral by the Collateral Agent
pursuant to the terms hereof.
(f) Title to Collateral; Perfected Security
Interest. The 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 Pledged Items described
in paragraphs (b) and (c) of Section 1 to the Collateral
Agent hereunder, the Collateral Agent will obtain a valid,
first priority perfected security interest in, and a first
lien upon, such Pledged Items subject to no other Lien.
None of the Collateral is or shall be pledged by the
Pledgor as collateral for any other purpose.
4. Representations and Warranties of the Collateral Agent.
The Collateral Agent represents and warrants to the
Pledgor 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.
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(b) Authorization and Non-Contravention. The execu-
tion, 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.
The Pledgor agrees that, so long as any of its
obligations under the Purchase Agreement remain outstanding:
(a) Title to Collateral. The Pledgor shall at all
times hereafter have good and marketable title to the
Collateral pledged hereunder, free of all Liens (other than
the Liens created by this Collateral Agreement) and
Transfer Restrictions, and, subject to the terms of this
Collateral Agreement, will at all times hereafter have
good, right and lawful authority to assign, transfer and
pledge such Collateral and all such additions thereto and
substitutions therefor under this Collateral Agreement.
(b) Pledge Value Requirement. The Pledgor shall
cause the 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(d) as necessary to cause such
requirement to be met.
(c) Pledge upon Adjustment Event. Upon the
occurrence of an Adjustment Event, the Pledgor shall
immediately cause to be delivered to the Collateral Agent,
in the manner provided in Section 6(d): (i) U.S. Government
Securities having an aggregate Market Value at least equal
to 105% of the Cash Delivery Obligations, if any; and (ii)
Reported Securities in an amount at least equal to the
Maximum Deliverable Number thereof (if any), or, at
Pledgor's election, U.S. Government Securities having an
aggregate Market Value at least equal to 150% of such
Maximum Deliverable Number of Reported Securities; in each
case to be held as substitute or additional Collateral
hereunder.
(d) Composition of Pledged Items. Notwithstanding
the Pledgor's right to substitute Collateral pursuant to
Section 6(b), the Pledgor shall cause the Collateral to
include, on the Exchange Date, unless Pledgor shall have
exercised its Cash Delivery Option, a number of shares of
Common Stock (or, if an Adjustment Event shall have
occurred, Reported Securities) at least equal to the number
of shares of Common Stock (or, if an Adjustment Event
shall have occurred, Reported Securities) required to be
7
delivered under the Purchase Agreement on the Exchange Date.
If the Pledgor exercises its Cash Delivery Option, then the
Pledgor shall cause the Collateral to consist entirely of
U.S. Government Obligations at all times from and after the
date 25 Business Days prior to the Exchange Date.
(e) Further Assurances. The Pledgor shall, at his
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 hereby
authorizes the Collateral Agent to execute and file, in the
name of the Pledgor or otherwise, Uniform Commercial Code
financing or continuation statements (which may be carbon,
photographic, photostatic or other reproductions of this
Agreement or of a financing statement relating to this
Agreement) which the Collateral Agent in its sole
discretion may deem necessary or appropriate to further
perfect, or maintain the perfection of the security
interests granted hereby.
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
Common Stock or Reported Securities pursuant to paragraph
(b) of this Section 6, shall determine the Pledge Value on
each Business Day and shall provide written notice of the
Pledge Value to the Pledgor.
(b) Substitution of Collateral. The Pledgor may
substitute Collateral in accordance with the following
provisions:
(1) Unless an Event of Default or a failure
by the Pledgor to meet any of its obligations under
Section 5(b) or (c) hereof has occurred and is
continuing, the Pledgor shall have the right at any
time and from time to time to deposit Eligible
Collateral with the Collateral Agent in substitution
for Pledged Items previously deposited hereunder
("Prior Collateral") and to obtain the release from
the Lien hereof of such Prior Collateral.
(2) If the Pledgor wishes to deposit Eligible
Collateral with the Collateral Agent in substitution
for Prior Collateral, the Pledgor shall (i) give
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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 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 addressed
to the Collateral Agent confirming the representations
contained in the second sentence of paragraph 3(b) of
Exhibit A hereto. The Pledgor hereby covenants and
agrees to take all actions required under Section 6(d)
and any other actions necessary to create for the
benefit of the Collateral Agent a valid, first
priority perfected security interest in, and a first
lien upon, such Eligible Collateral deposited with the
Collateral Agent in substitution for Prior Collateral.
(3) No such substitution shall be made
unless and until the Collateral Agent shall have
determined that the aggregate Pledge Value of all of
the Collateral at the time of such proposed
substitution, after giving effect to the proposed
substitution, shall at least equal the Pledge Value
Requirement.
(c) Additional Collateral. The Pledgor may pledge
additional Collateral hereunder at any time. Concurrently
with the delivery of any additional Eligible Collateral,
the Pledgor shall deliver (i) a certificate of the Pledgor
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 addressed to the Collateral Agent
confirming the representations contained in the second
sentence of paragraph 2(b) of Exhibit B hereto. The Pledgor
hereby covenants and agrees to take all actions required
under Section 6(d) and any other actions necessary to
create for the benefit of the Collateral Agent a valid,
first priority perfected security interest in, and a first
lien upon, such additional Eligible Collateral.
(d) Delivery of Collateral. The Pledgor shall
deliver all Collateral to the Collateral Agent in accordance
with the following provisions:
(1) Pledged Common Stock. In the case of
Collateral consisting of Common Stock, by delivery of
certificates evidencing such Common Stock, indorsed in
blank (together with all signature guarantees and any
other documents necessary to permit the Collateral Agent
to effect the re-registration thereof without further action
by the Pledgor) or registered in the name of the Collateral
Agent or its nominee or, if such Common Stock is not
9
issuable in certificated form but is held in book
entry form by The Depository Trust Company, by
transfer to an account of the Collateral Agent or to
an account (other than an account of the Pledgor)
designated by the Collateral Agent with The Depository
Trust Company;
(2) Pledged 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) designated by the Collateral Agent; and
(3) Pledged Reported Securities. In the case
of Collateral consisting of Reported Securities, by
delivery of certificates evidencing such Reported
Securities, indorsed in blank (together with all
signature guarantees and any other documents necessary
to permit the Collateral Agent to effect the
re-registration thereof without further action by the
Pledgor) or registered in the name of the Collateral
Agent or its nominee or, if such Reported Securities
are not issuable in certificated form but are held in
book entry form by The Depository Trust Company, by
transfer to an account of the Collateral Agent or to
an account (other than an account of the Pledgor)
designated by the Collateral Agent with The Depository
Trust Company. Each such delivery of Reported
Securities shall be accompanied by an opinion of
counsel satisfactory to the Collateral Agent that the
Collateral Agent has obtained a valid, first priority
perfected security interest in, and a first lien upon,
such Reported Securities.
Upon delivery of any Pledged Item under this
Collateral Agreement, the Collateral Agent shall examine such
Pledged Item and any opinions and certificates delivered pursuant
to Sections 6(b), 6(c), 6(d)(3) or otherwise pursuant to the
terms hereof in connection therewith to determine that they
comply as to form with the requirements for Eligible Collateral.
Immediately following the delivery to the Collateral Agent of any
Collateral in the form of certificates indorsed in blank, the
Collateral Agent shall cause all such certificates to be
re-registered on the books of the applicable transfer agent into
the name of the Collateral Agent or its nominee, and shall
thereafter maintain all such Collateral in such form until the
termination of this Agreement. 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, by
telephone call to an Authorized Representative of the
Pledgor followed by a written confirmation of such
call, promptly notify the Pledgor of such
determination and of the amount of the insufficiency.
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(2) If, by 4:00 p.m., New York City time on
the Business Day following the day on which telephonic
notice shall have been given pursuant to the preceding
paragraph (e)(1), the Pledgor shall have failed to
deliver, in the manner set forth in paragraphs (c) and
(d) of this Section 6, sufficient additional Eligible
Collateral so that, after giving effect to such
delivery (and taking into account that Common Stock
and Reported Securities in excess of the Maximum
Deliverable Number thereof shall not constitute
Eligible Collateral), the aggregate Pledge Value of
the Collateral, as of such Business Day, is at least
equal to the Pledge Value Requirement, then (x) the
Collateral Requirement with respect to any U.S.
Government Securities pledged hereunder (other than in
respect of Cash Delivery Obligations) shall be
increased from 150% to 200%, and (y) unless a
Collateral Event of Default shall have occurred and be
continuing, the Collateral Agent shall:
(i) commence sales, in the manner
described in paragraph (3) below, of such portion
of the Collateral consisting of U.S. Government
Securities as may be required to be sold in order
to generate proceeds sufficient to purchase
Common Stock or, after an Adjustment Event,
Reported Securities, as described in the
following clause (ii); and
(ii) commence purchases, in the manner
described in paragraph (3) below, of Common Stock
or, after an Adjustment Event, Reported
Securities, in an amount sufficient to cause the
aggregate Pledge Value of the Collateral to be at
least equal to the Pledge Value Requirement.
Notwithstanding the foregoing, the Collateral Agent
shall discontinue sales and purchases pursuant to the preceding
clauses (i) and (ii), respectively, if at any time a Collateral
Event of Default shall have occurred and be continuing. The
Collateral Agent shall determine the Market Value and the Pledge
Value of the Collateral after each purchase of Common Stock or
Reported Securities pursuant to the preceding clause (ii) in
order to determine whether the Pledge Value Requirement is met
and whether a Collateral Event of Default has occurred. Solely
for purposes of such calculation, the Market Value of the Common
Stock or Reported Securities shall be: (A) the most recent sales
price as reported in the composite transactions for the principal
securities exchange on which the Common Stock or Reported
Securities, as the case may be, are then listed or, if such
securities are not so listed, the last quoted ask price for such
securities in the over-the-counter market as reported by The
NASDAQ National Market or, if not so reported, by the National
Quotation Bureau or a similar organization; or (B) if higher, in
the case of Common Stock, the most recent available Closing
Price.
A "Collateral Event of Default" shall mean, at any
time, the occurrence of any of the following: (A) failure of the
aggregate Market Value of the Collateral to equal or exceed the
Pledge Value Requirement; (B) failure of the Market Value of any
U.S. 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
11
Market Value of a number of shares of Common Stock (or, from
and after any Adjustment Event, Reported Securities) equal to (x)
the Maximum Deliverable Number thereof minus (y) the number
thereof pledged as Collateral hereunder at such time; or (C) from
and after any Adjustment Event, failure of the U.S. Government
Securities pledged in respect of Cash Delivery Obligations to
have an aggregate Market Value at least equal to 105% of the Cash
Delivery Obligations at such time, if, in the case of a failure
described in this clause (C), such failure shall continue to be
in effect at 4:00 p.m., New York City time, on the Business Day
following the day on which telephonic notice in respect thereof
shall have been given pursuant to paragraph (e)(1) above. For
purposes of this Agreement, the portion of any pledged U.S.
Government Securities that shall be deemed to be in respect of
Cash Delivery Obligations at any time shall be a portion having a
Market Value equal to 105% of the Cash Delivery Obligations at
such time (or, if less, the aggregate Market Value of all U.S.
Government Securities pledged at such time).
(3) Collateral sold and Common Stock or
shares of Reported Securities purchased by the
Collateral Agent pursuant to the preceding paragraphs
(e)(2)(i) and (ii) may be sold and purchased on any
securities exchange or in any over-the-counter market
or in any private purchase transaction, and at such
price or prices, in each case as the Collateral Agent
may deem satisfactory. The Pledgor covenants and
agrees that it will execute and deliver such documents
and take such other action as the Collateral Agent
deems necessary or advisable in order that any such
sales and purchases may be made in compliance with
law.
(f) Release of Excess Collateral. If on any
Business Day the Collateral Agent determines that the
aggregate Pledge Value of the Pledgor's Eligible Collateral
exceeds the Pledge Value Requirement and no Event of
Default or failure by the Pledgor to meet any of its
obligations under Sections 5 or 6 hereof has occurred and
is continuing, the Pledgor may obtain the release from the
Lien hereof of any Collateral having an aggregate Pledge
Value on such Business Day less than or equal to such
excess, upon delivery to the Collateral Agent of a written
notice from an Authorized Representative of the Pledgor
indicating the items of Collateral to be released. Such
Collateral shall be released only after the Collateral
Agent shall have determined that the aggregate Pledge Value
of all of the Collateral remaining after such release as
determined on such Business Day is at least equal to the
Pledge Value Requirement.
(g) Delivery of Purchase Agreement Consideration.
On the Exchange Date, unless Pledgor shall have exercised
its Cash Delivery Option, the Collateral Agent shall
deliver to the Trust Common Stock (or, if an Adjustment
Event shall have occurred, Reported Securities) then held
by it hereunder representing the number of shares of Common
Stock (or, if an Adjustment Event shall have occurred,
Reported Securities) then required to be delivered under
the Purchase Agreement. Upon such delivery, the Trust shall
hold such Common Stock or Reported Securities, as the case
may be, absolutely and free from any claim or right
whatsoever.
12
(h) Investment of Cash Collateral. The Collateral
Agent shall invest any cash received by it pursuant to
Section 6.2 of the Purchase Agreement in U.S. Treasury
Securities maturing on or before _________, 2000.
7. Income and Voting Rights on Collateral.
(a) Unless an Event of Default or failure by the
Pledgor to meet any of Pledgor's obligations under Section 5(b)
or (c) hereof has occurred and is continuing, the Pledgor shall
be entitled to receive for Pledgor's own account all dividends,
interest and, if any, principal and premium relating to all of
the Collateral, unless the payment thereof to the Pledgor would
reduce the aggregate Pledge Value of the Collateral below the
Pledge Value Requirement. The Collateral Agent agrees to remit to
the Pledgor on the Business Day received or the first Business
Day thereafter all such payments received by it. If an Event of
Default or failure by the Pledgor to meet any of its obligations
under Section 5(b) or (c) hereof has occurred and is continuing,
all such payments made or accrued after and during the
continuance of such Event of Default or failure shall be retained
by the Collateral Agent, and any such payments which are received
by the Pledgor shall be received in trust for the benefit of the
Trust, shall be segregated from other funds of the Pledgor and
shall forthwith be paid over to the Collateral Agent. Any such
payments so retained by, or paid over to, the Collateral Agent
shall be held by the Collateral Agent as Collateral hereunder.
(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 shall take all such
action as may be necessary or appropriate to give effect to such
right, to vote and to give consents, ratifications and waivers,
and take any other action with respect to any or all of the
Collateral with the same force and effect as if the Collateral
Agent were the absolute and sole owner thereof.
8. Remedies upon Events of Default.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent may exercise on behalf of the
Trust all the rights of a secured party under the UCC (whether or
not in effect in the jurisdiction where such rights are
exercised) and, in addition, without being required to give any
notice, except as herein provided or as may be required by
mandatory provisions of law, shall: (i) deliver all Collateral
consisting of Common Stock or Reported Securities (but not, in
either case, in excess of the number of shares thereof
deliverable under the Purchase Agreement at such time) to the
Trust on the date of the notice delivered to the Collateral Agent
pursuant to Article VII(c) of the Purchase Agreement relating to
13
such Event of Default (or, in the case of an Event of Default
described in clause (iii), (iv) or (v) of the definition thereof,
on the Exchange Date) (in either case, the "Delivery Date"),
whereupon the Trust shall hold such Common Stock or Reported
Securities absolutely free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor
which may be waived, and the Pledgor, to the extent permitted by
law, hereby specifically waives all rights of redemption, stay or
appraisal which Pledgor has or may have under any law now
existing or hereafter adopted; and (ii) if such delivery shall be
insufficient to satisfy in full all of the obligations of Pledgor
under the Purchase Agreement, sell all of the remaining
Collateral, or such lesser portion thereof as may be necessary to
generate proceeds sufficient to satisfy in full all of the
obligations of Pledgor under the Purchase Agreement, at public or
private sale or at any broker's board or on any securities
exchange, for cash, upon credit or for future delivery, and at
such price or prices as the Collateral Agent may deem
satisfactory. The Pledgor covenants and agrees to execute and
deliver such documents and take such other action as the
Collateral Agent deems necessary or advisable in order that any
such sale may be made in compliance with law. Upon any such sale
the Collateral Agent shall have the right to deliver, assign and
transfer to the purchaser thereof the Collateral so sold. Each
purchaser at any such sale shall hold the Collateral so sold
absolutely and free from any claim or right of whatsoever kind,
including any equity or right of redemption of the Pledgor which
may be waived, and the Pledgor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or
appraisal which Pledgor has or may have under any law now
existing or hereafter adopted. The notice (if any) of such sale
required by Article 9 of the UCC shall (1) in case of a public
sale, state the time and place fixed for such sale, (2) in case
of sale at a broker's board or on a securities exchange, state
the board or exchange at which such sale is to be made and the
day on which the Collateral, or the portion thereof so being
sold, will first be offered for sale at such board or exchange,
and (3) in the case of a private sale, state the day after which
such sale may be consummated. Any such public sale shall be held
at such time or times within ordinary business hours and at such
place or places as the Collateral Agent may fix in the notice of
such sale. At any such sale the Collateral may be sold in one lot
as an entirety or in separate parcels, as the Collateral Agent
may determine. The Collateral Agent shall not be obligated to
make any such sale pursuant to any such notice. The Collateral
Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time
by announcement at the time and place fixed for the sale, and
such sale may be made at any time or place to which the same may
be so adjourned. In case of any sale of all or any part of the
Collateral on credit or for future delivery, the Collateral so
sold may be retained by the Collateral Agent until the selling
price is paid by the purchaser thereof, but the Collateral Agent
shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in
case of any such failure, such Collateral may again be sold upon
like notice. The Collateral Agent, instead of exercising the
power of sale herein conferred upon it, may proceed by a suit or
suits at law or in equity to foreclose the security interests and
sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) Power of Attorney. The Collateral Agent is hereby
irrevocably appointed the true and lawful attorney of the Pledgor
with full power and authority, in the name and stead of the
Pledgor, to do all of the following: (i) upon any delivery or
sale of all or any part of any Collateral made either under the
power of delivery or sale given hereunder or under judgment or
14
decree in any judicial proceedings for foreclosure or
otherwise for the enforcement of this Collateral Agreement, to
make all necessary deeds, bills of sale and instruments of
assignment, transfer or conveyance of the property thus delivered
or sold; (ii) upon the occurrence of an Adjustment Event while
any shares of Common Stock are Pledged Items, to take any
necessary actions with respect to such shares of Common Stock to
cause the Pledged Items to conform to the requirements of this
Agreement following the occurrence of the Adjustment Event,
including, without limitation, the tender of shares of Common
Stock and the sale of property (other than Reported Securities)
received in respect of Common Stock. For such purposes the
Collateral Agent may execute all necessary documents and
instruments. This power of attorney shall be deemed coupled with
an interest, and the Pledgor hereby ratifies and confirms all
that his attorneys acting under such power, or such attorneys'
successors or agents, shall lawfully do by virtue of this
Collateral Agreement. If so requested by the Collateral Agent, by
the Trustees or by any purchaser of the Collateral or a portion
thereof, the Pledgor shall further ratify and confirm any such
delivery or sale by executing and delivering to the Collateral
Agent, to the Trustees or to such purchaser or purchasers at the
expense of the Pledgor all proper deeds, bills of sale,
instruments of assignment, conveyance of transfer and releases as
may be designated in any such request. The Pledgor's obligations
and authorizations hereunder shall not be terminated by operation
of law or the occurrence of any event whatsoever, including the
death or disability of the Pledgor, or the occurrence of any
other event.
(c) Application of Collateral and Proceeds. In the
case of an Event of Default, the Collateral Agent may proceed to
realize upon the security interest in the Collateral against any
one or more of the types of Collateral, at any one time, as the
Collateral Agent shall determine in its sole discretion subject
to the foregoing provisions of this Section 8. The proceeds of
any sale of, or other realization upon, or other receipt from,
any of the Collateral remaining after delivery to the Trust
pursuant to Section 8(a) shall be applied by the Collateral Agent
in the following order of priorities:
first, to the payment to the Trust of an amount equal
to: (A) the aggregate Market Value of a number of
shares of Common Stock equal to (1) the number of
shares of Common Stock required to be delivered under
the Purchase Agreement on the Delivery Date minus (2)
the number of shares of Common Stock delivered by the
Collateral Agent to the Trust on the Delivery Date as
described above; or (B) from and after an Adjustment
Event, the sum of (1) the Cash Delivery Obligations on
the Delivery Date and (2) the aggregate Market Value
on the Delivery Date of a number of Reported
Securities (and, if applicable, shares of Common
Stock) equal to (x) the number thereof required to be
delivered on the Delivery Date under Section 6.2 of
the Purchase Agreement minus (y) the number thereof
delivered by the Collateral Agent to the Trust on the
Delivery Date as described above; or (C) if the
Pledgor shall have exercised its Cash Delivery Option,
the amount of cash required to be delivered under
Section 1.3(d) of the Purchase Agreement minus the
amount of cash so delivered;
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
15
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
hereunder and under the Purchase Agreement have been
fully discharged or sufficient funds have been set
aside by the Collateral Agent at the request of the
Pledgor for the discharge thereof, any remaining
proceeds shall be released to the Pledgor.
9. The Collateral Agent.
The Collateral Agent accepts its duties and
responsibilities hereunder as agent for the Trust, on and subject
to the following terms and conditions:
(a) Performance of Duties. The Collateral Agent
undertakes to perform such duties and only such duties as are
expressly set forth herein and, beyond the exercise of reasonable
care in the performance of such duties, no implied covenants or
obligations shall be read into this Collateral Agreement against
the Collateral Agent. No provision hereof shall be construed to
relieve the Collateral Agent from liability for its own grossly
negligent action, grossly negligent failure to act or its own
willful misconduct, subject to the following:
(1) The Collateral Agent may consult with
counsel, and the advice or opinion of such counsel shall be
full and complete authorization and protection in respect
of an action taken or suffered hereunder in good faith and
in accordance with such advice or opinion of counsel.
(2) The Collateral Agent shall not be liable with
respect to any action taken, suffered or omitted by it in
good faith (i) reasonably believed by it to be authorized
or within the discretion or rights or powers conferred on
it by this Collateral Agreement or (ii) in accordance with
any direction or request of the Trustees.
(3) The Collateral Agent shall not be liable for
any error of judgment made in good faith by any of its
officers, unless the Collateral Agent was grossly negligent
in ascertaining the pertinent facts.
(4) In the absence of bad faith on its part, the
Collateral Agent may conclusively rely, as to the truth of
the statements and the correctness of the opinions
expressed therein, upon any note, notice, resolution,
consent, certificate, affidavit, letter, telegram, teletype
message, statement, order or other document believed by it
to be genuine and correct and to have been signed or sent
by the proper Person or Persons.
(5) No provision of this Collateral Agreement
shall require the Collateral Agent to expend or risk its
own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the
exercise of any of its rights or powers, if it shall have
reasonable grounds for believing that repayment of such
funds or adequate indemnity against such risk or liability
is not reasonably assured to it.
16
(6) The Collateral Agent may perform any duties
hereunder either directly or by or through agents or
attorneys, and the Collateral Agent shall not be
responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it
hereunder. In furtherance thereof, any subsidiary owned or
controlled by the Collateral Agent, or its successors, as
agent for the Collateral Agent, may perform any or all of
the duties of the Collateral Agent relating to the
valuation of securities and other instruments constituting
Collateral hereunder.
(7) In no event shall the Collateral Agent be
personally liable for any taxes or other governmental
charges imposed upon or in respect of (i) the collateral or
(ii) the income or other distributions thereon.
(8) Unless and until the Collateral Agent shall
have received notice from the Pledgor, or unless and until
a Responsible Officer of the Collateral Agent shall have
actual knowledge to the contrary, the Collateral Agent
shall be entitled to deem and treat all Collateral
delivered to it hereunder as Eligible Collateral hereunder,
provided that the Collateral Agent has carried out the
duties specified in Section 6 with respect to such
Collateral at the time of delivery thereof.
The Collateral Agent shall not be responsible for the
correctness of the recitals and statements herein which are made
by the Pledgor or for any statement or certificate delivered by
the Pledgor pursuant hereto. Except as specifically provided
herein, the Collateral Agent shall not be responsible for the
validity, sufficiency, collectibility or marketability of any
Collateral given to or held by it hereunder or for the validity
or sufficiency of the Purchase Agreement or the Lien on the
Collateral purported to be created hereby.
(b) Knowledge. The Collateral Agent shall not be
deemed to have knowledge of any Event of Default (except a
Collateral Event of Default), unless and until a Responsible
Officer of the Collateral Agent shall have actual knowledge
thereof or shall have received written notice thereof.
(c) Merger. Any corporation or association into which
the Collateral Agent may be converted or merged, or with which it
may be consolidated, or to which it may sell or transfer its
agency business and assets as a whole or substantially as a
whole, or any corporation or association resulting from any such
conversion, sale, merger, consolidation or transfer to which it
is a party, shall, subject to the prior written consent of the
Trust, be and become a successor Collateral Agent hereunder and
vested with all of the title to the Collateral and all of the
powers, discretions, immunities, privileges and other matters as
was its predecessor without, except as provided above, the
execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
(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.
17
(e) Removal. The Collateral Agent may be removed at
any time by an instrument or concurrent instruments in writing
delivered to the Collateral Agent and to the Pledgor and signed
by the Trust.
(f) Appointment of Successor. (1) If the Collateral
Agent hereunder shall resign or be removed, or be dissolved or
shall be in the course of dissolution or liquidation or otherwise
become incapable of action hereunder, or if it shall be taken
under the control of any public officer or officers or of a
receiver appointed by a court, a successor may be appointed by
the Trust by an instrument or concurrent instruments in writing
signed by the Trust or by its attorneys in fact fully authorized
a copy of such instrument or concurrent instruments shall be sent
by registered mail to the Pledgor.
(2) Every such temporary or permanent successor
Collateral Agent appointed pursuant to the provisions
hereof shall be a trust company or bank in good standing,
having a reported capital and surplus of not less than
$100,000,000 and capable of holding the Collateral in the
State of New York, if there be such an institution willing,
qualified and able to accept the duties of the Collateral
Agent hereunder upon customary terms.
(g) Acceptance by Successor. Every temporary or
permanent successor Collateral Agent appointed hereunder shall
execute, acknowledge and deliver to its predecessor and also to
the Pledgor an instrument in writing accepting such appointment
hereunder, whereupon such successor, without any further act,
deed or conveyance, shall become fully vested with all the
estates, properties, rights, powers, duties and obligations of
its predecessors. Such predecessor shall, nevertheless, on the
written request of its successor or the Pledgor, execute and
deliver an instrument transferring to such successor all the
estates, properties, rights and powers of such predecessor
hereunder. Every predecessor Collateral Agent shall deliver all
Collateral held by it as the Collateral Agent hereunder to its
successor. Should any instrument in writing from the Pledgor be
required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties,
rights, powers, duties and obligations hereby vested or intended
to be vested in the predecessor, any and all such instruments in
writing shall, at the request of the temporary or permanent
successor Collateral Agent, be forthwith executed, acknowledged
and delivered by the Pledgor.
10. Miscellaneous.
(a) Benefit of Agreement; Successors and Assigns.
Whenever any of the parties hereto is referred to, such reference
shall be deemed to include the successors and assigns of such
party. All the covenants and agreements herein contained by or on
behalf of the Pledgor and the Collateral Agent shall bind, and
inure to the benefit of, their respective successors and
assigns whether so expressed or not, and shall be enforceable by
and inure to the benefit of the Trust and its successors and
assigns.
(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.
18
(c) Amendments and Waivers. Any term, covenant,
agreement or condition of this Collateral Agreement may be
amended or compliance therewith may be waived (either generally
or in a particular instance and either retrospectively or
prospectively) but only by a writing signed by the Collateral
Agent, the Pledgor and the Trust.
(d) Notices.
(1) Any notice provided for herein, unless
otherwise specified, shall be in writing (including
transmittals by telex or telecopier) and shall be given to
a party at the address set forth opposite such party's name
on the signature pages hereto or at such other address as
may be designated by notice duly given in accordance with
this Section 10(d) to each other party hereto.
(2) Each such notice given pursuant to paragraph
(1) shall be effective (i) if sent by certified mail
(return receipt requested), 72 hours after being deposited
in the United States mail, postage prepaid; (ii) if given
by telex or telecopier, when such telex or telecopied
notice is transmitted; or (iii) if given by any other
means, when delivered at the address specified in this
Section 10(d).
(e) Governing Law. This Collateral Agreement shall in
all respects be construed in accordance with and governed by the
laws of the State of New York; provided that as to Pledged Items
located in any jurisdiction other than the State of New York, the
Collateral Agent on behalf of the Trust shall have all of the
rights to which a secured party is entitled under the laws of
such other jurisdiction.
(f) Counterparts. This Collateral Agreement may be
executed, acknowledged and delivered in any number of
counterparts and such counterparts taken together shall
constitute one and the same instrument.
(g) Application of Bankruptcy Code. The parties hereto
acknowledge and agree that the Collateral Agent is a "financial
institution" within the meaning of Section 101(22) of Title 11 of
the United States Code (the "Bankruptcy Code") and is acting as
agent and custodian for the Trust in connection with the Purchase
Agreement and that the Trust is a "customer" of the Collateral
Agent within the meaning of said Section 101(22).
11. Termination of Collateral Agreement.
This Collateral Agreement and the rights hereby
granted by the Pledgor in the Collateral shall cease, terminate
and be void upon fulfillment of all of the obligations of the
Pledgor under the Purchase Agreement, and the Pledgor shall have
no further liability hereunder upon such termination. Any
Collateral remaining at the time of such termination shall be
fully released and discharged from the Lien hereof and delivered
to the Pledgor by the Collateral Agent, all at the expense of the
Pledgor.
19
12. No Personal Liability of Trustees.
By executing this Collateral Agreement none of the
Trustees assumes any personal liability hereunder.
20
IN WITNESS WHEREOF, the Pledgor 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, as of the date hereof.
PLEDGOR:
___________________________
By:
___________________________
Name:
Title:
Address for Notices:
Attention:
COLLATERAL AGENT:
____________________________,
as Collateral Agent
By:
_____________________________
Name:
Title:
Address for Notices:
Attention:
21
THE TRUST:
DECS TRUST
_____________________________
Xxxxxx X. Xxxxxxx
as Managing Trustee
Address for Notices:
Attention:
22
Exhibit A
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, _____________ (the "Pledgor"), hereby certifies,
pursuant to Section 6(b) of the Collateral Agreement dated as of
_________, 1997 among the Pledgor, The Bank of New York, as
Collateral Agent, and DECS 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 Collateral Agreement) and
Transfer Restrictions. Upon delivery of the Collateral
to the Collateral Agent, the Collateral Agent will
obtain a valid, first priority perfected security
interest in, and a first lien upon, such Substituted
Collateral subject to no other Lien. None of such
Substituted Collateral is or shall be pledged by the
Pledgor as collateral for any other purpose.
This Certificate may be relied upon by the Trust as
fully and to the same extent as if this Certificate had been
specifically addressed to the Trust.
A-1
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this _____ day of ____________, 199__.
_____________________________
Name:
Title:
A-2
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, __________________ (the "Pledgor"),
hereby certifies, pursuant to Section 6(c) of the Collateral
Agreement, dated as of , 1997, among the Pledgor, The Bank of New
York, as Collateral Agent and DECS 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
additional Collateral (the "Additional Collateral"):
2. The Pledgor hereby represents and warrants to the
Collateral Agent that:
(a) Consents to Transfer. No Transfer
Restrictions exist with respect to or otherwise apply to
the assignment of, or transfer by the Pledgor of possession
of, any items of Additional Collateral to the Collateral
Agent under the Collateral Agreement, or the subsequent
sale or transfer of such items of Additional Collateral by
the Collateral Agent pursuant to the terms of the
Collateral Agreement.
(b) Title to Collateral; Perfected Security
Interest. The Pledgor has good and marketable title to the
Additional Collateral, free of all Liens (other than the
Lien created by the Collateral Agreement) and Transfer
Restrictions. Upon delivery of the Collateral to the
Collateral Agent, the Collateral Agent will obtain a valid,
first priority perfected security interest in, and a first
lien upon, such additional Collateral subject to no other
Lien. None of such Additional Collateral is or shall be
pledged by the Pledgor as collateral for any other purpose.
This Certificate may be relied upon by the Trust as
fully and to the same extent as if this Certificate had been
specifically addressed to the Trust.
B-1
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this _____ day of ____________, 199__.
_____________________________
Name:
Title:
B-2
Exhibit C
to
Collateral Agreement
CERTIFICATE OF SPOUSE
Reference is made to the Collateral Agreement (the
"Collateral Agreement"), dated as of ___________, 1997, among the
undersigned person's husband or wife (the "Pledgor"), The Bank of
New York, as Collateral Agent, and DECS Trust (the "Trust"), and
to the related Purchase Agreement (the "Purchase Agreement")
between the Pledgor and the Trust. Terms defined in the
Collateral Agreement or the Purchase Agreement are used herein as
defined therein.
By his or her signature below, the undersigned hereby
acknowledges and consents to the transfers of Collateral by the
Pledgor as contemplated in the Collateral Agreement and agrees
that his or her legal and/or beneficial rights, if any, in any
such Collateral shall be subordinate to the rights of the Trust
in such Collateral as a secured party as provided in the
Collateral Agreement and as provided by applicable law. In
accordance with the terms of the Collateral Agreement, the Trust
shall be entitled to apply the Collateral (and any proceeds
thereof) to satisfy the Pledgor's obligations to the Trust under
the Collateral Agreement and the Purchase Agreement prior to any
claim or right which the undersigned may have in the Collateral.
_____________________
[Spouse]
C-1
