<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON AUGUST 2, 1996
SECURITIES ACT FILE NO. 333-325
INVESTMENT COMPANY ACT FILE NO. 811-7499
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
FORM N-2
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
PRE-EFFECTIVE AMENDMENT NO. 2 /X/
POST-EFFECTIVE AMENDMENT NO. / /
AND/OR
REGISTRATION STATEMENT UNDER THE
INVESTMENT COMPANY ACT OF 1940 /X/
AMENDMENT NO. 2 /X/
--------------
DOLE FOOD AUTOMATIC
COMMON EXCHANGE SECURITY TRUST
(Exact Name of Registrant as Specified in its Charter)
C/O GOLDMAN, SACHS & CO.
85 BROAD STREET
NEW YORK, NEW YORK 10004
(Address of Principal Executive Offices)
Registrant's Telephone Number, including Area Code: (212) 902-1000
KENNETH L. JOSSELYN
85 BROAD STREET
NEW YORK, NEW YORK 10004
(Name and Address of Agent for Service)
COPIES TO:
Robert E. Buckholz, Jr., Esq.
Sullivan & Cromwell
125 Broad Street
New York, New York 10004
--------------
APPROXIMATE DATE OF PROPOSED PUBLIC OFFERING:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If any securities being registered on this form will be offered on a delayed
or continuous basis in reliance on Rule 415 under the Securities Act of 1933,
other than securities offered in connection with a dividend reinvestment plan,
check the following box. / /
/ / This form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act and the Securities Act
registration statement number of the earlier effective registration statement
for the same offering is 33- .
CALCULATION OF REGISTRATION FEE UNDER THE SECURITIES ACT OF 1933
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT BEING OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
TITLE OF SECURITIES BEING REGISTERED REGISTERED UNIT PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Automatic Common Exchange
Securities.......................... 2,875,000 $38.25 $109,968,750 $37,920.26(2)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Of this amount, $3,448.28 was previously paid by the Registrant in
connection with the initial filing of this registration statement on January
19, 1996. The balance of $34,471.98 is submitted herewith.
--------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- - --------------------------------------------------------------------------------
- - --------------------------------------------------------------------------------
<PAGE>
DOLE FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST
CROSS-REFERENCE SHEET
(PURSUANT TO RULE 404(C) UNDER THE SECURITIES ACT OF 1933)
PART A & B OF PROSPECTUS*
<TABLE>
<CAPTION>
ITEM NUMBER CAPTION LOCATION IN PROSPECTUS
- - ------------- --------------------------------------------------- ---------------------------------------------------
<C> <S> <C>
1. Outside Front Cover................................ Front Cover Page
2. Inside Front and Outside Back Cover Page........... Front Cover Page; Inside Front Cover Page; Outside
Back Cover Page
3. Fee Table and Synopsis............................. Prospectus Summary; Fee Table
4. Financial Highlights............................... Not Applicable
5. Plan of Distribution............................... Front Cover Page; Prospectus Summary; Underwriting
6. Selling Shareholders............................... Not Applicable
7. Use of Proceeds.................................... Use of Proceeds; Investment Objective and Policies
8. General Description of the Registrant.............. Front Cover Page; Prospectus Summary; The Trust;
Investment Objective and Policies; Risk Factors
9. Management......................................... Management and Administration of the Trust
10. Capital Stock, Long-Term Debt and Other
Securities........................................ Investment Objective and Policies; Description of
the Securities; Certain Federal Income Tax
Considerations
11. Defaults and Arrears on Senior Securities.......... Not Applicable
12. Legal Proceedings.................................. Not Applicable
13. Table of Contents of the Statement of Additional
Information....................................... Not Applicable
14. Cover Page......................................... Not Applicable
15. Table of Contents.................................. Not Applicable
16. General Information and History.................... The Trust
17. Investment Objective and Policies.................. Investment Objective and Policies
18. Management......................................... Management and Administration of the Trust
19. Control Persons and Principal Holders of
Securities........................................ Management and Administration of the Trust
20. Investment Advisory and Other Services............. Management and Administration of the Trust
21. Brokerage Allocation and Other Practices........... Investment Objective and Policies
22. Tax Status......................................... Certain Federal Income Tax Considerations
23. Financial Statements............................... Statement of Assets and Liabilities
</TABLE>
- - ------------------------
* Pursuant to the General Instructions to Form N-2, all information required
to be set forth in Part B: Statement of Additional Information has been
included in Part A: The Prospectus. Information required to be included in
Part C is set forth under the appropriate item so numbered in Part C of this
Registration Statement.
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAW OF ANY SUCH STATE.
<PAGE>
SUBJECT TO COMPLETION, DATED AUGUST 2, 1996
2,500,000 SHARES
DOLE FOOD
AUTOMATIC COMMON EXCHANGE SECURITY TRUST
$ . AUTOMATIC COMMON EXCHANGE SECURITIES
(SUBJECT TO EXCHANGE INTO SHARES OF COMMON STOCK OF DOLE FOOD COMPANY, INC.)
--------------
Each of the $ . Automatic Common Exchange Securities (the "Securities") of
Dole Food Automatic Common Exchange Security Trust (the "Trust") represents the
right to receive an annual distribution of $x.xx, and will be exchanged for
between 0.x shares and 1 share of common stock, no par value (the "Common
Stock"), of Dole Food Company , Inc. (the "Company") on , 1999 (the
"Exchange Date"). The annual distribution of $ . per Security is payable
quarterly on each , , and ,
commencing , 1996. The Securities are not subject to redemption.
The Trust is a newly organized, finite-term Trust established to purchase
and hold a portfolio of stripped U.S. Treasury securities maturing on a
quarterly basis through the Exchange Date, and a forward purchase contract (the
"Contract") with an existing shareholder (the "Seller") of the Company relating
to the Common Stock. The Trust's investment objective is to provide each holder
of Securities with a quarterly distribution of $ . per Security and, on the
Exchange Date, a number of shares of Common Stock per Security equal to the
Exchange Rate. The Exchange Rate is equal to (i) if the Current Market Price is
less than $ . (the "Appreciation Threshold Price") but equal to or greater
than $ . (the "Initial Price"), a number (or fractional number) of shares of
Common Stock per Security having a value (determined at the Current Market
Price) equal to the Initial Price, (ii) if the Current Market Price is equal to
or greater than the Appreciation Threshold Price, 0.x shares of Common Stock per
Security and (iii) if the Current Market Price is less than the Initial Price, 1
share of Common Stock per Security, subject in each case to adjustment in
certain events. Holders otherwise entitled to receive fractional shares in
respect of their aggregate holdings of Securities will receive cash in lieu
thereof. The "Initial Price" is $ . per share of Common Stock. The "Current
Market Price" means the average Closing Price per share of Common Stock for the
20 Trading Days immediately prior to, but not including, the Exchange Date. In
lieu of delivery of the Common Stock, the Seller may elect under the Contract to
pay cash on the Exchange Date in an amount equal to the then current market
value of the number of shares of the Common Stock determined under the above
formula (the "Cash Settlement Alternative"). To the extent the Seller elects the
Cash Settlement Alternative, holders of Securities will receive cash instead of
Common Stock on the Exchange Date. Holders otherwise entitled to receive
fractional shares in respect of their aggregate holdings of Securities will
receive cash in lieu thereof.
Holders of Securities will receive distributions at a higher annual rate
than the current annual dividends paid on the Common Stock. There is no
assurance, however, that the yield on the Securities will be higher than the
dividend yield on the Common Stock over the term of the Trust. In addition, the
opportunity for equity appreciation afforded by an investment in the Securities
is less than that afforded by an investment in the Common Stock because holders
of Securities will realize no equity appreciation if, on the Exchange Date, the
Current Market Price of the Common Stock is below the Appreciation Threshold
Price, and less than all of the appreciation if at that time the Current Market
Price is above the Appreciation Threshold Price. Holders of Securities will
realize the entire decline in equity value if the Current Market Price is less
than the price to public per Security shown below.
The Company is not affiliated with the Trust.
Application will be made to list the Securities on the New York Stock
Exchange under the symbol . Prior to this offering there has been no
public market for the Securities. The last reported sale price of the Common
Stock on the New York Stock Exchange on August 1, 1996, was $40 3/8 per share,
which is equal to the issue price of the Securities.
SEE "RISK FACTORS" ON PAGE 19 OF THIS PROSPECTUS FOR A DISCUSSION OF CERTAIN
FACTORS RELEVANT TO AN INVESTMENT IN THE SECURITIES.
-------------
(CONTINUED ON NEXT PAGE)
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
PRICE TO PUBLIC SALES LOAD(1) PROCEEDS TO THE TRUST(2)
--------------- -------------- ------------------------
<S> <C> <C> <C>
Per Security....................................................... $ $ (4) $
Total(3)........................................................... $ $ (4) $
</TABLE>
- - --------------------------
(1) The Company and the Seller have agreed to indemnify the Underwriters against
certain liabilities, including liabilities under the Securities Act of 1933.
See "Underwriting".
(2) Expenses of the offering, which are payable by Goldman, Sachs & Co. and the
Seller, are estimated to be $ .
(3) The Trust has granted to the Underwriters an option for 30 days to purchase
up to an additional 375,000 Securities at the price to the public per
Security, solely to cover over-allotments. If the option is exercised in
full, the total Price to Public, Sales Load and Proceeds to the Trust will
be $ , $ , $ , respectively. See
"Underwriting".
(4) In light of the fact that the proceeds of the sale of the Securities will be
used in part by the Trust to purchase the Contract from the Seller, the
Underwriting Agreement provides that the Seller will pay to the Underwriters
as compensation ("Underwriters' Compensation") $x.xx per Security. See
"Underwriting".
----------------
The Securities are offered severally by the Underwriters, as specified
herein, subject to receipt and acceptance by them and subject to their right to
reject any order in whole or in part. It is expected that certificates for the
Securities will be ready for delivery at the offices of Goldman, Sachs & Co.,
New York, New York, on or about , 1996.
GOLDMAN, SACHS & CO.
---------
The date of this Prospectus is , 1996.
<PAGE>
The Trust has adopted a policy that the Contract may not be disposed of
during the term of the Trust. The Trust will continue to hold the Contract
despite any significant decline in the market price of the Common Stock or
adverse changes in the financial condition of the Company.
This Prospectus sets forth concisely information about the Trust that a
prospective investor ought to know before investing. Potential investors are
advised to read this Prospectus and to retain it for future reference.
The Securities may be a suitable investment for those investors who are able
to understand the unique nature of the Trust and the economic characteristics of
the Contract and the U.S. Treasury securities held by the Trust.
The Trust will be a grantor trust for federal income tax purposes and each
holder of Securities will be treated as the owner of its pro rata portions of
the stripped U.S. Treasury securities and the Contract. For a discussion of the
principal United States federal income tax consequences of ownership of
Securities, see "Certain Federal Income Tax Considerations".
THE TRUST IS A NEWLY ORGANIZED CLOSED-END INVESTMENT COMPANY WITH NO
PREVIOUS HISTORY OF PUBLIC TRADING. TYPICAL CLOSED-END FUND SHARES FREQUENTLY
TRADE AT A PREMIUM TO OR DISCOUNT FROM NET ASSET VALUE. THIS CHARACTERISTIC OF
INVESTMENTS IN A CLOSED-END INVESTMENT COMPANY IS A RISK SEPARATE AND DISTINCT
FROM THE RISK THAT THE TRUST'S NET ASSET VALUE WILL DECREASE. THE TRUST CANNOT
PREDICT WHETHER ITS SHARES WILL TRADE AT, BELOW OR ABOVE NET ASSET VALUE. THE
RISK OF PURCHASING INVESTMENTS IN A CLOSED-END COMPANY THAT MIGHT TRADE AT A
DISCOUNT MAY BE GREATER FOR INVESTORS WHO WISH TO SELL THEIR INVESTMENTS SOON
AFTER COMPLETION OF AN INITIAL PUBLIC OFFERING.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE SECURITIES OR
THE COMMON STOCK AT LEVELS ABOVE THOSE WHICH MIGHT OTHERWISE PREVAIL IN THE OPEN
MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON THE NEW YORK STOCK EXCHANGE, THE
PACIFIC STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
2
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY OF THE PROVISIONS RELATING TO THE SECURITIES DOES NOT PURPORT
TO BE COMPLETE AND IS QUALIFIED IN ITS ENTIRETY BY THE DETAILED INFORMATION
APPEARING ELSEWHERE IN THIS PROSPECTUS. CERTAIN TERMS USED IN THIS SUMMARY ARE
DEFINED ELSEWHERE IN THIS PROSPECTUS.
THE TRUST
GENERAL. The Trust is a newly organized, finite-term trust. The Trust will
be registered as a non-diversified closed-end management investment company
under the Investment Company Act of 1940 (the "Investment Company Act"). Under
provisions of the Internal Revenue Code of 1986, as amended (the "Code"),
applicable to grantor trusts, the Trustees will not have the power to vary the
investments held by the Trust.
INVESTMENT OBJECTIVE AND POLICIES. The Trust will purchase and hold a
portfolio of stripped U.S. Treasury securities maturing on a quarterly basis
through the Exchange Date and the Contract with the Seller obligating the
Seller, on the Exchange Date, to deliver to the Trust a number of shares of
Common Stock equal to the product of the Exchange Rate times the initial number
of shares subject to the Contract (or the Current Market Price thereof). It is
the Trust's investment objective to provide the holders of Securities
("Holders") with a quarterly distribution of $x.xx per Security (which amount
equals the pro rata portion of the fixed quarterly cash distributions from the
proceeds of the maturing U.S. Treasury securities) and, on the Exchange Date, a
number of shares of Common Stock per Security equal to the Exchange Rate or, if
the Seller elects the Cash Settlement Alternative, an amount in cash equal to
the Current Market Price thereof. The Exchange Rate is equal to (i) if the
Current Market Price is less than the Appreciation Threshold Price but equal to
or greater than the Initial Price, a number (or fractional number) of shares of
Common Stock per Security having a value (determined at the Current Market
Price) equal to the Initial Price, (ii) if the Current Market Price is equal to
or greater than the Appreciation Threshold Price, 0.x shares of Common Stock per
Security and (iii) if the Current Market Price is less than the Initial Price, 1
share of Common Stock per Security, subject in each case to adjustment in
certain events. This provides the Trust with the potential for a portion of any
capital appreciation above the Appreciation Threshold Price on the Common Stock,
but no protection from depreciation of the Common Stock. Holders otherwise
entitled to receive fractional shares in respect of their aggregate holdings of
Securities will receive cash in lieu thereof. See "Investment Objective and
Policies -- Trust Termination".
The purchase price under the Contract is equal to $ per share of
Common Stock initially subject thereto and $ ( shares of Common
Stock) in the aggregate and is payable to the Seller by the Trust at the closing
of the offering of the Securities. The obligations of the Seller under the
Contract will be secured by a pledge of the Common Stock or, at the election of
the Seller, by substitute collateral consisting of short-term, direct
obligations of the U.S. Government. See "Investment Objective and Policies --
The Contract -- Collateral Arrangements; Acceleration".
THE OFFERING
The Trust is offering 2,500,000 Securities to the public at a purchase price
of $ per Security (which is equal to the last reported sale price of
the Common Stock on the date of the Offering) through a group of underwriters
(the "Underwriters") lead managed by Goldman, Sachs & Co. ("Goldman Sachs"). In
addition, the Underwriters have been granted options to purchase up to 375,000
additional Securities solely for the purpose of covering over-allotments. See
"Underwriting".
THE SECURITIES
GENERAL. The Securities are designed to provide investors with a higher
distribution per Security than the dividend currently paid per share on the
Common Stock. The annual distribution on the Securities is $ per share.
Based on the current annual dividend rate of $.40 per share of Common Stock, the
annual per share distribution per Security is $ greater than the
current annual per share dividend rate on the Common Stock. Future declarations
of dividends on the Common Stock by the Company and the amount of such dividends
are discretionary with its Board of Directors
3
<PAGE>
and subject to legal and other factors. Such further declarations will
necessarily depend on the Company's future earnings, financial condition,
capital requirements and other factors. Quarterly distributions on the
Securities will consist solely of the cash received from the U.S. Treasury
securities. The Trust will not be entitled to any dividends that may be declared
on the Common Stock.
Holders will receive distributions at a higher annual rate than the current
annual dividends paid on the Common Stock. There is no assurance, however, that
the yield on the Securities will be higher than the dividend yield on the Common
Stock over the term of the Trust. In addition, the opportunity for equity
appreciation afforded by an investment in the Securities is less than that
afforded by an investment in the Common Stock because Holders will realize no
equity appreciation if, on the Exchange Date, the Current Market Price of the
Common Stock is below the Appreciation Threshold Price (which represents an
appreciation of % of the Initial Price). Moreover, because a Holder will
only receive 0.x shares of Common Stock per Security (or the current Market
Price thereof) if the Current Market Price exceeds the Appreciation Threshold
Price, Holders will only be entitled to receive upon exchange % of any
appreciation of the value of the Common Stock in excess of the Appreciation
Threshold Price. Holders of Securities will realize the entire decline in equity
value if the Current Market Price is less than the price to public per Security
shown on the cover page hereof.
DISTRIBUTIONS. Holders are entitled to receive distributions at the rate
per Security of $ per annum or $ per quarter, payable
quarterly on each , , and or, if any such date is not a
business day, on the next succeeding business day, to Holders of record as of
each , , and , respectively. The first
distribution will be payable on , 1996 to Holders of record as of
, 1996. See "Investment Objective and Policies -- General".
MANDATORY EXCHANGE. On the Exchange Date, each outstanding Security will be
exchanged automatically for between 0.x shares and 1 share of Common Stock,
subject to adjustment in the event of certain dividends or distributions,
subdivisions, splits, combinations, issuances of certain rights or warrants or
distributions of certain assets with respect to the Common Stock. In lieu of
delivery of the Common Stock, the Seller may elect under the Contract to pay
cash on the Exchange Date in an amount equal to the then Current Market Price of
such number of shares of the Common Stock (the "Cash Settlement Alternative").
If the Seller elects the Cash Settlement Alternative, Holders will receive cash
instead of Common Stock on the Exchange Date. In addition, in the event of a
merger of the Company into another entity, or the liquidation of the Company, or
in certain related events, Holders would receive consideration in the form of
cash or Marketable Securities (as defined below under the caption "Investment
Objective and Policies -- The Contract -- Dilution Adjustments") rather than
shares of Common Stock. Further, the occurrence of certain defaults by the
Seller under the Contract or the collateral arrangements would cause the
acceleration of the Contract and the exchange of each Security for an amount of
shares of Common Stock (or Marketable Securities), cash, or a combination
thereof, in respect of the shares of Common Stock and the U.S. Treasury
Securities. See "Investment Objective and Policies -- The Contract -- Collateral
Arrangements; Acceleration"; "-- The U.S. Treasury Securities" and "-- Trust
Termination".
VOTING RIGHTS. Holders will have the right to vote on matters affecting the
Trust, as described below under the caption "Description of the Securities", but
will have no voting rights with respect to the Common Stock prior to receipt of
shares of Common Stock by the Holders as a result of the exchange of the
Securities for the Common Stock on the Exchange Date. See "Investment Objective
and Policies -- The Company" and "Description of the Securities".
THE COMPANY
The Company is engaged in the business of food production and distribution.
The Company is one of the largest companies engaged in the worldwide sourcing,
growing, processing, distributing and marketing of high quality, branded food
products. The Company sources, grows, processes or markets fruits, vegetables,
nuts and beverages in the following locations: North America, Latin America,
Asia and Europe.
4
<PAGE>
Reference is made to the accompanying prospectus of the Company (pages A-1
through A- hereto) which describes the Company and the shares of Common Stock
of the Company deliverable to the Holders upon mandatory exchange of the
Securities on the Exchange Date. The Company is not affiliated with the Trust
and will not receive any of the proceeds from the sale of the Securities. The
Company prospectus relates to an aggregate of 4,140,000 shares of Common Stock.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The Trust will be treated as a grantor trust for federal income tax
purposes. Accordingly, each Holder will be treated for federal income tax
purposes as the owner of its pro rata portion of the U.S. Treasury securities
and the Contract, and income received (including original issue discount treated
as received) by the Trust will generally be treated as income of the Holders.
The U.S. Treasury securities held by the Trust will be treated for federal
income tax purposes as having "original issue discount" that will accrue over
the term of the U.S. Treasury securities. It is currently anticipated that a
substantial portion of each quarterly cash distribution to the Holders will be
treated as a tax-free return of the Holders' investment in the U.S. Treasury
securities and therefore will not be considered current income for federal
income tax purposes. However, a Holder (whether on the cash or accrual method of
tax accounting) must recognize currently as income original issue discount on
the U.S. Treasury securities as it accrues. A Holder will have taxable gain or
loss upon receipt of cash in lieu of Common Stock distributed upon termination
of the Trust. Each Holder's basis in its Common Stock will be equal to its basis
in its pro rata portion of the Contract less the portion of such basis allocable
to any shares of Common Stock for which cash is received. See "Certain Federal
Income Tax Considerations".
MANAGEMENT AND ADMINISTRATION OF THE TRUST
The Trust will be internally managed and will not have an investment
adviser. The administration of the Trust will be overseen by three Trustees. The
day-to-day administration of the Trust will be carried out by The Bank of New
York (or its successor) as trust administrator (the "Administrator"). The Bank
of New York (or its successor) will also act as custodian (the "Custodian") for
the Trust's assets and as paying agent (the "Paying Agent"), registrar and
transfer agent with respect to the Securities. Except as aforesaid, The Bank of
New York has no other affiliation with, and is not engaged in any other
transaction with, the Trust. See "Management and Administration of the Trust".
ALTERNATIVE FEDERAL INCOME TAX CHARACTERIZATIONS
Holders should also be aware that there are alternative characterizations of
the assets of the Trust which could require Holders to include more interest in
income than they would include in income under the analysis set out above. See
"Certain Federal Income Tax Considerations".
LIFE OF THE TRUST
The Trust will terminate automatically on or shortly after the Exchange
Date. Promptly after the Exchange Date the shares of Common Stock or cash, as
the case may be, to be exchanged for the Securities and other remaining Trust
assets, if any, will be distributed pro rata to Holders. See "Investment
Objective and Policies -- Trust Termination".
RISK FACTORS
The Trust will not be managed in the traditional sense. The Trust has
adopted a policy that the Contract may not be disposed of during the term of the
Trust and that the U.S. Treasury securities held by the Trust may not be
disposed of prior to the earlier of their respective maturities and the
termination of the Trust. The Trust will continue to hold the Contract despite
any significant decline in the market price of the Common Stock or adverse
changes in the financial condition of the Company. See "Risk Factors -- Internal
Management; No Portfolio Management" and "Management and Administration of the
Trust -- Trustees".
Holders will receive distributions at a higher annual rate than the current
annual dividends paid on the Common Stock. There is no assurance, however, that
the yield on the Securities will be higher than the dividend yield on the Common
Stock over the term of the Trust. In addition, the opportunity for equity
appreciation afforded by an investment in the Securities is less than that
afforded by an investment in the
5
<PAGE>
Common Stock because Holders will realize no equity appreciation if at the
Exchange Date the Current Market Price of the Common Stock is below the
Appreciation Threshold Price (which represents an appreciation of % of the
Initial Price). Moreover, because a Holder will only receive 0.x shares of
Common Stock per Security (or the Current Market Price thereof) if the Current
Market Price exceeds the Appreciation Threshold Price, Holders will only be
entitled to receive upon exchange % of any appreciation of the value of the
Common Stock in excess of the Appreciation Threshold Price. Holders of
Securities will realize the entire decline in equity value if the Current Market
Price is less than the price to public per Security shown on the cover page
hereof.
The Trust is classified as a "non-diversified" investment company under the
Investment Company Act. Consequently, the Trust is not limited by the Investment
Company Act in the proportion of its assets that may be invested in the
securities of a single issuer. Since the only securities held by the Trust will
be the U.S. Treasury securities and the Contract, the Trust may be subject to
greater risk than would be the case for an investment company with more
diversified investments. See "Investment Objective and Policies" and "Risk
Factors -- Non-Diversified Status".
The trading prices of the Securities in the secondary market will be
directly affected by the trading prices of the Common Stock in the secondary
market. Trading prices of Common Stock will be influenced by the Company's
operating results and prospects and by economic, financial and other factors and
market conditions.
Holders of the Securities will not be entitled to any rights with respect to
the Common Stock (including, without limitation, voting rights and rights to
receive any dividends or other distributions in respect thereof) unless and
until such time, if any, as the Seller shall have delivered shares of Common
Stock pursuant to the Contract at the Exchange Date.
LISTING
Application will be made to list the Securities on the New York Stock
Exchange (the "NYSE") under the symbol .
FEES AND EXPENSES
In light of the fact that the proceeds of the sale of the Securities will be
used in part by the Trust to purchase the Contract from the Seller, the
Underwriting Agreement provides that the Seller will pay Underwriters'
Compensation to the Underwriters of $x.xx per Security. See "Underwriting".
Estimated organization costs of the Trust in the amount of $ and
estimated costs of the Trust in connection with the initial registration and
public offering of the Securities in the amount of $ will be paid by
Goldman Sachs. Other estimated costs of the Trust in connection with the public
offering of the Securities in the amount of $ will be paid by the Seller.
Each of the Administrator, the Custodian and the Paying Agent, and each Trustee
will be paid by Goldman Sachs at the closing of the offering of the Securities a
one-time, up-front amount in respect of its ongoing fees and, in the case of the
Administrator, anticipated expenses of the Trust (estimated to be $ in
the aggregate), over the term of the Trust. Goldman Sachs have agreed to pay any
on-going expenses of the Trust in excess of these estimated amounts and to
reimburse the Trust for any amounts it may be required to pay as indemnification
to any Trustee, the Administrator, the Custodian or the Paying Agent. See
"Management and Administration of the Trust -- Estimated Expenses".
Regulations of the Securities and Exchange Commission ("SEC") applicable to
closed-end investment companies designed to assist investors in understanding
the costs and expenses that an investor will bear directly or indirectly require
the presentation of Trust expenses in the following format. Because the Trust
will not bear any fees or expenses, investors will not bear any direct expenses.
The only expenses that an investor might be considered to be bearing indirectly
are (i) the Underwriters' Compensation payable by the Seller with respect to
such investor's Securities and (ii) the ongoing expenses of the trust (including
fees of the Administrator, Custodian, Paying Agent and Trustees), estimated at
$ per year, payable by the Seller at the closing of the offering. See
"Investment Objective and Policies -- General".
6
<PAGE>
INVESTOR TRANSACTION EXPENSES
<TABLE>
<S> <C>
Sales Load (as a percentage of offering price)........................ %
Dividend Reinvestment and Cash Purchase Plan Fees..................... N/A
</TABLE>
ANNUAL EXPENSES
<TABLE>
<S> <C>
Management Fees........................................................ 0%
Other Expenses......................................................... %
--
Total Annual Expenses.............................................. %
--
--
</TABLE>
SEC regulations also require that closed-end investment companies present an
illustration of cumulative expenses (both direct and indirect) that an investor
would bear. The example is required to factor in the applicable Sales Load and
to assume, in addition to a 5% annual return, the reinvestment of all
distributions at net asset value. INVESTORS SHOULD NOTE THAT THE ASSUMPTION OF A
5% ANNUAL RETURN DOES NOT ACCURATELY REFLECT THE FINANCIAL TERMS OF THE TRUST.
SEE "INVESTMENT OBJECTIVE AND POLICIES -- GENERAL." ADDITIONALLY, THE TRUST DOES
NOT PERMIT THE REINVESTMENT OF DISTRIBUTIONS.
<TABLE>
<CAPTION>
EXAMPLE 1 YEAR 3 YEARS
- - ---------------------------------------------------------------------------- ----------- -----------
<S> <C> <C>
You would bear the following expenses (I.E., the applicable sales load and
allocable portion of ongoing expenses paid by the Seller) on a $1,000
investment, assuming a 5% annual return.................................... $ $
</TABLE>
7
<PAGE>
THE TRUST
The Trust is a newly organized New York trust and will be registered as a
closed-end investment company under the Investment Company Act. The Trust was
formed on August 1, 1996 pursuant to a trust agreement dated as of such date and
amended and restated as of , 1996. The address of the Trust is 85
Broad Street, New York, New York 10004 (telephone no. (212) 902-1000).
USE OF PROCEEDS
The net proceeds of this offering will be used on or shortly after the date
on which this offering is completed to purchase a fixed portfolio comprised of
stripped U.S. Treasury securities with face amounts and maturities corresponding
to the quarterly distributions payable with respect to the Securities and the
payment dates thereof, and to pay the purchase price under the Contract to the
Seller.
INVESTMENT OBJECTIVE AND POLICIES
GENERAL
The Trust will purchase and hold a portfolio of stripped U.S. Treasury
securities maturing on a quarterly basis through the Exchange Date and the
Contract relating to the Common Stock of the Company. The Trust's investment
objective is to provide each Holder with a quarterly cash distribution of $x.xx
per Security (which amount equals the pro rata portion of the fixed quarterly
distributions from the proceeds of the maturing U.S. Treasury securities held by
the Trust) and, on the Exchange Date, a number of shares of Common Stock per
Security equal to the Exchange Rate or, if the Seller elects the Cash Settlement
Alternative, an amount in cash equal to the Current Market Price thereof. The
Exchange Rate is equal to (i) if the Current Market Price is less than the
Appreciation Threshold Price but equal to or greater than the Initial Price, a
number (or fractional number) of shares of Common Stock per Security equal to
the Initial Price divided by the Current Market Price (i.e., the value of such
shares of Common Stock (determined at the Current Market Price) shall equal the
Initial Price), (ii) if the Current Market Price is equal to or greater than the
Appreciation Threshold Price, 0.x shares of Common Stock per Security and (iii)
if the Current Market Price is less than the Initial Price, 1 share of Common
Stock per Security, subject in each case to adjustment in certain events. See
"-- The Contract -- Dilution Adjustments". For purposes of the preceding clause
(i) the Exchange Rate will be rounded upward or downward to the nearest 1/10,000
(or if there is not a nearest 1/10,000, to the next lower 1/10,000). Holders
otherwise entitled to receive fractional shares in respect of their aggregate
holdings of Securities will receive cash in lieu thereof. See "-- Trust
Termination". The Current Market Price per share of Common Stock means the
average Closing Price (as defined below) of a share of Common Stock on the 20
Trading Days (as defined below) immediately prior to but not including the
Exchange Date. The Closing Price of the Common Stock on any date of
determination means the daily closing sale price (or, if no closing sale price
is reported, the last reported sale price) of the Common Stock as reported on
the NYSE Consolidated Tape on such date of determination or, if the Common Stock
is not listed for trading on the NYSE on any such date, as reported in the
composite transactions for the principal United States securities exchange on
which the Common Stock is so listed, or if the Common Stock is not so listed on
a United States national or regional securities exchange, as reported by The
Nasdaq National Market or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, provided that if any
event that results in an adjustment to the number of shares of Common Stock
deliverable under the Contract as described under "-- The Contract -- Dilution
Adjustments" occurs prior to the Exchange Date, the Closing Price as determined
pursuant to the foregoing will be appropriately adjusted to reflect the
occurrence of such event. A "Trading Day" means a day on which the Common Stock
(A) is not suspended from trading on any national or regional securities
exchange or association or over-the-counter market at the close of business and
(B) has traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security.
8
<PAGE>
A fundamental policy of the Trust is to invest at least 80% of its total
assets in the Contract. The Trust has also adopted a fundamental policy that the
Contract may not be disposed of during the term of the Trust and that the U.S.
Treasury securities held by the Trust may not be disposed of prior to the
earlier of their respective maturities and the termination of the Trust. The
foregoing investment objective and policies are fundamental policies of the
Trust that may not be changed without the approval of a majority of the Fund's
outstanding Securities. A "majority of the Fund's outstanding Securities" means
the lesser of (i) 67% of the Securities represented at a meeting at which more
than 50% of the outstanding Securities are represented, and (ii) more than 50%
of the outstanding Securities.
The value of the Common Stock (or cash or Marketable Securities received in
lieu thereof) that will be received by Holders in respect of the Securities on
the Exchange Date may be more or less than the amount paid for the Securities
offered hereby.
For illustrative purposes only, the following chart shows the number of
shares of Common Stock that a Holder would receive for each Security at various
Current Market Prices. The chart assumes that there would be no adjustments to
the number of shares of Common Stock deliverable under the Contract by reason of
the occurrence of any of the events described under "-- The Contract --Dilution
Adjustments". There can be no assurance that the Current Market Price will be
within the range set forth below. Given the Initial Price of $ per Securityand
the Appreciation Threshold Price of $, a Holder would receive in connection with
the exchange of Securities on the Exchange Date the following number of shares
of Common Stock:
<TABLE>
<CAPTION>
CURRENT MARKET PRICE NUMBER OF SHARES
OF COMMON STOCK OF COMMON STOCK
--------------------- ---------------------
<S> <C>
</TABLE>
The following table sets forth information regarding the distributions to be
received on the U.S. Treasuries, the portion of each year's distributions that
will constitute a return of capital for federal income tax purposes and the
amount of original issue discount accruing on the U.S. Treasuries with respect
to a Holder who acquires its Securities at the issue price from an Underwriter
pursuant to the original offering. See "Certain Federal Income Tax
Considerations -- Recognition of Interest on the U.S. Treasury Securities".
<TABLE>
<CAPTION>
ANNUAL GROSS
ANNUAL GROSS DISTRIBUTIONS FROM ANNUAL RETURN OF ANNUAL INCLUSION OF
DISTRIBUTIONS FROM U.S. TREASURIES CAPITAL PER ORIGINAL ISSUE DISCOUNT
YEAR U.S. TREASURIES PER SECURITY SECURITY IN INCOME PER SECURITY
- - ----------------------------- ------------------ ------------------ ----------------- -----------------------
<S> <C> <C> <C> <C>
1996......................... $ $ $ $
1997.........................
1998.........................
1999.........................
</TABLE>
The annual distribution of $ per Security is payable quarterly on each
, , and , commencing , 1996.
Quarterly distributions on the Securities will consist solely of the cash
received from the U.S. Treasury securities. The Trust will not be entitled to
any dividends that may be declared on the Common Stock. See "Management and
Administration of the Trust -- Distributions".
ENHANCED YIELD; LESS EQUITY APPRECIATION THAN COMMON STOCK; NO DEPRECIATION
PROTECTION
Holders will receive distributions at a higher annual rate than the current
annual dividends paid on the Common Stock. However, there is no assurance that
the yield on the Securities will be higher than the dividend yield on the Common
Stock over the term of the Trust. In addition, the opportunity for equity
appreciation afforded by an investment in the Securities is less than that
afforded by an investment in the Common Stock because Holders will realize no
equity appreciation if, on the Exchange Date, the Current
9
<PAGE>
Market Price of the Common Stock is below the Appreciation Threshold Price
(which represents an appreciation of % of the Initial Price). Moreover,
because Holders will only receive 0.x shares of Common Stock per Security (or
the Current Market Price thereof) if the Current Market Price exceeds the
Appreciation Threshold Price, Holders will only be entitled to receive upon
exchange % (the percentage equal to the Initial Price divided by the
Appreciation Threshold Price) of any appreciation of the value of the Common
Stock in excess of the Appreciation Threshold Price. Holders of Securities will
realize the entire decline in value if the Current Market Price is less than the
price to public per Security shown on the cover page hereof.
THE COMPANY
The Company is engaged in the business of food production and distribution.
The Company is one of the largest companies engaged in the worldwide sourcing,
growing, processing, distributing and marketing of high quality, branded food
products. The Company sources, grows, processes or markets fruits, vegetables,
nuts and beverages in the following locations: North America, Latin America,
Asia and Europe.
The shares of Common Stock are traded on the New York Stock Exchange and the
Pacific Stock Exchange. The following table sets forth, for the indicated
periods, the reported high and low sales prices of the shares of Common Stock on
the New York Stock Exchange Composite Tape and the cash dividends per share of
Common Stock. As of , 1996, there were record holders of the Common Stock,
including The Depository Trust Company, which holds shares of Common Stock on
behalf of an indeterminate number of beneficial owners.
<TABLE>
<CAPTION>
DIVIDEND
HIGH LOW PER SHARE
--------- --------- ---------
<S> <C> <C> <C>
1994
1st Quarter........................... $ 35 1/2 $ 26 3/8 $
2nd Quarter........................... 34 1/2 26 1/8
3rd Quarter........................... 30 3/4 26 1/4
4th Quarter........................... 28 3/8 22 1/2
1995
1st Quarter........................... 28 3/4 24
2nd Quarter........................... 30 3/4 28 1/4
3rd Quarter........................... 35 28 1/2
4th Quarter........................... 38 33 1/2
1996
1st Quarter...........................
2nd Quarter...........................
3rd Quarter (through , 1996)...
</TABLE>
Holders will not be entitled to rights with respect to the Common Stock
(including, without limitation, voting rights and rights to receive dividends or
other distributions in respect thereof) until receipt of shares of Common Stock
by the Holders as a result of the exchange of the Securities for the Common
Stock on the Exchange Date.
Reference is made to the accompanying prospectus of the Company (pages A-1
through A- hereto) which describes the Company and the shares of Common Stock
deliverable to the Holders upon mandatory exchange of the Securities on the
Exchange Date. The Company is not affiliated with the Trust and will not receive
any of the proceeds from the sale of the Securities. The Company prospectus
relates to an aggregate of 4,140,000 shares of Common Stock.
THE CONTRACT
GENERAL. The Trust will enter into the Contract with the Seller obligating
the Seller to deliver to the Trust on the Exchange Date a number of shares of
Common Stock equal to the product of the Exchange Rate times the initial number
of shares of Common Stock subject to the Contract. The aggregate initial
10
<PAGE>
number of shares of Common Stock under the Contract will equal the aggregate
number of Securities offered hereby (subject to increase in the event the
Underwriters exercise their overallotment option). The Contract also provides
that the Seller may deliver to the Trust on the Exchange Date, at the Seller's
option, an amount of cash equal to the value of the Common Stock deliverable
pursuant to the Contract (the "Cash Settlement Alternative"). If the Seller
elects to deliver cash in lieu of shares of Common Stock, he would be required
to deliver cash in respect of all shares deliverable pursuant to the Contract.
The purchase price of the Contract was arrived at by arm's-length
negotiation between the Trust and the Seller taking into consideration factors
including the price, expected dividend level and volatility of the Common Stock,
current interest rates, the term of the Contract, current market volatility
generally, the collateral security pledged by the Seller, the value of other
similar instruments and the costs and anticipated proceeds of the offering of
the Securities. All matters relating to the administration of the Contract will
be the responsibility of either the Administrator or the Custodian.
DILUTION ADJUSTMENTS. The Exchange Rate is subject to adjustment if the
Company shall (i) pay a stock dividend or make a distribution with respect to
the Common Stock in shares of such stock, (ii) subdivide or split its
outstanding shares of Common Stock, (iii) combine its outstanding shares of
Common Stock into a smaller number of shares, or (iv) issue by reclassification
of its shares of Common Stock any shares of other common stock of the Company.
In any such event, the Exchange Rate shall be multiplied by a dilution
adjustment equal to the number of shares of Common Stock (or, in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Company issued pursuant thereto), or fraction thereof, that
a shareholder who held one share of Common Stock immediately prior to such event
would be entitled solely by reason of such event to hold immediately after such
event.
In addition, if the Company shall issue rights or warrants to all holders of
Common Stock entitling them to subscribe for or purchase shares of Common Stock
at a price per share less than the Then-Current Market Price of the Common Stock
(as defined below) (other than rights to purchase Common Stock pursuant to a
plan for the reinvestment of dividends or interest) then the Exchange Rate shall
be multiplied by a dilution adjustment equal to a fraction, of which the
numerator shall be the number of shares of Common Stock outstanding immediately
prior to the time (determined as described below) the adjustment is calculated
by reason of the issuance of such rights or warrants plus the number of
additional shares offered for subscription or purchase pursuant to such rights
or warrants, and of which the denominator shall be the number of shares of
Common Stock outstanding immediately prior to the time such adjustment is
calculated plus the number of additional shares that the aggregate offering
price of the shares so offered for subscription or purchase would purchase at
the Then-Current Market Price. To the extent that, after expiration of such
rights or warrants, the shares offered thereby shall not have been delivered,
the Exchange Rate shall be further adjusted to equal the Exchange Rate that
would have been in effect had the foregoing adjustment been made upon the basis
of delivery of only the number of shares of Common Stock actually delivered. The
"Then-Current Market Price" of the Common Stock means the average Closing Price
per share of Common Stock for a Calculation Period of five Trading Days
immediately prior to the time such adjustment is calculated (or, in the case of
an adjustment calculated at the opening of business on the business day
following a record date, as described below, immediately prior to the earlier of
the time such adjustment is calculated and the related "ex-date" on which the
shares of Common Stock first trade regular way on their principal market without
the right to receive the relevant dividend, distribution or issuance); provided
that if no Closing Price for the Common Stock is determined for one or more (but
not all) of such Trading Days, such Trading Day shall be disregarded in the
calculation of the Then-Current Market Price (but no additional Trading Days
shall be added to the Calculation Period). If no Closing Price for the Common
Stock is determined for any of such Trading Days, the most recently available
Closing Price for the Common Stock prior to such five Trading Days shall be the
Then-Current Market Price.
Further, if the Company shall pay a dividend or make a distribution to all
holders of Common Stock, in either case, of evidences of its indebtedness or
other non-cash assets (excluding any stock dividends or distributions in shares
of Common Stock) or issue to all holders of Common Stock rights or warrants
11
<PAGE>
to subscribe for or purchase any of its securities (other than rights or
warrants referred to in the previous paragraph), then the Exchange Rate shall be
multiplied by a dilution adjustment equal to a fraction, of which the numerator
shall be the Then-Current Market Price per share of Common Stock, and the
denominator shall be such price less the fair market value (as determined by a
nationally recognized independent investment banking firm retained for this
purpose by the Administrator) as of the time the adjustment is calculated of the
portion of such evidences of indebtedness, non-cash assets or rights or warrants
payable in respect of one share of Common Stock.
Further, if the Company distributes cash (other than any Permitted Dividend
(as defined below), any cash distributed in consideration of fractional shares
of Common Stock and any cash distributed in a Reorganization Event (as defined
below) ("Excluded Distributions")), by dividend or otherwise, to all holders of
Common Stock or makes an Excess Purchase Payment (as defined below) then the
Exchange Rate shall be multiplied by a dilution adjustment equal to a fraction,
of which the numerator shall be the Then-Current Market Price on the record date
in respect of such distribution and of which the denominator shall be such price
less the amount of such distribution applicable to one share of Common Stock
that would not be a Permitted Dividend (or in the case of an Excess Purchase
Payment, less the aggregate amount of such Excess Purchase Payment divided by
the number of outstanding shares of Common Stock on such record date). For
purposes of these adjustments, (a) the term "Permitted Dividend" means any
quarterly cash dividend in respect of the Common Stock to the extent that the
per share amount of such dividend does not exceed $, and (b) the term "Excess
Purchase Payment" means the excess, if any, of (i) the cash and the value (as
determined by a nationally recognized independent investment banking firm
retained for this purpose by the Administrator, whose determination shall be
conclusive) of all other consideration paid by the Company with respect to one
share of Common Stock acquired in a tender offer or exchange offer by the
Company over (ii) the Then-Current Market Price per share of Common Stock.
If any adjustment in the Exchange Rate is required to be calculated as
described above, corresponding adjustments to the Initial Price and the
Appreciation Threshold Price shall be calculated.
Dilution adjustments shall be effected: (i) in the case of any dividend,
distribution or issuance described above, at the opening of business on the
business day following the record date for determination of holders of Common
Stock entitled to receive such dividend, distribution or issuance or, if the
announcement of any such dividend, distribution or issuance is after such record
date, at the time such dividend, distribution or issuance shall be announced by
the Company; (ii) in the case of any subdivision, split, combination or
reclassification described above, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the Company shall
announce, at or prior to the time it commences the relevant share repurchase,
the repurchase price for such shares to be repurchased, on the date of such
announcement; and (iv) in the case of any other Excess Purchase Payment, on the
date that the holders of Common Stock become entitled to payment with respect
thereto. There will be no adjustment under the Contract in respect of any
dividends, distributions, issuances or repurchases that may be declared or
announced after the Exchange Date. If any announcement or declaration of a
record date in respect of a dividend, distribution, issuance or repurchase shall
subsequently be cancelled by the Company, or such dividend, distribution,
issuance or repurchase shall fail to receive requisite approvals or shall fail
to occur for any other reason, then the Exchange Rate shall be further adjusted
to equal the Exchange Rate that would have been in effect had the adjustment for
such dividend, distribution, issuance or repurchase not been made. All
adjustments described herein shall be rounded upward or downward to the nearest
1/10,000 (or if there is not a nearest 1/10,000, to the next lower 1/10,000). No
adjustment in the Exchange Rate shall be required unless such adjustment would
require an increase or decrease of at least one percent therein; provided,
however, that any adjustments which by reason of the foregoing are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment.
In the event of (A) any consolidation or merger of the Company, or any
surviving entity or subsequent surviving entity of the Company (a "Company
Successor"), with or into another entity (other than a merger or consolidation
in which the Company is the continuing corporation and in which the
12
<PAGE>
Common Stock outstanding immediately prior to the merger or consolidation is not
exchanged for cash, securities or other property of the Company or another
corporation), (B) any sale, transfer, lease or conveyance to another corporation
of the property of the Company or any Company Successor as an entirety or
substantially as an entirety, (C) any statutory exchange of securities of the
Company or any Company Successor with another corporation (other than in
connection with a merger or acquisition) or (D) any liquidation, dissolution or
winding up of the Company or any Company Successor (any such event described in
clause (A), (B), (C) or (D), a "Reorganization Event"), the Exchange Rate will
be adjusted such that, on the Exchange Date, each Holder will receive for each
Security cash in an amount equal to (i) if the Transaction Value (as defined
below) is less than the Appreciation Threshold Price but equal to or greater
than the Initial Price, the Initial Price, (ii) if the Transaction Value is
greater than or equal to the Appreciation Threshold Price, 0.x multiplied by the
Transaction Value and (iii) if the Transaction Value is less than the Initial
Price, the Transaction Value. Notwithstanding the foregoing, to the extent that
any Marketable Securities (as defined below) are received by holders of Common
Stock in such Reorganization Event, then in lieu of delivering cash as provided
above, the Seller may at his option deliver a proportional amount of such
Marketable Securities. If a Seller elects to deliver Marketable Securities,
Holders will be responsible for the payment of any and all brokerage and other
transaction costs upon the sale of such securities.
"Transaction Value" means (i) for any cash received in any such
Reorganization Event, the amount of cash received per share of Common Stock,
(ii) for any property other than cash or Marketable Securities received in any
such Reorganization Event, an amount equal to the market value on the date the
Reorganization Event is consummated of such property received per share of
Common Stock as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator and (iii) for any
Marketable Securities received in any such Reorganization Event, an amount equal
to the average Closing Price per share of such securities on the 20 Trading Days
immediately prior to the Exchange Date multiplied by the number of such
securities received for each share of Common Stock; provided that if no Closing
Price for such Marketable Securities is determined for one or more (but not all)
of such Trading Days, such Trading Days shall be disregarded in the calculation
of such average Closing Price (but no additional Trading Days shall be added to
the Calculation Period). If no Closing Price for the Marketable Securities is
determined for all such Trading Days, the calculation in the preceding clause
(iii) shall be based on the most recently available Closing Price for the
Marketable Securities prior to such 20 Trading Days. The number of shares of
Marketable Securities included in the calculation of Transaction Value for
purposes of the preceding clause (iii) shall be subject to adjustment if a
dilution event of the type described above shall occur with respect to the
issuer of the Marketable Securities between the time of the Reorganization Event
and the Exchange Date.
"Marketable Securities" means any common equity securities listed on a U.S.
national securities exchange or reported by The Nasdaq National Market.
No dilution adjustments will be made for events, other than those described
above, such as offerings of Common Stock (other than through the issuance of
rights or warrants described above) for cash or in connection with acquisitions.
COLLATERAL ARRANGEMENTS; ACCELERATION. The Seller's obligations under the
Contract will be secured by a security interest in the maximum number of shares
of Common Stock subject to the Contract (subject to adjustment in accordance
with the dilution adjustment provisions of the Contract, described above)
pursuant to a Collateral Agreement between such Seller and The Bank of New York,
as collateral agent (the "Collateral Agent"). Unless the Seller is in default in
its obligations under the Security and Pledge Agreement, the Seller will be
permitted to substitute for the pledged shares of Common Stock collateral
consisting of short-term, direct obligations of the U.S. Government. Any U.S.
Government obligations pledged as substitute collateral will be required to have
an aggregate market value at the time of substitution and at daily
mark-to-market valuations thereafter of not less than 150% (or, from and after
any Insufficiency Determination that shall not be cured by the close of business
on the tenth business day thereafter, as described below, 200%) of the product
of the market price of the Common
13
<PAGE>
Stock at the time of each valuation times the number of shares of Common Stock
for which such obligations are being substituted. The Collateral Agreement will
provide that, in the event of a Reorganization Event, the Seller will pledge as
alternative collateral any Marketable Securities received by it in respect of
the maximum number of shares of Common Stock subject to the Contract at the time
of the Reorganization Event, plus U.S. Government obligations having an
aggregate market value when pledged and at daily mark-to-market valuations
thereafter of not less than 150% of the Seller's Cash Delivery Obligations. The
Seller's "Cash Delivery Obligations" shall be the Transaction Value of any
consideration other than Marketable Securities received by the Seller in respect
of the maximum number of shares subject to the Contract at the time of the
Reorganization Event. The number of shares of Marketable Securities required to
be pledged shall be subject to adjustment if any event requiring a dilution
adjustment under the Contract shall occur. The Seller will be permitted to
substitute U.S. Government obligations for Marketable Securities pledged at the
time of or after any Reorganization Event. Any U.S. Government obligations so
substituted will be required to have an aggregate market value at the time of
substitution and at daily mark-to-market valuations thereafter of not less than
150% (or, from and after any Insufficiency Determination that shall not be cured
by the close of business on the tenth business day thereafter, as described
below, 200%) of the product of the market price per share of Marketable
Securities at the time of each valuation times the number of shares of
Marketable Securities for which such obligations are being substituted. The
Collateral Agent will promptly pay over to the Seller any dividends, interest,
principal or other payments received by the Collateral Agent in respect of any
collateral, including any substitute collateral, unless the Seller is in default
of its obligations under the Collateral Agreement, or unless the payment of such
amount to the Seller would cause the collateral to become insufficient under the
Collateral Agreement. The Seller shall have the right to vote any pledged shares
of Marketable Securities for so long as such shares are owned by him and pledged
under the Collateral Agreement, including after an event of default under the
Contract or the Collateral Agreement.
If the Collateral Agent shall determine (an "Insufficiency Determination")
that U.S. Government obligations pledged as substitute collateral shall fail to
meet the foregoing requirements at any valuation, or that the Seller has failed
to pledge additional collateral required as a result of a dilution adjustment
increasing the maximum number of shares of Common Stock or shares of Marketable
Securities subject to the Contract, and such failure shall not be cured by the
close of business on the tenth business day after such determination, then,
unless a Collateral Event of Default (as defined below) under the Collateral
Agreement shall have occurred and be continuing, the Collateral Agent shall
commence (i) sales of the collateral consisting of U.S. Government obligations
and (ii) purchases, using the proceeds of such sales, of shares of Common Stock
or shares of Marketable Securities, in an amount sufficient to cause the
collateral to meet the requirements under the Collateral Agreement. The
Collateral Agent shall discontinue such sales and purchases if at any time a
Collateral Event of Default under the Collateral Agreement shall have occurred
and be continuing. A "Collateral Event of Default" under the Collateral
Agreement shall mean, at any time, (A) if no U.S. Government obligations shall
be pledged as substitute collateral at such time, failure of the collateral to
consist of at least the maximum number of shares of Common Stock subject to the
Contract at such time (or, if a Reorganization Event shall have occurred at or
prior to such time, failure of the collateral to include the maximum number of
shares of any Marketable Securities required to be pledged as described above);
(B) if any U.S. Government obligations shall be pledged as substitute collateral
for shares of Common Stock (or shares of Marketable Securities) at such time,
failure of such U.S. Government obligations to have a market value at such time
of at least 105% of the market price per share of Common Stock (or the
then-current market price per share of Marketable Securities, as the case may
be) times the difference between (x) the maximum number of shares of Common
Stock (or shares of Marketable Securities) subject to the Contract at such time
and (y) the number of shares of Common Stock (or shares of Marketable
Securities) pledged as collateral at such time; and (C) at any time after a
Reorganization Event in which consideration other than Marketable Securities
shall have been delivered, failure of the U.S. Government obligations pledged in
respect of the Cash Delivery Obligations to have a market value at such time of
at least 105% of the Cash Delivery Obligations, if such failure shall not be
cured within ten business days after notice thereof is delivered to the Seller.
14
<PAGE>
The occurrence of a Collateral Event of Default under the Collateral
Agreement, or the bankruptcy or insolvency of the Seller, will cause an
automatic acceleration of the Seller's obligations under the Contract. In any
such event, the Seller will become obligated to deliver shares of Common Stock
(or, after a Reorganization Event, Marketable Securities or cash or a
combination thereof) having an aggregate value equal to the "Aggregate
Acceleration Value" under the Contract. The Aggregate Acceleration Value will be
based on an "Acceleration Value" determined by the Administrator on the basis of
quotations from independent dealers. Each quotation will be for the amount that
would be paid to the relevant dealer in consideration of an agreement between
the Trust and such dealer that would have the effect of preserving the Trust's
rights to receive Common Stock (or, after a Reorganization Event, the
alternative consideration provided under the Contract) under a portion of the
Contract that corresponds to an initial number of shares of Common Stock equal
to 1,000. The Administrator will request quotations from four nationally
recognized independent dealers on or as soon as reasonably practicable following
the date of acceleration. If four quotations are provided, the Acceleration
Value will be the arithmetic mean of the two quotations remaining after
disregarding the highest and lowest quotations. If two or three quotations are
provided, the Acceleration Value will be the arithmetic mean of such quotations.
If one quotation is provided, the Acceleration Value will be equal to such
quotation. The Aggregate Acceleration Value will be computed by dividing the
Acceleration Value by 1,000 and multiplying the quotient by the initial number
of shares of Common Stock subject to the Contract, except that, if no quotations
are provided, the Aggregate Acceleration Value will be (A) the Current Market
Price per share of Common Stock on the acceleration date times the number of
shares of Common Stock that would be required to be delivered on such date under
the Contract if the Exchange Date were redefined to be the acceleration date or
(B) after a Reorganization Event, the value of the alternative consideration
that would be required to be delivered on such date under the Contract if the
Exchange Date were redefined to be the acceleration date. Upon the occurrence of
a Collateral Event of Default or the bankruptcy or insolvency of the Seller, the
Common Stock (or, after a Reorganization Event, Marketable Securities or cash or
a combination thereof) deliverable for each Security will be based solely on the
Aggregate Acceleration Value described above for the Contract.
Upon any acceleration, the Collateral Agent will distribute to the Trust,
for distribution pro rata to the Holders, the Aggregate Acceleration Value in
the form of shares of Common Stock then pledged, or cash generated from the
liquidation of U.S. Government obligations then pledged, or a combination
thereof (or, after a Reorganization Event, in the form of Marketable Securities
then pledged, cash generated from the liquidation of U.S. Government obligations
then pledged, or a combination thereof). In addition, in the event that by the
Exchange Date any substitute collateral has not been replaced by Common Stock
(or, after a Reorganization Event, cash or Marketable Securities) sufficient to
meet the obligations under the Contract, the Collateral Agent will distribute to
the Trust for distribution pro rata to the Holders the market value of the
Common Stock required to be delivered thereunder, in the form of any shares of
Common Stock then pledged by the Seller plus cash generated from the liquidation
of U.S. Government obligations then pledged by the Seller (or, after a
Reorganization Event, the market value of the alternative consideration required
to be delivered thereunder, in the form of any Marketable Securities then
pledged, plus any cash then pledged, plus cash generated from the liquidation of
U.S. Government obligations then pledged). See "-- Trust Termination".
DESCRIPTION OF SELLER. The Seller is David H. Murdock, as trustee of the
David H. Murdock Living Trust dated May 28, 1986, as amended. Reference is made
to the caption "Selling Shareholder" in the Annex A Prospectus for information
about the Seller.
THE U.S. TREASURY SECURITIES
The Trust will purchase and hold a series of zero-coupon ("stripped") U.S.
Treasury securities with face amounts and maturities corresponding to the
distributions payable with respect to the Securities and the payment dates
thereof. Up to 20% of the Trust's total assets may be invested in these U.S.
Treasury Securities. In the event that the Contract is accelerated or disposed
of as described under the caption "Management Administration of the Trust --
Trustees", then any such U.S. Treasury securities
15
<PAGE>
then held in the Trust shall be liquidated by the Administrator and distributed
pro rata to the Holders, together with the amounts distributed upon acceleration
or any consideration received by the Trust upon disposition of the Contract. See
"-- Collateral Arrangements; Acceleration" and "-- Trust Termination"
TEMPORARY INVESTMENTS
For cash management purposes, the Trust may invest the proceeds of the U.S.
Treasury securities and any other cash held by the Trust in short-term
obligations of the U.S. Government maturing no later than the business day
preceding the next following distribution date. Not more than 5% of the Trust's
total assets will be invested in such short-term obligations or held in cash at
any one time.
INVESTMENT RESTRICTIONS
As a matter of fundamental policy, the Trust may not purchase any securities
or instruments other than the U.S. Treasury securities, the Contract and the
Common Stock or other assets received pursuant to the Contract and, for cash
management purposes, short-term obligations of the U.S. Government; issue any
securities or instruments except for the Securities; make short sales or
purchase securities on margin; write put or call options; borrow money;
underwrite securities; purchase or sell real estate, commodities or commodities
contracts including futures contracts; or make loans. The Trust also has adopted
a fundamental policy that the Contract may not be disposed of during the term of
the Trust and that the U.S. Treasury securities held by the Trust may not be
disposed of prior to the earlier of their respective maturities and the
termination of the Trust.
Because of the foregoing limitations, the Trust's investments will be
concentrated in the food production and distribution industry, which is the
industry in which the Company operates. The Trust is
not permitted to purchase restricted securities.
TRUST TERMINATION
The Trust will terminate automatically on or shortly after the Exchange
Date. Alternatively, in the event that the Contract is accelerated, then any
U.S. Treasury securities then held in the Trust shall be liquidated by the
Administrator and distributed pro rata to the Holders, together with the amounts
distributed upon acceleration, and the Trust shall be terminated. See "--
Collateral Arrangements; Acceleration" and "-- The U.S. Treasury Securities".
RISK FACTORS
INTERNAL MANAGEMENT; NO PORTFOLIO MANAGEMENT
The Trust will be internally managed by its Trustees and will not have any
separate investment adviser. It is a fundamental policy of the Trust that the
Contract may not be disposed of during the term of the Trust and that the U.S.
Treasury securities held by the Trust may not be disposed of prior to the
earlier of their respective maturities and the termination of the Trust. As a
result, the Trust will continue to hold the Contract despite significant
declines in the market price of the Common Stock or adverse changes in the
financial condition of the Company (or, after a Reorganization Event, comparable
developments affecting any Marketable Securities or the issuer thereof). The
Trust will not be managed like a typical closed-end investment company.
LIMITED APPRECIATION POTENTIAL; COMMON STOCK DEPRECIATION RISK
The Trust anticipates that on the Exchange Date it will receive the Common
Stock deliverable pursuant to the Contract, which it will then distribute to
Holders. Although the yield on the Securities is
higher than the current dividend yield on the Common Stock, there is no
assurance that the yield on the Securities will be higher than the dividend
yield on the Common Stock over the term of the Trust. In addition, because the
Contract calls for the Seller to deliver less than the full number of shares of
Common Stock subject to the Contract where the Current Market Price exceeds the
Initial Price (and therefore less than one full share of Common Stock for each
outstanding Security), the Securities have more limited appreciation potential
than the Common Stock. Therefore, the Securities may trade below the value of
the Common Stock if the Common Stock appreciates in value. The value of the
Common
16
<PAGE>
Stock to be received by Holders on the Exchange Date (and any cash received in
lieu thereof) may be less than the amount paid for the Securities. Holders of
Securities will realize the entire decline in value if the Current Market Price
is less than the price to public per Security shown on the cover page hereof.
DILUTION ADJUSTMENTS; SHAREHOLDER RIGHTS
The number of shares of Common Stock that Holders are entitled to receive at
the termination of the Trust is subject to adjustment for certain events arising
from stock splits and combinations, stock dividends and certain other actions of
the Company that modify its capital structure. See "Investment Objective and
Policies -- The Contract -- Dilution Adjustments". The number of shares to be
received by Holders may not be adjusted for other events, such as offerings of
Common Stock for cash or in connection with acquisitions, that may adversely
affect the price of the Common Stock and, because of the relationship of the
amount to be received pursuant to the Contract to the price of the Common Stock,
such other events may adversely affect the trading price of the Securities.
There can be no assurance that the Company will not take any of the foregoing
actions, or that it will not make offerings of, or that major shareholders will
not sell any, Common Stock in the future, or as to the amount of any such
offerings or sales. In addition, until the receipt of the Common Stock by
Holders as a result of the exchange of the Securities for the Common Stock,
Holders will not be entitled to any rights with respect to the Common Stock
(including without limitation voting rights and the rights to receive any
dividends or other distributions in respect thereof).
TRADING VALUE; LISTING
The Trust is a newly organized closed-end investment company with no
previous operating history and the Securities are innovative securities. It is
not possible to predict how the Securities will trade in the secondary market.
The trading price of the Securities may vary considerably prior to the Exchange
Date due to, among other things, fluctuations in the price of the Common Stock
(which may occur due to changes in the Company's financial condition, results of
operations or prospects, or because of complex and interrelated political,
economic, financial and other factors that can affect the capital markets
generally, the stock exchanges or quotation systems on which the Common Stock is
traded and the market segment of which the Company is a part) and fluctuations
in interest rates and other factors that are difficult to predict and beyond the
Trust's control. The Trust believes, however, that because of the yield on the
Securities and the formula for determining the number of shares of Common Stock
to be delivered on the Exchange Date, the Securities will tend to trade at a
premium to the market value of the Common Stock to the extent the Common Stock
price falls and at a discount to the market value of the Common Stock to the
extent the Common Stock price rises.
Shares of closed-end investment companies frequently trade at a premium to
or discount from net asset value. This characteristic of investments in a
closed-end investment company is a risk separate and distinct from the risk that
the Trust's net asset value will decrease. The Trust cannot predict whether its
shares will trade at, below or above net asset value. The risk of purchasing
investments in a closed-end company that might trade at a discount may be
greater for investors who wish to sell their investments soon after completion
of an initial public offering because for those investors, realization of a gain
or loss on their investments is likely to be more dependent upon the existence
of a premium or discount than upon portfolio performance.
Goldman Sachs currently intend, but are not obligated, to make a market in
the Securities. There can be no assurance that a secondary market will develop
or, if a secondary market does develop, that it will provide the Holders with
liquidity of investment or that it will continue for the life of the Securities.
Application will be made to list the Securities on the NYSE. Assuming the
acceptance of such application, there can be no assurance that the Securities
will not later be delisted or that trading in the Securities on the NYSE will
not be suspended. In the event of a delisting or suspension of trading on such
exchange, the Trust will apply for listing of the Securities on another national
securities exchange or for quotation on another trading market. If the
Securities are not listed or traded on any securities
17
<PAGE>
exchange or trading market, or if trading of the Securities is suspended,
pricing information for the Securities may be more difficult to obtain, and the
price and liquidity of the Securities may be adversely affected.
NON-DIVERSIFIED STATUS
The Trust is considered non-diversified under the Investment Company Act,
which means that the Trust is not limited in the proportion of its assets that
may be invested in the obligations of a single issuer. Since the only securities
or instruments held or received by the Trust will be U.S. Treasury securities
and the Contract or other assets consistent with the terms of the Contract, the
Trust may be subject to greater risk than would be the case for an investment
company with more diversified investments.
RISK RELATING TO BANKRUPTCY OF SELLER
The Trust believes that the Contract constitutes a "securities contract" for
purposes of the Bankruptcy Code, performance of which would not be subject to
the automatic stay provisions of the Bankruptcy Code in the event of bankruptcy
of the Seller. It is, however, possible that the Contract will be determined not
to qualify as a "securities contract" for this purpose, in which case the
Seller's bankruptcy may cause a delay in settlement of the Contract, or
otherwise subject the Contract to the bankruptcy proceedings, which could
adversely affect the timing of exchange or amount received by the Holders in
respect of the Securities.
DESCRIPTION OF THE SECURITIES
Each Security represents an equal proportional interest in the Trust, and a
total of Securities will be issued. Upon liquidation of the Trust, Holders are
entitled to share pro rata in the net assets of the Trust available for
distribution. The Securities have no preemptive, redemption or conversion
rights. Securities are fully paid and nonassessable by the Trust. The only
securities that the Trust is authorized to issue are the Securities offered
hereby and those sold to the initial Holder referred to below. See
"Underwriting". The Securities will be in registered form.
Holders are entitled to a full vote for each Security held on all matters to
be voted on by Holders and are not able to cumulate their votes in the election
of Trustees. The Trustees of the Trust have been selected initially by Goldman
Sachs, as the initial Holder of Securities of the Trust. The Trust intends to
hold annual meetings as required by the rules of the NYSE. The Trustees may call
special meetings of Holders for action by Holder vote as may be required by
either the Investment Company Act or the Trust Agreement. The Holders have the
right, upon the declaration in writing or vote of more than two-thirds of the
outstanding Securities, to remove a Trustee. The Trustees will call a meeting of
Holders to vote on the removal of a Trustee upon the written request of the
Holders of record of 10% of the Securities or to vote on other matters upon the
written request of the Holders of record of 51% of the Securities (unless
substantially the same matter was voted on during the preceding 12 months). The
Trust will also assist in communications with other Holders as required by the
Investment Company Act.
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<PAGE>
MANAGEMENT AND ADMINISTRATION OF THE TRUST
TRUSTEES
The Trust will be internally managed by three Trustees. Under the provisions
of the Code applicable to grantor trusts, the Trustees will not have the power
to vary the investments held by the Trust. It is a fundamental policy of the
Trust that the Contract may not be disposed of during the term of the Trust and
that the U.S. Treasury Securities held by the Trust may not be disposed of prior
to the earlier of their respective maturities and termination of the Trust.
The names of the persons who have been elected by Goldman Sachs, the initial
Holder of the Trust, and who will serve as the Trustees are set forth below. The
positions and the principal occupations of the individual Trustees during the
past five years are also set forth below.
<TABLE>
<CAPTION>
PRINCIPAL OCCUPATION
NAME, AGE AND ADDRESS TITLE DURING PAST FIVE YEARS
- - -------------------------------------------- ---------------------- --------------------------------------------
<S> <C> <C>
MANAGING TRUSTEE
TRUSTEE
TRUSTEE
</TABLE>
Each Trustee who is not a director, officer or employee of any Underwriter
or the Administrator, or of any affiliate thereof, will be paid by the Seller,
on behalf of the Trust, in respect of its annual fee and anticipated
out-of-pocket expenses, a one-time, up-front fee of $ . The Trust's
Managing Trustee will also receive an additional up-front fee of $ for
serving in that capacity. The Trustees will not receive, either directly or
indirectly, any compensation, including any pension or retirement benefits, from
the Trust. None of the Trustees receives any compensation for serving as a
trustee or director of any other affiliated investment company.
ADMINISTRATOR
The day-to-day affairs of the Trust will be managed by The Bank of New York
as Trust Administrator pursuant to an Administration Agreement. Under the
Administration Agreement, the Trustees have delegated most of their operational
duties to the Administrator, including without limitation, the duties to: (i)
receive invoices for expenses incurred by the Trust; (ii) with the approval of
the Trustees, engage legal and other professional advisors (other than the
independent public accountants for the Trust); (iii) instruct the Paying Agent
to pay distributions on Securities as described herein; (iv) prepare and mail,
file or publish all notices, proxies, reports, tax returns and other
communications and documents, and keep all books and records, for the Trust; (v)
at the direction of the Trustees, institute and prosecute legal and other
appropriate proceedings to enforce the rights and remedies of the Trust; and
(vi) make all necessary arrangements with respect to meetings of Trustees and
any meetings of Holders. The Administrator, however, will not select the
independent public accountants for the Trust or sell or otherwise dispose of the
Trust assets (except in connection with an acceleration of the Contract or the
settlement of the Contract at the Exchange Date and upon termination of the
Trust).
The Administration Agreement may be terminated by either the Trust or the
Administrator upon 60 days' prior written notice, except that no termination
shall become effective until a successor Administrator has been chosen and has
accepted the duties of the Administrator.
Except for its roles as Administrator, Custodian, Paying Agent, registrar
and transfer agent for the Trust, The Bank of New York has no other affiliation
with, and is not engaged in any other transactions with, the Trust.
The address of the Administrator is 101 Barclay Street, New York, NY 10286.
CUSTODIAN
The Trust's custodian (the "Custodian") is The Bank of New York pursuant to
a custodian agreement (the "Custodian Agreement"). In the event of any
termination of the Custodian Agreement by the Trust or the resignation of the
Custodian, the Trust must engage a new Custodian to carry out the duties of the
Custodian as set forth in the Custodian Agreement. Pursuant to the Custodian
Agreement, all net
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<PAGE>
cash received by the Trust will be invested by the Custodian in short-term U.S.
Treasury securities maturing on or shortly before the next quarterly
distribution date. The Custodian will also act as collateral agent under the
Collateral Agreement and will hold a perfected security interest in the Common
Stock and U.S. Government obligations or other assets consistent with the terms
of the Contract.
PAYING AGENT
The transfer agent, registrar and paying agent (the "Paying Agent") for the
Securities is The Bank of New York pursuant to a paying agent agreement (the
"Paying Agent Agreement"). In the event of any termination of the Paying Agent
Agreement by the Trust or the resignation of the Paying Agent, the Trust will
use its best efforts to engage a new Paying Agent to carry out the duties of the
Paying Agent.
INDEMNIFICATION
The Trust will indemnify each Trustee, the Paying Agent, the Administrator
and the Custodian, with respect to any claim, liability, loss or expense
(including the costs and expenses of the defense against any claim or liability)
that it may incur in acting as Trustee, Paying Agent, Administrator or
Custodian, as the case may be, except in the case of willful misfeasance, bad
faith, gross negligence or reckless disregard of their respective duties or
where applicable law prohibits such indemnification. Goldman Sachs has agreed to
reimburse the Trust for any amounts it may be required to pay as indemnification
to any Trustee, the Administrator, the Custodian or the Paying Agent. Goldman
Sachs will in turn be reimbursed by the Seller for all such reimbursements paid
by it.
DISTRIBUTIONS
The Trust intends to distribute to Holders on a quarterly basis an amount
equal to $x.xx per Security (which amount equals the pro rata portion of the
fixed quarterly cash distributions from the proceeds of the maturing U.S.
Treasury securities held by the Trust). The first distribution, reflecting the
Trust's operations from the date of this offering, will be made on
, 1996 to Holders of record as of , 1996. Thereafter,
distributions will be made on , and of
each year to Holders of record as of each and , respectively. A
portion of each such distribution will be treated as a tax-free return of the
Holder's investment. See "Investment Objective and Policies -- General" and
"Certain Federal Income Tax Considerations -- Recognition of Interest on the
U.S. Treasury Securities".
Upon termination of the Trust, as described under the caption "Investment
Objective and Policies -- Trust Termination", each Holder will receive any
remaining net assets of the Trust.
The Trust does not permit the reinvestment of distributions.
ESTIMATED EXPENSES
At the closing of this offering Goldman Sachs will pay to each of the
Administrator, the Custodian and the Paying Agent, and to each Trustee, a
one-time, up-front amount in respect of its fee and, in the case of the
Administrator, anticipated expenses of the Trust over the term of the Trust. The
anticipated Trust expenses to be borne by the Administrator include, among other
things, expenses for legal and independent accountants' services, costs of
printing proxies, Securities certificates and Holder reports, expenses of the
Trustees, fidelity bond coverage, stock exchange listing fees and expenses of
qualifying the Securities for sale in the various states. Organization costs of
the Trust in the amount of $ and estimated costs of the Trust in connection
with the initial registration and public offering of the Securities in the
amount of $ will be paid by Goldman Sachs. Other estimated costs of the
Trust in connection with the public offering of the Securities in the amount of
$ will be paid by the Seller.
The amount payable to the Administrator in respect of ongoing expenses of
the Trust was determined based on estimates made in good faith on the basis of
information currently available to the Trust, including estimates furnished by
the Trust's agents. There cannot, however, be any assurance that actual
operating expenses of the Trust will not be substantially more than this amount.
Any excess expenses will be paid by Goldman Sachs or, in event of their failure
to pay such amounts, the Trust.
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<PAGE>
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The following summary of the principal United States federal income tax
consequences of ownership of Securities is based upon the opinion of Sullivan &
Cromwell, special tax counsel to the Trust. It deals only with Securities held
as capital assets by a Holder who acquires its Securities at the issue price
from an Underwriter pursuant to the original offering, and not with special
classes of Holders, such as dealers in securities or currencies, banks, life
insurance companies, persons who are not United States Holders (as defined
below), persons that hold Securities that are part of a hedging transaction,
straddle or conversion transaction, or persons whose functional currency is not
the U.S. dollar. The summary is based on the Internal Revenue Code of 1986, as
amended (the "Code"), its legislative history, existing and proposed regulations
thereunder, published rulings and court decisions, all as currently in effect
and all subject to change at any time, perhaps with retroactive effect.
Prospective purchasers of Securities should consult their own tax advisors
concerning the consequences, in their particular circumstances, under the Code
and the laws of any other taxing jurisdiction, of ownership of Securities.
A United States Holder is a beneficial owner who or that is (i) a citizen or
resident of the United States, (ii) a domestic corporation or (iii) otherwise
subject to United States federal income taxation on a net income basis in
respect of Securities.
Holders should also be aware that there are alternative characterizations of
the assets of the Trust which could result in different federal income tax
consequences. See "Alternative Characterizations" below. While Sullivan &
Cromwell does not believe these alternative characterizations should apply for
federal income tax purposes, there can be no assurance in this regard, and
Holders should consult their tax advisors concerning the risks associated with
alternative characterizations. The following discussion assumes that no such
alternative characterizations will apply.
TAX STATUS OF THE TRUST. The Trust will be treated as a grantor trust for
federal income tax purposes, and each Holder will be considered the owner of its
pro rata portions of the stripped U.S. Treasury securities and the Contract in
the Trust under the grantor trust rules of the Code. Income received by the
Trust will be treated as income of the Holders in the manner set forth below.
RECOGNITION OF INTEREST ON THE U.S. TREASURY SECURITIES. The U.S. Treasury
securities in the Trust will consist of stripped U.S. Treasury securities. A
Holder will be required to treat its pro rata portion of each U.S. Treasury
security in the Trust as a bond that was originally issued on the date the
Holder purchased its Securities at an original issue discount equal to the
excess of the Holder's pro rata portion of the amounts payable on such U.S.
Treasury security over the Holder's tax basis therefor (determined as described
below). The amount of such excess, however, will constitute only a portion of
the total amounts payable in respect of U.S. Treasury securities held by the
Trust and, consequently, a substantial portion of each quarterly cash
distribution to the Holders will be treated as a tax-free return of the Holders'
investment in the U.S. Treasury securities and will not be considered current
income for federal income tax purposes. See "Investment Objective and Policies
- - -- General".
A Holder (whether on the cash or accrual method of tax accounting) will be
required to include original issue discount (other than original issue discount
on short-term U.S. Treasury securities as defined below) in income for federal
income tax purposes as it accrues on a constant yield basis. The Trust expects
that more than 20% of the Holders will be accrual basis taxpayers, in which case
original issue discount on any short-term U.S. Treasury security (I.E., any U.S.
Treasury security with a maturity of one year or less from the date it is
purchased) held by the Trust also will be required to be included in income by
the Holders as it is accrued. Unless a Holder elects to accrue the original
issue discount on a short-term U.S. Treasury security according to a constant
yield method based on daily compounding, such original issue discount will be
accrued on a straight-line basis. The Holder's tax basis in a U.S. Treasury
security will be increased by the amounts of any original issue discount
included in income by the Holder with respect to such U.S. Treasury security.
TAX BASIS OF THE U.S. TREASURY SECURITIES AND THE CONTRACT. A Holder's tax
basis in the Contract and the U.S. Treasury Securities, respectively, will equal
its pro rata portion of the amounts paid for them by the Trust. It is currently
anticipated that % and % of the net proceeds of the offering will be used
by the Trust to purchase the U.S. Treasury securities and as payments for the
Contract, respectively.
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<PAGE>
TREATMENT OF THE CONTRACT. Each Holder will be treated as having entered
into a pro rata portion of the Contract and, at the Exchange Date, as having
received a pro rata portion of the Common Stock or cash, Marketable Securities
or a combination thereof delivered to the Trust.
DISTRIBUTION OF THE COMMON STOCK. The delivery of Common Stock pursuant to
the Contract will not be taxable to the Holders. Each Holder's basis in its
Common Stock will be equal to its basis in its pro rata portion of the Contract
less the portion of such basis allocable to any fractional shares of Common
Stock for which cash is received. A Holder will recognize capital gain or loss
upon receipt of cash in lieu of fractional shares of Common Stock distributed
upon termination of the Trust equal to the difference between the amount of cash
received and the basis of such fractional share. The holding period for the
Common Stock will begin on the date it is acquired.
DISTRIBUTION OF CASH OR MARKETABLE SECURITIES. If the Seller elects the
Cash Settlement Alternative or, as a result of a Reorganization Event, cash,
Marketable Securities, or a combination of cash and Marketable Securities is
delivered pursuant to the Contract, a Holder will recognize capital gain or loss
upon receipt equal to the difference between the amount of cash received, and
its basis in its pro rata portion of the Contract allocable to any shares for
which such cash was received. Any gain or loss will be capital gain or loss and,
if the Holder has held the Securities for more than one year, such gain or loss
will be long-term capital gain or loss. A Holder's basis in any Marketable
Securities received will be equal to its basis in its pro rata portion of the
Contract less the portion of such basis allocable to any shares of Common Stock
for which cash or fractional shares of Marketable Securities were received. See
"Investment Objective and Policies -- The Contract".
SALE OF SECURITIES. Upon a sale of all or some of a Holder's Securities, a
Holder will be treated as having sold its pro rata portions of the U.S. Treasury
securities and the Contract underlying the Securities. The selling Holder will
recognize gain or loss equal to the difference between the amount realized and
the Holder's aggregate tax bases in its pro rata portions of the U.S. Treasury
securities and the Contract. Any gain or loss will be long-term capital gain or
loss if the Holder has held the Securities for more than one year.
ALTERNATIVE CHARACTERIZATIONS
Sullivan & Cromwell believes the Contract should be treated for federal
income tax purposes as a prepaid forward contract for the purchase of a variable
number of shares of Common Stock. The Internal Revenue Service could conceivably
take the view that the Contract should be treated as a loan to the Seller in
exchange for a contingent debt obligation of the Seller. If the Internal Revenue
Service were to prevail in making such an assertion and the Contract is entered
into on or after August 13, 1996, a Holder might be required to include original
issue discount in income over the life of the Securities based on the excess of
the anticipated value of the Common Stock to be received in respect of the
Contract over the amount paid for the Contract, and a Holder would be required
to include additional interest (rather than capital gain) in income on the
Exchange Date (or might be entitled to an ordinary deduction to the extent of
interest previously included in income) based on the difference between such
anticipated value and the value of the Common stock and/or cash actually
received on the Exchange Date. In addition, a Holder might be required to treat
gain attributable to the sale of the Contract as ordinary interest income. The
Internal Revenue Service could also conceivably take the view that a Holder
should simply include in income as interest the amount of cash actually received
each year in respect of the Securities.
BACKUP WITHHOLDING AND INFORMATION REPORTING
The payments of principal and interest (including original issue discount)
on, and the proceeds received from the sale of, Securities may be subject to
U.S. backup withholding tax at the rate of 31% if the Holder thereof fails to
supply an accurate taxpayer identification number or otherwise to comply with
applicable U.S. information reporting or certification requirements. Any amounts
so withheld will be allowed as a credit against such Holder's U.S. federal
income tax liability and may entitle such Holder to a refund, provided that the
required information is furnished to the Internal Revenue Service.
After the end of each calendar year, the Trust will furnish to each record
Holder of Securities an annual statement containing information relating to the
payments on the U.S. Treasury securities received by the Trust. The Trust will
also furnish annual information returns to each record Holder of the Securities
and to the Internal Revenue Service.
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<PAGE>
UNDERWRITING
Subject to the terms and conditions of the Underwriting Agreement, the Trust
has agreed to sell to each of the Underwriters named below (the "Underwriters"),
and each of the Underwriters, for whom Goldman Sachs are acting as
Representative, has severally agreed to purchase from the Trust, the respective
number of Securities set forth opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SECURITIES
- - --------------------------------------------------------------------------------- ---------------------
<S> <C>
Goldman, Sachs & Co.
---------------------
Total 2,500,000
---------------------
---------------------
</TABLE>
Under the terms and conditions of the Underwriting Agreement, the
Underwriters are committed to take and pay for all of the Securities offered
hereby, if any are taken.
The Underwriters propose to offer the Securities in part directly to the
public at the price to the public set forth on the cover page of this Prospectus
and in part to certain securities dealers at such price less a concession of
$ per Security. The Underwriters may allow, and such dealers may re-allow, a
concession not in excess of $ per Security to certain brokers and dealers.
After the Securities are released for sale to the public, the offering price and
other selling terms may from time to time be varied by the Underwriters.
In light of the fact that proceeds from the sale of the Securities will be
used by the Trust to purchase the Contract from the Seller, the Underwriting
Agreement provides that the Seller will pay to the Underwriters the
Underwriters' Compensation of $ per Security.
The Trust has granted the Underwriters an option exercisable for 30 calendar
days after the date of this Prospectus to purchase up to an aggregate of 375,000
additional Securities solely to cover over-allotments, if any. If the
Underwriters exercise their over-allotment option, they will receive the
Underwriters' Compensation referred to above for each Security so purchased. In
addition, in connection with any such exercise, the Underwriters have severally
agreed, subject to certain conditions, to purchase approximately the same
percentage thereof that the number of the Securities to be purchased by each of
them, as shown in the foregoing table, bears to the 2,500,000 Securities
initially offered.
The Seller and the Company have agreed that, during the period beginning
from the date of this Prospectus and continuing to and including the date 180
days, in the case of the Seller, and 90 days, in the case of the Company, after
the date of this Prospectus, they will not offer, sell, contract to sell or
otherwise dispose of any Common Stock or other securities of the Company (other
than pursuant to employee stock option plans existing, or on the conversion or
exchange of convertible or exchangeable securities outstanding, on the date of
this Prospectus) which are substantially similar to the Common Stock or which
are convertible or exchangeable into Common Stock or other securities which are
substantially similar to the Common Stock, without the prior written consent of
Goldman Sachs.
The Securities will be a new issue of securities with no established trading
market. Application has been made to list the Securities on the New York Stock
Exchange. Goldman Sachs have advised the Company that they intend to make a
market in the Securities, but they are not obligated to do so and may
discontinue market making at any time without notice. No assurance can be given
as to the liquidity of the trading market for the Securities.
The Company and the Seller have agreed to indemnify the several Underwriters
against certain liabilities, including certain liabilities under the Securities
Act of 1933.
23
<PAGE>
Securities have been subscribed for by Goldman Sachs at an aggregate
purchase price of $100,000. No Securities will be sold to the public until the
Securities subscribed for have been purchased and the purchase price thereof
paid in full to the Trust.
VALIDITY OF SECURITIES
The validity of the Securities will be passed upon for the Trust and the
Underwriters by their counsel, Sullivan & Cromwell, 125 Broad Street, New York,
New York 10004.
EXPERTS
The financial statement included in this Prospectus has been audited by
Coopers & Lybrand L.L.P., independent accountants, as stated in their opinion
appearing herein, and has been so included in reliance upon such opinion given
upon the authority of that firm as experts in accounting and auditing.
FURTHER INFORMATION
The Trust has filed with the Securities and Exchange Commission, Washington,
D.C. 20549, a Registration Statement under the Securities Act of 1933, as
amended, with respect to the Securities offered hereby. Further information
concerning the Securities and the Trust may be found in the Registration
Statement of which this Prospectus constitutes a part. The Registration
Statement may be inspected without charge at the Commission's office in
Washington, D.C., and copies of all or any part thereof may be obtained from
such office after payment of the fees prescribed by the Commission.
24
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees and Securityholders of
Dole Food Automatic Common Exchange Security Trust:
We have audited the accompanying statement of assets and liabilities of Dole
Food Automatic Common Exchange Security Trust as of August , 1996. This
financial statement is the responsibility of the Trust's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the statement of assets and liabilities is
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statement. An
audit also includes assessing the accounting principles used and significant
estimates made by the Trust's management, as well as evaluating the overall
financial statement presentation. We believe that our audit of the financial
statement provides a reasonable basis for our opinion.
In our opinion, the financial statement referred to above presents fairly,
in all material respects, the financial position of Dole Food Automatic Common
Exchange Security Trust, as of August , 1996 in conformity with generally
accepted accounting principles.
New York, New York
August , 1996
25
<PAGE>
DOLE FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST
STATEMENT OF ASSETS AND LIABILITIES
AUGUST , 1996
ASSETS
<TABLE>
<S> <C>
Cash............................................................................. $ 100,000
---------
Total assets................................................................. $ 100,000
---------
---------
LIABILITIES
.......................................................................... $ 0
---------
NET ASSETS
Balance applicable to Securities outstanding................................. $ 100,000
---------
---------
Net asset value per Security..................................................... $
---------
---------
</TABLE>
- - ------------------------
(1) Dole Food Automatic Common Exchange Security Trust (the "Trust") was
established on August 1, 1996 and has had no operations to date other than
matters relating to its organization and registration as a non-diversified,
closed-end management investment company under the Investment Company Act of
1940. Costs incurred in connection with the organization of the Trust,
estimated at $ , have been paid by Goldman, Sachs & Co.
26
<PAGE>
- - ----------------------------------------------
--------------------------------------------
- - ----------------------------------------------
--------------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS, AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY ANY SECURITIES OTHER THAN THE SECURITIES TO
WHICH IT RELATES OR ANY OFFER TO SELL OR THE SOLICITATION OF ANY OFFER TO BUY
SUCH SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR SOLICITATION IS
UNLAWFUL.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
-----
<S> <C>
Prospectus Summary................................. 3
The Trust.......................................... 8
Use of Proceeds.................................... 8
Investment Objective and Policies.................. 8
Risk Factors....................................... 16
Description of the Securities...................... 18
Management and Administration of the Trust......... 19
Certain Federal Income Tax Considerations.......... 21
Underwriting....................................... 23
Validity of Securities............................. 24
Experts............................................ 24
Further Information................................ 24
Report of Independent Accountants.................. 25
Statement of Assets and Liabilities................ 26
</TABLE>
--------------
UNTIL , 1996 (25 DAYS AFTER THE DATE OF THIS PROSPECTUS), ALL
DEALERS EFFECTING TRANSACTIONS IN THE SECURITIES, WHETHER OR NOT PARTICIPATING
IN THIS DISTRIBUTION, MAY BE REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN
ADDITION TO THE OBLIGATION OF DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS
UNDERWRITERS AND WITH RESPECT TO THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
2,500,000 SHARES
DOLE FOOD AUTOMATIC
COMMON EXCHANGE
SECURITY TRUST
$ . AUTOMATIC COMMON
EXCHANGE SECURITIES
-----------
PROSPECTUS
-----------
GOLDMAN, SACHS & CO.
- - ----------------------------------------------
----------------------------------------------
- - ----------------------------------------------
----------------------------------------------
<PAGE>
PART C
OTHER INFORMATION
ITEM 24. FINANCIAL STATEMENTS AND EXHIBITS
<TABLE>
<S> <C> <C>
(a) Financial Statements
Part A -- Report of Independent Accountants.
Statement of Assets and Liabilities.
Part B -- None.
Exhibits
(b)
2.a.(i)
Trust Agreement
2.a.(ii)
Form of Amended and Restated Trust Agreement
2.d
Form of Specimen Certificate of Automatic Common Exchange
Security
(included in Exhibit 2.a.(ii))
2.h
Form of Underwriting Agreement
2.j
Form of Custodian Agreement
2.k.(i)
Form of Administration Agreement
2.k.(ii)
Form of Paying Agent Agreement
2.k.(iii)
Form of Purchase Contract
2.k.(iv)
Form of Collateral Agreement
2.k.(v)
Form of Fund Expense Agreement
2.k.(vi)
Form of Fund Indemnity Agreement
2.l
Opinion and Consent of Counsel to the Trust
2.n.(i)
Tax Opinion of Counsel to the Trust (Consent contained in
Exhibit 2.n.(i))
2.n.(iii)
Consent of Independent Public Accountants*
2.n.(iv)
Consents to Being Named as Trustee*
2.p
Form of Subscription Agreement
2.r
Financial Data Schedule*
</TABLE>
- - ------------------------
* To be filed by amendment.
ITEM 25. MARKETING ARRANGEMENTS
See the Form of Underwriting Agreement filed as Exhibit 2.h to this
Registration Statement.
ITEM 26. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the offering described in this Registration Statement:
<TABLE>
<S> <C>
Registration fees................................................ $
New York Stock Exchange listing fee..............................
Printing (other than certificates)...............................
Engraving and printing certificates..............................
Fees and expenses of qualification under state securities laws
(excluding fees of counsel).....................................
Accounting fees and expenses.....................................
Legal fees and expenses..........................................
NASD fees........................................................
Miscellaneous....................................................
---------
Total........................................................ $
---------
---------
</TABLE>
C-1
<PAGE>
ITEM 27. PERSON CONTROLLED BY OR UNDER COMMON CONTROL WITH REGISTRANT
Prior to August 1, 1996 the Trust had no existence. As of the effective
date, the Trust will have entered into a Subscription Agreement for
Securities with Goldman, Sachs & Co. and an Underwriting Agreement with respect
to Securities with Goldman, Sachs & Co.
ITEM 28. NUMBER OF HOLDERS OF SECURITIES
<TABLE>
<CAPTION>
NUMBER OF RECORD
TITLE OF CLASS HOLDERS
- - ---------------------------------------------------------------------------- ---------------------
<S> <C>
Automatically Convertible Equity Securities................................. 0
</TABLE>
ITEM 29. INDEMNIFICATION
The Underwriting Agreement, filed as Exhibit 2.h to this Registration
Statement, provides for indemnification to the Underwriters against certain
liabilities, including liabilities under the Securities Act of 1933, as amended
(the "Securities Act").
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to trustees, officers and controlling persons of the
Registrant, pursuant to the foregoing provisions or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a trustee, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
trustee, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
ITEM 30. BUSINESS AND OTHER CONNECTIONS OF INVESTMENT ADVISER
Not Applicable.
ITEM 31. LOCATION OF ACCOUNTS AND RECORDS
The Trust's accounts, books and other documents are currently located at the
offices of the Registrant, c/o Goldman, Sachs & Co., 85 Broad Street, New York,
New York 10004 and at the offices of The Bank of New York, the Registrant's
Administrator, Custodian, paying agent, transfer agent and registrar.
ITEM 32. MANAGEMENT SERVICES
Not applicable.
ITEM 33. UNDERTAKINGS
(a) The Registrant hereby undertakes to suspend offering of its units until
it amends its prospectus if (1) subsequent to the effective date of its
Registration Statement, the net asset value declines more than 10 percent from
its net asset value as of the effective date of the Registration Statement or
(2) the net asset value increases to an amount greater than its net proceeds as
stated in the prospectus.
(b) The Registrant hereby undertakes that (i) for the purpose of determining
any liability under the Securities Act, the information omitted from the form of
prospectus filed as part of this registration statement in reliance upon Rule
430A and contained in a form of prospectus filed by the Registrant under Rule
497(h) under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective; (ii) for the purpose of
determining any liability under the Securities Act, each post-effective
amendment that contains a form of prospectus shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of the securities at that time shall be deemed to be the initial bona
fide offering thereof.
C-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the
Investment Company Act of 1940, the Registrant has duly caused this Amendment to
the Registration Statement to be signed on its behalf by the undersigned,
thereto duly authorized, in the City of New York, State of New York, on the 2nd
day of August, 1996.
DOLE FOOD AUTOMATIC COMMON
EXCHANGE SECURITY TRUST
By: /s/ JOHN P. MCNULTY
-----------------------------------
John P. McNulty
TRUSTEE
Pursuant to the requirements of the Securities Act of 1933, this Amendment
to the Registration Statement has been signed below by the following person, in
the capacities and on the date indicated.
<TABLE>
<C> <S> <C>
NAME TITLE DATE
- - ------------------------------------------------------ ------------------------------------- ------------------
Principal Executive Officer,
/s/ JOHN P. MCNULTY Principal Financial Officer,
------------------------------------------- Principal Accounting Officer and August 2, 1996
John P. McNulty Trustee
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL PAGE
NUMBER DESCRIPTION NUMBER
- - --------- ------------------------------------------------------------------------------------------- ---------------
<S> <C> <C>
2.a.(i) Trust Agreement
2.a.(ii) Form of Amended and Restated Trust Agreement
2.d Form of Specimen Certificate of Automatic Common Exchange Security (included in Exhibit
2.a.(ii))
2.h Form of Underwriting Agreement
2.j Form of Custodian Agreement
2.k.(i) Form of Administration Agreement
2.k.(ii) Form of Paying Agent Agreement
2.k.(iii) Form of Purchase Contract
2.k.(iv) Form of Collateral Agreement
2.k.(v) Form of Fund Expense Agreement
2.k.(vi) Form of Fund Indemnity Agreement
2.l Opinion and Consent of Counsel to the Trust
2.n.(i) Tax Opinion of Counsel to the Trust (Consent contained in Exhibit 2.n.(i))
2.n.(iii) Consent of Independent Public Accountants*
2.n.(iv) Consents to Being Named as Trustee*
2.p Form of Subscription Agreement
2.r Financial Data Schedule*
</TABLE>
- - ------------------------
* To be filed by amendment.
<PAGE>
TRUST AGREEMENT
This TRUST AGREEMENT, dated as of August 1, 1996, between GOLDMAN,
SACHS & CO., as sponsor (the "Sponsor") and JOHN P. McNULTY, as trustee (the
"Trustee").
1. The Sponsor hereby creates Dole Food Automatic Common Exchange
Security Trust (the "Trust") in order that it may acquire and hold a fixed
portfolio of stripped U.S. Treasury Securities (the "Treasuries"), enter into
and hold purchase contracts with respect to common stocks chosen by the Trustee
(the "Contracts"), issue shares of beneficial interest therein ("Shares") and
hold the Trust Estate in trust for the use and benefit of all present and future
beneficial owners of Shares and otherwise carry out the terms and conditions
hereof, all for the purpose of providing periodic cash distributions and the
potential for capital appreciation for the beneficial owners of Shares. The
Trustee hereby declares that he will accept and hold the Trust Estate in trust
for the use and benefit of all present or future beneficial owners of Shares.
The Sponsor hereby deposits with the Trustee the sum of $10 to accept and hold
in trust hereunder. As used herein, "Trust Estate" means the Treasuries, the
Contracts and any monies held by the Trust from time to time.
2. The Sponsor specifically authorizes and directs the Trust to
(i) prepare a Registration Statement to be filed with the Securities and
Exchange Commission and an accompanying Prospectus to be furnished to
prospective purchasers of Shares; (ii) acquire the Treasuries as directed by the
Sponsor; (iii) enter into the Contracts; (iv) hold, invest and disburse monies
as directed by the Sponsor; and (v) adopt and amend bylaws and take any and all
other actions as necessary or advisable to carry out the purposes of the Trust.
3. Subject to the specific provisions hereof, the Trust will be
managed solely by the Trustee. The Trustee shall have fiduciary responsibility
for the safekeeping and use of all funds and assets of the Trust and shall not
employ, or permit another to employ, such funds or assets in any manner except
for the exclusive benefit of the Trust.
4. The Trustee may resign or be discharged of the trust created
hereby by executing an instrument in writing, filing the same with the Sponsor
and such resignation shall become effective immediately unless otherwise
specified therein. Prior to the issuance of
<PAGE>
Shares, any vacancy in the office of the Trustee may be filled by appointment by
the Sponsor.
5. The Trustee shall not be liable to the Trust or any beneficial
owner of Shares for any action taken or for refraining from taking any action
except in the case of willful misfeasance, bad faith, gross negligence or a
willful disregard of the duties of his office.
6. Prior to the issuance of Shares, (i) the trust created hereby
shall be revocable by the Sponsor at any time upon written notice to the
Trustee, and (ii) this Trust Agreement may be amended by the Trustee from time
to time for any purpose. This Trust Agreement and the Trust shall terminate
upon the date which is 21 years after the death of the last survivor of Joseph
P. Kennedy living on the date hereof.
7. This Trust Agreement is executed and delivered in the State of
New York, and all laws or rules of construction of the State of New York shall
govern the rights of the parties hereto and beneficial owners of Shares and the
interpretation of the provisions hereof.
8. This Trust Agreement may be executed in one or more
counterparts and when a counterpart has been executed by each party hereto all
such counterparts taken together shall constitute one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed.
GOLDMAN, SACHS & CO., as Sponsor
--------------------------------
JOHN P. McNULTY, as Trustee
--------------------------------
John P. McNulty
<PAGE>
Draft of July 30, 1996
AMENDED AND RESTATED
TRUST AGREEMENT
CONSTITUTING
DOLE FOOD AUTOMATIC
COMMON EXCHANGE SECURITY TRUST
Dated as of August__, 1996
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
SECTION 2.1 Declaration of Trust; Purposes of the
Trust........................................... 6
SECTION 2.2 General Powers and Duties of the
Trustees........................................ 6
SECTION 2.3 Portfolio Acquisition............................. 8
SECTION 2.4 Portfolio Administration.......................... 8
SECTION 2.5 Manner of Sales................................... 11
SECTION 2.6 Limitations on Trustees' Powers................... 11
ARTICLE III
ACCOUNTS AND PAYMENTS
SECTION 3.1 The Trust Account................................. 12
SECTION 3.2 Payment of Fees and Expenses...................... 12
SECTION 3.3 Distributions to Holders.......................... 12
SECTION 3.4 Segregation....................................... 13
SECTION 3.5 Investments....................................... 13
ARTICLE IV
REDEMPTION
SECTION 4.1 Redemption........................................ 13
ARTICLE V
ISSUANCE OF CERTIFICATES;
REGISTRY; TRANSFER OF SECURITIES
SECTION 5.1 Form of Certificate............................... 14
SECTION 5.2 Transfer of Securities; Issuance,
Transfer and Interchange of
Certificates.................................... 14
SECTION 5.3 Replacement of Certificates....................... 15
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE VI
ISSUANCE OF THE CONTRACT
SECTION 6.1 Execution of the Contract......................... 16
ARTICLE VII
TRUSTEES
SECTION 7.1 Trustees.......................................... 16
SECTION 7.2 Vacancies......................................... 16
SECTION 7.3 Powers............................................ 17
SECTION 7.4 Meetings.......................................... 17
SECTION 7.5 Resignation and Removal........................... 18
SECTION 7.6 Liability......................................... 18
SECTION 7.7 Compensation...................................... 19
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 Meetings of Holders............................... 19
SECTION 8.2 Books and Records; Reports........................ 20
SECTION 8.3 Termination....................................... 21
SECTION 8.4 Amendment and Waiver.............................. 21
SECTION 8.5 Accountants....................................... 23
SECTION 8.6 Nature of Holder's Interest....................... 24
SECTION 8.7 New York Law to Govern............................ 24
SECTION 8.8 Notices........................................... 24
SECTION 8.9 Severability...................................... 25
SECTION 8.10 Counterparts...................................... 25
<PAGE>
AMENDED AND RESTATED TRUST AGREEMENT
This Amended and Restated Trust Agreement, dated as of August __,
1996 (the "Trust Agreement"), by and between Goldman Sachs & Co., as sponsor
(the "Sponsor"), and ________________,__________________ and _______________ as
trustees (the "Trustees"), constituting Dole Food Automatic Common Exchange
Security Trust (the "Trust") .
W I T N E S S E T H:
WHEREAS, the Sponsor and John P. McNulty, as trustee, have
previously entered into a Trust Agreement dated as of August __, 1996 (the
"Original Agreement"), creating Dole Food Automatic Common Exchange Security
Trust;
WHEREAS, the parties hereto desire to amend and restate the Original
Agreement in certain respects; and
WHEREAS, the Trust has previously issued to the Sponsor one Security
in consideration of the aggregate purchase price therefor of $100,000 in
satisfaction of the requirements of Section 14(a)(1) under the Investment
Company Act (as defined hereinafter);
NOW, THEREFORE, the parties hereto agree to amend and restate the
Original Agreement as provided herein. Upon the execution and delivery of
copies hereof by the parties hereto, the Original Agreement will be
automatically amended and restated in its entirety to read as provided herein.
ARTICLE I
DEFINITIONS
Whenever used in this Trust Agreement, the following words and
phrases shall have the meanings listed below. Any reference to any agreement
shall be a reference to such agreement as supplemented or amended from time to
time.
"ACCELERATION AMOUNT NOTICE" - An Acceleration Amount Notice as
defined in the Contract.
"ACCELERATION VALUE" - The Acceleration Value as defined in the
Contract.
"ADDITIONAL PURCHASE PRICE" - The Additional Purchase Price as
defined in the Contract.
<PAGE>
"AGGREGATE ACCELERATION VALUE" - The Aggregate Acceleration Value
as defined in the Contract.
"ADMINISTRATION AGREEMENT" - The Administration Agreement, dated
as of the date hereof, between the Administrator and the Trustees, and any
substitute agreement therefor entered into pursuant to Section 2.2(a) hereof.
"ADMINISTRATOR" - The Bank of New York or its successor as
permitted under Section 6.1 of the Administration Agreement or appointed
pursuant to Section 2.2(a) hereof.
"BUSINESS DAY" - A day on which the New York Stock Exchange, Inc.
is open for trading that is not a day on which banks in The City of New York are
authorized or obligated by law to close.
"CASH SETTLEMENT ALTERNATIVE" - The Cash Settlement Alternative as
defined in the Contract.
"CERTIFICATE" - Any certificate evidencing the ownership of
Securities substantially in the form of Exhibit A hereto.
"CODE" - The Internal Revenue Code of 1986, as amended from time
to time; each reference herein to any section of the Code or any regulation
thereunder shall constitute a reference to any successor provision thereto.
"COLLATERAL AGENT" - The Bank of New York or its successor as
permitted under the Collateral Agreement.
"COLLATERAL AGREEMENT" - The Collateral Agreement between the
Collateral Agent, the Seller and the other parties thereto, securing the
Seller's obligations under the Contract, substantially in the form of Exhibit B
hereto.
"COMMENCEMENT DATE" - The day on which the Underwriting Agreement
is executed.
"COMMISSION" - The United States Securities and Exchange
Commission.
"COMMON STOCK" - Common Stock, no par value, of Dole Food Company,
Inc.
"COMPANY" - Dole Food Company, Inc., a Hawaii corporation.
-2-
<PAGE>
"CONTRACT" - The forward purchase contract entered into by the
Trustees, the Seller and the other parties thereto, substantially in the form of
Exhibit C hereto.
"CURRENT MARKET PRICE" - Current Market Price as defined in the
Contract.
"CUSTODIAN" - The Bank of New York or its successor as permitted
under paragraph 11 of the Custodian Agreement or appointed pursuant to Section
2.2(a) hereof.
"CUSTODIAN AGREEMENT" - The Custodian Agreement, dated as of the
date hereof, between the Custodian and the Trustees, and any substitute
agreement therefor entered into pursuant to Section 2.2(a) hereof.
"DEPOSITARY" - The Depository Trust Company, or any successor
thereto.
"DISTRIBUTION DATE" - Each ________, ________, ________ and
________ of each year commencing ________, 1996, to and including ________ __,
____ or if any such date is not a Business Day, then the first Business Day
thereafter.
"EXCESS PURCHASE PAYMENT" - Excess Purchase Payment as defined
under the Contract.
"EVENT OF DEFAULT" - An Event of Default as defined in the
Contract.
"EXCHANGE" - The delivery by the Trustees to the Holders of Shares
(or, if the seller elects the Cash Settlement Alternative under the Contract,
the amount in cash specified in the Contract as payable in respect thereof) in
mandatory exchange for the Securities on the Exchange Date.
"EXCHANGE DATE" - ________ __, ____.
"EXCHANGE RATE" - The Exchange Rate as defined in the Contract.
"FIRM PURCHASE PRICE" - The Firm Purchase Price as defined in the
Contract.
"FIRST TIME OF DELIVERY" - The First Time of Delivery as defined
in the Underwriting Agreement.
"HOLDER" - The registered owner of any Security as recorded on the
books of the Paying Agent.
-3-
<PAGE>
"INDEPENDENT DEALERS" - Independent Dealers as defined in the
Contract.
"INDEMNITY AGREEMENT" - The Fund Indemnity Agreement dated as of
the date hereof between the Trustees and the Sponsor substantially in the form
of Exhibit D hereto.
"INVESTMENT COMPANY ACT" - The Investment Company Act of 1940, as
amended from time to time; each reference herein to any section of such Act or
any rule or regulation thereunder shall constitute a reference to any successor
provision thereto.
"MANAGING TRUSTEE" - The Trustee designated the Managing Trustee
by resolution of the Trustees.
"MARKETABLE SECURITIES" - Marketable Securities as defined in the
Contract.
"ORIGINAL AGREEMENT" - The meaning specified in the recitals
hereof.
"PARTICIPANT" - A Person having a book-entry only system account
with the Depositary.
"PAYING AGENT" - The Bank of New York or its successor as
permitted under Section 6.6 of the Paying Agent Agreement or appointed pursuant
to Section 2.2(a) hereof.
"PAYING AGENT AGREEMENT" - The Paying Agent Agreement, dated as of
the date hereof, between the Paying Agent and the Trustees, and any substitute
agreement therefor entered into pursuant to Section 2.2(a) hereof.
"PERSON" - An individual, a partnership, a corporation, a trust,
an unincorporated association, a joint venture or other entity or a government
or any agency or political subdivision thereof.
"PROSPECTUS" - The prospectus relating to the Trust constituting a
part of the Registration Statement, as first filed with the Commission pursuant
to Rule 497(b) or (h) under the Securities Act, and as subsequently amended or
supplemented by the Trust.
"QUARTERLY DISTRIBUTION" - $______ per Security paid to each
Holder on each Distribution Date.
"RECORD DATE" - Each ________, ________, ________, and ________ of
each year commencing ________, 1996.
-4-
<PAGE>
"REGISTRATION STATEMENT" - Registration Statement on Form N-2
(Registration No. 333-325) of the Trust, as amended.
"REORGANIZATION EVENT" - A Reorganization Event as defined in the
Contract.
"SECOND TIME OF DELIVERY" - The Second Time of Delivery as defined
in the Underwriting Agreement.
"SECURITIES ACT" - The Securities Act of 1933, as amended from
time to time.
"SECURITY" - $.___ Automatic Common Exchange Security of the Trust
evidencing a Holder's undivided interest in the Trust and right to receive a pro
rata distribution upon liquidation of the Trust Estate.
"SELLER" - The person named as Seller in the Contract.
"SHARES" - Shares of Common Stock to be exchanged by the Trustees
for the Securities on the Exchange Date.
"TEMPORARY INVESTMENTS" - Direct short-term U.S. government
obligations, as specified from time to time by the Trustees or through standing
instructions from the Trustees to the Administrator or the Paying Agent.
"TRANSFER AGENT AND REGISTRAR" - The First National Bank of
Boston, as Transfer Agent and Registrar for the Common Stock.
"TREASURY SECURITIES" - The meaning specified in Section 2.3(b)
hereof.
"TRUST ACCOUNT" - The account created pursuant to Section 3.1
hereof.
"TRUST ESTATE" - The Contract and the Treasury Securities held at
any time by the Trust, together with any Temporary Investments held at any time
pursuant to Section 3.5 hereof, and any proceeds thereof or therefrom and any
other moneys held at any time in the Trust Account.
"UNDERWRITERS" - The Underwriters named in the Underwriting
Agreement.
"UNDERWRITING AGREEMENT" - The Underwriting Agreement as described
in the Prospectus.
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ARTICLE II
TRUST DECLARATION; PURPOSES, POWERS
AND DUTIES OF THE TRUSTEES; ADMINISTRATION
SECTION 2.1 DECLARATION OF TRUST; PURPOSES OF THE TRUST. The
Sponsor hereby creates the Trust in order that it may acquire the Treasury
Securities, enter into the Contract, issue and sell to the Sponsor and the
Underwriters the Securities, hold the Trust Estate in trust for the use and
benefit of all present and future Holders and otherwise carry out the terms and
conditions of this Trust Agreement, all for the purpose of achieving the
investment objectives set forth in the Prospectus. The Trustees hereby declare
that they will accept and hold the Trust Estate in trust for the use and benefit
of all present and future Holders. The Sponsor has heretofore deposited with
the Trustees the sum of $10 to accept and hold in trust hereunder until the
issuance and sale of the Securities to the Underwriters, whereupon such sum
shall be donated to an organization satisfying the requirements of Section
170(c)(2) of the Code selected by unanimous consent of the Trustees.
SECTION 2.2 GENERAL POWERS AND DUTIES OF THE TRUSTEES. In
furtherance of the provisions of Section 2.1 hereof, the Sponsor authorizes and
directs the Trustees:
(a) to enter into and perform (and, in accordance with Section
8.4(a) hereof, amend), the Contract, the Collateral Agreement, the
Underwriting Agreement, the Indemnity Agreement, the Custodian Agreement,
the Administration Agreement and the Paying Agent Agreement and to perform
all obligations of the Trustees (including the obligation to provide
indemnity hereunder and thereunder) and enforce all rights and remedies of
the Trust under each of such agreements; and if any of the Custodian
Agreement, the Administration Agreement, the Collateral Agreement and the
Paying Agent Agreement terminates, or the agent of the Trust thereunder
resigns or is discharged, to appoint a substitute agent and enter into a
new agreement with such substitute agent containing provisions
substantially similar to those contained in the agreement being
terminated; provided that in any such new agreement (i) the Custodian and
the Paying Agent shall each be a commercial bank or trust company
organized and existing under the laws of the United States of America or
any state therein, shall have full trust powers and shall have minimum
capital, surplus and retained earnings of not less than $100,000,000; and
(ii) the Administrator and the Collateral Agent shall each be a reputable
financial
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institution qualified in all respects to carry out its obligations under
the Administration Agreement or the Collateral Agreement, as the case may
be;
(b) to hold the Trust Estate in trust, to create and administer the
Trust Account, to direct payments received by the Trust to the Trust
Account and to make payments out of the Trust Account as set forth in
Article III hereof;
(c) to issue and sell to the Underwriters an aggregate of up to
______ Securities (including those Securities subject to the
over-allotment option of the Underwriters provided for in the Underwriting
Agreement) pursuant to the Underwriting Agreement and as contemplated by
the Prospectus; provided, however, that subsequent to the determination of
the public offering price per Security and related underwriting discount
for the Securities to be sold to the Underwriters but prior to the sale of
the Securities to the Underwriters, the Securities originally issued to
the Sponsor shall be split into a greater number of Securities so that
immediately following such split the value of each Security held by the
Sponsor will equal the aforesaid public offering price less the related
underwriting discount;
(d) to select independent public accountants and, subject to the
provisions of Section 8.5 hereof, to engage such independent public
accountants;
(e) to engage legal counsel and, to the extent required by Section
2.4 hereof, to engage professional advisors and pay reasonable
compensation thereto;
(f) to defend any action commenced against the Trustees or the
Trust and to prosecute any action which the Trustees deem necessary to
protect the Trust and the rights and interests of Holders, and to pay the
costs thereof;
(g) to arrange for the bonding of officers and employees of the
Trust as required by Section 17(g) of the Investment Company Act and the
rules and regulations thereunder;
(h) to delegate any and all of its powers and duties hereunder as
contemplated by the Custodian Agreement, the Paying Agent Agreement and
the Administration Agreement, to the extent permitted by applicable law;
and
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(i) to adopt and amend bylaws, and take any and all such other
actions as necessary or advisable to carry out the purposes of the Trust,
subject to the provisions hereof and applicable law, including, without
limitation, the Investment Company Act.
SECTION 2.3 PORTFOLIO ACQUISITION. In furtherance of the
provisions of Section 2.1 hereof, the Sponsor further specifically authorizes
and directs the Trustees:
(a) to enter into the Contract with respect to the Shares subject
thereto with the Seller on the Commencement Date for settlement on the
date or dates provided thereunder and, subject to satisfaction of the
conditions set forth in the Contracts, to pay the Firm Purchase Price and
the Additional Purchase Price, if any, thereunder with the proceeds of the
sale of the Securities, net of underwriting commissions and other expenses
payable in connection with the public offering of the Securities as
described in Section 3.2 hereof and net of the purchase price paid for the
Treasury Securities as provided in paragraph (b) below; and, subject to
the adjustments and exceptions set forth in the Contract, the Contract
shall entitle the Trust to receive from the Seller on the Exchange Date
the Shares subject thereto (or, if the Seller elects the Cash Settlement
Alternative under the Contract, the amount in cash specified in the
Contract in respect thereof) so that the Trust may execute the Exchange
with the Holders; and
(b) to purchase for settlement at the First Time of Delivery, and
at the Second Time of Delivery, as appropriate, with the proceeds of the
sale the Securities, net of underwriting commissions and other expenses
payable in connection with the public offering of the Securities, U.S.
Treasury securities from such brokers or dealers as the Trustees shall
designate in writing to the Administrator having the terms set forth on
Schedule I hereto ("Treasury Securities").
SECTION 2.4 PORTFOLIO ADMINISTRATION. In furtherance of the
provisions of Section 2.1 hereof, the Sponsor further specifically authorizes
and directs the Trustees:
(a) DETERMINATION OF DILUTION OR MERGER ADJUSTMENTS. Upon
receipt of any notice pursuant to Section 5.4(b) of the Contract of an
event requiring an adjustment to the Exchange Rate, or upon otherwise
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acquiring knowledge of such an event, to calculate the required adjustment
and furnish notice thereof to the Collateral Agent and the Seller, or to
request from the Seller such further information as may be necessary to
calculate or effect the required adjustment;
(b) SELECTION OF INDEPENDENT INVESTMENT BANK. Upon receipt of
notice of (i) the occurrence of a Reorganization Event in which property
other than cash or Marketable Securities is to be received in respect of
the Common Stock as described in Section 6.2 of the Contract or (ii) an
Excess Purchase Payment in which the Company has paid or will pay
consideration other than cash as described in Section 6.1(d) of the
Contract, to select and retain a nationally recognized investment banking
firm to determine the market value of such property as provided in the
Contract, and to deliver to the Seller notice pursuant to Section 8.1 of
the Contract identifying the firm proposed to be selected and retained,
and to consult with the Seller on such selection and retention as provided
in such Section 8.1;
(c) ACCELERATION. Upon receipt of any notice pursuant to Section
5.4(a) of the Contract or pursuant to Section 6(a) of the Collateral
Agreement that a Collateral Event of Default has occurred, or upon
otherwise acquiring notice that an Event of Default has occurred, to
request quotations from Independent Dealers, compute Acceleration Value
and Aggregate Acceleration Value and deliver an Acceleration Amount
Notice, in each case with respect to the Contract, all as described in
Article VII of the Contract;
(d) DETERMINATION OF EXCHANGE DATE AMOUNTS. To calculate, on the
Exchange Date, the number of Shares (or, if the Seller elects the Cash
Settlement Alternative under the Contract, the amount in cash) required to
be delivered by the Seller under Section 1.1 of the Contract or, if a
Reorganization Event shall have occurred, the amount of cash required to
be delivered by the Seller, and the number of Marketable Securities
permitted to be delivered by the Seller in lieu of all or a portion of
such cash, all as provided in Section 6.2 of the Contract; and to furnish
notice of the amounts so determined to the Collateral Agent and the
Seller;
(e) DISTRIBUTION OF EXCHANGE CONSIDERATION. Unless a
Reorganization Event shall have occurred (in which event distribution of
proceeds shall be governed
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by Section 8.3 below) or the Seller elects the Cash Settlement Alternative
under the Contract (in which event the cash received in respect thereof
shall be distributed pro rata to the Holders of Securities):
(i) DETERMINATION OF FRACTIONAL SHARES. To determine,
on the Exchange Date: (A) for each Holder of Securities, such
Holder's pro rata share of the total number of Shares delivered to
the Trustees under the Contract on the Exchange Date; and (B) the
number of fractional Shares allocable to each Holder (including, in
the case of the Depositary, fractional shares allocable to
beneficial owners of Securities who own through Participants) and in
the aggregate;
(ii) CASH FOR FRACTIONAL SHARES. To sell, in the
principal market therefor, on the Exchange Date, a number of Shares
equal to the aggregate number of fractional Shares determined
pursuant to clause (i) (B) above, rounded down to the nearest
integral number; and to determine the difference between (A) the
aggregate proceeds of such sale (net of any brokerage or related
expenses) and (B) the product of the number of Shares so sold and
the Current Market Price; and, in accordance with the Indemnity
Agreement, to pay such difference, if positive, to Goldman, Sachs &
Co., or to request payment of such difference, if negative, from
Goldman, Sachs & Co.;
(iii) DELIVERY OF SHARES. To deliver the remaining Shares
to the Transfer Agent and Registrar on the Exchange Date, with
instructions that such Shares be re-registered and re-issued as
follows: (A) for and in the name of each Holder (other than the
Depositary) who holds Securities in definitive form, the Transfer
Agent and Registrar shall be instructed to issue definitive
certificates representing a number of Shares equal to such Holder's
pro rata share of the total delivered to the Trustees under the
Contract, rounded down to the nearest integral number; (B) the
Transfer Agent and Registrar Shares shall be instructed to transfer
all remaining Shares to the account of the Custodian held through
the Depositary, who shall then be instructed to transfer and credit
such Shares to each Participant who holds Securities, with each
Participant receiving its pro rata share of the total Shares
delivered to the Trust on the
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Exchange Date, reduced by the aggregate fractional shares allocable
to such Participant;
(iv) DISTRIBUTION OF CASH IN RESPECT OF FRACTIONAL
SHARES. To distribute to each Holder of Securities cash in the
amount of: (A) the fraction of a Share, if any, allocable to such
Holder as determined pursuant to clause (i) (B) above; times (B) the
Current Market Price; and
(v) RECORD DATE. The distributions described in this
paragraph (e) shall be made to Holders of record as of the close of
business on the Business Day preceding the Exchange Date.
SECTION 2.5 MANNER OF SALES. Any sale of Trust property
permitted under Section 8.3(c) hereof shall be made through such executing
brokers or to such dealers as the Trustees, seeking best price and execution for
the Trust, shall designate in writing to the Paying Agent, taking into account
such factors as price, commission, size of order, difficulty of execution and
brokerage skill required.
SECTION 2.6 LIMITATIONS ON TRUSTEES' POWERS. The Trustees are
not permitted:
(a) to purchase or hold any securities or instruments except for
the Shares, the Contract, the Treasury Securities, the Temporary
Investments contemplated by Section 3.5 hereof and, in the event of a
Reorganization Event, Marketable Securities;
(b) to dispose of the Contract prior to the Exchange Date;
(c) to issue any securities or instruments except for the
Securities, or to issue any Securities other than the Securities sold to
the Sponsor and the Securities to be sold pursuant to the Underwriting
Agreement and until such Securities have been so purchased and paid for in
full;
(d) to make short sales or purchases on margin;
(e) to write put or call options;
(f) to borrow money;
(g) to underwrite securities;
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(h) to purchase or sell real estate, commodities or commodities
contracts;
(i) to purchase restricted securities;
(j) to make loans; or
(k) to take any action, or direct or permit the Administrator, the
Paying Agent or the Custodian to take any action, that would vary the
investment of the Holders within the meaning of Treasury Regulation
Section 301.7701-4(c), or otherwise take any action or direct or permit
any action to be taken that would or could cause the Trust not to be a
"grantor trust" under the Code.
ARTICLE III
ACCOUNTS AND PAYMENTS
SECTION 3.1 THE TRUST ACCOUNT. The Trustees shall, upon issuance
of the Securities, establish with the Paying Agent an account to be called the
"Trust Account". All moneys received by the Trustees in respect of the
Contract, the Treasury Securities and any Temporary Investments held pursuant to
Section 3.5 hereof, all moneys received from the sale of the Securities to the
Sponsor, and any proceeds from the sale to the Underwriters of the Securities
after the purchase of the Contract and the Treasury Securities and the payment
of the Trust's expenses described in Section 3.2 hereof shall be credited to the
Trust Account.
SECTION 3.2 PAYMENT OF FEES AND EXPENSES. The Administrator is
authorized to pay from the Trust Account out of the net proceeds of the sale of
the Securities, the fees and expenses of the Trust incurred in connection with
the offering of the Securities and the costs and expenses incurred in the
organization of the Trust.
SECTION 3.3 DISTRIBUTIONS TO HOLDERS. On or shortly after each
Distribution Date the Trustees shall distribute to each Holder of record at the
close of business on the preceding Record Date, at the post office address of
the Holder appearing on the books of the Trust or Paying Agent or by any other
means mutually agreed upon by the Holder and the Trustees, an amount equal to
such Holder's pro rata share of the Quarterly Distribution computed as of the
close of business on such Distribution Date.
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SECTION 3.4 SEGREGATION. All moneys and other assets deposited
or received by the Trustees hereunder shall be held by them in trust as part of
the Trust Estate until required to be disbursed or otherwise disposed of in
accordance with the provisions of this Trust Agreement, and the Trustees shall
handle such moneys and other assets in such manner as shall constitute the
segregation and holding in trust within the meaning of the Investment Company
Act.
SECTION 3.5 INVESTMENTS. To the extent necessary to enable the
Paying Agent to make the next succeeding Quarterly Distribution, any moneys
deposited with or received by the Trustees in the Trust Account shall be
invested as soon as possible by the Paying Agent in Temporary Investments
maturing no later than the Business Day preceding the next following
Distribution Date. Except as otherwise specifically provided herein or in the
Paying Agent Agreement, the Paying Agent shall not have the power to sell,
transfer or otherwise dispose of any Temporary Investment prior to the maturity
thereof, or to acquire additional Temporary Investments. The Paying Agent shall
hold any Temporary Investments to its maturity and shall apply the proceeds
thereof upon maturity to the payment of the next succeeding Quarterly
Distribution. All such Temporary Investments shall be selected from time to
time by the Trustees or pursuant to standing instructions from the Trustees to
the Administrator, and the Administrator and/or Paying Agent shall have no
liability to the Trust or any Holder or any other Person with respect to any
such Temporary Investment. Any interest or other income received on any moneys
in the Trust Account shall, upon receipt thereof, be deposited into the Trust
Account. Notwithstanding the foregoing, not more than 5% of the assets of the
Trust may be held at any time in the form of cash and Temporary Investments, and
the Trustees shall distribute cash, or liquidate Temporary Investments and
distribute the proceeds thereof, if, when and to the extent needed to maintain
compliance with the foregoing restriction.
ARTICLE IV
REDEMPTION
SECTION 4.1 REDEMPTION. The Trustees shall have no right or
obligation to redeem Securities.
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ARTICLE V
ISSUANCE OF CERTIFICATES; REGISTRY; TRANSFER OF SECURITIES
SECTION 5.1 FORM OF CERTIFICATE. Each Certificate evidencing
Securities shall be countersigned manually or in facsimile by the Managing
Trustee and executed manually by the Paying Agent in substantially the form of
Exhibit A hereto with the blanks appropriately filled in, shall be dated the
date of execution and delivery by the Paying Agent and shall represent a
fractional undivided interest in the Trust, the numerator of which fraction
shall be the number of Securities set forth on the face of such Certificate and
the denominator of which shall be the total number of Securities outstanding at
that time. All Securities shall be issued in registered form and shall be
numbered serially.
Pending the preparation of definitive Certificates, the Trustees may
execute and the Paying Agent shall authenticate and deliver temporary
Certificates (printed, lithographed, typewritten or otherwise reproduced, in
each case in form satisfactory to the Paying Agent). Temporary Certificates
shall be issuable as registered Certificates substantially in the form of the
definitive Certificates but with such omissions, insertions and variations as
may be appropriate for temporary Certificates, all as may be determined by the
Trustees with the concurrence of the Paying Agent. Every temporary Certificate
shall be executed by the Managing Trustee and be authenticated by the Paying
Agent upon the same conditions and in substantially the same manner, and with
like effect, as the definitive Certificates. Without unreasonable delay the
Managing Trustee shall execute and shall furnish definitive Certificates and
thereupon temporary Certificates may be surrendered in exchange therefor without
charge at each office or agency of the Paying Agent and the Paying Agent shall
authenticate and deliver in exchange for such temporary Certificates definitive
Certificates for a like aggregate number of Securities. Until so exchanged, the
temporary Certificates shall be entitled to the same benefits hereunder as
definitive Certificates.
SECTION 5.2 TRANSFER OF SECURITIES; ISSUANCE, TRANSFER AND
INTERCHANGE OF CERTIFICATES. Securities may be transferred by the Holder
thereof by presentation and surrender of properly endorsed Certificates at the
office of the Paying Agent, accompanied by such documents executed by the Holder
or his authorized attorney as the Paying Agent deems necessary to evidence the
authority of the person making the transfer. Certificates issued pursuant to
this
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Trust Agreement are interchangeable for one or more other Certificates in an
equal aggregate number of Securities and all Certificates issued as may be
requested by the Holder and deemed appropriate by the Paying Agent shall be
issued in denominations of one Security or any multiple thereof. The Paying
Agent may deem and treat the person in whose name any Security shall be
registered upon the books of the Paying Agent as the owner of such Security for
all purposes hereunder and the Paying Agent shall not be affected by any notice
to the contrary. The transfer books maintained by the Paying Agent for the
purposes of this Section 5.2 hereof shall include the name and address of the
record owners of the Securities and shall be closed in connection with the
termination of the Trust pursuant to Section 8.3 hereof.
A sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any such transfer shall be paid to the Paying
Agent by the Holder. A Holder may be required to pay a fee for each new
Certificate to be issued pursuant to the preceding paragraph in such amount as
may be specified by the Paying Agent and approved by the Trustees.
All Certificates cancelled pursuant to this Trust Agreement may be
voided by the Paying Agent in accordance with the usual practice of the Paying
Agent or in accordance with the instructions of the Trustees; provided, however,
that the Paying Agent shall not be required to destroy cancelled Certificates.
The Paying Agent may adopt other reasonable rules and regulations
for the registration, transfer and tender of Securities as it may, in its
discretion, deem necessary.
SECTION 5.3 REPLACEMENT OF CERTIFICATES. In case any Certificate
shall become mutilated or be destroyed, stolen or lost, the Paying Agent shall
execute and deliver a new Certificate in exchange and substitution therefor upon
the Holder's furnishing the Paying Agent with proper identification and
satisfactory indemnity, complying with such other reasonable regulations and
conditions as the Paying Agent may prescribe and paying such expenses and
charges, including any bonding fee, as the Paying Agent may incur or reasonably
impose; provided that if the Trust has terminated or is in the process of
terminating, the Paying Agent, in lieu of issuing such new Certificate, may,
upon the terms and conditions set forth herein, make the distributions set forth
in Section 8.3(c) hereof. Any mutilated Certificate shall be duly surrendered
and cancelled before any duplicate Certificate shall be issued in exchange and
substitution therefor. Upon issuance of any duplicate Certificate pur-
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suant to this Section 5.3 hereof, the original Certificate claimed to have
been lost, stolen or destroyed shall become null and void and of no effect,
and any bona fide purchaser thereof shall have only such rights as are
afforded under Article 8 of the Uniform Commercial Code to a Holder
presenting a Certificate for transfer in the case of an overissue.
ARTICLE VI
ISSUANCE OF THE CONTRACT
SECTION 6.1 Execution of the Contract. The Contract shall be
countersigned manually or in facsimile by the Managing Trustee and executed
manually by the Seller and shall be dated the date of execution and delivery by
the Seller.
ARTICLE VII
TRUSTEES
SECTION 7.1 Trustees. The Trust shall have three Trustees who
shall initially be elected by the Sponsor. One Trustee shall be the Managing
Trustee and, as such, is authorized to execute documents and instruments on
behalf of the Trust. The Managing Trustee will be appointed by resolution of
the Trustees. Each Trustee shall serve until the next regular annual or special
meeting of Holders called for the purpose of electing Trustees and, then, until
such Trustee's successor is duly elected and qualified. Holders may not
cumulate their votes in the election of Trustees. Each Trustee shall not be
considered to have qualified for the office unless such Trustee shall agree to
be bound by the terms of this Trust Agreement and shall evidence his consent by
executing this Trust Agreement or a supplement hereto.
SECTION 7.2 Vacancies. Any vacancy in the office of a Trustee may
be filled in compliance with Sections 10 and 16 of the Investment Company Act by
the vote, within thirty days, of the remaining Trustees; provided that if
required by Section 16 of the Investment Company Act, the Trustees shall
forthwith cause to be held as promptly as possible and in any event within sixty
days (unless the Commission by order shall extend such period) a meeting of
Holders for the purpose of electing Trustees in compliance with Sections 10 and
16 of the Investment Company Act. Until a vacancy in the office of any Trustee
is filled as
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provided above, the remaining Trustees in office, regardless of their number,
shall have the powers granted to the Trustees and shall discharge all the duties
imposed upon the Trustees by this Trust Agreement. Election shall be by the
affirmative vote of Holders of a majority of the Securities entitled to vote
present in person or by proxy at a special meeting of Holders called for the
purpose of electing any Trustee. Each individual Trustee shall be at least 21
years of age and shall not be under any legal disability. No Trustee who is an
"interested person", as defined in the Investment Company Act, may assume office
if it would cause the composition of the Trustees of the Trust not to be in
compliance with the percentage limitations on interested persons in Section 10
of the Investment Company Act. Trustees need not be Holders. Notice of the
appointment or election of a successor Trustee shall be mailed promptly after
acceptance of such appointment by the successor Trustee to each Holder.
SECTION 7.3 POWERS. The Trust will be managed solely by the
Trustees, who will, subject to the provisions of Article II hereof, have
complete and exclusive control over the management, conduct and operation of the
Trust's business, and shall have the rights, powers and authority of a board of
directors of a corporation organized under New York law. The Trustees shall
have fiduciary responsibility for the safekeeping and use of all funds and
assets of the Trust and shall not employ, or permit another to employ, such
funds or assets in any manner except for the exclusive benefit of the Trust and
except in accordance with the terms of this Trust Agreement. Subject to the
continuing supervision of the Trustees and as permitted by applicable law, the
functions of the Trust shall be performed by the Custodian, the Paying Agent,
the Administrator and such other entities engaged to perform such functions as
the Trustees may determine, including, without limitation, any or all
administrative functions.
SECTION 7.4 MEETINGS. Meetings of the Trustees shall be held
from time to time upon the call of any Trustee on not less than 48 hours' notice
(which may be waived by any or all of the Trustees in writing either before or
after such meeting or by attendance at the meeting unless the Trustee attends
the meeting for the express purpose of objecting to the transaction of any
business on the ground that the meeting has not been lawfully called or
convened). The Trustees shall act either by majority vote of the Trustees
present at a meeting at which at least a majority of the Trustees then in office
are present or by a unanimous written consent of the Trustees without a meeting.
Except as otherwise required under the Investment Company Act, all
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or any of the Trustees may participate in a meeting of the Trustees by means of
a conference telephone call or similar communications equipment by means of
which all persons participating in the meeting can hear each other, and
participation in a meeting pursuant to such communications equipment shall
constitute presence in person at such meeting.
SECTION 7.5 RESIGNATION AND REMOVAL. Any Trustee may resign and
be discharged of the trust created by the Trust Agreement by executing an
instrument in writing resigning as Trustee, filing the same with the
Administrator and sending notice thereof to the remaining Trustees, and such
resignation shall become effective immediately unless otherwise specified
therein. Any Trustee may be removed in the event of incapacity by vote of the
remaining Trustees and for any reason by written declaration or vote of the
Holders of more than 66 2/3% of the outstanding Securities, notice of which vote
shall be given to the remaining Trustees and the Administrator. The
resignation, removal or failure to reelect any Trustee shall not cause the
termination of the Trust.
SECTION 7.6 LIABILITY. The Trustees shall not be liable to the
Trust or any Holder for any action taken or for refraining from taking any
action except in the case of willful misfeasance, bad faith, gross negligence or
reckless disregard of the duties of their office. Specifically, without
limitation, the Trustees shall not be responsible for or in respect of the
recitals herein or the validity or sufficiency of this Trust Agreement or for
the due execution hereof by any other Person, or for or in respect of the
validity or sufficiency of Securities or certificates representing Securities
and shall in no event assume or incur any liability, duty or obligation to any
Holder or to any other Person, other than as expressly provided for herein. The
Trustees may employ agents, attorneys, administrators, accountants and auditors,
and shall not be answerable for the default or misconduct of any such Persons if
such Persons shall have been selected with reasonable care. Action in good
faith may include action taken in good faith in accordance with an opinion of
counsel. In no event shall any Trustee be personally liable for any expenses
with respect to the Trust. Each Trustee shall be indemnified from the Trust
Account with respect to any claim, liability, loss or expense incurred in acting
as Trustee of the Trust, including the costs and expenses of the defense against
any such claim or liability, except in the case of willful misfeasance, bad
faith, gross negligence or reckless disregard of the duties of his office.
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SECTION 7.7 COMPENSATION. Each Trustee, other than a Trustee who
is a director, officer or employee of the Sponsor, any Underwriter, or the
Administrator or any affiliate thereof, shall receive a one-time, up-front fee
of [$10,800], in respect of its annual fee and anticipated out-of-pocket
expenses. In addition, the Managing Trustee shall receive an additional
one-time, up-front fee of [$3,600] for serving in such capacity. The Trustees
will not receive any pension or retirement benefits. In the event of the
resignation or removal of a Trustee, such Trustee shall remit to the Trust the
portion of its fee ratable for the period from the day of such resignation or
removal through the Exchange Date.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1 MEETINGS OF HOLDERS. The Trustees shall not hold
annual or regular meetings of Holders except as set forth herein. A special
meeting may be called at any time by the Trustees or upon petition of Holders of
not less than 51% of the Securities outstanding (unless substantially the same
matter was voted on during the preceding 12 months), and shall be called as
provided in Section 7.2 hereof (or as otherwise required by the Investment
Company Act and the rules and regulations thereunder, including, without
limitation, when requested by the Holders of not less than 10% of the Securities
outstanding for the purposes of voting upon the question of the removal of any
Trustee or Trustees). The Trustees shall establish, and notify the Holders in
writing of, the record date for each such meeting which shall be not less than
10 nor more than 50 days before the meeting date. Holders at the close of
business on the record date will be entitled to vote at the meeting. The
Administrator shall, as soon as possible after any such record date (or prior to
such record date if appropriate), mail by first class mail to each Holder a
notice of meeting and a proxy statement and form of proxy in the form approved
by the Trustees and complying with the Investment Company Act and the rules and
regulations thereunder. Except as otherwise specified herein or in any
provision of the Investment Company Act and the rules and regulations
thereunder, any action may be taken by vote of Holders of a majority of the
Securities outstanding present in person or by proxy if Holders of a majority of
Securities outstanding on the record date are so represented. Each Security
shall have one vote and may be voted in person or by duly executed proxy. Any
proxy may be revoked by notice in writing, by a subsequently dated proxy or by
voting in person at the
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<PAGE>
meeting, and no proxy shall be valid after eleven months following the date of
its execution.
SECTION 8.2 BOOKS AND RECORDS; REPORTS. (a) The Trustees shall
keep a certified copy or duplicate original of this Trust Agreement on file at
the office of the Trust and the office of the Administrator available for
inspection at all reasonable times during its usual business hours by any
Holder. The Trustees shall keep proper books of record and account for all the
transactions under this Trust Agreement at the office of the Trust and the
office of the Administrator, and such books and records shall be open to
inspection by any Holder at all reasonable times during usual business hours.
The Trustees shall retain all books and records in compliance with Section 31 of
the Investment Company Act and the rules and regulations thereunder.
(b) With each payment to Holders the Paying Agent shall set forth,
either in the instruments by means of which payment is made or in a separate
statement, the amount being paid from the Trust Account expressed as a dollar
amount per Security and the other information required under Section 19 of the
Investment Company Act and the rules and regulations thereunder. The Trustees
shall prepare and file or distribute reports as required by Section 30 of the
Investment Company Act and the rules and regulations thereunder. The Trustees
shall prepare and file such reports as may from time to time be required to be
filed or distributed to Holders under any applicable state or Federal statute or
rule or regulation thereunder, and shall file such tax returns as may from time
to time be required under any applicable state or Federal statute or rule or
regulation thereunder. One of the Trustees shall be designated by resolution of
the Trustees to make the filings and give the notices required by Rule 17g-1
under the Investment Company Act.
(c) In calculating the net asset value of the Trust as required by
the Investment Company Act, (i) the Treasury Securities will be valued at the
mean between the last current bid and asked prices or, if quotations are not
available, as determined in good faith by the Trustees, (ii) short-term
investments having a maturity of 60 days or less will be valued at cost with
accrued interest or discount earned included in interest receivable and (iii)
the Contract will be valued at the mean of the bid prices received by the
Administrator from at least three independent broker-dealer firms unaffiliated
with the Trust to be named by the Trustees who are in the business of making
bids on financial instruments similar to the Contract and with terms comparable
thereto.
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<PAGE>
SECTION 8.3 TERMINATION. (a) This Trust Agreement and the Trust
created hereby shall terminate upon the earliest of (i) the date 90 days after
the execution of this Trust Agreement if (x) the Securities have not theretofore
been issued or (y) the net worth of the Trust is not at least $100,000 at such
time, (ii) the date of the repayment, sale or other disposition, as the case may
be, of all of the Contract, the Treasury Securities and any other securities
held hereunder, (iii) the date 10 Business Days after the Exchange Date (or, if
the Contracts shall be accelerated pursuant to Article VIII thereof, 10 Business
Days after the date on which the Trust shall receive the Shares then required to
be delivered by the Seller, or the proceeds of any sale of collateral pursuant
to Section 8(c) of the Collateral Agreement), and (iv) the date which is 21
years less 91 days after the death of the last survivor of all of the
descendants of Joseph P. Kennedy living on the date hereof. The Trust is
irrevocable, the Sponsor has no right to withdraw any assets constituting a
portion of the Trust Estate, and the dissolution of the Sponsor shall not
operate to terminate the Trust. The death or incapacity of any Holder shall not
operate to terminate this Trust Agreement, nor entitle his legal representatives
or heirs to claim an accounting or to take any action or proceeding in any court
for a partition or winding up of the Trust, and shall not otherwise affect the
rights, obligations and liabilities of the parties hereto.
(b) Written notice of any termination shall be sent to Holders
specifying the record date for any distribution to Holders and the time of
termination as determined by the Trustees, upon which the books maintained by
the Paying Agent pursuant to Section 5.2 hereof shall be closed.
(c) For purposes of termination under Sections 8.3(a)(ii), (iii)
and (iv) hereof, within five Business Days after such termination, the Trustees
shall, subject to any applicable provisions of law, effect the sale of any
remaining property of the Trust, and the Paying Agent shall distribute pro rata
as soon as practicable thereafter to each Holder, upon surrender for
cancellation of its Certificates, its interest in the Trust Estate. Together
with the distribution to the Holders, the Trustees shall furnish the Holders
with a final statement as of the date of the distribution of the amount
distributable with respect to each Security.
SECTION 8.4 AMENDMENT AND WAIVER. (a) This Trust Agreement, and
any of the agreements referred to in Section 2.2(a) hereof, may be amended from
time to time by the Trustees for any purpose prior to the issuance and sale to
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<PAGE>
the Underwriters of the Securities and thereafter without the consent of any of
the Holders (i) to cure any ambiguity or to correct or supplement any provision
contained herein or therein which may be defective or inconsistent with any
other provision contained herein or therein; (ii) to change any provision hereof
or thereof as may be required by applicable law or the Commission or any
successor governmental agency exercising similar authority; or (iii) to make
such other provisions in regard to matters or questions arising hereunder or
thereunder as shall not materially adversely affect the interests of the Holders
(as determined in good faith by the Trustees, who may rely on an opinion of
counsel).
(b) This Trust Agreement may also be amended from time to time by
the Trustees (or the performance of any of the provisions of the Trust Agreement
may be waived) with the consent by the required vote of the Holders in
accordance with Section 8.1 hereof; provided that this Trust Agreement may not
be amended (i) without the consent by vote of the Holders of all Securities then
outstanding, so as to increase the number of Securities issuable hereunder above
the number of Securities specified in Section 2.2(c) hereof or such lesser
number as may be outstanding at any time during the term of this Trust
Agreement, (ii) to reduce the interest in the Trust represented by Securities
without the consent of the Holders of such Securities, (iii) if such amendment
is prohibited by the Investment Company Act or other applicable law, (iv)
without the consent by vote of the Holders of all Securities then outstanding,
if such amendment would effect a change in the voting requirements set forth in
Section 8.1 hereof or this Section 8.4, or (v) without the consent by vote of
the Holders of the lesser of (x) 67% or more of the Securities represented at a
special meeting of Holders, if more than 50% of the Securities outstanding are
represented at such meeting, and (y) more than 50% of the Securities
outstanding, if such amendment would effect a change in Section 2.1 or 2.6
hereof.
(c) Promptly after the execution of any amendment, the Trustees
shall furnish written notification of the substance of such amendment to each
Holder.
(d) Notwithstanding subsections (a) and (b) of this Section 8.4 no
amendment hereof shall permit the Trust, the Trustees, the Administrator, the
Paying Agent or the Custodian to take any action or direct or permit any Person
to take any action that (i) would vary the investment of Holders within the
meaning of Treasury Regulation Section 301.7701-4(c), or (ii) would or could
cause the Trust, or
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<PAGE>
direct or permit any action to be taken that would or could cause the Trust, not
to be a "grantor trust" under the Code.
SECTION 8.5 ACCOUNTANTS.
(a) The Trustees shall, in accordance with Section 30 of the
Investment Company Act, file annually with the Commission such information,
documents and reports as investment companies having securities registered on a
national securities exchange are required to file annually pursuant to Section
13(a) of the Securities Exchange Act of 1934, as amended, and the rules and
regulations issued thereunder. The Trustees shall transmit to the Holders, at
least semi-annually, the reports required by Section 30(d) of the Investment
Company Act and the rules and regulations thereunder, including, without
limitation, a balance sheet accompanied by a statement of the aggregate value of
investments on the date of such balance sheet, a list showing the amounts and
values of such investments owned on the date of such balance sheet, and a
statement of income for the period covered by the report. Financial statements
contained in such annual reports shall be accompanied by a certificate of
independent public accounts based upon an audit not less in scope or procedures
than that which independent public accountants would ordinarily make for the
purpose of presenting comprehensive and dependable financial statements and
shall contain such information as the Commission may prescribe. Each such
report shall state that such independent public accountants have verified
investments owned, either by actual examination or by receipt of a certificate
from the Custodian.
(b) The independent public accountants referred to in subsection
(a) above shall be selected at a meeting held within thirty days before or after
the beginning of the fiscal year by the vote, cast in person, of a majority of
the Trustees who are not "interested persons" as defined in the Investment
Company Act and such selection shall be submitted for ratification at the first
meeting of Holders to be held as set forth in Section 8.1 hereof, and thereafter
as required by the Investment Company Act and the rules and regulations
thereunder. The employment of any independent public accountant for the Trust
shall be conditioned upon the right of the Holders by a vote of the lesser of
(i) 67% or more of the Securities present at a special meeting of Holders, if
Holders of more than 50% of Securities outstanding are present or represented by
proxy at such meeting or (ii) more than 50% of the Securities outstanding to
terminate such employment at any time without penalty.
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<PAGE>
(c) The foregoing provisions of this Section 8.5 are in addition to
any applicable requirements of the Investment Company Act and the rules and
regulations thereunder.
SECTION 8.6 NATURE OF HOLDER'S INTEREST. Each Holder holds at
any given time a beneficial interest in the Trust Estate, but does not have any
right to take title or possession of any portion of the Trust Estate. Each
Holder expressly waives any right he may have under any rule of law, or the
provisions of any statute, or otherwise, to require the Trustees at any time to
account, in any manner other than as expressly provided in this Trust Agreement,
for the Shares, the Contract, the Treasury Securities or other assets or moneys
from time to time received, held and applied by the Trustees hereunder. No
Holder shall have any right except as provided herein to control or determine
the operation and management of the Trust or the obligations of the parties
hereto. Nothing set forth herein or in the certificates representing Securities
shall be construed to constitute the Holders from time to time as partners or
members of an association.
SECTION 8.7 NEW YORK LAW TO GOVERN. This Trust Agreement is
executed and delivered in the State of New York, and all laws or rules of
construction of the State of New York shall govern the rights of the parties
hereto and the Holders and the construction, validity and effect of the
provisions hereof.
SECTION 8.8 NOTICES. Any notice, demand, direction or
instruction to be given to the Sponsor hereunder shall be in writing and shall
be duly given if mailed or delivered to Goldman, Sachs & Co., 85 Broad Street,
New York, New York 10004, Attention: ________, or at such other address as shall
be specified by the Sponsor to the other parties hereto in writing. Any notice,
demand, direction or instruction to be given to the Trust and the Trustees
hereunder shall be in writing and shall be duly given if mailed or delivered to
the Trust at 101 Barclay Street, New York, New York 10286 and to each Trustee at
such Trustee's address set forth beneath its signature below, or such other
address as shall be specified to the other parties hereto by such party in
writing. Any notice to be given to a Holder shall be duly given if mailed,
first class postage prepaid, or by such other substantially equivalent means as
the Trustees may deem appropriate, or delivered to such Holder at the address of
such Holder appearing on the registry of the Paying Agent.
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<PAGE>
SECTION 8.9 SEVERABILITY. If any one or more of the covenants,
agreements, provisions or terms of this Trust Agreement shall be for any reason
whatsoever held invalid, then such covenants, agreements, provisions or terms
shall be deemed severable from the remaining covenants, agreements, provisions
and terms of this Trust Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Trust Agreement or of the
Certificates, or the rights of the Holders thereof.
SECTION 8.10 COUNTERPARTS. This Trust Agreement may be executed
in counterparts, and as so executed will constitute one agreement, binding on
all of the parties hereto.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Trust
Agreement to be duly executed.
_______________________________
(Goldman, Sachs & Co.)
TRUSTEES:
__________________________________
Name:
Address:
_________________________________
Name:
Address:
_________________________________
Name:
Address:
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<PAGE>
Schedule I
TREASURY SECURITIES
All terms specified are for stripped principal or interest
components of U.S. Treasury debt obligations.
STRIPS Payment Date Aggregate Face Amount, per Security, Payable
at Payment Date
<PAGE>
Exhibit A
THIS CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS, PROVISIONS AND
CONDITIONS OF THE TRUST AGREEMENT REFERRED TO BELOW TO WHICH THE HOLDER OF THIS
CERTIFICATE BY VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS BOUND.
$___. AUTOMATIC COMMON EXCHANGE SECURITIES
DOLE FOOD AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
CUSIP NO. _______
NO. _____ _______________ SHARES
THIS CERTIFIES THAT _____________________________________________ IS THE
RECORD OWNER OF ____________________ $___ AUTOMATIC COMMON EXCHANGE SECURITIES
OF DOLE FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST CONSTITUTING FRACTIONAL
UNDIVIDED INTERESTS IN DOLE FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST, A
TRUST CREATED UNDER THE LAWS OF THE STATE OF NEW YORK PURSUANT TO A TRUST
AGREEMENT BETWEEN GOLDMAN, SACHS & CO. AND THE TRUSTEES NAMED THEREIN. THIS
CERTIFICATE IS ISSUED UNDER AND IS SUBJECT TO THE TERMS, PROVISIONS AND
CONDITIONS OF THE TRUST AGREEMENT TO WHICH THE HOLDER OF THIS CERTIFICATE BY
VIRTUE OF THE ACCEPTANCE HEREOF ASSENTS AND IS BOUND, A COPY OF WHICH TRUST
AGREEMENT IS AVAILABLE AT THE OFFICE OF THE TRUST'S ADMINISTRATOR AND PAYING
AGENT, THE BANK OF NEW YORK, 101 BARCLAY STREET, NEW YORK, NEW YORK. THIS
CERTIFICATE IS TRANSFERABLE AND INTERCHANGEABLE BY THE REGISTERED OWNER IN
PERSON OR BY HIS DULY AUTHORIZED ATTORNEY AT THE OFFICE OF THE PAYING AGENT UPON
SURRENDER OF THIS CERTIFICATE PROPERLY ENDORSED OR ACCOMPANIED BY A WRITTEN
INSTRUMENT OF TRANSFER AND ANY OTHER DOCUMENTS THAT THE PAYING AGENT MAY REQUIRE
FOR TRANSFER, IN FORM SATISFACTORY TO THE PAYING AGENT AND PAYMENT OF THE FEES
AND EXPENSES PROVIDED IN THE TRUST AGREEMENT.
THIS CERTIFICATE IS NOT VALID UNLESS MANUALLY COUNTERSIGNED BY THE
PAYING AGENT.
<PAGE>
WITNESS THE FACSIMILE SIGNATURE OF THE MANAGING TRUSTEE.
Dole Food Automatic Common
Exchange Security Trust
DATED:
By
-----------------------------
Managing Trustee
COUNTERSIGNED:
The Bank of New York,
as Paying Agent
By
--------------------------
Authorized Signature
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<PAGE>
S&C DRAFT OF AUGUST 1, 1996
DOLE FOOD AUTOMATIC COMMON EXCHANGE SECURITY TRUST
$ . AUTOMATIC COMMON EXCHANGE SECURITIES
(SUBJECT TO EXCHANGE INTO SHARES OF
COMMON STOCK OF DOLE FOOD COMPANY, INC.)
UNDERWRITING AGREEMENT
---------------------------------------
. . . . . . , 1996
Goldman, Sachs & Co.,
As representatives of the several Underwriters
named in Schedule I hereto,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
Dole Food Automatic Common Exchange Security Trust, a trust duly created
under the laws of the State of New York (such trust and the trustees thereof
acting in their capacities as such being referred to herein as the "Trust"),
proposes, subject to the terms and conditions stated herein, to issue and sell
to the Underwriters named in Schedule I hereto (the "Underwriters") an aggregate
of .......... of the $ . Automatic Common Exchange Securities of the Trust
specified above (the "Firm Securities") and, at the election of the
Underwriters, up to an aggregate of additional $ . Automatic Common Exchange
Securities (the "Optional Securities") (the Firm Securities and the Optional
Securities which the Underwriters elect to purchase pursuant to Section 2 hereof
are herein collectively called the "Securities").
The $ . Automatic Common Exchange Securities of the Trust to be
outstanding after giving effect to the sales contemplated hereby are hereinafter
called the "Automatic Common Exchange Securities." Each Automatic Common
Exchange Security will be exchanged for shares of Common Stock, no par value
("Stock"), of Dole Food Company, Inc. (the "Company") on .........., 1999 (the
"Exchange Date") to be delivered pursuant to a purchase agreement (the "Purchase
Agreement") among the Trust and David H. Murdock as trustee of the David H.
Murdock Living Trust dated May 28, 1986, as amended, and in his individual
capacity (together, the "Seller"). The Trust has entered into the Purchase
Agreement with the Seller pursuant to which the Seller has agreed to sell, and
the Trust has agreed to purchase, the number of shares of Stock deliverable by
the Seller on, or
<PAGE>
S&C DRAFT OF AUGUST 1, 1996
immediately prior to, the Exchange Date. The Seller's obligations under the
Purchase Agreement will be secured by a pledge of collateral pursuant to the
terms of a collateral agreement between the Seller and The Bank of New York, as
collateral agent (the "Collateral Agreement").
1. (a) The Trust represents and warrants to, and agrees with, each of
the Underwriters, the Seller and the Company that:
(i) A notification on Form N-8A (the "Notification") of
registration of the Trust as an investment company has been filed with the
Securities and Exchange Commission (the "Commission"); a registration
statement on Form N-2 (File No. 333-325) (the "Initial Trust Registration
Statement" in respect of the Securities has been filed with the Commission;
the Initial Trust Registration Statement and any post-effective amendment
thereto, each in the form heretofore delivered to you, and, excluding
exhibits thereto, to you for each of the other Underwriters, have been
declared effective by the Commission in such form; other than a
registration statement, if any, increasing the size of the offering (a
"Trust Rule 462(b) Registration Statement"), filed pursuant to Rule 462(b)
under the Securities Act of 1933, as amended (the "Act"), which became
effective upon filing, no other document with respect to the Initial Trust
Registration Statement has heretofore been filed with the Commission; and
no stop order suspending the effectiveness of the Initial Trust
Registration Statement, any post-effective amendment thereto or the Trust
Rule 462(b) Registration Statement, if any, has been issued and no
proceeding for that purpose has been initiated or threatened by the
Commission (any preliminary prospectus included in the Initial Trust
Registration Statement or filed with the Commission pursuant to Rule 424(a)
of the rules and regulations of the Commission under the Act, is
hereinafter called a "Trust Preliminary Prospectus"; the various parts of
the Initial Trust Registration Statement and the Trust Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including the information contained in the form of final prospectus filed
with the Commission pursuant to Rule 424(b) under the Act in accordance
with Section 5(a) hereof and deemed by virtue of Rule 430A under the Act to
be part of the Initial Trust Registration Statement at the time it was
declared effective or such part of the Trust Rule 462(b) Registration
Statement, if any, became or hereafter becomes effective, each as amended
at the time such part of the registration statement became effective, are
hereinafter collectively called the "Trust Registration Statement"; and
such final prospectus, in the form first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "Trust Prospectus";
(ii) No order preventing or suspending the use of any Trust
Preliminary Prospectus has been issued by the Commission, and each Trust
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the Investment Company
Act of 1940 as amended (the "Investment Company Act" and together with the
"Act", the "Acts"), and the rules and regulations of the Commission
thereunder, and did not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; PROVIDED, HOWEVER, that this representation
and warranty shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished in writing to
the Trust by the Underwriters expressly for use therein;
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<PAGE>
(iii) The Notification and the Trust Registration Statement
conform, and the Trust Prospectus and any further amendments or supplements
to the Notification, the Trust Registration Statement or the Trust
Prospectus will conform, in all material respects to the requirements of
the Acts and the rules and regulations of the Commission thereunder and do
not and will not, as of the applicable effective date as to the Trust
Registration Statement and any amendment thereto and as of the applicable
filing date as to the Trust Prospectus and any amendment or supplement
thereto, contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading; PROVIDED, HOWEVER, that this
representation and warranty shall not apply to any statements or omissions
made in reliance upon and in conformity with information furnished in
writing to the Trust by the Underwriters expressly for use therein;
(iv) Since the respective dates as of which information is
given in the Trust Registration Statement and the Trust Prospectus, there
has not been any material adverse change, or any development involving a
prospective material adverse change, in or affecting the general affairs,
management, financial position, results of operations, prospects,
investment objectives, investment policies, liabilities of the Trust,
otherwise than as set forth or contemplated in the Trust Prospectus and
there have been no transactions entered into by the Trust which are
material to the Trust other than those in the ordinary course of its
business or as described in the Trust Prospectus;
(v) The Trust has been duly created, is validly existing as a
trust under the laws of the State of New York, with power and authority to
own its properties and conduct its business as described in the Trust
Prospectus and to enter into and perform its obligations under this
Agreement and the Amended and Restated Trust Agreement, dated as of
............, 1996 among the trustees of the Trust (the "Trustees") and
Goldman, Sachs & Co., as Sponsor (the "Trust Agreement"); the Trust has all
necessary consents, approvals, authorizations, orders, registrations or
qualifications, of and from, and has made all declarations and filings
with, all courts and governmental agencies and bodies, to own and use its
assets and to conduct its business in the manner described in the Trust
Prospectus, except to the extent that the failure to obtain or file the
foregoing would not have a material adverse effect on the Trust and except
such as may be required by the NASD or the registration under the Act of
the Securities and such consents, approvals, authorizations, registrations
or qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Securities by
the Underwriters; the Trust has no subsidiaries;
(vi) The Trust is registered with the Commission as a
non-diversified, closed-end management investment company under the
Investment Company Act and no order of suspension or revocation of such
registration has been issued or proceedings therefor initiated or, to the
knowledge of the Trust, threatened by the Commission; no person is serving
or acting as an officer or trustee of, the Trust except in accordance with
the provisions of the Investment Company Act;
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<PAGE>
(vii) Each of the Purchase Agreement, the Collateral
Agreement, the Administration Agreement between The Bank of New York
("BONY") and the Trust (the "Administration Agreement"), the Custodian
Agreement between BONY and the Trust (the "Custodian Agreement"), the
Paying Agent Agreement between BONY and the Trust (the "Paying Agent
Agreement"), the Fund Expense Agreement between Goldman, Sachs & Co. and
BONY (the "Fund Expense Agreement") and the Fund Indemnity Agreement
between Goldman, Sachs & Co. and the Trust (the "Fund Indemnity Agreement")
(the Purchase Agreement, the Collateral Agreement, the Administration
Agreement, the Custodian Agreement, the Paying Agent Agreement, the Fund
Expense Agreement and the Fund Indemnity Agreement are herein collectively
called the "Fundamental Agreements") has been duly authorized, executed and
delivered by the Trust and, assuming due authorization, execution and
delivery by the other parties thereto, constitutes a valid and legally
binding agreement of the Trust, enforceable in accordance with its terms,
subject, as to enforcement, to bankruptcy, insolvency, reorganization and
other laws of general applicability relating to or affecting creditors'
rights and to general equity principles;
(viii) The Trust Agreement and the Fundamental Agreements
comply with all applicable provisions of the Acts, and all approvals of
such documents required under the Investment Company Act by the holders of
the Automatic Common Exchange Securities and the Trustees have been
obtained and are in full force and effect;
(ix) All of the outstanding Automatic Common Exchange
Securities have been duly and validly authorized and issued and are fully
paid and non-assessable and the form of certificates used to evidence the
Automatic Common Exchange Securities is in due and proper form and complies
with all provisions of applicable law; the Trust Agreement and the
Fundamental Agreements conform to the description thereof contained in the
Trust Prospectus;
(x) The Securities have been duly authorized and, when issued
and delivered pursuant to this Agreement, will be validly issued, fully paid
and non-assessable; the Securities will conform to the description thereof
in the Trust Prospectus; no person has rights to registration of any
securities because of the filing of the Trust Registration Statement;
(xi) The issue and sale of the Securities and the compliance
by the Trust with all of the provisions of the Securities, this Agreement
and each Fundamental Agreement and the consummation of the transactions
herein and therein contemplated will not conflict with or result in a breach
or violation of any of the terms or provisions of, or constitute a default
under, the Trust Agreement or any indenture, mortgage, deed of trust, loan
agreement or other agreement or instrument to which the Trust is a party or
by which the Trust is bound or to which any of the property or assets of
the Trust is subject, nor will such action result in any violation of any
statute or any order, rule or regulation of any court or governmental
agency or body having jurisdiction over the Trust or any of its properties;
and no consent, approval, authorization, order, registration or
qualification of or with any such court or governmental agency or body is
required for the issue and sale of the Securities or the consummation by
the Trust of the transactions contemplated by this Agreement or the
Fundamental Agreements, except such as may be required by the NASD and
except the registration under
-4-
<PAGE>
the Act of the Securities and such consents, approvals, authorizations,
registrations or qualifications as may be required under state securities
or Blue Sky laws in connection with the purchase and distribution of the
Securities by the Underwriters;
(xii) The Fundamental Agreements are in full force and effect
and the Trust is not in default in the performance or observance of any
obligation, covenant or condition thereunder and, to the knowledge of the
Trust, no event has occurred which with the passage of time or the giving
of notice or both would constitute a default thereunder; the Trust is not
in default in the performance or observance of any obligation, covenant or
condition contained in any other agreement or instrument to which it is a
party or by which it or any of its properties may be bound;
(xiii) The statements set forth in the Trust Prospectus under
the caption "Description of the Securities", insofar as they purport to
constitute a summary of the terms of the Securities, under the caption
"Certain Federal Income Tax Considerations", and under the caption
"Underwriting", insofar as they purport to describe the provisions of the
laws and documents referred to therein, are accurate, complete and fair;
(xiv) Other than as set forth in the Trust Prospectus, there
are no legal or governmental proceedings pending to which the Trust is a
party or of which any property of the Trust is the subject which, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a material adverse effect on the
current or future financial position, or results of operations of the
Trust; and, to the best of the Trust's knowledge, no such proceedings are
threatened or contemplated by governmental authorities or threatened by
others;
(xv) There are no material restrictions, limitations or
regulations with respect to the ability of the Trust to invest its assets
as described in the Trust Prospectus, other than as described therein;
(xvi) The Securities and any Automatic Common Exchange
Securities outstanding prior to the issuance of the Securities have been
approved for listing on the New York Stock Exchange, subject to notice of
issuance; the Trust's Registration Statement on Form 8-A under the
Exchange Act of 1934, as amended (the "Exchange Act") is effective;
(xvii) The Trust does not do business with the government of
Cuba or with any person or affiliate located in Cuba within the meaning of
Section 517.075, Florida Statutes; and
(xviii) [Name of Accountants,] who have certified certain
financial statements and supporting schedules included in Trust
Registration Statement, are independent public accountants as required by
the Act and the rules and regulations of the Commission thereunder.
(b) The Seller represents and warrants to, and agrees with, each
of the Underwriters, the Company and the Trust that:
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<PAGE>
(i) The David H. Murdock Living Trust dated May 28, 1986, as
amended, has been duly created, is validly existing as a trust under the
laws of the State of [California], has the power and authority to own its
property and to conduct its business and has been duly qualified for the
transaction of business and is in good standing under the laws of each
other jurisdiction in which it owns or leases properties or conducts any
business so as to require such qualification, or is subject to no material
liability or disability by reason of the failure to be so qualified in any
such jurisdiction;
(ii) Each of the Purchase Agreement and the Collateral
Agreement has been duly authorized, executed and delivered by the Seller
and, assuming due authorization, execution and delivery by the other parties
thereto, constitutes a valid and legally binding agreement of the Seller,
enforceable in accordance with its terms, subject, as to enforcement, to
bankruptcy, insolvency, reorganization and other laws of general
applicability relating to or affecting creditors' rights and to general
equity principles;
(iii) The compliance by the Seller with all of the provisions
of this Agreement, the Purchase Agreement and the Collateral Agreement and
the consummation of the transactions herein and therein contemplated will
not conflict with or result in a breach or violation of any of the terms or
provisions of, or constitute a default under, the constitutive documents of
the David H. Murdock Living Trust dated May 28, 1986, as amended, or any
indenture, mortgage, deed of trust, loan agreement or other agreement or
instrument to which the Seller is a party or by which the Seller is bound
or to which any of the property or assets of the Seller is subject, nor
will such action result in any violation of any statute or any order, rule
or regulation of any court or governmental agency or body having
jurisdiction over the Seller or any of the Seller's properties; and no
consent, approval, authorization, order, registration or qualification of
or with any such court or governmental agency or body is required for the
compliance by the Seller with or the consummation by the Seller of the
transactions contemplated by this Agreement, the Purchase Agreement or the
Collateral Agreement, except such as may be required by the NASD and except
the registration under the Act of the Securities and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of Stock by the Trust pursuant to the Purchase
Agreement;
(iv) The Seller has, and immediately prior to each Time of
Delivery (as defined in Section 4 hereof) the Seller will have, good and
valid title to the shares of Stock to be pledged and assigned by it under
the Collateral Agreement, free and clear of all liens, encumbrances,
equities or claims other than such liens as have been disclosed to you in
writing and as will be released at or before the relevant Time of Delivery
and other than those created pursuant to the Collateral Agreement; all
consents, approvals, authorizations and orders necessary for the Seller to
pledge and assign the shares of Stock to be pledged and assigned by the
Seller pursuant to the Collateral Agreement have been obtained; the Seller
has full right, power and authority to pledge and assign the shares of
Stock to be pledged and assigned by the Seller pursuant to the Collateral
Agreement; and, upon delivery of such shares of Stock and payment therefor
pursuant to the Purchase Agreement, good and valid title to such shares of
Stock, free and clear of all liens, encumbrances, equities or claims, will
pass to the holders of the Securities;
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(v) The representations and warranties of the Seller set
forth in Section 3 of the Collateral Agreement are true and correct on and
as of the date hereof with the same effect as though such representations
and warranties had been set forth in full in this Agreement;
(vi) No order preventing or suspending the use of any Trust
Preliminary Prospectus has been issued by the Commission, and each Trust
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Trust by the Underwriters expressly
for use therein; and
(vii) The Trust Registration Statement conforms, and the
Trust Prospectus and any further amendments or supplements to the Trust
Registration Statement or the Trust Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and does not and will not, as of
the applicable effective date as to the Trust Registration Statement and
any amendment thereto and as of the applicable filing date as to the Trust
Prospectus and any amendment or supplement thereto, contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not
misleading; PROVIDED, HOWEVER, that this representation and warranty shall
not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Trust by the
Underwriters expressly for use therein.
(c) The Company represents and warrants to, and agrees with, each of
the Underwriters, the Trust and the Sellers that:
(i) A registration statement on Form S-3 (File No. 333-....)
(the "Initial Company Registration Statement") in respect of the shares of
Stock deliverable pursuant to the Purchase Agreement has been filed with
the Commission; the Initial Company Registration Statement and any
post-effective amendment thereto, each in the form heretofore delivered to
you, and, excluding exhibits thereto but including all documents
incorporated by reference in the prospectus contained therein, to you for
each of the other Underwriters, have been declared effective by the
Commission in such form; other than a registration statement, if any,
increasing the size of the offering (a "Company Rule 462(b) Registration
Statement"), filed pursuant to Rule 462(b) under the Act, which became
effective upon filing, no other document with respect to the Initial
Registration Statement or document incorporated by reference therein has
heretofore been filed with the Commission; and no stop order suspending the
effectiveness of the Initial Company Registration Statement, any
post-effective amendment thereto or the Company Rule 462(b) Registration
Statement, if any, has been issued and no proceeding for that purpose has
been initiated or threatened by the Commission (any preliminary prospectus
included in the Initial Company Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the Act is hereinafter called a "Company Preliminary
Prospectus"; the various parts of the
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Initial Company Registration Statement and the Company Rule 462(b)
Registration Statement, if any, including all exhibits thereto and
including (i) the information contained in the form of final prospectus
filed with the Commission pursuant to Rule 424(b) under the Act in
accordance with Section 5(a) hereof and deemed by virtue of Rule 430A under
the Act to be part of the Initial Registration Statement at the time it was
declared effective and (ii) the documents incorporated by reference in the
prospectus contained in the registration statement at the time such part of
the Initial Company Registration Statement became effective or such part of
the Company Rule 462(b) Registration Statement, if any, became or hereafter
becomes effective, each as amended at the time such part of the
registration statement became effective or such part of the Company Rule
462(b) Registration Statement, if any, became or hereafter becomes
effective, are hereinafter collectively called the "Company Registration
Statement"; such final prospectus, in the form first filed pursuant to Rule
424(b) under the Act, is hereinafter called the "Company Prospectus"; the
Trust Registration Statement and the Company Registration Statement are
hereinafter collectively called the "Registration Statements" and the Trust
Prospectus and the Company Prospectus are hereinafter collectively called
the "Prospectuses"; any reference herein to any Company Preliminary
Prospectus or the Company Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to Item 12
of Form S-3 under the Act, as of the date of such Company Preliminary
Prospectus or Company Prospectus, as the case may be; any reference to any
amendment or supplement to any Company Preliminary Prospectus or the
Company Prospectus shall be deemed to refer to and include any documents
filed after the date of such Company Preliminary Prospectus or Company
Prospectus, as the case may be, under the Exchange Act, and incorporated by
reference in such Company Preliminary Prospectus or Company Prospectus, as
the case may be; and any reference to any amendment to the Company
Registration Statement shall be deemed to refer to and include any annual
report of the Company filed pursuant to Section 13(a) or 15(d) of the
Exchange Act after the effective date of the Initial Company Registration
Statement that is incorporated by reference in the Company Registration
Statement);
(ii) No order preventing or suspending the use of any Company
Preliminary Prospectus has been issued by the Commission, and each Company
Preliminary Prospectus, at the time of filing thereof, conformed in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder, and did not contain an untrue
statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in the light
of the circumstances under which they were made, not misleading; PROVIDED,
HOWEVER, that this representation and warranty shall not apply to any
statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters
expressly for use therein or by the Seller expressly for use in the
preparation of the answers therein to Item 7 of Form S-3;
(iii) The documents incorporated by reference in the Company
Prospectus, when they became effective or were filed with the Commission,
as the case may be, conformed in all material respects to the requirements
of the Act or the Exchange Act and the rules and regulations of the
Commission thereunder, and none of such documents contained an untrue
statement of a material fact or omitted to state a material fact required
to be stated therein or
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<PAGE>
necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Company Prospectus
or any further amendment or supplement thereto, when such documents become
effective or are filed with the Commission, as the case may be, will
conform in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the
Commission thereunder and will not contain an untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading;
PROVIDED, HOWEVER, that this representation and warranty shall not apply to
any statements or omissions made in reliance upon and in conformity with
information furnished in writing to the Company by the Underwriters
expressly for use therein;
(iv) The Company Registration Statement conforms, and the
Company Prospectus and any further amendments or supplements to the Company
Registration Statement or the Company Prospectus will conform, in all
material respects to the requirements of the Act and the rules and
regulations of the Commission thereunder and does not and will not, as of
the applicable effective date as to the Company Registration Statement and
any amendment thereto and as of the applicable filing date as to the
Company Prospectus and any amendment or supplement thereto, contain an
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading; PROVIDED, HOWEVER, that this representation and warranty
shall not apply to any statements or omissions made in reliance upon and in
conformity with information furnished in writing to the Company by the
Underwriters expressly for use therein or by the Seller expressly for use
in the preparation of the answers therein to Item 7 of Form S-3;
(v) Neither the Company nor any of its subsidiaries has
sustained since the date of the latest audited financial statements
included or incorporated by reference in the Company Prospectus any
material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as
set forth or contemplated in the Company Prospectus; and, since the
respective dates as of which information is given in the Company
Registration Statement and the Company Prospectus, there has not been any
change in the capital stock or long-term debt of the Company or any of its
subsidiaries or any material adverse change, or any development relating
specifically to the Company which the Company reasonably believes will
involve a prospective material adverse change, in or affecting the general
affairs, management, financial position, shareholders' equity or results of
operations of the Company and its subsidiaries, otherwise than as set forth
or contemplated in the Company Prospectus;
(vi) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate and
other) to own its properties and conduct its business as described in the
Company Prospectus;
(vii) The Company has an authorized capitalization as set
forth in the Company Prospectus, and all of the issued shares of capital
stock of the Company have been duly and validly authorized and issued, are
fully paid and non-assessable and conform to the description of the Stock
contained in the Company Prospectus;
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<PAGE>
(viii) The compliance by the Company with all of the
provisions of this Agreement and the consummation of the transactions
herein contemplated will not conflict with or result in a breach or
violation of any of the terms or provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, loan agreement or other
agreement or instrument to which the Company is a party or by which the
Company is bound or to which any of the property or assets of the Company
is subject or any statute or any order, rule or regulation of any court or
governmental agency or body having jurisdiction over the Company or any of
its properties (with such exceptions as would not have a material adverse
effect on the transactions contemplated hereby or on the Company and its
subsidiaries taken as a whole), nor will such action result in any
violation of the provisions of the Articles of Association or By-laws of
the Company; and no consent, approval, authorization, order, registration
or qualification of or with any such court or governmental agency or body
is required for sale of the Stock or the consummation by the Company of the
transactions contemplated by this Agreement, except such as may be required
by the NASD or the registration under the Act of the Stock and such
consents, approvals, authorizations, registrations or qualifications as may
be required under state securities or Blue Sky laws in connection with the
purchase and distribution of the shares of Stock pursuant to the Purchase
Agreement;
(ix) Other than as set forth in the Company Prospectus, there
are no legal or governmental proceedings pending to which the Company or any
of its subsidiaries is a party or of which any property of the Company or
any of its subsidiaries is the subject which, if determined adversely to the
Company or any of its subsidiaries, would individually or in the aggregate
have a material adverse effect on the consolidated financial position,
shareholders' equity or results of operations of the Company and its
subsidiaries; and, to the best of the Company's knowledge, no such
proceedings are threatened or contemplated by governmental authorities or
threatened by others;
(x) The Stock is listed on the New York Stock Exchange and
the Pacific Stock Exchange; and
(xi) Neither the Company nor any of its affiliates does
business with the government of Cuba or with any person or affiliate located
in Cuba within the meaning of Section 517.075, Florida Statutes.
2. Subject to the terms and conditions herein set forth, (a) the Trust
agrees, to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at a
purchase price of $..... per security, the number of Firm Securities set forth
opposite the name of such Underwriter in Schedule I hereto, and (b) in the event
and to the extent that the Underwriters shall exercise the election to purchase
Optional Securities as provided below, the Seller agrees to cause the Trust, and
the Trust agrees, to issue and sell to each of the Underwriters, and each of the
Underwriters agrees, severally and not jointly, to purchase from the Trust, at
the same purchase price set forth in clause (a) of this Section 2, that portion
of the aggregate number of Optional Securities as to which such election shall
have been exercised (to be adjusted by you so as to eliminate fractional
securities) determined by multiplying such aggregate number of Optional
Securities by a fraction, the numerator of which is the maximum aggregate number
of Optional Securities which such Underwriter is entitled to purchase as set
forth opposite the name of such Underwriter in Schedule I hereto and the
denominator of which is the maximum aggregate number of Optional Securities
which all of the Underwriters are entitled to purchase
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<PAGE>
hereunder. The agreements in this Section made by the Trust are for the benefit
of and enforceable by the Underwriters. The agreements in this Section made by
the Underwriters are for the benefit of and enforceable by the Seller and the
Trust.
The Trust hereby grants to the Underwriters the right to purchase at their
election up to ........ Optional Securities, at the purchase price set forth in
clause (a) of the first paragraph of this Section 2, for the sole purpose of
covering overallotments in the sale of Firm Securities. Any such election to
purchase Optional Securities may be exercised by written notice from you to the
Trust, given within a period of 30 calendar days after the date of this
Agreement, setting forth the aggregate principal amount of Optional Securities
to be purchased and the date on which such Optional Securities are to be
delivered, as determined by you but in no event earlier than the First Time of
Delivery (as defined in Section (4) hereof) or, unless you and the Trust
otherwise agree in writing, earlier than two or later than ten business days
after the date of such notice.
As compensation to the Underwriters for their commitments hereunder, and in
view of the fact that the proceeds of the sale of the Securities will be used by
the Trust as specified in the Purchase Agreement, the Seller hereby agrees to
pay at each Time of Delivery (as defined in Section 4 hereof) to Goldman, Sachs
& Co., for the accounts of the several Underwriters, an amount equal to $......
per Security for the Securities to be delivered at such Time of Delivery.
Alternatively, as a matter of convenience, Goldman, Sachs & Co. may deduct such
amount from the purchase price of the Securities and in such event the Seller
shall be deemed to have paid the same.
3. Upon the authorization by you of the release of the Firm Securities,
the several Underwriters propose to offer the Firm Securities for sale upon the
terms and conditions set forth in the Prospectus.
4. (a) The Securities to be purchased by each Underwriter hereunder, in
definitive form, and in such authorized denominations and registered in such
names as Goldman, Sachs & Co. may request upon at least forty-eight hours' prior
notice to the Trust, shall be delivered by or on behalf of the Trust to Goldman,
Sachs & Co. for the account of such Underwriter, against payment by or on behalf
of such Underwriter of the purchase price therefor in Federal (same day) funds.
The Trust will cause the certificates representing the Securities to be made
available for checking and packaging at least twenty-four hours prior to the
Time of Delivery (as defined below) at the office of Goldman, Sachs & Co., 85
Broad Street, New York, New York 10004 (the "Designated Office"). The time and
date of such delivery and payment shall be, with respect to the Firm Securities,
9:30 a.m., New York City time, on ................, 1996 or such other time and
date as Goldman, Sachs & Co. and the Trust may agree upon in writing, and, with
respect to the Optional Securities, 9:30 a.m., New York City time, on the date
specified by Goldman, Sachs & Co. in the written notice given by Goldman, Sachs
& Co. of the Underwriters' election to purchase such Optional Securities, or
such other time and date as the Underwriters and the Trust may agree upon in
writing. Such time and date for delivery of the Firm Securities is herein
called the "First Time of Delivery", such time and date for delivery of the
Optional Securities, if not the First Time of Delivery, is herein called the
"Second Time of Delivery", and each such time and date for delivery is herein
called a "Time of Delivery".
(b) The documents to be delivered at each Time of Delivery by or on
behalf of the parties hereto pursuant to Section 7 hereof, including the
cross-receipt for the Securities and any additional documents requested by the
Underwriters pursuant to Section 7(l) hereof, will be delivered at the offices
of Sullivan & Cromwell, 444 South Flower Street, Los Angeles, California 90071
(the "Closing Location"), and the Securities will be delivered at the Designated
Office, all at the Time of Delivery.
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A meeting will be held at the Closing Location at ......... p.m., Los Angeles
time, on the New York Business Day next preceding such Time of Delivery, at
which meeting the final drafts of the documents to be delivered pursuant to the
preceding sentence will be available for review by the parties hereto. For the
purposes of this Section 4, "New York Business Day" shall mean each Monday,
Tuesday, Wednesday, Thursday and Friday which is not a day on which banking
institutions in New York City are generally authorized or obligated by law or
executive order to close.
5. (a) The Trust agrees with each of the Underwriters:
(i) To prepare the Trust Prospectus in a form approved by you and to
file such Trust Prospectus pursuant to Rule 497(h) under the Act not later than
the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Trust Registration Statement or Trust
Prospectus which shall be disapproved by you promptly after reasonable notice
thereof; to advise you, promptly after it receives notice thereof, of the time
when any amendment to the Trust Registration Statement has been filed or becomes
effective or any supplement to the Trust Prospectus or any amended Prospectus
has been filed and to furnish you with copies thereof; to advise you, promptly
after it receives notice thereof, of the issuance by the Commission of any stop
order or of any order preventing or suspending the use of any Trust Preliminary
Prospectus or prospectus or any order pursuant to Section 8(e) of the Investment
Company Act, of the suspension of the qualification of the Securities for
offering or sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the Commission for the
amending or supplementing of the Trust Registration Statement or Trust
Prospectus or for additional information; and, in the event of the issuance of
any stop order or of any order preventing or suspending the use of any Trust
Preliminary Prospectus or prospectus or suspending any such qualification or
order pursuant to Section 8(e) of the Investment Company Act, to promptly use
its best efforts to obtain the withdrawal of such order;
(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the Securities for offering and sale under the
securities laws of such jurisdictions as you may request and to comply with such
laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Securities, provided that in connection therewith the Trust shall not be
required to qualify as a foreign trust or association or to file a general
consent to service of process in any jurisdiction;
(iii) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Trust Prospectus in New York City
in such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Trust Prospectus in connection with the offering or
sale of the Securities and if at such time any event shall have occurred as a
result of which the Trust Prospectus as then amended or supplemented would
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Trust Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Trust Prospectus in order to
comply with the Act, to notify you and upon your request to prepare and furnish
without charge to each Underwriter and to any dealer in securities as many
copies as you may from time to
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time reasonably request of an amended Trust Prospectus or a supplement to the
Trust Prospectus which will correct such statement or omission or effect such
compliance; and in case any Underwriter is required to deliver a prospectus in
connection with sales of any of the Securities at any time nine months or more
after the time of issue of the Trust Prospectus, upon your request but at the
expense of such Underwriter, to prepare and deliver to such Underwriter as many
copies as you may request of an amended or supplemented Trust Prospectus
complying with Section 10(a)(3) of the Act;
(iv) To make generally available to the Trust's securityholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Trust Registration Statement (as defined in Rule 158(c)
under the Act), an earnings statement of the Trust (which need not be audited)
complying with Section 11(a) of the Act and the rules and regulations of the
Trust thereunder (including, at the option of the Trust, Rule 158);
(v) To use the net proceeds received by it from the sale of the
Securities pursuant to this Agreement in the manner specified in the Trust
Prospectus under the caption "Use of Proceeds";
(vi) To use its best efforts to list, subject to notice of issuance,
the Securities on the New York Stock Exchange (the "Exchange"); and
(vii) If the Trust elects to rely upon Rule 462(b), the Trust
shall file a Trust Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and the Trust shall at the time of the filing either pay to the
Commission the filing fee for the Trust Rule 462(b) Registration Statement or
give irrevocable instructions for the payment of such fee pursuant to Rule
111(b) under the Act.
(b) The Company agrees with each of the Underwriters:
(i) To prepare the Company Prospectus in a form approved by you and
to file such Company Prospectus pursuant to Rule 424(b) under the Act not later
than the Commission's close of business on the second business day following the
execution and delivery of this Agreement, or, if applicable, such earlier time
as may be required by Rule 430A(a)(3) under the Act; to make no further
amendment or any supplement to the Company Registration Statement or Company
Prospectus prior to such Time of Delivery which shall be disapproved by you
promptly after reasonable notice thereof; to advise you, promptly after it
receives notice thereof, of the time when any amendment to the Company
Registration Statement has been filed or becomes effective or any supplement to
the Company Prospectus or any amended Company Prospectus has been filed and to
furnish you with copies thereof; to file promptly all reports and any definitive
proxy or information statements required to be filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of the Company Prospectus and for so long as the delivery
of a prospectus is required in connection with the offering or sale of the
Securities; to advise you, promptly after it receives notice thereof, of the
issuance by the Commission of any stop order or of any order preventing or
suspending the use of any Company Preliminary Prospectus or prospectus, of the
suspension of the qualification of the shares of Stock to be delivered pursuant
to the Purchase Agreement for offering or sale in any jurisdiction, of the
initiation or threatening of any proceeding for any such purpose, or of any
request by the Commission for the amending or supplementing of the Company
Registration Statement or Company Prospectus or for additional information; and,
in the event of the issuance of any stop order or of any order preventing or
suspending the use of any Company Preliminary Prospectus or prospectus or
suspending any such qualification, to promptly use its best efforts to obtain
the withdrawal of such order;
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(ii) Promptly from time to time to take such action as you may
reasonably request to qualify the shares of Stock for offering and sale under
the securities laws of such jurisdictions as you may request and to comply with
such laws so as to permit the continuance of sales and dealings therein in such
jurisdictions for as long as may be necessary to complete the distribution of
the Stock, provided that in connection therewith the Company shall not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any jurisdiction;
(iii) Prior to 10:00 a.m., New York City time, on the New York
Business Day next succeeding the date of this Agreement and from time to time,
to furnish the Underwriters with copies of the Company Prospectus in New York
City in such quantities as you may reasonably request, and, if the delivery of a
prospectus is required at any time prior to the expiration of nine months after
the time of issue of the Company Prospectus in connection with the offering or
sale of the Securities and if at such time any event shall have occurred as a
result of which it is necessary to amend or supplement the Company Prospectus in
order that the Trust Prospectus as then amended or supplemented would not
include an untrue statement of a material fact or omit to state any material
fact necessary in order to make the statements therein, in light of the
circumstances under which they were made when such Trust Prospectus is
delivered, not misleading, or, if for any other reason it shall be necessary
during such same period to amend or supplement the Company Prospectus or to file
under the Exchange Act any document incorporated by reference in the Company
Prospectus in order to comply with the Act or the Exchange Act, to notify you
and upon your request to file such document and to prepare and furnish without
charge to each Underwriter and to any dealer in securities as many copies as you
may from time to time reasonably request of an amended Company Prospectus or a
supplement to the Company Prospectus which will correct such statement or
omission or effect such compliance; and in case any Underwriter is required to
deliver a prospectus in connection with sales of any of the Securities at any
time nine months or more after the time of issue of the Trust Prospectus, upon
your request but at the expense of such Underwriter, to prepare and deliver to
such Underwriter as many copies as you may request of an amended or supplemented
Company Prospectus complying with Section 10(a)(3) of the Act;
(iv) To make generally available to its securityholders as soon as
practicable, but in any event not later than eighteen months after the effective
date of the Company Registration Statement (as defined in Rule 158(c) of the
Act), an earnings statement of the Company and its subsidiaries (which need not
be audited) complying with Section 11(a) of the Act and the rules and
regulations of the Commission thereunder (including, at the option of the
Company, Rule 158);
(v) During the period beginning from the date hereof and continuing
to and including the date 90 days after the date of the Company Prospectus, not
to offer, sell, contract to sell or otherwise dispose of, except as provided
hereunder, any Stock or any securities of the Company that are substantially
similar to the Stock, including but not limited to any securities that are
convertible into or exchangeable for, or that represent the right to receive,
Stock or any such substantially similar securities (other than pursuant to
employee stock option plans existing on, or upon the conversion or exchange of
convertible or exchangeable securities outstanding as of, the date of this
Agreement), without your prior written consent;
(vi) To furnish to the holders of the Securities and to its
shareholders as soon as practicable after the end of each fiscal year an annual
report (including a balance sheet and statements of income, shareholders' equity
and cash flows of the Company and its consolidated subsidiaries certified by
independent public accountants) and to make available to its shareholders,
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as soon as practicable after the end of each of the first three quarters of each
fiscal year (beginning with the fiscal quarter ending after the effective date
of the Company Registration Statement), consolidated summary financial
information of the Company and its subsidiaries for such quarter in reasonable
detail;
(vii) During a period of five years from the effective date of the
Company Registration Statement, to furnish to you copies of all reports or other
communications (financial or other) furnished to shareholders, and to deliver to
you (i) as soon as they are available, copies of any reports and financial
statements furnished to or filed with the Commission or any national securities
exchange on which the Stock or any class of securities of the Company is listed;
and (ii) such additional information concerning the business and financial
condition of the Company as you may from time to time reasonably request (such
financial statements to be on a consolidated basis to the extent the accounts of
the Company and its subsidiaries are consolidated in reports furnished to its
shareholders generally or to the Commission); and
(viii) If the Company elects to rely upon Rule 462(b), the Company
shall file a Company Rule 462(b) Registration Statement with the Commission in
compliance with Rule 462(b) by 10:00 p.m., Washington, D.C. time, on the date of
this Agreement, and the Company shall at the time of filing either pay or cause
to be paid to the Commission the filing fee for the Company Rule 462(b)
Registration Statement or give irrevocable instructions for the payment of such
fee pursuant to Rule 111(b) under the Act.
(c) The Seller agrees with each of the Underwriters, during the
period beginning from the date hereof and continuing to and including the date
180 days after the date of the Company Prospectus, not to offer, sell, contract
to sell or otherwise dispose of, except as provided hereunder, any Stock or any
securities of the Company that are substantially similar to the Stock, including
but not limited to any securities that are convertible into or exchangeable for,
or that represent the right to receive, Stock or any such substantially similar
securities, without your prior written consent.
6. The Trust, the Company and the Seller covenant and agree with one
another and with the several Underwriters that (a) the Seller will pay or cause
to be paid (i) the fees, disbursements and expenses of the Company's counsel and
the Seller's counsel and the Company's accountants in connection with the
registration of the Securities and the Stock under the Act; (ii) all other
expenses in connection with the preparation, printing and filing of the
Notification, the Registration Statements, any Trust Preliminary Prospectus and
Company Preliminary Prospectus and the Prospectuses and amendments and
supplements thereto and the mailing and delivering of copies thereof to the
Underwriters and dealers which are not otherwise specifically provided for in
this section; (iii) the cost of printing or producing Blue Sky Memoranda in
connection with the offering, purchase, sale and delivery of the Securities and
Stock; (iv) all expenses in connection with the qualification of the Securities
and Stock for offering and sale under state securities laws as provided in
Section 5(b) hereof, including the fees and disbursements of counsel for the
Underwriters in connection with such qualification and in connection with the
Blue Sky survey; (v) the filing fees incident to, and the fees and disbursements
of counsel for the Underwriters in connection with, securing any required review
by the National Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (vi) all fees and expenses in connection with the preparation
and filing of a registration statement under the Exchange Act relating to the
Securities and all costs and expenses incident to the listing of the Securities
on the New York Stock Exchange; (vii) the cost of preparing certificates
representing the Securities; (viii) the cost and charges of any transfer agent
or registrar for the Securities; (ix) all
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expenses and taxes incident to the sale and delivery of the shares of Stock to
be sold or pledged by the Seller; and (x) all other costs and expenses incident
to the performance by the Trust, the Company and the Seller of their respective
obligations hereunder which are not otherwise specifically provided for in this
Section; (b) the Company will pay or cause to be paid (i) the cost of preparing
stock certificates; and (ii) the cost and charges of any transfer agent or
registrar for the Stock and (c) Goldman, Sachs & Co. will pay or cause to be
paid all fees, disbursements and expenses of the Trust's counsel and the Trust's
accountants in connection with the registration of the Securities under the Act.
It is understood, however, that, except as provided in this Section, and
Sections 8 and 11 hereof, the Underwriters will pay all of their own costs and
expenses, including the fees of their counsel, transfer taxes on resale of any
of the Securities by them, and any advertising expenses connected with any
offers they may make.
7. The obligations of the Underwriters hereunder, as to the Securities to
be delivered at each Time of Delivery, shall be subject, in their discretion, to
the condition that all representations and warranties and other statements of
the Trust, the Company and the Seller herein are, at and as of such Time of
Delivery, true and correct, the condition that the Trust, the Company and the
Seller shall have performed all of their respective obligations hereunder
theretofore to be performed, and the following additional conditions:
(a) The Prospectuses shall have been filed with the Commission
pursuant to Rule 424(b) or Rule 497(h), as applicable, within the applicable
time period prescribed for such filing by the rules and regulations under the
Act and in accordance with Section 5(a) hereof; if the Company and the Trust
have elected to rely upon Rule 462(b), the Company Rule 462(b) Registration
Statement and the Trust Rule 462(b) Registration Statement shall have become
effective by 10:00 p.m., Washington, D.C. time, on the date of this Agreement;
no stop order suspending the effectiveness of the Registration Statements or any
part thereof, and no order pursuant to Section 8(e) of the Investment Company
Act, shall have been issued and no proceeding for that purpose shall have been
initiated or threatened by the Commission; and all requests for additional
information on the part of the Commission shall have been complied with to your
reasonable satisfaction;
(b) Sullivan & Cromwell, counsel for the Underwriters and the Trust,
shall have furnished to you their opinion or opinions, dated such Time of
Delivery, with respect to such matters as you may reasonably request, and such
counsel shall have received such papers and information as they may reasonably
request to enable them to pass upon such matters;
(c) Counsel for the Company and the Seller satisfactory to you, shall
have furnished to you their written opinion or opinions, dated such Time of
Delivery, in form and substance satisfactory to you, to the effect set forth in
Annex I;
(d) On the date of the Trust Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Trust Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
........... shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
in the form set forth as Annex II hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex II(a)
hereto and a draft of the form of letter to be delivered on the effective date
of any post-effective amendment to the Trust Registration Statement and as of
each Time of Delivery is attached as Annex II(b) hereto);
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(e) On the date of the Company Prospectus at a time prior to the
execution of this Agreement, at 9:30 a.m., New York City time, on the effective
date of any post-effective amendment to the Company Registration Statement filed
subsequent to the date of this Agreement and also at each Time of Delivery,
Arthur Andersen LLP shall have furnished to you a letter or letters, dated the
respective dates of delivery thereof, in form and substance satisfactory to you,
to the effect set forth in Annex III hereto (the executed copy of the letter
delivered prior to the execution of this Agreement is attached as Annex III(a)
hereto and a draft of the form of letter to be delivered on the effective date
of any post-effective amendment to the Company Registration Statement and as of
each Time of Delivery is attached as Annex III(b) hereto);
(f) (i) Since the respective dates as of which information is given
in the Trust Registration Statement and the Trust Prospectus, there shall not
have been any change, or any development involving a prospective change, in or
affecting the general affairs, management, financial position, results of
operations, prospects, investment objectives, investment policies or liabilities
of the Trust, otherwise than as set forth or contemplated in the Trust
Prospectus, (ii) neither the Company nor any of its subsidiaries shall have
sustained since the date of the latest audited financial statements included in
the Company Prospectus any loss or interference with its business from fire,
explosion, flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as set forth or contemplated in the Company Prospectus, and (iii) since the
respective dates as of which information is given in the Company Prospectus
there shall not have been any change in the capital stock or long-term debt of
the Company or any of its subsidiaries or any change, or any development
involving a prospective change, in or affecting the general affairs, management,
financial position, shareholders' equity or results of operations of the Company
and its subsidiaries, otherwise than as set forth or contemplated in the Company
Prospectus, the effect of which, in any such case described in Clause (i), (ii)
or (iii), is in the judgment of the Representatives so material and adverse as
to make it impracticable or inadvisable to proceed with the public offering or
the delivery of the Securities being issued at such Time of Delivery on the
terms and in the manner contemplated in the Trust Prospectus;
(g) On or after the date hereof (i) no downgrading shall have
occurred in the rating accorded the Company's debt securities or preferred stock
by any "nationally recognized statistical rating organization", as that term is
defined by the Commission for purposes of Rule 436(g)(2) under the Act, and (ii)
no such organization shall have publicly announced that it has under
surveillance or review, with possible negative implications, its rating of any
of the Company's debt securities or preferred stock;
(h) On or after the date hereof there shall not have occurred any of
the following: (i) a suspension or material limitation in trading in securities
generally on the New York Stock Exchange; (ii) a suspension or material
limitation in trading in the securities of the Company or the Trust on the New
York Stock Exchange; (iii) a general moratorium on commercial banking activities
declared by either Federal or New York or California State authorities; or (iv)
the outbreak or escalation of hostilities involving the United States or the
declaration by the United States of a national emergency or war, if the effect
of any such event specified in this Clause (iv) in the judgment of the
Representatives makes it impracticable or inadvisable to proceed with the public
offering or the delivery of the Securities being issued at such Time of Delivery
on the terms and in the manner contemplated in the Trust Prospectus;
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(i) The Securities shall have been duly listed, subject to notice of
issuance, on the New York Stock Exchange;
(j) Each Fundamental Agreement shall have been executed and delivered
by all parties thereto, and the Seller shall have delivered to the Collateral
Agent the number of shares of Stock required by the Collateral Agreement to be
initially pledged thereunder in accordance with the requirements of the
Collateral Agreement;
(k) The Trust and the Company shall have complied with the provisions
of Section 5(a)(iii) and 5(b)(iii) hereof with respect to the furnishing of
prospectuses on the New York Business Day next succeeding the date of this
Agreement; and
(l) The Trust, the Company and the Seller shall have furnished or
caused to be furnished to you at such Time of Delivery certificates of officers
or trustees of the Trust, the Company and the Seller, respectively, satisfactory
to you as to the accuracy of the representations and warranties of the Trust,
the Company and the Seller herein and in the Purchase Agreement and Collateral
Agreement at and as of such Time of Delivery, as to the satisfaction and
performance by the Trust, the Company and the Seller of all of their respective
obligations hereunder and thereunder to be performed at or prior to such Time of
Delivery, as to the matters set forth in subsections (a) and (f) of this Section
and as to such other matters as you may reasonably request.
8. (a) (i) The Company and the Seller will indemnify and hold harmless
the Trust and each Underwriter against any losses, claims, damages or
liabilities, joint or several, to which the Trust or such Underwriter may become
subject, under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon an
untrue statement or alleged untrue statement of a material fact contained in any
Company Preliminary Prospectus, the Company Registration Statement or the
Company Prospectus, or any amendment or supplement thereto, or arise out of or
are based upon the omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein not
misleading, and will reimburse the Trust and each Underwriter for any legal or
other expenses reasonably incurred by the Trust or such Underwriter in
connection with investigating or defending any such action or claim as such
expenses are incurred; PROVIDED, HOWEVER, that the Company and the Seller shall
not be liable in any such case to the extent that any such loss, claim, damage
or liability arises out of or is based upon an untrue statement or alleged
untrue statement or omission or alleged omission made in any Company Preliminary
Prospectus, the Company Registration Statement or the Company Prospectus or any
such amendment or supplement in reliance upon and in conformity with written
information furnished to the Company by any Underwriter through Goldman, Sachs &
Co. expressly for use therein; PROVIDED, FURTHER, that the Company shall not be
liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon an untrue statement or alleged untrue
statement or omission or alleged omission relating only to the Seller made in
any Company Preliminary Prospectus, the Company Registration Statement or the
Company Prospectus or any such amendment or supplement in reliance upon and in
conformity with information furnished to the Company by the Seller expressly for
use therein. (ii) The Seller will indemnify and hold harmless the Trust and
each Underwriter against any losses, claims, damages or liabilities, joint or
several, to which the Trust or such Underwriter may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon an untrue statement
or alleged untrue statement of a material fact contained in any Trust
Preliminary Prospectus, the Trust Registration Statement or the Trust
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<PAGE>
Prospectus, or any amendment or supplement thereto, or arise out of or are based
upon the omission or alleged omission to state therein a material fact required
to be stated therein or necessary to make the statements therein not misleading,
and will reimburse the Trust and each Underwriter for any legal or other
expenses reasonably incurred by the Trust or such Underwriter in connection with
investigating or defending any such action or claim as such expenses are
incurred; PROVIDED, HOWEVER, that the Seller shall not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in any Trust Preliminary Prospectus, the Trust
Registration Statement or the Trust Prospectus or any such amendment or
supplement in reliance upon and in conformity with written information furnished
to the Trust by any Underwriter through Goldman, Sachs & Co. expressly for use
therein.
(b) Each Underwriter will indemnify and hold harmless the Company,
the Trust and the Seller against any losses, claims, damages or liabilities to
which the Company, the Trust or the Seller may become subject, under the Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon an untrue statement or alleged
untrue statement of a material fact contained in any Company Preliminary
Prospectus or Trust Preliminary Prospectus, either of the Registration
Statements or either of the Prospectuses, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, in each case to the extent, but only to
the extent, that such untrue statement or alleged untrue statement or omission
or alleged omission was made in any Company Preliminary Prospectus or Trust
Preliminary Prospectus, either of the Registration Statements or either of the
Prospectuses or any such amendment or supplement in reliance upon and in
conformity with written information furnished to the Trust or the Company by
such Underwriter through Goldman, Sachs & Co. expressly for use therein; and
will reimburse the Company, the Trust and the Seller for any legal or other
expenses reasonably incurred by the Company, the Trust or the Seller in
connection with investigating or defending any such action or claim as such
expenses are incurred.
(c) Promptly after receipt by an indemnified party under subsection
(a) or (b) above of notice of the commencement of any action, such indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under such subsection, notify the indemnifying party in
writing of the commencement thereof; but the omission so to notify the
indemnifying party shall not relieve it from any liability which it may have to
any indemnified party otherwise than under such subsection. In case any such
action shall be brought against any indemnified party and it shall notify the
indemnifying party of the commencement thereof, the indemnifying party shall be
entitled to participate therein and, to the extent that it shall wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party (who shall not,
except with the consent of the indemnified party (which consent shall not be
unreasonably withheld), be counsel to the indemnifying party), and, after notice
from the indemnifying party to such indemnified party of its election so to
assume the defense thereof, the indemnifying party shall not be liable to such
indemnified party under such subsection for any legal expenses of other counsel
or any other expenses, in each case subsequently incurred by such indemnified
party, in connection with the defense thereof other than reasonable costs of
investigation. No indemnifying party shall, without the written consent of the
indemnified party, effect the settlement or compromise of, or consent to the
entry of any judgment with respect to, any pending or threatened action or claim
in respect of which indemnification or contribution may be sought hereunder
(whether or not the
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<PAGE>
indemnified party is an actual or potential party to such action or claim)
unless such settlement, compromise or judgment (i) includes an unconditional
release of the indemnified party from all liability arising out of such action
or claim and (ii) does not include a statement as to or an admission of fault,
culpability or a failure to act, by or on behalf of any indemnified party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company, the Trust and the Seller on the one
hand and the Underwriters on the other from the offering of the Securities. If,
however, the allocation provided by the immediately preceding sentence is not
permitted by applicable law or if the indemnified party failed to give the
notice required under subsection (c) above, then each indemnifying party shall
contribute to such amount paid or payable by such indemnified party in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company, the Trust and the Seller on the one hand and
the Underwriters on the other in connection with the statements or omissions
which resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative benefits received by the Company, the Trust and the Seller on the one
hand and the Underwriters on the other shall be deemed to be in the same
proportion as the total net proceeds from the offering (before deducting
expenses) received by the Company, the Trust and the Seller bear to the total
underwriting discounts and commissions received by the Underwriters, in each
case as set forth in the table on the cover page of the Prospectus. The
relative fault shall be determined by reference to, among other things, whether
the untrue or alleged untrue statement of a material fact or the omission or
alleged omission to state a material fact relates to information supplied by the
Company, the Trust or the Seller on the one hand or the Underwriters on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company, the
Trust, the Seller and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this subsection (d) were determined by PRO
RATA allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation which does not take account of the
equitable considerations referred to above in this subsection (d). The amount
paid or payable by an indemnified party as a result of the losses, claims,
damages or liabilities (or actions in respect thereof) referred to above in this
subsection (d) shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or defending
any such action or claim. Notwithstanding the provisions of this subsection
(d), no Underwriter shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. The Underwriters' obligations in
this subsection (d) to contribute are several in proportion to their respective
underwriting obligations and not joint.
(e) The obligations of the Company and the Seller under this Section
8 shall be in addition to any liability which the Company and the Seller may
otherwise have and shall extend, upon the
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same terms and conditions, to each person, if any, who controls any Underwriter
within the meaning of the Act; and the obligations of the Underwriters under
this Section 8 shall be in addition to any liability which the respective
Underwriters may otherwise have and shall extend, upon the same terms and
conditions, to each officer and director of the Company and to each person, if
any, who controls the Trust, the Company or the Seller within the meaning of the
Act.
9. (a) If any Underwriter shall default in its obligation to purchase
the Securities which it has agreed to purchase hereunder, you may in your
discretion arrange for you or another party or other parties to purchase such
Securities on the terms contained herein at a Time of Delivery. If within
thirty-six hours after such default by any Underwriter you do not arrange for
the purchase of such Securities, then the Company, the Seller and the Trust
shall be entitled to a further period of thirty-six hours within which to
procure another party or other parties satisfactory to you to purchase such
Securities on such terms. In the event that, within the respective prescribed
periods, you notify the Company, the Seller and the Trust that you have so
arranged for the purchase of such Securities, or the Company, the Seller and the
Trust notify you that it has so arranged for the purchase of such Securities,
you or the Company, the Seller and the Trust shall have the right to postpone
such Time of Delivery for a period of not more than seven days, in order to
effect whatever changes may thereby be made necessary in the Registration
Statements or the Prospectuses, or in any other documents or arrangements, and
the Company, the Seller and the Trust agree to file promptly any amendments to
the Registration Statements or the Prospectuses which in your opinion may
thereby be made necessary. The term "Underwriter" as used in this Agreement
shall include any person substituted under this Section with like effect as if
such person had originally been a party to this Agreement with respect to such
Securities.
(b) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company, the Seller and the Trust as provided in subsection (a) above, the
aggregate principal amount of such Securities which remains unpurchased does not
exceed one-eleventh of the aggregate principal amount of all the Securities to
be purchased at such Time of Delivery, then the Company, the Seller and the
Trust shall have the right to require each non-defaulting Underwriter to
purchase the principal amount of Securities which such Underwriter agreed to
purchase hereunder at such Time of Delivery and, in addition, to require each
non-defaulting Underwriter to purchase its pro rata share (based on the
principal amount of Securities which such Underwriter agreed to purchase
hereunder) of the Securities of such defaulting Underwriter or Underwriters for
which such arrangements have not been made; but nothing herein shall relieve a
defaulting Underwriter from liability for its default.
(c) If, after giving effect to any arrangements for the purchase of
the Securities of a defaulting Underwriter or Underwriters by you and the
Company, the Seller and the Trust as provided in subsection (a) above, the
aggregate principal amount of Securities which remains unpurchased exceeds
one-eleventh of the aggregate principal amount of all the Securities to be
purchased at such Time of Delivery, or if the Company, the Seller and the Trust
shall not exercise the right described in subsection (b) above to require
non-defaulting Underwriters to purchase Securities of a defaulting Underwriter
or Underwriters, then this Agreement (or, with respect to the Second Time of
Delivery, the obligation of the Underwriters to purchase and of the Trust to
sell the Optional Securities) shall thereupon terminate, without liability on
the part of any non-defaulting Underwriter or the Company, the Trust or the
Seller, except for the expenses to be borne by the Company, the Trust or the
Seller and the Underwriters as provided in Section 6 hereof and the indemnity
and contribution agreements
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in Section 8 hereof; but nothing herein shall relieve a defaulting Underwriter
from liability for its default.
10. The respective indemnities, agreements, representations, warranties
and other statements of the Company, the Trust, the Seller and the several
Underwriters, as set forth in this Agreement or made by or on behalf of them,
respectively, pursuant to this Agreement, shall remain in full force and effect,
regardless of any investigation (or any statement as to the results thereof)
made by or on behalf of any Underwriter or any controlling person of any
Underwriter, or the Trust, the Company or the Seller or any officer or director
or controlling person of the Trust, the Company or the Seller and shall survive
delivery of and payment for the Securities.
11. If this Agreement shall be terminated pursuant to Section 9 hereof,
neither the Company, the Trust nor the Seller shall then be under any liability
to any Underwriter except as provided in Sections 6 and 8 hereof; but, if for
any other reason, any Securities are not delivered by or on behalf of the Trust
as provided herein, the Seller will reimburse the Underwriters through you for
all out-of-pocket expenses approved in writing by you, including fees and
disbursements of counsel, reasonably incurred by the Underwriters in making
preparations for the purchase, sale and delivery of the Securities, but the
Company, the Trust and the Seller shall then be under no further liability to
any Underwriter except as provided in Sections 6 and 8 hereof.
12. In all dealings hereunder, you shall act on behalf of each of the
Underwriters, and the parties hereto shall be entitled to act and rely upon any
statement, request, notice or agreement on behalf of any Underwriter made or
given by you [jointly or by Goldman, Sachs & Co. on behalf of you as the
representatives].
All statements, requests, notices and agreements hereunder shall be in
writing, and if to the Underwriters shall be delivered or sent by mail, telex or
facsimile transmission to you as the representatives [at] [in care of Goldman,
Sachs & Co.,] 85 Broad Street, New York, New York 10004, Attention: Registration
Department; if to the Trust shall be delivered or sent by mail, telex or
facsimile transmission to ...........................; if to the Company shall
be delivered or sent by mail, telex or facsimile transmission to the address of
the Company set forth in the Registration Statement, Attention: Secretary; and
if to the Seller shall be delivered or sent by mail, telex or facsimile
transmission to O'Melveny & Myers, 153 E. 53rd Street, New York, New York 10022,
Attention: Charles F. Niemeth, Esq., counsel for the Seller; provided, however,
that any notice to an Underwriter pursuant to Section 8(c) hereof shall be
delivered or sent by mail, telex or facsimile transmission to such Underwriter
at its address set forth in its Underwriters' Questionnaire, or telex
constituting such Questionnaire, which address will be supplied to the Company
by you upon request. Any such statements, requests, notices or agreements shall
take effect upon receipt thereof.
13. This Agreement shall be binding upon, and inure solely to the benefit
of, the Underwriters, the Trust, the Company, the Seller and, to the extent
provided in Sections 8 and 10 hereof, the officers and directors of the Company,
the Trust, the Seller and each person who controls the Company or any
Underwriter, and their respective heirs, executors, administrators, successors
and assigns, and no other person shall acquire or have any right under or by
virtue of this Agreement. No purchaser of any of the Securities from any
Underwriter shall be deemed a successor or assign by reason merely of such
purchase.
14. Time shall be of the essence of this Agreement. As used herein, the
term "business day" shall mean any day when the Commission's office in
Washington, D.C. is open for business.
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15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.
16. This Agreement may be executed by any one or more of the parties
hereto in any number of counterparts, each of which shall be deemed to be an
original, but all such respective counterparts shall together constitute one and
the same instrument.
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<PAGE>
If the foregoing is in accordance with your understanding, please sign and
return to us ten counterparts hereof, and upon the acceptance hereof by you, on
behalf of each of the Underwriters, this letter and such acceptance hereof shall
constitute a binding agreement between each of the Underwriters, the Company,
the Trust and the Seller. It is understood that your acceptance of this letter
on behalf of each of the Underwriters is pursuant to the authority set forth in
a form of Agreement among Underwriters, the form of which shall be submitted to
the Company for examination upon request, but without warranty on your part as
to the authority of the signers thereof.
Very truly yours,
Dole Food Company, Inc.
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
Dole Food Automatic Common
Exchange Security Trust
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
By:. . . . . . . . . . . . . . . . . .
Name:
Title:
each a trustee of Dole Food Automatic
Common Exchange Security Trust
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<PAGE>
David H. Murdock in his individual
capacity and as trustee of the David H.
Murdock Living Trust dated May 28, 1986,
as amended
By:. . . . . . . . . . . . . . . . . .
Name: David H. Murdock
Accepted as of the date hereof:
Goldman, Sachs & Co.
By:. . . . . . . . . . . . . . . . . . .
(Goldman, Sachs & Co.)
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SCHEDULE I
NUMBER OF
NUMBER OF OPTIONAL SECURITIES
FIRM SECURITIES TO BE PURCHASED
TO BE IF MAXIMUM OPTION
UNDERWRITER PURCHASED EXERCISED
----------- --------- ---------
Goldman, Sachs & Co.
[NAMES OF OTHER UNDERWRITERS]
Total
<PAGE>
Draft of July 29, 1996
ANNEX I
(i) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of Hawaii with corporate power to
own or lease its properties and to carry on its business as described in the
Company Prospectus;
(ii) The Company has, as of the date of the consolidated balance sheet
of the Company included in the most recent Annual Report on Form 10-K filed
prior to the date of such opinion and incorporated by reference in the
Company Prospectus, the authorized capital stock as set forth in such balance
sheet; the Company has, as of December 30, 1995, authorized 80 million shares
of Stock, no par value, and 30 million shares of preferred stock, no par
value; the shares of Stock to be delivered by the Seller in pledge pursuant
to the Collateral Agreement have been duly authorized by all necessary
corporate action on the part of the Company and are validly issued, fully
paid and non-assessable; and the description of the capital stock of the
Company included in the Company Prospectus under the caption "Description of
Capital Stock" insofar as it summarizes provisions of the Articles of
Association and By-laws of the Company, fairly presents the information
required by Form S-3;
(iii) Except as disclosed in the Company Prospectus, such counsel has not
given substantive attention on behalf of the Company to, or represented the
Company in connection with, any actions, suits or proceedings pending or
threatened to which the Company or any of its subsidiaries is a party or of
which any property of the Company or any subsidiary is subject, before any
court, arbitrator or governmental agency which individually or in the
aggregate are material to the Company and its subsidiaries, taken as a whole;
(iv) The execution, delivery and performance of this Agreement has been
duly authorized by all necessary corporate action on the part of the Company;
this Agreement has been duly executed and delivered by the Company;
(v) The Company's performance of its obligations under this Agreement
and consummation of the transactions contemplated hereby will not (a)
violate, breach or result in a default under any agreement filed as an
exhibit to the Company's Annual Report on Form 10-K for the Company's most
recent fiscal year, (b) violate the Company's Articles of Association or
By-laws, or (c) breach or otherwise violate any existing obligation of or
restriction on the Company under any order of any California, Hawaii or
federal court or governmental authority binding on the Company identified in
an attached certificate;
(vi) No consent, approval, permit or order of any federal, California or
New York governmental authority is required on the part of the Company for
the sale of the Securities or the consummation by the Company of the
transactions contemplated by this Agreement, except such as may be required
by the NASD or the registration under the Act of the Securities or as may be
required under state or other securities or Blue Sky laws in connection with
the purchase and distribution of the Securities by the Underwriters;
(vii) Each of the Registration Statements has been declared effective
under the Act and, to the knowledge of such counsel, no stop order suspending
the effectiveness thereof has been issued and no proceedings for that purpose
have been instituted or are pending or contemplated under the Act;
(viii) Each of the Registration Statements and each of the Prospectuses
(excluding the documents incorporated by reference in the Company Prospectus
(the "Incorporated Documents")), and each amendment or supplement thereto,
as of their respective effective or issue dates and as of such Time of
Delivery, each appeared on its face to comply in all material respects with
the requirements as to form for registration statements on Form S-3 and Form
N-2, as applicable, under the Acts and the related rules and regulations of
the Commission thereunder (except that such need express no opinion as to the
financial statements or other financial data included or required to be
included therein); the Incorporated Documents, as of their respective dates,
each appeared on its face to comply in all material respects with the
requirements as to forms for reports on Form 10-K and Form 10-Q, as the case
may be, under the Exchange Act and the related rules and regulations of the
Commission thereunder in effect at the respective dates of their filing
(except that such counsel need express no opinion as to the financial
statements or other financial data included or required to be included
therein);
(ix) The statements included in the Prospectuses under the captions
"Underwriting", [other] insofar as such statements summarize
provisions of documents referred to therein, are accurate in all material
respects and fairly summarize the matters referred to therein;
(x) The David H. Murdock Living Trust dated May 28, 1986, as amended,
has been duly created, is validly existing as a trust under the laws of the
State of [California], has the power and authority to own its property and to
conduct its business and has been duly qualified for the transaction of
business and is in good standing under the laws of each other jurisdiction in
which it owns or leases properties or conducts any business so as to require
such qualification, or is subject to no material liability or disability by
reason of the failure to be so qualified in any such jurisdiction;
(xi) This Agreement has been duly authorized, executed and delivered by
the Seller; each of the Purchase Agreement and the Collateral Agreement has
been duly authorized, executed and delivered by the Seller and, assuming due
authorization, execution and delivery by the other parties thereto,
constitutes a valid and legally binding agreement of the Seller, enforceable
in accordance with its terms, subject, as to enforcement, to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles;
(xii) The compliance by the Seller with all of the provisions of this
Agreement, the Purchase Agreement and the Collateral Agreement and the
consummation of the transactions herein and therein contemplated will not
violate, breach or result in any default under, (a) any existing obligation
of the Seller under any agreement listed in the Seller's Certificate attached
to such opinion, or (b) any existing obligation of the Seller listed in the
Seller's Certificate under any order of any California or federal court or
governmental authority binding on the Seller or the property of the Seller,
or (c) the constitutive documents of the David H. Murdock Living Trust dated
May 28, 1986, as amended;
(xiii) No consent, approval, permit or order of any federal, California or
New York court or governmental authority is required on the part of the
Seller for the consummation of the transactions contemplated by this
Agreement, the Purchase Agreement and the Collateral Agreement in connection
with the Securities and Stock to be pledged, assigned or sold thereunder,
except such as have been obtained under the Act and such as may be required
by the NASD or under state securities laws in connection with the purchase
and distribution of the Securities and the Stock; the Seller has full right,
power and authority to pledge and assign the shares of Stock to be pledged
and assigned by the Seller pursuant to the Collateral Agreement;
(xiv) Seller has good and valid title to the shares of Stock pledged and
assigned by the Seller pursuant to the Collateral Agreement as of such Time
of Delivery, free and clear of any adverse claims; the shares of Stock
pledged by the Seller as of such Time of Delivery have been duly and validly
assigned, delivered and pledged by the Seller under the Collateral Agreement
and such Collateral Agreement, together with such assignment, delivery and
pledge, creates, as security for the performance of the obligations of the
Seller under the Purchase Agreement, a valid first priority and perfected
security interest in such shares of Stock prior to other liens;
(xv) Upon payment for and delivery of the shares of Stock pursuant to
this Agreement and the Purchase Agreement, the purchasers will own such
shares of Stock, free and clear of any adverse claim; and
(xvi) Upon the occurrence of an Event of Default specified in the
Collateral Agreement, the rights of the Collateral Agent with respect to the
Collateral, as set forth in the Collateral Agreement, shall immediately
become exercisable in accordance with the terms of the Collateral Agreement,
and such rights will be not be subject to any stay pursuant to Section 362(a)
of the Bankruptcy Code.
In addition to the foregoing, such counsel shall state that while in
connection with their participation in the preparation of the Registration
Statements and the Prospectuses, such counsel have not independently verified
the accuracy or completeness or fairness of the statements contained or
incorporated therein, and the limitations inherent in the examination made by
such counsel and the knowledge available to such counsel are such that they
are unable to assume and they do not assume any responsibility for such
accuracy, completeness or fairness, on the basis of such counsel's review of
the Registration Statements, the Prospectuses and the Incorporated Documents
and such counsel's participation in conferences in connection with the
preparation of the Registration Statements and the Prospectuses, and relying
as to materiality to a large extent upon opinions of Company officers and
other representatives, such counsel do not believe that the Registration
Statements (excluding the Incorporated Documents) and the Incorporated
Documents, considered as whole, as of the effective date of the Registration
Statements, contained any untrue statement of a material fact or omitted to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading, and such counsel do not believe that the
Prospectuses and the Incorporated Documents, considered as a whole, on the
date of the Prospectuses or as of such Time of Delivery, contained or contain
any untrue statement of a material fact or omitted or omit to state a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. Such counsel shall also state that they do not know of
any contract or other document of a character required to be filed as an
exhibit to either of the Registration Statements which is not filed as
required. Such opinion may be limited to matters governed by Federal laws of
the United States or the laws of the States of Hawaii, California or New York.
<PAGE>
ANNEX III
Pursuant to Section 7(d) of the Underwriting Agreement, the accountants shall
furnish letters to the Underwriters to the effect that:
(i) They are independent certified public accountants with respect to
the Company and its subsidiaries within the meaning of the Act and the
applicable published rules and regulations thereunder;
(ii) In their opinion, the financial statements and any supplementary
financial information and schedules (and, if applicable, prospective
financial statements and/or pro forma financial information) examined by
them and included or incorporated by reference in the Registration
Statement or the Prospectus comply as to form in all material respects with
the applicable accounting requirements of the Act or the Exchange Act, as
applicable, and the related published rules and regulations thereunder;
and, if applicable, they have made a review in accordance with standards
established by the American Institute of Certified Public Accountants of
the consolidated interim financial statements, selected financial data, pro
forma financial information, prospective financial statements and/or
condensed financial statements derived from audited financial statements of
the Company for the periods specified in such letter, as indicated in their
reports thereon, copies of which have been separately furnished to the
representatives of the Underwriters (the "Representatives");
(iii) They have made a review in accordance with standards established
by the American Institute of Certified Public Accountants of the unaudited
condensed consolidated statement of income, consolidated balance sheets and
consolidated statements of cash flows included in the Prospectus and/or
included in the Company's quarterly report on Form 10-Q incorporated by
reference into the Prospectus as indicated in their reports thereon copies
of which have been separately furnished to the Representatives; and on the
basis of specified procedures including inquiries of officials of the
Company who have responsibility for financial and accounting matters
regarding whether the unaudited condensed consolidated financial statements
referred to in paragraph (vi)(A)(i) below comply as to form in the related
in all material respects with the applicable accounting requirements of the
Act and the Exchange Act and the related published rules and regulations,
nothing came to their attention that caused them to believe that the
unaudited condensed consolidated financial statements do not comply as to
form in all material respects with the applicable accounting requirements
of the Act and the Exchange Act and the related published rules and
regulations;
(iv) The unaudited selected financial information with respect to the
consolidated results of operations and financial position of the Company
for the five most recent fiscal years included in the Prospectus and
included or incorporated by reference in Item 6 of the Company's Annual
Report on Form 10-K for the most recent fiscal year agrees with the
corresponding amounts (after restatement where applicable) in the audited
consolidated financial statements for such five fiscal years which were
included or incorporated by reference in the Company's Annual Reports on
Form 10-K for such fiscal years;
<PAGE>
(v) They have compared the information in the Prospectus under
selected captions with the disclosure requirements of Regulation S-K and on
the basis of limited procedures specified in such letter nothing came to
their attention as a result of the foregoing procedures that caused them to
believe that this information does not conform in all material respects
with the disclosure requirements of Items 301, 302, 402 and 503(d),
respectively, of Regulation S-K;
(vi) On the basis of limited procedures, not constituting an
examination in accordance with generally accepted auditing standards,
consisting of a reading of the unaudited financial statements and other
information referred to below, a reading of the latest available interim
financial statements of the Company and its subsidiaries, inspection of the
minute books of the Company and its subsidiaries since the date of the
latest audited financial statements included or incorporated by reference
in the Prospectus, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and such
other inquiries and procedures as may be specified in such letter, nothing
came to their attention that caused them to believe that:
(A) (i) the unaudited condensed consolidated statements of
income, consolidated balance sheets and consolidated statements of
cash flows included in the Prospectus and/or included or incorporated
by reference in the Company's Quarterly Reports on Form 10-Q
incorporated by reference in the Prospectus do not comply as to form
in all material respects with the applicable accounting requirements
of the Exchange Act and the related published rules and regulations,
or (ii) any material modifications should be made to the unaudited
consolidated statements of income, consolidated balance sheets and
consolidated statements of cash flows included or incorporated by
reference in the Company's Quarterly Reports on Form 10-Q incorporated
by reference in the Prospectus, for them to be in conformity with
generally accepted accounting principles;
(B) any other unaudited income statement data and balance sheet
items included in the Prospectus do not agree with the corresponding
items in the unaudited consolidated financial statements from which
such data and items were derived, and any such unaudited data and
items were not determined on a basis substantially consistent with the
basis for the corresponding amounts in the audited consolidated
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
(C) the unaudited financial statements which were not included
in the Prospectus but from which were derived the unaudited condensed
financial statements referred to in Clause (A) and any unaudited
income statement data and balance sheet items included in the
Prospectus and referred to in Clause (B) were not determined on a
basis substantially consistent with the basis for the audited
financial statements included or incorporated by reference in the
Company's Annual Report on Form 10-K for the most recent fiscal year;
III-2
<PAGE>
(D) any unaudited pro forma consolidated condensed financial
statements included or incorporated by reference in the Prospectus do
not comply as to form in all material respects with the applicable
accounting requirements of the Act and the published rules and
regulations thereunder or the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of those
statements;
(E) as of a specified date not more than five days prior to the
date of such letter, there have been any changes in the consolidated
capital stock (other than issuances of capital stock upon exercise of
options and stock appreciation rights, upon earn-outs of performance
shares and upon conversions of convertible securities, in each case
which were outstanding on the date of the latest balance sheet
included or incorporated by reference in the Prospectus) or any
increase in the consolidated long-term debt of the Company and its
subsidiaries, or any decreases in consolidated net current assets or
stockholders' equity or other items specified by the Representatives,
or any increases in any items specified by the Representatives, in
each case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, except in
each case for changes, increases or decreases which the Prospectus
discloses have occurred or may occur or which are described in such
letter; and
(F) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to
the specified date referred to in Clause (E) there were any decreases
in consolidated net revenues or operating profit or the total or per
share amounts of consolidated net income or other items specified by
the Representatives, or any increases in any items specified by the
Representatives, in each case as compared with the comparable period
of the preceding year and with any other period of corresponding
length specified by the Representatives, except in each case for
increases or decreases which the Prospectus discloses have occurred or
may occur or which are described in such letter; and
(vii) In addition to the examination referred to in their report(s)
included or incorporated by reference in the Prospectus and the limited
procedures, inspection of minute books, inquiries and other procedures
referred to in paragraphs (iii) and (vi) above, they have carried out
certain specified procedures, not constituting an examination in accordance
with generally accepted auditing standards, with respect to certain
amounts, percentages and financial information specified by the
Representatives which are derived from the general accounting records of
the Company and its subsidiaries, which appear in the Prospectus (excluding
documents incorporated by reference) or in Part II of, or in exhibits and
schedules to, the Registration Statement specified by the Representatives
or in documents incorporated by reference in the Prospectus specified by
the Representatives, and have compared certain of such amounts, percentages
and financial information with the accounting records of the Company and
its subsidiaries and have found them to be in agreement.
III-3
<PAGE>
Draft of August 1, 1996
CUSTODIAN AGREEMENT
This CUSTODIAN AGREEMENT dated as of this _____ day of August 1996
by and between The Bank of New York, a New York banking corporation (the
"Custodian"), and ____________, ____________ and ___________ (collectively, the
"Trustees"), not in their individual capacities but solely as Trustees of Dole
Food Automatic Common Exchange Security Trust (the "Trust"), a trust organized
under the laws of the State of New York, under and by virtue of an Amended and
Restated Trust Agreement, dated as of August __, 1996 (the "Trust Agreement").
W I T N E S S E T H
WHEREAS, the Trust is a non-diversified, closed-end management
investment company, as defined in the Investment Company Act of 1940 (the
"Investment Company Act"), formed to purchase and hold certain U.S. treasury
securities (the "Treasury Securities"), to enter into and hold a forward
contract with an existing shareholder of Dole Food Company, Inc. (the
"Contract"), and to issue Automatic Common Exchange Securities (the
"Securities") in accordance with the terms and conditions of the Trust
Agreement;
WHEREAS, the Trustees desire to engage the services of the Custodian
to perform certain custodial duties for the Trust; and
WHEREAS, the Custodian is willing to assume such duties, on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined herein
shall have the respective meanings specified in the Trust Agreement.
2. APPOINTMENT OF CUSTODIAN; TRANSFER OF ASSETS. The Trustees
hereby constitute and appoint the Custodian, and the Custodian accepts such
appointment, as custodian of all of the property, including but not limited to,
the Contract, the Treasury Securities, the Temporary Investments, any cash and
any other property at any time owned or held by the Trust (collectively, the
"Assets"). The Trustees hereby deposit the Assets with the Custodian and the
Custodian hereby accepts such into its custody and the
<PAGE>
Trustees shall deliver to the Custodian all of the Assets, including all monies,
securities and other property received by the Trust at any time during the
period of this Agreement, subject to the following terms and conditions. The
Custodian hereby agrees that it shall hold the Assets in a segregated custody
account, separate and distinct from all other accounts, in accordance with
Section 17(f) of, and in such manner as shall constitute the segregation and
holding in trust within the meaning of, the Investment Company Act and the rules
and regulations thereunder. The Trustees authorize the Custodian, for any Assets
held hereunder, to use the services of any United States securities depository
permitted to perform such services for registered investment companies and their
custodians under Rule 17f-4 under the Investment Company Act and which have been
approved by the Trustees, including but not limited to, the Depository Trust
Company and the Federal Reserve Book Entry System.
3. ASSET DISPOSITION; EXAMINATIONS. The Custodian shall have no
power or authority to assign, hypothecate, pledge or otherwise dispose of the
Assets, except pursuant to a written direction in accordance with paragraph 4
below and then only for the account of the Trust. The Assets shall be subject to
no lien or charge of any kind in favor of the Custodian for itself or for any
other Person claiming through the Custodian. The Custodian shall permit actual
examination of the Assets by the Trust's independent public accountant at the
end of each annual and semi-annual fiscal period of the Trust and at least one
other time during the fiscal year of the Trust chosen by such independent public
accountant and shall permit the inspection of the Assets by the Commission
through its employees or agents during the normal business hours of the
Custodian upon reasonable request.
4. AUTHORIZED ACTIONS. The Custodian shall take such actions with
respect to the Assets as directed in writing by the Trustees or by any officer
of the Administrator duly authorized by the Trustees to give written
instructions on behalf of the Trustees and named in such resolutions of the
Trustees, certified by a Trustee, as may be received by the Custodian from time
to time.
5. CUSTODIAN'S ACTIONS TAKEN IN GOOD FAITH. In connection with
the performance of its duties under this Agreement, the Custodian shall be under
no liability to the Trust or any Holder for any action taken in good faith in
relaince on any paper, order, certification, list, demand, request, consent,
affidavit, notice, opinion, direction, endorsement, assignment, resolution,
draft or other document, prima facie properly executed, or for the
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<PAGE>
disposition of the Assets pursuant to the Trust Agreement or in respect of any
action taken or suffered under the Trust Agreement in good faith, in accordance
with an opinion of counsel or at the direction of the Trustees pursuant hereto;
provided that this provision shall not protect the Custodian against any
liability to which it would otherwise be subject by reason of its reckless
disregard of its obligations and duties hereunder. Notwithstanding any other
provision of this Agreement, the Custodian shall under no circumstances be
liable for any indirect or consequential damages.
6. TRUST AGREEMENT VALIDITY. The Custodian shall not be
responsible for the validity or sufficiency of the Trust Agreement or the due
execution thereof, or for the form, character, genuineness, sufficiency, value
or validity of any of the Assets and the Custodian shall in no event assume or
incur any liability, duty or obligation to any Holder or to the Trustees, other
than as expressly provided for herein. The Custodian shall not be responsible
for or in respect of the validity of any signature by or on behalf of the
Trustees.
7. LITIGATION OBLIGATIONS, COSTS AND INDEMNITY. The Custodian
shall not be under any obligation to appear in, prosecute or defend any action
which in its opinion may involve it in expense or liability, unless it shall be
furnished with such reasonable security and indemnity against such expense or
liability as it may require, and any pecuniary costs of the Custodian from such
actions shall be expenses which are reimbursable pursuant to paragraph 13
hereof.
8. TAXES; TRUST EXPENSES. In no event shall the Custodian be
personally liable for any taxes or other governmental charges imposed upon or in
respect of the Assets or upon the monies, securities or other properties
included therein. The Custodian shall be reimbursed and indemnified by the
Trustees for all such taxes and charges, for any tax or charge imposed against
the Trust and for any expenses, including counsel fees, interest, penalties and
additions to tax which the Custodian may sustain or incur with respect to such
taxes or charges.
9. CUSTODIAN RESIGNATION, SUCCESSION. (a) The Custodian may
resign by executing an instrument in writing resigning as Custodian and
delivering the same to the Trustees, not less than 60 days before the date
specified in such instrument when, subject to clause (b) of this paragraph 9,
such resignation is to take effect. Upon receiving such notice of resignation,
the Trustees shall use their reasonable efforts promptly to appoint a successor
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<PAGE>
Custodian in the manner and meeting the qualifications provided in the Trust
Agreement, by written instrument or instruments delivered to the resigning
Custodian and the successor Custodian.
(b) In case no successor Custodian shall have been appointed within
30 days after notice of resignation has been received by the Trustees, the
resigning Custodian may forthwith apply to a court of competent jurisdiction for
the appointment of a successor Custodian. Such court may thereupon, after such
notice, if any, as it may deem proper and prescribed, appoint a successor
Custodian.
10. CUSTODIAN REMOVAL. The Trustees may remove the Custodian
upon 60 days' prior written notice to the Custodian and appoint a successor
Custodian. In case at any time the Custodian shall not meet the requirements set
forth in the Trust Agreement or shall become incapable of acting or if a court
having jurisdiction shall enter a decree or order for relief in respect of the
Custodian in an involuntary case, or the Custodian shall commence a voluntary
case, under any applicable bankruptcy, insolvency, or other similar law now or
hereafter in effect, or any receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) for the Custodian or for any substantial part
of its property shall be appointed, or the Custodian shall make any general
assignment for the benefit of creditors, or shall generally fail to pay its
debts as they become due, the Trustees may remove the Custodian immediately and
appoint a successor Custodian. The termination of the Administration Agreement
or the Paying Agent Agreement shall cause the removal of the Custodian
simultaneously therewith.
11. TRANSFERS TO SUCCESSOR CUSTODIAN. Upon the request of any
successor Custodian, the Custodian hereunder shall, upon payment of all amounts
due it, execute and deliver an instrument acknowledged by it transferring to
such successor Custodian all the rights and powers of the resigning Custodian;
and the resigning Custodian shall transfer, deliver and pay over to the
successor Custodian the Assets at the time held by it hereunder, if any,
together with all necessary instruments of transfer and assignment or other
documents properly executed necessary to effect such transfer and such of the
records or copies thereof maintained by the resigning Custodian in the
administration hereof as may be requested by the successor Custodian, and shall
thereupon be discharged from all duties and responsibilities hereunder. Any
resignation or removal of the Custodian shall become effective upon such
acceptance of appointment by the successor Custodian. The
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<PAGE>
indemnification of the resigning Custodian provided for hereunder shall survive
any resignation, discharge or removal of the Custodian hereunder.
12. CUSTODIAN MERGER, CONSOLIDATION. Any corporation into which
the Custodian may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Custodian shall be a party, shall be the successor Custodian hereunder
and under the Trust Agreement without the execution or filing of any paper,
instrument or further act to be done on the part of the parties hereto, provided
that such corporation meets the requirements set forth in the Trust Agreement
and provided further that the Trust has given its prior written consent to the
Custodian with respect to any such merger, conversion or consolidation.
13. COMPENSATION; EXPENSES. The Custodian shall receive
compensation for performing the usual, ordinary, normal and recurring services
under this Custodian Agreement and, with the prior written approval of the
Trustees, reimbursement for any and all expenses and disbursements incurred
hereunder, as provided in Section 3.1 of the Administration Agreement.
14. SECTION 17(f) QUALIFICATION. The Custodian hereby represents
that it is qualified to act as a custodian under Section 17(f) of the Investment
Company Act.
15. CUSTODIAN'S LIMITED LIABILITY. The Trustees shall indemnify
and hold the Custodian harmless from and against any loss, damages, cost or
expense (including the costs of investigation, preparation for and defense of
legal and/or administrative proceedings related to a claim against it and
reasonable attorneys' fees and disbursements), liability or claim incurred by
reason of any inaccuracy in information furnished to the Custodian by the
Trustees, or any act or omission in the course of, connected with or arising out
of any services to be rendered hereunder, provided that the Custodian shall not
be indemnified and held harmless from and against any such loss, damages, cost,
expense, liability or claim arising from its willful misfeasance, bad faith or
gross negligence in the performance of its duties, or its reckless disregard of
its duties and obligations hereunder. Neither the Federal Reserve Book Entry
System nor the Depository Trust Company shall be deemed to be agents of the
Custodian.
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<PAGE>
16. RIGHTS OF SET-OFF; BANKER'S LIEN. The Custodian hereby
waives all rights of set-off or banker's lien it may have with respect to the
Assets held by it as Custodian hereunder.
17. TERMINATION. This Agreement shall terminate upon the earlier
of the termination of the Trust or the appointment of a successor Custodian.
18. CHOICE OF LAW. This Agreement is executed and delivered in
the State of New York, and all laws or rules of construction of the State of New
York shall govern the right of the parties hereto and the interpretation of the
provisions hereof.
19. NOTICES. Any notice to be given to the Trust hereunder shall
be in writing and shall be duly given if mailed or delivered to Dole Food
Automatic Common Exchange Security Trust, c/o [__________________], 85 Broad
Street, New York, New York 10004, and to the Custodian if mailed or delivered to
The Bank of New York, 101 Barclay Street, New York, New York 10286, Attention:
[Theodore D. Parsons] or at such other address as shall be specified by the
addressee to the other party hereto in writing.
20. NO THIRD PARTY BENEFICIARIES. Nothing herein, express or
implied, shall give to any Person, other than the Trustees, the Custodian and
their respective successors and assigns, any benefit of any legal or equitable
right, remedy or claim hereunder.
21. AMENDMENTS; TRUST AGREEMENT CHANGES; WAIVER. This Agreement
shall not be deemed or construed to be modified, amended, rescinded, cancelled
or waived, in whole or in part, except by a written instrument signed by a duly
authorized representative of the party to be charged. The Trustees shall notify
the Custodian of any change in the Trust Agreement prior to the effective date
of any such change. Failure of either party hereto to exercise any right or
remedy hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
TRUSTEES
____________________________
___________________________,
as Trustee
____________________________
___________________________,
as Trustee
____________________________
___________________________,
as Trustee
THE BANK OF NEW YORK
By _________________________
Name:
Title:
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<PAGE>
Draft of August 1, 1996
ADMINISTRATION AGREEMENT
This ADMINISTRATION AGREEMENT dated as of this ____ day of August
1996 by and between The Bank of New York, a New York banking corporation (the
"Administrator"), and ________________, _________________ and ________________
(collectively, the "Trustees"), not in their individual capacities but solely as
Trustees of Dole Food Automatic Common Exchange Security Trust (the "Trust"), a
trust organized under the laws of the State of New York under and by virtue of
an Amended and Restated Trust Agreement, dated as of August __, 1995 (the "Trust
Agreement").
W I T N E S S E T H
WHEREAS, the Trust is a non-diversified, closed-end management
investment company, as defined in the Investment Company Act of 1940 (the
"Investment Company Act"), formed to purchase and hold certain U.S. treasury
securities (the "Treasury Securities"), to enter into and hold a forward
contract with an existing shareholder (the "Seller") of Dole Food Company, Inc.
(the "Contract") and to issue Automatic Common Exchange Securities (the
"Securities") in accordance with the terms and conditions of the Trust
Agreement;
WHEREAS, the Trustees desire to engage the services of the
Administrator to assume certain duties and responsibilities of the Trustees
under the Trust Agreement and the Investment Company Act and to undertake
certain services on behalf of and subject to the supervision of the Trustees as
provided herein; and
WHEREAS, the Administrator is qualified and willing to assume such
duties and responsibilities and to undertake to render such services, subject to
the supervision of the Trustees, on the terms and conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
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ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms not otherwise defined herein
shall have the respective meanings specified in the Trust Agreement.
ARTICLE II
ENGAGEMENT OF ADMINISTRATOR
2.1 ENGAGEMENT. The Trustees hereby engage the Administrator,
and the Administrator hereby agrees to be so engaged, to provide the services
hereinafter enumerated.
2.2 SERVICES OF ADMINISTRATOR. Subject to the supervision of
the Trustees, the Administrator shall effect the matters set forth further in
Sections 2.3, 2.4 and 2.5 of the Trust Agreement, to the extent such
responsibilities can lawfully be delegated to the Administrator; provided,
however, that the Administrator shall not (i) render investment advisory
services to the Trust as defined in the Investment Company Act or the Investment
Advisers Act of 1940; (ii) have the power of the Trustees to sell the Contract
or the Treasury Securities except as provided in Sections 2.5 of the Trust
Agreement; or (iii) have the power to select the independent public accountants
for the Trust. Additionally, the Administrator shall be responsible for
rendering the following services:
(a) instruct the Paying Agent to pay out of the Net Proceeds of
the sale of the Securities the fees and expenses of the Trust incurred in
connection with the offering of the Securities as specified in Schedule I
hereto;
(b) instruct the Paying Agent to pay out of the Net Proceeds of
the sale of the Securities the fees and expenses of the Trust incurred in
connection with the organization of the Trust as specified in Schedule II
hereto;
(c) instruct the Paying Agent to effect the transactions set forth
in Sections 2.3, 2.4 and 2.5 of the Trust Agreement and to otherwise
perform the duties of the Paying Agent referred to in the Trust Agreement;
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(d) with the approval of the Trustees, engage legal and other
professional advisors, subject to clause 2.2 (iii) above;
(e) receive all demands, bills and invoices for expenses incurred
by or on behalf of the Trust and pay the same, or cause the Paying Agent
to pay the same, out of moneys paid to the Administrator pursuant to the
Fund Expense Agreement dated the date hereof between Goldman, Sachs & Co.,
and The Bank of New York (the "Fund Expense Agreement") but in no event
out of any assets of the Trust except, as provided in paragraphs (a) and
(b) hereof;
(f) (i) prepare and mail, file or publish, or, as appropriate,
direct the Paying Agent to prepare and mail, file or publish, any notices,
proxies, reports and other communications required to be mailed or
published pursuant to the Trust Agreement and the Investment Company Act,
(ii) keep all the books and records of the Trust (other than those to be
kept by the Paying Agent), and (iii) prepare (or cause to be prepared)
and, as necessary, file (or cause to be filed) any and all reports,
returns and other documents as required under the Investment Company Act,
the Securities Exchange Act of 1934, or the Code, or, as reasonably
requested by the Trustees, under any other applicable laws, rules or
regulations or otherwise; provided, however, that responsibility for the
adequacy and accuracy of any such reports, returns, etc. shall be that of
the Trustees and provided, further, that the Administrator shall have no
liability for the adequacy or accuracy of such reports, returns, etc.;
(g) at the request of the Trustees and upon being furnished with
such reasonable security and indemnity against any related expense or
liability as the Administrator may require, institute and prosecute, in
accordance with the instructions of the Trustees, legal or other
appropriate proceedings to enforce any and all rights and remedies of the
Trust;
(h) receive and review on behalf of the Trust all notices,
reports, certificates and other documents regarding the Contract and the
Treasury Securities;
(i) make all necessary arrangements with respect to meetings of
Trustees and meetings of Holders, including, without limitation, the
preparation of notices, proxies and minutes, subject to the approval of
Trustees; and
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(j) in conjunction with the Trustees, determine and publish, in
such manner as the Trustees shall direct in writing, the Trust's net asset
value in accordance with the Trust's policy as set forth in the
Prospectus.
2.3 CERTAIN RIGHTS OF THE ADMINISTRATOR. In connection with the
performance of its duties under this Agreement, the Administrator shall not be
liable to the Trust, the Trustees or any Holder (i) for any action taken or for
refraining from taking any action hereunder except in the case of its willful
misfeasance, bad faith, gross negligence or the reckless disregard of its duties
hereunder, (ii) with respect to any action taken or omitted to be taken by it in
good faith in accordance with the directions of the Trustees or of any Trustee
or (iii) in connection with the performance of its duties under Section 2.2(j)
hereof, for good faith reliance upon information furnished by third parties
selected by the Administrator with due care. The Administrator shall under no
circumstances be liable for any indirect or consequential damages. The
Administrator may consult with counsel and the written advice of such counsel
shall be full and complete authorization and protection in respect of any action
taken, suffered or omitted by it hereunder in good faith and in reliance
thereon. The Administrator may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys appointed with
due care by it but shall be liable for the acts and omissions of such persons to
the same extent as if the functions had been performed by the Administrator
itself.
ARTICLE III
COMPENSATION OF ADMINISTRATOR
3.1 COMPENSATION. For services to be rendered by the
Administrator pursuant to this Agreement, as custodian under the Custodian
Agreement, dated as of August __, 1996, between the Administrator, as custodian,
and the Trustees, as paying agent under the Paying Agent Agreement, dated as of
August __, 1996, between the Administrator, as paying agent, and the Trustees,
and as collateral agent under the Collateral Agreement, dated as of August __,
1996, among the Administrator, as collateral agent, the Seller and the Trustees,
and for the payment of Trust expenses pursuant to Section 2.2(e) hereof, the
Administrator shall receive only such fees and expenses as shall be paid to it
pursuant to the terms of the Fund Expense Agreement and shall have no
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recourse to the assets of the Trust for the payment of any such amounts.
3.2 ADDITIONAL SERVICES. If and to the extent that the Trustees
shall request the Administrator to render services for the Trust, other than
those to be rendered by the Administrator hereunder, and if the Administrator
agrees to render such services, such additional services shall be compensated
separately on terms to be agreed upon between the Administrator and the Trustees
from time to time.
ARTICLE IV
TERMINATION
4.1 TERMINATION.
(a) This Agreement shall terminate immediately upon written notice
of termination from the Trustees to the Administrator if any of the following
events shall occur:
(i) If the Administrator shall violate any provision of this
Agreement, the Trust Agreement, or the Investment Company Act, and after
notice of such violation, shall not cure such default within 30 days; or
(ii) If the Administrator shall be adjudged bankrupt or
insolvent by a court of competent jurisdiction, or an order shall be made
by a court of competent jurisdiction for the appointment of a receiver,
liquidator, or trustee of the Administrator, or of all or substantially
all of its property by reason of the foregoing, or approving any petition
filed against the Administrator for its reorganization, and such
adjudication or order shall remain in force or unstayed for a period of 30
days; or
(iii) If the Administrator shall institute proceedings for
voluntary bankruptcy, or shall file a petition seeking reorganization
under the Federal bankruptcy laws, or for relief under any law for the
relief of debtors, or shall consent to the appointment of a receiver of
the Administrator or of all or substantially all of its property, or shall
make a general assignment for the benefit of its creditors, or shall admit
in writing its inability to pay its debts generally as they become due; or
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(iv) Upon the voluntary or involuntary dissolution of the
Administrator, or unless the Trust shall have given its prior written
consent thereto, the merger or consolidation of the Administrator with any
other entity.
If any of the events specified in clauses (ii), (iii) or (iv) of
this Section 4.1(a) shall occur, the Administrator shall give immediate written
notice thereof to the Trustees.
(b) Notwithstanding anything to the contrary contained herein,
this Agreement shall terminate immediately (i) upon termination of the Trust
Agreement, (ii) upon termination of the Paying Agent Agreement, (iii) upon
termination of the Collateral Agreement, (iv) upon termination of the Custodian
Agreement or (v) upon the resignation or removal of the Custodian.
(c) This Agreement may be terminated by either party hereto
without penalty upon 60 days' prior written notice to the other party hereto;
provided that neither party hereto may terminate this Agreement pursuant to this
Section 4.1(c) unless a successor Administrator shall have been appointed and
shall have accepted the duties of the Administrator. If, within 30 days after
notice by the Administrator to the Trustees of termination of this Agreement, no
successor Administrator shall have been selected and accepted the duties of the
Administrator, the Administrator may apply to a court of competent jurisdiction
for the appointment of a successor Administrator.
4.2 EFFECT OF TERMINATION. The Administrator shall forthwith
upon termination of this Agreement deliver to the Trustees any records or other
property of the Trust then in the possession or custody of the Administrator.
Any obligation to indemnify the Administrator pursuant to Section 6.6 shall
survive the termination of this Agreement.
ARTICLE V
RECORDS AND REPORTS
5.1 BOOKS AND RECORDS; INSPECTION AND COPYING. The
Administrator shall keep appropriate, and reasonably detailed and accurate,
books and records of all its activities pursuant to this Agreement. The
Trustees shall have the right to inspect such books and records during the
Administrator's normal business hours upon reasonable
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request, and to make copies of the same at the expense of the Trust.
5.2 ACCESS TO INFORMATION. The Administrator shall make
available to each of the Trustees all information it receives and compiles with
respect to the Contract and the Treasury Securities, the moneys available to the
Trust, the financial condition of the Trust and all other relevant matters
concerning the Trust.
ARTICLE VI
MISCELLANEOUS
6.1 BINDING EFFECT. Any corporation into which the
Administrator may be merged or converted or with which it may be consolidated,
or any corporation resulting from any merger, conversion or consolidation to
which the Administrator shall be a party, shall be the successor Administrator
hereunder and under the Trust Agreement without the execution or filing of any
paper, instrument or further act to be done on the part of the parties hereto,
provided that such corporation meets the requirements set forth in the Trust
Agreement and provided further that the Trustees have given their prior written
consent to the Administrator with respect to any such merger, conversion or
consolidation. This Agreement shall be binding on and inure to the benefit of
the parties hereto and their respective successors and permitted assigns.
6.2 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties with respect to the matters contained herein and
supersedes all prior agreements or understandings, whether oral or written.
This Agreement shall not be amended, changed, modified, or discharged, in whole
or in part, except by an instrument in writing signed by both parties hereto, or
their respective successors or permitted assigns.
6.3 NOTICES. Any notice, report or other communication required
or permitted to be given hereunder shall be in writing, and shall, unless some
other method of giving such notice, report or other communication is accepted by
the party to whom it is to be given or is required by the Trust Agreement or the
Investment Company Act, be given by being mailed by U.S. first class mail,
certified or registered, return receipt requested, postage prepaid, to the
following addresses of the parties hereto:
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The Trust: Dole Food Automatic Common
Exchange Security Trust
c/o _________________________
_____________________________
_____________________________
Telephone:
Telecopier:
The Administrator: The Bank of New York
101 Barclay Street
New York, New York 10286
Attn: [Theodore D. Parsons]
Telephone: (212) 815-3199
Telecopier: (212) 571-3050
Any party may at any time give written notice to the other party
that it wishes to change its address for the purposes of this Section 6.3.
6.4 APPLICABLE LAW. The provisions of this Agreement shall be
construed and interpreted in accordance with the laws of the State of New York
as at the time in effect except to the extent such law is preempted by federal
law.
6.5 NON-ASSIGNABILITY. This Agreement and the rights and
obligations of the parties hereunder may not be assigned or delegated by either
party without the prior written consent of the other party.
6.6 INDEMNIFICATION. The Trustees shall indemnify and hold the
Administrator harmless from and against any loss, damages, cost or expense
(including the costs of investigation, preparation for and defense of legal
and/or administrative proceedings related to a claim against it and reasonable
attorneys' fees and disbursements), liability or claim incurred by reason of any
inaccuracy in information furnished to the Administrator by the Trustees, or any
act or omission in the course of, connected with or arising out of any services
to be rendered hereunder, provided that the Administrator shall not be
indemnified and held harmless from and against any such loss, damages, cost,
expense, liability or claim incurred by reason of its willful misfeasance, bad
faith, or gross negligence in the performance of its duties, or its reckless
disregard of its duties and obligations hereunder.
6.7. PROVISIONS OF LAW TO CONTROL. This Agreement shall be
subject to the applicable provisions of the Investment Company Act and the rules
and regulations of the Commission thereunder. To the extent that any provisions
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herein contained conflict with any applicable provisions of the Investment
Company Act or such rules and regulations, the latter shall control.
6.8. COUNTERPARTS. This Agreement may be signed in counterparts
with all counterparts constituting one and the same instrument.
IN WITNESS WHEREOF the parties have hereunto executed this
Administration Agreement as of the day and year first above written.
TRUSTEES
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as Trustee
-----------------------------,
-----------------------------
as Trustee
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as Trustee
THE BANK OF NEW YORK
By
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Name:
Title:
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SCHEDULE I
[TO COME]
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SCHEDULE II
[TO COME]
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Draft of August 1, 1996
PAYING AGENT AGREEMENT
This PAYING AGENT AGREEMENT dated as of this ___ day of August 1996,
by and between The Bank of New York, a New York banking corporation (the "Paying
Agent"), and _____________, _______________ and ________________ (collectively,
the "Trustees"), not in their individual capacities but solely as Trustees of
Dole Food Automatic Common Exchange Security Trust (the "Trust"), a trust
organized under the laws of the State of New York under and by virtue of an
Amended and Restated Trust Agreement, dated as of August __, 1996 (the "Trust
Agreement").
W I T N E S S E T H
WHEREAS, the Trust is a non-diversified, closed-end management
investment company, as defined in the Investment Company Act of 1940 (the
"Investment Company Act"), formed to purchase and hold the U.S. treasury
securities (the "Treasury Securities"), to enter into and hold a forward
contract with an existing shareholder of Dole Food Company, Inc. (the
"Contract") and to issue Automatic Common Exchange Securities (the "Securities")
to the public in accordance with the terms and conditions of the Trust
Agreement;
WHEREAS, the Trustees desire to engage the services of the Paying
Agent to assume certain responsibilities and to perform certain duties as the
transfer agent, registrar and paying agent with respect to the Securities upon
the terms and conditions of this Agreement; and
WHEREAS, the Paying Agent is qualified and willing to assume such
responsibilities and to perform such duties, subject to the supervision of the
Trustees, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties agree as follows:
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ARTICLE I
DEFINITIONS
1.1 DEFINITIONS. Capitalized terms not otherwise defined herein
shall have the respective meanings specified in the Trust Agreement.
ARTICLE II
PAYING AGENT
2.1 APPOINTMENT OF PAYING AGENT AND ACCEPTANCE. The Trust
Agreement provides that The Bank of New York shall act as the initial Paying
Agent. The Bank of New York accepts such appointment and agrees to act in
accordance with its standard procedures and the provisions of the Trust
Agreement and the provisions set forth in this Article 2 as Paying Agent with
respect to the Securities. Without limiting the generality of the foregoing,
The Bank of New York, as Paying Agent, agrees that it shall establish and
maintain the Trust Account, subject to the provisions of Section 2.3 hereof.
2.2 CERTIFICATES AND NOTICES. The Trustees shall deliver to the
Paying Agent the certificates and notices required to be delivered to the Paying
Agent pursuant to the Trust Agreement, and the Paying Agent shall mail or
publish such certificates or notices as required by the Trust Agreement, but the
Paying Agent shall have no responsibility to confirm or verify the accuracy of
certificates or notices of the Trustees so delivered.
2.3 PAYMENTS AND INVESTMENTS. The Paying Agent shall make
payments out of the Trust Account as provided for in Section 3.2 of the Trust
Agreement. The Paying Agent shall effect the transactions set forth in Sections
2.3, 2.4, 2.5 and 8.3 of the Trust Agreement upon instructions to do so from the
Administrator (except that with respect to its obligations under Section 8.3 of
the Trust Agreement, the Paying Agent shall act without instructions from the
Administrator) and shall invest moneys on deposit in the Trust Account in
Temporary Investments in accordance with Section 3.5 of the Trust Agreement.
Except as otherwise specifically provided herein or in the Trust Agreement, the
Paying Agent shall not have the power to sell, transfer or otherwise dispose of
any Temporary Investment prior to the maturity thereof, or to acquire additional
Temporary Investments. The Paying Agent shall hold any Temporary Investment to
its maturity and shall apply the proceeds
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thereof paid upon maturity to the payment of the next succeeding Quarterly
Distribution. All such Temporary Investments shall be selected by the Trustees
from time to time or pursuant to standing instructions from the Trustees, and
the Paying Agent shall have no liability to the Trust or any Holder or any other
Person with respect to any such Temporary Investment.
2.4 INSTRUCTIONS FROM ADMINISTRATOR. The Paying Agent shall
receive and execute all instructions from the Administrator, except to the
extent they conflict with or are contrary to the terms of the Trust Agreement or
this Agreement.
ARTICLE III
TRANSFER AGENT AND REGISTRAR
3.1 ORIGINAL ISSUE OF CERTIFICATES. On the date Securities sold
pursuant to the Underwriting Agreement are originally issued, certificates for
the Securities shall be issued by the Trust, and, at the request of the
Trustees, registered in such names and such denominations as the underwriters
shall have previously requested of the Trustees, executed manually or in
facsimile by the Managing Trustee and countersigned by the Paying Agent. At no
time shall the aggregate number of Securities represented by such countersigned
certificates exceed the number of then outstanding Securities.
3.2 REGISTRY OF HOLDERS. The Paying Agent shall maintain a
registry of the Holders of the Securities.
3.3 REGISTRATION OF TRANSFER OF THE SECURITIES. The Securities
shall be registered for transfer or exchange, and new certificates shall be
issued, in the name of the designated transferee or transferees, upon surrender
of the old certificates in form deemed by the Paying Agent properly endorsed for
transfer with (a) all necessary endorsers' signatures guaranteed in such manner
and form as the Paying Agent may require by a guarantor reasonably believed by
the Paying Agent to be responsible, (b) such assurances as the Paying Agent
shall deem necessary or appropriate to evidence the genuineness and
effectiveness of each necessary endorsement and (c) satisfactory evidence of
compliance with all applicable laws relating to the collection of taxes or funds
necessary for the payment of such taxes.
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3.4 LOST CERTIFICATES. The Paying Agent shall issue and register
replacement certificates for certificates represented to have been lost, stolen
or destroyed, upon the fulfillment of such requirements as shall be deemed
appropriate by the Trustees and the Paying Agent, subject at all times to
provisions of law, the Trust Agreement and resolutions adopted by the Trustees
with respect to lost securities. The Paying Agent may issue new certificates in
exchange for and upon the cancellation of mutilated certificates. Any request
by the Trustees to the Paying Agent to issue a replacement or new certificate
pursuant to this Section 3.4 shall be deemed to be a representation and warranty
by the Trustees to the Paying Agent that such issuance will comply with such
provisions of law and the Trust Agreement and resolutions of the Trustees.
3.5 TRANSFER BOOKS. The Paying Agent shall maintain the transfer
books listing the Holders of the Securities. In case of any written request or
demand for the inspection of the transfer books of the Trust or any other books
in the possession of the Paying Agent, the Paying Agent will notify the Trustees
and secure instructions as to permitting or refusing such inspection. The
Paying Agent reserves the right, however, to exhibit the transfer books or other
books to any person in case it is advised by its counsel that its failure to do
so would be unlawful.
3.6 DISPOSITION OF CANCELLED CERTIFICATES; RECORDS. The Paying
Agent shall retain certificates which have been cancelled in transfer or in
exchange and accompanying documentation in accordance with applicable rules and
regulations of the Commission for six calendar years from the date of such
cancellation, and shall make such records available during this period at any
time, or from time to time, for reasonable periodic, special, or other
examinations by representatives of the Commission and the Board of Governors of
the Federal Reserve System. Thereafter such records shall not be destroyed by
the Paying Agent but will be safely stored for possible future reference. In
case of any request or demand for the inspection of the register of the Trust or
any other books in the possession of the Paying Agent, the Paying Agent will
notify the Trustees and seek to secure instructions as to permitting or refusing
such inspection. The Paying Agent reserves the right, however, to exhibit the
register or other records to any person in case it is advised by its counsel
that its failure to do so would (i) be unlawful, or (ii) expose it to liability,
unless the Trustees shall have offered indemnification satisfactory to the
Paying Agent.
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ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE TRUSTEES
The Trustees represent and warrant to the Paying Agent that:
(a) the Trust is a validly existing trust under the laws of the
State of New York and the Trustees have full power under the Trust
Agreement to execute and deliver this Agreement and to authorize, create
and issue the Securities;
(b) this Agreement has been duly and validly authorized, executed
and delivered by the Trustees and constitutes the valid and binding
agreement of the Trustees, enforceable against the Trustees in accordance
with its terms, subject as to such enforceability to bankruptcy,
insolvency, reorganization and other laws of general applicability
relating to or affecting creditors' rights and to general equitable
principles;
(c) the form of the certificate evidencing the Securities complies
with all applicable laws of the State of New York;
(d) the Securities have been duly and validly authorized, executed
and delivered by the Trustees and are validly issued;
(e) the offer and sale of the Securities has been registered under
the Securities Act of 1933 and the Trust has been registered under the
Investment Company Act and no further action by or before any governmental
body or authority of the United States or of any state thereof is required
in connection with the execution and delivery of this Agreement or the
issuance of the Securities;
(f) the execution and delivery of this Agreement and the issuance
and delivery of the Securities do not and will not conflict with, violate,
or result in a breach of, the terms, conditions or provisions of, or
constitute a default under, the Trust Agreement, any law or regulation,
any order or decree of any court or public authority having jurisdiction
over the Trust, or any mortgage, indenture, contract, agreement or
undertaking to which the Trustees are a party or by which any of them are
bound; and
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(g) no taxes are payable upon or in respect of the execution of
this Agreement or the issuance of the Securities.
ARTICLE V
DUTIES AND RIGHTS
5.1 DUTIES. (a) The Paying Agent is acting solely as agent for
the Trustees hereunder and owes no fiduciary duties to any other Person by
reason of this Agreement.
(b) In the absence of bad faith, gross negligence or willful
misfeasance on its part in the performance of its duties hereunder or its
reckless disregard of its duties and obligations hereunder, the Paying Agent
shall not be liable for any action taken, suffered, or omitted in the
performance of its duties under this Agreement. The Paying Agent shall under no
circumstances be liable for any indirect or consequential damages hereunder.
5.2 RIGHTS. (a) The Paying Agent may rely and shall be
protected in acting or refraining from acting upon any communication authorized
hereby and upon any written instruction, notice, request, direction, consent,
report, certificate, share certificate or other instrument, paper or document
reasonably believed by it to be genuine. The Paying Agent shall not be liable
for acting upon any telephone communication authorized hereby which the Paying
Agent believes in good faith to have been given by the Trustees.
(b) The Paying Agent may consult with legal counsel and the advice
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by it hereunder in good faith
and in reliance thereon.
(c) The Paying Agent shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder.
(d) The Paying Agent may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys appointed with
due care by it hereunder.
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5.3 DISCLAIMER. The Paying Agent makes no representation as to
(a) the first two recitals of this Agreement or (b) the validity or adequacy of
the Securities.
5.4 COMPENSATION, EXPENSES AND INDEMNIFICATION. (a) The Paying
Agent shall receive for all services rendered by it under this Agreement and,
upon the prior written approval of the Trustees, for all expenses, disbursements
and advances incurred or made by the Paying Agent in accordance with any
provision of this Agreement (including the reasonable compensation and the
expenses and disbursements of its agents and counsel), the compensation set
forth in Section 3.1 of the Administration Agreement.
(b) The Trustees shall indemnify the Paying Agent for and hold it
harmless against any loss, liability, claim or expense (including the costs of
investigation, preparation for and defense of legal and/or administrative
proceedings relating to a claim against it and reasonable attorneys' fees and
disbursements) arising out of or in connection with the performance of its
obligations under this Agreement, provided such loss, liability or expense is
not the result of gross negligence, willful misfeasance or bad faith on its part
in the performance of its duties hereunder or its reckless disregard of its
duties or obligations hereunder, including the costs and expenses of defending
itself against any claim or liability in connection with its exercise or
performance of any of its duties or obligations hereunder and thereunder. The
indemnification provided by this Section 5.4(b) shall survive the termination of
this Agreement.
ARTICLE VI
MISCELLANEOUS
6.1 TERM OF AGREEMENT. (a) The term of this Agreement is
unlimited unless terminated as provided in this Section 6.1 or unless the Trust
is terminated, in which case this Agreement shall terminate ten days after the
date of termination of the Trust. This Agreement may be terminated by either
party hereto without penalty upon 60 days' prior written notice to the other
party hereto; provided that neither party hereto may terminate this Agreement
pursuant to this Section 6.1(a) unless a successor Paying Agent shall have been
appointed and shall have accepted the duties of the Paying Agent. The
termination of the Trust Agreement, the Collateral Agreement, the Administration
Agreement or the Custodian Agreement or the resignation or removal of the
Custodian shall cause the termination of this Agreement
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simultaneously therewith. If, within 30 days after notice by the Paying Agent
of termination of this Agreement, no successor Paying Agent shall have been
selected and accepted the duties of the Paying Agent, the Paying Agent may apply
to a court of competent jurisdiction for the appointment of a successor Paying
Agent.
(b) Except as otherwise provided in this paragraph (b), the
respective rights and duties of the Trustees and the Paying Agent under this
Agreement shall cease upon termination of this Agreement. The Trustees'
representations, warranties, covenants and obligations to the Paying Agent under
Article IV and Section 5.4 hereof shall survive the termination hereof. Upon
termination of this Agreement, the Paying Agent shall, at the Trustees' request,
promptly deliver to the Trustees or to any successor Paying Agent as requested
by the Trustees (i) copies of all books and records maintained by it and (ii)
any funds deposited with the Paying Agent by the Trustees.
6.2 COMMUNICATIONS. Except for communications authorized to be
made by telephone pursuant to this Agreement, all notices, requests and other
communications to any party hereunder shall be in writing (including telecopy or
similar writing) and given to such person at its address or telecopy number set
forth below:
If to the Trust,
addressed: Dole Food Automatic Common
Exchange Security Trust
c/o ______________________
85 Broad Street
New York, New York 10004
Telephone: (212) 902-1000
Telecopier: (212) 902-3000
with a copy to the Administrator if the duties of the Administrator are being
performed by a Person other than the Person performing the obligations of the
Paying Agent.
If to the Paying Agent,
addressed: The Bank of New York
101 Barclay Street
New York, New York 10286
Attn: [Theodore D. Parsons]
Telephone: (212) 815-3199
Telecopier: (212) 571-3050
or such other address or telecopy number as such party may hereafter specify for
such purpose by notice to the other party. Each such notice, request or
communication shall be
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effective when delivered at the address specified herein. Communications shall
be given on behalf of the Trust by the Trustees (or by the Administrator,
provided that the Trustees shall not have delivered to the Paying Agent an
instrument in writing revoking the authorization of the Administrator to act for
it pursuant hereto) and on behalf of the Paying Agent by a Senior Vice President
or Vice President of the Paying Agent assigned to its Corporate Trust
Department.
6.3 ENTIRE AGREEMENT. This Agreement contains the entire
agreement between the parties relating to the subject matter hereof, and there
are no other representations, endorsements, promises, agreements or
understandings, oral, written or inferred, between the parties relating to the
subject matter hereof.
6.4 NO THIRD PARTY BENEFICIARIES. Nothing herein, express or
implied, shall give to any Person, other than the Trustees, the Paying Agent and
their respective successors and assigns, any benefit of any legal or equitable
right, remedy or claim hereunder.
6.5 AMENDMENT; WAIVER. (a) This Agreement shall not be deemed
or construed to be modified, amended, rescinded, cancelled or waived, in whole
or in part, except by a written instrument signed by a duly authorized
representative of the party to be charged. The Trustees shall notify the Paying
Agent of any change in the Trust Agreement prior to the effective date of any
such change.
(b) Failure of either party hereto to exercise any right or remedy
hereunder in the event of a breach hereof by the other party shall not
constitute a waiver of any such right or remedy with respect to any subsequent
breach.
6.6 SUCCESSORS AND ASSIGNS. Any corporation into which the
Paying Agent may be merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or consolidation to which
the Paying Agent shall be a party, shall be the successor Paying Agent hereunder
and under the Trust Agreement without the execution or filing of any paper,
instrument or further act to be done on the part of the parties hereto, provided
that such corporation meets the requirements set forth in the Trust Agreement,
provided further that the Trustees have given their prior written consent to the
Paying Agent with respect to any such merger, conversion or consolidation. This
Agreement shall be binding upon, inure to the benefit of, and be enforceable by,
the respective successors of each
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of the Trust and the Paying Agent. This Agreement shall not be assignable by
either the Trustees or the Paying Agent, without the prior written consent of
the other party.
6.7 SEVERABILITY. If any clause, provision or section hereof
shall be ruled invalid or unenforceable by any court of competent jurisdiction,
the invalidity or unenforceability of such clause, provision or section shall
not affect any of the remaining clauses, provisions or sections hereof.
6.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed in
several counterparts, each of which shall be an original and all of which shall
constitute but one and the same instrument.
6.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York, without giving
effect to principles of conflicts of law.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered as of the date first above written.
TRUSTEES
______________________________
_____________________________,
as Trustee
______________________________
_____________________________,
as Trustee
______________________________
_____________________________,
as Trustee
THE BANK OF NEW YORK
By: __________________________
Name:
Title:
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<PAGE>
S&C Draft of August 1, 1996
PURCHASE AGREEMENT
THIS AGREEMENT is made as of this ___ day of August 1996 between David
H. Murdock, as trustee of the David H. Murdock Living Trust dated May 28, 1986,
as amended ("Seller") and Dole Food Automatic Common Exchange Security Trust
(such trust and the trustees thereof acting in their capacity as such being
referred to herein as "Purchaser").
WHEREAS, Seller owns shares of common stock, no par value (the "Common
Stock"), of Dole Food Company, Inc., a Hawaii corporation (the "Company");
WHEREAS, Purchaser has filed with the Securities and Exchange
commission a registration statement contemplating the offering of up to _______
Automatic Common Exchange Securities (the "Securities"), the terms of which
contemplate delivery by Purchaser to the holders thereof of a number of shares
of Common Stock (or, at the option of Seller, cash in lieu thereof) on
___________, _____ (the "Exchange Date");
WHEREAS, Seller has agreed, pursuant to the Collateral Agreement (the
"Collateral Agreement") dated as of August __, 1996, among Purchaser, Seller and
The Bank of New York, as collateral agent (the "Collateral Agent"), to grant
Purchaser a security interest in Common Stock and in certain other circumstances
certain other collateral to secure the obligations of Seller hereunder;
WHEREAS, Purchaser has agreed, pursuant to an underwriting agreement,
dated August __, 1996 (the "Underwriting Agreement"), among Purchaser, Seller,
the Company and Goldman Sachs & Co. as representatives of the several
underwriters named therein (the "Underwriters"), to issue and sell to the
Underwriters an aggregate of ________ Securities (the "Firm Securities") and, at
the Underwriters' option, up to _________ additional Securities (the "Optional
Securities") to cover overallotments;
NOW, THEREFORE, in consideration of their mutual covenants herein
contained, the parties hereto, intending to be legally bound, hereby mutually
covenant and agree as follows:
<PAGE>
DEFINITIONS
As used herein, the following words and phrases shall have the
following meanings:
"Acceleration Amount" has the meaning provided in Article VII.
"Acceleration Amount Notice" has the meaning provided in Article VII.
"Acceleration Value" has the meaning provided in Article VII.
"Additional Purchase Price" has the meaning provided in Section
1.2(b).
"Additional Share Base Amount" means a number equal to the number of
Optional Securities that the Underwriters elect to purchase under the
Underwriting Agreement.
"Additional Shares" has the meaning provided in Section 1.1(b).
"Additional STRIPS" means the U.S. Treasury obligations purchased by
Purchaser for settlement at the Second Time of Delivery.
"Administrator" means The Bank of New York, administrator for
Purchaser under the Administration Agreement dated as of August__, 1996, or any
successor thereto.
"Aggregate Acceleration Value" has the meaning provided in
Article VII.
"Appreciation Threshold Price" has the meaning provided in
Section 1.1(c).
"Business Day" means any day on which commercial banks are open for
business in New York City and the New York Stock Exchange is not closed.
"Calculation Period" means any period of Trading Days for which an
average security price must be determined pursuant to this Agreement.
"Cash Settlement Alternative" has the meaning provided in
Section 1.2(d).
"Closing Price" of the Common Stock on any date of determination means
the daily closing sale price (or, if no closing sale price is reported, the last
reported sale price) of the Common Stock as reported on the NYSE Consolidated
Tape on such date of determination or, if the Common Stock is not listed for
trading on the NYSE on any such date, as reported in the composite transactions
for the principal United States securities exchange on which the Common Stock is
so listed, or if the Common Stock is not so listed
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on a United States national or regional securities exchange, as reported by The
Nasdaq National Market or, if the Common Stock is not so reported, the last
quoted bid price for the Common Stock in the over-the-counter market as reported
by the National Quotation Bureau or similar organization, provided that if any
event that results in an adjustment to the number of shares of Common Stock
deliverable hereunder pursuant to Section 6.1(e), occurs prior to the Exchange
Date, the Closing Price as determined pursuant to the foregoing will be
appropriately adjusted to reflect the occurrence of such event.
"Contract Shares" has the meaning provided in Section 1.1(b).
"Current Market Price" per share of Common Stock means the average
Closing Price of a share of Common Stock on the 20 Trading Days immediately
prior to but not including the Exchange Date.
"Custodian" means The Bank of New York, custodian for Purchaser under
the Custodian Agreement dated as of August __, 1996, or any successor thereto.
"Dilution Adjustment" means any fraction or number by which the
Exchange Rate shall be multiplied pursuant to Section 6.1(a), (b), (c) or (d).
"Event of Default" has the meaning provided in Article VII.
"Excess Purchase Payment" has the meaning provided in Section 6.1(d).
"Exchange Rate" has the meaning provided in Section 1.1(c).
"Firm Purchase Price" has the meaning provided in Section 1.2(a).
"Firm Share Base Amount" has the meaning provided in Section 1.1(a).
"Firm Shares" has the meaning provided in Section 1.1(a).
"First Time of Delivery" has the meaning provided in Section 1.3(a).
"Independent Dealers" has the meaning provided in Article VII.
"Initial Price" has the meaning provided in Section (1)(c).
"Marketable Securities" has the meaning provided in Section 6.2.
"Permitted Dividend" has the meaning provided in Section 6.1(d).
"Reorganization Event" has the meaning provided in Section 6.2.
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"Second Time of Delivery" has the meaning provided in Section 1.1(b).
"Then-Current Market Price" of the Common Stock, for the purpose of
applying any adjustment pursuant to Section 6.1, means the average Closing Price
per share of the Common Stock for the Calculation Period of 5 Trading Days
immediately prior to the time such adjustment is effected (or, in the case of an
adjustment effected at the opening of business on the Business Day next
following a record date as described in Section 6.1(f)(i), immediately prior to
the earlier of the time such adjustment is effected and the related ex-date);
provided that if no Closing Price for the Common Stock is determined for one or
more (but not all) of such Trading Days, such Trading Day shall be disregarded
in the calculation of the Then-Current Market Price (but no additional trading
days shall be added to the Calculation Period). If no Closing Price for the
Common Stock may be determined for any of such Trading Days, the Then-Current
Market Price shall be the Closing Price for the Common Stock for the most recent
Trading Day prior to such 5 Trading Days for which a Closing Price for the
Common Stock may be determined pursuant to clause (i), (ii) or (iv) of the
"Closing Price " definition. The "ex-date" with respect to any dividend,
distribution or issuance shall mean the first date on which the shares of Common
Stock trade regular way on their principal market without the right to receive
such dividend, distribution or issuance.
"Trading Day" means a day on which the Common Stock (A) is not
suspended from trading on any national or regional securities exchange or
association or over-the-counter market at the close of business and (B) has
traded at least once on the national or regional securities exchange or
association or over-the-counter market that is the primary market for the
trading of such security.
"Transaction Value" has the meaning provided in Section 6.2.
"Trust Agreement" means the Amended and Restated Trust Agreement
constituting Dole Food Automatic Common Exchange Security Trust dated as of
August __, 1996.
I.
SALE AND PURCHASE
1.1 Sale and Purchase. (a) Firm Shares. Upon the terms and subject
to the conditions of this Agreement, Seller agrees to sell to Purchaser, and
Purchaser agrees to purchase and acquire from Seller, the number of shares of
Common Stock (the "Firm Shares") equal to the product of ______ (the "Firm Share
Base Amount") and the Exchange Rate.
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<PAGE>
(b) Additional Shares. Upon the terms and subject to the conditions
of this Agreement, Seller agrees to sell to Purchaser, and Purchaser shall have
a right to purchase, a number of additional shares of Common Stock (the
"Additional Shares") equal to the product of the Exchange Rate and the
Additional Share Base Amount. If the Underwriters exercise their option to
purchase Optional Securities pursuant to the Underwriting Agreement, Purchaser
shall notify Seller in writing that Purchaser will purchase the Additional
Shares, which notice shall specify the Additional Share Base Amount and the date
on which Purchaser shall deliver the purchase price for the Additional Shares,
which shall be the Second Time of Delivery specified pursuant to Section 2 of
the Underwriting Agreement (the "Second Time of Delivery"). The Firm Shares and
the Additional Shares (if any) are collectively referred to herein as the
"Contract Shares".
(c) Exchange Rate. The "Exchange Rate" shall be determined in
accordance with the following formula, subject to adjustment as a result of
certain events relating to the Common Stock as provided in Article VI: (i) if
the Current Market Price is less than $_______(the "Appreciation Threshold
Price") but equal to or greater than $_______ (the "Initial Price"), a fraction
(rounded upward or downward to the nearest 1/10,000th or, if there is not a
nearest 1/10,000th, to the next lower 1/10,000th) equal to the Initial Price
divided by the Current Market Price; (ii) if the Current Market Price is equal
to or greater than the Threshold Appreciation Price, 0.x and (iii) if the
Current Market Price is less than the Initial Price, 1.
1.2 Purchase Price. (a) Firm Purchase Price. The purchase price for
the Firm Shares (the "Firm Purchase Price") shall be $______ in cash.
(b) Additional Purchase Price. The purchase price for the Additional
Shares (the "Additional Purchase Price") shall be the difference between:
(i) the aggregate proceeds to Purchaser from the sale of the Optional
Securities; and (ii) the aggregate cost to Purchaser, as notified by Purchaser
to Seller at the Second Time of Delivery, of the Additional STRIPS.
1.3 Payment for and Delivery of Contract Shares. (a) First Time of
Delivery. Upon the terms and subject to the conditions of this Agreement,
Purchaser shall deliver to Seller the Firm Purchase Price on August __, 1996
(the "First Time of Delivery") at the offices of Sullivan & Cromwell, 125 Broad
Street, New York, New York 10004, or at such other place as shall be agreed upon
by Purchaser and Seller, paid by wire transfer to an account designated by
Seller, in Federal (immediately available) funds.
(b) Second Time of Delivery. Upon the terms and subject to the
conditions of this Agreement, Purchaser shall deliver to Seller the Additional
Purchase Price at the Second Time of Delivery at the offices of Sullivan &
Cromwell, 125 Broad Street, New York, New York 10004, or at such other place as
shall be agreed upon by Purchaser
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<PAGE>
and Seller, paid by wire transfer to an account designated by Seller, in Federal
(immediately available) funds.
(c) Delivery of Contract Shares. On _________________ (the "Exchange
Date"), Seller agrees to deliver the Contract Shares to Purchaser. Delivery
shall be effected by delivery by the Collateral Agent to the Custodian, for the
account of Purchaser, of shares of Common Stock then held by the Collateral
Agent as collateral under the Collateral Agreement, in an amount equal to the
number of Contract Shares, rounded down to the nearest whole number. Instead of
any fractional shares of Common Stock that would otherwise be deliverable to
Purchaser at the Exchange Date, Seller agrees to make a cash payment in respect
of such fractional shares of Common Stock in an amount equal to the value
thereof at the Current Market Price. Notwithstanding the foregoing, if a
Reorganization Event shall have occurred prior to the Exchange Date then, in
lieu of the foregoing, delivery shall be effected as follows: (i) in the case of
any cash required to be delivered on the Exchange Date as provided in
Section 6.2, by wire transfer of immediately available funds to an account
designated by Purchaser; or (ii) in the case of any Marketable Securities
elected by Seller to be delivered in lieu of cash as provided in Section 6.2, at
Seller's election, by instruction to the Collateral Agent to deliver to the
Custodian, for the account of Purchaser, a specified number of Marketable
Securities then held as collateral under the Collateral Agreement, as provided
in Section 6(g) of the Collateral Agreement.
(d) Cash Settlement Alternative. At its option, Seller may deliver
to Purchaser on the Exchange Date, in lieu of the Contract Shares, an amount in
cash equal to the Current Market Price of the Contract Shares (the "Cash
Settlement Alternative"), paid by wire transfer to an account designated by
Custodian, in Federal (immediately available) funds. Seller may elect the Cash
Settlement Alternative in respect of all, but not less than all, Contract Shares
by notice to Purchaser, the Collateral Agent and the Custodian not less than ten
days prior to the Exchange Date.
II.
REPRESENTATIONS AND WARRANTIES OF SELLER
Seller represents and warrants to Purchaser that each representation
and warranty made by Seller pursuant to Section 1(b) of the Underwriting
Agreement is true and correct on the date hereof.
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III.
REPRESENTATIONS AND WARRANTIES OF PURCHASER
Purchaser represents and warrants to Seller that each representation
and warranty made by Purchaser pursuant to Section 1(a) of the Underwriting
Agreement is true and correct on the date hereof.
IV.
CONDITIONS TO PURCHASER'S OBLIGATIONS
(a) The obligation of Purchaser to deliver the Firm Purchase Price at
the First Time of Delivery is subject to the condition that the purchase by the
Underwriters of the Firm Securities pursuant to the Underwriting Agreement shall
have been consummated as contemplated under the Underwriting Agreement.
(b) The obligation of Purchaser to deliver the Additional Purchase
Price at the Second Time of Delivery is subject to the condition that the
purchase by the Underwriters of the Optional Securities shall have been
consummated as contemplated under the Underwriting Agreement.
V.
COVENANTS
5.1 Taxes. Seller shall pay any and all documentary, stamp, transfer
or similar taxes and charges that may be payable in respect of the entry into
this Agreement and the transfer and delivery of the Contract Shares pursuant
hereto.
5.2 Forward Contract. Seller hereby agrees that: (i) he will not
treat this Agreement, any portion of this Agreement, or any obligation hereunder
as giving rise to any interest income or other inclusions of ordinary income;
(ii) he will not treat the delivery of any portion of the Contract Shares, cash
or Marketable Securities to be delivered pursuant to this Agreement as the
payment of interest or ordinary income; (iii) he will treat this Agreement in
its entirety as a forward contract for the delivery of such Contract Shares,
cash or Marketable Securities; and (iv) he will not take any action (including
filing any tax return or form or taking any position in any tax proceeding) that
is inconsistent with the obligations contained in clause (i) through (iii).
Notwithstanding the preceding sentence, Seller may take any action or position
required by law, provided that Seller delivers to Purchaser an unqualified
opinion of counsel, nationally recognized as expert in Federal tax
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<PAGE>
matters, to the effect that such action or position is required by a statutory
change, Treasury regulation, or applicable court decision published after the
date of this Agreement.
5.3 Limitations on Trading During Certain Days. Seller hereby agrees
that he will not buy shares of Common Stock for his own account during the 60
days prior to the Exchange Date.
5.4 Notices. Seller will cause to be delivered to Purchaser:
(a) Immediately upon the occurrence of any Event of Default hereunder
or under the Collateral Agreement, or upon Seller's obtaining knowledge that any
of the conditions or events described in paragraph (a) or (b) of Article VII
shall have occurred with respect to the Company, notice of such occurrence; and
(b) In case at any time prior to the Exchange Date Seller receives
notice, or otherwise obtains knowledge, that any event requiring that an
adjustment be effected pursuant to Article VI hereof shall have occurred or be
pending, then Seller shall promptly cause to be delivered to Purchaser a notice
identifying such event and stating, if known to Seller, the date on which such
event is to occur and, if applicable, the record date relating to such event.
Seller shall cause further notices to be delivered to Purchaser if Seller shall
subsequently receive notice, or otherwise obtain knowledge, of any further or
revised information regarding the terms or timing of such event or any record
date relating thereto.
5.5 Further Assurances. From time to time on and after the date
hereof through the Exchange Date, each of the parties hereto shall use its or
his reasonable best efforts to take, or cause to be taken, all action and to do,
or cause to be done, all things necessary, proper and advisable to consummate
and make effective as promptly as practicable the transactions contemplated by
this Agreement in accordance with the terms and conditions hereof, including
(i) using reasonable best efforts to remove any legal impediment to the
consummation of such transactions and (ii) the execution and delivery of all
such deeds, agreements, assignments and further instruments of transfer and
conveyance necessary, proper or advisable to consummate and make effective the
transactions contemplated by the Agreement in accordance with the terms and
conditions hereof.
VI.
ADJUSTMENT OF EXCHANGE RATE, APPRECIATION THRESHOLD PRICE,
INITIAL PRICE AND CLOSING PRICE
6.1 Dilution Adjustments. The Exchange Rate, Appreciation Threshold
Price and Initial Price shall be subject to adjustment from time to time as
follows:
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(a) Stock Dividends, Splits, Reclassifications, Etc. If the Company
shall, after the date hereof,
(i) pay a stock dividend or make a distribution with respect to
Common Stock in shares of such stock;
(ii) subdivide or split the outstanding shares of Common Stock into a
greater number of shares of Common Stock;
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares; or
(iv) issue by reclassification of shares of its Common Stock any
shares of other common stock of the Company;
then, in each such case, the Exchange Rate shall be multiplied by a Dilution
Adjustment equal to the number of shares of Common Stock (or in the case of a
reclassification referred to in clause (iv) above, the number of shares of other
common stock of the Company issued pursuant thereto), or the fraction thereof,
that a holder who held one share of Common Stock immediately prior to such event
would be entitled solely by reason of such event to hold immediately after such
event. The Appreciation Threshold Price and Initial Price shall also be
adjusted in the manner described in paragraph (e).
(b) Right or Warrant Issuances. If the Company shall, after the date
hereof, issue, or declare a record date in respect of an issuance of, rights or
warrants to all holders of Common Stock entitling them to subscribe for or
purchase shares of Common Stock at a price per share less than the Then-Current
Market Price of the Common Stock (other than rights to purchase Common Stock
pursuant to a plan for the reinvestment of dividends or interest), then, in each
such case, the Exchange Rate shall be multiplied by a Dilution Adjustment equal
to a fraction of which the numerator shall be the number of shares of Common
Stock outstanding immediately prior to the time the adjustment is effected by
reason of the issuance of such rights or warrants, plus the number of additional
shares of Common Stock offered for subscription or purchase pursuant to such
rights or warrants, and of which the denominator shall be the number of shares
of Common Stock outstanding immediately prior to the time the adjustment is
effected, plus the number of additional shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so
offered for subscription or purchase pursuant to such rights or warrants would
purchase at the Then-Current Market Price of the Common Stock, which shall be
determined by multiplying the total number of shares so offered for subscription
or purchase by the exercise price of such rights or warrants and dividing the
product so obtained by such Then-Current Market Price. To the extent that,
after the expiration of such rights or warrants, the shares of Common Stock
offered thereby shall not have been delivered, the Exchange Rate shall be
further adjusted to equal the Exchange Rate which
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would have been in effect had such adjustment for the issuance of such rights or
warrants been made upon the basis of delivery of only the number of shares of
Common Stock actually delivered. The Appreciation Threshold Price and Initial
Price shall also be adjusted in the manner described in paragraph (e).
(c) Distributions of Other Assets. If the Company shall, after the
date hereof, declare or pay a dividend or make a distribution to all holders of
Common Stock, in either case, of evidences of its indebtedness or other
non-cash assets (excluding any dividends or distributions referred to in
paragraph (a) above) or shall issue to all holders of Common Stock rights or
warrants to subscribe for or purchase any of its securities (other than rights
or warrants referred to in paragraph (b) above), then, in each such case, the
Exchange Rate shall be multiplied by a Dilution Adjustment equal to a fraction,
of which the numerator shall be the Then-Current Market Price per share of the
Common Stock, and of which the denominator shall be such Then-Current Market
Price per share less the fair market value (as determined by a nationally
recognized independent investment banking firm retained for this purpose by the
Administrator) as of the time the adjustment is effected of the portion of the
assets or evidences of Indebtedness so distributed or of such subscription
rights or warrants applicable to one share of Common Stock. The Appreciation
Threshold Price and Initial Price shall also be adjusted in the manner described
in subparagraph (e).
(d) Cash Dividends; Excess Purchase Payments. If, after the date
hereof, the Company declares a record date in respect of a distribution of cash
(other than any Permitted Dividend, any cash distributed in consideration of
fractional shares of Common Stock and any cash distributed in a Reorganization
Event), by dividend or otherwise, to all holders of Common Stock, or makes an
Excess Purchase Payment, then the Exchange Rate will be multiplied by a Dilution
Adjustment equal to a fraction, of which the numerator shall be the Then-Current
Market Price of the Common Stock on such record date, and of which the
denominator shall be such Then-Current Market Price less the amount of such
distribution applicable to one share of Common Stock which would not be a
Permitted Dividend (or in the case of an Excess Purchase Payment, less the
aggregate amount of such Excess Purchase Payment for which adjustment is being
made at such time divided by the number of shares of Common Stock outstanding on
such record date). For purposes of these adjustments, (A) "Permitted Dividend"
means any quarterly cash dividend in respect of the Common Stock to the extent
that the per share amount of such dividend does not exceed ______ and
(B) "Excess Purchase Payment" means the excess, if any, of (x) the cash and the
value (as determined by a nationally recognized independent investment banking
firm retained for this purpose by the Administrator, whose determination shall
be final) of all other consideration paid by the Company with respect to one
share of Common Stock acquired in a tender offer or exchange offer by the
Company, over (y) the Then-Current Market Price of the Common Stock. The
Appreciation Threshold Price and Initial Price shall also be adjusted in the
manner described in subparagraph (e).
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(e) Corresponding Adjustments to Initial Price, Appreciation
Threshold Price and Closing Price; Change in Principal Market. (i) If any
adjustment is made to the Exchange Ratio pursuant to paragraph (a), (b), (c) or
(d) of this Section 6.1, an adjustment shall also be made to the Appreciation
Threshold Price and the Initial Price. The required adjustment shall be made by
dividing each of the Appreciation Threshold Price and the Initial Price by the
relevant Dilution Adjustment.
(ii) If, during any Calculation Period used in calculating the Current
Market Price, the Then-Current Market Price or the Transaction Value, there
shall occur any event requiring an adjustment to be effected pursuant to this
Section 6.1, then the Closing Price for each Trading Day in the Calculation
Period occurring prior to the day on which such adjustment is effected shall be
adjusted by being divided by the relevant Dilution Adjustment.
(f) Timing of Dilution Adjustments. Each Dilution Adjustment shall
be effected:
(i) in the case of any dividend, distribution or issuance, at the
opening of business on the Business Day next following the record date for
determination of holders of Common Stock entitled to receive such dividend,
distribution or issuance or, if the announcement of any such dividend,
distribution or issuance is after such record date, at the time such
dividend, distribution or issuance shall be announced by the Company;
(ii) in the case of any subdivision, split, combination or
reclassification, on the effective date of such transaction;
(iii) in the case of any Excess Purchase Payment for which the
Company shall announce, at or prior to the time it commences the relevant
share repurchase, the repurchase price per share for shares proposed to be
repurchased, on the date of such announcement; and
(iv) in the case of any other Excess Purchase Payment, on the date
that the holders of the repurchased shares become entitled to payment in
respect thereof.
(g) General; Failure of Dilution Event to Occur. All Dilution
Adjustments shall be rounded upward or downward to the nearest 1/10,000th (or if
there is not a nearest 1/10,000th to the next lower 1/10,000th). No adjustment
in the Exchange Rate shall be required unless such adjustment would require an
increase or decrease of at least one percent therein; provided, however, that
any adjustments which by reason of this sentence are not required to be made
shall be carried forward and taken into account in any subsequent adjustment.
If any announcement or declaration of a record date in respect of a dividend,
distribution, issuance or repurchase requiring an adjustment pursuant to this
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Section 6.1 shall subsequently be cancelled by the Company, or such dividend,
distribution, issuance or repurchase shall fail to receive requisite approvals
or shall fail to occur for any other reason, then, upon such cancellation,
failure of approval or failure to occur, the Exchange Rate shall be further
adjusted to the Exchange Rate which would then have been in effect had
adjustment for such event not been made. If a Reorganization Event shall occur
after the occurrence of one or more events requiring an adjustment pursuant to
this Section 6.1, the Dilution Adjustments previously applied to the Exchange
Rate in respect of such events shall not be rescinded but shall be applied to
the new Exchange Rate provided for under Section 6.2.
6.2 Adjustment for Consolidation, Merger or Other Reorganization
Event. In the event of (i) any consolidation or merger of the Company, or any
surviving entity or subsequent surviving entity of the Company (a "Company
Successor"), with or into another entity (other than a merger or consolidation
in which the Company is the continuing corporation and in which the Common Stock
outstanding immediately prior to the merger or consolidation is not exchanged
for cash, securities or other property of the Company or another corporation),
(ii) any sale, transfer, lease or conveyance to another corporation of the
property of the Company or any Company Successor as an entirety or substantially
as an entirety, (iii) any statutory exchange of securities of the Company or any
Company Successor with another corporation (other than in connection with a
merger or acquisition) or (iv) any liquidation, dissolution or winding up of the
Company or any Company Successor (any such event described in clause (i), (ii),
(iii) or (iv), a "Reorganization Event"), the Exchange Rate shall be adjusted so
that on the Exchange Date Purchaser shall receive, in lieu of the Contract
Shares, cash in an amount equal to the product of (x) the Firm Share Base Amount
plus the Additional Share Base Amount (if any) and (y)(i) if the Transaction
Value is less than the Appreciation Threshold Price but equal to or greater than
the Initial Price, the Initial Price, (ii) if the Transaction Value is equal to
or greater than the Appreciation Threshold Price, 0.x multiplied by the
Transaction Value, and (iii) if the Transaction Value is less than the Initial
Price, the Transaction Value. Notwithstanding the foregoing, if any Marketable
Securities are received by holders of Common Stock in such Reorganization Event,
Seller may, at its option, in lieu of delivering cash as described above,
deliver an equivalent amount (based on the value determined in accordance with
clause (z) of the following paragraph) of Marketable Securities, but not
exceeding, as a percentage of the total consideration required to be delivered,
the percentage of the total Transaction Value attributable to such Marketable
Securities.
"Transaction Value" means the sum of: (x) for any cash received in any
such Reorganization Event, the amount of cash received per share of Common
Stock; (y) for any property other than cash or Marketable Securities received in
any such Reorganization Event, an amount equal to the market value on the date
the Reorganization Event is consummated of such property received per share of
Common Stock, as determined by a nationally recognized independent investment
banking firm retained for this purpose by the Administrator; and (z) for any
Marketable Securities received in any such Reorganization
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<PAGE>
Event, an amount equal to the average Closing Price per share of such Marketable
Securities for the Calculation Period of 20 Trading Days immediately prior to
the Exchange Date multiplied by the number of such Marketable Securities
received for each share of Common Stock; provided that if no Closing Price for
such Marketable Securities may be determined for one or more (but not all) of
such Trading Days such Trading Day shall be disregarded in the calculation of
such average Closing Price (but no additional trading days shall be added to the
Calculation Period). If no Closing Price for the Marketable Securities may be
determined for all such Trading Days, the calculation in the preceding clause
(z) shall be based on the most recently available Closing Price for the
Marketable Securities prior to such 20 Trading Days.
"Marketable Securities" means any common equity securities listed on a
U.S. national securities exchange or reported by The Nasdaq National Market.
The number of shares of any Marketable Securities included in the calculation of
Transaction Value pursuant to the preceding clause (z) shall be subject to
adjustment if any event that would, had it occurred with respect to the Common
Stock or the Company, have required an adjustment pursuant to Section 6.1, shall
occur with respect to such Marketable Securities or the issuer thereof
subsequent to the date the Reorganization Event is consummated. Adjustment for
such subsequent events shall be as nearly equivalent as practicable to the
adjustments provided for in Section 6.1.
VII.
ACCELERATION
If one or more of the following events (each an "Event of Default")
shall occur:
(a) Seller, in his individual capacity or as trustee of the David H.
Murdock Living Trust dated May 28, 1986, shall commence a voluntary case or
other proceeding seeking a liquidation, reorganization or other relief with
respect to himself or his debts under any 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 him 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, or shall take any action to authorize
any of the foregoing;
(b) an involuntary case or other proceeding shall be commenced
against the Seller, in his individual capacity or as trustee of the David H.
Murdock Living Trust dated May 28, 1986, seeking liquidation, reorganization or
other relief with respect to him or his debts under any bankruptcy, insolvency
or other similar law now or hereafter in
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<PAGE>
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of him 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 an order for relief shall be entered against the
Seller under the federal bankruptcy laws as now or hereafter in effect; or
(c) a Collateral Event of Default within the meaning of the
Collateral Agreement;
then, upon the occurrence of any such event, an Acceleration Date shall occur,
and Seller shall become obligated to deliver, immediately upon receipt of the
Acceleration Amount Notice (as defined below), the Acceleration Amount of Common
Stock. The "Acceleration Amount" means the quotient obtained by dividing:
(i) the Aggregate Acceleration Value, as defined below, by (ii) the Current
Market Price on the Acceleration Date. If a Reorganization Event shall have
occurred on or before the Acceleration Date, then in lieu of the Acceleration
Amount of Common Stock, Seller shall deliver cash, Marketable Securities or a
combination thereof having an aggregate value, based on the Closing Price per
share of the Marketable Securities on the Acceleration Date, equal to the
Aggregate Acceleration Value; provided that the percentage of such aggregate
value that may be delivered in the form of Marketable Securities shall not
exceed the percentage of the Transaction Value that would be attributable to
Marketable Securities if the Exchange Date were the Acceleration Date.
The "Aggregate Acceleration Value" means the product obtained by
multiplying: (i) the quotient obtained by dividing (A) the Acceleration Value by
(B) 1,000 by (ii) the sum of the Firm Share Base Amount and the Additional Share
Base Amount (if any); except that, if no quotations for the determination of the
Acceleration Value are obtained as described below, the Aggregate Acceleration
Value shall be (A) the Current Market Price on the Acceleration Date times the
number of shares of Common Stock that would be required to be delivered by
Seller on such date under this Agreement if the Exchange Date were the
Acceleration Date or (B) after a Reorganization Event, the value of the
alternative consideration that would be required to be delivered by Seller on
such date under this Agreement if the Exchange Date were the Acceleration Date.
The "Acceleration Value" means an amount determined on the basis of
quotations from Independent Dealers, determined as follows. Each quotation will
be for the amount that would be paid to the relevant Independent Dealer in
consideration of an agreement between Purchaser and such Independent Dealer that
would have the effect of preserving Purchaser's right to receive the payments
and deliveries that Purchaser would, but for the occurrence of the Acceleration
Date, have been entitled to receive after the Acceleration Date under Article I
hereof (taking into account any adjustments to the Exchange Rate that may have
been effected on or prior to the Acceleration Date), provided that, for purposes
of determining the payments and deliveries to which Purchaser is entitled
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<PAGE>
under Article I hereof, the Additional Share Base Amount shall be redefined to
be zero and the Firm Share Base Amount shall be redefined to be 1,000. On or as
soon as reasonably practicable following the Acceleration Date, Purchaser will
request each Independent Dealer to provide its quotation as soon as reasonably
practicable, but in any event within two Business Days. Purchaser shall compute
the Acceleration Value upon receipt of each Independent Dealer's quotation,
provided that if, at the close of business on the fourth Business Day following
the Acceleration Date, Purchaser shall have received quotations from fewer than
four of the Independent Dealers, Purchaser shall compute the Acceleration Value
using the quotations, if any, it shall have received at or prior to such time.
If four quotations are provided, the Acceleration Value will be the arithmetic
mean of the two quotations remaining after disregarding the highest and lowest
quotations. (For this purpose, if more than one quotation has the same highest
or lowest value, then one of such quotations shall be disregarded.) If two or
three quotations are provided, the Acceleration Value will be the arithmetic
mean of such quotations. If one quotation is provided, the Acceleration Value
will be equal to such quotation. If no quotations are provided, the
Acceleration Value will not be determined and the Aggregate Acceleration Value
will be determined as provided above.
"Independent Dealers" means four nationally recognized independent
investment banking firms selected by the Administrator.
As promptly as reasonably practicable after receipt of the quotations
on which the Acceleration Value is based (or, as the case may be, after failure
to receive any such quotations within the time period prescribed above)
Purchaser shall deliver to Seller a notice (the "Acceleration Amount Notice")
specifying the Acceleration Amount of Common Stock (or, after a Reorganization
Event, the amount of cash and marketable Securities) required to be delivered by
Seller. Purchaser and Seller agree that the Aggregate Acceleration Value is a
reasonable pre-estimate of loss and not a penalty. Such amount is payable for
the loss of bargain and Purchaser will not be entitled to recover additional
damage as a consequence of loss resulting from an Event of Default.
VIII.
MISCELLANEOUS
8.1 Adjustments of Exchange Rate; Selection of Independent Investment
Banking Firm. Purchaser shall be responsible for the effectuation and
calculation of any adjustment pursuant to Article VI hereof and shall furnish
Seller notice of any such adjustment and shall provide Seller reasonable
opportunity to review the calculations pertaining to any such adjustment. If,
pursuant to the terms and conditions hereof, the Administrator shall be required
to retain a nationally recognized independent
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<PAGE>
investment banking firm for any purpose provided herein, such nationally
recognized independent investment banking firm shall be selected and retained by
the Administrator only after consultation with Seller.
8.2 Notices. All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if mailed or transmitted
by any standard forms of telecommunication. Notices to Purchaser shall be
directed to it in care of the Administrator for Purchaser, The Bank of New York,
at 101 Barclay Street, New York, New York 10286, Telecopy No: (212) 815-5999,
attention ________________, with a copy to _______________; notices to Seller
shall be directed to him at ____________________.
8.3 Governing Law; Severability. This Agreement shall be governed by
and construed in accordance with the laws of the State of New York. To the
extent permitted by law, the unenforceability or invalidity of any provision or
provisions of this Agreement shall not render any other provision or provisions
herein contained unenforceable or invalid.
8.4 Entire Agreement. Except as expressly set forth herein, this
Agreement constitutes the entire agreement among the parties with respect to the
subject matter hereof and supersedes all prior agreements, understandings and
negotiations, both written an oral, among the parties with respect to the
subject matter of this Agreement.
8.5 Amendments; Waivers. Any provision of this Agreement may be
amended or waived if, and only if, such amendment or waiver is in writing and
signed, in the case of an amendment, by Purchaser and Seller or, in the case of
a waiver, by the party against whom the waiver is to be effective. No failure
or delay by either party in exercising any right, power or privilege hereunder
shall operate as a waiver thereof nor shall any single or partial exercise
thereof preclude any other or further exercise thereof or the exercise of any
other right, power or privilege. The rights and remedies herein provided shall
be cumulative and not exclusive of any rights or remedies provided by law.
8.6 No Third Party Rights; Successors and Assigns. This Agreement is
not intended and shall not be construed to create any rights in any person other
than Seller and Purchaser and their respective successors and assigns and no
person shall assert any rights as third party beneficiary hereunder. Whenever
any of the parties hereto is referred to, such reference shall be deemed to
include the successors and assigns of such party. All the covenants and
agreements herein contained by or on behalf of the Seller and Purchaser shall
bind, and inure to the benefit of, their respective successors and assigns
whether so expressed or not, and shall be enforceable by and inure to the
benefit of Purchaser and its successors and assigns.
8.7 Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties have signed this Agreement as of the
date and year first above written.
SELLER:
David H. Murdock, as trustee of the
David H. Murdock Living Trust
---------------------------
PURCHASER:
, as trustee,
-------------------------
, as trustee, and
-------------------------
, as trustee,
-------------------------
each as trustee of Dole Food Automatic
Common Exchange Security Trust
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<PAGE>
Draft of August 1, 1996
COLLATERAL AGREEMENT
Among
DAVID H. MURDOCK, as Trustee
for the DAVID H. MURDOCK LIVING TRUST, As Pledgor,
THE BANK OF NEW YORK, As Collateral Agent
and
DOLE FOOD AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
Dated as of
August ___, 1996
<PAGE>
The following Table of Contents has been inserted for convenience of
reference only and does not constitute a part of the Collateral Agreement.
TABLE OF CONTENTS
SECTION PAGE
- - ------- ----
1. The Security Interests. . . . . . . . . . . . . . . . . . . . . . 1
2. Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3. Representations and Warranties of the Pledgor . . . . . . . . . . 6
4. Representations and Warranties of the Collateral Agent. . . . . . 6
5. Certain Covenants of the Pledgor. . . . . . . . . . . . . . . . . 7
6. Administration of the Collateral and Valuation of
the Securities. . . . . . . . . . . . . . . . . . . . . . . . . . 8
7. Income and Voting Rights on Collateral. . . . . . . . . . . . . . 13
8. Remedies upon Events of Default . . . . . . . . . . . . . . . . . 14
9. The Collateral Agent. . . . . . . . . . . . . . . . . . . . . . . 17
10. Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . 21
11. Termination of Collateral Agreement . . . . . . . . . . . . . . . 22
12. No Personal Liability of Trustees . . . . . . . . . . . . . . . . 22
Exhibit A - Certificate for Substituted Collateral
Exhibit B - Certificate for Additional Collateral
<PAGE>
COLLATERAL AGREEMENT
THIS COLLATERAL AGREEMENT (the "Agreement"), dated as of August __,
1996, among David H. Murdock, as Trustee for the David H. Murdock Living Trust
(the "Pledgor"), The Bank of New York, a New York banking corporation, as
collateral agent (the "Collateral Agent") hereunder for the benefit of Dole Food
Automatic Common Exchange Security Trust, a trust duly created under the laws of
the State of New York (such trust and the trustees thereof acting in their
capacity as such being referred to herein as the "Trust" or "Purchaser");
WITNESSETH:
WHEREAS, pursuant to the Purchase Agreement (the "Purchase
Agreement"), dated as of August __, 1996, between the Pledgor and Purchaser, the
Pledgor has agreed to sell and Purchaser has agreed to purchase Common Stock,
without par value (the "Common Stock"), of Dole Food Company, Inc., a Hawaii
corporation (the "Company"), subject to the terms and conditions of the Purchase
Agreement; and
NOW, THEREFORE, to secure the performance by the Pledgor of its
obligations under the Purchase Agreement and to secure the observance and
performance of the covenants and agreements contained herein and in the Purchase
Agreement, the parties hereto agree as follows:
1. THE SECURITY INTERESTS.
In order to secure the observance and performance of the covenants and
agreements contained herein and in the Purchase Agreement:
(a) Effective upon and subject to the receipt by Pledgor of the Firm
Purchase Price at the First Time of Delivery, the Pledgor hereby grants, sells,
conveys, assigns, transfers and pledges unto the Collateral Agent, as agent of
and for the benefit of the Trust, a security interest in and to, and a lien upon
and right of set-off against, all of his right, title and interest in and to (i)
the Pledged Items described in paragraph (b); (ii) all additions to and
substitutions for such Pledged Items; (iii) all income, proceeds and collections
received or to be received, or derived or to be derived, now or any time
hereafter from or in connection with the Pledged Items; and (iv) all powers and
rights now owned or hereafter acquired under or with respect to the Pledged
Items (such Pledged Items, additions, substitutions, proceeds, collections,
<PAGE>
powers and rights being herein collectively called the "Collateral"). The
Collateral Agent shall have all of the rights, remedies and recourses with
respect to the Collateral afforded a secured party by the New York Uniform
Commercial Code, in addition to, and not in limitation of, the other rights,
remedies and recourses afforded to the Collateral Agent by this Agreement.
(b) At the First Time of Delivery, the Pledgor shall deliver, to the
Collateral Agent in pledge hereunder _____ shares of the Common Stock registered
in the name of the Collateral Agent or its nominee.
(c) Effective upon and subject to the receipt by the Pledgor of the
Additional Purchase Price, at the Second Time of Delivery, the Pledgor shall
deliver to the Collateral Agent in the pledge hereunder Common Stock
representing the Additional Share Base Amount of Common Stock, registered in the
name of the Collateral Agent or its nominee.
2. DEFINITIONS.
Capitalized terms used and not otherwise defined herein shall have the
meanings ascribed to them in the Purchase Agreement. Capitalized terms used
herein shall have the meanings as follows:
"Authorized Representative" of the Pledgor means any trustee or other
representative as to whom Pledgor shall have delivered notice to the Collateral
Agent that such trustee or other representative is authorized to act hereunder
on behalf of Pledgor.
"Business Day" means any day except a Saturday, Sunday or other day on
which banking institutions in New York City are authorized or obligated by law
or regulation to close or a day on which the New York Stock Exchange, Inc. is
closed.
"Cash Delivery Obligations" means, at any time (A) if no
Reorganization Event shall have occurred prior to such time, zero, and (B) from
and after any Reorganization Event, the Dilution Adjustment that shall have been
applied to the Exchange Rate pursuant to Section 6.1 of the Purchase Agreement
at or prior to the Reorganization Event, times the product of: (i) the Firm
Share Base Amount plus the Additional Share Base Amount (if any); and (ii) the
Transaction Value of any property other than Marketable Securities received by
the Pledgor in such Reorganization Event.
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<PAGE>
"Collateral" has the meaning specified in Section 1(a).
"Collateral Agent" means the financial institution identified as such
in the preliminary paragraph hereof, or any successor appointed in accordance
with Section 9.
"Collateral Agreement" means this Collateral Agreement and any
exhibits hereto.
"Collateral Event of Default" has the meaning specified in Section
6(e).
"Collateral Requirement" means, as of any date and with respect to:
(i) any Common Stock, 100%; (ii) any Marketable Securities, 100%; (iii) any U.S.
Government Securities pledged in respect of Cash Delivery Obligations, 105%; and
(iv) any other U.S. Government Securities, 150%, provided that upon and after
any failure to cure an Insufficiency Determination by 4:00 p.m. New York City
time on the tenth Business Day following telephonic notice of such Insufficiency
Determination as described in Section 6(e), which insufficiency shall be
continuing on such tenth business day, the Collateral Requirement relating to
any U.S. Government Securities shall be 200%. The portion of any pledged U.S.
Government Securities that shall be deemed at any time to be in respect of Cash
Delivery Obligations shall be as provided in Section 6(e).
"Eligible Collateral" means (i) Common Stock, (ii) U.S. Government
Securities, and (iii) from and after any Reorganization Event, Marketable
Securities, provided, in each case, that the Pledgor has good and marketable
title thereto, free of all Liens (other than the Liens created by this
Collateral Agreement) and Transfer Restrictions and that the Collateral Agent
has a valid, first priority perfected security interest therein and first lien
thereon, and provided further that to the extent the number of shares of
Marketable Securities pledged hereunder exceeds at any time the Maximum
Deliverable Number thereof, such excess shares shall not be Eligible Collateral.
"Event of Default" means the occurrence of: (i) an event described in
clause (a) or (b) of Article VII of the Purchase Agreement, (ii) a Collateral
Event of Default, (iii) a failure by Pledgor to have caused the Collateral to
meet the requirements described in Section 5(d) on the Exchange Date or (iv) if
a Reorganization Event shall have occurred prior to the Exchange Date, failure
by Pledgor to cause to be delivered to Purchaser on the Exchange Date the
consideration then required to be delivered pursuant to Section 6.2 of the
Purchase Agreement.
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<PAGE>
"Ineligible Collateral" means Collateral that does not constitute
"Eligible Collateral".
"Lien" means any lien, mortgage, security interest, pledge, charge or
encumbrance of any kind.
"Market Value" means, as of any date: (a) with respect to any Common
Stock (except as otherwise provided in Section 6(e)(2)), the Closing Price on
such date; (b) with respect to any U.S. Government Security, the product of
(x)(i) the average unit bid price for such security as published on the Trading
Day prior to such date in the New York edition of The Wall Street Journal or The
New York Times or, if not so published, (ii) the lower bid price quoted (which
quotation shall be evidenced in writing) on the Trading Day prior to such date
by either of two nationally recognized dealers making a market in such security
which are members of the National Association of Securities Dealers, Inc. and
(y) the number of such units comprised in the outstanding principal amount of
such security; and (c) with respect to any share of Marketable Securities, the
Closing Price thereof on the Trading Day prior to such date; provided that the
"Market Value" of any Ineligible Collateral shall be zero.
"Maximum Deliverable Number" means, on any date, with respect to the
Common Stock, the product of the Firm Share Base Amount plus the Additional
Share Base Amount (if any), multiplied successively by each number by which the
Exchange Rate shall have been multiplied on or prior to such date pursuant to
the adjustments provided for under Section 6.1 of the Purchase Agreement. The
Maximum Deliverable Number of Marketable Securities means, on any date, the
product of (i) the Firm Share Base Amount plus the Additional Share Base Amount
(if any) and (ii) the number of Marketable Securities received by the Pledgor in
the Reorganization Event for each share of Common Stock, multiplied successively
by each number by which the Exchange Rate shall have been multiplied on or prior
to such date and after the date of such Reorganization Event pursuant to the
adjustments provided for under Article VI of the Purchase Agreement.
"Person" means an individual, a corporation, a partnership, an
association, a trust or any other entity or organization, including a government
or political subdivision or an agency or instrumentality thereof.
"Pledge Value" means, as of any date and with respect to any
particular type of Collateral, an amount equal to the aggregate Market Value of
such Collateral divided by the Collateral Requirement for such Collateral.
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<PAGE>
"Pledge Value Requirement" means, as of any date, (a) the aggregate
Market Value on such date of the Maximum Deliverable Number of shares of Common
Stock on such date or, from and after a Reorganization Event, Marketable
Securities, plus (b) from and after a Reorganization Event, the Cash Delivery
Obligations.
"Pledged Items" means, as of any date, any and all securities and
instruments delivered by the Pledgor to be held by the Collateral Agent under
this Collateral Agreement as Collateral, whether Eligible Collateral or
Ineligible Collateral.
"Prior Collateral" has the meaning specified in Section 6(b)(1).
"Responsible Officer" means, when used with respect to the Collateral
Agent, any vice president, assistant vice president, assistant treasurer or
assistant secretary located in the division or department of the Collateral
Agent responsible for performing the obligations of the Collateral Agent under
this Collateral Agreement, or in any other division or department of the
Collateral Agent performing operations substantially equivalent to those
performed by such division or department pursuant hereto, or any other officer
of the Collateral Agent or any successor Collateral Agent customarily performing
functions similar to those performed by any of the aforesaid officers, and also
means, with respect to any matter relating to this Collateral Agreement or the
Collateral, any other officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Transfer Restriction" means, with respect to any item of Collateral,
any condition to or restriction on the ability of the holder thereof to sell,
assign or otherwise transfer such item of Collateral or to enforce the
provisions thereof or of any document related thereto whether set forth in such
item of Collateral itself or in any document related thereto, including, without
limitation, (i) any requirement that any sale, assignment or other transfer or
enforcement of such item of Collateral be consented to or approved by any
Person, including, without limitation, the issuer thereof or any other obligor
thereon, (ii) any limitations on the type or status, financial or otherwise, of
any purchaser, pledgee, assignee or transferee of such item of Collateral, (iii)
any requirement of the delivery of any certificate, consent, agreement, opinion
of counsel, notice or any other document of any Person to the issuer of, any
other obligor on or any registrar or transfer agent for, such item of
Collateral, prior to the sale, pledge, assignment or other transfer or
enforcement of such item of Collateral and (iv) any registration or
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<PAGE>
qualification requirement for such item of Collateral pursuant to any federal or
state securities law; provided that the required delivery of any assignment from
the seller, pledgor, assignor or transferor of such item of Collateral, together
with any evidence of the corporate or other authority of such Person, shall not
constitute a "Transfer Restriction."
"Trustee" or "Trustees" means any trustee or trustees of the Trust
identified on the signature pages hereto, or any successor as such trustee or
trustees.
"UCC" means the Uniform Commercial Code as in effect in the State of
New York.
"U.S. Government Securities" means direct obligations of the United
States of America that mature on a date that is one year or less from the date
such obligations are pledged hereunder, but in any event prior to the Exchange
Date.
3. REPRESENTATIONS AND WARRANTIES OF THE PLEDGOR.
The Pledgor hereby represents and warrants to the Collateral Agent and
the Trust that:
(a) No Transfer Restrictions. No Transfer Restrictions exist with
respect to or otherwise apply to the assignment of, or transfer by the Pledgor
of possession of, any items of Collateral to the Collateral Agent hereunder, or
the subsequent sale or transfer of such items of Collateral by the Collateral
Agent pursuant to the terms hereof.
(b) Title to Collateral; Perfected Security Interest. The Pledgor
has good and marketable title to the Pledged Items, free of all Liens (other
than the Lien created by this Collateral Agreement) and Transfer Restrictions.
Upon delivery of the Collateral to the Collateral Agent hereunder, the
Collateral Agent will obtain a valid, first priority perfected security interest
in, and a first lien upon, such Collateral subject to no other Lien; none of
such Collateral is or shall be pledged by the Pledgor as collateral for any
other purpose.
4. REPRESENTATIONS AND WARRANTIES OF THE COLLATERAL AGENT.
The Collateral Agent represents and warrants to the Pledgor and the
Trust that:
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<PAGE>
(a) Corporate Existence and Power. The Collateral Agent is a banking
corporation, duly incorporated, validly existing and in good standing under the
laws of the jurisdiction of its incorporation, and has all corporate powers and
all material governmental licenses, authorizations, consents and approvals
required to enter into, and perform its obligations under, this Collateral
Agreement.
(b) Authorization and Non-Contravention. The execution, delivery and
performance by the Collateral Agent of this Collateral Agreement have been duly
authorized by all necessary corporate action on the part of the Collateral Agent
(no action by the shareholders of the Collateral Agent being required) and do
not and will not violate, contravene or constitute a default under any provision
of applicable law or regulation or of the charter or by-laws of the Collateral
Agent or of any material agreement, judgment, injunction, order, decree or other
instrument binding upon the Collateral Agent.
(c) Binding Effect. This Collateral Agreement constitutes a valid
and binding agreement of the Collateral Agent enforceable against the Collateral
Agent in accordance with its terms.
5. CERTAIN COVENANTS OF THE PLEDGOR.
The Pledgor agrees that, so long as any of its obligations under the
Purchase Agreement remain outstanding:
(a) Title to Collateral. The Pledgor shall at all times hereafter
have good and marketable title to the Collateral pledged by him, free of all
Liens (other than the Liens created by this Collateral Agreement) and Transfer
Restrictions, and, subject to the terms of this Collateral Agreement, will at
all times hereafter have good, right and lawful authority to assign, transfer
and pledge such Collateral and all such additions thereto and substitutions
therefor under this Collateral Agreement.
(b) Pledge Value Requirement. The Pledgor shall cause the aggregate
Pledge Value of the Collateral to be equal to or greater than the Pledge Value
Requirement at all times, and shall pledge additional Collateral in the manner
described in Section 6(d) as necessary to cause such requirement to be met.
(c) Pledge upon Reorganization Event. Upon the occurrence of a
Reorganization Event, the Pledgor shall immediately cause to be delivered to the
Collateral Agent, in the manner provided in Section 6(d): (i) U.S. Government
Securities having any aggregate Market Value at least equal
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<PAGE>
to 105% of the Cash Delivery Obligations; and (ii) Marketable Securities in an
amount at least equal to the Maximum Deliverable Number thereof, or, at
Pledgor's election, U.S. Government Securities having an aggregate Market Value
at least equal to 150% of such Maximum Deliverable Number of Marketable
Securities; in each case to be held as substitute Collateral hereunder.
(d) Pledge of Purchase Agreement Consideration. Notwithstanding the
Pledgor's right to substitute Collateral pursuant to Section 6(b), the Pledgor
shall cause the Collateral to include, on the Exchange Date, unless a
Reorganization Event shall have occurred, a number of shares of Common Stock at
least equal to the number of shares of Common Stock required to be delivered
under the Purchase Agreement on the Exchange Date.
(e) Further Assurances. The Pledgor shall, at his expense and in
such manner and form as the Trust or the Collateral Agent may require, give,
execute, deliver, file and record any financing statement, notice, instrument,
document, agreement or other papers that may be necessary or desirable in order
to create, preserve, perfect, substantiate or validate any security interest
granted pursuant hereto or to enable the Collateral Agent to exercise and
enforce its rights and the rights of the Trust hereunder with respect to such
security interest. To the extent permitted by applicable law, the Pledgor
hereby authorizes the Collateral Agent to execute and file, in the name of the
Pledgor or otherwise, Uniform Commercial Code financing or continuation
statements (which may be carbon, photographic, photostatic or other
reproductions of this Agreement or of a financing statement relating to this
Agreement) which the Collateral Agent in its sole discretion may deem necessary
or appropriate to further perfect, or maintain the perfection of the security
interests granted hereby.
6. ADMINISTRATION OF THE COLLATERAL AND VALUATION OF THE SECURITIES.
(a) Valuation of Collateral. The Collateral Agent shall determine on
each Business Day whether the Pledge Value is at least equal to the Pledge Value
Requirement and whether an Insufficiency Determination or Collateral Event of
Default shall have occurred and, from and after any substitution of U.S.
Government Securities for pledged Common Stock or Marketable Securities pursuant
to paragraph (b) of this Section 6, shall determine the Pledge Value on each
Business Day and shall provide written notice of the Pledge Value to the
Pledgor.
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(b) Substitution of Collateral. The Pledgor may substitute
Collateral in accordance with the following provisions:
(1) Unless an Event of Default or a failure by the Pledgor to meet
any of its obligations under Section 5(b) or (c) hereof has occurred and is
continuing, the Pledgor shall have the right at any time and from time to
time to deposit Eligible Collateral with the Collateral Agent in
substitution for Pledged Items previously deposited hereunder ("Prior
Collateral") and to obtain the release from the Lien hereof of such Prior
Collateral.
(2) If a Pledgor wishes to deposit Eligible Collateral with the
Collateral Agent in substitution for Prior Collateral, he shall (i)
give written notice to the Collateral Agent identifying the Prior
Collateral to be released from the Lien hereof, (ii) deliver to the
Collateral Agent concurrently with such Eligible Collateral a
certificate of an Authorized Officer of the Pledgor substantially in
the form of Exhibit A hereto and dated the date of such delivery, (A)
identifying the items of Eligible Collateral being substituted for the
Prior Collateral and the Prior Collateral that is to be transferred to
the Pledgor and (B) certifying that the representations and warranties
contained in such Exhibit A hereto are true and correct on and as of
the date thereof and (iii) deliver to the Collateral Agent
concurrently with such Eligible Collateral an opinion (dated the date
of such delivery) of counsel (who may be an employee of the Pledgor)
addressed to the Collateral Agent confirming the representations
contained in the second sentence of paragraph 3(b) of
Exhibit A hereto. The Pledgor hereby covenants and agrees to take all
actions required under Section 6(d) and any other actions necessary to
create for the benefit of the Collateral Agent a valid, first priority
perfected security interest in, and a first lien upon, such Eligible
Collateral deposited with the Collateral Agent in substitution for Prior
Collateral.
(3) No such substitution shall be made unless and until the
Collateral Agent shall have determined that the aggregate Pledge Value of
all of the Collateral at the time of such proposed substitution, after
giving effect to the proposed substitution, shall at least equal the Pledge
Value Requirement.
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(c) Additional Collateral. The Pledgor may pledge additional
Collateral hereunder at any time. Concurrently with the delivery of any
additional Eligible Collateral, the Pledgor shall deliver (i) a certificate of
an Authorized Officer of the Pledgor substantially in the form of Exhibit B
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
addressed to the Collateral Agent confirming the representations contained in
the second sentence of paragraph 2(b) of Exhibit B hereto. The Pledgor hereby
covenants and agrees to take all actions required under Section 6(d) and any
other actions necessary to create for the benefit of the Collateral Agent a
valid, first priority perfected security interest in, and a first lien upon,
such additional Eligible Collateral.
(d) Delivery of Collateral. The Pledgor shall deliver the Collateral
to the Collateral Agent in accordance with the following provisions:
(1) Pledged Common Stock. In the case of Collateral consisting of
Common Stock, by delivery to the Collateral Agent of Common Stock,
registered in the name of the Collateral Agent or its nominee;
(2) Pledged U.S. Government Securities. In the case of Collateral
consisting of U.S. Government Securities, by transfer thereof through the
Book Entry System of the Federal Reserve System to the account of the
Collateral Agent or to an account (other than an account of the Pledgor)
designated by the Collateral Agent; and
(3) Pledged Marketable Securities. In the case of Collateral
consisting of Marketable Securities, by delivery of certificates evidencing
such Marketable Securities, registered in the name of the Collateral Agent
or its nominee or, if such Marketable Securities are not issuable in
certificated form but are held in book entry form by The Depository Trust
Company, by transfer to an account of the Collateral Agent or to an account
(other than an account of the Pledgor) designated by the Collateral Agent
with The Depository Trust Company. Each such delivery of Marketable
Securities shall be accompanied by an opinion of counsel satisfactory to
the Collateral Agent that the
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Collateral Agent has obtained a valid, first priority perfected security
interest in, and a first lien upon, such Marketable Securities.
Upon delivery of any Pledged Item under this Collateral Agreement, the
Collateral Agent shall examine such Pledged Item and any opinions and
certificates delivered pursuant to Sections 6(b) 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. The Pledgor hereby
designates the Collateral Agent as the person in whose name any Collateral held
in book entry form in the Federal Reserve System shall be registered.
(e) Insufficiency Determination.
(1) If on any Business Day the Collateral Agent determines that the
aggregate Pledge Value of the Collateral is less than the Pledge Value
Requirement (any such determination, an "Insufficiency Determination"), the
Collateral Agent shall promptly notify the Pledgor of such determination by
telephone call to an Authorized Representative of the Pledgor followed by a
written confirmation of such call.
(2) If, by 4:00 p.m., New York City time on the tenth Business Day
following the day on which telephonic notice shall have been given pursuant to
the preceding paragraph (e)(1), the Pledgor shall have failed to deliver, in the
manner set forth in paragraphs (c) and (d) of this Section 6, sufficient
additional Eligible Collateral so that, after giving effect to such delivery,
the aggregate Pledge Value of the Collateral, as of such tenth business day, is
at least equal to the Pledge Value Requirement, then (x) the Collateral
Requirement with respect to any U.S. Government Securities pledged hereunder
(other than in respect of Cash Delivery Obligations) shall be increased from
150% to 200%, and (y) unless a Collateral Event of Default shall have occurred
and be continuing, the Collateral Agent shall:
(i) commence sales, in the manner described in paragraph (3) below,
of such portion of the Collateral consisting of U.S. Government Securities
as may be required to be sold in order to generate proceeds sufficient to
purchase Common Stock or, after a Reorganization Event, Marketable
Securities, as described in the following clause (ii); and
(ii) commence purchases, in the manner described in paragraph (3)
below, of Common Stock or, after a Reorganization Event, Marketable
Securities, in an
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amount sufficient to cause the aggregate Pledge Value of the Collateral to
be at least equal to the Pledge Value Requirement.
Notwithstanding the foregoing, the Collateral Agent shall discontinue sales and
purchases pursuant to the preceding clauses (i) and (ii), respectively, if at
any time a Collateral Event of Default shall have occurred and be continuing.
The Collateral Agent shall determine the Market Value and the Pledge Value of
the Collateral after each purchase of Common Stock or Marketable Securities
pursuant to the preceding clause (ii) in order to determine whether the Pledge
Value Requirement is met and whether a Collateral Event of Default has occurred.
Solely for purposes of such calculation, the Market Value of the Common Stock or
Marketable Securities shall be: (A) the most recent sales price as reported in
the composite transactions for the principal securities exchange on which the
Common Stock or Marketable Securities, as the case may be, are then listed or,
if such securities are not so listed, the last quoted ask price for such
securities in the over-the-counter market as reported by The NASDAQ National
Market or, if not so reported, by the National Quotation Bureau or a similar
organization; or (B) if higher, in the case of Common Stock, the most recent
available Closing Price.
A "Collateral Event of Default" shall mean, at any time, the
occurrence of any of the following: (A) failure of the aggregate Market Value of
the Collateral to equal or exceed the Pledge Value Requirement; (B) failure of
the Market Value of any U.S. Government Securities pledged at such time (not
including any U.S. Government Securities pledged in respect of Cash Delivery
Obligations at such time) to have an aggregate Market Value of at least 105% of
the Market Value of a number of shares of Common Stock (or, from and after any
Reorganization Event, Marketable Securities) equal to (x) the Maximum
Deliverable Number thereof minus (y) the number thereof pledged as Collateral
hereunder at such time; or (C) from and after any Reorganization Event, failure
of the U.S. Government Securities pledged in respect of Cash Delivery
Obligations to have an aggregate Market Value at least equal to 105% of the Cash
Delivery Obligations at such time, if, in the case of a failure described in
this clause (C), such failure shall continue to be in effect at 4:00 p.m., New
York City time, on the tenth Business Day following the day on which telephonic
notice in respect thereof shall have been given pursuant to paragraph (e)(1)
above. For purposes of this Agreement, the portion of any pledged U.S.
Government Securities that shall be deemed to be in respect of Cash Delivery
Obligations at any time shall be a portion having a Market Value equal to 105%
of the Cash Delivery Obligations
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at such time (or, if less, the aggregate Market Value of all U.S. Government
Securities pledged at such time).
(3) Collateral sold and Common Stock or shares of Marketable
Securities purchased by the Collateral Agent pursuant to the preceding
paragraphs (e)(i) and (ii) may be sold and purchased on any securities exchange
or in any over-the-counter market or in any private purchase transaction, and at
such price or prices, in each case as the Collateral Agent may deem
satisfactory. The Pledgor covenants and agrees that it will execute and deliver
such documents and take such other action as the Collateral Agent deems
necessary or advisable in order that any such sales and purchases may be made in
compliance with law.
(f) Release of Excess Collateral. If on any Business Day the
Collateral Agent determines that the aggregate Pledge Value of the Pledgor's
Eligible Collateral exceeds the Pledge Value Requirement and no Event of Default
or failure by the Pledgor to meet any of its obligations under Sections 5 or 6
hereof has occurred and is continuing, the Pledgor may obtain the release from
the Lien hereof of any Collateral having an aggregate Pledge Value on such
Business Day less than or equal to such excess, upon delivery to the Collateral
Agent of a written notice from an Authorized Representative of the Pledgor
indicating the items of Collateral to be released. Such Collateral shall be
released only after the Collateral Agent shall have determined that the
aggregate Pledge Value of all of the Collateral remaining after such release as
determined on such Business Day is at least equal to the Pledge Value
Requirement.
(g) Delivery of Purchase Agreement Consideration. On the Exchange
Date, unless a Reorganization Event shall have occurred prior thereto, the
Collateral Agent shall deliver to the Trust Common Stock then held by it
hereunder representing the number of shares of Common Stock then required to be
delivered under the Purchase Agreement. If a Reorganization Event shall have
occurred prior to the Exchange Date, then, if so instructed by the Pledgor by
the close of business on the Business Day preceding the Exchange Date, the
Collateral Agent shall deliver to the Trust, to the extent permitted to be
delivered in lieu of cash required to be delivered on such date under
Section 6.2 of the Purchase Agreement, the Marketable Securities then held by
the Collateral Agent hereunder. Upon such delivery, the Trust shall hold such
Common Stock or Marketable Securities, as the case may be, absolutely and free
from any claim or right whatsoever.
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7. INCOME AND VOTING RIGHTS ON COLLATERAL.
(a) Unless an Event of Default or failure by the Pledgor to meet any
of his obligations under Section 5(b) or (c) hereof has occurred and is
continuing, the Pledgor shall be entitled to receive for his own account all
dividends, interest and, if any, principal and premium relating to all of the
Collateral, unless the payment thereof to the Pledgor or would reduce the
aggregate Pledge Value of the Collateral below the Pledge Value Requirement.
The Collateral Agent agrees to remit to the Pledgor on the Business Day received
or the first Business Day thereafter all such payments received by it. If an
Event of Default or failure by the Pledgor to meet any of its obligations under
Section 5(b) or (c) hereof has occurred and is continuing, all such payments
made or accrued after and during the continuance of such default or failure
shall be retained by the Collateral Agent, and any such payments which are
received by the Pledgor shall be received in trust for the benefit of the Trust,
shall be segregated from other funds of the Pledgor and shall forthwith be paid
over to the Collateral Agent. Any such payments so retained by, or paid over
to, the Collateral Agent shall be held by the Collateral Agent as Collateral
hereunder.
(b) Unless an Event of Default has occurred and is continuing, the
Pledgor shall have the right, from time to time, to vote and to give consents,
ratifications and waivers with respect to the Collateral, and the Collateral
Agent shall, upon receiving a written request from the Pledgor, deliver to the
Pledgor or as specified in such request such proxies, powers of attorney,
consents, ratifications and waivers in respect of any of the Collateral which is
registered in the name of the Collateral Agent or its nominee as shall be
specified in such request and be in form and substance satisfactory to the
Collateral Agent.
If an Event of Default shall have occurred and be continuing, the
Collateral Agent shall have the right to the extent permitted by law, and the
Pledgor shall take all such action as may be necessary or appropriate to give
effect to such right, to vote and to give 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.
8. REMEDIES UPON EVENTS OF DEFAULT.
(a) If any Event of Default shall have occurred and be continuing, the
Collateral Agent may exercise on behalf of the Trust all the rights of a secured
party under
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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: (i) deliver all Collateral consisting of Common Stock or
Marketable Securities (but not, in either case, in excess of the number of
shares thereof deliverable under the Purchase Agreement at such time) to the
Trust on the date of the Acceleration Notice relating to such Event of Default
(or, in the case of an Event of Default described in clause (iii) or (iv) of the
definition thereof, on the Exchange Date) (in either case, the "Delivery Date"),
whereupon the Trust shall hold such Common Stock or Marketable Securities
absolutely free from any claim or right of whatsoever kind, including any equity
or right of redemption of the Pledgor which may be waived, and the Pledgor, to
the extent permitted by law, hereby specifically waives all rights of
redemption, stay or appraisal which he has or may have under any law now
existing or hereafter adopted; and (ii) if such delivery shall be insufficient
to satisfy in full all of the obligations of Pledgor under the Purchase
Agreement, sell all of the remaining Collateral, or such lesser portion thereof
as may be necessary to generate proceeds sufficient to satisfy in full all of
the obligations of Pledgor under the Purchase Agreement, at public or private
sale or at any broker's board or on any securities exchange, for cash, upon
credit or for future delivery, and at such price or prices as the Collateral
Agent may deem satisfactory. The Pledgor covenants and agrees that he 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 Pledgor which may be waived, and the
Pledgor, to the extent permitted by law, hereby specifically waives all rights
of redemption, stay or appraisal which he 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 UCC shall (1) in case of a public sale, state the time and
place fixed for such sale, (2) in case of sale at a broker's board or on a
securities exchange, state the board or exchange at which such sale is to be
made and the day on which the Collateral, or the portion thereof so being sold,
will first be offered for sale at such board or exchange, and (3) in the case of
a private sale, state the day after which such sale may be consummated. Any
such public sale shall be held at such time or times within ordinary business
hours and at such place or places as the Collateral Agent
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may fix in the notice of such sale. At any such sale the Collateral may be sold
in one lot as an entirety or in separate parcels, as the Collateral Agent may
determine. The Collateral Agent shall not be obligated to make any such sale
pursuant to any such notice. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the same may be so
adjourned. In case of any sale of all or any part of the Collateral on credit
or for future delivery, the Collateral so sold may be retained by the Collateral
Agent until the selling price is paid by the purchaser thereof, but the
Collateral Agent shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any such
failure, such Collateral may again be sold upon like notice. The Collateral
Agent, instead of exercising the power of sale herein conferred upon it, may
proceed by a suit or suits at law or in equity to foreclose the security
interests and sell the Collateral, or any portion thereof, under a judgment or
decree of a court or courts of competent jurisdiction.
(b) Power of Attorney. Upon any delivery or sale of all or any part
of any Collateral made either under the power of delivery or sale given
hereunder or under judgment or decree in any judicial proceedings for
foreclosure or otherwise for the enforcement of this Collateral Agreement, the
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 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 the 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 Collateral Agreement. If so
requested by the Collateral Agent, by the Trustees or by any purchaser of the
Collateral or a portion thereof, the Pledgor shall further ratify and confirm
any such delivery or sale by executing and delivering to the Collateral Agent,
to the Trustees or to such purchaser or purchasers at the expense of the Pledgor
all proper deeds, bills of sale, instruments of assignment, conveyance of
transfer and releases as may be designated in any such request.
(c) Application of Collateral and Proceeds. In the case of an Event
of Default, the Collateral Agent may proceed to realize upon the security
interest in the Collateral against any one or more of the types of
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Collateral, at any one time, as the Collateral Agent shall determine in its sole
discretion subject to the foregoing provisions of this Section 8. The proceeds
of any sale of, or other realization upon, or other receipt from, any of the
remaining Collateral shall be applied by the 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 of shares of Common Stock equal to (1)
the number of shares of Common Stock required to be delivered under the
Purchase Agreement on the Delivery Date minus (2) the number of shares of
Common Stock delivered by the Collateral Agent to the Trust on the Delivery
Date as described above; or (B) from and after a Reorganization Event, the
sum of (1) the Cash Delivery Obligations on the Delivery Date and (2) the
aggregate Market Value on the Delivery Date of a number of Marketable
Securities equal to (x) the number thereof permitted to be delivered on the
Delivery Date under Section 6(b) of the Purchase Agreement minus (y) the
number thereof delivered by the Collateral Agent to the Trust on the
Delivery Date as described above;
second, to the payment to the Collateral Agent of the expenses of such
sale or other realization, including reasonable compensation to the
Collateral Agent and its agents and counsel, and all expenses, liabilities
and advances incurred or made by the Collateral Agent in connection
therewith, including brokerage fees in connection with the sale by the
Collateral Agent of any Pledged Item; and
finally, if all of the obligations of the Pledgor hereunder and under
the Purchase Agreement have been fully discharged or sufficient funds have
been set aside by the Collateral Agent at the request of the Pledgor for
the discharge thereof, any remaining proceeds shall be released to the
Pledgor.
9. THE COLLATERAL AGENT.
The Collateral Agent accepts its duties and responsibilities hereunder
as agent for the Trust, on and subject to the following terms and conditions:
(a) Performance of Duties. The Collateral Agent undertakes to
perform such duties and only such duties as are expressly set forth herein and,
beyond the exercise of reasonable care in the performance of such duties, no
implied covenants or obligations shall be read into this Collateral Agreement
against the Collateral Agent. No provision hereof shall be construed to relieve
the
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Collateral Agent from liability for its own grossly negligent action, grossly
negligent failure to act or its own wilful misconduct, subject to the following:
(1) The Collateral Agent may consult with counsel, and the advice or
opinion of such counsel shall be full and complete authorization and
protection in respect of an action taken or suffered hereunder in good
faith and in accordance with such advice or opinion of counsel.
(2) The Collateral Agent shall not be liable with respect to any
action taken, suffered or omitted by it in good faith (i) reasonably
believed by it to be authorized or within the discretion or rights or
powers conferred on it by this Collateral Agreement or (ii) in accordance
with any direction or request of the Trustees.
(3) The Collateral Agent shall not be liable for any error of
judgment made in good faith by any of its officers, unless the Collateral
Agent was grossly negligent in ascertaining the pertinent facts.
(4) In the absence of bad faith on its part, the Collateral Agent may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any note, notice, resolution, consent,
certificate, affidavit, letter, telegram, teletype message, statement,
order or other document believed by it to be genuine and correct and to
have been signed or sent by the proper Person or Persons.
(5) No provision of this Collateral Agreement shall require the
Collateral Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties hereunder, or
in the exercise of any of its rights or powers, if it shall have reasonable
grounds for believing that repayment of such funds or adequate indemnity
against such risk or liability is not reasonably assured to it.
(6) The Collateral Agent may perform any duties hereunder either
directly or by or through agents or attorneys, and the Collateral Agent
shall not be responsible for any misconduct or negligence on the part of
any agent or attorney appointed with due care by it hereunder. In
furtherance thereof, any subsidiary owned or controlled by the Collateral
Agent, or its successors, as agent for the Collateral Agent, may perform
any or all of the duties of the Collateral
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Agent relating to the valuation of securities and other instruments
constituting Collateral hereunder.
(7) In no event shall the Collateral Agent be personally liable for
any taxes or other governmental charges imposed upon or in respect of
(i) the collateral or (ii) the income or other distributions thereon.
(8) Unless and until the Collateral Agent shall have received notice
from the Pledgor, or unless and until a Responsible Officer of the
Collateral Agent shall have actual knowledge to the contrary, the
Collateral Agent shall be entitled to deem and treat all Collateral
delivered to it hereunder as Eligible Collateral hereunder, provided that
the Collateral Agent has carried out the duties specified in Section 6 with
respect to such Collateral at the time of delivery thereof.
The Collateral Agent shall not be responsible for the correctness of the
recitals and statements herein which are made by the Pledgor or for any
statement or certificate delivered by the Pledgor pursuant hereto. Except as
specifically provided herein, the Collateral Agent shall not be responsible for
the validity, sufficiency, collectibility or marketability of any Collateral
given to or held by it hereunder or for the validity or sufficiency of the
Purchase Agreement or the Lien on the Collateral purported to be created hereby.
(b) Knowledge. The Collateral Agent shall not be deemed to have
knowledge of any Event of Default (except a Collateral Event of Default), unless
and until a Responsible Officer of the Collateral Agent shall have actual
knowledge thereof or shall have received written notice thereof.
(c) Merger. Any corporation or association into which the Collateral
Agent may be converted or merged, or with which it may be consolidated, or to
which it may sell or transfer its agency business and assets as a whole or
substantially as a whole, or any corporation or association resulting from any
such conversion, sale, merger, consolidation or transfer to which it is a party,
shall, subject to the prior written consent of the Trust, be and become a
successor Collateral Agent hereunder and vested with all of the title to the
Collateral and all of the powers, discretions, immunities, privileges and other
matters as was its predecessor without, except as provided above, the execution
or filing of any instrument or any further act, deed or conveyance on the part
of any of the parties hereto, anything herein to the contrary notwithstanding.
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(d) Resignation. The Collateral Agent and any successor Collateral
Agent may at any time resign by giving thirty days' written notice by registered
or certified mail to the Pledgor and notice to the Trust in accordance with the
provisions of Section 10(d) hereof. Such resignation shall take effect upon the
appointment of a successor Collateral Agent by the Trust.
(e) Removal. The Collateral Agent may be removed at any time by an
instrument or concurrent instruments in writing delivered to the Collateral
Agent and to the Pledgor and signed by the Trust.
(f) Appointment of Successor. (1) If the Collateral Agent hereunder
shall resign or be removed, or be dissolved or shall be in the course of
dissolution or liquidation or otherwise become incapable of action hereunder, or
if it shall be taken under the control of any public officer or officers or of a
receiver appointed by a court, a successor may be appointed by the Trust by an
instrument or concurrent instruments in writing signed by the Trust or by its
attorneys in fact fully authorized. A copy of such instrument or concurrent
instruments shall be sent by registered mail to the Pledgor.
(2) Every such temporary or permanent successor Collateral Agent
appointed pursuant to the provisions hereof shall be a trust company or bank in
good standing, having a reported capital and surplus of not less than
$100,000,000 and capable of holding the Collateral in the State of New York, if
there be such an institution willing, qualified and able to accept the duties of
the Collateral Agent hereunder upon customary terms.
(g) Acceptance by Successor. Every temporary or permanent successor
Collateral Agent appointed hereunder shall execute, acknowledge and deliver to
its predecessor and also to the Pledgor an instrument in writing accepting such
appointment hereunder, whereupon such successor, without any further act, deed
or conveyance, shall become fully vested with all the estates, properties,
rights, powers, duties and obligations of its predecessors. Such predecessor
shall, nevertheless, on the written request of its successor or the Pledgor,
execute and deliver an instrument transferring to such successor all the
estates, properties, rights and powers of such predecessor hereunder. Every
predecessor Collateral Agent shall deliver all Collateral held by it as the
Collateral Agent hereunder to its successor. Should any instrument in writing
from the Pledgor be required by a successor Collateral Agent for more fully and
certainly vesting in such successor the estates, properties, rights, powers,
duties and obligations hereby vested or intended to be vested in the
predecessor, any and
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all such instruments in writing shall, at the request of the temporary or
permanent successor Collateral Agent, be forthwith executed, acknowledged and
delivered by the Pledgor.
10. MISCELLANEOUS.
(a) Benefit of Agreement; Successors and Assigns. Whenever any of
the parties hereto is referred to, such reference shall be deemed to include the
successors and assigns of such party. All the covenants and agreements herein
contained by or on behalf of the Pledgor and the Collateral Agent shall bind,
and inure to the benefit of, their respective successors and assigns whether so
expressed or not, and shall be enforceable by and inure to the benefit of the
Trust and its successors and assigns.
(b) Separability. To the extent permitted by law, the
unenforceability or invalidity of any provision or provisions of this Collateral
Agreement shall not render any other provision or provisions herein contained
unenforceable or invalid.
(c) Amendments and Waivers. Any term, covenant, agreement or
condition of this Collateral Agreement may be amended or compliance therewith
may be waived (either generally or in a particular instance and either
retrospectively or prospectively) but only by a writing signed by the Collateral
Agent, the Pledgor and the Trust.
(d) Notices. (1) Any notice provided for herein, unless otherwise
specified, shall be in writing (including transmittals by telex or telecopier)
and shall be given to a party at the address set forth opposite such party's
name on the signature pages hereto or at such other address as may be designated
by notice duly given in accordance with this Section 10(d) to each other party
hereto.
(2) Each such notice given pursuant to paragraph (1) shall be
effective (i) if sent by certified mail (return receipt requested), 72 hours
after being deposited in the United States mail, postage prepaid; (ii) if given
by telex or telecopier, when such telex or telecopied notice is transmitted, or
(iii) if given by any other means, when delivered at the address specified in
this Section 10(d).
(e) Governing Law. This Collateral Agreement shall in all respects
be construed in accordance with and governed by the laws of the State of New
York; provided that as to Pledged Items located in any jurisdiction other than
the State of New York, the Collateral Agent on behalf of the Trust shall have
all of the rights to which a secured party is entitled under the laws of such
other jurisdiction.
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<PAGE>
(f) Counterparts. This Collateral Agreement may be executed,
acknowledged and delivered in any number of counterparts and such counterparts
taken together shall constitute one and the same instrument.
11. TERMINATION OF COLLATERAL AGREEMENT.
This Collateral Agreement and the rights hereby granted by the Pledgor
in the Collateral shall cease, terminate and be void upon fulfillment of all of
the obligations of the Pledgor under the Purchase Agreement, and the Pledgor
shall have no further liability hereunder upon such termination. Any Collateral
remaining at the time of such termination shall be fully released and discharged
from the Lien hereof and delivered to the Pledgor by the Collateral Agent, all
at the expense of the Pledgor.
12. NO PERSONAL LIABILITY OF TRUSTEES.
By executing this Collateral Agreement none of the Trustees assumes
any personal liability hereunder.
IN WITNESS WHEREOF, the Pledgor has caused this Collateral Agreement
to be duly executed on its behalf, and the Collateral Agent has caused this
Collateral Agreement to be duly executed on its behalf, as of the date hereof.
PLEDGOR:
DAVID H. MURDOCK, as Trustee for
the DAVID H. MURDOCK LIVING TRUST
By
--------------------------------
Name:
Title:
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Attention:
------------------------
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<PAGE>
COLLATERAL AGENT:
THE BANK OF NEW YORK,
as Collateral Agent
By
--------------------------------
Name:
Title:
Address for Notices:
101 Barclay Street
New York, New York 10286
Attention: [Theodore D. Parsons]
THE TRUST:
DOLE FOOD AUTOMATIC COMMON EXCHANGE
SECURITY TRUST
------------------------------------
------------------------------------,
as Trustee
------------------------------------
------------------------------------,
as Trustee
------------------------------------
------------------------------------,
as Trustee
_________________________________
Address for Notices:
----------------------------------
----------------------------------
----------------------------------
----------------------------------
----------------------------------
Attention:
------------------------
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<PAGE>
Exhibit A
to
Collateral Agreement
CERTIFICATE FOR SUBSTITUTED COLLATERAL
The undersigned, DAVID H. MURDOCK, as Trustee for the DAVID H. MURDOCK
LIVING TRUST (the "Pledgor"), hereby certifies, pursuant to Section 6(b) of the
Collateral Agreement dated as of July __, 1996 among the Pledgor,
__________________________, as Collateral Agent, and DOLE FOOD AUTOMATIC COMMON
EXCHANGE SECURITY TRUST (the "Collateral Agreement"; terms defined in the
Collateral Agreement being used herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as substituted Collateral
(the "Substituted Collateral"):
2. The Pledgor requests that the Collateral Agent transfer to the
Pledgor the following Prior Collateral, pursuant to Section 6(b) of the
Collateral Agreement:
3. The Pledgor hereby represents and warrants to the Collateral
Agent and the Trust that:
(a) Consents to Transfer. No Transfer Restrictions exist with
respect to or otherwise apply to the assignment of, or transfer by the Pledgor
of possession of, any items of Substituted Collateral to the Collateral Agent
under the Collateral Agreement, or the subsequent sale or transfer of such items
of Substituted Collateral by the Collateral Agent pursuant to the terms of the
Collateral Agreement.
(b) Title to Collateral; Perfected Security Interest. The Pledgor
has good and marketable title to the Substituted Collateral, free of all Liens
(other than the Lien created by the Collateral Agreement) and Transfer
Restrictions. Upon delivery of the Collateral to the Collateral Agent, the
Collateral Agent will obtain a valid, first priority perfected security interest
in, and a first lien upon, such Substituted Collateral subject to no other Lien.
None of such Substituted Collateral is or shall be pledged by the Pledgor as
collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the
same extent as if this Certificate had been specifically addressed to the Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
_______ day of _______________ , 199__.
------------------------------
Name:
Title:
-2-
<PAGE>
Exhibit B
to
Collateral Agreement
CERTIFICATE FOR ADDITIONAL COLLATERAL
The undersigned, DAVID H. MURDOCK, as Trustee for the DAVID H. MURDOCK
LIVING TRUST (the "Pledgor"), hereby certifies, pursuant to Section 6(c) of the
Collateral Agreement, dated as of July __, 1996, among the Pledgor,
_________________________, as Collateral Agent and DOLE FOOD AUTOMATIC COMMON
EXCHANGE SECURITY TRUST (the "Collateral Agreement"; terms defined in the
Collateral Agreement being used herein as defined therein), that:
1. The Pledgor is delivering the following securities to the
Collateral Agent to be held by the Collateral Agent as additional Collateral
(the "Additional Collateral"):
2. The Pledgor hereby represents and warrants to the Collateral
Agent that:
(a) Consents to Transfer. No Transfer Restrictions exist with
respect to or otherwise apply to the assignment of, or transfer by the Pledgor
of possession of, any items of Additional Collateral to the Collateral Agent
under the Collateral Agreement, or the subsequent sale or transfer of such items
of Additional Collateral by the Collateral Agent pursuant to the terms of the
Collateral Agreement.
(b) Title to Collateral; Perfected Security Interest. The Pledgor
has good and marketable title to the Additional Collateral, free of all Liens
(other than the Lien created by the Collateral Agreement) and Transfer
Restrictions. Upon delivery of the Collateral to the Collateral Agent, the
Collateral Agent will obtain a valid, first priority perfected security interest
in, and a first lien upon, such additional Collateral subject to no other Lien.
None of such Additional Collateral is or shall be pledged by the Pledgor as
collateral for any other purpose.
This Certificate may be relied upon by the Trust as fully and to the
same extent as if this Certificate had been specifically addressed to the Trust.
<PAGE>
IN WITNESS WHEREOF, the undersigned has executed this Certificate this
____ day of ______________ , 199___.
--------------------------------
Name:
Title:
-2-
<PAGE>
Draft of August 1, 1996
FUND EXPENSE AGREEMENT
Agreement dated as of August __, 1996 between Goldman, Sachs & Co.
("Goldman Sachs") and The Bank of New York (the "Service Provider"), in its
capacities as administrator, custodian, paying agent and collateral agent for
Dole Food Automatic Common Exchange Security Trust (the "Trust").
WHEREAS the Trust is a trust formed under the laws of the State of
New York pursuant to a Trust Agreement dated as of August ___, 1996, as amended
and restated as of August __, 1996 (the "Trust Agreement"); and
WHEREAS, Goldman Sachs as sponsor under the Trust Agreement, desires
to make provisions for the payment of certain initial and on-going expenses of
the Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
1. DEFINITIONS. (a) Capitalized terms used herein and not
defined herein shall have the meanings ascribed thereto in the Trust Agreement.
(b) The following terms shall have the following meanings:
"Additional Expense" means the Ordinary Expense the incurring of
which will require the Service Provider to provide the Additional Expense Notice
pursuant to Section 3(a) hereof and any Ordinary Expense incurred thereafter.
"Additional Expense Notice" means the notice required to be given by
the Service Provider to Goldman Sachs pursuant to Section 3(a)(i) hereof.
"First Time of Delivery" shall have the meaning ascribed thereto in
the Underwriting Agreement.
"Ordinary Expense" of the Trust means any expense of the Trust other
than any expense of the Trust arising under Section 6.6 of the Administration
Agreement, Section 15 of the Custodian Agreement, Section 5.4(b) of the Paying
Agent Agreement, Section 7.6 of the Trust Agreement.
<PAGE>
"Up-front Fee Amount" means the amount set forth as such on Schedule
I hereto payable as a one-time payment to the Service Provider in respect of
its collective services as Administrator, Custodian, Paying Agent and Collateral
Agent for the entire term of the Trust.
"Up-front Expense Amount" means the amount set forth as such on
Schedule I hereto payable as a one-time payment to the Service Provider in
respect of Ordinary Expenses anticipated to be incurred by the Administrator on
behalf of the Trust, pursuant to the Administration Agreement, during the term
of the Trust.
2. AGREEMENT TO PAY UP-FRONT FEES AND EXPENSES. Goldman Sachs
agrees to pay to the Service Provider in Federal (same day) funds at the First
Time of Delivery the Up-front Fee Amount and the Up-front Expense Amount.
3. AGREEMENT TO PAY ADDITIONAL EXPENSES. (a) Prior to incurring
any Ordinary Expense on behalf of the Trust that, together with all prior
Ordinary Expenses incurred by the Administrator on behalf of the Trust, would
cause the aggregate amount of Ordinary Expenses of the Trust to exceed the
Up-front Expense Amount, the Administrator shall provide to Goldman Sachs (i)
prompt written notice to the effect that the aggregate amount of Ordinary
Expenses of the Trust will exceed the Up-front Expense Amount, and (ii) an
accounting, in such detail as shall be reasonably acceptable to Goldman Sachs,
of all Ordinary Expenses incurred on behalf of the Trust through the date of the
Additional Expense Notice.
(b) From and after the date of the Additional Expense Notice, the
Service Provider agrees that it will not, without the prior written consent of
Goldman Sachs, incur on behalf of the Trust (i) any single expense in excess of
$___________ or (ii) in any calendar period, expenses aggregating in excess of
$___________. Subject to the foregoing, the Service Provider shall give notice
to Goldman Sachs in writing promptly following the incurring of any Additional
Expense. Such notice shall be accompanied by any demand, bill, invoice or other
similar document in respect of such Additional Expense.
(c) Subject to the first sentence of paragraph (b) of this Section
3, Goldman Sachs agrees to pay to the Service Provider from time to time the
amount of any Additional Expense. Payment by Goldman Sachs of any Additional
Expense shall be made in New York Clearing House funds by the later of (i) five
Business Days after the receipt by Goldman Sachs from the Service Provider of
notice
-2-
<PAGE>
of the incurring thereof or (ii) the due date for the payment of such Additional
Expense.
(d) Goldman Sachs may contest in good faith the reasonableness of
any Additional Expense and the parties shall attempt to resolve amicably the
disagreement; provided that if the parties cannot resolve the dispute by the due
date hereunder with respect to such Additional Expense, subject to the first
sentence of paragraph (b) of this Section 3, Goldman Sachs shall pay the amount
of such Additional Expense subject to later adjustment and credit if such
dispute is resolved in favor of Goldman Sachs.
4. CONDITION TO PAYMENT. Goldman Sachs' obligations under
paragraphs 2 and 3 hereof shall be subject to the condition that the Trust's
Automatic Common Exchange Securities shall have been issued and paid for at the
First Time of Delivery.
5. TRUST TERMINATION; REFUND OF UNUSED EXPENSE FUNDS. If at the
termination of the Trust in accordance with Section 8.3 of the Trust Agreement
the aggregate amount of Ordinary Expenses incurred by the Service Provider on
behalf of the Trust through the date of termination shall be less than the
Up-front Expenses Amount, the Service Provider shall, promptly following the
date of such termination, pay to Goldman Sachs in New York Clearing House funds
the amount of such excess.
6. TERMINATION OF ADMINISTRATION AGREEMENT. In the event of the
termination of the Administration Agreement in accordance with Section 4.1
thereof, the Service Provider shall promptly pay to Goldman Sachs the portion of
its Up-front Fee Amount ratable for the period from the date of the termination
of the Administration Agreement to the Exchange Date together with any
unexpended portion of the Up-front Expense Amount.
7. STATEMENTS AND REPORTS. The Service Provider shall collect
and safekeep all demands, bills, invoices or other written communications
received from third parties in connection with any Ordinary Expenses and
Additional Expenses and shall prepare and maintain adequate books and records
showing all receipts and disbursements of funds in connection therewith.
Goldman Sachs shall have the right to inspect and to copy, at its expense, all
such documents, books and records at all reasonable times and from time to time
during the term of this Agreement.
-3-
<PAGE>
8. TERM OF CONTRACT. This Agreement shall continue in effect
until the termination of the Trust in accordance with Section 8.3 of the Trust
Agreement.
9. NO ASSIGNMENT. No party to this Agreement may assign its
rights or delegate its duties hereunder without the prior written consent of the
other party.
10. AMENDMENTS. The Service Provider agrees that it will not
consent to any amendment of the Administration Agreement, the Custodian
Agreement, the Paying Agent Agreement or the Collateral Agreement without the
prior written consent of Goldman Sachs.
11. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties with respect to the matters contained herein and supersedes
all prior agreements or understandings. No amendment or modification of this
Agreement shall be valid unless the amendment or modification is in writing and
is signed by all the parties to this Agreement.
12. NOTICES. All notices, demands, reports, statements, approvals
or consents given by any party under this Agreement shall be in writing and
shall be delivered in person or by telecopy or other facsimile communication or
sent by first-class U.S. mail, registered or certified, postage prepaid, to the
appropriate party at its address on the signature pages hereof or at such other
address subsequently notified to the other parties hereto. Any party may change
its address for purposes hereof by delivering a written notice of the change to
the other parties. All notices given under this Agreement shall be deemed
received (a) in the case of hand delivery, on the day of delivery, (b) in the
case of telecopy or other facsimile communication, on the day of transmission,
and (c) in the case of mailing, on the third day after such notice was deposited
in the mail.
13. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
14. GOVERNING LAW. This Agreement shall be governed by and be
construed in accordance with the laws of the State of New York.
15. COUNTERPARTS. This Agreement may be signed in counterparts
with all of such counterparts constituting one and the same instrument.
-4-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized representatives the date first above written.
GOLDMAN, SACHS & CO.
By_____________________
Address:
85 Broad Street
New York, New York 10004
THE BANK OF NEW YORK
By_____________________
Address:
101 Barclay Street
New York, New York 10286
-5-
<PAGE>
SCHEDULE I
[TO COME]
- 6 -
<PAGE>
Draft of August 1, 1996
FUND INDEMNITY AGREEMENT
Agreement dated as of August ___, 1996 between Goldman, Sachs & Co.
("Goldman Sachs") and _______________________, _______________________
and _______________________ (collectively, the "Trustees"), not in their
individual capacities but solely as trustees of Dole Food Automatic Common
Exchange Security Trust (the "Trust").
WHEREAS the Trust is a trust formed under the laws of the State of New
York pursuant to a Trust Agreement dated as of August ___, 1996, as amended and
restated as of August ___, 1996 (the "Trust Agreement"); and
WHEREAS, Goldman Sachs, as sponsor under the Trust Agreement, desires
to make provision for the payment of certain indemnification expenses of the
Trust;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants contained in this Agreement, the parties agree as follows:
1. DEFINITIONS. Capitalized terms used herein and not defined
herein shall have the meanings ascribed thereto in the Trust Agreement.
2. AGREEMENT TO PAY EXPENSES. Goldman Sachs agrees to pay to the
Trust, and hold the Trust harmless from, any expenses of the Trust arising under
Sections 2.2(f) and 6.6 of the Administration Agreement, Section 15 of the
Custodian Agreement, Section 5.4(b) of the Paying Agent Agreement and Section
7.6 of the Trust Agreement (collectively, "Indemnification Expenses"). Subject
to paragraph 4 hereof, payment hereunder by Goldman Sachs shall be made in New
York Clearing House funds no later than five Business Days after the receipt by
Goldman Sachs, pursuant to paragraph 3 hereof, of written notice of any claim
for Indemnification Expenses.
3. NOTICE OF RECEIPT OF CLAIM. The Trustees shall give notice to,
or cause notice to be given to, Goldman Sachs in writing of any claim for
Indemnification Expenses or any threatened claim for Indemnificaiton Expenses
immediately upon their acquiring knowledge thereof. Such written notice
shall be accompanied by any demand, bill, invoice or other communication
received from any third party claimant (a "Claimant") in respect of such
Indemnification Expense.
<PAGE>
4. RIGHT TO CONTEST. The Trustees agree that Goldman Sachs may, and
Goldman Sachs is authorized on behalf of the Trustees and the Trust to, contest
in good faith with any Claimant any amount contained in any claim for
Indemnification Expense, provided, that if, within such time period as Goldman
Sachs shall determine to be reasonable, Goldman Sachs and such Claimant are
unable to resolve amicably any disagreement regarding such claim for
Indemnification Expense, Goldman Sachs shall retain counsel reasonably
satisfactory to the Trustees to represent the Trustees in any resulting
proceeding and shall pay the fees and disbursements of such counsel related to
such proceeding. It is understood that Goldman Sachs shall not, in respect of
the legal expenses of any indemnified party in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm (in addition to any local counsel).
Goldman Sachs shall not be liable for any settlement of any proceeding effected
without its written consent, but if settled with such consent or if there be a
final judgment for the Claimant, Goldman Sachs agrees to indemnify the Trustees
and the Trust from and against any loss or liability by reason of such
settlement or judgment.
5. STATEMENTS AND REPORTS. The Trustees shall collect and safekeep
all demands, bills, invoices or other written communications received from third
parties in connection with any claim for Indemnification Expenses and shall
prepare and maintain adequate books and records showing all receipts and
disbursements of funds in connection therewith. Goldman Sachs shall have the
right to inspect and to copy, at its expense, all such documents, books and
records at all reasonable times and from time to time during the term of this
Agreement.
6. TERM OF CONTRACT. This Agreement shall continue in effect until
the termination of the Trust in accordance with Section 8.3 of the Trust
Agreement.
7. NO ASSIGNMENT. No party to this Agreement may assign its rights
or delegate its duties hereunder without the prior written consent of the other
parties, except that the Trust may delegate any and all duties hereunder to the
Administrator to the extent permitted by law.
8. ENTIRE AGREEMENT. This Agreement contains the entire agreement
among the parties with respect to the matters contained herein and supersedes
all prior agreements or understandings. No amendment or modification of this
Agreement shall be valid unless the amendment or
-2-
<PAGE>
modification is in writing and is signed by all parties to this Agreement.
9. NOTICES. All notices, demands, reports, statements, approvals or
consents given by any party under this Agreement shall be in writing and shall
be delivered in person or by telecopy or other facsimile communication or sent
by first-class U.S. mail, registered or certified, postage prepaid, to the
appropriate party at its address on the signature pages hereof or at such other
address subsequently notified to the other parties hereto. A copy of any
communication to Goldman Sachs shall be furnished to Sullivan & Cromwell, [444
S. Flower Street, Los Angeles, California 90071, Attention: Frank H. Golay, Jr.,
Esq.,) provided that the failure to furnish such copy shall not affect the
effectiveness of any such communication. Any party may change its address for
purposes hereof by delivering a written notice of the change to the other
parties. All notices, given under this Agreement shall be deemed received (a) in
the case of hand delivery, on the day of delivery, (b) in the case of telecopy
or other facsimile communication, on the day of transmission, and (c) in the
case of mailing, on the third day after such notice was deposited in the mail.
10. BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
permitted assigns.
11. GOVERNING LAW. This Agreement shall be governed by and be
construed in accordance with the laws of the State of New York.
12. COUNTERPARTS. This Agreement may be signed in counterparts with
all of such counterparts constituting one and the same instrument.
-3-
<PAGE>
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their authorized representatives the date first above written.
GOLDMAN, SACHS & CO.
By
----------------------------
Address:
85 Broad Street
New York, NY 10004
TRUSTEES
-----------------------------
as Trustee
Address:
-----------------------------
as Trustee
Address:
-----------------------------
as Trustee
Address:
-4-
<PAGE>
August 2, 1996
Dole Food Automatic Common Exchange Security Trust,
c/o The Bank of New York,
101 Barclay Street,
New York, New York 10286.
Dear Sirs:
In connection with the registration under the Securities Act of 1933 (the
"Act") and the Investment Company Act of 1940 (the "Investment Company Act")
of Dole Food Automatic Common Exchange Securities (the "Securities") of Dole
Food Automatic Common Exchange Security Trust, a New York trust (the "Trust"),
we, as your counsel, have examined such records, certificates and other
documents, and such questions of law, as we have considered necessary or
appropriate for the purposes of this opinion. Upon the basis of such
examination, we advise you that, in our opinion, when the registration
statement relating to the Securities (the "Registration Statement") has
become effective under the Act, the Trust's Amended and Restated Trust
Agreement has been duly executed and delivered by the parties thereto, and the
Securities have been duly issued and sold as contemplated by the Registration
Statement, the Securities will be validly issued, fully paid and nonassessable.
The foregoing opinion is limited to the Federal laws of the United States
and the laws of the State of New York, and we are expressing no opinion as to
the effect of the laws of any other jurisdiction.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to us under the heading "Validity
of Securities" in the Prospectus. In giving such consent, we do not thereby
admit that we are in the category of persons whose consent is required under
Section 7 of the Act.
Very truly yours,
SULLIVAN & CROMWELL
<PAGE>
Exhibit 2.n.(i)
August 2, 1996
Dole Food Automatic Common Exchange Security Trust,
c/o Goldman, Sachs & Co.,
85 Broad Street,
New York, New York 10004.
Ladies and Gentlemen:
We have acted as special tax counsel to Dole Food Automatic Common
Exchange Security Trust (the "Trust") in connection with the Registration
Statement on Form N-2 of the Trust filed with the Securities and Exchange
Commission on August 2, 1996 (the "Registration Statement") and hereby
confirm to you our opinion as set forth under the heading "Certain Federal
Income Tax Considerations" in the Prospectus included in the Registration
Statement.
We hereby consent to the filing with the Securities and Exchange
Commission of this letter as an exhibit to the Registration Statement and the
reference to us under the heading "Certain Federal Income Tax
Considerations". In giving such consent, we do not thereby admit that we are
in the category of persons whose consent is required under Section 7 of the
Securities Act of 1933.
Very truly yours,
Sullivan & Cromwell
<PAGE>
Draft of August 1, 1996
SUBSCRIPTION AGREEMENT
THIS SUBSCRIPTION AGREEMENT is entered into as of the ___ day of
August 1996, between __________, __________ and __________ (collectively, the
"Trustees"),not in their individual capacities, but solely as trustees of Dole
Food Automatic Common Exchange Security Trust, a trust organized and existing
under the laws of New York (the "Trust"), and Goldman, Sachs & Co. or one of its
affiliates (the "Purchaser").
THE PARTIES HEREBY AGREE AS FOLLOWS:
1. PURCHASE AND SALE OF THE SECURITIES
1.1 SALE AND ISSUANCE OF UNITS. Subject to the terms and conditions
of this Agreement, the Trustees agree to sell to the Purchaser, and the
Purchaser agrees to purchase from the Trustees, Automatic Common Exchange
Securities, representing undivided beneficial interests in the Trust (the
"Securities") at an aggregate purchase price of [$___________].
1.2 CLOSING. The purchase and sale of the Securities shall take
place at the offices of Sullivan & Cromwell [144 S. Flower Street, Los Angeles,
California] at ___a.m., on August ___, 1996, or at such other time ("Closing
Date") and place as the Trustees and the Purchaser mutually agree upon. At or
after the Closing, the Trustees shall deliver to the Purchaser certificates
representing the Securities, registered in the name of the Purchaser or its
nominee. Payment for the Securities shall be made on the Closing Date by the
Purchaser by bank wire transfers or by delivery of certified or official bank
checks, in either case in immediately available funds, of an amount equal to the
purchase price of the Securities purchased by the Purchaser.
2. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PURCHASER. The
Purchaser hereby represents and warrants to, and covenants for the benefit of,
the Trust that:
2.1 PURCHASE ENTIRELY FOR OWN ACCOUNT. This Agreement is made by the
Trustees with the Purchaser in reliance upon the Purchaser's representation to
the Trustees, which by the Purchaser's execution of this Agreement the Purchaser
hereby confirms, that the Securities are being acquired for investment for the
Purchaser's own account, and not as a nominee or agent and not with a view
<PAGE>
to the resale or distribution by the Purchaser of any of the Securities, and
that the Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the Securities, in either case in
violation of any securities registration requirement under applicable law, but
subject nevertheless, to any requirement of law that the disposition of its
property shall at all times by within its control. By executing this Agreement,
the Purchaser further represents that the Purchaser does not have any contract,
undertaking, agreement or arrangement with any person to sell, transfer or grant
participation to such person or to any third person, with respect to any of the
Securities.
2.2 INVESTMENT EXPERIENCE. The Purchaser acknowledges that it can
bear the economic risk of the investment for an indefinite period of time and
has such knowledge and experience in financial and business matters (and
particularly in the business in which the Trust operates) as to be capable of
evaluating the merits and risks of the investment in the Securities. The
Purchaser is an "accredited investor" as defined in Rule 501(a) of Regulation D
under the Securities Act of 1933 (the "Act").
2.3 RESTRICTED SECURITIES. The Purchaser understands that the
Securities are characterized as "restricted securities" under the United States
securities laws inasmuch as they are being acquired form the Trustees in a
transaction not involving a public offering and that under such laws and
applicable regulations such Securities may be resold without registration under
the Act only in certain circumstances. In this connection, the Purchaser
represents that it understands the resale limitations imposed by the Act and is
generally familiar with the existing resale limitations imposed by Rule 144.
2.4 FURTHER LIMITATIONS ON DISPOSITION. The Purchaser further agrees
not to make any disposition directly or indirectly of all or any portion of the
Securities unless and until:
(a) There is then in effect a registration statement under the Act
covering such proposed disposition and such disposition is made in accordance
with such registration statement; or
(b) The Purchaser shall have furnished the Trustees with an opinion
of counsel, reasonably satisfactory to the Trustees, that such disposition will
not require registration of such Securities under the Act.
-2-
<PAGE>
(c) Notwithstanding the provisions of subsections (a) and (b) above,
no such registration statement or opinion of counsel shall be necessary for a
transfer by the Purchaser to any affiliate of the Purchaser, if the transferee
agrees in writing to be subject to the terms hereof to the same extent as if it
were the original Purchaser hereunder.
2.5 LEGENDS. It is understood that the certificate evidencing the
Securities may bear either or both of the following legends:
(a) "These securities have not been registered under the Securities
Act of 1933. They may not be sold, offered for sale, pledged or hypothecated in
the absence of a registration statement in effect with respect to the securities
under such Act or an opinion of counsel reasonably satisfactory to the Trustees
of Dole Food Automatic Common Exchange Security Trust that such registration is
not required."
(b) Any legend required by the laws of any other applicable
jurisdiction.
The Purchaser and the Trustees agree that the legend contained in the
paragraph (a) above shall be removed at a holder's request when they are no
longer necessary to ensure compliance with federal securities laws.
2.6 AMENDMENT TO TRUST AGREEMENT: SPLIT OF THE SECURITIES. The
Purchaser consents to (a) the execution and delivery by the Trustees and
Goldman, Sachs & Co., as sponsor of the Trust, of an Amended and Restated Trust
Agreement in the form attached hereto and (b) the split of the Purchaser's
Securities. Subsequent to the determination of the public offering price per
Security and related underwriting discount for the Securities to be sold to the
Underwriters (as defined in the aforementioned Amended and Restated Trust
Agreement) but prior to the sale of the Securities to the Underwriters, each
Security purchased hereby shall be split into a greater number of Securities so
that immediately following such split the value of each Security held by the
Purchaser will equal the aforesaid public offering price less the related
underwriting discount.
2.7 COUNTERPARTS. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
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<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
TRUSTEES
GOLDMAN, SACHS & CO.
By:
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Title:
Address:
85 Broad Street
New York, NY 10004
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