EXHIBIT 2(k)(iv)
COLLATERAL AGREEMENT
Among
Luckygold 18A Limited, As Pledgor,
The Bank of New York, As Collateral Agent
and
Peak TrENDS Trust
Dated as of
, 1998
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
1. The Security Interests...................................................1
2. Definitions..............................................................2
3. Representations and Warranties of the Pledgor............................7
4. Representations and Warranties of the
Collateral Agent.........................................................8
5. Certain Covenants of the Pledgor.........................................8
6. Administration of the Collateral and Valuation
of the Securities.......................................................10
7. Income and Voting Rights on Collateral..................................17
8. Remedies upon Events of Default.........................................18
9. The Collateral Agent....................................................21
10. Miscellaneous...........................................................25
11. Termination of Collateral Agreement.....................................26
12. No Personal Liability of Trustees.......................................26
Exhibit A - Certificate for Substituted Collateral
Exhibit B - Certificate for Additional Collateral
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COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT (the "Agreement"), dated as of [May] ,
1998, among Luckygold 18A Limited, a company incorporated in the British Virgin
Islands ("Pledgor"), The Bank of New York, a New York banking corporation, as
collateral agent and securities intermediary (the "Collateral Agent") hereunder
for the benefit of Peak TrENDS Trust, a trust duly created under the laws 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, dated as of [May] ,
1998, between the Pledgor and Purchaser (the "Purchase Agreement"), the Pledgor
has agreed to sell and Purchaser has agreed to purchase ordinary issued shares,
$.01 par value per share ("Common Stock"), of Peak International Limited, a
Bermuda holding company (the "Company"), subject to the terms and conditions of
the Purchase Agreement; and
NOW, THEREFORE, to secure the observance and performance of 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 all of the
Pledgor's obligations herein and in the Purchase Agreement:
(a) The Pledgor hereby grants, sells, conveys, assigns, transfers
and pledges unto the Trust, a security interest in and to, and a lien upon and
right of set-off against, all of its right, title and interest in and to (i)
Eligible Collateral having a Pledge Value equal to or greater than the Pledge
Value Requirement; (ii) account number ____________ in the name of the Trust, as
secured party [under the Agreement dated [May _____, 1998] maintained at The
Bank of New York, and any successor account
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(the "Collateral Account"); (iii) all Eligible Collateral, securities,
financial assets, investment property, instruments, cash and any other property
held in or credited to the Collateral Account, and all security entitlements
with respect to any and all of the foregoing; (iv) any certificates or other
evidence of ownership representing the foregoing; (v) all additions to and
substitutions for any of the foregoing; (vi) proceeds and products of any of the
foregoing including, without limitation, all income, distributions, collections,
investment property, financial assets, security entitlements and any other
property received or to be received, or derived or to be derived, distributed or
distributable, now or any time hereafter from or in connection with any of the
foregoing, whether held in or credited to the Collateral Account or otherwise;
and (vii) all powers and rights now owned or hereafter acquired under or with
respect to any of the foregoing (collectively, the "Collateral").
The Trust shall have all of the rights, remedies and
recourses with respect to the Collateral afforded a secured party by the UCC and
all rights now or hereafter existing under all other applicable laws, in
addition to, and not in limitation of, the other rights, remedies and recourses
afforded to the Trust by this Agreement.
(b) On the Payment Date, the Pledgor shall deliver or transfer to
the Trust in pledge hereunder, for credit to the Collateral Account or as
otherwise agreed by the parties, Eligible Collateral having a Pledge Value equal
to or greater than the Pledge Value Requirement on such date.
(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 to the Trust and pledge hereunder additional Eligible Collateral such
that the Pledge Value of all Collateral pledged hereunder is equal to or greater
than the Pledge Value Requirement on such date.
2. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in
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the Purchase Agreement. Capitalized terms used herein shall have the meanings as
follows:
"Authorized Representative" of the Pledgor means any officer of
the Pledgor as to whom the Pledgor shall have delivered notice to the Collateral
Agent that such officer or other representative is authorized to act hereunder
on behalf of the Pledgor.
"Bankruptcy Code" shall mean Title 11 of the United States Code,
as amended.
"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 regula tion to close or a day on which the New York Stock Ex change,
the American Stock Exchange or the Nasdaq National Market 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 Transaction Value of any property other than
Marketable Securities received by the Pledgor in such Adjustment Event in
respect of the maximum number of Contract Shares at the time of such Adjustment
Event.
"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 Marketable 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
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cure an Insufficiency Determination by 4:00 p.m. New York City time on the tenth
Business Day following telephonic notice of such Insufficiency Determination as
described in Section 6(e), which insufficiency shall be continuing on such tenth
business day, the Collateral Requirement relating to any U.S. Government
Securities (other than 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).
"Eligible Collateral" means (i) Common Stock, (ii) U.S.
Government Securities, and (iii) from and after any Adjustment Event, Marketable
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 Trust has a valid,
first priority perfected security interest therein and first lien thereon, and
provided further that to the extent the number of Mar ketable 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) on the Exchange
Date, or (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.
"Ineligible Collateral" means Collateral that does not constitute
"Eligible Collateral".
"Insufficiency Determination" has the meaning specified in
Section 6(e)(1).
"Lien" means any lien, mortgage, security interest, pledge,
charge or encumbrance of any kind.
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"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 of the Common Stock 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 security; and (c) with respect to any
Marketable 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 Marketable 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 Marketable 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 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
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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 on such date or, from and after an Adjustment Event, Marketable
Securities, 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).
"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 or her 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,
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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 (x) 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, or (y) any
registration or qualification requirement for such item of Collateral pursuant
to any Federal or state securities law which is generally applicable to all
holders of such item of Collateral 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 at the applicable date.
"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 obliga tions 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 Trust hereunder, or the
subsequent sale or transfer of such items of Collateral by the Trust 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 Trust hereunder, the Trust 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 and
the Trust that:
(a) Corporate Existence and Power. The Collateral Agent is a
trust company, 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
legal, valid and binding agreement of the Collateral Agent enforceable against
the Collateral Agent in accordance with its terms.
5. CERTAIN COVENANTS OF THE PLEDGOR.
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The Pledgor agrees that, so long as any of its obligations under
the Purchase Agreement remain outstanding:
(a) Title to Collateral. The Pledgor shall at all times hereafter
have good and marketable title to the Collateral pledged by him, 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
Trust, 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) Marketable Securities 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 Marketable Securities; 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 shall cause the Collateral to include, on the Exchange Date, unless an
Adjustment Event shall have occurred or unless the Pledgor shall have elected
the Cash Settlement Alternative, a number of shares of Common Stock at least
equal to the number of shares of Common Stock required to be delivered under the
Purchase Agreement on the Exchange Date. If the Pledgor shall have elected the
Cash Settlement Alternative, the Pledgor shall cause the Collateral to include,
on the Exchange Date, cash in an amount at least equal to 105% of the
Then-Reference Market Price of the Contract Shares.
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(e) Further Assurances. The Pledgor shall, at its 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 or take any other action that may be
necessary or desirable in order (i) to create, preserve, perfect, substantiate
or validate any security interest granted pursuant hereto, (ii) to enable the
Collateral Agent to credit any and all Collateral to the Collateral Account or
(iii) to enable the Trust, directly or through the Collateral Agent, to exercise
and enforce its rights hereunder with respect to such security interest. To the
extent permitted by applicable law, the Pledgor hereby authorizes the Trust or
the Collateral Agent to execute and file, in the name of the Pledgor or
otherwise, Uniform Commercial Code financing or continuation statements or
similar documents (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement relating to this
Agreement) which the Trust or the Collateral Agent, each in its sole discretion
may deem necessary or appropriate to further perfect, or maintain the perfection
of the security interests granted hereby.
(f) Notice of Event of Default. The Pledgor shall give the Trust
and the Collateral Agent the notice of Event of Default immediately upon the
occurrence of such Event of Default, by telecopier and by overnight, next
business day delivery service.
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 Marketable 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:
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(1) Unless an Event of Default or a failure by the
Pledgor to meet any of its obligations under Section 5(b), (c) or (d)
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 here under ("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 for the benefit of the Trust 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 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 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 Trust confirming the representations
contained in the second sentence of paragraph 3(b) of Exhibit A. 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 Trust 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 without undue or unreasonable
delay 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.
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(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
an Authorized Officer of the Pledgor substantially in the form of Exhibit B 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 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) addressed to the Trust confirming the representations
contained in the second sentence of paragraph 2(b) of Exhibit B. 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 Trust 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 any and all
Collateral to the Trust by causing any and all such Collateral to be credited to
the Collateral Account.
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.
(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 Representative
of the Pledgor followed by a written confirmation of such call.
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(2) If, by 4:00 p.m., New York City time on the tenth
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, the aggregate Pledge Value
of the Collateral, as of such tenth 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 for the benefit of the Trust
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 suffi-
cient to purchase Common Stock or, after an Adjustment Event, Marketable
Securities, as described in the following clause (ii); and (ii) commence
purchases using the proceeds of such sales, in the manner described in para-
graph (3) below, of Common Stock or, after an Adjustment Event, Marketable
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 for the
benefit of the Trust 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 Marketable 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 Marketable 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
Marketable Securities, as the case may be, are then
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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 Na-
tional 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 Market Value of a number of shares of Common Stock (or, from and after any
Adjustment Event, Marketable 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. Gov-
ernment 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
tenth 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 Marketable
Securities purchased by the Collateral Agent for the benefit of the
Trust 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 (after having used its best endeavors to sell or purchase at a
price or prices of at least Market Value), in
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each case as the Collateral Agent may deem satis factory. The Pledgor
covenants and agrees that it will execute and deliver such documents and
take such other action as the Collateral Agent reasonably 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 Pledge Value, 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 without
undue and unreasonable delay 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 an Adjustment Event shall have occurred prior thereto or
the Pledgor shall have elected the Cash Settlement Alternative, the Collateral
Agent shall deliver to the Trust, pursuant to the instructions of the Trust,
Common Stock then held by it hereunder representing the number of shares of
Common Stock then required to be delivered under the Purchase Agreement. If an
Adjustment Event shall have occurred prior to the 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, pursuant to
the instructions of 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, the Marketable Securities then held by the Collateral Agent for the
benefit of the Trust, including such securities held in the Collateral Account
hereunder. Upon such delivery, the Trust shall hold such Common Stock or
Marketable Securities, as the
15
case may be, absolutely and free from any claim or right whatsoever. If the
Pledgor shall have elected the Cash Settlement Alternative and shall have
delivered Collateral to the Trust as required by Section 6(d), the Collateral
Agent shall deliver to the Trust the amount of cash required to satisfy the
Pledgor's obligations under the Cash Settlement Alternative.
(h) Investment of Cash Collateral. The Collateral Agent for the
benefit of the Trust 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 , 2001.
7. INCOME AND VOTING RIGHTS ON COLLATERAL.
(a) Unless an Event of Default or failure by the Pledgor to meet
any of its obligations under Section 5(b) or (c) 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 to meet any of its obligations under Section 5(b) or
(c) 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
Trust, directly or indirectly through 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 Trust, directly or indirectly through 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, forthwith upon receiving a written request from the
Pledgor, deliver to the Pledgor or
16
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 Trust, 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
Trust 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 Trust 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 Trust may exercise, through the Collateral Agent or otherwise,
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 all
rights now or hereafter existing under all other applicable laws 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 Marketable 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 Acceleration
Amount 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 Common Stock or Marketable 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 it
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
17
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 Trust acting through the Collateral Agent or otherwise 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 sale may be made in compliance
with law. Upon any such sale the Trust acting through the Collateral Agent or
otherwise 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 it 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 Trust acting through the
Collateral Agent or otherwise 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 Trust acting through the
Collateral Agent or otherwise shall not be obligated to make any such sale
pursuant to any such notice. The Trust acting through the Collateral Agent or
otherwise 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. If any notice of a proposed sale or other
disposition of Collateral shall
18
be required by law, such notice shall be deemed reasonable and proper if given
at least [10] days before such sale or other disposition. 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 Trust acting through the Collateral
Agent or otherwise 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 Trust
acting through the Collateral Agent or otherwise, 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
Trust and the Collateral Agent are each hereby irrevocably appointed the true
and lawful attorney of the Pledgor, in the name and stead of the Pledgor, 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 Trust
or the Collateral Agent may execute all such documents and instruments. This
power of attorney shall be deemed coupled with an interest, and the Pledgor
hereby ratifies and confirms all that its attorneys acting under such power, or
such attorneys' successors or agents, shall lawfully do by virtue of this
Collateral Agreement. If so requested by the Collateral Agent, by the Trustees
or by any purchaser of the Collateral or a portion thereof, the Pledgor shall
further ratify and confirm any such delivery or sale by executing and delivering
to the Collateral Agent, to the Trustees or to such purchaser or purchasers at
the expense of the Pledgor all proper deeds, bills of sale, instruments of
assignment, conveyance of transfer and releases as may be designated in any
such request.
(c) Application of Collateral and Proceeds. In the case of an
Event of Default, the Trust, directly
19
or through 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 Trust acting through the Collateral Agent or
otherwise 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 Marketable Securities 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 legal 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 without undue delay.
20
(d) If the Event of Default shall result from the Pledgor
becoming a debtor under the Bankruptcy Code or a debtor or insolvent under
bankruptcy or insolvency laws in effect in the British Virgin Islands as of the
date of any such Event of Default, and if the Collateral Agent shall fail
promptly to exercise the rights and remedies granted by this Section 8, the
Trust shall use its best efforts to obtain an opinion of a nationally recognized
United States law firm and a British Virgin Islands law firm, each reasonably
acceptable to the Collateral Agent, to the effect that as a result of the
Pledgor's being a debtor or similar status in such bankruptcy case, the
Collateral Agent will not be prohibited from exercising the rights and remedies
granted by this Section 8, and shall deliver such opinions to the Collateral
Agent within __ days after the occurrence of such an Event of Default. If the
Trust shall be unable to obtain such opinions, or the Collateral Agent shall
continue, after delivery of such opinions, to refuse to exercise the rights and
remedies granted by this Section 8, then the Trust may, to the extent its legal
counsel finds such course of action proper, well founded and advisable, commence
the appropriate action or proceeding seeking an order directing or authorizing
the Collateral Agent to exercise the rights and remedies granted by this
Section 8.
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 pro-
21
tection 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
reasonably 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.
(6) The Collateral Agent may perform any duties hereunder
either directly or by or through agents or attorneys, provided that the
Collateral Agent shall remain liable to fulfill all of such duties to
the same extent, and with the same protections, as if the Collateral
Agent was performing them itself. In furtherance thereof, any subsidiary
owned or controlled by the Collateral Agent, or its successors, as agent
for the Collateral Agent, may
22
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,
23
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 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 without undue delay.
(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.
24
(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 and the Trust 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 reasonably 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 executed, acknowledged and delivered by the Pledgor; provided that any
costs and expenses incurred by the Pledgor in doing so are reimbursed to the
Pledgor by such temporary or permanent successor Collateral Agent.
(h) Cost and Expenses. the Pledgor shall not be liable for any
costs or expenses arising under subclauses (c), (d), (e), (f) or (g) of this
Section 9.
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
25
or provisions of this Collateral Agreement shall not render any other provision
or provisions herein contained unenforceable or invalid.
(c) Amendments and Waivers. Any term, covenant, agreement or
condition of this Collateral Agreement may be amended or compliance therewith
may be waived (either generally or in a particular instance and either
retrospectively or prospectively) but only by a writing signed by the Collateral
Agent, the Pledgor and the Trust.
(d) Notices.
(1) Any notice provided for herein, unless otherwise
specified, shall be in writing (including transmittals by telex or
telecopier) and shall be given to a party at the address set forth
opposite such party's name on the signature pages hereto or at such
other address as may be designated by notice duly given in accordance
with this Section 10(d) to each other party hereto.
(2) Each such notice given pursuant to paragraph (1) shall
be effective (i) if sent by certified mail (return receipt requested),
72 hours after being deposited in the United States mail, postage
prepaid; (ii) if given by telex or telecopier, when such telex or
telecopied notice is transmitted, or (iii) if given by any other means,
when delivered at the address specified in this Section 10(d).
(e) Governing Law; Submission to Jurisdictions. This Collateral
Agreement shall be governed by and construed in accordance with the laws of the
State of New York, without giving effect to any principles of conflicts of laws;
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. Pledgor hereby submits to the non-exclusive jurisdiction of the
United States District Court for the Southern District of New York and any New
York state court sitting in New York City for the purposes of all legal
proceedings arising out of or relating to this Agreement or the transaction
26
contemplated hereby. Pledgor hereby irrevocably waives, to the fullest extent
permitted by applicable law, any objection that it may now or hereafter have to
laying of the venue of any such proceedings brought in such a court and any
claim that any such proceeding brought in such a court has been brought in an
inconvenient forum.
(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 in the Collateral shall terminate upon fulfillment of all of the
obligations of the Pledgor under the Purchase Agreement and the Collateral Agent
under this Agreement. The Pledgor shall have no further liability hereunder upon
such termination. Any Collateral remaining at the time of such termination
shall be fully released and discharged from the Lien hereof and delivered to the
Pledgor by the Collateral Agent, all at the expense of the Pledgor.
12. NO PERSONAL LIABILITY OF TRUSTEES.
By executing this Collateral Agreement none of the Trustees
assumes any personal liability hereunder.
27
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:
LUCKYGOLD 18A LIMITED
By_____________________________
Name:
Title:
Address for Notices:
[ ]
[ ]
[Telecopier: ]
Attention: General Counsel
COLLATERAL AGENT:
THE BANK OF NEW YORK,
as Collateral Agent
By_____________________________
Name:
Title:
Address for Notices:
The Bank of New York
000 Xxxxxxx Xxxxxx
Xxxxx 00 Xxxx
Xxx Xxxx, XX 00000
[Telecopier: ]
Attention:
THE TRUST:
PEAK TrENDS TRUST
-------------------------------
as Trustee
-------------------------------
as Trustee
-------------------------------
as Trustee
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
29
Exhibit A
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, Luckygold 18A Limited (the "Pledgor"), hereby
certifies, pursuant to Section 6(b) of the Collateral Agreement dated as of
[May] , 1998 among the Pledgor, The Bank of New York, as Collateral Agent, and
Peak TrENDS 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 on behalf of
the Trust 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 Trust 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 Substituted Collateral to the Trust, the
Trust 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
30
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 _______________.
-------------------------------
Name:
Title:
31
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, Luckygold 18A Limited (the "Pledgor"), hereby
certifies, pursuant to Section 6(c) of the Collateral Agreement, dated as of
[May] , 1998, among the Pledgor, The Bank of New York, as Collateral Agent and
Peak TrENDS 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 Trust 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 Additional Collateral to the Trust, the
Trust 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.
32
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 _______________________.
__________________________________
Name:
Title:
33
