COLLATERAL AGREEMENT Among THE PHOENIX COMPANIES, INC. As Pledgor, WACHOVIA BANK, NATIONAL ASSOCIATION, As Collateral Agent and WACHOVIA BANK, NATIONAL ASSOCIATION, As Purchase Contract Agent Dated as of
Exhibit 4.1
Among
THE PHOENIX COMPANIES, INC.
As Pledgor,
WACHOVIA BANK, NATIONAL ASSOCIATION,
As Collateral Agent
and
WACHOVIA BANK, NATIONAL ASSOCIATION,
As Purchase Contract Agent
Dated as of
, 2002
The following Table of Contents has been inserted for convenience of reference
only and does not constitute a part of the Collateral Agreement.
SECTION
1. |
THE SECURITY INTERESTS. |
3 | ||
2. |
DEFINITIONS. |
4 | ||
3. |
REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR. |
8 | ||
4. |
REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT. |
10 | ||
5. |
CERTAIN COVENANTS OF THE PLEDGOR. |
11 | ||
6. |
ADMINISTRATION OF THE COLLATERAL AND VALUATION OF THE SECURITIES. |
13 | ||
7. |
INCOME AND VOTING RIGHTS ON COLLATERAL. |
18 | ||
8. |
REMEDIES UPON EVENTS OF DEFAULT. |
19 | ||
9. |
THE COLLATERAL AGENT. |
22 | ||
10. |
AMENDMENT. |
25 | ||
11. |
MISCELLANEOUS. |
27 | ||
12. |
TERMINATION OF COLLATERAL AGREEMENT. |
28 |
Exhibit A—Certificate for Substituted Collateral
Exhibit B—Certificate for Additional Collateral
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THIS COLLATERAL AGREEMENT (the “Agreement”), dated as of
, 2002, among The Phoenix Companies, Inc., a corporation organized under the laws of the State of Delaware, (the “Pledgor”), Wachovia Bank, National
Association, as collateral agent (the “Collateral Agent”) hereunder for the benefit of Wachovia Bank, National Association, as purchase contract agent and as attorney-in fact of the Holders from time to time of the Purchase
Contracts under the Purchase Contract Agreement (in such capacity, together with its successors in such capacity, the “Purchase Contract Agent”) and the Purchase Contract Agent;
In order to secure the observance and performance of the covenants, agreements and obligations contained herein and in the Purchase Contract Agreement and the Purchase Contracts:
(a) Security Interests. The Pledgor hereby grants and
pledges unto the Collateral Agent, as agent of and for the benefit of the Purchase Contract Agent, as agent and attorney-in fact of the Holders from time to time of the Purchase Contracts, 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 (including, without limitation, any securities,
instruments or other property delivered, pledged or purchased pursuant to Section 6(b) or (c)); (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) (the
“Proceeds”); (iv) the Collateral Account, all securities and other financial assets (each as defined in Section 8-102 of the UCC) and other funds, property or assets from time to time held therein or credited thereto as
Collateral hereunder and all security entitlements in respect thereof; and (v) all powers and rights now owned or hereafter acquired under or with respect to the Pledged Items (such Pledged Items, additions, substitutions, income, Proceeds,
collections, powers and rights being herein collectively called the “Collateral”). The Collateral Agent shall have all of the rights, remedies
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and recourses with respect to the Collateral afforded a secured party by the UCC, 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. On the date hereof, the Pledgor shall deliver to the Collateral Agent in pledge hereunder Eligible Collateral consisting of shares of HRH
Common Stock (the “Firm Share Base Amount”), in the manner provided in Section 6(d).
(c) Option Closing Date. At the date of delivery of any Option Securities (as defined in the Underwriting Agreement), the Pledgor shall deliver to the Collateral Agent in pledge
hereunder Eligible Collateral consisting of a number of shares of HRH Common Stock equal to the number of Option Securities sold on such date (the “Additional Share Base Amount”), in the manner provided in Section 6(d).
The parties hereto expressly agree that all rights, assets and property (including, without limitation, cash) at
any time held or credited as Collateral hereunder shall be treated as financial assets (as defined in Section 8-102 of the UCC).
Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to them in the Purchase Contract Agreement. Capitalized terms used herein shall have the meanings as follows:
“Additional Share Base Amount” has the meaning specified in Section 1(c).
“Authorized Representative” of the Pledgor means any trustee, officer 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 DTC is closed.
“Cash Delivery
Obligations” means, at any time (A) if no Adjustment Event or Reorganization Event shall have occurred prior to such time, zero, and (B) from and after the occurrence of any Adjustment Event or Reorganization Event, (i) the Firm Share Base
Amount plus the Additional Share Base Amount (if any) multiplied by (ii) the Market Value of any Cash Equivalents received per share of HRH Common Stock in such Adjustment Event or Reorganization Event, divided successively by each number by
which the Settlement Ratio shall have been divided on or prior to the Adjustment Event or Reorganization Event pursuant to the adjustments provided for under Article 4 of the Purchase Contract Agreement; provided, however, that upon the
occurrence of a Merger Early Partial Settlement, then the Cash Delivery Obligations with respect to such Reorganization Event shall be zero.
“Cash Equivalents” means (i) United States dollars, (ii) securities issued or directly and fully guaranteed or insured by the United States government or any agency or instrumentality
thereof (provided that the full faith and credit of the United States is pledged in
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support thereof) having maturities of not more than six months from the date of acquisition, (iii) certificates of deposit with maturities of six months or less from the date of the acquisition,
bankers’ acceptances with maturities not exceeding six months and overnight bank deposits, in each case with any domestic commercial bank having capital and surplus in excess of $500 million and a Xxxxxxxx Bank Watch Rating of “B” or
better, (iv) repurchase obligations with a term of not more than seven days for underlying securities of the types described in clause (ii) above entered into with any financial institution meeting the qualifications specified in clause (iii) above,
(v) commercial paper having the highest rating obtainable from Xxxxx’x Investors Service, Inc. or Standard & Poor’s Ratings Group and in each case maturing within six months after the date of acquisition and (vi) money market funds at
least 95% of the assets of which constitute Cash Equivalents of the kinds described in clauses (i)-(v) of this definition.
“Collateral” has the meaning specified in Section 1(a).
“Collateral Account” has the meaning specified in Section 6(d).
“Collateral Agent” means the financial institution identified as such in the preliminary paragraph hereof, or any successor appointed in accordance with Section 9.
“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 HRH Common Stock, 100%; (ii)
any Exchange Property consisting of Reported Securities, 100%; (iii) any U.S. Government Securities or Cash Equivalents (other than cash) pledged in respect of Cash Delivery Obligations, 105%; (iv) any cash (in U.S. dollars) pledged in respect of
Cash Delivery Obligations, 100%; and (v) any other U.S. Government Securities or Cash Equivalents, 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 or Cash Equivalents
(other than U.S. Government Securities or Cash Equivalents pledged in respect of Cash Delivery Obligations) shall be 200%. The portion of any pledged U.S. Government Securities or Cash Equivalents that shall be deemed at any time to be in respect of
Cash Delivery Obligations shall be as provided in Section 6(e).
“Control” means
“control” as defined in Section 8-106 and Section 9-106 of the UCC.
“Delivery
Date” has the meaning specified in Section 8(a).
“Eligible Collateral”
means (i) HRH Common Stock, (ii) U.S. Government Securities, (iii) Cash Equivalents, and (iv) from and after any Reorganization Event, Reported Securities or any other Exchange Property, provided, in each case, that (A) the Pledgor has good
and marketable title thereto, free of all Liens (other than the Liens created by this Collateral Agreement) and Transfer Restrictions except as contemplated by Section 3(e) and (B) the Collateral Agent has a valid, first priority perfected security
interest therein and first lien thereon and Control with respect thereto, and provided further that to the extent the number of shares of HRH Common Stock or Exchange Property (other than Cash Equivalents) pledged hereunder
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exceeds at any time the Maximum Deliverable Number thereof, such excess shares shall not be Eligible Collateral.
“Event of Default” means the occurrence of: (i) an event described in Section 5.01 of the Purchase Contract Agreement, (ii) a Collateral
Event of Default or (iii) a failure by Pledgor to have caused the Collateral to meet the requirements described in Section 5(e).
“Firm Share Base Amount” has the meaning specified in Section 1(b).
“HRH Common Stock” means the Common Stock of Hilb, Xxxxx and Xxxxxxxx Company, no par value per share.
“Ineligible Collateral” means Collateral that does not constitute “Eligible Collateral.”
“Insufficiency Determination” has the meaning specified in Section 6(e).
“Investment Property” means “investment property” as defined in Section 9-102(a)(49) of the
UCC.
“Lien” means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.
“Location” means, with respect to any party, the place
such party is “located” within the meaning of Section 9-307 of the Uniform Commercial Code as in effect in each jurisdiction that may be deemed applicable to such party.
“Market Value” means, as of any date: (a) with respect to any HRH Common Stock (except as otherwise provided in Section 6(e)(2)), the
Closing Price of the HRH Common Stock on such date; (b) with respect to any U.S. Government Security, (x)(i) the average unit bid price for such security on the Trading Day prior to such date as published in the New York edition of The Wall Street
Journal or The New York Times or, if not so published, (ii) the lower bid price quoted (which quotation shall be evidenced in writing) on such date (or if such date is not a Trading Day, on the preceding Trading Day) by either of two nationally
recognized dealers making a market in such security that are members of the National Association of Securities Dealers, Inc. multiplied by (y) the number of such units comprised in the outstanding principal amount of such U.S. Government
Security; (c) with respect to any unit of Reported Securities, the Closing Price thereof on such date; provided that the “Market Value” of any Ineligible Collateral shall be zero; (d) with respect to any Exchange Property that is
not a Reported Security, the fair market value of such Exchange Property, as determined by a nationally recognized investment banking firm retained by the Pledgor for this purpose; and (e) with respect to any Cash Equivalent, the face value of such
instrument.
“Maximum Deliverable Number” means, on any date, with respect to the
HRH Common Stock, the product of the Firm Share Base Amount plus the Additional Share Base Amount (if any), divided successively by each number by which the Settlement Ratio shall have been divided on or prior to such date pursuant to the
adjustments provided for under Article 4 of the Purchase Contract Agreement. Following a Reorganization Event, the Maximum
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Deliverable Number of Exchange Property (other than Cash Equivalents) means, on any date, (i) the Firm Share Base Amount plus the Additional Share Base Amount (if any) multiplied by (ii)
the number or amount of Exchange Property (other than Cash Equivalents) received in the Reorganization Event for each share of HRH Common Stock, divided successively by each number by which the Settlement Ratio shall have been divided on or prior to
such date and after the date of such Reorganization Event pursuant to the adjustments provided for under Article 4 of the Purchase Contract Agreement. Following an Adjustment Event which results in the Exchange Property consisting of HRH Common
Stock and property other than Cash Equivalents, the Maximum Deliverable Number of Exchange Property (other than Cash Equivalents) means, on any date, the Maximum Deliverable Number of the Exchange Property consisting of HRH Common Stock, as
determined pursuant to the first sentence of this definition, plus the Maximum Deliverable Number of the other Exchange Property (other than Cash Equivalents), as determined pursuant to the second sentence of this definition.
“Other Liens” has the meaning specified in Section 4(e).
“Permitted Transfer Restrictions” has the meaning specified in Section 3(e).
“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 HRH Common Stock or, from and after a Reorganization Event, the Maximum Deliverable Number of Exchange Property (other than Cash Equivalents), on such
date plus (b) from and after an Adjustment Event or Reorganization 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, and any security entitlement in
respect thereof, whether Eligible Collateral or Ineligible Collateral.
“Prior
Collateral” has the meaning specified in Section 6(b)(1).
“Reported
Securities” means any securities received in an Adjustment Event or a Reorganization Event that (A) are (i) listed on a United States national securities exchange, (ii) reported on a United States national securities system subject to last
sale reporting, (iii) traded in the over-the-counter market and reported on the National Quotation Bureau or similar organization or (iv) for which bid and ask prices are available from at least three nationally recognized investment banking firms;
and (B) are either (x) perpetual equity securities or (y) non-perpetual equity or debt securities with a stated maturity after the Purchase Contract Settlement Date.
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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, 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 to the Holders of Purchase Contracts 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 (i) 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, (ii) any condition or
restriction imposed by DTC generally in respect of securities held by it and (iii) any condition or restriction imposed hereunder or under the Purchase Contract Agreement, shall not constitute a “Transfer Restriction.”
“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 Purchase Contract Settlement Date.
The Pledgor hereby represents and warrants to the Collateral Agent and the Purchase Contract Agent that:
(a) Corporate Existence and Power. The Pledgor is a corporation, duly incorporated, validly existing and in good standing under the laws of the state of Delaware, 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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by all necessary corporate action on the part of the Pledgor (no action by the shareholders of the Pledgor 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 Pledgor or of any material agreement, judgment, injunction, order, decree or other instrument binding upon the Pledgor.
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have Control, subject to no other Lien. None of the Collateral is
or shall be pledged by the Pledgor as collateral for any other purpose.
The Collateral Agent represents, warrants and agrees with to the Pledgor and the Purchase Contract Agent that:
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The Pledgor agrees that, so long as any of its obligations under the Purchase Contracts or the Purchase Contract Agreement remain
outstanding:
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election, U.S. Government Securities or Cash Equivalents having an aggregate
Market Value equal to at least 150% of such Maximum Deliverable Number of any such Exchange Property consisting of Reported Securities, plus (ii) U.S. Government Securities or Cash Equivalents (other than cash) having an aggregate Market Value equal
to at least 105% of the Cash Delivery Obligations, if any, or at Pledgor’s election, U.S. dollars in an amount equal to at least 100% of the Cash Delivery Obligations, in each case to be held as substitute or additional Collateral hereunder.
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cease to Control any of the Collateral consisting of Investment Property or subject any Collateral to any other Lien.
(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 in accordance with the provisions of sub-paragraphs (2)
and (3) below.
(2) If the Pledgor wishes to deposit Eligible Collateral
with the Collateral Agent in substitution for Prior Collateral, the Pledgor shall (i) give written notice to the Collateral Agent, at least one Business Day prior to the date of substitution, identifying the Prior Collateral to be released from the
Lien hereof, and (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. 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
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upon, such Eligible Collateral deposited with the Collateral Agent in substitution for Prior Collateral as to which, in the case of Eligible Collateral consisting of Investment Property, the
Collateral Agent will have Control.
(3) No such substitution shall be made
unless and until the Collateral Agent shall have (i) 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, which determination shall be made promptly, and (ii) confirmed receipt of the Eligible Collateral being substituted for the Prior Collateral.
Upon delivery of any
Pledged Item under this Collateral Agreement, the Collateral Agent shall examine such Pledged Item and any certificates delivered pursuant to
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Sections 6(b), 6(c), 6(d)(i) or otherwise pursuant to the terms hereof in connection therewith to determine that they comply as to form with the requirements for Eligible Collateral. The
Collateral Agent shall cause all Collateral held hereunder to be credited to a securities account (as defined in Section 8-502(a) of the UCC) established in the name of the Collateral Agent at the offices of Wachovia Bank, National Association as
securities intermediary (the “Collateral Account”). At any time following the delivery of Collateral, the Collateral Agent may cause all Collateral in the form of certificates indorsed in blank (i) to be re-registered on the books
of the applicable transfer agent in 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 or release of such Collateral as provided herein or (ii) to
be deposited with DTC and thereafter hold such securities in a securities account of the Collateral Agent. The Pledgor hereby designates the Collateral Agent as the person in whose name any Collateral consisting of uncertificated securities held
through the Federal Reserve System shall be recorded.
(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, but no later than the next succeeding Business Day, notify the Pledgor of such determination and of the amount of the insufficiency.
(2) If, by 4:00 p.m., New York City time on the Business Day following the day on which telephonic
notice shall have been given pursuant to the preceding paragraph (e)(1), the Pledgor shall have failed to deliver, in the manner set forth in paragraphs (c) and (d) of this Section 6, sufficient additional Eligible Collateral so that, after giving
effect to such delivery (and taking into account that HRH 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 or Cash Equivalents 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 or Cash Equivalents (other than
that pledged in respect of Cash Delivery Obligations) as may be required to be sold in order to generate proceeds sufficient to purchase HRH Common Stock and/or, after a Reorganization Event, Reported Securities, as described in the following clause
(ii); and
(ii) commence purchases, in the manner described in paragraph
(3) below, of HRH Common Stock and/or, after a Reorganization
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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 the Collateral Agent shall have determined that a Collateral Event of Default shall have occurred and be continuing. All securities purchased pursuant to the preceding clause (ii) shall be held as, and constitute,
Collateral hereunder. The Collateral Agent shall determine the Market Value and the Pledge Value of the Collateral after each purchase of HRH 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 HRH Common Stock or Reported Securities shall be the most recent sales price as reported in the
composite transactions for the principal securities exchange on which the HRH 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.
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 and Cash Equivalents pledged at such time (not including any U.S. Government Securities and Cash Equivalents 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 HRH Common Stock (or, from and after any Reorganization Event, Reported Securities) equal to (x) the Maximum Deliverable Number thereof
minus (y) the number thereof pledged as Collateral hereunder at such time; (C) from and after any Adjustment Event or Reorganization Event, failure of the U.S. Government Securities and Cash Equivalents (other than cash) 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 or, in the case of cash pledged in respect of Cash Delivery Obligations, failure of such cash to be at least equal to
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; (D) from and after any Reorganization Event, failure of the U.S. Government Securities and Cash Equivalents pledged in respect of Exchange Property not consisting of Reported
Securities, U.S. Government Securities or Cash Equivalents, to have an aggregate Market Value at least equal to 105% of the Maximum Deliverable Number of the Exchange Property multiplied by the percentage of the Exchange Property that does
not consist of Reported Securities, U.S. Government Securities or Cash Equivalents or (E) failure at any time of the security interests granted hereunder to constitute valid and perfected security interests in all of the Collateral, subject to no
prior or equal Lien, and, with respect to any Collateral consisting of securities or security entitlements, as to which the Collateral has Control, or in each case, assertion of such by the Pledgor in writing. For purposes of this Agreement, the
portion
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of any pledged U.S. Government Securities and Cash Equivalents 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 and Cash Equivalents pledged at such time). To the extent that any pledged U.S. Government Securities and Cash Equivalents
have a Market Value exceeding 105%, the U.S. Government Securities shall be applied to satisfy the 105% requirement in the first instance.
(3) Collateral sold and HRH 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 such price or prices are hereby acknowledged and agreed by Pledgor to be reasonable and 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, including, without limitation, Rule
144 under the Securities Act, if applicable.
(ii) On an Early Settlement Date with respect to a Merger Early Full Settlement, unless a Merger Early Full Settlement has occurred
or the Pledgor shall have otherwise effected the deliveries required pursuant to Section 4.05 of the Purchase Contract Agreement, the Collateral Agent shall deliver out of the Collateral to the Purchase Contract Agent, for pro rata distribution to
the Holders of Purchase Contracts, the amount of cash required to be delivered pursuant to Section 4.05 of the Purchase Contract Agreement.
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In either case, upon any such delivery, the Purchase Contract Agent shall hold
such Exchange Property absolutely and free from any claim or right whatsoever (including, without limitation, any claim or right of Pledgor).
(a) Unless an Event of Default or failure by the Pledgor to meet any of Pledgor’s obligations under Section 5(b), (c) or (d) 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 or result in an Insufficiency Determination. 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), (c) or (d) 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 that are received by the Pledgor shall be received in trust for the benefit of the Purchase Contract Agent, as attorney-in-fact for the Holders of the Purchase Contracts, shall be segregated from other funds
of the Pledgor and shall forthwith be paid over to the Collateral Agent. Any such payments so retained by, or paid over to, the Collateral Agent shall be held by the Collateral Agent as Collateral hereunder. If any such Event of Default or failure
is no longer continuing, then the Collateral Agent shall remit any such payments that are so retained by, or paid to it, on the first Business Day after the Collateral Agent shall have received notice from the Purchase Contract Agent that such Event
of Default or failure is no longer continuing, unless the payment thereof to the Pledgor would reduce the aggregate Pledge Value of the Collateral below the Pledge Value Requirement.
(b) Unless an Event of Default has occurred and is continuing, (i) the Pledgor shall have the right, from time to time, to vote and
to give all approvals, consents, ratifications and waivers with respect to the Collateral (including all shares of HRH Common Stock), and the Collateral Agent shall promptly deliver to the Pledgor such proxies, powers of attorney, consents,
ratifications and waivers in respect of any of the Collateral that is registered in the name of the Collateral Agent or its nominee and shall further deliver such documents and instruments as shall be specified in a written request by the Pledgor
and (ii) the Pledgor shall have the right to direct the Collateral Agent as to whether to tender any Collateral in any tender offer or exchange offer related to such Collateral; provided that the Collateral Agent shall maintain a perfected
security interest in the proceeds of any such tender or exchange offer and, with respect to any such proceeds consisting of investment property, as to which the Collateral Agent shall have Control.
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 as requested by the Collateral Agent, to vote and to give all approvals, 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.
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(a) If any Event of Default shall have occurred and be continuing, the Collateral Agent
may exercise on behalf of the Purchase Contract Agent, as agent of and attorney-in-fact for the Holders of the Purchase Contracts, 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 HRH Common Stock or Reported Securities (but not,
in either case, in excess of the number of shares thereof deliverable under the Purchase Contracts at such time) to the Purchase Contract Agent, for pro rata distribution to the Holders of the Purchase Contracts, on the Acceleration Date of the
Purchase Contracts (the “Delivery Date”), whereupon the Holders of the Purchase Contracts shall hold such HRH 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 Contracts, under the Purchase Contract Agreement and under this Collateral 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 Contracts, under the Purchase Contract Agreement and under this Collateral
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, at the request of the Collateral Agent, 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
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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 hereunder and sell the Collateral, or any portion thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
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(1) |
first, to the payment to the Purchase Contract Agent for pro rata distribution to the Holders of Purchase Contracts of an amount equal to: (A) the aggregate
Market Value of a number of shares of HRH Common Stock equal to (1) the number of shares of HRH Common Stock required to be delivered under the Purchase Contracts on the Delivery Date minus (2) the number of shares of HRH Common Stock
delivered by the Collateral Agent to the Purchase Contract Agent on the Delivery Date as described above; or (B) from and after an Adjustment Event or Reorganization Event, the sum of (1) the Cash Delivery Obligations on the Delivery Date
plus (2) the aggregate Market Value on the Delivery Date of a number of Reported Securities (and, if applicable, shares of HRH Common Stock or other Exchange Property) equal to (x) the number thereof required to be delivered on the Delivery
Date under the Purchase Contracts minus (y) the number thereof delivered by the Collateral Agent to the Purchase Contract Agent on the Delivery Date as described above; |
(2) |
second, to the payment to the Purchase Contract Agent for pro rata distribution to the Holders of Purchase Contracts of an amount equal to the aggregate amount
of (A) all accrued and unpaid Contract Adjustment Payments and (B) any Contract Adjustment Payments payable pursuant to Section 4.05(f) or 5.02(b) of the Purchase Contract Agreement; |
(3) |
third, to the payment to the Collateral Agent of the expenses of such sale or other realization, including reasonable compensation to the Collateral Agent and
its agents and counsel, and all expenses, liabilities and advances incurred or made by the Collateral Agent in connection therewith, including brokerage fees in connection with the sale by the Collateral Agent of any Pledged Item;
|
(4) |
fourth, to the payment to the Purchase Contract Agent of any expenses incurred in connection with the Event of Default and such sale or other realization,
including reasonable compensation to the Collateral Agent and its agents and counsel, and all expenses, liabilities and advances incurred or made by the Collateral Agent in connection therewith, and |
(5) |
finally, if all of the obligations of the Pledgor hereunder and under the outstanding Purchase Contracts, the Purchase Contract Agreement and this Collateral
Agreement, including, without limitation, the obligation with respect to the fees, costs and expenses of the Collateral Agent and the Purchase Contract Agent, have been fully discharged or sufficient funds have been set aside by the Collateral
|
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Agent at the request of the Pledgor for the discharge thereof, any remaining proceeds shall be released to the Pledgor. |
The Collateral Agent accepts its duties
and responsibilities hereunder as agent for the Purchase Contract Agent, as attorney-in-fact for the Holders of the Purchase Contracts, on and subject to the following terms and conditions:
(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 Purchase Contract Agent.
(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) The Collateral Agent shall not be liable for any claims, losses, liabilities, damages or expenses (including attorneys’ fees and expenses) due to forces beyond the reasonable control of the Collateral
Agent, including without limitation strikes, work stoppages, acts of war or terrorism, insurrection, revolution, nuclear or natural catastrophes or acts of God, and interruptions, loss or malfunctions of utilities, communications or computer
(software and hardware) services; provided that this provision shall not protect the Collateral Agent against any liability to which it would otherwise be subject by reason of its willful misfeasance, bad faith or gross negligence in
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the performance of its duties or by reason of its reckless disregard of its obligations and duties hereunder.
(5) 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.
(6) 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.
(7) 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 willful misconduct or gross 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.
(8) 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.
(9) 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.
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liabilities which it may reasonably expect to incur and liabilities which it may reasonably expect to incur in compliance with such request or direction.
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 Contract Agreement, the Purchase Contracts or the Lien on the Collateral purported to be created hereby.
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Purchase Contract Agent 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.
(1) evidence the succession of another Person to the Pledgor and the assumption by any such successor of the covenants of the
Pledgor;
(2) evidence and provide for the acceptance of appointment
hereunder by a successor Collateral Agent or Purchase Contract Agent;
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(3) add to the covenants of the Pledgor
for the benefit of the Holders, or surrender any right or power herein conferred upon the Pledgor, provided such covenants or such surrender do not adversely affect the validity, perfection or priority of the Pledge created hereunder; or
(4) cure any ambiguity (or formal defect), correct or supplement any
provisions herein which may be inconsistent with any other such provisions herein, or make any other provisions with respect to such matters or questions arising under this Agreement, provided such action shall not adversely affect the
interests of the Holders in any material respect.
(1) change the amount or type of Collateral required to be pledged to secure the Pledgor’s performance under the Purchase Contracts (except as set forth in Article 4 of the
Purchase Contract Agreement), unless such change is not adverse to the Holders, impair the right of the Holder of any Purchase Contract to receive distributions of the underlying Collateral or otherwise adversely affect the Holder’s rights in
or to such Collateral; or
(2) otherwise effect any action that would
require the consent of the Holder of each Outstanding Purchase Contract affected thereby pursuant to the Purchase Contract Agreement if such action were effected by a modification or amendment of the provisions of the Purchase Contract Agreement; or
(3) reduce the percentage of Purchase Contracts the consent of whose
Holders is required for the modification or amendment of the provisions of this Agreement;
It shall not be
necessary for any Act of Holders under this Section to approve the particular form of any proposed amendment, but it shall be sufficient if such Act shall approve the substance thereof.
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form a part of this Agreement for all purposes; and every Holder of Purchase Contracts theretofore or thereafter authenticated, executed on behalf of the Holders and delivered under the Purchase
Contract Agreement shall be bound thereby.
(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).
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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 all Outstanding Purchase Contracts, and under the Purchase Contract Agreement and this Collateral Agreement and the Pledgor shall have no further liability or obligation 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, accompanied by such documents of termination and release as
Pledgor may reasonably request, all at the expense of the Pledgor.
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PLEDGOR: THE PHOENIX COMPANIES, INC. | ||
By: |
| |
Name: | ||
Title: | ||
Address for Notices: |
COPY TO Debevoise & Xxxxxxxx 000 Xxxxx Xxx. Xxx Xxxx, Xxx Xxxx 00000 Fax. No. (000) 000-0000 Attention: Xxxx X. Xxxxx |
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THE PURCHASE CONTRACT AGENT, as attorney-in-fact for the holders from time to time of the Purchase Contracts: | ||
By: |
| |
Name: | ||
Title: |
Address for Notices: Wachovia Bank, National Association Corporate Trust Dept. 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxx, XX 00000 Fax: (000) 000-0000 with a copy to: Xxxxxxx Xxxxx LLP Two Xxxxxxx
Xxxx Xxxxxx, XX 00000 Fax: (000) 000-0000 Attention: Xxxxx X. Xxxxxxx |
THE COLLATERAL AGENT, as
Collateral Agent | ||
By: |
| |
Name: | ||
Title: |
Address for Notices: Wachovia Bank, National Association Corporate Trust Dept. 000 Xxxxxxxx Xxxxxx, 00xx Xxxxx Xxxxxx, XX 00000 Fax: (000) 000-0000 with a copy to: Xxxxxxx Xxxxx LLP Two Xxxxxxx
Xxxx Xxxxxx, XX 00000 Fax: (000) 000-0000 Attention: Xxxxx X. Xxxxxxx |
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Exhibit A
to
Collateral Agreement
The Phoenix Companies, Inc. (the
“Pledgor”), hereby certifies, pursuant to Section 6(b) of the Collateral Agreement dated as of
, 2002 among the Pledgor, , as Collateral Agent, and
, as Purchase Contract Agent and attorney-in-fact for the holders of Purchase Contracts (the “Collateral Agreement”; terms defined in the Collateral Agreement
being used herein as defined therein), that:
1. The Pledgor is delivering
the following items of Eligible Collateral 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 Purchase Contract Agent that:
(a) Consents
to Transfer. No Transfer Restrictions (except for, with respect to any Substituted Collateral consisting of HRH Common Stock, Permitted 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.
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(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). Upon delivery of the Collateral to the Collateral
Agent, the Collateral Agent will have obtained a valid, first priority perfected security interest in, and a first lien upon, such Substituted Collateral subject to no other Lien, as to which the Collateral Agent shall have Control over all
applicable Investment Property. 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 Purchase Contract Agent as fully and to the same extent as if this Certificate had been specifically addressed to the Purchase Contract Agent.
THE PHOENIX COMPANIES, INC. |
|
Name: |
Title: |
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Exhibit B
to
Collateral Agreement
The Phoenix Companies, Inc. (the “Pledgor”), hereby certifies, pursuant to Section 6(c) of the Collateral Agreement dated as of
, 2002 among the Pledgor, , as
Collateral Agent, and , as Purchase Contract Agent and attorney-in-fact for the holders of Purchase Contracts (the “Collateral Agreement”; terms defined in the
Collateral Agreement being used herein as defined therein), that:
1. The
Pledgor is delivering the following items of Eligible Collateral 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 (except
for, with respect to any Substituted Collateral consisting of HRH Common Stock, Permitted 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). Upon delivery of the Collateral to the Collateral Agent, the Collateral Agent will have obtained a valid, first
priority perfected security interest in, and a first lien upon, such additional Collateral subject to no other Lien, as to which the Collateral Agent shall have Control over all applicable investment Property. 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 Purchase Contract Agent as fully and to the same extent as if this Certificate had been specifically addressed to the Purchase Contract Agent.
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THE PHOENIX COMPANIES, INC. |
|
Name: |
Title: |
34