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Exhibit (k)(4)
Form of Security and Pledge Agreement
SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement (the "Security and Pledge
Agreement") is made as of March __, 1997 among Nextel STRYPES Trust, a Delaware
business trust (such trust and the trustees thereof acting in their capacity as
such being referred to herein as the "Trust"), Cherrywood Holdings, Inc., a
Delaware corporation ("Cherrywood"), Xxxxxx Investors, L.L.C., a Delaware
limited liability company ("Xxxxxx") (Cherrywood and Xxxxxx being referred to
herein individually as a "Pledgor" and collectively as the "Pledgors"), and The
Bank of New York, a New York banking corporation, as collateral agent (the
"Collateral Agent") hereunder for the benefit of the Trust.
WHEREAS, the Trust has filed with the Securities and Exchange
Commission a registration statement on Form N-2 (File Nos. 33-63795 and
811-7389) and Pre-Effective Amendments Xx. 0, Xx. 0, Xx. 0 and No. 4 thereto
contemplating the offering of up to 8,243,875 of its Structured Yield Product
Exchangeable for Stock(SM) (the "STRYPES"), the terms of which contemplate that,
on , 2000 (the "Exchange Date"), each such STRYPES will be mandatorily
exchanged for a specified number or amount of each type of Reference Security
and other property constituting part of the Reference Property (or, in certain
circumstances, cash, or a combination of cash and Reference Property, with an
equal value).
WHEREAS, the STRYPES are to be issued pursuant to an Amended and
Restated Trust Agreement, dated as of March __, 1997 (the "Trust Agreement"),
among the trustees of the Trust and ML IBK Positions, Inc. and Xxxxxxxxx, Xxxxxx
& Xxxxxxxx Securities Corporation, as Sponsors.
WHEREAS, in order to obtain the Reference Property that would be
required by the Trust in order to exchange all of the STRYPES on the Exchange
Date in accordance with the Trust's investment objective, the Trust has entered
into a Forward Purchase Contract, dated as of March __, 1997 (the "Forward
Purchase Contract"), with the Pledgors providing for the future acquisition,
sale and delivery of the aggregate number or amount of each type of Reference
Security and other property constituting part of the Reference Property that
would be required by the Trust in order to exchange all of the STRYPES on the
Exchange Date in accordance with the Trust's investment objective, assuming that
none of the Pledgors has elected to exercise its option to deliver cash in lieu
of all or part of the Reference Property.
WHEREAS, the Trust and each Pledgor desire that, to the extent
permitted by law, at the option of each Pledgor, the future sale and delivery
obligations of such Pledgor can be settled in whole or in part through cash
payment in lieu of delivery of all or a part of such Pledgor's Contract
Consideration.
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(SM) Service xxxx of Xxxxxxx Xxxxx & Co., Inc.
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WHEREAS, the Trust and the Pledgors desire that ownership of the
Contract Consideration (including, without limitation, voting rights and rights
to receive any dividends, interest, distributions and other payments in respect
thereof, provided that, to the extent constituting part of the Reference
Property, such dividends, interest, distributions and other payments and the
proceeds of any sale required by the provisions of the Forward Purchase Contract
shall be retained and held by the Collateral Agent in accordance with the
provisions hereof or of the Forward Purchase Contract) remain in the Pledgors
unless and until delivery, if any, of such Contract Consideration to the Trust
pursuant to the provisions hereof and of the Forward Purchase Contract.
WHEREAS, the Pledgors have initially Delivered to the Collateral Agent
an aggregate of 7,168,587 shares of Class A Common Stock, par value $.001 per
share (the "Nextel Common Stock"), of Nextel Communications, Inc., a Delaware
corporation ("Nextel").
WHEREAS, the Trust and the Pledgors desire that the obligations of each
Pledgor under the Forward Purchase Contract shall be secured pursuant to the
terms hereof.
NOW, THEREFORE, in consideration of the foregoing premises and for
other good and valuable consideration, the receipt and adequacy of which is
hereby acknowledged, the parties hereto hereby agree as follows:
1. Definitions.
(a) This Security and Pledge Agreement. The following terms, when used
herein, shall have the following meanings; capitalized words and phrases used
herein and not otherwise defined shall have the meanings ascribed to them in the
Forward Purchase Contract:
"Authorized Representative" means, with respect to any Pledgor, any
officer or other representative as to whom such Pledgor shall have delivered
notice to the Collateral Agent that such officer or other representative is
authorized to act hereunder on behalf of such Pledgor.
"Bankruptcy Code" has the meaning specified in Section 12.
"Bankruptcy Event" has the meaning ascribed thereto in Schedule B.
"Business Day" means any day that is not a Saturday, a Sunday or a day
on which the New York Stock Exchange, the NASDAQ National Market, banking
institutions or trust companies in The City of New York are authorized or
obligated by law or executive order to close.
"Collateral" means all the cash, securities and other property
Delivered to the Collateral Agent hereunder in respect of each Pledgor's
Collateral Amount and held by the Collateral Agent, including, without
limitation, cash, securities or other property purchased or obtained by the
Collateral Agent in respect of any Pledgor's Collateral Amount pursuant to
Section 4(e) or with cash Delivered by any Pledgor pursuant to Section 4(i) or
obtained by the Collateral Agent as contemplated in Section 4(g) or in respect
of any of the foregoing.
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"Collateral Agent" means the financial institution identified as such
in the introductory paragraph hereof, or any successor appointed in accordance
with Section 9(l).
"Collateral Amount" shall mean, with respect to any Pledgor at any
time, such Pledgor's Maximum Contract Consideration.
"Collateral Event of Default" has the meaning specified in Section
4(e).
"Collateral Requirement" means, as of any date and with respect to: (i)
any Reference Security and other property constituting part of the Reference
Property, 100%; and (ii) any U.S. Government Securities, 150%, provided that
upon and after any failure to cure an Insufficiency Determination by 4:00 p.m.,
New York City time, on the third Business Day following telephonic notice of
such Insufficiency Determination as described in Section 4(e), which
insufficiency shall be continuing on such third Business Day, the Collateral
Requirement relating to any U.S. Government Securities shall be 200%.
"Delivery" means (i) the delivery of cash, securities or other
property, free and clear of all Liens (other than a Lien created or permitted by
this Security and Pledge Agreement), (A) to the Collateral Agent at such
location in the State of New York as it shall direct, in suitable form for
delivery and transfer, accompanied by duly executed instruments of transfer or
assignment in blank and accompanied by any required transfer tax stamps, or (B)
to an account of the Collateral Agent in a clearing system (or with a Securities
Intermediary) acceptable to the Collateral Agent or (ii) with respect to any
securities the ownership of which is recorded in book-entry form by a Federal
Reserve Bank, delivery to the Collateral Agent of (a) a listing of such
securities by title (or series), unpaid principal amount and maturity date and
(b) such steps as are necessary for the Collateral Agent or its Securities
Intermediary to become the holder of a Security Entitlement with respect to such
securities through the Securities Account. The term "Deliver" used as a verb has
a corresponding meaning.
"Eligible Collateral" means (i) Nextel Common Stock and/or cash,
securities and other property constituting part of the Reference Property, and
(ii) U.S. Government Securities, provided, in each case, that the Pledgor has
good and marketable title thereto, free of all Liens (other than the Liens
created by this Security and Pledge Agreement) and Transfer Restrictions and (at
any time after Delivery) that the Collateral Agent has a valid, first priority
perfected security interest therein and first lien thereon, and provided further
that to the extent the number or amount of any type of Reference Security or
other property constituting part of the Reference Property pledged by any
Pledgor hereunder exceeds at any time the Maximum Deliverable Number thereof
with respect to such Pledgor, such excess number or amount thereof shall not be
Eligible Collateral.
"Event of Default" means, with respect to any Pledgor, the occurrence
of: (i) a Bankruptcy Event described in Schedule B hereto, (ii) a Collateral
Event of Default, or (iii) a failure by such Pledgor to have caused the
Collateral to meet the requirements described in Section 2(c) on the date of
Closing.
"Ineligible Collateral" means Collateral that does not constitute
"Eligible Collateral".
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"Insufficiency Determination" has the meaning specified in Section
4(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 Reference
Property consisting of cash, the amount of such cash on such date; (b) with
respect to any Reference Property consisting of property other than cash or
Reference Securities, the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Collateral Agent) as of such date; (c) with respect to any Reference Property
consisting of a Reference Security, an amount equal to the Closing Price of a
unit of such Reference Security on such date multiplied by the number of units
of such Reference Security then being valued; and (d) with respect to any U.S.
Government Security, the product of (x)(i) the average unit bid price for such
security as published on the Trading Day prior to such date in the New York
edition of The Wall Street Journal or The New York Times or, if not so
published, (ii) the lower bid price quoted (which quotation shall be evidenced
in writing) on the Trading Day prior to such date by either of two nationally
recognized dealers making a market in such security which are members of the
National Association of Securities Dealers, Inc. and (y) the number of such
units comprised in the outstanding principal amount of such security; provided
that the "Market Value" of any Ineligible Collateral shall be zero.
"Maximum Contract Consideration" has the meaning ascribed thereto in
Section 6.1(a) of the Forward Purchase Contract.
"Maximum Deliverable Number" means, with respect to any Pledgor on any
date and with respect to any type of Reference Security or other property
constituting part of the Reference Property, the maximum number or amount of
such type of Reference Security or other property constituting part of the
Reference Property that may be required to be delivered by such Pledgor at the
Closing pursuant to Section 2.1 of the Forward Purchase Contract.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Pledge Value" means, as of any date and with respect to any particular
type of Collateral, an amount equal to the aggregate Market Value of such
Collateral divided by the Collateral Requirement for such Collateral.
"Pledge Value Requirement" means, with respect to any Pledgor as of any
date, the aggregate Market Value on such date of such Pledgor's Collateral
Amount on such date.
"Prior Collateral" has the meaning specified in Section 4(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 Security and Pledge Agreement, or in any other division or department of
the
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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 Security and Pledge Agreement
or the Collateral, any other officer to whom such matter is referred because of
his knowledge of and familiarity with the particular subject.
"Secured Amounts" means, with respect to any Pledgor, the amounts at
any time payable or obligations to be performed by such Pledgor to or for the
benefit of the Trust pursuant to the Forward Purchase Contract and this Security
and Pledge Agreement, including, without limitation, (i) the delivery of such
Pledgor's Contract Consideration at Closing pursuant to Section 2.1 of the
Forward Purchase Contract or, if such Pledgor has elected to exercise its option
to settle such obligation in whole or in part through a cash payment at Closing,
the payment of the cash settlement payment at Closing in lieu of delivering the
portion of the Contract Consideration in respect of which such election is made
pursuant to Section 2.5 of the Forward Purchase Contract, and (ii) the delivery
to the Trust of all or any portion of the Collateral required to be delivered to
the Trust pursuant to Section 6.1(a) and (b) of the Forward Purchase Contract at
the respective times specified therein.
"Securities Account" means the account of the Collateral Agent
identified as such in __________ or such other account as is identified as such
to the relevant Pledgor by notice from the Collateral Agent.
"Securities Intermediary" has the meaning ascribed thereto in the
Uniform Commercial Code.
"Security and Pledge Agreement" means this Security and Pledge
Agreement and any schedules and exhibits hereto.
"Security Entitlement" has the meaning ascribed thereto in the Uniform
Commercial Code.
"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 (x) the required delivery of any assignment
from the seller, pledgor, assignor or transferor of such item of Collateral,
together with any evidence of the corporate or other authority of such Person,
or
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(y) any registration or qualification requirement for such item of Collateral
pursuant to any federal or state securities law which is generally applicable to
all holders of such item of Collateral, shall not constitute a "Transfer
Restriction."
"Trustee" or "Trustees" means any trustee or trustees of the Trust
identified on the signature pages hereto, or any successor as such trustee or
trustees.
"Uniform Commercial Code" means the Uniform Commercial Code in effect
in the State of New York or, in connection with Delivery of any security
referred to in clause (ii) of the definition of that term, deemed to be in
effect pursuant to U.S. law and regulations applicable thereto.
"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 date of
Closing.
(b) Uniform Commercial Code. Unless otherwise defined herein, all terms
defined in Article 8 or Article 9 of the Uniform Commercial Code are used herein
as therein defined.
2. Required Collateral.
(a) Initial Delivery by Pledgors to Collateral Agent. Each Pledgor has
Delivered to the Collateral Agent certificates representing the number of shares
of Nextel Common Stock set forth opposite such Pledgor's name on Schedule A
hereto, which represents such Pledgor's Collateral Amount as of the date hereof.
(b) Pledge Value Requirement. Each Pledgor shall cause the aggregate
Pledge Value of the Collateral pledged by such Pledgor hereunder to be equal to
or greater than such Pledgor's Pledge Value Requirement at all times, and shall
pledge additional Collateral in the manner described in Section 4(c) as
necessary to cause such requirement to be met.
(c) Pledge of Contract Consideration. Notwithstanding each Pledgor's
right to substitute Collateral pursuant to Section 4(b), each Pledgor shall
cause the Collateral pledged by such Pledgor to include, on the date of Closing,
a number or amount of each type of Reference Security and other property
constituting part of the Reference Property at least equal to the number or
amount thereof required to be delivered by such Pledgor at the Closing pursuant
to Section 2.1 of the Forward Purchase Contract.
3. Grant of Security Interest.
(a) As security for the prompt and complete payment and performance
when due of the Secured Amounts with respect to such Pledgor, each Pledgor
hereby pledges, assigns, grants and conveys unto the Collateral Agent, as agent
of and for the benefit of the Trust, a continuing first priority security
interest under the Uniform Commercial Code or other applicable law in and to,
and a general first lien upon and right of set off against, all of such
Pledgor's right, title
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and interest in and to, the securities, obligations and other property of such
Pledgor which are Delivered to the Collateral Agent on behalf of the Trust and
to any other assets in possession of the Collateral Agent as security pursuant
to and in accordance with the provisions of this Security and Pledge Agreement,
all certificates or instruments representing or evidencing any or all of the
foregoing, and all principal, interest and payments and distributions or
dividends, cash or other property and proceeds from time to time received,
receivable or otherwise distributed in respect of, or in exchange for, any or
all of the foregoing (whether such proceeds arise before or after the
commencement of any proceeding under any applicable bankruptcy, insolvency or
other similar law, by or against such Pledgor with respect to such Pledgor)
(except for the cash dividends, interest and payments required to be distributed
to such Pledgor in accordance with Section 5 hereof) and, subject to Section 5
hereof, all powers and rights of such Pledgor now or hereafter acquired by such
Pledgor, including rights of enforcement, under or with respect to any or all of
the foregoing.
(b) Each 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, and shall take all other action, that may be necessary or desirable in
order to create, preserve, perfect, substantiate or validate any security
interest in the Collateral granted by such Pledgor 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. Upon the request of the
Collateral Agent, each Pledgor will execute and deliver to the Collateral Agent
financing statements conforming to the Uniform Commercial Code in effect in any
state or jurisdiction deemed appropriate by the Collateral Agent, and such other
documents as may be required in order to perfect the security interest, all in a
form the Collateral Agent reasonably deems to be acceptable. Upon the request of
the Collateral Agent, each Pledgor also agrees to execute and deliver to the
Collateral Agent for filing by the Collateral Agent continuation statements
conforming to the Uniform Commercial Code in effect in any state or jurisdiction
deemed appropriate by the Collateral Agent and in a form the Collateral Agent
reasonably deems to be acceptable. If any Pledgor fails to deliver to the
Collateral Agent financing statements or continuation statements that the
Collateral Agent requests, the Collateral Agent may, to the extent permitted by
law and without limiting its other rights under this Security and Pledge
Agreement, execute and file in such Pledgor's name, as such Pledgor's
attorney-in-fact, such documents.
4. Administration of Collateral and Valuation of Securities.
(a) Valuation of Collateral. The Collateral Agent shall determine on
each Business Day whether the aggregate Pledge Value of the Collateral pledged
by each Pledgor is at least equal to such Pledgor's Pledge Value Requirement and
whether an Insufficiency Determination or Collateral Event of Default shall have
occurred and, from and after any substitution by a Pledgor of U.S. Government
Securities for pledged Reference Property pursuant to paragraph (b) of this
Section 4, shall determine the Pledge Value of the Collateral pledged by such
Pledgor on each Business Day and shall provide written notice of such Pledge
Value to such Pledgor.
(b) Substitution of Collateral. Each Pledgor may substitute Collateral
in accordance with the following provisions:
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(1) Unless an Event of Default or a failure by such Pledgor to meet any
of its obligations under Section 2(b) hereof has occurred and is continuing,
such Pledgor shall have the right at any time and from time to time to Deliver
Eligible Collateral to the Collateral Agent in substitution for securities,
obligations or other property previously Delivered to the Collateral Agent as
Collateral hereunder ("Prior Collateral") and to obtain the release from the
Lien hereof of such Prior Collateral.
(2) If a Pledgor wishes to deposit Eligible Collateral with the
Collateral Agent in substitution for Prior Collateral, it shall (i) give written
notice to the Collateral Agent identifying the Prior Collateral to be released
from the Lien hereof, (ii) deliver to the Collateral Agent concurrently with
such Eligible Collateral a certificate of an Authorized Representative of such
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 such
Pledgor and (B) certifying that the representations and warranties contained in
such Exhibit A are true and correct on and as of the date thereof and (iii)
deliver to the Collateral Agent concurrently with such Eligible Collateral an
opinion (dated the date of such delivery) of counsel (who may be an employee of
such Pledgor) addressed to the Collateral Agent confirming the representations
contained in the second sentence of paragraph 3(b) of Exhibit A hereto. Each
Pledgor hereby covenants and agrees to take all actions required under Section
3(b) 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 pledged by the relevant Pledgor at the time of such proposed
substitution, after giving effect to the proposed substitution, shall at least
equal such Pledgor's Pledged Value Requirement. However, the Collateral Agent
shall determine the Pledge Value of all such Collateral promptly and, promptly
after the required determination has been made, take all such steps as are
necessary to effect delivery of the Prior Collateral so identified to such
Pledgor, free and clear of all Liens and Transfer Restrictions, to such account
or place as such Pledgor shall have specified by notice to the Collateral Agent
and otherwise in the manner contemplated for such Prior Collateral in the
definition of "Delivery" herein.
(c) Additional Collateral. A Pledgor may pledge additional Collateral
hereunder at any time. Concurrently with the Delivery of any additional Eligible
Collateral, the Pledgor pledging such additional Collateral shall deliver (i) a
certificate of an Authorized Representative of such Pledgor substantially in the
form of Exhibit B hereto and dated the date of such delivery, (A) identifying
the additional items of Eligible Collateral being pledged and (B) certifying
that with respect to such items of additional Eligible Collateral the
representations and warranties contained in such Exhibit B hereto are true and
correct on and as of the date thereof and (ii) an opinion, dated the date of
such delivery, of counsel (who may be an employee of such Pledgor) addressed to
the Collateral Agent confirming the representations contained in the second
sentence of paragraph 2(b) of Exhibit B hereto. Each Pledgor hereby covenants
and agrees to take all actions required under Section 3(b) 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.
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(d) Examination of Collateral. Upon Delivery of any securities,
obligations or other property by a Pledgor as Collateral under this Security and
Pledge Agreement, the Collateral Agent shall examine such securities,
obligations or property and any opinions and certificates delivered pursuant to
Sections 4(b) or (c) or otherwise pursuant to the terms hereof in connection
therewith to determine that they comply as to form with the requirements for
Eligible Collateral.
(e) Insufficiency Determination. (1) If on any Business Day the
Collateral Agent determines that the aggregate Pledge Value of the Collateral
pledged by a Pledgor is less than such Pledgor's Pledge Value Requirement (any
such determination, an "Insufficiency Determination"), the Collateral Agent
shall promptly notify such Pledgor of such determination by telephone call to an
Authorized Representative of such Pledgor followed by a written confirmation of
such call.
(2) If, by 4:00 p.m., New York City time, on the third Business Day
following the day on which telephonic notice shall have been given pursuant to
the preceding paragraph (e)(1), the relevant Pledgor shall have failed to
Deliver, in the manner set forth in paragraph (c) of this Section 4, sufficient
additional Eligible Collateral so that, after giving effect to such Delivery,
the aggregate Pledge Value of the Collateral pledged by such Pledgor, as of such
third Business Day, is at least equal to such Pledgor's Pledge Value
Requirement, then (x) the Collateral Requirement with respect to any U.S.
Government Securities pledged by such Pledgor hereunder 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, if practicable:
(i) commence sales, in the manner described in paragraph (3)
below, of such portion of the Collateral pledged by such Pledgor
consisting of U.S. Government Securities as may be required to be sold
in order to generate proceeds sufficient to purchase each type of
Reference Security and other property constituting part of the
Reference Property, as described in the following clause (ii); and
(ii) commence purchases, in the manner described in paragraph
(3) below, of each type of Reference Security and other property then
constituting part of the Reference Property, in such numbers or amounts
as are sufficient to cause the aggregate Pledge Value of the Collateral
pledged by such Pledgor to be at least equal to such Pledgor's 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 with respect to such Pledgor shall have
occurred and be continuing. The Collateral Agent shall determine the Market
Value and the Pledge Value of the Collateral pledged by such Pledgor after each
purchase of Reference Property pursuant to the preceding clause (ii) in order to
determine whether such Pledgor's Pledge Value Requirement is met and whether a
Collateral Event of Default with respect to such Pledgor has occurred. Any cash
obtained from any such sale which cannot be invested through any such purchase
shall be held as, and deemed to be, cash Collateral pledged by such Pledgor.
A "Collateral Event of Default" shall mean, with respect to any Pledgor
at any time, the occurrence of any of the following: (A) failure of the
aggregate Market Value of the Collateral pledged by such Pledgor to equal or
exceed such Pledgor's Pledge Value Requirement; (B)
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failure of the Market Value of any U.S. Government Securities pledged by such
Pledgor at such time to have an aggregate Market Value of at least 105% of the
aggregate Market Value of a number or amount of each type of Reference Security
and other property constituting part of the Reference Property equal to (x) the
Maximum Deliverable Number thereof with respect to such Pledgor minus (y) the
number or amount thereof pledged by such Pledgor as Collateral hereunder at such
time.
(3) Collateral sold and Reference Property purchased by the Collateral
Agent pursuant to the preceding paragraphs (e)(i) and (e)(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, in all cases consistent with commercial
reasonableness. Each 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 any Pledgor's Eligible
Collateral exceeds such Pledgor's Pledge Value Requirement and no Event of
Default with respect to such Pledgor or failure by such Pledgor to meet any of
its obligations under Sections 2 or 4 hereof has occurred and is continuing,
such Pledgor may obtain the release from the Lien hereof of any Collateral
pledged by such Pledgor 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 such 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 pledged by such Pledgor remaining after such release as
determined on such Business Day is at least equal to such Pledgor's Pledge Value
Requirement. Release shall be effected as described in Section 4(b)(3) in
connection with substitutions and release of Prior Collateral.
(g) Sale of Certain Rights or Warrants. Upon receipt by the Collateral
Agent of any rights or warrants identified in writing to the Collateral Agent by
the Administrator as being those rights or warrants referred to in Section
3.1(b) of the Forward Purchase Contract in respect of the Collateral Amount of
any Pledgor, the Collateral Agent shall, through the Administrator, solicit net
bids at approximately 10:00 A.M., New York City Time, on the fifth Business Day
following receipt by the Collateral Agent of such rights or warrants (the
"Receipt Date") for settlement three Business Days later, of three (or such
fewer number of dealers as may be providing such bids) recognized securities
dealers in The City of New York (which may include the Collateral Agent or its
affiliates) selected by the Administrator and so identified in writing to the
Collateral Agent for the purchase by the quoting dealer of all such rights or
warrants. If for any reason the Collateral Agent is unable, through the
Administrator, to obtain the required bid on the fifth Business Day following
the Receipt Date, it shall attempt to obtain such bid at successive intervals of
three months thereafter and on the third Business Day prior to the Exchange Date
until it is able to obtain the required bid, or, if earlier, until the third
Business Day prior to the Exchange Date. The Collateral Agent shall accept the
highest bid that will result in the greatest amount of proceeds from the sale of
all such rights or warrants and shall sell all such rights or warrants at that
highest bid and the proceeds from such sale shall be held by the Collateral
Agent as Collateral in accordance with the provisions of this Security and
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Pledge Agreement. If the Collateral Agent is unable to obtain the required bid
or otherwise unable to consummate such sale, the rights or warrants shall be
held by the Collateral Agent as Collateral pledged by such Pledgor subject to
the provisions of this Security and Pledge Agreement. The Collateral Agent shall
not be held liable in any way for failure to obtain such required bid solicited
by the Collateral Agent in accordance with this Section 4(g).
(h) Maintenance of Collateral. The Collateral shall be maintained by
the Collateral Agent in a separate non-commingled account and the Collateral
Agent shall use reasonable care with respect to the custody, safekeeping and
physical preservation of the Collateral in its possession and shall accord the
Collateral treatment substantially equal to that which it accords its own
property. The Collateral Agent shall have no right of offset against the
Collateral with respect to any amounts owed to the Collateral Agent, whether or
not arising under this Security and Pledge Agreement, and the Collateral Agent
hereby waives any such right of offset that it may otherwise have.
Any securities to be held by the Collateral Agent shall be held by the
Collateral Agent as Delivered, or caused to be Delivered, to it by the relevant
Pledgor (endorsed in blank) or as obtained by the Collateral Agent pursuant to
Section 4(e), 4(g) or 4(i), if applicable.
(i) Investment of Cash Collateral. The Collateral Agent shall, in
accordance with the written instructions of each Pledgor, invest and reinvest
all cash Collateral pledged by such Pledgor in United States Treasury Bills with
maturities of 30 days or less but in any case maturing not later than the second
Business Day prior to the Exchange Date and all such securities so obtained and
amounts obtained in respect thereof shall be held as Collateral pledged by such
Pledgor for all purposes hereof.
(j) Delivery of Contract Consideration. At the Closing, the Collateral
Agent shall deliver to the Trust, in respect of each Pledgor's obligations under
Section 2.1 of the Forward Purchase Contract, an aggregate number or amount of
each type of Reference Security and other property constituting part of the
Reference Property then pledged by such Pledgor and held by the Collateral Agent
hereunder equal to the number or amount of each such type of Reference Property
then required to be delivered by such Pledgor under Section 2.1 of the Forward
Purchase Contract, except to the extent such Pledgor has elected, pursuant to
Section 2.5 thereof, to settle its obligations under Section 2.1 thereof through
a cash payment. Upon such delivery, the Trust shall hold such Reference Property
absolutely and free from any claim or right whatsoever.
5. Distributions in Respect of Collateral.
(a) Unless an Event of Default with respect to a Pledgor or a failure
by a Pledgor to meet any of its obligations under Section 2(c) hereof has
occurred and is continuing, such Pledgor shall be entitled to receive for its
own account all dividends, interest, distributions and other payments relating
to all of the Collateral pledged by such Pledgor, unless such dividends,
interest, distributions or other payments constitute part of the Reference
Property or the payment thereof to such Pledgor would reduce the aggregate
Pledge Value of the Collateral pledged by such Pledgor below such Pledgor's
Pledge Value Requirement. The Collateral Agent agrees to remit to the relevant
Pledgor on the Business Day received or the first Business Day thereafter
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all such payments received by it. At any time when a Pledgor is not entitled to
receive any such payments hereunder, the Collateral Agent shall retain such
payments (and any such payments which are received by such 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),
and the Collateral Agent shall hold all such payments so retained by, or paid
over to, the Collateral Agent as Collateral hereunder. The security interest of
the Collateral Agent shall continue in any such payment so retained by, or paid
over to, the Collateral Agent.
(b) Unless an Event of Default with respect to a Pledgor has occurred
and is continuing, such Pledgor shall have the right, from time to time, to vote
and to give consents, ratifications and waivers with respect to the Collateral
pledged by such Pledgor, and the Collateral Agent shall, upon receiving a
written request from such Pledgor, deliver to such Pledgor or as specified in
such request such proxies, powers of attorney, consents, ratifications and
waivers in respect of any of the Collateral pledged by such Pledgor which is
registered in the name of the Collateral Agent or its nominee as shall be
specified in such request and be in form and substance satisfactory to the
Collateral Agent.
If an Event of Default with respect to a Pledgor shall have
occurred and be continuing, the Collateral Agent shall have the right to the
extent permitted by law, and such Pledgor shall take all such action as may be
necessary or appropriate to give effect to such right, to vote and to give
consents, ratifications and waivers, and take any other action with respect to
any or all of the Collateral pledged by such Pledgor with the same force and
effect as if the Collateral Agent were the absolute and sole owner thereof.
6. Remedies Upon Events of Default.
(a) Delivery Upon Receipt of Acceleration Amount Notice. (i) If an
Event of Default with respect to any Pledgor shall have occurred and be
continuing, the Collateral Agent shall, in respect of each Pledgor, deliver all
Collateral pledged by such Pledgor consisting of Reference Securities and other
property constituting part of the Reference Property (but not, in the case of
any particular type of Reference Security or other property constituting part of
the Reference Property, in excess of the number or amount thereof deliverable by
such Pledgor under the Forward Purchase Contract at such time) to the Trust on
the date of the Acceleration Amount Notice relating to such Event of Default
(or, in the case of an Event of Default described in clause (iii) of the
definition thereof, on the date of Closing) (in either case, the "Delivery
Date"), whereupon the Trust shall hold such Reference Property absolutely free
from any claim or right of whatsoever kind, including any equity or right of
redemption of any Pledgor which may be waived, and each Pledgor, to the extent
permitted by law, hereby specifically waives all rights of redemption, stay or
appraisal which it has or may have under any law now existing or hereafter
adopted.
(ii) If the delivery made pursuant to subsection (i) above shall be
insufficient to satisfy in full all of the obligations of any Pledgor under the
Forward Purchase Contract, the Collateral Agent may exercise as agent for and on
behalf of the Trust all the rights of a secured party under the Uniform
Commercial Code (whether or not in effect in the jurisdiction where such rights
are exercised) and, in addition, without being required to give any notice,
except as herein provided or as may be required by mandatory provisions of law,
shall sell all
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of the remaining Collateral pledged by such Pledgor, or such lesser portion
thereof as may be necessary to generate proceeds sufficient to satisfy in full
all of the obligations of such Pledgor under the Forward Purchase Contract, at
public or private sale or at any broker's board or on any securities exchange or
otherwise, for cash, upon credit or for future delivery, and at such price or
prices as the Collateral Agent may deem satisfactory.
Each Pledgor covenants and agrees that it will execute and deliver such
documents and take such other action as the Collateral Agent deems necessary or
advisable in order that any such sale may be made in compliance with law. Upon
any such sale the 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
relevant Pledgor which may be waived, and each Pledgor, to the extent permitted
by law, hereby specifically waives all rights of redemption, stay or appraisal
which it has or may have under any law now existing or hereafter adopted.
The notice (if any) of such sale required by Section 9 of the Uniform
Commercial Code 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 relevant Collateral may be sold in one lot as an entirety
or in separate parcels, as the Collateral Agent may determine. The Collateral
Agent shall not be obligated to make any such sale pursuant to any such notice.
The Collateral Agent may, without notice or publication, adjourn any public or
private sale or cause the same to be adjourned from time to time by announcement
at the time and place fixed for the sale, and such sale may be made at any time
or place to which the same may be so adjourned. In case of any sale of all or
any part of the Collateral on credit or for future delivery, the Collateral so
sold may be retained by the Collateral Agent until the selling price is paid by
the purchaser thereof, but the Collateral Agent shall not incur any liability in
case of the failure of such purchaser to take up and pay for the Collateral so
sold and, in case of any such failure, such Collateral may again be sold upon
like notice. The Collateral Agent, instead of exercising the power of sale
herein conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or courts of competent
jurisdiction.
(b) Power of Attorney. Upon any delivery or sale of all or any part of
any Collateral pledged by a Pledgor 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 Security and Pledge
Agreement, the Collateral Agent is hereby irrevocably appointed the true and
lawful attorney of such Pledgor, in the name and stead of such Pledgor, to make
all necessary deeds, bills of sale and instruments of assignment, transfer or
conveyance of the property thus delivered or sold. For that purpose the
Collateral Agent may execute all such documents and instruments. This power of
attorney shall be deemed coupled with an interest, and each Pledgor hereby
ratifies and confirms all that his attorneys acting under such power, or such
attorneys' successors or agents, shall lawfully do by virtue of this Security
and Pledge
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Agreement. If so requested by the Collateral Agent, by the Trustees or by any
purchaser of the Collateral pledged by a Pledgor or a portion thereof, such
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 such Pledgor all proper deeds, bills of sale,
instruments of assignment, conveyance of transfer and releases as may be
designated in any such request.
(c) Application of Collateral and Proceeds. In the case of an Event of
Default with respect to any Pledgor, 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 6. The
proceeds of any sale of, or other realization upon, or other receipt from, any
of the remaining Collateral pledged by any Pledgor shall be applied by the
Collateral Agent in the following order of priorities:
first, to the payment to the Trust of an amount equal to: (A) the
aggregate Market Value of a number or amount of each type of Reference
Security and other property constituting part of the Reference Property
equal to (1) the number or amount of each type of Reference Security
and other property constituting part of the Reference Property required
to be delivered by such Pledgor under the Forward Purchase Contract on
the Delivery Date minus (2) the number or amount of each type of
Reference Security and other property constituting part of the
Reference Property pledged by such Pledgor delivered by the Collateral
Agent to the Trust on the Delivery Date as described above;
second, to the payment to the Collateral Agent of the expenses of such
sale or other realization, including reasonable compensation to the
Collateral Agent and its agents and counsel, and all expenses,
liabilities and advances incurred or made by the Collateral Agent in
connection therewith, including brokerage fees in connection with the
sale by the Collateral Agent of any securities, obligations or other
property pledged by such Pledgor as Collateral hereunder; and finally,
if all of the obligations of such Pledgor hereunder and under the
Forward Purchase Contract have been fully discharged or sufficient
funds have been set aside by the Collateral Agent at the request of
such Pledgor for the discharge thereof, any remaining proceeds shall be
released to such Pledgor.
(d) Waivers by Pledgors. Each Pledgor waives any presentment, demand,
protest or, to the extent permitted by applicable law, notice in connection with
this Security and Pledge Agreement.
7. Other Provisions Regarding the Collateral.
Until all obligations of each party under the Forward Purchase Contract
have been performed in full, the parties hereto covenant and agree as follows:
(a) No Disposition. Each Pledgor covenants and agrees that it will not
sell, assign, transfer, exchange or otherwise dispose of, or grant any option
with respect to, any of the Collateral, nor will it create, incur or permit to
exist any Lien on or with respect to any of the Collateral, any interest
therein, or any proceeds thereof, other than Liens created by this Security and
Pledge Agreement.
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(b) Direction of Transfer Agents. Each Pledgor shall deliver to the
transfer agent for each Reference Security a letter of direction, substantially
in the form of Exhibit C hereto, directing such transfer agent to Deliver, and
shall use its best efforts to cause such transfer agent to Deliver, all cash,
securities and other property constituting part of the Reference Property
received in respect of such Reference Security directly to the Collateral Agent.
If any such cash, securities or other property constituting part of the
Reference Property shall be delivered to any Pledgor, such Pledgor shall
promptly Deliver the same to the Collateral Agent. So long as a Pledgor's
obligations under Articles 2 and 7 of the Forward Purchase Contract have been
fully satisfied and discharged, the Collateral Agent and the Trust shall, upon
request of such Pledgor, take such action as shall be necessary to modify or
terminate in accordance with such request any standing letter of direction
previously delivered pursuant to this Section 7(b).
(c) Further Protections. Each Pledgor will pay in a timely fashion all
taxes, assessments or charges of any nature that are imposed in respect of the
Collateral pledged by such Pledgor. Each Pledgor will give written notice to the
Trust and the Collateral Agent of, and defend the Collateral pledged by such
Pledgor against, any suit, action or proceeding against the Collateral pledged
by such Pledgor or which could adversely affect the security interests granted
hereunder.
(d) Delay in Enforcement; No Waiver. To the extent consistent with the
Uniform Commercial Code and applicable law, the Collateral Agent can choose to
delay or not to enforce any of its rights under this Security and Pledge
Agreement without losing such rights. If the Collateral Agent chooses not to
exercise or enforce any of its rights, each Pledgor agrees that the Collateral
Agent is not waiving the right to enforce such rights at a later time or any of
its other rights. Any waiver of the Collateral Agent's rights under this
Security and Pledge Agreement must be in writing.
8. Representations and Warranties.
(a) Representations and Warranties of the Pledgors. On a continuing
basis during the term of this Security and Pledge Agreement, each Pledgor
represents and warrants to the Collateral Agent and to the Trust as follows:
(i) such Pledgor has full power and authority to execute and
deliver this Security and Pledge Agreement and to perform and observe
the provisions hereof, except as performance may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors' rights, and
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(ii) the execution, delivery and performance of this Security
and Pledge Agreement by such Pledgor has been duly authorized by all
necessary action, corporate or otherwise, on the part of such Pledgor
and does not contravene any requirement of law, such Pledgor's charter
or by-laws or any transactional restriction or agreement binding on or
affecting such Pledgor or any of its assets;
(iii) this Security and Pledge Agreement has been duly and
properly executed and delivered by such Pledgor and constitutes a
legal, valid and binding agreement of such
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Pledgor enforceable against such Pledgor in accordance with its terms,
except as the enforcement of rights and remedies may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors' rights, and
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law);
(iv) no Transfer Restrictions exist with respect to or
otherwise apply to the assignment of, or transfer by such 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;
(v) except for the rights of the Trust and of the
Collateral Agent on the Trust's behalf established under this Security
and Pledge Agreement and the Forward Purchase Contract, such Pledgor
has good and marketable title to the Collateral pledged by it under
this Security and Pledge Agreement, free and clear of all Liens (other
than the Lien created by this Security and Pledge Agreement) and
Transfer Restrictions and has the right to pledge such Collateral as
provided in this Security and Pledge Agreement;
(vi) such 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 Security and Pledge Agreement;
(vii) upon Delivery of the Collateral to the Collateral Agent
hereunder, the Collateral Agent will obtain a valid first priority and
perfected and enforceable security interest in, and a first lien on,
such Collateral subject to no other Lien; and none of such Collateral
is or shall be pledged by such Pledgor as collateral for any other
purpose; and
(viii) such Pledgor is presently solvent and able to pay, and
paying, its debts as they come due, and anticipates that it will
continue to be able to pay its debts as they come due for the
foreseeable future.
(b) Representations and Warranties of Collateral Agent. On a continuing
basis during the term of this Security and Pledge Agreement, the Collateral
Agent represents and warrants to each Pledgor and to the Trust as follows:
(i) 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 Security and Pledge Agreement;
(ii) the execution, delivery and performance by the
Collateral Agent of this Security and Pledge 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
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Collateral Agent or of any material agreement, judgment, injunction,
order, decree or other instrument binding upon the Collateral Agent;
and
(iii) this Security and Pledge Agreement has been duly and
properly executed and delivered by the Collateral Agent and constitutes
a legal, valid and binding agreement of the Collateral Agent
enforceable against the Collateral Agent in accordance with its terms,
except as the enforcement of rights and remedies may be limited by
bankruptcy, insolvency, reorganization, moratorium, or other similar
laws now or hereafter in effect relating to creditors' rights, and
general principles of equity (regardless of whether such enforceability
is considered in a proceeding in equity or at law).
9. The Collateral Agent.
(a) Appointment of Collateral Agent. The Trust hereby appoints and
designates the Collateral Agent as its agent for the purposes set forth herein,
and the Collateral Agent does hereby accept such appointment under the terms and
conditions set forth herein.
(b) Duties of Agent. The Collateral Agent undertakes to perform only
such duties as are expressly set forth herein. The duties and responsibilities
of the Collateral Agent hereunder shall be determined solely by the express
provisions of this Security and Pledge Agreement, and no other or further duties
or responsibilities shall be implied.
(c) Reliance. Subject to the limitations, covenants and provisions
hereof, the Collateral Agent may 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, statement, order
or other document furnished to it hereunder by the Trust or any Pledgor and
believed by it to be genuine and to have been signed or presented by the proper
party or parties, and shall have no responsibility for determining the accuracy
thereof.
(d) Liability of Agent. Neither the Collateral Agent nor any of its
directors, officers or employees shall be liable for any action taken or omitted
by it hereunder except in the case of its negligence, bad faith, willful
misconduct or its failure to use reasonable care with respect to the custody,
safekeeping and physical preservation of the Collateral in its possession. The
Collateral Agent may consult with counsel of its own choice, including in-house
counsel, and shall have full and complete authorization and protection for any
action taken or omitted by it hereunder in good faith and in accordance with the
opinion of such counsel. 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 Security and Pledge Agreement or (ii) in accordance with
any direction or request of the Trustees. 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. Except as specifically provided herein, the Collateral Agent shall not
be responsible for the validity, sufficiency, collectibility or marketability of
any Collateral Delivered to or held by it hereunder or for the validity or
sufficiency of the Forward Purchase Contract or the Lien on the Collateral
purported to be created hereby. In no event shall the Collateral Agent be liable
for indirect, punitive, special or consequential damages.
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(e) Risk of Funds. No provision of this Security and Pledge 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.
(f) Use of Sub-Agents or Attorneys. The Collateral Agent may perform
any duties hereunder either directly or by or through agents or attorneys,
provided that the Collateral Agent shall remain liable to fulfill all of such
duties to the same extent, and with the same protections, as if the Collateral
Agent was performing them itself. In furtherance thereof, any subsidiary owned
or controlled by the Collateral Agent, or its successors, as agent for the
Collateral Agent, may perform any or all of the duties of the Collateral Agent
relating to the valuation of securities and other instruments and property
constituting Collateral hereunder.
(g) Eligibility of Collateral; Recitals and Statements. Unless and
until the Collateral Agent shall have received notice from a 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 4 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 Trust and the Pledgors or for any
statement or certificate delivered by any Pledgor pursuant hereto.
(h) 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.
(i) 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.
(j) Resignation of Agent. The Collateral Agent may resign and be
discharged from its duties or obligations hereunder by giving thirty (30) days
prior notice in writing of such resignation to the Trust and each Pledgor. Such
resignation shall take effect upon the appointment of a successor Collateral
Agent by the Trust.
(k) 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 each Pledgor and signed by the Trust.
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(l) 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 each 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.
(m) Acceptance by Successor. Every temporary or permanent successor
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
its predecessor and also to each 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 any 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 any 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 such Pledgor.
10. Miscellaneous.
(a) Amendments, Etc. Any amendment or modification of any provision of
this Security and Pledge Agreement shall be in writing with the express written
consent of the parties hereto. Any terms and conditions of this Security and
Pledge Agreement may be waived in writing at any time by the party or parties
entitled to the benefits of such terms and conditions. Any waiver shall be
effective only for the specific purpose for which given and for the specific
time period, if any, contemplated therein. A waiver of any of the terms and
conditions of this Security and Pledge Agreement on one occasion shall not
constitute a waiver of the other terms and conditions of this Security and
Pledge Agreement, or of such terms and conditions on any other occasion.
(b) Notices and Other Communications. All notices and other
communications shall be directed as follows (or to such other address for a
particular party as shall be specified by such party in a like notice given
pursuant to this Section 10(b):
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Pledgors: x/x Xxxxxx Xxxxxxxx, X.X.X.
0000 Xxxxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention:
Telephone:
Telecopier:
Collateral Agent: The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxxxxxx X. Xxxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Trust: c/o Puglisi & Associates
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxx
Telephone: 000-000-0000
Telecopier: 000-000-0000
Except as otherwise specifically provided herein, all notices and other
communications provided for hereunder shall be in writing and shall be deemed to
have been duly given if either (i) personally delivered (including delivery by
courier service or by Federal Express or any other nationally recognized
overnight delivery service for next day delivery) to the offices set forth
above, in which case they shall be deemed received on the first Business Day by
which delivery shall have been made to said offices, (ii) transmitted by any
standard form of telecommunication to the offices set forth above, in which case
they shall be deemed received on the first Business Day by which a standard
confirmation that such transmission occurred is received by the transmitting
party, or (iii) sent by certified mail, return receipt requested, in which case
they shall be deemed received when receipted for unless acknowledgment of
receipt is refused (in which case delivery shall be deemed to have been received
on the first Business Day on which such acknowledgment is refused).
(c) Waivers. No failure or delay by any party hereto in exercising any
rights, power or privilege hereunder shall operate as a waiver thereof.
(d) Non-Assignment. No party hereto shall have the right to assign
their rights or obligations hereunder to any other person without the other
parties' prior written consent.
(e) 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
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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 SECURITY AND PLEDGE 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 HEREBY
ACKNOWLEDGES THAT IT HAS BEEN INFORMED THAT THE PROVISIONS OF THIS SECTION
CONSTITUTE A MATERIAL INDUCEMENT UPON WHICH THE OTHER PARTIES HERETO HAVE
RELIED, ARE RELYING AND WILL RELY IN ENTERING INTO THIS SECURITY AND PLEDGE
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 PARTIES HERETO TO THE WAIVER OF THEIR RESPECTIVE RIGHTS TO
TRIAL BY JURY.
(f) Governing Law. This Security and Pledge Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed wholly within such State; provided that
as to Collateral 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. For
the purpose of any suit, action or proceeding arising out of or relating to this
Security and Pledge Agreement, the parties hereto hereby expressly and
irrevocably consent and submit to the non-exclusive jurisdiction of any
competent court in the place of its domicile and any United States Federal court
sitting in the Borough of Manhattan, City and State of New York, and expressly
and irrevocably waive, to the extent permitted under applicable law, any
immunity from the jurisdiction thereof and any claim or defense in such suit,
action or proceeding based on a claim of improper venue, forum non conveniens or
any similar basis to which it might otherwise be entitled.
(g) Headings. The headings herein are for the convenience of reference
only and shall not affect the meaning or construction of any provision hereof.
(h) Entire Agreement. This Security and Pledge Agreement and the
Forward Purchase Contract contains the entire agreement between the parties
relating to the subject matter hereof and supersede all oral statements and
prior writings with respect thereto.
(i) Counterparts. This Security and Pledge Agreement may be executed in
any number of counterparts, each of which when so executed and delivered shall
be deemed for all purposes an original, but all such counterparts shall
constitute but one and the same instrument.
(j) Force Majeure. None of the Pledgors, the Collateral Agent or the
Trust shall be responsible for delays or failures in performance resulting from
acts beyond its control. Such acts shall include but not be limited to acts of
God, strikes, lockouts, riots, acts of war, epidemics, governmental regulations
superimposed after the fact, fire, communication line failures, computer
viruses, power failures, earthquakes or other disasters.
(k) Binding Effect. This Security and Pledge Agreement shall be binding
upon the respective parties hereto and their heirs, executors, successors and
assigns. All the covenants and agreements herein contained by or on behalf of
any Pledgor and the Collateral Agent shall be enforceable by and inure to the
benefit of the Trust and its successors and assigns.
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(l) Separability. To the extent permitted by law, the unenforceability
or invalidity of any provision or provisions of this Security and Pledge
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
11. Termination of Security and Pledge Agreement. This Security and Pledge
Agreement and the rights hereby granted by each Pledgor in the Collateral
pledged by such Pledgor shall cease, terminate and be void upon fulfillment of
all of the obligations of such Pledgor under the Forward Purchase Contract, and
each Pledgor shall have no further liability hereunder upon such termination.
Any Collateral pledged by a Pledgor remaining at the time of such termination
shall be fully released and discharged from the Lien hereof and delivered to
such Pledgor by the Collateral Agent, all at the expense of such Pledgor.
12. Application of Bankruptcy Code. The parties hereto acknowledge and agree
that the Collateral Agent is a "financial intermediary" within the meaning of
Section 101(22) of Title 11 of the United States Code (the "Bankruptcy Code")
and is acting hereunder as agent and custodian for the Trust in connection with
the Forward Purchase Contract and that the Trust is a "customer" of the
Collateral Agent within the meaning of said Section 101(22).
13. No Personal Liability of Trustees. By executing this Security and Pledge
Agreement, none of the Trustees assumes any personal liability hereunder.
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IN WITNESS WHEREOF, the parties hereto have caused this Security and
Pledge Agreement to be executed by their respective officers or representatives
thereunto duly authorized as of the day and year first above written.
CHERRYWOOD HOLDINGS, INC.
By:_______________________________________
Name:
Title:
Tax ID No. _______________________________
XXXXXX INVESTORS, L.L.C.
By:_______________________________________
Name:
Title:
Tax ID No. _______________________________
THE BANK OF NEW YORK,
as Collateral Agent
By:_______________________________________
Name:
Title:
NEXTEL STRYPES TRUST
__________________________________________,
Xxxxxx X. Xxxxxxx, as Trustee
__________________________________________,
Xxxxxxx X. Xxxxxx III, as Trustee
__________________________________________,
Xxxxx X. X'Xxxxx, as Trustee
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SCHEDULE A
----------
Number of
Name of Pledgor Shares
--------------- ---------
Cherrywood Holdings, Inc........................................ 5,108,907
Xxxxxx Investors, L.L.C. ....................................... 2,059,680
-----------
Total ................................................ 7,168,587
===========
Sch A-1
25
SCHEDULE B
Bankruptcy Events
A "Bankruptcy Event" shall have occurred with respect to any Pledgor
upon the occurrence at any time of any of the following events:
1. Such Pledgor shall commence a voluntary case or other proceeding
seeking a liquidation, reorganization or other relief with respect to itself or
its debts under the Bankruptcy Code or any other bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against it, or shall take any corporate action to
authorize any of the foregoing; or
2. An involuntary case or other proceeding shall be commenced against
such Pledgor seeking liquidation, reorganization or other relief with respect to
it or its debts under the Bankruptcy Code or any other bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or any
substantial part of its property, and such involuntary case or other proceeding
shall remain undismissed and unstayed for a period of 60 days; or such Pledgor's
assets shall become subject to the jurisdiction of a bankruptcy court; or an
order for relief or similar decree shall be entered against such Pledgor under
the Bankruptcy Code or any other bankruptcy, insolvency or other similar law now
or hereafter in effect.
Sch B-1
26
EXHIBIT A
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, __________________, [title] of [Cherrywood Holdings,
Inc.] [Xxxxxx Investors, L.L.C.] (the "Pledgor"), hereby certifies, pursuant to
Section 4(b) of the Security and Pledge Agreement dated as of March __, 1997
among the Pledgor, __________________________, as Collateral Agent, and Nextel
STRYPES Trust (the "Security and Pledge Agreement"; terms defined in the
Security and Pledge 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"):
[Specify Substituted Collateral]
2. The Pledgor requests that the Collateral Agent transfer to the
Pledgor the following Prior Collateral, pursuant to Section 4(b) of the Security
and Pledge Agreement:
[Specify Prior Collateral]
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 Security and Pledge Agreement, or the
subsequent sale or transfer of such items of Substituted Collateral by
the Collateral Agent pursuant to the terms of the Security and Pledge
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 Security and
Pledge Agreement) and Transfer Restrictions. Upon Delivery of the
Substituted 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.
Ex A-1
27
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_______ day of _______________ , 199__.
___________________________
Name:
Title:
Ex A-2
28
EXHIBIT B
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, ________________, [title] of [Cherrywood Holdings,
Inc.] [Xxxxxx Investors, L.L.C.] (the "Pledgor"), hereby certifies, pursuant to
Section 4(c) of the Security and Pledge Agreement, dated as of March __, 1997,
among the Pledgor, _________________________, as Collateral Agent, and Nextel
STRYPES Trust (the "Security and Pledge Agreement"; terms defined in the
Security and Pledge Agreement being used herein as defined therein), that:
1. The Pledgor is delivering the following securities, obligation
or other property to the Collateral Agent to be held by the Collateral Agent as
additional Collateral (the "Additional Collateral"):
[Specify 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 Security and Pledge Agreement, or the
subsequent sale or transfer of such items of Additional Collateral by
the Collateral Agent pursuant to the terms of the Security and Pledge
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 Security and
Pledge Agreement) and Transfer Restrictions. Upon Delivery of the
Additional 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.
Ex B-1
29
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_______ day of _______________ , 199__.
________________________________
Name:
Title:
Ex B-2
30
EXHIBIT C
[Date]
[Transfer Agent of Reference Security]
[Address]
Re: [description of securities]
owned by [Cherrywood Holdings, Inc.] [Xxxxxx Investors, L.L.C.] (the
"Pledgor")
Dear Sir/Madam:
Please be advised that as of _______, ____, the Pledgor hereby directs
that you, as transfer agent of the [description of securities] owned by the
Pledgor, distribute all future dividends or other distributions in the form of
cash, securities or other property to The Bank of New York at
___________________________________________, ABA No. ___________, Account No.
__________, Ref: ______________________________. This letter of direction may
not be amended or altered in any way without the receipt by you, as transfer
agent, of joint written instructions from the Pledgor, The Bank of New York and
Nextel STRYPES Trust.
Very truly yours,
[Cherrywood Holdings, Inc.]
[Xxxxxx Investors, L.L.C.]
By: _________________________
Name:
Title:
Accepted and Acknowledged:
[Transfer Agent]
Name: Date:
Title:
Ex C-1
