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Exhibit (k)(4)
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DOLLAR GENERAL STRYPES TRUST
SECURITY AND PLEDGE AGREEMENT
Dated: ______________________, 1998
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Table of Contents
Page
1. Definitions............................................................2
(a) Terms Defined in this Security and Pledge Agreement..............2
"Collateral".....................................................2
"Collateral Agent"...............................................2
"Collateral Amount"..............................................2
"Collateral Event of Default"....................................2
"Delivery........................................................2
"Dollar General".................................................3
"Dollar General Common Stock"....................................3
"Event of Default"...............................................3
"Forward Purchase Contract"......................................3
"Lien"...........................................................3
"Pledgor"........................................................3
"Responsible Officer"............................................3
"Secured Amounts"................................................3
"Securities Account".............................................4
"Securities Intermediary"........................................4
"Security and Pledge Agreement"..................................4
"Security Entitlement"...........................................4
"Series A Preferred Stock".......................................4
"Transfer Restriction"...........................................4
"Trust"..........................................................4
"Trust Agreement"................................................4
"Trustee" or "Trustees"..........................................5
"Xxxxxx Trustees"................................................5
"Uniform Commercial Code"........................................5
(b) Uniform Commercial Code..........................................5
(c) Terms Defined in Forward Purchase Contract.......................5
2. Required Collateral....................................................5
(a) Initial Delivery by Pledgor to Collateral Agent..................5
(b) Collateral Requirement...........................................5
3. Grant of Security Interest.............................................5
4. Administration of Collateral...........................................6
(a) Collateral Adequacy..............................................6
(b) Additional Collateral............................................6
(c) Examination of Collateral........................................7
(d) Release of Excess Collateral.....................................7
(e) Conversion of Series A Preferred Stock...........................7
(f) Maintenance of Collateral........................................8
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(g) Investment of Cash Collateral....................................8
(h) Delivery of Contract Consideration...............................9
5. Distributions in Respect of Collateral.................................9
6. Remedies Upon Events of Default.......................................10
(a) Delivery Upon Event of Default..................................10
(b) Power of Attorney...............................................11
(c) Waivers by the Pledgor..........................................11
(d) Rights and Remedies Under the Uniform Commercial Code...........11
7. Other Provisions Regarding the Collateral.............................11
(a) No Disposition..................................................11
(b) Further Protections.............................................11
(c) Delay in Enforcement; No Waiver.................................12
8. Representations and Warranties........................................12
(a) Representations and Warranties of Pledgor.......................12
(b) Representations and Warranties of Collateral Agent..............13
9. The Collateral Agent..................................................14
(a) Appointment of Collateral Agent.................................14
(b) Duties of Collateral Agent......................................14
(c) Reliance........................................................14
(d) Liability of Collateral Agent...................................14
(e) Risk of Funds...................................................15
(f) Use of Sub-Agents or Attorneys..................................15
(g) Recitals and Statements.........................................15
(h) Knowledge.......................................................15
(i) Merger..........................................................15
(j) Resignation of Collateral Agent.................................15
(k) Removal.........................................................16
(l) Appointment of Successor........................................16
(m) Acceptance by Successor.........................................16
10. Miscellaneous.........................................................16
(a) Amendments, Etc.................................................16
(b) Notices and Other Communications................................17
(c) Waivers.........................................................17
(d) Non-Assignment..................................................18
(e) Waiver of Jury Trial............................................18
(f) Governing Law...................................................18
(g) Headings........................................................18
(h) Entire Agreement................................................18
(i) Counterparts....................................................18
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(j) Force Majeure...................................................18
(k) Binding Effect..................................................19
(l) Separability....................................................19
11. Termination of Security and Pledge Agreement..........................19
12. Application of Bankruptcy Code........................................19
13. No Personal Liability of Trustees.....................................19
SCHEDULE A Events of Default.......................................Sch A-1
EXHIBIT A Certificate for Additional Collateral....................Ex A-1
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SECURITY AND PLEDGE AGREEMENT
This Security and Pledge Agreement is made as of _________________, 1998
among Dollar General STRYPES Trust, a business trust created pursuant to the
Business Trust Act of the State of Delaware (Chapter 38, Title 12, of the
Delaware Code, 12 Del. C. (Sections 3801 et seq.)) (such trust and the trustees
thereof acting in their capacity as such being referred to herein as the
"Trust"), the Xxxxxx Children Trust, a trust made by Xxx Xxxxxx, Xx., Xxxxx
Xxxxxxx Xxxxxx, Xxxxx X. Xxxxx and Xxxxxxxxx Xxxxxx Xxxxxx as Donors under the
Indenture of Trust dated January 21, 1980, as amended (the "Indenture of
Trust"), and for which Xxx Xxxxxx, Xx. and Xxxxx Xxxxxxx Xxxxxx act as
Co-Trustees (such trust and the co-trustees thereof acting in their capacities
as such being referred to herein as the "Pledgor"), and The Bank of New York, a
New York banking corporation, as agent and custodian for and on behalf of the
Trust (the "Collateral Agent").
WHEREAS, the Trust has filed with the Securities and Exchange Commission a
registration statement on Form N-2 (File Nos. 333-50783 and 811-08755) and
Pre-Effective Amendments No. 1 and 2 thereto contemplating the offering of up to
8,625,000 of its Structured Yield Product Exchangeable for Stock(SM) (the
"STRYPES"), the terms of which contemplate that, on [ ], 2001 (the "Exchange
Date"), each such STRYPES will be mandatorily exchanged for a specified number
of shares of Common Stock, par value $.50 per share (the "Dollar General Common
Stock"), of Dollar General Corporation, a Kentucky corporation ("Dollar
General"), or, in certain circumstances, cash, or a combination of cash and
Dollar General Common Stock, with an equal value.
WHEREAS, the STRYPES are to be issued pursuant to an Amended and Restated
Trust Agreement, dated as of May 1, 1998 (the "Trust Agreement"), among the
trustees of the Trust and ML IBK Positions, Inc., as Sponsor.
WHEREAS, in order to obtain the shares of Dollar General Common Stock that
would be required by the Trust in order to exchange all of the STRYPES on the
Exchange Date, the Trust has entered into a Forward Purchase Contract, dated as
of _____________, 1998 (the "Forward Purchase Contract"), with the Collateral
Agent and the Pledgor providing for the future acquisition, sale and delivery of
the aggregate number of shares of Dollar General Common Stock that would be
required by the Trust in order to exchange all of the STRYPES on the Exchange
Date, subject to the Pledgor's right to accelerate the settlement of its
obligation under the Forward Purchase Contract.
WHEREAS, the Pledgor has initially Delivered ______ shares of Series A
Convertible Junior Preferred Stock of Dollar General (the "Series A Preferred
Stock") to the Collateral Agent, which has agreed to hold such shares pursuant
to the terms hereof as security for the obligations of the Pledgor pursuant to
the Forward Purchase Contract.
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(SM) Service mark of Xxxxxxx Xxxxx & Co., Inc.
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WHEREAS, the Trust and the Pledgor desire that ownership of the shares of
Series A Preferred Stock held by the Collateral Agent (including, without
limitation, voting rights and rights to receive any dividends, interest,
distributions and other payments in respect thereof) remain in the Pledgor
unless and until such shares are delivered to the Trust pursuant to the
provisions hereof and of the Forward Purchase Contract.
WHEREAS, the Trust and the Pledgor desire that the obligations of the
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) Terms Defined in this Security and Pledge Agreement. For all purposes
of this Security and Pledge Agreement, except as otherwise expressly provided or
unless the context otherwise requires, the following terms, when used herein,
shall have the following meanings:
"Collateral" means all the cash, securities and other property Delivered
to the Collateral Agent hereunder or pursuant to the Forward Purchase Contract
in respect of the Collateral Amount and held by the Collateral Agent, including,
without limitation, cash, securities or other property purchased with cash
Delivered pursuant to Section 4(g) or otherwise obtained by the Collateral Agent
in respect of the foregoing.
"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 Event of Default" has the meaning specified in Schedule A.
"Delivery" means (i) with respect to shares of Dollar General Common Stock
or Series A Preferred Stock, the delivery of such shares, free and clear of all
Liens (other than a Lien created or permitted by this Security and Pledge
Agreement or a Lien created by the Collateral Agent or the Trust), to the
Collateral Agent at such location in The City of New York as it shall direct,
registered in the name of the Collateral Agent or its nominee or 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; (ii) with respect to cash or Marketable Securities, the delivery of such
cash or Marketable Securities, free and clear of all Liens (other than a Lien
created or permitted by this Security and Pledge Agreement or a Lien created by
the Collateral Agent or the Trust), (A) to the Collateral Agent at such location
in The City 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 and (iii) with respect to any Treasury
securities maintained in the Treasury/Reserve Automated Debt Entry System
(TRADES), (a) delivery to the Collateral Agent of a listing of such securities
by title (or series), unpaid principal amount
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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.
"Dollar General" has the meaning specified in the first recital in this
Security and Pledge Agreement.
"Dollar General Common Stock" has the meaning specified in the first
recital in this Security and Pledge Agreement; provided that, in the event of a
reclassification referred to in clause (iv) of Section 3.1(a) of the Forward
Purchase Contract, the term "Dollar General Common Stock" shall mean the other
common stock of Dollar General issued pursuant thereto.
"Event of Default" has the meaning specified in Schedule A.
"Forward Purchase Contract" has the meaning specified in the third recital
in this Security and Pledge Agreement.
"Lien" means any lien, mortgage, security interest, pledge, charge,
encumbrance, claim or equity of any kind.
"Pledgor" has the meaning specified in the introductory paragraph of this
Security and Pledge Agreement.
"Responsible Officer" means, when used with respect to the Collateral
Agent, any vice president, assistant vice president, trust officer, 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 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 the amounts at any time payable or obligations to
be performed by the 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 the Contract Consideration on the
Closing Date pursuant to Section 2.1, 7.1, 7.2 or 7.3 of the Forward Purchase
Contract and/or, if the Pledgor has elected to exercise its option to settle its
obligations under Sections 2.1, 2.2, 2.3 or 2.4 of the Forward Purchase Contract
in whole or in part by making the cash settlement payment pursuant to Section
2.5 of the Forward Purchase Contract in lieu of delivering shares of Dollar
General Common Stock, the delivery of such cash settlement payment 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
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by the Pledgor pursuant to Section 6.1 of the Forward Purchase Contract at the
respective times specified therein.
"Securities Account" means the account in the name of the Collateral Agent
at a Federal Reserve Bank or branch to which Treasury securities are or may be
credited and which is identified as such to the 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.
"Series A Preferred Stock" has the meaning specified in the fourth recital
in this Security and Pledge Agreement.
"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 (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."
"Trust" has the meaning specified in the introductory paragraph of this
Security and Pledge Agreement.
"Trust Agreement" has the meaning specified in the second recital in this
Security and Pledge Agreement.
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"Trustee" or "Trustees" means any trustee or trustees of the Trust
identified on the signature pages to the Trust Agreement, or any successor as
such trustee or trustees.
"Xxxxxx Trustee" or "Xxxxxx Trustees" means any trustee or trustees of the
Pledgor identified on the signature page to the Indenture of Trust, dated
January 21, 1980, made by Xxx Xxxxxx, Xx., Xxxxx Xxxxxxx Xxxxxx, Xxxxx Xx Xxxxx
and Xxxxxxxxx Xxxxxx Xxxxxx, as Xxxxxx, 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 the term Delivery, deemed to be in effect
pursuant to U.S. law and regulations applicable thereto.
(b) Uniform Commercial Code. Unless otherwise defined herein or in the
Forward Purchase Contract, all terms defined in Article 8 or Article 9 of the
Uniform Commercial Code are used herein as therein defined.
(c) Terms Defined in Forward Purchase Contract. Capitalized words and
phrases used herein and not otherwise defined herein are used herein as defined
in the Forward Purchase Contract.
2. Required Collateral.
(a) Initial Delivery by the Pledgor to Collateral Agent. The Pledgor has
Delivered to the Collateral Agent certificates representing [ ] shares of
Series A Preferred Stock, representing the Collateral Amount as of the date
hereof.
(b) Collateral Requirement. The Pledgor shall Deliver, or cause to be
Delivered, to the Collateral Agent cash, securities and other property such that
the Collateral is at all times at least equal to the Collateral Amount. The
Collateral Agent shall hold such amounts of cash, securities and/or other
property as from time to time may be Delivered, or caused to be Delivered, to
the Collateral Agent as Collateral as expressly provided herein in order to
perfect the continuing first priority security interest in such Collateral
granted to the Collateral Agent, as agent of and for the benefit of the Trust.
3. Grant of Security Interest.
(a) As security for the prompt and complete payment and performance when
due of the Secured Amounts, the 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 the Pledgor's right, title and interest in and to, the
cash, securities and other property of the 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
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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
any donor of the Pledgor) (except for the cash dividends, interest and payments
required to be distributed to the Pledgor in accordance with Section 5 hereof)
and, subject to Section 5 hereof, all powers and rights of the Pledgor now or
hereafter acquired by the Pledgor, including rights of enforcement, under or
with respect to any or all of the foregoing.
(b) The Pledgor shall, at its expense and in such manner and form as the
Trust or the Collateral Agent may reasonably 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 the 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, the 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, the 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 the 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 the Pledgor's name, as the Pledgor's
attorney-in-fact, such documents and the Pledgor does hereby designate the
Collateral Agent as its attorney-in-fact to execute and file any such financing
statement or continuation statement.
4. Administration of Collateral.
(a) Collateral Adequacy. As soon as practicable after becoming aware of
any event that requires an adjustment to the Exchange Rate Formula, the
Collateral Agent shall determine whether the Collateral is at least equal to the
Collateral Amount. If the Collateral Agent determines that the Collateral is
less than the Collateral Amount, the Collateral Agent shall promptly notify the
Pledgor of such determination by telephone call followed by a written
confirmation of such call [given as contemplated by Section 10(b) hereof].
(b) Additional Collateral. The Pledgor shall Deliver, or cause to be
Delivered, to the Collateral Agent such additional cash, securities and other
property of the Pledgor in the manner described in this Section 4(b) as are
necessary to satisfy the Collateral requirement set forth in Section 2(b)
hereof. Concurrently with the Delivery of any additional cash, securities or
other property as Collateral hereunder, the Pledgor shall deliver (i) a
certificate of the Pledgor substantially in the form of Exhibit A hereto and
dated the date of such Delivery, (A) identifying
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the additional items of Collateral being Delivered and (B) certifying that with
respect to such additional items of Collateral the representations and
warranties contained in such Exhibit A hereto are true and correct on and as of
the date thereof and (ii) an opinion of counsel, dated the date of such
delivery, addressed to the Collateral Agent, confirming the representations
contained in the second sentence of paragraph 2(b) of Exhibit A hereto. The
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, any such additional Collateral.
(c) Examination of Collateral. Upon Delivery of any cash, securities or
other property by the Pledgor as Collateral under this Security and Pledge
Agreement, the Collateral Agent shall examine such cash, securities or property
and any opinions and certificates delivered pursuant to Section 4(b) or
otherwise pursuant to the terms hereof in connection therewith to determine that
they comply as to form with the requirements of this Security and Pledge
Agreement.
(d) Release of Excess Collateral. Unless an Event of Default or a failure
by the Pledgor to meet any of its obligations under Sections 2 or 4 hereof has
occurred and is continuing, the Pledgor may obtain the release from the Lien
hereof of any Collateral in excess of the Collateral Amount, upon delivery to
the Collateral Agent of a written notice from 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 Collateral at the time of such
proposed release, after giving effect to the proposed release, shall at least
equal the Collateral Amount.
(e) Conversion of Series A Preferred Stock. (i) As soon as practicable
after the tenth Trading Day prior to the Settlement Date, unless the Collateral
Agent shall have been notified by the Administrator that the Pledgor has made a
proper election, pursuant to Section 2.5 of the Forward Purchase Contract, to
settle its obligation under Section 2.1 thereof in whole through a cash payment,
the Collateral Agent shall convert into Dollar General Common Stock such number
of shares of Series A Preferred Stock then held by the Collateral Agent
hereunder as is necessary to obtain an aggregate number of shares of Dollar
General Common Stock equal to the number required to be delivered by the Pledgor
on the Settlement Date pursuant to Section 2.1 of the Forward Purchase Contract.
(ii) As soon as practicable after the Collateral Agent shall have received
notice from the Administrator that the Pledgor has properly exercised its
acceleration option contained in Section 7.3 of the Forward Purchase Contract
and has elected to pay the Optional Acceleration Amount in shares of Dollar
General Common Stock, but in no event later than five calendar days prior to the
related Optional Acceleration Date, the Collateral Agent shall convert into
Dollar General Common Stock such number of shares of Series A Preferred Stock
then held by the Collateral Agent hereunder as is necessary to obtain an
aggregate number of shares of Dollar General Common Stock equal to the number
required to be delivered by the Pledgor on the related Optional Acceleration
Date pursuant to Section 7.3 of the Forward Purchase Contract.
(iii) The Collateral Agent shall effect any conversion of Series A
Preferred Stock required pursuant to this Section 4(e) by surrendering to Dollar
General or any transfer agent for the Series A Preferred Stock the certificate
or certificates for the shares of Series A Preferred
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Stock so to be converted, with the notice of conversion on such certificate duly
completed and executed. All shares of Dollar General Common Stock obtained by
the Collateral Agent upon conversion of shares of Series A Preferred Stock as
contemplated by this Section 4(e) shall be held as Collateral for all purposes
hereof pending delivery pursuant to the Forward Purchase Agreement as expressly
provided herein.
(f) 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, it
being understood that the Collateral Agent in its capacity as such shall not,
except as specifically set forth herein or contemplated hereby, have any
responsibility for (a) ascertaining or taking action with respect to calls,
conversions, exchanges, maturities or other matters relative to any Collateral,
whether or not the Collateral Agent has or is deemed to have knowledge of such
matters, (b) taking any necessary steps to preserve rights against parties with
respect to any Collateral or (c) investing or reinvesting any of the Collateral.
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. Except as specifically
provided in this Security and Pledge Agreement, the Collateral Agent 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 or Transfer Restriction on or with
respect to any of the Collateral, any interest therein, or any proceeds thereof.
Any certificated securities to be held by the Collateral Agent shall be
registered in the name of the Collateral Agent or its nominee. In the event that
certificates evidencing any securities shall be Delivered to the Collateral
Agent accompanied by duly executed instruments of transfer or assignment in
blank, the Collateral Agent shall, as soon as practicable after such Delivery,
take such steps as are necessary to register such securities in the name of the
Collateral Agent or its nominee. Any uncertificated 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 Pledgor or as obtained by the Collateral Agent
pursuant to Section 4(f), if applicable.
In the event of (i) any adjustment to the Exchange Rate Formula resulting
from the application of the provisions of Section 3.1 of the Forward Purchase
Contract or (ii) any Reorganization Event, the Collateral Agent shall take all
measures reasonably designed to assure that the Collateral is maintained by the
Collateral Agent as provided in this Security and Pledge Agreement and
facilitating the operation of Section 5 of this Security and Pledge Agreement.
(g) Investment of Cash Collateral. The Collateral Agent shall, in
accordance with the written instructions of the Pledgor, invest and reinvest all
cash Collateral in United States Treasury Bills with maturities of 7 days or
less but in any case maturing not later than the second Business Day prior to
the Early Settlement Date and all such securities so obtained and amounts
obtained in respect thereof shall be held as Collateral for all purposes hereof.
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(h) Delivery of Contract Consideration. (i) On the Settlement Date, the
Collateral Agent shall deliver to the Trust, in respect of the Pledgor's
obligation under Section 2.1 of the Forward Purchase Contract, an aggregate
number of shares of Dollar General Common Stock then held by the Collateral
Agent hereunder equal to the number of shares of Dollar General Common Stock
then required to be delivered by the Pledgor under Section 2.1 of the Forward
Purchase Contract, except to the extent that the Pledgor has made a proper
election, pursuant to Section 2.5 of the Forward Purchase Contract, to settle
its obligation under such Section 2.1 in whole through a cash payment. Upon such
delivery, the Trust shall hold such delivered shares of Dollar General Common
Stock free and clear of all Liens (other than Liens created by the Collateral
Agent or the Trust) and Transfer Restrictions (other than Transfer Restrictions
created by the Collateral Agent or the Trust).
(ii) On the Early Settlement Date (if any), the Collateral Agent shall
deliver to the Trust, in respect of the Pledgor's obligation under Section 7.2
of the Forward Purchase Contract, an aggregate amount of cash and/or an
aggregate number or amount of Marketable Securities then held by the Collateral
Agent hereunder equal to the amount or number of cash and/or Marketable
Securities then required to be delivered by the Pledgor under Section 7.2 of the
Forward Purchase Contract. Upon such delivery, the Trust shall hold such
delivered cash and/or Marketable Securities free and clear of all Liens (other
than Liens created by the Collateral Agent or the Trust) and Transfer
Restrictions (other than Transfer Restrictions created by the Collateral Agent
or the Trust).
(iii) On any Optional Acceleration Date, the Collateral Agent shall
deliver to the Trust, in respect of the Pledgor's obligation under Section 7.3
of the Forward Purchase Contract, an aggregate number of shares of Dollar
General Common Stock then held by the Collateral Agent hereunder equal to the
number of shares of Dollar General Common Stock then required to be delivered by
the Pledgor under Section 7.3 of the Forward Purchase Contract, except to the
extent the Pledgor has made a proper election, pursuant to said Section 7.3, to
settle its obligation in whole through a cash payment. Upon such delivery, the
Trust shall hold such delivered shares of Dollar General Common Stock free and
clear of all Liens (other than Liens created by the Collateral Agent or the
Trust) and Transfer Restrictions (other than Transfer Restrictions created by
the Collateral Agent or the Trust).
(iv) If after effecting the delivery, if any, required by subsection (i),
(ii) or (iii) of this Section 4(h), as applicable, all of the obligations of the
Pledgor under Articles II and VII of the Forward Purchase Contract (including
any obligation to pay the Cash Payment Amount pursuant to Section 2.5 thereof)
have been discharged or sufficient funds have been deposited with the
Administrator for the discharge thereof, any remaining cash, securities and
other property then pledged by the Pledgor and held by the Collateral Agent
shall be released and Delivered to such account or place as the Pledgor shall
have specified by notice to the Collateral Agent.
5. Distributions in Respect of Collateral.
(a) Unless an Event of Default or a failure by the Pledgor to meet any of
its obligations under Sections 2 or 4 hereof has occurred and is continuing, the
Pledgor shall be entitled to receive for its own account all dividends,
interest, distributions and other payments
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relating to all of the Collateral. The Collateral Agent agrees to release from
the Lien hereof all such payments received by it and to remit the same to the
Pledgor on the Business Day received or as soon as practicable thereafter;
provided that such payments shall be so released and remitted only after the
Collateral Agent shall have determined that the Collateral at the time of such
proposed release and remittance, after giving effect to the proposed release and
remittance, shall at least equal the Collateral Amount. At any time when the
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
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), 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 or a failure by the Pledgor to meet any of
its obligations under Sections 2 or 4 hereof has occurred and is continuing,
until delivery pursuant to Section 4(h) hereof, the Pledgor shall have the
right, from time to time, to vote and to give consents, ratifications and
waivers with respect to the Collateral, and the Collateral Agent shall 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 as shall be necessary or appropriate to give
effect to such right.
If an Event of Default or a failure by the Pledgor to meet any of
its obligations under Sections 2 or 4 hereof shall have occurred and be
continuing, until delivery pursuant to Section 4(h) hereof, the Collateral Agent
may, and at the direction of the managing trustee of the Trust shall, 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), vote and give consents,
ratifications and waivers, and take any other action with respect to any or all
of the Collateral with the same force and effect as if the Collateral Agent were
the absolute and sole owner thereof.
6. Remedies Upon Events of Default.
(a) Delivery Upon Event of Default. If an Event of Default shall have
occurred and be continuing, the Collateral Agent shall deliver to the Trust on
the date the Acceleration Amount Notice relating to such Event of Default is
received by the Collateral Agent or as soon as practicable thereafter an
aggregate number of shares of Dollar General Common Stock equal to the number
then required to be delivered by the Pledgor under Section 7.1 of the Forward
Purchase Contract, whereupon the Trust shall hold such shares of Dollar General
Common Stock free and clear of all Liens (other than Liens created by the
Collateral Agent or the Trust) and Transfer Restrictions (other than Transfer
Restrictions created by the Collateral Agent or the Trust), 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 waive all rights of redemption,
stay or appraisal which it has or may have under any law now existing or
hereafter adopted.
(b) Power of Attorney. Upon any delivery of all or any part of any
Collateral duly made under the power of delivery given hereunder or under
judgment or decree in any judicial proceedings for foreclosure or otherwise for
the enforcement of this Security and Pledge
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Agreement, the Collateral Agent is hereby irrevocably appointed the true and
lawful attorney of the Pledgor, in the name and stead of the Pledgor, to make
all necessary deeds, bills of sale and instruments of assignment, transfer or
conveyance of the property thus delivered. 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 the Pledgor hereby ratifies and confirms
all that attorneys acting under such power, or such attorneys' successors or
agents, shall lawfully do by virtue of this Security and Pledge Agreement. If so
requested by the Collateral Agent or by the Trustees, the Pledgor shall further
ratify and confirm any such delivery by executing and delivering to the
Collateral Agent or to the Trustees at the expense of the Pledgor all proper
deeds, instruments of assignment, conveyance of transfer and releases as may be
designated in any such request.
(c) Waivers by the Pledgor. The Pledgor waives any presentment, demand,
protest or, to the extent permitted by applicable law, notice in connection with
this Security and Pledge Agreement.
(d) Rights and Remedies Under the Uniform Commercial Code. In the event
that any Secured Amounts payable by the Pledgor are not paid when due or any
Secured Amounts to be performed by the Pledgor are not performed when due, in
addition to all other rights and remedies provided for herein or otherwise
available to the Collateral Agent and the Trust, the Collateral Agent may, and
at the direction of the managing trustee of the Trust shall, exercise all of the
rights and remedies of a secured party under the Uniform Commercial Code
(whether or not the Uniform Commercial Code applies to the Collateral) and all
other applicable law with respect to all or any part of the Collateral.
7. Other Provisions Regarding the Collateral.
Until all obligations of the Pledgor under Articles II and VII of the
Forward Purchase Contract have been performed in full, the parties hereto
covenant and agree as follows:
(a) No Disposition. The 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 and Liens created by the Collateral Agent or the Trust.
(b) Further Protections. The Pledgor will pay in a timely fashion all
taxes, assessments, fees or charges of any nature that are imposed in respect of
the Collateral as a result of the Pledgor's ownership thereof or any action or
omission on the part of the Pledgor. The Pledgor will give written notice to the
Trust and the Collateral Agent of, and defend the Collateral against, any suit,
action or proceeding against the Collateral or which could adversely affect the
security interests granted hereunder.
(c) 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
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Collateral Agent chooses not to exercise or enforce any of its rights, the
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. Representations and Warranties. (a) Representations and Warranties of
Pledgor. On a continuing basis during the term of this Security and Pledge
Agreement, the Pledgor represents and warrants to the Collateral Agent and to
the Trust as follows:
(i) the 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 the
enforceability of such performance is considered in a proceeding in
equity or at law);
(ii) the execution, delivery and performance of this Security and
Pledge Agreement by the Pledgor do not contravene any requirement of
law, the Indenture of Trust or any material transactional
restriction or material agreement binding on or affecting the
Pledgor or any of its assets;
(iii) this Security and Pledge Agreement has been duly and properly
executed and delivered by the Pledgor and constitutes a legal, valid
and binding agreement of the Pledgor enforceable against the 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 (other than Transfer Restrictions
applicable to the Series A Preferred Stock contained in the Restated
Articles of Incorporation of Dollar General, as amended as of August
22, 1994, Transfer Restrictions created by this Security and Pledge
Agreement and Transfer Restrictions created by the Collateral Agent
or the Trust) 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;
(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, the Pledgor has all
rights, title and interest in and 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 any Lien created by the Collateral Agent or the Trust)
and Transfer
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Restrictions (other than Transfer Restrictions applicable to the
Series A Preferred Stock contained in the Restated Articles of
Incorporation of Dollar General, as amended as of August 22, 1994,
Transfer Restrictions created by this Security and Pledge Agreement
and Transfer Restrictions created by the Collateral Agent or the
Trust), and has the right to pledge such Collateral as provided in
this Security and Pledge Agreement;
(vi) the Pledgor is not in default under any agreement by which the
Collateral may be bound and no litigation, arbitration or
administrative proceeding of which the Pledgor has received notice
or service of process is pending, which default, litigation,
arbitration or administrative proceeding is 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,
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 the Pledgor as collateral for
any other purpose; and
(viii) the Pledgor is presently solvent and able to pay, and is
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 the 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 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
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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 and custodian 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 Collateral 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 the face of any note,
notice, resolution, consent, certificate, affidavit, letter, telegram,
statement, order or other document furnished to it hereunder by the Trust or the
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 Collateral 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 gross 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 (or the priority thereof) on the Collateral purported to be created
hereby. In no event shall the Collateral Agent be liable for punitive,
exemplary, indirect or consequential damages. Except as specifically set forth
herein or contemplated hereby, the Collateral Agent shall have no duty (a) to
see to any recording, filing or depositing of this Security and Pledge Agreement
or any agreement referred to herein or therein or any financing statement or
continuation statement evidencing a security interest, or to see to the
maintenance of any such recording or filing or depositing or to any rerecording,
refiling or redepositing of any thereof, (b) to see to the maintenance of any
insurance or (c) to see to the
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payment or discharge of any tax, assessment, or other governmental charge or any
lien or encumbrance of any kind owing with respect to, assessed or levied
against, any part of the Collateral. The Collateral Agent shall not be
accountable for the use or application by the Trust of any of the proceeds of
the Collateral.
(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.
(g) Recitals and Statements. The Collateral Agent shall not be responsible
for the correctness of the recitals and statements herein which are made by the
Trust and the Pledgor or for any statement or certificate delivered by the
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,
anything herein to the contrary notwithstanding, shall 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, the execution or filing of any instrument or any
further act, deed or conveyance on the part of any of the parties hereto,
provided that such corporation or association meets the requirements set forth
in Section 9(l)(2) hereof and in the Trust Agreement.
(j) Resignation of Collateral 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 the Pledgor.
Such resignation shall take effect upon the appointment of a successor
Collateral Agent by the Trust. If, within 30 days after notice by the Collateral
Agent to the Trust and the Pledgor of the Collateral Agent's resignation, no
successor Collateral Agent shall have been appointed and accepted the duties of
the Collateral Agent as provided herein, the Collateral Agent may apply to a
court of competent jurisdiction for the appointment of a successor Collateral
Agent.
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(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 the Pledgor and signed by the Trust.
(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 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.
(m) Acceptance by Successor. Every temporary or permanent successor
Xxxxxxxxxx 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) 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
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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)):
Pledgor: The Xxxxxx Children Trust
c/o Xxx Xxxxxx, Xx.
Dollar General Corporation
000 Xxxxxxxx Xxxx.
Suite 500
Nashville, Tennessee 37205
Collateral Agent: The Bank of New York
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopier: (000) 000-0000
Trust: c/x Xxxxxxx & Associates
000 Xxxxxxx Xxxxxx
Xxxxx 000
Xxxxxx, Xxxxxxxx 19715
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 (unless such confirmation states that such transmission occurred after
5:00 P.M. on such first Business Day, in which case delivery shall be deemed to
have been received on the immediately succeeding Business Day), or (iii) sent by
certified mail, return receipt requested to the offices set forth above, in
which case they shall be deemed received when receipted for unless
acknowledgment of receipt is refused (in which case delivery shall be
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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 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 United
States Federal or New York State 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.
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(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 Pledgor, 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, power failures, earthquakes or other
disasters.
(k) Binding Effect. This Security and Pledge Agreement shall be binding
upon the respective parties hereto and their respective successors and assigns.
All the covenants and agreements herein contained by or on behalf of the Pledgor
and the Collateral Agent shall be enforceable by and inure to the benefit of the
Trust and its successors and assigns.
(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 the Pledgor in the Collateral shall
cease, terminate and be void upon fulfillment of all of the obligations of the
Pledgor under Articles II and VII of the Forward Purchase Contract, 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. 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 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). The parties hereto further acknowledge and agree that the
term "forward contract", as such term is used in the Forward Purchase Contract,
does not mean a "forward contract" as referred to in either Section
101(49)(B)(iii) of the Bankruptcy Code or Section 1259(d)(1) of the Internal
Revenue Code of 1986, as amended.
13. No Personal Liability of Trustees. By executing and delivering this Security
and Pledge Agreement, none of the Trustees assumes, and in no event shall incur,
any personal liability hereunder, other than as expressly provided by law. By
executing and delivering this Security and Pledge Agreement, none of the Xxxxxx
Trustees assumes, and in no event shall incur, any personal liability hereunder,
other than as expressly provided by law.
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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.
XXXXXX CHILDREN TRUST
By:
--------------------------------------
Xxx Xxxxxx, Xx., as Co-Trustee
By:
--------------------------------------
Xxxxx Xxxxxxx Xxxxxx, as Co-Trustee
THE BANK OF NEW YORK,
as Collateral Agent
By:
--------------------------------------
Name:
Title:
DOLLAR GENERAL STRYPES TRUST
By:
--------------------------------------
Xxxxxx X. Xxxxxxx, as Managing Trustee
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SCHEDULE A
Events of Default
An "Event of Default" shall have occurred upon the occurrence at any time
of any of the following events:
1. Failure of the Collateral to equal the Collateral Amount if such
failure is not remedied on or before the third Business Day after written notice
of such failure is given to the Pledgor by the Collateral Agent as contemplated
by Section 10(b) of this Security and Pledge Agreement (a "Collateral Event of
Default");
2. Failure by the Pledgor to comply with or perform any agreement or
obligation (other than an obligation to make or cause to be made any Delivery
under Section 2(b) of this Security and Pledge Agreement) to be complied with or
performed by the Pledgor in accordance with this Security and Pledge Agreement
if such failure is not remedied on or before the fifteenth day after written
notice of such failure is given to the Pledgor by the Collateral Agent as
contemplated by Section 10(b) of this Security and Pledge Agreement;
3. The Pledgor (a) defaults in making any payment or delivery of
securities or cash due to be paid or delivered to the Purchaser under the
Forward Purchase Contract (other than Section 6.2 thereof) or (b) disaffirms,
disclaims, repudiates or rejects, in whole or in part, the Forward Purchase
Contract;
4. Any donor of the Xxxxxx Children Trust shall commence a voluntary case
or other proceeding seeking relief with respect to himself or his 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,
custodian or other similar official of his property or any substantial part of
his 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 him;
5. An involuntary case or other proceeding shall be commenced against any
donor of the Xxxxxx Children Trust seeking relief with respect to him or his
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, custodian or other similar official of his property or any substantial
part of his property, and such involuntary case or other proceeding shall remain
undismissed and unstayed for a period of 60 days; or all or substantially all of
the assets of the Xxxxxx Children Trust shall become subject to the jurisdiction
of a bankruptcy court; or an order for relief or similar decree shall be entered
against any donor of the Xxxxxx Children Trust under the Bankruptcy Code or any
other bankruptcy, insolvency or other similar law now or hereafter in effect;
6. Any of the representations or warranties made by the Pledgor in this
Security and Pledge Agreement or the Forward Purchase Contract or in any
document delivered by or on
Sch A-1
26
behalf of the Pledgor hereunder or thereunder shall be materially false on the
date as of which made;
7. The Collateral Agent fails, at any time, to have a valid first and
perfected and enforceable security interest in, and lien on, the Collateral, and
such failure is not remedied on or before the fifth calendar day after written
notice of such failure is given to the Pledgor by the Collateral Agent as
contemplated by Section 10(b) of this Security and Pledge Agreement;
8. A judgment, statutory or other Lien (other than a Lien created or
permitted by this Security and Pledge Agreement) is asserted or assessed against
any of the Collateral;
9. Paragraph B of Article V of the Restated Articles of Incorporation of
Dollar General, as amended as of August 22, 1994, setting forth the powers,
designations, preferences and relative, participating, optional and other
special rights of the Series A Preferred Stock and the qualifications,
limitations and restrictions of the Series A Preferred Stock, shall be amended
or modified in any respect; which, in the judgment of the Trust upon advice of
counsel, adversely affects the rights of the Trust under the Forward Purchase
Contract or the Security and Pledge Agreement;
10. The donors of the Xxxxxx Children Trust shall, amend or modify the
Xxxxxx Children Trust or transfer the situs of administration thereof or change
the governing law applicable thereto and, in the judgment of the Trust upon
advice of counsel, such amendment, modification, transfer or change adversely
affects the rights of the Trust under the Forward Purchase Contract or the
Security Pledge Agreement; or
11. The donors of the Xxxxxx Children Trust shall revoke or terminate the
Xxxxxx Children Trust, or the Xxxxxx Children Trust shall otherwise terminate in
accordance with the terms of the Indenture of Trust dated January 21, 1980, as
amended.
Sch A-2
27
EXHIBIT A
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, Xxx Xxxxxx, Xx. and Xxxxx Xxxxxxx Xxxxxx, as Co-Trustees
of the Xxxxxx Children Trust (the "Pledgor"), hereby certify, pursuant to
Section 4(b) of the Security and Pledge Agreement, dated as of _______________,
1998, among the Pledgor, The Bank of New York, as Collateral Agent, and Dollar
General 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, obligations 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 all rights, title and interest in and 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 A-1
28
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_______ day of _______________, 199__.
XXXXXX CHILDREN TRUST
By:
--------------------------------------
Xxx Xxxxxx, Xx., as Co-Trustee
By:
--------------------------------------
Xxxxx Xxxxxxx Xxxxxx, as Co-Trustee
Ex A-2