Exhibit (K)(4)
[FORM OF COLLATERAL AGREEMENT]
COLLATERAL AGREEMENT
Among
[METROMEDIA COMPANY]
[XXXXXXX X. XXXXXXXX]
[XXXXXX XXXXXXXXX]
As Pledgor,
THE BANK OF NEW YORK, As Collateral Agent
and
DECS TRUST VI
Dated as of
November [ ], 1999
The following Table of Contents has been inserted for
convenience of reference only and does not constitute a part of the Collateral
Agreement.
TABLE OF CONTENTS
SECTION
1. The Security Interests..................................................................................1
2. Definitions.............................................................................................2
3. Representations and Warranties of the Pledgor...........................................................5
4. Representations and Warranties of the Collateral Agent..................................................6
5. Certain Covenants of the Pledgor........................................................................7
6. Administration of the Collateral and Valuation of the Securities........................................9
7. Income and Voting Rights on Collateral.................................................................13
8. Remedies upon Events of Default........................................................................14
9. The Collateral Agent...................................................................................16
10. Miscellaneous..........................................................................................19
11. Termination of Collateral Agreement....................................................................20
12. No Personal Liability of Trustees......................................................................20
Exhibit A - Certificate for Substituted Collateral
Exhibit B - Certificate for Additional Government Securities
Exhibit C - Certificate for Additional Collateral
Exhibit D - Certificate of Spouse
COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT (the "AGREEMENT"), dated as of
November [ ] 1999, among [Metromedia, a general partnership organized under
the law of the State of Delaware] [Xxxxxxx X. Xxxxxxxx] [Xxxxxx Xxxxxxxxx]
(the "PLEDGOR"), The Bank of New York, a New York banking corporation, as
collateral agent (the "COLLATERAL AGENT") hereunder for the benefit of DECS
Trust VI, a statutory business trust organized under the Business Trust Act
of the State of Delaware (such trust and the trustees thereof acting in their
capacity as such being referred to herein as the "TRUST" or "PURCHASER"), and
the Trust;
W I T N E S S E T H:
WHEREAS, pursuant to the Forward Purchase Agreement (the
"PURCHASE AGREEMENT"), dated as of November [ ], 1999, between Pledgor and
Purchaser, the Pledgor has agreed to sell and Purchaser has agreed to purchase
Class A Common Stock, $.01 par value, of Metromedia Fiber Network, Inc., a
Delaware corporation (the "COMPANY"), subject to the terms and conditions of
the Purchase Agreement; and
NOW, THEREFORE, to secure the performance by the Pledgor of
its obligations under the Purchase Agreement and to secure the observance and
performance of the covenants and agreements contained herein and in the Purchase
Agreement, the parties hereto agree as follows:
1. THE SECURITY INTERESTS.
In order to secure the observance and performance of the
covenants and agreements contained herein and in the Purchase Agreement:
(a) SECURITY INTERESTS. The Pledgor hereby grants, sells,
conveys, assigns, transfers and pledges unto the Collateral Agent, as agent of
and for the benefit of the Trust, a security interest in and to, and a lien upon
and right of set-off against, all of Pledgor's right, title and interest in and
to (i) the Pledged Items described in paragraphs (b) and (d); (ii) all additions
to and substitutions for such Pledged Items; (iii) (subject to the remittance of
certain payments upon satisfaction of the conditions specified in Section 7(a)
hereof) all income, proceeds and collections received or to be received, or
derived or to be derived, now or any time hereafter from or in connection with
the Pledged Items (whether such proceeds arise before or after the commencement
of any proceeding under any applicable bankruptcy, insolvency or other similar
law, by or against the Pledgor with respect to the Pledgor); and (iv) all powers
and rights now owned or hereafter acquired under or with respect to the Pledged
Items (such Pledged Items, additions, substitutions, income, proceeds,
collections, powers and rights being herein collectively called the
"COLLATERAL"). The Collateral Agent shall have all of the rights, remedies and
recourses with respect to the Collateral afforded a secured party by the New
York Uniform
Commercial Code, in addition to, and not in limitation of, the other rights,
remedies and recourses afforded to the Collateral Agent by this Agreement.
(b) FIRM PAYMENT DATE. At the Firm Payment Date, the Pledgor
shall deliver to the Collateral Agent in pledge hereunder one or more
certificates in registered form representing in the aggregate [ ] shares of
Common Stock, indorsed in blank or in the name of the Collateral Agent for the
benefit of the Trust (together with any other documents necessary to permit the
Collateral Agent to effect the re-registration of such Common Stock without
further action by the Pledgor) or, if such Common Stock is not issuable in
certificated form but is held in book entry form by The Depository Trust
Company, the Pledgor shall transfer such number of shares of Common Stock to an
account of the Collateral Agent or to an account (other than an account of the
Pledgor) designated by the Collateral Agent with The Depository Trust Company.
(c) OPTION CLOSING DATE. Effective upon and subject to the
receipt by the Pledgor of the Additional Purchase Price, at the Option Closing
Date, the Pledgor shall deliver to the Collateral Agent in pledge hereunder one
or more certificates in registered form representing in the aggregate a number
of shares of Common Stock equal to the Additional Share Base Amount, indorsed in
blank or in the name of the Collateral Agent for the benefit of the Trust
(together with all signature guarantees and any other documents necessary to
permit the Collateral Agent to effect the re-registration of such Common Stock
without further action by the Pledgor) or, if such Common Stock is not issuable
in certificated form but is held in book entry form by The Depository Trust
Company, the Pledgor shall transfer such number of shares of Common Stock to an
account of the Collateral Agent or to an account (other than an account of the
Pledgor) designated by the Collateral Agent with The Depository Trust Company.
(d) EXTENSION OF EXCHANGE DATE. Prior to, or simultaneously
with Pledgor's election to extend the Exchange Date pursuant to Section 1.3(f)
of the Purchase Agreement, the Pledgor shall deliver to the Collateral Agent in
pledge hereunder Additional Government Securities meeting the requirements of
Section 1.3(f) of the Purchase Agreement.
[(e) REREGISTRATION. Immediately following the Firm Payment
Date and any Option Closing Date, the Collateral Agent shall cause all
certificates for Common Stock delivered pursuant to Section 1(b) or 1(c) above
to be re-registered on the books of the transfer agent for the Common Stock into
the name of the Collateral Agent or its nominee, and shall thereafter maintain
them in such form until the termination of this Agreement; PROVIDED, HOWEVER,
that at any time following the Firm Payment Date, the Collateral Agent may cause
any such certificates for the Common Stock to be deposited with The Depository
Trust Company and thereafter hold such certificates in book entry form in an
account (other than an account of the Pledgor) designated by the Collateral
Agent.]
2. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall
have the meanings ascribed to them in the Purchase Agreement. Capitalized terms
used herein shall have the meanings as follows:
"ADDITIONAL GOVERNMENT SECURITIES" means collateral that must
be pledged to the Collateral Agent in connection with a Seller's election to
extend the Exchange Date, consisting of direct obligations of the United States
of America or other Cash Equivalents (as defined below) which through the
scheduled payment of principal and interest in accordance with their terms will
provide, not later than one Business Day before the extended Exchange Date,
money in an amount not less than the Extension Amount.
"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 the New York Stock
Exchange, Inc. is closed.
"CASH DELIVERY OBLIGATIONS" means, at any time (A) if no
Adjustment Event shall have occurred prior to such time, zero, and (B) from and
after any Adjustment Event, the product of: (i) the Firm Share Base Amount plus
the Additional Share Base Amount (if any) and (ii) the Transaction Value of any
property other than Reported Securities received by the Pledgor in such
Adjustment Event, multiplied successively by each number by which the Exchange
Rate shall have been multiplied on or prior to the Adjustment Event pursuant to
the adjustments provided for under Section 6.1 of the Purchase Agreement.
"CASH EQUIVALENTS" means (i) United States dollars, (ii)
securities issued or directly and fully guaranteed or insured by (a) the United
States government or any agency or instrumentality thereof (provided that the
full faith and credit of the United States is pledged in 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 AGENT" means the financial institution identified
as such in the preliminary paragraph hereof, or any successor appointed in
accordance with Section 9.
"COLLATERAL AGREEMENT" means this Collateral Agreement and any
exhibits hereto.
"COLLATERAL EVENT OF DEFAULT" has the meaning specified in
Section 6(e).
"COLLATERAL REQUIREMENT" means, as of any date and with
respect to: (i) any Common Stock, 100%; (ii) any Reported Securities, 100%;
(iii) any U.S. Government Securities or Cash Equivalents pledged in respect of
Cash Delivery Obligations, 105%; and (iv) 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 (i) Additional Government Securities and (ii) 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).
"COMMON STOCK" means either Class A or Class B common stock of
Metromedia Fiber Network, Inc., either of which may be pledged as collateral
under this Collateral Agreement.
"DELIVERY DATE" has the meaning specified in Section 8(a).
"ELIGIBLE COLLATERAL" means (i) Common Stock, (ii) U.S.
Government Securities, (iii) Cash Equivalents, (iv) from and after Pledgor's
election to extend the Exchange Date pursuant to Section 1.3(f) of the Purchase
Agreement, Additional Government Securities, and (v) from and after any
Adjustment Event, Reported Securities, 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 and (B)
the Collateral Agent has a valid, first priority perfected security interest
therein and first lien thereon, and provided further that to the extent the
number of shares of Common Stock or Reported Securities pledged hereunder
exceeds at any time the Maximum Deliverable Number thereof, such excess shares
shall not be Eligible Collateral.
"EVENT OF DEFAULT" means the occurrence of: (i) an event
described in clause (a) or (b) of Article VII of the Purchase Agreement, (ii) a
Collateral Event of Default, (iii) a failure by Pledgor to have caused the
Collateral to meet the requirements described in Section 5(d), (iv) if an
Adjustment Event shall have occurred prior to the Exchange Date, failure by
Pledgor to cause to be delivered to Purchaser on the Exchange Date the
consideration then required to be delivered pursuant to Section 6.2 of the
Purchase Agreement or (v) if Pledgor shall have exercised its Cash Delivery
Option, a failure by the Pledgor to deliver cash on the Exchange Date in the
amount required under Section 1.3(d) of the Purchase Agreement.
"INELIGIBLE COLLATERAL" means Collateral that does not
constitute "Eligible Collateral".
"INSUFFICIENCY DETERMINATION" has the meaning specified in
Section 6(e).
"LIEN" means any lien, mortgage, security interest, pledge,
charge or encumbrance of any kind.
"MARKET VALUE" means, as of any date: (a) with respect to any
Common Stock (except as otherwise provided in Section 6(e)(2)), the Closing
Price of the Class A 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 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 Date, on
the preceding Trading Date) by either of two nationally recognized dealers
making a market in such security which are members of the National
Association of Securities Dealers, Inc. and (y) the number of such units
comprised in the outstanding principal amount of such U.S. Government
Security; and (c) with respect to any unit of Reported Securities, the
Closing Price thereof on such date; provided that the "Market Value" of any
Ineligible Collateral shall be zero; and (d) with respect to any Cash
Equivalent, the face value of such instrument.
"MAXIMUM DELIVERABLE NUMBER" means, on any date, with respect
to the Common Stock, the product of the Firm Share Base Amount plus the
Additional Share Base Amount (if any), multiplied successively by each number by
which the Exchange Rate shall have been multiplied on or prior to such date
pursuant to the adjustments provided for under Section 6.1 of the Purchase
Agreement. The Maximum Deliverable Number of Reported Securities means, on any
date, the product of (i) the Firm Share Base Amount plus the Additional Share
Base Amount (if any) and (ii) the number of Reported Securities received by the
Pledgor in the Adjustment Event for each share of Common Stock, multiplied
successively by each number by which the Exchange Rate shall have been
multiplied on or prior to such date and after the date of such Adjustment Event
pursuant to the adjustments provided for under Article VI of the Purchase
Agreement.
"PERSON" means an individual, a corporation, a partnership, an
association, a limited liability company, a trust or any other entity or
organization, including a government or political subdivision or an agency or
instrumentality thereof.
"PLEDGE VALUE" means, as of any date and with respect to any
particular type of Collateral, an amount equal to the aggregate Market Value of
such Collateral divided by the Collateral Requirement for such Collateral.
"PLEDGE VALUE REQUIREMENT" means, as of any date, (a) the
aggregate Market Value on such date of the Maximum Deliverable Number of shares
of Common Stock or, from and after an Adjustment Event, Reported Securities, on
such date plus (b) from and after an Adjustment Event, the Cash Delivery
Obligations plus (c) from and after the Pledgor's extension of the Exchange Date
pursuant to Section 1.3(f) of the Purchase Agreement, the Additional Government
Securities.
"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
knowledge of and familiarity with the particular subject.
"TRANSFER RESTRICTION" means, with respect to any item of
Collateral, any condition to or restriction on the ability of the holder thereof
to sell, assign or otherwise transfer such item of Collateral or to enforce the
provisions thereof or of any document related thereto whether set forth in such
item of Collateral itself or in any document related thereto, including, without
limitation, (i) any requirement that any sale, assignment or other transfer or
enforcement of such item of Collateral be consented to or approved by any
Person, including, without limitation, the issuer thereof or any other obligor
thereon, (ii) any limitations on the type or status, financial or otherwise, of
any purchaser, pledgee, assignee or transferee of such item of Collateral, (iii)
any requirement of the delivery of any certificate, consent, agreement, opinion
of counsel, notice or any other document of any Person to the issuer of, any
other obligor on or any registrar or transfer agent for, such item of
Collateral, prior to the sale, pledge, assignment or other transfer or
enforcement of such item of Collateral and (iv) any registration or
qualification requirement for such item of Collateral pursuant to any federal or
state securities law; provided that the required delivery of any assignment from
the seller, pledgor, assignor or transferor of such item of Collateral, together
with any evidence of the corporate or other authority of such Person, shall not
constitute a "Transfer Restriction."
"TRUSTEE" or "TRUSTEES" means any trustee or trustees of the
Trust identified on the signature pages hereto, or any successor as such trustee
or trustees.
"UCC" means the Uniform Commercial Code as in effect in the
State of New York.
"U.S. GOVERNMENT SECURITIES" means direct obligations of the
United States of America that mature on a date that is one year or less from the
date such obligations are pledged hereunder, but in any event prior to the
Exchange Date.
3. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR.
The Pledgor hereby represents and warrants to the Collateral
Agent and the Trust that:
(a) POWER. The Pledgor has full power and authority
to execute and
deliver this Collateral Agreement and to perform and observe the
provisions hereof;
(b) NON-CONTRAVENTION. The execution, delivery and
performance by the Pledgor of this Collateral Agreement do not and will
not violate, contravene or constitute a default under any provision of
applicable law or regulation or of any material agreement, judgment,
injunction, order, decree or other instrument binding upon the Pledgor.
The Pledgor is not in default under any agreement by which the
Collateral may be bound and no litigation, arbitration or
administrative proceedings are current or pending, which default,
litigation, arbitration or administrative proceedings are material to
the Collateral in the context of this Collateral Agreement.
(c) BINDING EFFECT. This Collateral Agreement
constitutes a valid and binding agreement of the Pledgor enforceable
against the Pledgor in accordance with its terms.
(d) SOLVENCY. The Pledgor is presently solvent and
able to pay, and paying its debts as they become due, and anticipates
that it will continue to be able to pay its debts as they become due
for the foreseeable future.
(e) NO TRANSFER RESTRICTIONS. Except for any legend
with respect to restrictions pursuant to applicable federal and state
securities laws on transfer of the Common Stock pledged by the Pledgor
hereunder which appears on the certificates representing such Common
Stock (and which (i) will not be applicable to the delivery of any
such Common Stock to the Trust pursuant to the Purchase Agreement
and this Agreement or to the delivery of any such Common Stock by
the Trust to the holders of DECS pursuant to the DECS and (ii) will
be removed at the request of the Collateral Agent to the transfer
agent for the Common Stock prior to any such delivery to the holders
of DECS) and except for a Notice of Conversion which is executed in
black and delivered to the Collateral Agent on the date hereof, no
Transfer Restrictions exist with respect to or otherwise apply to
the assignment of, or transfer by the Pledgor of possession of, any
items of Collateral to the Collateral Agent hereunder, or the
subsequent sale or transfer of such items of Collateral by the
Collateral Agent pursuant to the terms hereof.
(f) TITLE TO COLLATERAL; PERFECTED SECURITY INTEREST.
The Pledgor has good and marketable title to the Pledged Items, free of
all Liens (other than the Lien created by this Collateral Agreement)
and Transfer Restrictions (except for any legend as provided in Section
3(e) hereof and except for a Notice of Conversion which is executed
in black and delivered to the Collateral Agent on the date hereof).
Upon delivery of the Pledged Items described in paragraph (b) and
(d) of Section 1 to the Collateral Agent hereunder, the Collateral
Agent will obtain a valid, first priority perfected security
interest in, and a first lien upon, such Pledged Items subject to no
other Lien. None of the Collateral is or shall be pledged by the
Pledgor as collateral for any other purpose.
(g) OWNERSHIP OF PLEDGOR. Xxxx X. Xxxxx and Xxxxxx
Xxxxxxxxx or the related permissible Class B holders own 100% general
partnership interests in the Pledgor and the Pledgor has no other
equity interests outstanding.
4. REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the Pledgor
and the Trust that:
(a) CORPORATE EXISTENCE AND POWER. The Collateral
Agent is a banking corporation, duly incorporated, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation, and has all corporate powers and all material
governmental licenses, authorizations, consents and approvals required
to enter into, and perform its obligations under, this Collateral
Agreement.
(b) AUTHORIZATION AND NON-CONTRAVENTION. The
execution, delivery and performance by the Collateral Agent of this
Collateral Agreement have been duly authorized by all necessary
corporate action on the part of the Collateral Agent (no action by the
shareholders of the Collateral Agent being required) and do not and
will not violate, contravene or constitute a default under any
provision of applicable law or regulation or of the charter or by-laws
of the Collateral Agent or of any material agreement, judgment,
injunction, order, decree or other instrument binding upon the
Collateral Agent.
(c) BINDING EFFECT. This Collateral Agreement
constitutes a valid and binding agreement of the Collateral Agent
enforceable against the Collateral Agent in accordance with its terms.
5. CERTAIN COVENANTS OF THE PLEDGOR.
The Pledgor agrees that, so long as any of its obligations
under the Purchase Agreement remain outstanding:
(a) TITLE TO COLLATERAL. The Pledgor shall at all
times hereafter have good and marketable title to the Collateral
pledged hereunder, free of all Liens (other than the Liens created by
this Collateral Agreement) and Transfer Restrictions (except for
those permitted by Section 3(e) hereof), and, subject to the terms of
this Collateral Agreement, will at all times hereafter have good, right
and lawful authority to assign, transfer and pledge such Collateral and
all such additions thereto and substitutions therefor under this
Collateral Agreement.
(b) PLEDGE VALUE REQUIREMENT. The Pledgor shall cause
the aggregate Pledge Value of the Collateral to be equal to or greater
than the Pledge Value Requirement at all times, and shall pledge
additional Collateral in the manner described in Section 6(d) as
necessary to cause such requirement to be met.
(c) PLEDGE UPON ADJUSTMENT EVENT. Upon the occurrence
of an Adjustment Event, the Pledgor shall immediately cause to be
delivered to the Collateral Agent, in the manner provided in Section
6(d): (i) U.S. Government Securities or Cash Equivalents having an
aggregate Market Value at least equal to 105% of the Cash Delivery
Obligations, if any; and (ii) Reported Securities in an amount at least
equal to
the Maximum Deliverable Number thereof (if any), or, at Pledgor's
election, U.S. Government Securities or Cash Equivalents having an
aggregate Market Value at least equal to 150% of such Maximum
Deliverable Number of Reported Securities; in each case to be held as
substitute or additional Collateral hereunder.
(d) COMPOSITION OF PLEDGED ITEMS. Notwithstanding the
Pledgor's right to substitute Collateral pursuant to Section 6(b), the
Pledgor shall cause the Collateral to include, on the Exchange Date,
except to the extent Pledgor shall have exercised its Cash Delivery
Option, a number of shares of Common Stock (and/or, if an Adjustment
Event shall have occurred, Reported Securities) at least equal to the
number of shares of Common Stock (and/or, if an Adjustment Event shall
have occurred, Reported Securities) required to be delivered under the
Purchase Agreement on the Exchange Date. To the extent the Pledgor
exercises its Cash Delivery Option, then the Pledgor shall cause the
Collateral for the Cash Delivery Obligations to consist entirely of
U.S. Government Securities or Cash Equivalents at all times from and
after the date 25 Business Days prior to the Exchange Date, and, if the
Pledgor shall have extended the Exchange Date pursuant to Section
1.3(f) of the Purchase Agreement, the Pledgor shall cause Collateral
for Pledgor's obligations in connection with Pledgor's extension of the
Exchange Date to consist entirely of Additional Government Securities.
(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 that may be necessary or desirable in order to create, preserve,
perfect, substantiate or validate any security interest granted
pursuant hereto or to enable the Collateral Agent to exercise and
enforce its rights and the rights of the Trust hereunder with respect
to such security interest. To the extent permitted by applicable law,
the Pledgor hereby authorizes the Collateral Agent to execute and file,
in the name of the Pledgor or otherwise, Uniform Commercial Code
financing or continuation statements (which may be carbon,
photographic, photostatic or other reproductions of this Agreement or
of a financing statement relating to this Agreement) which the
Collateral Agent in its sole discretion may deem necessary or
appropriate to further perfect, or maintain the perfection of the
security interests granted hereby.
(f) OWNERSHIP OF PLEDGOR. The Pledgor shall be
beneficially owned exclusively by Xxxx X. Xxxxx and/or Xxxxxx
Xxxxxxxxx or the related permissible Class B holders during the term
of this Agreement.
[(g) The Pledgor shall not consolidate with or merge
with or into, or transfer all or substantially of its assets to, any
other Person unless:
(i) either (x) the Pledgor shall be the resulting or
surviving entity or (y) such other Person is an entity
organized and existing under the laws of the
United States, a State thereof or the District of Columbia,
such other Person expressly assumes by supplemental agreement
executed and delivered to the Trust, in form satisfactory to
counsel to the Trust, all the obligations of the Pledgor under
the Underwriting Agreement, Collateral Agreement, the
Reimbursement Agreement, and this Agreement (in which case all
such obligations of the Pledgor shall terminate); and
(ii) the Pledgor shall deliver to the Trust prior to
the proposed transaction an Officer's Certificate and an
Opinion of Counsel, each of which shall state that such
consolidation, merger or transfer and such supplemental
agreement comply with this Section 5(g) and that all
conditions precedent herein provided for relating to such
transaction have been complied with.
Upon any consolidation or merger, or any transfer of
all or substantially all of the assets of the Pledgor in accordance
with this Section 5(g), the successor entity formed by such
consolidation or into which the Pledgor is merged or to which such
transfer is made shall succeed to, and be substituted for, and may
exercise every right and power of the Pledgor under this Agreement with
the same effect as if such successor entity had been named as the
Pledgor herein, and the predecessor entity, shall be relieved of any
further obligation under this Agreement.]4
5A. COVENANT OF THE COLLATERAL AGENT. Other than in
connection with an Insufficiency Determination, a Collateral Event of
Default or the delivery of Class A Common Stock on the Exchange Date, the
Collateral Agent will not deliver the Notice of Conversion referred to in
Section 3(e) and 3(f) above.
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 or Cash Equivalents for pledged
Common Stock or Reported Securities pursuant to paragraph (b) of this Section 6,
shall determine the Pledge Value on each Business Day and shall provide written
notice of the Pledge Value to the Pledgor.
(b) SUBSTITUTION OF COLLATERAL. The Pledgor may substitute
Collateral in accordance with the following provisions:
(1) Unless an Event of Default or a failure by the
Pledgor to meet any of its obligations under Section 5(b) or (c) hereof
has occurred and is continuing, the Pledgor shall have the right at any
time and from time to time to deposit Eligible Collateral with the
Collateral Agent in substitution for Pledged Items previously deposited
hereunder ("PRIOR COLLATERAL") and to obtain the release from the Lien
hereof of such Prior Collateral.
(2) If the Pledgor wishes to deposit Eligible
Collateral with the
Collateral Agent in substitution for Prior Collateral, the Pledgor
shall (i) give written notice to the Collateral Agent identifying the
Prior Collateral to be released from the Lien hereof, (ii) deliver to
the Collateral Agent concurrently with such Eligible Collateral a
certificate of the Pledgor substantially in the form of Exhibit A
hereto and dated the date of such delivery, (A) identifying the items
of Eligible Collateral being substituted for the Prior Collateral and
the Prior Collateral that is to be transferred to the Pledgor and (B)
certifying that the representations and warranties contained in such
Exhibit A hereto are true and correct on and as of the date thereof and
(iii) deliver to the Collateral Agent concurrently with such Eligible
Collateral an opinion (dated the date of such delivery) of counsel,
substantially similar to those delivered by Xxxx, Weiss, Rifkind,
Xxxxxxx & Xxxxxxxx at the Firm Purchase Date, addressed to the
Collateral Agent that covers the matters contained in the second
sentence of paragraph 3(b) of Exhibit A hereto. The Pledgor hereby
covenants and agrees to take all actions required under Section 6(d)
and any other actions necessary to create for the benefit of the
Collateral Agent a valid, first priority perfected security interest
in, and a first lien upon, such Eligible Collateral deposited with the
Collateral Agent in substitution for Prior Collateral.
(3) No such substitution shall be made unless and
until the Collateral Agent shall have determined that the aggregate
Pledge Value of all of the Collateral at the time of such proposed
substitution, after giving effect to the proposed substitution, shall
at least equal the Pledge Value Requirement.
(c) ADDITIONAL COLLATERAL. The Pledgor may pledge additional
Collateral (excluding Additional Government Securities) hereunder at any time
and may pledge Additional Government Securities hereunder at any time prior to
or simultaneously with Pledgor's election to extend the Exchange Date pursuant
to Section 1.3(f) of the Purchase Agreement. Concurrently with the delivery of
any additional Eligible Collateral, the Pledgor shall deliver (i) in the case of
Eligible Collateral consisting of Additional Government Securities, a
certificate of the Pledgor substantially in the form of Exhibit B hereto, or in
the case of all other Eligible Collateral, a certificate of the Pledgor
substantially in the form of Exhibit C hereto and dated the date of such
delivery, in each case (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 or Exhibit C, as the case may be, hereto are true and correct on
and as of the date thereof and (ii) an opinion, dated the date of such delivery,
of counsel addressed to the Collateral Agent, substantially similar to those
delivered by Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx at the Firm Purchase Date
with respect to similar matters, that covers the matters (other than with
respect to priority or the creation of a first lien) contained in the second
sentence of paragraph 2(b) of Exhibit B or Exhibit C, as the case may be,
hereto. The Pledgor hereby covenants and agrees to take all actions required
under Section 6(d) and any other actions necessary to create for the benefit of
the Collateral Agent a valid, first priority perfected security interest in, and
a first lien upon, such additional Eligible Collateral.
(d) DELIVERY OF COLLATERAL. The Pledgor shall deliver all
Collateral to the Collateral Agent in accordance with the following provisions:
(1) PLEDGED COMMON STOCK. In the case of Collateral
consisting of Common Stock, by delivery of certificates evidencing such
Common Stock, indorsed in blank (together with all documents necessary
to permit the Collateral Agent to effect the re-registration thereof
without further action by the Pledgor) or registered in the name of the
Collateral Agent or its nominee or, if such Common Stock is not
issuable in certificated form but is held in book entry form by The
Depository Trust Company, by transfer to an account of the Collateral
Agent or to an account (other than an account of the Pledgor)
designated by the Collateral Agent with The Depository Trust Company;
(2) PLEDGED GOVERNMENT SECURITIES. In the case of
Collateral consisting of U.S. Government Securities or Additional
Government Securities, by transfer thereof through the Book Entry
System of the Federal Reserve System to the account of the Collateral
Agent or to an account (other than an account of the Pledgor)
designated by the Collateral Agent; and
(3) PLEDGED REPORTED SECURITIES. In the case of
Collateral consisting of Reported Securities, by delivery of
certificates evidencing such Reported Securities, indorsed in blank
(together with all documents necessary to permit the Collateral Agent
to effect the re-registration thereof without further action by the
Pledgor) or registered in the name of the Collateral Agent or its
nominee or, if such Reported Securities are not issuable in
certificated form but are held in book entry form by The Depository
Trust Company, by transfer to an account of the Collateral Agent or to
an account (other than an account of the Pledgor) designated by the
Collateral Agent with The Depository Trust Company. Each such delivery
of Reported Securities shall be accompanied by an opinion of counsel,
substantially similar to those delivered by Xxxx, Weiss, Rifkind,
Xxxxxxx & Xxxxxxxx at the Firm Purchase Date, satisfactory to the
Collateral Agent that the Collateral Agent has obtained a valid,
perfected security interest in, and lien upon, such Reported
Securities.
Upon delivery of any Pledged Item under this Collateral
Agreement, the Collateral Agent shall examine such Pledged Item and any opinions
and certificates delivered pursuant to Sections 6(b), 6(c), 6(d)(3) or otherwise
pursuant to the terms hereof in connection therewith to determine that they
comply as to form with the requirements for Eligible Collateral. Immediately
following the delivery to the Collateral Agent of any Collateral in the form of
certificates indorsed in blank, the Collateral Agent shall cause all such
certificates to be re-registered on the books of the applicable transfer agent
into the name of the Collateral Agent or its nominee, and shall thereafter
maintain all such Collateral in such form until the termination of this
Agreement; PROVIDED, HOWEVER, that at any time following such delivery to the
Collateral Agent, the Collateral Agent may cause any such certificates to be
deposited with The Depository Trust Company and thereafter hold such
certificates in book entry form in an account (other than an account of Pledgor)
designated by the Collateral Agent. The Pledgor hereby designates the Collateral
Agent as the person in whose name any Collateral held in book entry form in the
Federal Reserve System shall be registered.
(e) INSUFFICIENCY DETERMINATION.
(1) If on any Business Day the Collateral Agent
determines that the aggregate Pledge Value of the Collateral is less
than the Pledge Value Requirement (any such determination, an
"INSUFFICIENCY DETERMINATION"), the Collateral Agent shall, by
telephone call to an Authorized Representative of the Pledgor followed
by a written confirmation of such call, promptly notify the Pledgor of
such determination and of the amount of the insufficiency.
(2) If, by 4:00 p.m., New York City time on the
Business Day following the day on which telephonic notice shall have
been given pursuant to the preceding paragraph (e)(1), the Pledgor
shall have failed to deliver, in the manner set forth in paragraphs (c)
and (d) of this Section 6, sufficient additional Eligible Collateral so
that, after giving effect to such delivery (and taking into account
that Common Stock and Reported Securities in excess of the Maximum
Deliverable Number thereof shall not constitute Eligible Collateral),
the aggregate Pledge Value of the Collateral, as of such Business Day,
is at least equal to the Pledge Value Requirement, then (x) the
Collateral Requirement with respect to any U.S. Government Securities
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
as may be required to be sold in order to generate proceeds
sufficient to purchase Common Stock and/or, after an
Adjustment Event, Reported Securities, as described in the
following clause (ii); and
(ii) commence purchases, in the manner described in
paragraph (3) below, of Common Stock and/or, after an
Adjustment Event, Reported Securities, in an amount sufficient
to cause the aggregate Pledge Value of the Collateral to be at
least equal to the Pledge Value Requirement.
Notwithstanding the foregoing, the Collateral Agent
shall discontinue sales and purchases pursuant to the preceding clauses
(i) and (ii), respectively, if at any time a Collateral Event of
Default shall have occurred and be continuing. The Collateral Agent
shall determine the Market Value and the Pledge Value of the Collateral
after each purchase of Common Stock or Reported Securities pursuant to
the preceding clause (ii) in order to determine whether the Pledge
Value Requirement is met and whether a Collateral Event of Default has
occurred. Solely for purposes of such calculation, the Market Value of
the Common Stock or Reported Securities shall be: (A) the most recent
sales price as reported in the composite transactions for the principal
securities exchange on which the Common Stock or Reported Securities,
as the case may be, are then listed or, if such securities are not so
listed, the last quoted ask price for such securities in the
over-the-counter market as reported by The NASDAQ National Market or,
if not so reported, by the National Quotation Bureau or a similar
organization; or (B) if higher, in
the case of Common Stock, the most recent available Closing Price.
A "COLLATERAL EVENT OF DEFAULT" shall mean, at any
time, the occurrence of any of the following: (A) failure of the
aggregate Market Value of the Collateral to equal or exceed the Pledge
Value Requirement; (B) failure of the Market Value of any U.S.
Government Securities and Cash Equivalents pledged at such time (not
including any (i) Additional Government Securities or (ii) 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 Common Stock
(or, from and after any Adjustment Event, Reported Securities) equal to
(x) the Maximum Deliverable Number thereof minus (y) the number thereof
pledged as Collateral hereunder at such time; or (C) from and after any
Adjustment Event, failure of the U.S. Government Securities and Cash
Equivalents pledged in respect of Cash Delivery Obligations to have an
aggregate Market Value at least equal to 105% of the Cash Delivery
Obligations at such time, if, in the case of a failure described in
this clause (C), such failure shall continue to be in effect at 4:00
p.m., New York City time, on the Business Day following the day on
which telephonic notice in respect thereof shall have been given
pursuant to paragraph (e)(1) above. For purposes of this Agreement, the
portion of any pledged U.S. Government Securities 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 has 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 Common Stock or shares of
Reported Securities purchased by the Collateral Agent pursuant to the
preceding paragraphs (e)(2)(i) and (ii) may be sold and purchased on
any securities exchange or in any over-the-counter market or in any
private purchase transaction, and at such price or prices, in each case
as the Collateral Agent may deem satisfactory. The Pledgor covenants
and agrees that it will execute and deliver such documents and take
such other action as the Collateral Agent deems necessary or advisable
in order that any such sales and purchases may be made in compliance
with law.
(f) RELEASE OF EXCESS COLLATERAL. If on any Business Day the
Collateral Agent determines that the aggregate Pledge Value of the Pledgor's
Eligible Collateral exceeds the Pledge Value Requirement and no Event of Default
or failure by the Pledgor to meet any of its obligations under Sections 5 or 6
hereof has occurred and is continuing, the Pledgor may obtain the release from
the Lien hereof of any Collateral having an aggregate Pledge Value on such
Business Day less than or equal to such excess, upon delivery to the Collateral
Agent of a written notice from an Authorized Representative of the Pledgor
indicating the items of Collateral to be released. Such Collateral shall be
released only after the Collateral Agent shall have determined that the
aggregate Pledge Value of all of the Collateral remaining after such release as
determined on such Business Day is at least equal to the Pledge Value
Requirement.
(g) DELIVERY OF PURCHASE AGREEMENT CONSIDERATION. On the
Exchange Date, except to the extent Pledgor shall have exercised its Cash
Delivery Option, the Collateral Agent shall deliver to the Trust Common Stock
(or, if an Adjustment Event shall have occurred, Reported Securities) then held
by it hereunder representing the number of shares of Common Stock (or, if an
Adjustment Event shall have occurred, Reported Securities) then required to be
delivered under the Purchase Agreement. Upon such delivery, the Trust shall hold
such Common Stock or Reported Securities, as the case may be, absolutely and
free from any claim or right whatsoever.
(h) INVESTMENT OF CASH COLLATERAL. The Collateral Agent shall
invest any cash received by it pursuant to Section 6.2 of the Purchase Agreement
in direct obligations of the United States of America maturing on or before the
Exchange Date.
7. INCOME AND VOTING RIGHTS ON COLLATERAL.
(a) Unless an Event of Default or failure by the Pledgor to
meet any of Pledgor's obligations under Section 5(b) or (c) hereof has occurred
and is continuing, the Pledgor shall be entitled to receive for Pledgor's own
account all dividends, interest and, if any, principal and premium relating to
all of the Collateral, unless the payment thereof to the Pledgor would reduce
the aggregate Pledge Value of the Collateral below the Pledge Value Requirement.
The Collateral Agent agrees to remit to the Pledgor on the Business Day received
or the first Business Day thereafter all such payments received by it. If an
Event of Default or failure by the Pledgor to meet any of its obligations under
Section 5(b) or (c) hereof has occurred and is continuing, all such payments
made or accrued after and during the continuance of such Event of Default or
failure shall be retained by the Collateral Agent, and any such payments which
are received by the Pledgor shall be received in trust for the benefit of the
Trust, shall be segregated from other funds of the Pledgor and shall forthwith
be paid over to the Collateral Agent. Any such payments so retained by, or paid
over to, the Collateral Agent shall be held by the Collateral Agent as
Collateral hereunder. 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 Trust 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, the Pledgor shall retain beneficial ownership of all shares of
Common Stock and 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 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 which
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. In the case of Collateral consisting of
Reported Securities of the type defined in clause (v) of the definition of
Reported Securities in Section 6.2 of the Purchase Agreement, the Pledgor
shall have the right to convert such Reported Securities.
If an Event of Default shall have occurred and be continuing,
the Collateral Agent shall have the right to the extent permitted by law, and
the Pledgor shall take all such action as may be necessary or appropriate to
give effect to such right, to vote and to give 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. In the case of Collateral
consisting of Reported Securities of the type defined in clause (v) of the
definition of Reported Securities in Section 6.2 of the Purchase Agreement,
the Collateral Agent shall have the right to convert such Reported Securities.
8. REMEDIES UPON EVENTS OF DEFAULT.
(a) If any Event of Default shall have occurred and be
continuing, the Collateral Agent may exercise on behalf of the Trust all the
rights of a secured party under the UCC (whether or not in effect in the
jurisdiction where such rights are exercised) and, in addition, without being
required to give any notice, except as herein provided or as may be required by
mandatory provisions of law, shall: (i) deliver all Collateral consisting of
Common Stock or Reported Securities (but not, in either case, in excess of the
number of shares thereof deliverable under the Purchase Agreement at such time)
to the Trust on the date of the notice delivered to the Collateral Agent
pursuant to the last paragraph of Article VII of the Purchase Agreement relating
to such Event of Default (or, in the case of an Event of Default described in
clause (iii), (iv) or (v) of the definition thereof in this Agreement, on the
Exchange Date) (in either case, the "DELIVERY DATE"), whereupon the Trust shall
hold such Common Stock or Reported Securities absolutely free from any claim or
right of whatsoever kind, including any equity or right of redemption of the
Pledgor which may be waived, and the Pledgor, to the extent permitted by law,
hereby specifically waives all rights of redemption, stay or appraisal which
Pledgor has or may have under any law now existing or hereafter adopted; and
(ii) if such delivery shall be insufficient to satisfy in full all of the
obligations of Pledgor under the Purchase Agreement, sell all of the remaining
Collateral, or such lesser portion thereof as may be necessary to generate
proceeds sufficient to satisfy in full all of the obligations of Pledgor under
the Purchase Agreement, at public or private sale or at any broker's board or on
any securities exchange, for cash, upon credit or for future delivery, and at
such price or prices as the Collateral Agent may deem satisfactory. The Pledgor
covenants and agrees to execute and deliver such documents and take such other
action as the Collateral Agent deems necessary or advisable in order that any
such sale may be made in compliance with law. Upon any such sale the Collateral
Agent shall have the right to deliver, assign and transfer to the purchaser
thereof the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold absolutely and free from any claim or right of whatsoever
kind, including any equity or right of redemption of the Pledgor which may be
waived, and the Pledgor, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which Pledgor has or may have
under any law now existing or hereafter adopted. The notice (if any) of such
sale required by Article 9 of the UCC shall (1) in case of a public sale, state
the time and place fixed for such sale, (2) in case of sale at a broker's board
or on a securities exchange, state the board or exchange at which such sale is
to be made and the day on which the Collateral, or the portion thereof so being
sold, will
first be offered for sale at such board or exchange, and (3) in the case of a
private sale, state the day after which such sale may be consummated. Any such
public sale shall be held at such time or times within ordinary business hours
and at such place or places as the Collateral Agent may fix in the notice of
such sale. At any such sale the Collateral may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may determine. The Collateral
Agent shall not be obligated to make any such sale pursuant to any such notice.
The Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of all or
any part of the Collateral on credit or for future delivery, the Collateral so
sold may be retained by the Collateral Agent until the selling price is paid by
the purchaser thereof, but the Collateral Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be sold upon
like notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
(b) POWER OF ATTORNEY. The Collateral Agent is hereby
irrevocably appointed the true and lawful attorney of the Pledgor with full
power and authority, in the name and stead of the Pledgor, to do all of the
following: (i) upon any delivery or sale of all or any part of any Collateral
made either under the power of delivery or sale given hereunder or under
judgment or decree in any judicial proceedings for foreclosure or otherwise for
the enforcement of this Collateral Agreement, to make all necessary deeds, bills
of sale and instruments of assignment, transfer or conveyance of the property
thus delivered or sold; (ii) upon the occurrence of an Adjustment Event while
any shares of Common Stock are Pledged Items, to take any necessary actions with
respect to such shares of Common Stock to cause the Pledged Items to conform to
the requirements of this Agreement following the occurrence of the Adjustment
Event, including, without limitation, the tender of shares of Common Stock and
the sale of property (other than Reported Securities) received in respect of
Common Stock. For such purposes the Collateral Agent may execute all necessary
documents and instruments. This power of attorney shall be deemed coupled with
an interest, and the Pledgor hereby ratifies and confirms all that 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. The Pledgor's obligations and authorizations
hereunder shall not be terminated by operation of law or the occurrence of any
event whatsoever, including the death or disability of the Pledgor, or the
occurrence of any other event.
(c) APPLICATION OF COLLATERAL AND PROCEEDS. In the case of
the occurrence and continuance of an Event of Default, the Collateral Agent
may proceed to realize upon the security interest in the Collateral against
any one or more of the types of Collateral, at any one time, as the
Collateral Agent shall
determine in its sole discretion subject to the foregoing provisions of this
Section 8. The proceeds of any sale of, or other realization upon, or other
receipt from, any of the Collateral remaining after delivery to the Trust
pursuant to Section 8(a) shall be applied by the Collateral Agent in the
following order of priorities:
(1) first, to the payment to the Trust of an amount equal to: (A)
the aggregate Market Value of a number of shares of Common
Stock equal to (1) the number of shares of Common Stock
required to be delivered under the Purchase Agreement on the
Delivery Date minus (2) the number of shares of Common Stock
delivered by the Collateral Agent to the Trust on the Delivery
Date as described above; or (B) from and after an Adjustment
Event, the sum of (1) the Cash Delivery Obligations on the
Delivery Date and (2) the aggregate Market Value on the
Delivery Date of a number of Reported Securities (and, if
applicable, shares of Common Stock) equal to (x) the number
thereof required to be delivered on the Delivery Date under
Section 6.2 of the Purchase Agreement minus (y) the number
thereof delivered by the Collateral Agent to the Trust on the
Delivery Date as described above; and/or (C) to the extent the
Pledgor shall have exercised its Cash Delivery Option, the
amount of cash required to be delivered under Section 1.3(d)
of the Purchase Agreement minus the amount of cash so
delivered; and (D) if the Pledgor shall have extended the
Exchange Date pursuant to Section 1.3(f) of the Purchase
Agreement, the amount of cash required to be delivered under
said Section 1.3(f) (or, if the Pledgor shall have accelerated
the Exchange Date pursuant to Section 1.3(g) thereof, the
amount of cash deliverable pursuant to said Section 1.3(g));
(2) second, to the payment to the Collateral Agent of the expenses
of such sale or other realization, including reasonable
compensation to the Collateral Agent and its agents and
counsel, and all expenses, liabilities and advances incurred
or made by the Collateral Agent in connection therewith,
including brokerage fees in connection with the sale by the
Collateral Agent of any Pledged Item; and
(3) finally, if all of the obligations of the Pledgor hereunder
and under the Purchase Agreement have been fully discharged or
sufficient funds have been set aside by the Collateral Agent
at the request of the Pledgor for the discharge thereof, any
remaining proceeds shall be released to the Pledgor.
9. THE COLLATERAL AGENT.
The Collateral Agent accepts its duties and responsibilities
hereunder as agent for the Trust, on and subject to the following terms and
conditions:
(a) PERFORMANCE OF DUTIES. The Collateral Agent undertakes to
perform such duties and only such duties as are expressly set forth herein and,
beyond the exercise of reasonable care in the performance of such duties, no
implied covenants or obligations shall be read into this Collateral Agreement
against the Collateral Agent. No provision hereof shall be construed to relieve
the Collateral Agent from liability for its own grossly negligent action,
grossly negligent failure to act or its own willful misconduct, subject to the
following:
(1) The Collateral Agent may consult with counsel,
and the advice or opinion of such counsel shall be full and complete
authorization and protection in respect of an action taken or suffered
hereunder in good faith and in accordance with such advice or opinion
of counsel.
(2) The Collateral Agent shall not be liable with
respect to any action taken, suffered or omitted by it in good faith
(i) reasonably believed by it to be authorized or within the discretion
or rights or powers conferred on it by this Collateral Agreement or
(ii) in accordance with any direction or request of the Trustees.
(3) The Collateral Agent shall not be liable for any
error of judgment made in good faith by any of its officers, unless the
Collateral Agent was grossly negligent in ascertaining the pertinent
facts.
(4) In the absence of bad faith on its part, the
Collateral Agent may conclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein, upon
any note, notice, resolution, consent, certificate, affidavit, letter,
telegram, teletype message, statement, order or other document believed
by it to be genuine and correct and to have been signed or sent by the
proper Person or Persons.
(5) No provision of this Collateral Agreement shall
require the Collateral Agent to expend or risk its own funds or
otherwise incur any financial liability in the performance of any of
its duties hereunder, or in the exercise of any of its rights or
powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(6) The Collateral Agent may perform any duties
hereunder either directly or by or through agents or attorneys, and the
Collateral Agent shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care
by it hereunder. In furtherance thereof, any subsidiary owned or
controlled by the Collateral Agent, or its successors, as agent for the
Collateral Agent, may perform any or all of the duties of the
Collateral Agent relating to the valuation of securities and other
instruments constituting Collateral hereunder.
(7) In no event shall the Collateral Agent be
personally liable for any taxes or other governmental charges imposed
upon or in respect of (i) the collateral or (ii) the income or other
distributions thereon.
(8) Unless and until the Collateral Agent shall have
received notice from the Pledgor, or unless and until a Responsible
Officer of the Collateral Agent shall have actual knowledge to the
contrary, the Collateral Agent shall be entitled to deem and treat all
Collateral delivered to it hereunder as Eligible Collateral hereunder,
provided that the Collateral Agent has carried out the duties specified
in Section 6 with respect to such Collateral at the time of delivery
thereof.
The Collateral Agent shall not be responsible for the
correctness of the recitals and statements herein which are made by the Pledgor
or for any statement or certificate delivered by the Pledgor pursuant hereto.
Except as specifically provided herein, the Collateral Agent shall not be
responsible for the validity, sufficiency, collectibility or marketability of
any Collateral given to or held by it hereunder or for the validity or
sufficiency of the Purchase Agreement or the Lien on the Collateral purported to
be created hereby.
(b) KNOWLEDGE. The Collateral Agent shall not be deemed to
have knowledge of any Event of Default (except a Collateral Event of Default),
unless and until a Responsible Officer of the Collateral Agent shall have actual
knowledge thereof or shall have received written notice thereof.
(c) MERGER. Any corporation or association into which the
Collateral Agent may be converted or merged, or with which it may be
consolidated, or to which it may sell or transfer its agency business and assets
as a whole or substantially as a whole, or any corporation or association
resulting from any such conversion, sale, merger, consolidation or transfer to
which it is a party, shall, subject to the prior written consent of the Trust,
be and become a successor Collateral Agent hereunder and vested with all of the
title to the Collateral and all of the powers, discretions, immunities,
privileges and other matters as was its predecessor without, except as provided
above, the execution or filing of any instrument or any further act, deed or
conveyance on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
(d) RESIGNATION. The Collateral Agent and any successor
Collateral Agent may at any time resign by giving thirty days' written notice by
registered or certified mail to the Pledgor and notice to the Trust in
accordance with the provisions of Section 10(d) hereof. Such resignation shall
take effect upon the appointment of a successor Collateral Agent by the Trust.
(e) REMOVAL. The Collateral Agent may be removed at any time
by an instrument or concurrent instruments in writing delivered to the
Collateral Agent and to the Pledgor and signed by the Trust.
(f) APPOINTMENT OF SUCCESSOR. (1) If the Collateral Agent
hereunder shall resign or be removed, or be dissolved or shall be in the course
of dissolution or liquidation or otherwise become incapable of action hereunder,
or if it shall be taken under the control of any public officer or officers or
of a receiver appointed by a court, a successor may be appointed by the Trust by
an instrument or concurrent instruments in writing signed by the Trust or by its
attorneys in fact fully authorized a copy of such instrument or concurrent
instruments shall be sent by registered mail to the Pledgor.
(2) Every such temporary or permanent successor Collateral
Agent appointed pursuant to the provisions hereof shall be a trust company or
bank in good standing, having a reported capital and surplus of not less than
$100,000,000 and capable of holding the Collateral in the State of New York, if
there be such an institution willing, qualified and able to accept the duties of
the Collateral Agent hereunder upon customary terms.
(g) ACCEPTANCE BY SUCCESSOR. Every temporary or permanent
successor Collateral Agent appointed hereunder shall execute, acknowledge and
deliver to its predecessor and also to the Pledgor an instrument in writing
accepting such appointment hereunder, whereupon such successor, without any
further act, deed or conveyance, shall become fully vested with all the estates,
properties, rights, powers, duties and obligations of its predecessors. Such
predecessor shall, nevertheless, on the written request of its successor or the
Pledgor, execute and deliver an instrument transferring to such successor all
the estates, properties, rights and powers of such predecessor hereunder. Every
predecessor Collateral Agent shall deliver all Collateral held by it as the
Collateral Agent hereunder to its successor. Should any instrument in writing
from the Pledgor be required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties, rights, powers,
duties and obligations hereby vested or intended to be vested in the
predecessor, any and all such instruments in writing shall, at the request of
the temporary or permanent successor Collateral Agent, be forthwith executed,
acknowledged and delivered by the Pledgor.
10. MISCELLANEOUS.
(a) BENEFIT OF AGREEMENT; SUCCESSORS AND ASSIGNS. Whenever any
of the parties hereto is referred to, such reference shall be deemed to include
the successors and assigns of such party. All the covenants and agreements
herein contained by or on behalf of the Pledgor and the Collateral Agent shall
bind, and inure to the benefit of, their respective successors and assigns
whether so expressed or not, and shall be enforceable by and inure to the
benefit of the Trust and its successors and assigns.
(b) SEPARABILITY. To the extent permitted by law, the
unenforceability or invalidity of any provision or provisions of this Collateral
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
(c) AMENDMENTS AND WAIVERS. Any term, covenant, agreement or
condition of this Collateral Agreement may be amended or compliance therewith
may be waived (either generally or in a particular instance and either
retrospectively or prospectively) but only by a writing signed by the Collateral
Agent, the Pledgor and the Trust.
(d) NOTICES.
(1) Any notice provided for herein, unless otherwise
specified, shall be in writing (including transmittals by telex or
telecopier) and shall be given to a party at the address set forth
opposite such party's name on the signature pages hereto or at such
other address as may be designated by notice duly given in accordance
with this Section 10(d) to each other party hereto.
(2) Each such notice given pursuant to paragraph (1)
shall be effective (i) if sent by certified mail (return receipt
requested), 72 hours after being deposited in the United States mail,
postage prepaid; (ii) if given by telex or telecopier, when such telex
or telecopied notice is transmitted; or (iii) if given by any other
means, when delivered at the address specified in this Section 10(d).
(e) GOVERNING LAW. This Collateral Agreement shall in all
respects be construed in accordance with and governed by the laws of the State
of New York; provided that as to Pledged Items located in any jurisdiction other
than the State of New York, the Collateral Agent on behalf of the Trust shall
have all of the rights to which a secured party is entitled under the laws of
such other jurisdiction.
(f) COUNTERPARTS. This Collateral Agreement may be executed,
acknowledged and delivered in any number of counterparts and such counterparts
taken together shall constitute one and the same instrument.
(g) APPLICATION OF BANKRUPTCY CODE. The parties hereto
acknowledge and agree that the Collateral Agent is a "financial institution"
within the meaning of Section 101(22) of Title 11 of the United States Code (the
"BANKRUPTCY CODE") and is acting as agent and custodian for the Trust in
connection with the Purchase Agreement and that the Trust is a "customer" of the
Collateral Agent within the meaning of said Section 101(22).
(h) WAIVER OF JURY TRIAL. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE PARTIES HERETO HEREBY WAIVE AND COVENANT THAT THEY WILL NOT
ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE) ANY RIGHT TO TRIAL BY JURY
IN ANY FORUM IN RESPECT OF ANY ISSUE, CLAIM, DEMAND, ACTION OR CAUSE OF ACTION
ARISING OUT OF OR BASED UPON THIS AGREEMENT OR THE SUBJECT MATTER HEREOF, IN
EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING OR WHETHER IN CONTRACT OR
TORT OR OTHERWISE. EACH PARTY HERETO ACKNOWLEDGES THAT IT OR HE HAS BEEN
INFORMED BY THE OTHER PARTY HERETO THAT THE PROVISIONS OF THIS SECTION
CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH SUCH OTHER PARTY HERETO HAS RELIED,
IS RELYING AND WILL RELY IN ENTERING INTO THIS AGREEMENT AND ANY DOCUMENT
RELATED THERETO. EACH PARTY HERETO MAY FILE AN ORIGINAL COUNTERPART OF THIS
SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE OTHER PARTY
HERETO TO THE WAIVER OF ITS RIGHTS TO TRIAL BY JURY.
11. TERMINATION OF COLLATERAL AGREEMENT.
This Collateral Agreement and the rights hereby granted by the
Pledgor in the Collateral shall cease, terminate and be void upon fulfillment of
all of the obligations of the Pledgor under the Purchase Agreement, and the
Pledgor shall have no further liability hereunder upon such termination. Any
Collateral remaining at the time of such termination shall be fully released and
discharged from the Lien hereof and delivered to the Pledgor by the Collateral
Agent, all at the expense of the Pledgor.
12. NO PERSONAL LIABILITY OF TRUSTEES.
By executing this Collateral Agreement none of the Trustees
assumes any personal liability hereunder.
IN WITNESS WHEREOF, each of the Pledgor, the Collateral Agent
and the Trust has caused this Collateral Agreement to be duly executed on its
behalf as of the date hereof.
PLEDGOR:
[ ]
By:
Name:
Title:
Address for Notices:
[ ]
[ ]
[ ]
COPY TO
XXXX, WEISS, RIFKIND, XXXXXXX & XXXXXXXX
0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, xxx Xxxx 0000000
Fax. No. (000) 000-0000
Attention: Xxxxxxx X. Xxxx
THE TRUST:
DECS TRUST VI
By:
Xxxxxx X. Xxxxxxx,
as Trustee
By:
Xxxxxxx X. Xxxxxx, III,
as Trustee
By:
Xxxxx X. X'Xxxxx,
as Trustee
Address for Notices:
c/o Puglisi & Associates
000 Xxxxxxx Xxxxxx - Xxxxx 000
Xxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxx
COLLATERAL AGENT:
The Bank of New York
as Collateral Agent
By:
Name:
Title:
Address for Notices:
000 Xxxxxxx Xxxxxx, 00 X Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Exhibit A
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, _____________ (the "PLEDGOR"), hereby certifies, pursuant to
Section 6(b) of the Collateral Agreement dated as of November [ ], 1999 among
the Pledgor, The Bank of New York, as Collateral Agent, and DECS Trust VI (the
"COLLATERAL AGREEMENT"; terms defined in the Collateral Agreement being used
herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as substituted Collateral
(the "SUBSTITUTED COLLATERAL"):
2. The Pledgor requests that the Collateral Agent transfer to
the Pledgor the following Prior Collateral, pursuant to Section 6(b) of the
Collateral Agreement:
3. The Pledgor hereby represents and warrants to the
Collateral Agent and the Trust that:
(a) CONSENTS TO TRANSFER. No Transfer Restrictions
exist with respect to or otherwise apply to the assignment of,
or transfer by the Pledgor of possession of, any items of
Substituted Collateral to the Collateral Agent under the
Collateral Agreement, or the subsequent sale or transfer of
such items of Substituted Collateral by the Collateral Agent
pursuant to the terms of the Collateral Agreement.
(b) TITLE TO COLLATERAL; PERFECTED SECURITY INTEREST.
The Pledgor has good and marketable title to the Substituted
Collateral, free of all Liens (other than the Lien created by
the Collateral Agreement) and Transfer Restrictions. Upon
delivery of the Collateral to the Collateral Agent, the
Collateral Agent will obtain a valid, first priority perfected
security interest in, and a first lien upon, such Substituted
Collateral subject to no other Lien. None of such Substituted
Collateral is or shall be pledged by the Pledgor as collateral
for any other purpose.
This Certificate may be relied upon by the Trust as fully and
to the same extent as if this Certificate had been specifically addressed to the
Trust.
A-
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this _____ day of ______, 1999.
Name:
Title:
A-
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL GOVERNMENT SECURITIES
The undersigned, __________________ (the "PLEDGOR"), hereby
certifies, pursuant to Section 6(c) of the Collateral Agreement, dated as of
November [ ], 1999, among the Pledgor, The Bank of New York, as Collateral
Agent, and DECS Trust VI (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 Collateral deliverable in
connection with Pledgor's option to extend the Exchange Date in accordance with
Section 1.3(f) of the Purchase Agreement (the "ADDITIONAL GOVERNMENT
SECURITIES"):
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
Government Securities to the Collateral Agent under the Collateral
Agreement, or the subsequent sale or transfer of such items of
Additional Government Securities 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 Government
Securities, free of all Liens (other than the Lien created by the
Collateral Agreement) and Transfer Restrictions. Upon delivery of the
Collateral to the Collateral Agent, the Collateral Agent will obtain a
valid, first priority perfected security interest in, and a first lien
upon, such Additional Government Securities subject to no other Lien.
None of such Additional Government Securities is or shall be pledged by
the Pledgor as collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and
to the same extent as if this Certificate had been specifically addressed to the
Trust.
B-
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this _____ day of _____ 1999.
Name:
Title:
Exhibit C
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, __________________ (the "PLEDGOR"), hereby
certifies, pursuant to Section 6(c) of the Collateral Agreement, dated as of
November [ ], 1999, among the Pledgor, The Bank of New York, as Collateral
Agent, and DECS Trust VI (the "COLLATERAL AGREEMENT"; terms defined in the
Collateral Agreement being used herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as additional Collateral
(the "ADDITIONAL COLLATERAL"):
2. The Pledgor hereby represents and warrants to the
Collateral Agent that:
(a) CONSENTS TO TRANSFER. No Transfer Restrictions
exist with respect to or otherwise apply to the assignment of, or
transfer by the Pledgor of possession of, any items of Additional
Collateral to the Collateral Agent under the Collateral Agreement, or
the subsequent sale or transfer of such items of Additional Collateral
by the Collateral Agent pursuant to the terms of the Collateral
Agreement.
(b) TITLE TO COLLATERAL; PERFECTED SECURITY INTEREST.
The Pledgor has good and marketable title to the Additional Collateral,
free of all Liens (other than the Lien created by the Collateral
Agreement) and Transfer Restrictions. Upon delivery of the Collateral
to the Collateral Agent, the Collateral Agent will obtain a valid,
first priority perfected security interest in, and a first lien upon,
such additional Collateral subject to no other Lien. None of such
Additional Collateral is or shall be pledged by the Pledgor as
collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and
to the same extent as if this Certificate had been specifically addressed to the
Trust.
C-
IN WITNESS WHEREOF, the undersigned has executed this
Certificate this _____ day of _____ 1999.
Name:
Title:
C-
